/C O R R E C T I O N -- China-Biotics, Inc./

In the news release, "China-Biotics, Inc. Reports Fourth Quarter and Full
Year Fiscal 2008 Financial Results", issued by China-Biotics, Inc. (OTC
Bulletin Board: CHBT) over Xinhua PR Newswire on July 10, we are advised by
the Company that in the last bullet point under "Fourth Quarter 2008
Highlights" and in the last paragraph before the section heading "Fiscal Year
2008 Results" the diluted earnings per share figure should read "$0.24" rather
than "$0.26" as originally issued inadvertently. The Company also advises us
that the first financial statement titled "CHINA-BIOTICS, INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS" has also been updated.
The revised financial statement should read:

CHINA-BIOTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts expressed in US Dollars)

Three months ended March 31, Years ended March 31,
2008 2007 2008 2007
(unaudited) (unaudited)
Net sales 12,689,489 $8,376,788 $42,321,111 $30,609,941
Cost of sales (4,270,441) (2,390,986) (12,310,092) (8,910,633)
Gross profit 8,419,048 5,985,802 30,011,019 21,699,308

Operating expenses:
Selling expenses (1,873,372) (1,236,525) (6,869,109) (4,502,687)
General and
administrative expenses (1,670,930) (890,476) (4,826,473) (2,265,220)
Total operating expenses (3,544,302) (2,127,001) (11,695,582) (6,767,907)

Income from operations 4,874,746 3,858,801 18,315,437 14,931,401

Other income and
expenses:
Other income 3,973,432 81,159 4,163,438 223,401
Other expenses 404,147 26,528 -- (62,948)
Total other income
(expenses) 4,377,580 107,688 4,163,438 160,453

Income before taxes 9,252,326 $3,966,489 22,478,875 15,091,854

Provision for income
taxes (1,264,197) (1,120,756) (4,936,631) (4,186,868)
Net income 7,988,129 $2,845,733 17,542,244 $10,904,986

Earnings per share:
Basic $0.47 $0.17 $1.03 $0.64
Diluted $0.24 $0.17 $0.80 $0.64
Weighted average shares
outstanding:
Basic 17,080,000 17,080,000 17,080,000 17,080,000
Diluted 19,163,333 17,080,000 17,719,269 17,080,000

Full, correct version follows:

China-Biotics, Inc. Reports Fourth Quarter and
Full Year Fiscal 2008 Financial Results

Full year revenues increased 38% to $42.3 million

Full year non-GAAP net income rose 30% to $14.2 million

SHANGHAI, China, July 10 /Xinhua-PRNewswire-FirstCall/ -- China-Biotics,
Inc. (OTC Bulletin Board: CHBT) ("China-Biotics", "the Company"), a leading
Chinese firm specializing in the manufacture, research, development, marketing
and distribution of probiotics products, today announced its financial results
for the fourth quarter and fiscal year ended March 31, 2008.
Fourth Quarter 2008 Highlights

-- Net sales increased 51.5% year-over-year to $12.7 million

-- Gross profit increased 40.7% year-over-year to $8.4 million

-- Operating income increased 26.3% year-over-year to $4.9 million

-- Net income increased 180.7% year-over-year to $8.0 million

-- Excluding a $3.4 million gain related to the change in fair value of
convertible notes, net income increased 62.4% year-over-year to $4.6
million

-- Basic earnings per share increased to $0.47 from $0.17 a year ago

-- Diluted earnings per share increased to $0.24 from $0.17 a year ago

Fiscal Year 2008 Highlights

-- Net sales increased 38.3% to $42.3 million

-- Gross profit rose 38.3% to $30.0 million

-- Gross margin was 70.9%

-- Operating income increased 22.7% to $18.3 million

-- Net income increased 60.9% to $17.5 million

-- Excluding a $3.4 million gain related to the change in fair value of
convertible notes, net income increased 30.0% to $14.2 million

-- Basic earnings per share increased to $1.03 from $0.64 the prior year

-- Diluted earnings per share increased to $0.80 from $0.64 the prior year

-- Received government approval and began construction of a 150-metric-
ton-per-year bulk additives manufacturing facility

-- Completed $25 million financing

-- Opened 51 new Shining-branded retail outlets, bringing the total number
of stores to 60 in Shanghai and five other cities in China

-- Joined International Probiotics Association

-- Launched new products such as Shining Probiotics Protein Powder

-- Signed contracts to supply probiotics to dairy and food manufacturers
as additives

