GeoInvesting - China Health Industries (OTC BB:CHHE)

	For the Three Months Ended						For the Nine Months Ended
	March 31, 2012			March 31, 2011			March 31, 2012			March 31, 2011

REVENUE		11,250,503			16,681,724			56,164,111			41,662,210

COST OF GOODS SOLD		6,406,449			8,918,379			33,777,650			21,611,710

GROSS PROFIT		4,844,054			7,763,345			22,386,461			20,050,500

OPERATING EXPENSES
Selling, general & administrative expenses		566,849			1,069,847			3,442,839			3,558,266
Depreciation and amortization expenses		51,414			20,958			81,975			60,754
Research & development		120,152			602,860			360,200			1,374,403
Total operating expenses		738,415			1,693,665			3,885,014			4,993,423

INCOME FROM OPERATIONS		4,105,639			6,069,680			18,501,447			15,057,077

OTHER INCOME (EXPENSES)
Interest income		82,860			62,905			232,776			141,542
Interest expense		(6,907	)		(1,195	)		(20,602	)		(3,531	)
Total other income		75,953			61,710			212,174			138,011

INCOME BEFORE INCOME TAXES		4,181,592			6,131,390			18,713,621			15,195,088

Provision for income taxes		550,167			1,730,671			4,588,768			4,394,107

NET INCOME	$	3,631,425		$	4,400,719		$	14,124,853		$	10,800,981

OTHER COMPREHENSIVE INCOME
Foreign currency translation gain (loss)		(6,373	)		1,728,002			1,158,748			1,929,003

Total comprehensive income	$	3,625,052		$	6,128,721		$	15,283,601		$	12,729,984

Earning per share:
Basic & diluted earning per share	$	0.06		$	0.07		$	0.23		$	0.17

Weighted average shares outstanding:
Basic & diluted weighted average shares outstanding		62,239,737			62,239,737			62,239,737			62,239,737

Total revenues decreased by $5,431,221, or 33%, to $11,250,503 for the three months ended March 31, 2012 compared to $16,681,724 for the same period in 2011. The decrease in revenues was attributable to the decrease in product sales. According to the current PRC Health Food and Supplement Policy promulgated in 2010 (“Policy”), certification issued by provincial Food and Drug Administration cannot be renewed after expiration. Only certification issued by State Food and Drug Administration can be renewed and only products with State certification are allowed on the market. Among the seven products Humankind previously sold on the market, only Waterlilies Soft Capsule (Sailuozhi) was certified by State Food and Drug Administration. The other six products were certified by provincial Food and Drug Administration and the certifications will expire in May 2012. In order to reduce operational risks, the Company ceased the production of four health products with provincial certification in the quarter ended March 31, 2012. Currently, we only sell Waterlilies Soft Capsule (Sailuozhi), Colon Cleanser Capsule and Virility Max Capsule. In accordance with the Policy, despite expiration of State certification, the product is still allowed on the market so long as the product is within its usage expiration date.

2012 Outlook:

We anticipate our total revenues in 2012 versus 2011 to decrease by 7.64% to 10.83% or approximately $4.8 million to $6.8 million. Our gross profit margin in 2012 is expected to be approximately 40% due to an increase in raw material costs resulting from inflation. We estimate our overall 2012 net profit margin to be approximately 24%. However, there is no assurance that these predictions will be reached.

Previous 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 increase in raw material costs resulting from inflation. We estimate our overall 2012 net profit margin to be approximately 26%

	For the Three Months Ended						For the Six Months Ended
	December 31, 2011			December 31, 2010			December 31, 2011			December 31, 2010

REVENUE		23,973,612			13,363,093			46,167,138			24,980,486

COST OF GOODS SOLD		14,401,135			6,708,036			27,371,201			12,693,331

GROSS PROFIT		9,572,477			6,655,057			18,795,937			12,287,155

OPERATING EXPENSES
Selling, general & administrative		2,286,370			1,227,027			4,129,519			2,488,419
Depreciation and amortization		15,862			20,099			30,561			39,796
Research & development		120,024			34,115			240,048			771,543
Total operating expenses		2,422,256			1,281,241			4,400,128			3,299,758

INCOME FROM OPERATIONS		7,150,221			5,373,816			14,395,809			8,987,397

OTHER INCOME
Interest income		76,778			39,282			149,916			78,637
Interest expense		(6,595	)		(1,168	)		(13,695	)		(2,336	)
Total other income		70,183			38,114			136,221			76,301

