Pingchuan Signs Purchase Agreement With Guangdong Medicine Group HARBIN, China, July 11 /Xinhua-PRNewswire-FirstCall/ -- Harbin Pingchuan Pharmaceutical Holding Co. Ltd. (OTC:PGCN) (BULLETIN BOARD: PGCN) ('PINGCHUAN') announced today that PINGCHUAN signed a Purchase Agreement with the Guangdong Medicine Group Co. Ltd. ('GDMG'). Under the terms of the agreement, PINGCHUAN will authorize GDMG as its franchisee in five southern provinces of China. With respect to the authorization, GDMG intends to purchase approximately US$2.00million worth of PINGCHUAN's pharmaceutical products in 2005. By cooperating with GDMG, PINGCHUAN will greatly enhance the marketing network and sales channels in Southern China. 'We are delighted to reach this agreement with the leading medical enterprise in Southern China. This purchase agreement not only increases our sales revenue in these five provinces, but also substantially improves our brand awareness in Southern China. While maintaining the existing marketing network, we are developing and setting up new marketing network and sales channel actively.' Said Hu ZhanWu, Chairman and President of Pingchuan Pharmaceutical Co. Ltd., 'One of our marketing strategies is to establish a connection with medical enterprises such as Guangdong Medicine Group, for the promotion of our products into their commercial networks throughout the entire country.' About Pingchuan Pharmaceutical Inc. Pingchuan Pharmaceutical Inc. ('PINGCHUAN') is a modernized pharmaceutical manufacturer with first-class medical R&D abilities, pioneered medicine products, and well-established marketing networks. Since its establishment, PINGCHUAN has focused its businesses on diabetes medicine and its medical products. The products of PINGCHUAN include health care products, varieties of medicine, as well as medical apparatus. Kang Da Glycosuria Capsule is a successful product of PINGCHUAN for treating diabetes, which was first developed in 1998 and introduced to the market in 2001. PINGCHUAN has a well-established marketing network and sale branches, which include about 180,000 retail pharmacies/drugstores across China, agency networks in major cities like Beijing, Shanghai, Guangzhou, and Xi'an, special counter sales at drug chain stores in key regions, residential community clinic sales and promotions, as well as internet marketing through the company's website. The marketing network of PINGCHUAN covers more than 50% of China and exports to the U.S., Japan, Russia, and South-east Asia. About Guangdong Medicine Group Co. Ltd. Guangdong Medicine Group Co. Ltd. (GDMG) is a large-scale state-owned pharmaceutical enterprise headquartered in Guangzhou. It owns a nationwide marketing network, which includes the operative places and outlet stores of 130,000 square meters and 330 Bencao Medicine Chain Stores. GDMG also runs three pharmaceutical enterprises, and controls 20 associate enterprises. According to the latest statistics, the sales revenue for the first two months in 2005 of GDMG ranked No.1 in China. The company successfully caught up with and, surpassed the performance of its main rivals such as Harbin Pharmaceutical Group, North China Pharmaceutical Group and Yangtze River Pharmaceutical Group. Safe Harbor Information in this news release or on this website may contain statements about future expectations, plans, prospects or performance of Harbin Pingchuan Pharmaceutical Holding Co. Ltd. that constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. The words or phrases "can be,' "expects,' "may affect,' "believed,' "estimate,' "project,' and similar words and phrases are intended to identify such forward-looking statements. Harbin Pingchuan Pharmaceutical Holding Co. Ltd. cautions you that any forward- looking information provided by or on behalf of Harbin Pingchuan Pharmaceutical Holding Co. Ltd. is not a guarantee of future performance. None of the information on this website constitutes an offer to sell securities or investment advice of any kind, and visitors should not base their investment decisions on information contained in this website. Harbin Pingchuan Pharmaceutical Holding Co. Ltd.'s actual results may differ materially from those anticipated in such forward-looking statements as a result of various important factors, some of which are beyond Harbin Pingchuan Pharmaceutical Holding Co. Ltd.'s control. In addition to those discussed in Harbin Pingchuan Pharmaceutical Holding Co. Ltd.'s press releases, public filings, and statements by Harbin Pingchuan Pharmaceutical Holding Co. Ltd.'s management, including, but not limited to, Harbin Pingchuan Pharmaceutical Holding Co. Ltd.'s estimate of the sufficiency of its existing capital resources, Harbin Pingchuan Pharmaceutical Holding Co. Ltd.'s ability to raise additional capital to fund future operations, Harbin Pingchuan Pharmaceutical Holding Co. Ltd.'s ability to repay its existing indebtedness, the uncertainties involved in estimating market opportunities and, in identifying contracts which match Harbin Pingchuan Pharmaceutical Holding Co. Ltd.'s capability to be awarded contracts. All such forward-looking statements are current only as of the date on which such statements were made. Harbin Pingchuan Pharmaceutical Holding Co. Ltd. does not undertake any obligation to publicly update any forward-looking statement to reflect events or circumstances after the date on which any such statement is made or to reflect the occurrence of unanticipated events. DATASOURCE: Pingchuan Pharmaceutical Inc. CONTACT: Xiao Yi of Pingchuan Pharmaceutical Inc., +86-10-6347-0270 x101, or

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