Trading symbol: CYXN (OTCBB) Yongxin Pharmaceuticals, Inc. 927 Canada Court City of Industry, CA 91748 - USA Phone: (626) 581-9098 Fax: (626) 581-9138 Email: [email protected] www.chinayongxin.com

Overview September 2008

China Yongxin Pharmaceuticals, Inc. is a 15-year-old enterprise that was founded in Changchun, Jilin province, China. China Yongxin’s Chinese enterprise is known as Yongxin brand. The company is a producer, distributor and retailer of pharmaceutical products. Today, the company has five subsidiaries including 93 stores.

“Profiting from China’s fast-growing Public Company Stats

pharmaceutical industry” Ticker: CYXN CIK: 0001087848 SIC Code: 5912

China Yongxin Pharmaceuticals’ revenues for the six month period ending June State of Incorporation: Delaware 30, 2008 grew 30% as compared to revenues for the six month period ending June 30, 2007. The Company’s sales for the six month period ending June 30, Price (9/01/2008): $0.54 2008 were $29.6 million compared to $22.9 million for the six month period 52-wk high/low: $0.32/$3.00 ending June 30, 2007. Net Comprehensive Income rose by 32.7% to $2.32 Av. volume (90-day): 21,200 million for the six month period ending June 30, 2008 from $1.75 million for the Shares outstanding: 31.0 million six month period ending June 30, 2007. Market cap: $16.74 million Cash on 6/30/08: $1.09 million Revenues (6 mos):* $29.57 million Gross Profit (6 mos):* $5.38 million Net Profit (6 mos):* $2.32 million Rev Growth (6 mos):* 30% Net Comprehensive Income Growth:* * 32.7%

On the Web: www.yongxinchina.com

*Six month period ending June 30, 2008 **Compared to Six month period ending June 30, 2007 Sources: Company filings, Hoover’s

Market Drivers

• China’s overall GDP grew at over 11% per the latest readings; • Retail pharmaceutical sales are projected to grow at 20% per year to over $30B by 2011; • A strong network of over3,500 retail buyers of the company’s products; • China’s up and coming middle class is demanding higher quality medicines and natural and organic alternatives.

Company Highlights Management

China Yongxin Pharmaceuticals, Inc. is a diverse pharmaceutical and medical Liu, Yongxin products company which operates five subsidiaries: Chairman/CEO • Changchun Yongxin Dirui Medical Co., Ltd. • Jilin province Yongxin Chain Drugstore Co., Ltd. Mr. Liu is a successful and well-respected • Jinyongxin Chain Drugstore Co., Ltd. Chinese business executive. In1993, he • Jilin Province Yongxin Zaoantang Chain Co., Ltd. worked as a General Manager of Yongxin Medicine Co. Ltd., and in 2007 Mr. Liu • Jilin Dingjian Natural & Health Products Co., Ltd. served as Chairman & CEO of CYXN. After

Mr. Liu graduated from Northeast Normal The company’s products include ingredients sourced from biological materials University and he pursued advanced located in the Changbaishan Mountains, mainly ginseng. The company’s further studies named EMBA at Beijing products are specially prepared Chinese traditional medicines, chemical University in 2003-2004. pharmaceutical preparations, flower teas, natural health products, healthy food,cosmetics and medical equipment. Samuel Liu Today, China Yongxin Pharmaceuticals, Inc. operates 93 drugstores. With President /COO growing demand for pharmaceutical products by an aging Chinese population and greater discretionary income that is expected to drive 20% annual growth in From 1986-1993 Samuel was a senior China’s retail pharmaceutical sales to $30 billion by 2011, management sees manager in a large trading company potential to significantly expand its store base over the next several years. (annual operating revenue over USD 300 Organic growth and growth through accretive acquisitions should help Yongxin million ) in the United States. From 1994- produce strong earnings and cash flow. 2002 he was the president of a research and development enterprise (total annual Peer Comparison sales USD 80 million). Mr. Liu has managed a number of foreign investment China Nepstar (NYSE: NPD) is probably the closest comparable peer company. projects in China, and has completed China Nepstar operates over 1,790 drugstores throughout China. The company numerous complex fundings and mergers priced its IPO at a 30% premium to its proposed price and received a strong with public companies in the US. Mr. Liu reception. The company’s lead underwriter was Goldman Sachs. has a Master of Arts degree from the University of Peking. In comparison to China Nepstar and other Chinese medical and pharmaceutical companies, China Yongxin Pharmaceuticals, Inc. appears to be trading at a Liu, Yongkui discount to its peers, which include: CVS Caremark (CVS); Rite Aid (RAD); Walgreens (WAG); Longs Drug Stores (LDG); Mindray Medical (MR); WuXi Vice President/CFO PharmaTech (WX); and, (SCR). Mr. Liu, Yongkui has worked as the Vice General Manager of Yongxin Medicine Co. Ltd. since 1993. In2007 he became Vice President & CFO of CYXN. He is also a founder of CYXN. He studied at China Renmin University in 2004-2006.

