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Winner Medical Reports 4Q Results

January 1, 2010

Shenzhen, China-based Winner Medical Group Inc.’s fourth quarter sales were $27.7 million, an increase of 9.7% from the fourth quarter last year. Net income rose 84.4% over the fourth quarter 2008 to $3 million. Gross profit reached $8.4 million, an increase of 24.9% from the $6.7 million in the corresponding period of 2008.

In the fourth quarter of 2009, the company’s PurCotton sales grew 91.3% to $2.3 million compared with the same period last year. PurCotton jumbo rolls were sold to customers in China, the U.S., Europe and Japan, where they were made into consumer products, including sanitary and incontinence products. The company is also processing orders of PurCotton finished medical products, such as operating room towels and sponges, for customers in North America and Europe. Winner Medical’s sales of PurCotton during fiscal 2009 tallied $5.5 million, compared to $1.4 million in fiscal 2008.

For the fiscal year ended September 30, 2009, Winner Medical’s sales rose 15.1% to $98.4 million, from $85.5 million in 2008. This increase was mainly attributed to increased volume of large sales orders from North and South American and Chinese customers as well as increased sales of PurCotton products. Gross profit increased by 30.5% to $27.9 million for the fiscal year ended September 30, 2009, from $21.4 million in fiscal 2008. Gross margins were 28.4%, an increase of 330 basis points from 25.1% in the same period of fiscal 2008. The gross margin increase was mainly due to improved production management and unit product cost decreases.

Jianquan Li, chairman and CEO of Winner Medical, commented, “We were pleased with our results despite a challenging global environment, as we were able to grow our business and enhance our production efficiencies while implementing stringent cost controls, thus enabling us to improve our margins and profitability. We were able to meet our revenue goals through strong organic growth in the Chinese market and the successful launch of PurCotton, as well as maintaining market share for our traditional export products.”