The pharmaceutical market in China is one of the most rapidly growing in the entire world. Growth has been driven in part by numerous economic factors, including the tremendous growth of the Chinese economy, an emerging Chinese middle class, rising prosperity among the general Chinese population, increasing government support of the industry including a commitment of substantial resources and additional legislation, and an aging population more inclined to utilize pharmaceutical products. According to most estimates, the Asia-Pacific pharmaceuticals market is expected to grow at a much higher annual growth rate than that of its North American and European counterparts, in the neighborhood of 9%-12% for the Asia-Pacific region as opposed to 5%-8%in North America and Europe (Source: IMS Health). Even within this highly dynamic growth region, the Chinese pharmaceutical industry is expected to continue to outpace all others. Sales of pharmaceutical products in China have consistently reached double-digit growth rates. For example, in 2005, pharmaceutical sales in China reached $11.7 Billion, up approximately 20.4% from the previous year (Source: Mergent).

China Yongxin Pharmaceuticals Inc. (OTCBB: CYXN) is one of the largest medical suppliers in northeast China. After fourteen years of operations the Company operates four active subsidiaries accounting for 80% of the medicine supplies in Northeast China. Its operations include a wholesale division distributing pharmaceutical drugs and medical supplies, a retail pharmacy chain, a retail drugstore chain, retail operations as a franchisee of American Medicine Shoppe International, as well as the manufacture of proprietary ginseng products. China represents one of the world's largest pharmaceutical markets. With its population of over one billion people and fast-growing economy, China presents significant potential for the pharmaceutical and retail drugstore industry. CYXN is engaged in both wholesale and retail sales and has a significant market presence in the highly sought after market of the People’s Republic of China. The Company’s revenues grew by 23% in 2007, and net income more than doubled. With current plans to open or acquire approximately 108 new retail stores in 2008, CYXN should stand to increase revenues to well over $100 Million with $8-10 Million in net income, and 2009 sales of $200 Million with net income of $30 Million.

Through its wholesale subsidiary Yongxin Medical, CYXN is involved in the wholesale distribution of pharmaceutical products, medical products and equipment, herbal and nutritional supplements and cosmetics to over 1,000 customers including hospitals, large clinics and retail pharmacies. The Company opened a "Logistics Center" in January 2005 which contains a storage area of over 43,000 square meters, giving the Company the ability to store pharmaceutical inventory at various temperatures. The Logistics Center is able to process over 30,000 orders per day from its customers and retail outlets. CYXN wholesale business has a client base of more than 1,000 medical institutions, clinics, and competing retail and medical stores.

Recent financial news from the Company has been outstanding. For example, for the three month period ended March 31, 2008, net revenues increased approximately 49% from $10,076,930 to $14,993,597 relative to the same period ended March 31, 2007, resulting mainly from the remodeling of the stores, developing new chain stores and due to favorable market conditions. In addition, cost of sales decreased from $8,497,963, or approximately 84% of net revenues for the three month period ended March 31, 2007, to $12,466,690, or approximately 83% of net sales for the three month period ended March 31, 2008. The approximately 1% decrease was primarily due to the economies of scale due to higher purchases with the increase in revenue. Gross profit also increased approximately 60% from $1,578,967 for the three month period ended March 31, 2007 to $2,526,906 for the three month period ended March 31, 2008. This increase in gross profit was primarily due to the increase in the revenues and the reduction in the cost of sales during the period. Finally, Net income increased approximately 53% from a net income of $503,054 for the three month period ended March 31, 2007 to a net income of $767,356 for the three month period ended March 31, 2008.