China Agri-Business Continues Its Growth in the First Half Year of 2011

XI'AN, China, Aug. 24, 2011 /PRNewswire-Asia-FirstCall/ -- China Agri-Business, Inc. ("China Agri" or the "Company," OTC: CHBU), a manufacturer and distributor of organic agricultural application products in China, reported its operation results for the three and six months ended June 30, 2011.

Highlights For The Three Months Ended June 30, 2011

• Total sales increased 11% to $3,838,000 in the second quarter of 2011 compared to $3,452,574 in the second quarter of 2010.
• Net income increased 200% to $2,256,307 in the second quarter of 2011 compared to $753,221 in the second quarter of 2010
• Earnings per common share increased to $0.17 in the second quarter of 2011 compared to $0.06 in the second quarter of 2010

Highlights For The Six Months Ended June 30, 2011

• Total sales increased 12% to $5,592,414 in the first half year of 2011 compared to $4,993,515 in the comparable period of 2010.
• Net income increased 188% to $3,122,273 in the first half year of 2011 compared to $1,085,029 in the comparable period of 2010
• Earnings per common share increased to $0.24 in the first half year of 2011 compared to $0.08 in the comparable period of 2010

Approximately 630 branded stores sell the Company's products under the name "Xinsheng Shiji" as of June 30, 2011. The majority of branded stores are located in Shaanxi Province, the Company's local province; the others are located in Hunan and Sichuan provinces. The sales from the Company's traditional sales network increased 126% to $1,800,757 in the six months ended June 30, 2011 compared to $1,003,370 in the comparable period of 2010. For the six months ended June 30, 2011 and 2010, approximately 68% and 84%, respectively, of revenue was generated from the Company's branded sales stores, and approximately 32% and 16%, respectively, of revenue was generated from traditional sales channels.

In December 2010, the Company decided to outsource the operation and ownership of its direct sales stores to subcontractors who bear the risk of operations of the stores, and stopped selling third party products in such branded stores. "This change enables us to focus more on product development, our marketing strategy and business expansion issues," commented Mr. Deng, Chief Executive Officer, President, and Director of the Company. "As a direct result of above change, our gross margin rate increased to 69% in the first half of year of 2011, an increase of 31 percentage points from 38% for the comparable period of 2010."

Financial Highlights

About China Agri-Business, Inc.

China Agri-Business, Inc., through its operating company in China, Shaanxi Xinsheng Centennial Agriculture and Technology Co., Ltd., manufactures and sells non-toxic fertilizer, bactericide, and fungicide products used for farming in China. Crops grown with Xinsheng's products are eligible to qualify for the "AA Green Food" rating administered by the China Green Food Development Center, an agency under the jurisdiction of the Ministry of Agriculture of the People's Republic of China (however, our products themselves do not bear the "AA green food" designation). The Company's two primary product groups are organic fertilizers (Xinsheng Luyuan brand) and bactericides (Xinsheng Lufeng brand). The Company has a total of five brands and produces more than 50 different applications, including products designed to stimulate plant growth, condition soil, and prevent and cure plant diseases and parasites. The Company has products for a variety of crops, including potatoes, vegetables, cotton, fruit plants, and orchard trees. The products can be used alone or as supplements with other products. The Company's Xinsheng manufacturing facilities are located in Xi'an, Shaanxi province, China. For more information about China Agri, please visit http://www.chinaagri-business.com.

Forward-Looking Statements

This news release contains forward-looking statements. These statements can be identified by the use of forward-looking terminology such as "anticipates," "believes," "continue," "could," "estimates," "expects," "future," "goal," "hopes," "intends," "may," "objective," "plans," "potential," "scheduled," "seek," "should," or "will" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. We caution you that no statements contained in this news release should be construed as a guarantee or assurance of future performance or results or the implementation of our current plans. You should not place undue reliance upon any forward-looking statements. Forward-looking statements involve risks and uncertainties, including those discussed under "Item 1A.  Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2010 and in other reports we file with the Securities and Exchange Commission ("SEC"). The actual results that we achieve may differ materially from any forward-looking statements due to the effect of such risks and uncertainties. These forward-looking statements are based on current expectations, and, except as required by law, we assume no obligation to update this information whether as a result of new information, future events, or otherwise. You are urged to carefully review and consider the various disclosures made by us in our Annual Report on Form 10-K for the year ended December 31, 2010 and in our other reports we file with the SEC that attempt to advise interested parties of the risks that may affect our business, financial condition, and results of operations.

SOURCE China Agri-Business, Inc.

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