-- Launched new corporate and investor relations Web site

Fourth Quarter 2008 Results
During the fourth quarter of the 2008 fiscal year, net sales increased
51.5% to $12.7 million from $8.4 million a year ago. The increase primarily
resulted from significant growth in the sales of new products, most of which
were sold in the Company's Shining-branded retail outlets. The sales of new
products accounted for 19% of total sales in the fourth quarter of 2008,
compared to 3% in the same quarter the prior year.
"We concluded the 2008 fiscal year with a strong finish, continuing to
achieve high growth in revenues and net income, as our combined strategy of
company-owned retail stores and traditional sales through distributors was a
great success," said Mr. Jinan Song, Chairman and Chief Executive Officer of
China-Biotics. "We look forward to another promising fiscal year in 2009, as
we remain on schedule to complete construction and begin production at our new
bulk additives facility in the latter part of the 2008 calendar year. By then,
we expect to become the dominant supplier of naturally occurring probiotic
bacteria in China."
Gross profit for the quarter increased 40.7% to $8.4 million from $6.0
million a year ago. Gross margin was 66.4% in the fourth quarter, compared to
71.5% in the same period of fiscal 2007, as a 30% increase in pulp and paper
costs resulted in greater packaging costs. The Company is working with
suppliers of its packaging materials to bring down such costs in the future.
Operating expenses were $3.5 million, compared to $2.1 million in the
fourth quarter of fiscal 2007. The increase was primarily due to setup and
operations costs for new retail stores and increased salary expense stemming
from new hires to support the Company's expansion.
Operating income increased 26.3% to $4.9 million from $3.9 million the
prior year, while operating margin declined to 38.4% from 46.1% a year ago.
Other income was $4.4 million, up from other expense of $0.3 million a
year ago. The increase largely resulted from a $3.4 million book gain recorded
in the fourth quarter of 2008 related to the change in the fair value of the
Company's convertible bonds.
Net income for the fourth quarter of the 2008 fiscal year was $8.0
million.
Excluding the book gain associated with the revaluation of the convertible
bonds, net income was $4.6 million, up 62.4% from $2.8 million a year ago.
Diluted earnings per share were $0.24 calculated on a weighted average
basis, compared with $0.17 per diluted share in the fourth quarter of fiscal
2007. The calculation of diluted earnings per share for the fourth quarter of
2008 assumes full conversion of the convertible bonds and thus excludes the
gain from the change in fair value of the bonds.
Fiscal Year 2008 Results
For the 2008 fiscal year, net sales were $42.3 million, up 38.3% from
$30.6 million in fiscal 2007. The sales increase was attributed to increased
sales volume and increases in average selling prices because of a change in
the sales mix. Shining Essence, the Company's best-selling product, accounted
for 48.6% of sales during the year, compared with 61.6% during the prior year.
Newly launched products, including Shining Essence Stomach Protection
Capsules,
Shining Probiotics Protein Powder and other products, accounted for 13.6% of
total sales during the year ended March 31, 2008, compared to 1.9% during the
prior year. The Company's Shining-branded retail stores helped to promote new
products by precisely targeting existing regular customers who had benefited
from taking probiotics products.
Gross profit during the year was $30.0 million, an increase of 38.3% from
$21.7 million the prior year. Gross margin was 70.9% in fiscal 2008, unchanged
from fiscal 2007. The Company continues to expect gross margin of around 70%
during the 2009 fiscal year.
Operating expenses were $11.7 million in fiscal 2008, compared to $6.8
million a year ago. The increase primarily resulted from the rapid expansion
of the Shining retail network and additional administrative and research
expenses, including costs associated with new product development and
construction of the new bulk additives facility.
Full-year operating income increased 22.7% to $18.3 million from $14.9
million in fiscal 2007. Operating margin was 43.3% in fiscal 2008, compared to
48.8% the prior year.
Other income was $4.2 million, up from $0.2 million in fiscal 2007. The
increase largely resulted from a $3.4 million book gain recorded in the fourth
quarter of 2008 related to the change in the fair value of the Company's
convertible notes.
Net income for the 2008 fiscal year was $17.5 million. Excluding the book
gain associated with the change in the fair value of convertible notes, net
income was $14.2 million, an increase of 30.0% from a year ago.
Diluted earnings per share were $0.80 calculated on a weighted average
basis, compared with $0.64 per diluted share during the 2007 fiscal year. The
calculation of diluted earnings per share for 2008 assumes full conversion of
the convertible bonds and thus excludes the gain from the change in fair value
of the bonds.
Financial Condition
As of March 31, 2008, the Company had cash and cash equivalents of $64.3
million and working capital of $53.1 million. The increase in cash resulted in
part from the private placement of $25 million of the Company's convertible
notes in December 2007. In fiscal 2008, China-Biotics generated $19.4 million
in cash flow from operations and recorded $10.3 million in capital
expenditures for the purchase of fixed assets. Accounts receivable were $13.2
million, and days' sales outstanding improved to 119 for the year from 151 in
2007. At March 31, 2008, the Company had stockholders' equity of $44.4
million.
Business Outlook
The Company's new bulk additives production facility is scheduled to
commence production in the fourth quarter of the 2008 calendar year. As of
June 30, 2008, China-Biotics had signed contracts with four business customers
to supply those customers with bulk probiotics in powder form that can be
added to products such as milk, ice cream, yogurt, baked breads and
nutritional supplements.
"With the expansion of our retail sales and bulk additives businesses, we
continue to expect significant new business opportunities during the 2009
fiscal year," Mr. Song said. "Same-store sales for Shining retail stores that
have been in operation at least one year are expected to grow significantly
