Yayi International anticipates 66.7% increase in revenues for fiscal first-quarter

Yayi International Inc., (OTC Bulletin Board: YYIN) ("Yayi International" or "the Company"), the first mover and a leading producer and distributor of premium goat milk formula products for infants, toddlers, young children, and adults in the People's Republic of China ("China"), today announced that the Company expects to report strong sequential growth in the first quarter of its new fiscal year ended June 30, 2010. Based on its preliminary results, the Company expects to report revenues of approximately $7.5 million, a 66.7% increase from $4.5 million for the three months ended March 31, 2010, and expects to be profitable for the first quarter of Fiscal 2011.

“We are encouraged by the Company's performance and are confident that they have the right strategy to maximize long-term growth and profitability and, more importantly, establish a sustainable leadership position in the premium goat milk formula segment of China's dairy market”

Revenues for the three months ended March 31, 2010 have not been audited or reviewed due to the transition period as a result of the change in the Company's fiscal year end from October 31 to March 31 earlier this year. Those revenue numbers are included in this release for the sole purpose of providing additional information.

Following the streamlining of its product portfolio to focus on key addressable markets and highest margin categories and the launch of an aggressive marketing campaign in recent months, the Company has experienced increased orders from distributors and made progress in entering new retail stores. The Company expects to report its full quarterly financial results by August 16, 2010.

"We are pleased to see solid momentum in the launch of our new products in recent months. In conjunction with the Children's Day in June, we have aggressively marketed our "Milk Goat" brand through about 1,000 sales promotional activities across 23 provinces and municipalities in China. We remain optimistic about consumer confidence and acceptance of our high quality products and anticipate continued sales growth in the next few quarters, providing us with confidence that we are on track to achieve our financial goals for this year of net sales of $58.6 million to $65.9 million for Fiscal 2011," said Ms. Li Liu, Chief Executive Officer of Yayi International. "Increasing health awareness among Chinese consumers and parents about the safety of infant formula, combined with the demonstrated health benefits of goat milk formula, have created a very attractive market opportunity for our premium 'Milk Goat' branded products. The Company's vertically integrated production and strict quality control have ensured our goat milk products a safe and reliable choice for consumers."

In addition, Yayi International separately announced that it has recently amended an existing agreement with its current shareholder, SAIF Partners III L.P., a well-known private equity investor in Asia, to modify the terms of its Series A Preferred Stock, so as to readjust the Company's "make good" target to reflect the new business focus and align with its new fiscal year. The new target provides for an aggregate net income of $20 million in the Fiscal Years ended March 31, 2011 and 2012.

"We are encouraged by the Company's performance and are confident that they have the right strategy to maximize long-term growth and profitability and, more importantly, establish a sustainable leadership position in the premium goat milk formula segment of China's dairy market," said Kenneth Lee, Principal at SAIF Partners. "The amended agreement provides management with the flexibility to take full advantage of opportunities for the rapid market expansion, while reducing potential dilution for both management and existing shareholders."