Competition

The drugstore industry in China is highly fragmented with 1,410 pharmacy chain stores and 58,065 individual pharmaceutical product retailers; China Yongxin Pharmaceuticals, Inc. holds less than 0.1% market share. Moreover, competition is expected to increase because of the dynamic trends in the industry. Major competitors include: China Nepstar, Accord and Shenzhen Associate Pharmacy, Pharmaceutical Company, Jianmin and Guangzhou Caizhilin Chain Drugstore, Liaoning Chengda, Wulin Drugstore and Siming Dayaofang.

Share Valuation vs. Industry Peers Risk Factors

During the last week of August 2008, CYXN shares were priced in a range of China Yongxin Pharmaceuticals, Inc. may about 3.4 times trailing twelve month’s (TTM) EPS. Its price-to-sales ratio, based face challenges while executing on its on TTM revenues, has ranged from 0.36 to 0.84. At the July 18, 2008 close, the aggressive expansion strategy. There is P/S ratio was 0.41. Given CYXN’s focus on China markets and its mix of currently a nationwide shortage of wholesale and retail drug sales, it has no near equivalents among companies pharmacists, which may cause publicly traded in the U.S. Its closest peer on the retail side is China Nepstar compensation costs to rise as the company Chain Drugstore Ltd. (NYSE: NPD), a Shenzhen-based company that operates competes for qualified personnel. just under 1,800 drugstores in the People’s Republic of China. At the close on July 18, 2008, NPD shares sold at 26.9 times 2007 earnings and 2.6 times 2007 Stores take several years to reach sales.* maturity, and the company may incur significant advertising expenses to attract The following table of valuation and performance metrics compares CYXN with and retain customers. Some peers China Nepstar Chain Drugstore Ltd. (NYSE: NPD), Chindex International, pharmaceutical products are subject to Inc. (NASDAQ: CHDX), China Medicine Corporation (OTCBB: CHME), China price caps established by the Chinese Pharma Holdings Inc. (OTCBB: CPHI) and China Shenghuo Pharmaceutical Government. Also, the drugstore business Holdings Inc. (AMEX: KUN). is somewhat seasonal in China. Pharmaceutical sales overall are typically All ratios are based on calendar-year 2007 financial results and on prices at the stronger in the fourth quarter from the June 3, 2008 close. Boldface type indicates lowest valuation ratios and winter cold season and weaker after the highest growth rates: *Sources: Capital IQ, Company filings first quarter during the Chinese New Year.

Symbol Mkt Cap P/E Price/Sales Rev growth % Net Income ($Million) 2006-07 Growth %, 2006-07

CYXN 16.74 <3.0 0.41 23% 162.8% NPD 1,230.0 50.4 4.36 13% N/A1 CHDX 280.0 40.7 2.34 17% N/A2

CHME 35.2 4.7 0.83 75% 44% CPHI 85.4 6.6 2.51 52% 49%

1Loss of ($394,000) in 2006, net income of $19.0 million in 2007. 2 Loss of ($2.9) million in 2006, net income of $2.7 million in 2007.

Strategy for Growth Statements made in this Report which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, Strong economic growth, a changing demographic, increasing domestic wealth financial condition, results of operations, future performance and business of China Yongxin and a strong appetite for Chinese companies by Western investors are a wind at Pharmaceuticals, Inc. including, without limitation, (i) the back of China Yongxin Pharmaceuticals, Inc. While investor interest in US- their ability to successfully implement the business based retail pharmacy chains has been mixed, Chinese pharmaceutical and plan and their ability to retain relationships with medical companies continue to experience strong demand, as evidenced by contractors, suppliers, individual representatives and/or government agencies; and (ii) statements China Nepstar's ability to price its IPO at a 30% premium to its proposed range. preceded by, followed by or that include the words "may", "would", "could", "should", "expects", "projects", "anticipates", "believes", "estimates", "plans", "intends", "targets" or similar expressions.

Forward-looking statements speak only as of the date they are made. China Yongxin Pharmaceuticals, Inc. and the editor of this report do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements. This report was produced from information provided by the company or otherwise available in publicly available resources. The China Yongxin Pharmaceuticals, Inc. intends to focus its efforts on expanding its information herein is believed to be reliable but is not warranted as such. You should perform your own due retail chain’s reach across China. The company continues to grow its wholesale diligence to verify any material information presented business and is moving more aggressively to expand the higher-margin retail and herein. This report is not a recommendation to buy or manufacturing activities. In 2008, it expects to open or acquire additional retail sell any securities. Any decision to buy or sell stores and to expand its retail capabilities. securities should be made only after consultation with the appropriate financial advisors. Investing in penny stocks carries inherent risks. Investing in penny Management also intends to pursue listing China Yongxin’s shares on a senior stocks carries inherent risk and you could lose all of US stock exchange as soon as it qualifies. your investment capital.