year-over-year, and we hope to increase the number of Shining retail outlets
to 300 by the end of March 2009.
"We are pleased to have initiated relationships with China's leading food
and supplement manufacturers, which will provide us with sufficient bulk
additives prospects prior to the commencement of production at our new
manufacturing plant," Mr. Song continued. "Leveraging our technical
competence,
cost efficiencies and widely recognized Shining brand, we look forward to
becoming China's dominant domestic supplier of probiotics and related products
in coming years."
"With three board committees established in May 2008, we have improved our
corporate governance and oversight in order to meet requirements to be listed
on the Nasdaq Stock Market during the new fiscal year."
Recent Events
In April 2008, China-Biotics completed the foundation work for its new,
150-metric-ton-per-year bulk additives plant at Qing Pu, Shanghai and placed
orders for all of the plant's major equipment. Management expects to complete
construction of the factory's infrastructure by the end of the third quarter
of the 2009 fiscal year
In May 2008, the Company signed a one-year contract with a subsidiary of
Holiland Enterprise Investment Management Co., Ltd. ("Holiland") to supply
probiotics for Holiland's bakery products. Holiland is China-Biotics' third
bulk additive customer, following previously announced agreements with Bright
Dairy & Food Co., Ltd. and Shanghai Relax Xinqiao Food Co., Ltd.
On May 28, 2008, the Company's Board of Directors established three Board
committees: the Audit Committee, the Nominating Committee and the Compensation
Committee. Dr. Ji Wei Chin, Dr. Wen Min Du and Mr. Simon Yick were appointed
as the initial members of the Audit Committee. Mr. Song Jinan, Dr. Chin and
Dr.
Du were appointed as the initial members of the Nominating Committee. Dr.
Chin,
Dr. Du and Mr. Yick were appointed as the initial members of the Compensation
Committee. The chairmen of the Audit, Nominating and Compensation Committees
are Mr. Yick, Mr. Song and Dr. Du, respectively.
In June 2008, China-Biotics announced a supply contract with Jiangxi Lijia
Pharmaceutical Co., Ltd., the Company's fourth bulk additives customer. Lijia
will use a combination of two Shining Probiotics, Bifidobacterium adolescentis
and Bifidobacterium infantis, as additives in its newly developed dietary
supplement powders and tablets. These probiotics will help to reduce the
symptoms of lactose intolerance, to improve gastrointestinal tract health and
to boost immune system health. The agreement runs through May 2009.
Conference Call
The company will host a conference call at 9:00 a.m. EDT on, Friday, July
11, 2008, to discuss its financial results for the fourth quarter and fiscal
year ended March 31, 2008. To participate in the event by telephone, please
dial (888) 241-0558 five to 10 minutes prior to the start time (to allow time
for registration) and reference passcode 52029883. International callers
should dial 647-427-3417. The conference call will be broadcast live over the
Internet and can be accessed by all interested parties at the Company's Web
site, http://www.chn-biotics.com . To listen to the call, please visit the
site at least 15 minutes prior to the start of the call to register, download,
and install any necessary audio software. For those unable to participate
during the live webcast, it will be archived using the same link for 90 days.
A digital replay of the call will also be available on Friday, July 11, at
approximately 11:00 a.m. EDT through Friday, July 18, at midnight EDT. Dial
(800) 695-3382 and enter the conference ID number 52029883. International
callers should dial (402) 220-1756 and enter the same conference ID number.
Use of Non-GAAP Financial Information
GAAP results for the fourth quarter and fiscal year ended March 31, 2008,
include a non-cash gain related to change in fair value of the Company's
convertible notes. To supplement the Company's condensed consolidated
financial statements presented on a GAAP basis, the Company has provided non-
GAAP financial information excluding the impact of these items in this
release,
which are non-GAAP net income. The Company's management believes that these
non-GAAP measures provide investors with a better understanding of how the
results relate to the Company's historical performance. A reconciliation of
adjustments to GAAP results appears in the tables accompanying this press
release. This additional non-GAAP information is not meant to be considered in
isolation or as a substitute for GAAP financials. The non-GAAP financial
information that the Company provides also may differ from the non-GAAP
information provided by other companies.
About China-Biotics, Inc.
China-Biotics, Inc. ("China-Biotics," "the Company"), a leading
manufacturer of biotechnology products and supplements, engages in the
research, development, marketing and distribution of probiotics dietary
supplements. Through its wholly owned subsidiary, Shanghai Shining
Biotechnology Co., Ltd., the Company has operations in Shanghai. Its
proprietary product portfolio contains live microbial nutritional supplements
under the "Shining" brand. Currently, the products are sold OTC through large
distributors to pharmacies and supermarkets in Shanghai, Jiangsu, and
Zhejiang.
China-Biotics plans to launch 300 Shining brand stores in major cities in
China. Currently, China-Biotics is strategically expanding its production
capacity of probiotics to meet growing demand in the bulk additive market.
For more information, please visit http://www.chn-biotics.com .
Safe Harbor Statement Under the Private Securities Litigation Reform Act
of 1995: Any statements set forth above that are not historical facts are
forward-looking statements that involve risks and uncertainties that could
cause actual results to differ materially from those in the forward-looking
statements. Such factors include, but are not limited to, the Company's
ability to market existing and new products, ability to access capital for
expansion, and changes from anticipated levels of sales, future national or
regional economic and competitive conditions, market acceptance of its retail
store concept, changes in relationships with customers, dependence on its
flagship product profits and other factors detailed from time to time in the
Company's filings with the United States Securities and Exchange Commission
and other regulatory authorities. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise.