INCOME BEFORE INCOME TAXES		7,220,404			5,411,930			14,532,030			9,063,698

Provision for income taxes		2,041,873			1,548,022			4,038,601			2,663,436

NET INCOME	$	5,178,531		$	3,863,908		$	10,493,429		$	6,400,262

OTHER COMPREHENSIVE INCOME
Foreign currency translation gain (loss)		631,937			(23,552	)		1,165,121			201,001

Total other comprehensive income	$	5,810,468		$	3,840,356		$	11,658,550		$	6,601,263

Earning per share:
Basic & diluted earning per share	$	0.08		$	0.06		$	0.17		$	0.10

Weighted average shares outstanding:
Basic & diluted weighted average shares outstanding		62,239,737			62,239,737			62,239,737			62,239,737

The increase in revenues was attributable to growth in product sales. This growth in product sales was attributable to increase in sales volume resulting from our efforts to continue to develop our distribution channels by hiring additional sales agents to ensure that our products and their benefits are introduced to those making or influencing the purchasing decisions.

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 increase in raw material costs resulting from inflation. We estimate our overall 2012 net profit margin to be approximately 26%

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.

CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Three Months Ended						For the Nine Months Ended
	March 31, 2011			March 31, 2010			March 31, 2011			March 31, 2010

REVENUE		16,681,724			9,889,459			41,662,210			29,511,002

COST OF GOODS SOLD		8,918,379			4,540,126			21,611,710			13,061,854

GROSS PROFIT		7,763,345			5,349,333			20,050,500			16,449,148

OPERATING EXPENSES
Selling, general & administrative expenses		1,069,847			946,960			3,558,266			3,462,505
Depreciation and amortization expenses		20,958			20,716			60,754			77,012
Research & development		602,860			-			1,374,403			-
Total operating expenses		1,693,665			967,676			4,993,423			3,539,517

INCOME FROM OPERATION		6,069,680			4,381,657			15,057,077			12,909,631

OTHER INCOME (EXPENSES)
Interest income		62,905			226,482			141,542			226,487
Interest expenses		(1,195	)		(3,845	)		(3,531	)		(24,680	)
Total other income (expenses)		61,710			222,637			138,011			201,807

INCOME BEFORE INCOME TAXES		6,131,390			4,604,294			15,195,088			13,111,438

Provision for income taxes		1,730,671			1,140,243			4,394,107			3,289,639

NET INCOME		4,400,719			3,464,051			10,800,981			9,821,799

OTHER COMPREHENSIVE INCOME
Foreign currency translation gain(loss)		1,728,002			(1,870	)		1,929,003			183,227

Total other comprehensive income	$	6,128,721		$	3,462,181		$	12,729,984		$	10,005,026

Earning per share:
Basic & diluted earning per share	$	0.07		$	0.06		$	0.17		$	0.16

Weighted average shares outstanding:
Basic & diluted weighted average shares outstanding		62,239,737			62,239,737			62,239,737			62,239,737

2011 Outlook

We anticipate our total revenues in 2011 versus 2010 to increase by 40% or approximately $17.2 million with growth in all categories of our product sales. Our gross profit margin in 2011 is expected to be approximately 53% due to increased raw material costs resulting from inflation. We estimate our overall 2011 net profit margin to be approximately 28%. However, there is no assurance that these predictions will be reached.

CHINA HEALTH INDUSTRIES HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	For the Three Months Ended						For the Six Months Ended
	December 31, 2010			December 31, 2009			December 31, 2010			December 31, 2009

REVENUE	$	13,363,093		$	9,374,937		$	24,980,486		$	19,621,543
COST OF GOODS SOLD		6,708,036			4,035,362			12,693,331			8,521,728

Gross Profit		6,655,057			5,339,575			12,287,155			11,099,815

OPERATING EXPENSES
Selling, general & administrative expenses		1,227,027			1,999,220			2,488,419			2,515,545
Depreciation and amortization expenses		20,099			35,965			39,796			56,296
Research & development		34,115			-			771,543			-
Total operating expenses		1,281,241			2,035,185			3,299,758			2,571,841
Operating profit		5,373,816			3,304,390			8,987,397			8,527,974

OTHER INCOME (EXPENSES)
Interest expenses		(1,168	)		(4,936	)		(2,336	)		(20,835	)
Interest income		39,282			-			78,637			5
Other income		-			-			-			-
Total other income (expense)		38,113			(4,936	)		76,300			(20,830	)

INCOME (LOSS) BEFORE INCOME TAXES		5,411,930			3,299,454			9,063,698			8,507,144
Income taxes		1,548,022			831,363			2,663,436			2,149,396
Net income (loss)	$	3,863,908		$	2,468,091		$	6,400,262		$	6,357,748

