China BCT Further Expands its Footprint by Acquiring 33 Retail Pharmaceutical Stores

LIUZHOU CITY, China, Sept. 27 /PRNewswire-Asia-FirstCall/ -- China BCT Pharmacy Group, Inc., (OTC Bulletin Board: CNBI), ("China BCT" or the "Company"), a leading pharmaceutical distributor, retail pharmacy, and manufacturer of pharmaceutical products in Guangxi Province, China, today announced that it has further expanded its retail network throughout Guangxi province by adding 33 retail pharmaceutical stores, bringing the total number of the Company's pharmacies to 170. The Company's retail subsidiary started the year with 66 directly-owned stores.

In the first of two separate transactions during September 2010, Guangxi Liuzhou Baicaotang Medicine Retail Limited ("BCT Retail"), a subsidiary of the Company acquired 15 retail pharmacy stories, located throughout six counties of Liuzhou city, for RMB 4.7 million (approximately $0.70 million) in cash from Guangxi San Le Pharmacy Chain Co., Ltd. Management expects these stores to generate annual revenue of roughly $2.2 million and to contribute approximately $0.6 million to the Company's top-line in 2010. Liuzhou is Guangxi's second largest city, with a population of over 3.6 million, and is the region's main industrial center.

In the second transaction, BCT Retail acquired 18 retail pharmacy stores located in the Rongshui County of Liuzhou City for RMB 5.9 million (approximately $0.88 million) in cash from Rongshui County Jiu Zhou Pharmaceutical Chain Co., Ltd. Management expects these stores to generate annual revenue of roughly $2.6 million and to contribute approximately $0.7 million to the Company's top-line in 2010. Rongshui County is one of the highly populated counties in Guangxi province.

The Company intends to renovate the acquired pharmacies, at an average price of approximately $7,000 per store, and will operate each store under "Baicaotang" brand name. Store upgrades and renovations should be complete by the end of October 2010. On average, these stores are expected to generate operating margins of roughly 15% and the Company anticipates a 2.5 year to 3 year payback period.

"We continue to successfully execute on our strategy of selectively acquiring drugstore chains and independently operated pharmacies that complement our existing network of stores in populated rural areas. We have significantly strengthened our presence in Guangxi province, and intend to continue to expand our footprint in the region while simultaneously evaluating attractive growth opportunities outside the province," said Mr. Hui Tian Tang, Chairman and Chief Executive Officer of China BCT. "By integrating newly acquired stores into our current distribution network, we expect to realize meaningful operational and financial benefits that will enhance long-term shareholder value."

About China BCT

China BCT is engaged in pharmaceutical distribution, pharmacy retailing, and the manufacture of pharmaceuticals products through its subsidiaries, Guangxi Liuzhou Baicaotang Medicine Limited, Hefeng Pharmaceutical Co. Limited, and Guangxi Liuzhou Baicaotang Medicine Retail Limited, each located in Guangxi province, China. The Company operates a large regional retail network in Guangxi province, consisting of 170 directly owned retail stores in Guangxi province through its subsidaries and currently over 8,000 products are distributed through the Company's wholesale distribution network. For more information, please visit http://www.china-bct.com

Safe Harbor Statement

This press release contains "forward-looking statements" within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to differ materially from the results expressed or implied by such statements, including statements related to anticipated revenue and payback period of the new stores. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). Accordingly, although the Company believes that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. The Company has no obligation to update the forward- looking information contained in this presentation.

    Company Contact:
     Ms. Shelly Zhang, Chief Financial Officer
     China BCT Pharmacy Group, Inc.
     Tel:     +86-772-363-8318
     Email:   [email protected]

    Investor Relations Contact:
     Mr. Crocker Coulson, President
     CCG Investor Relations
     Tel:     +1-646-213-1915
     Email:   [email protected]
     Website: http://www.china-bct.com

SOURCE China BCT Pharmacy Group, Inc.