CHINA-BIOTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts expressed in US Dollars)

Three months ended March 31, Years ended March 31,
2008 2007 2008 2007
(unaudited) (unaudited)
Net sales 12,689,489 $8,376,788 $42,321,111 $30,609,941
Cost of sales (4,270,441) (2,390,986) (12,310,092) (8,910,633)
Gross profit 8,419,048 5,985,802 30,011,019 21,699,308

Operating expenses:
Selling expenses (1,873,372) (1,236,525) (6,869,109) (4,502,687)
General and
administrative expenses (1,670,930) (890,476) (4,826,473) (2,265,220)
Total operating expenses (3,544,302) (2,127,001) (11,695,582) (6,767,907)

Income from operations 4,874,746 3,858,801 18,315,437 14,931,401

Other income and
expenses:
Other income 3,973,432 81,159 4,163,438 223,401
Other expenses 404,147 26,528 -- (62,948)
Total other income
(expenses) 4,377,580 107,688 4,163,438 160,453

Income before taxes 9,252,326 $3,966,489 22,478,875 15,091,854

Provision for income
taxes (1,264,197) (1,120,756) (4,936,631) (4,186,868)
Net income 7,988,129 $2,845,733 17,542,244 $10,904,986

Earnings per share:
Basic $0.47 $0.17 $1.03 $0.64
Diluted $0.24 $0.17 $0.80 $0.64
Weighted average shares
outstanding:
Basic 17,080,000 17,080,000 17,080,000 17,080,000
Diluted 19,163,333 17,080,000 17,719,269 17,080,000

CHINA-BIOTICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Audited, amounts expressed in US Dollars)
AS OF MARCH 31, 2008 AND 2007