OTHER COMPREHENSIVE INCOME
Foreign currency translation gain (loss)	$	(23,552	)	$	642		$	201,001		$	185,097
Comprehensive income	$	3,840,356		$	2,468,733		$	6,601,263		$	6,542,845

Basic and diluted net loss per share		0.06			0.04			0.10			0.10
Weight average shares outstanding		62,239,737			62,234,737			62,239,737			62,234,737

2011 Outlook We anticipate our

total revenues in 2011 versus 2010 to increase by 40% or approximately $17.2 million with growth in all categories of our product sales
gross profit margin in 2011 is expected to be approximately 53% due to increased raw material costs resulting from inflation
overall 2011 net profit margin to be approximately 28%.

However, there is no assurance that these predictions will be reached.

GeoTeam® note: Applying the company's guidance, for the last half of fiscal 2011:

Revenues will come in at $35.0 million vs. $23.5 million

Net income will come in at $9.8 million vs. $6.9 million

EPS will come in at (assuming no dilution) $0.16 vs. $0.11

For the Three Months Ended
	September 30, 2010			September 30, 2009
REVENUE	$	11,617,393		$	10,246,606
COST OF GOODS SOLD		5,985,295			4,486,366

Gross Profit		5,632,098			5,760,240

OPERATING EXPENSES
Selling, general & administrative expenses		1,261,392			516,325
Depreciation and amortization expenses		19,697			20,331
Research & development		737,428			-
Total operating expenses		2,018,517			536,656
Operating profit		3,613,581			5,223,584

OTHER INCOME (EXPENSES)
Interest expenses		(1,168	)		(15,899	)
Interest income		39,355			-
Other income					5
Total other income (expense)		38,187			(15,894	)

INCOME (LOSS) BEFORE INCOME TAXES		3,651,768			5,207,690
Income taxes		1,115,414			1,318,033
Net income (loss)	$	2,536,354		$	3,889,657

OTHER COMPREHENSIVE INCOME
Foreign currency translation gain (loss)	$	224,553		$	184,455
Comprehensive income	$	2,760,907		$	4,074,112

Basic and diluted net loss per share		0.04			0.06
Weight average shares outstanding
Basic		62,239,737			62,234,737
Diluted		62,239,737			62,234,737

2011 Outlook

We anticipate our total revenues in 2011 versus 2010 to increase by 40% or approximately $17.2 million with growth in all categories of our product sales. Our gross profit margin in 2011 is expected to be approximately 53% due to raw material cost inflation. We estimate our overall 2011 net profit margins to be approximately 28%. However, there is no assurance that these predictions will be reached.

For the year ended June 30, 2010 as compared to June 30, 2009

Total revenues increased by 293% to $43.1 million for the year ended June 30, 2010 compared to the same period in 2009. The $32,138,144 increase in revenue is attributable to strong performances from our sales distribution channels.

"This growth in sales is attributable to volume and our efforts to continue to develop our distribution channels by hiring additional sales agents to assure that our products and their associated benefits are seen by those making or influencing the purchasing decisions."

Net income increased 375.0% to $13.3 million from $2.8 million.
EPS increased to$0.21 compared to $0.05.

GeoTeam® Note: 2010 Fourth quarter EPS was flat at $0.05.

2011 Outlook:

We anticipate our:

Revenues will increase 40.0% to $60.3 million with growth in all categories of our product sales.
Gross profit margin to be approximately 53% due to raw material cost inflation.
Net profit margins to be approximately 28%. This would translate into net income of $16.9 million and EPS of $0.27 using the 2010 share count of 62.2 million.

We anticipate our total revenues in 2010 versus 2009 to increase by 300% or approximately $30 million with growth in all categories of our product sales. Our gross profit margin in 2010 is expected to be approximately 55.45% due to raw material cost inflation. Operating expenses will increase due to higher percentage of R&D investment as well as expanding our own distribution channels. We estimate our overall 2009 net profit margins to be approximately 22.64%. However, there is no assurance that these predictions will be reached. Fiscal Year ends in June.

Source: 10K (For the quarterly period ended December 31, 2009)

2010 Outlook:

"We anticipate our total revenues in 2010 versus 2009 to increase by 101% or approximately $11.04 million with growth in all categories of our product sales. Our gross profit margin in 2010 is expected to be approximately 55.45% due to raw material cost inflation. Operating expenses will increase due to higher percentage of R&D investment as well as expanding our own distribution channels. We estimate our overall 2009 net profit margins to be approximately 22.64%.However, there is no assurance that these predictions will be reached."

Source: See SEC Filing (For the quarterly period ended September 30, 2009)

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