China Health Industries (OTC BB:CHHE)

We believe our current working capital position; together with our expected future cash flows from operations will be adequate to fund our operations in the ordinary course of business, anticipated capital expenditures, debt payment requirements and other contractual obligations for at least the next twelve months. However, this belief is based upon many assumptions and is subject to numerous risks, and there can be no assurance that we will not require additional funding in the future.

CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Audited)
		For the Year Ended
		June 30, 2011				June 30, 2010
REVENUE			62,779,978				43,105,972
COST OF GOODS SOLD			33,335,334				20,160,420
GROSS PROFIT			29,444,644				22,945,552
OPERATING EXPENSES
Selling, general & administrative expenses			6,000,090				5,399,736
Depreciation and amortization expenses			46,578				79,388
Total operating expenses			6,046,668				5,479,124
INCOME FROM OPERATIONS			23,397,976				17,466,428
OTHER INCOME (EXPENSES)
Interest income			227,837				226,536
Interest expense			(27,317	)			(20,580	)
Other income							29,254
Total other income (expenses)			200,520				235,210
INCOME BEFORE INCOME TAXES			23,598,496				17,701,638
Provision for income taxes			5,924,501				4,447,467
NET INCOME		$	17,673,995			$	13,254,171
OTHER COMPREHENSIVE INCOME
Foreign currency translation gain			1,421,363				327,761
Total other comprehensive income		$	19,095,358			$	13,581,932
Earning per share:
Basic & diluted earning per share		$	0.28			$	0.21
Weighted average shares outstanding:
Basic & diluted weighted average shares outstanding			62,239,737				62,239,737

GeoTeam® Note: Fourth Quarter 2011 vs. 2010 EPS was $0.11 vs. $0.05

2012 Outlook We anticipate our total revenues in 2012 versus 2011 to increase by 20% or approximately $12.5 million with growth in all categories of our product sales. Our gross profit margin in 2012 is expected to be approximately 47% due to increased raw material costs resulting from inflation. We estimate our overall 2012 net profit margin to be approximately 26%. However, there is no assurance that these predictions will be reached.