ASSETS
Current assets 2008 2007

Cash and cash equivalents $ 64,310,448 $ 26,992,025
Accounts receivable 13,214,531 14,309,818
Other receivables 238,835 216,236
Inventories 408,358 203,054
Prepayment 1,806,605 176,094
Total current assets 79,978,777 41,897,227
Property, plant and equipment and
land use right 13,812,749 2,682,617
Total assets 93,791,526 44,579,844

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable 2,786,180 1,523,471
Tax payables 22,317,982 18,019,721
Other payables and accruals 1,792,156 1,126,645
Total current liabilities $ 26,896,318 $ 20,669,837
Non-current liabilities
Convertible Note, net of discount of
$8,554,365 as of March 31, 2008 16,445,635 --
Embedded derivatives 5,752,000 --
Interest payable 302,306 --
Total non-current liabilities $ 22,499,941 $ --

Commitments and contingencies
Stockholders' equity:
Common stock 1,708 1,708
Additional paid-in capital 7,863,031 7,863,031
Retained earnings 29,827,144 12,284,900
Accumulated other comprehensive
income 3,677,590 734,574
Capital and statutory reserves 3,025,794 3,025,794
Total stockholders' equity 44,395,267 23,910,007
Total liabilities and stockholders'
equity $ 93,791,526 $ 44,579,844

CHINA-BIOTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(Audited, amounts expressed in US Dollars)
FOR THE YEARS ENDED MARCH 31, 2008 AND 2007

CASH FLOWS FROM OPERATING ACTIVITIES 2008 2007

Net income 17,542,244 $10,904,986
Adjustment for:
Gain on disposal of plant and
equipment -- (14,793)
Depreciation 999,148 493,472
Change in fair value of convertible
notes (3,366,000) --
(Increase)/Decrease in restricted
cash -- 748,742
(Increase)/Decrease in accounts
receivable 2,261,918 (2,881,034)
(Increase)/Decrease in inventories (154,189) 65,303
(Increase)/Decrease in prepayment (1,418,658) (352,923)
(Increase)/Decrease in other
receivables 2,732
Increase/(Decrease) in accounts
payable 1,036,521 (451,305)
Increase in income tax and surcharge
tax payable 5,008,143 4,186,868
Income tax paid (2,969,765) (2,373,846)
Increase/(Decrease) in other payables
and accruals, and value added tax
payable 422,113 (321,043)
NET CASH PROVIDED BY OPERATING
ACTIVITIES 19,361,475 10,007,159

CASH FLOWS USED IN INVESTING
ACTIVITIES
Sales proceeds from disposal of plant
and equipment -- 14,793
Purchase of fixed assets and payments
for leasehold improvements (10,302,291) (1,485,789)
NET CASH USED IN INVESTING ACTIVITIES (10,302,291) (1,470,996)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of convertible
bond 25,000,000 --
Repayment on loan from shareholders -- (2,280,687)
NET CASH PROVIDED BY/(USED IN)
FINANCING ACTIVITIES 25,000,000 (2,280,687)

Effect of exchange rate changes on
cash 3,259,239 895,737
NET INCREASE IN CASH AND CASH
EQUIVALENTS BALANCES 37,318,423 7,151,213
CASH AND CASH EQUIVALENTS BALANCES AT
BEGINNING OF PERIOD 26,992,025 19,840,812
CASH AND CASH EQUIVALENTS BALANCES AT
END OF PERIOD 64,310,448 26,992,025

CHINA-BIOTICS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL DATA

Non-GAAP Net income Q4 2008 Q4 2007
Net Income (Loss) and Diluted EPS Net Income Net Income

Adjusted Amount 4,622,129 $2,845,734
Adjustments
Non-cash gains from change in
fair value of convertible bonds $3,366,000 --
Amount per consolidated statement of
operations $7,988,129 $2,845,734

Non-GAAP Net income FY 2008 FY 2007

Net Income (Loss) and Diluted EPS Net Income Net Income
Adjusted Amount $14,176,244 $10,904,986
Adjustments
Non-cash gains from change in
fair value of convertible bonds $3,366,000 --
Amount per consolidated statement of
operations $17,542,244 $10,904,986

For more information, please contact:

CCG Investor Relations
Crocker Coulson, President
Phone: +1-646-213-1915 (New York)
Email: crocker.coulson@ccgir.com

SOURCE China-Biotics, Inc.

Crocker Coulson, President of CCG Elite Investor Relations, +1-646-213-1915
(New York), or crocker.coulson@ccgir.com