China Pharmaceuticals 2010 second quarter net sales increase 105%

China Pharmaceuticals, Inc. (OTC Bulletin Board: CFMI) ("China Pharmaceuticals Inc." or the "Company"), one of China's leading manufacturers and distributors of prescription and over-the-counter pharmaceuticals, today announced record financial results for its second quarter ended June 30, 2010. The Company's annual report on Form 10-Q was filed on August 23, 2010 with the United States Securities and Exchange Commission.

“We are focused on continuing to expand our portfolio of high margin products and aggressively expanding our sales and marketing network that will allow us to continue to build sustainable growth in revenues and profits.”

"We are extremely delighted to report a strong second quarter of 2010, with revenues and Net income significantly exceeding our expectations. We continue to believe that the factors that contributed to this performance were strong sales from our new products and the highly effective restructuring of our sales and marketing network. With $10,447,588 in Net sales for the quarter ended June 30, 2010, representing a 105% increase over the same quarter last year, along with a particularly robust $5,371,366 in recorded Net income, representing a 208% increase over the same quarter last year, we continue to be extremely pleased with the company's performance to date and its growth prospects for the future," stated Mr. Guozhu Wang, Chairman and Chief Executive Officer of China Pharmaceuticals, Inc. "We are focused on continuing to expand our portfolio of high margin products and aggressively expanding our sales and marketing network that will allow us to continue to build sustainable growth in revenues and profits."

Second Quarter 2010 Highlights versus second quarter 2009:

• Total revenue for the quarter increased 105% over the same period last year.
• Gross profit increased by 89%.
• Operating income rose 204%.
• Net income grew 208%.
• Diluted earnings per share of $0.16.

Total revenue for the quarter ended June 30, 2010 increased 105% to $10,447,588 from $5,084,112 for the second quarter ended June 30, 2009. Gross profit rose 89% to $6,080,998, as compared to $3,217,017 for the second quarter last year. Operating income grew 204% to $6,355,754 from $2,089,349 for the second quarter ended June 30, 2009. Net income increased 208% to $5,371,366, producing diluted earnings per share of $0.16, as compared to the second quarter ended June 30, 2009, which produced $1,743,935 in Net income and diluted earnings per share of $0.06.

Six months ended June 30, 2010 versus six months ended June 30, 2009:

• Total revenue increased 79% over the same period last year.
• Gross profit increased by 72%.
• Operating income rose 77%.
• Net income grew 69%.
• Diluted earnings per share of $0.19.

Total revenue for the six months period ended June 30, 2010 increased 79% to $17,500,787 from $9,777,545 for the six months period ended June 30, 2010. Gross profit rose 72% to $10,314,019, as compared to $5,981,156 for the six months period ended last year. Operating income grew 77% to $7,571,000 from $4,278,503 for the six months period ended June 30, 2009. Net income increased 69% to $6,015,553, producing diluted earnings per share of $0.19, as compared to the six months period ended June 30, 2009, which produced $3,546,704 in Net income and diluted earnings per share of $0.13.

Financial Condition as at June 30, 2010:

As of June 30, 2010, the Company had $6,739,263 in cash. Working capital was $17,942,308, up from $9,243,121 as at December 31, 2009, representing an increase of 94%. Long term debt remains at Nil. Shareholders' equity as at June 30, 2010 was $36,883,263, as compared to $28,624,514 at the end of December 31, 2009. Total assets as at June 30, 2010 amounted to $40,135,508.

Outlook for 2010:

"Fiscal 2010 continues to be a transitional year for China Pharmaceuticals, Inc. as we prepare for the introduction of new drugs, and pursue additional opportunities for both organic growth and potential strategic acquisitions. Our current outlook reflects only the drugs that we have in hand today and will be subject to update as we execute strategic initiatives to expand our market position and profitability in the future. Based on our performance to date, we continue to remain extremely optimistic regarding our future growth prospects and look forward to sharing further details with our shareholders as we proceed with our expansion plans," concluded Mr. Guozhu Wang.