SOURCE: Renhuang Pharmaceuticals Inc.

October 11, 2007 07:00 ET

Renhuang Pharmaceuticals Inc. Alerts Shareholders to Positive Independent Research Coverage by Market Harmonics Including Initial Buy Rating and 12 Month Price Target of 5 Dollars

MIAMI, FL--(Marketwire - October 11, 2007) - Renhuang Pharmaceuticals, Inc. (or "the Company") (OTCBB: RHGP), a leading integrated developer, manufacturer and distributor of a broad line of high-quality nutraceutical, natural medicinal and bio-pharmaceutical products in the People's Republic of China (PRC), is pleased to announce that is has received positive independent research coverage by Tony Carrion of Market Harmonics. Highlights from the report are presented below, and the full report can be accessed by clicking on the following link: http://www.thesubway.com/RHGP_Research_Summary-1.htm

"Market Harmonics is 'initiating coverage of Renhuang Pharmaceuticals with a preliminary rating of Buy, and a 12-month price target of $5.00. Taking into account the stronger seasonality, continued improved cost efficiencies and the ability to bring more production online, we think it not unreasonable for Renhuang to have a slightly stronger finish for FY 2007 as it begins to take advantage of stepped-up production going into the end of the fiscal year (October 31). We further believe it possible for the company to achieve twice FY 2007 revenues, as it will be able to double production output once the resources of the Qingyang Herbal Extracting Factory are fully put online.'"

"As such, we are estimating that gross profits for FY 2007 will be approximately $16.5 million, and that net income will be approximately $13.5 million, representing respective increases of 37% and 22% over the nine months ended October 31, 2006. For FY 2008, and since we are expecting a doubling in production levels, we are forecasting gross profits of $25.5 million, and net income of $19.3 million. If achieved, these would respectively represent increases of 65% and 70% over FY 2007. Note that per Reuters data, current gross margin projections for the biotechnology industry are 70%, and our projections are thus consistent with that outlook."

Details of the Company's financial data for the quarter ending July 31, 2007 are available in the Company's Quarterly Report 10Q dated and filed with the Securities and Exchange Commission on September 19, 2007.

About Renhuang Pharmaceuticals, Inc.:

Renhuang Pharmaceuticals, located in Harbin of Heilongjiang Province in Northeast China, is a leading integrated developer, manufacturer and distributor of a broad line of high-quality nutraceutical, natural medicinal and bio-pharmaceutical products. The Company provides three major product lines including the Acanthopanax-based natural medicinal products, Shark Power Health Care series and Traditional Chinese Medicines. Renhuang's key product line is Acanthopanax-based products, an effective natural medicine in treating depression and melancholy and offering various other health benefits. By controlling an estimated 70% of China's natural resource of Acanthopanax (also known as Siberian Ginseng), the Company has a dominant market position in Acanthopanax-based natural medicines. The Company distributes its products through a multi-layer sales network of over 2000 sales agents. Its products are not only sold nationwide but also exported to Russia and Southeast Asia.

Renhuang has established a multi-channel research and development infrastructure composed of in-house researchers, a post-doctoral working center, and collaboration with well known institutions and scientists. The Company has achieved a significant progress in research & development of standard extraction, separation of effective components, and medication with specificity. Several of these products have already been submitted for approval by the State Food and Drug Administration ("SFDA"). These products are expected to have a substantial upside growth potential due to their insufficient supply in China. In manufacturing, the Company strictly follows the international GMP certified quality standards and system by utilizing cutting-edge technologies, the state of the art equipment, and the proprietary innovative and award winning processes. RHGP-G

Safe Harbor Statement

This press release contains certain statements that may include 'forward-looking statements' as defined in the Securities Act of 1933, and the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included herein are 'forward-looking statements.' Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release.

The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with and available from the Securities and Exchange Commission. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

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