Green Star Reports Strong Second Quarter 2012 Financial Results and Appoints New Audit Committee Member and Chair

TORONTO, ONTARIO--(Marketwire - Aug. 28, 2012) - China Green Star Agricultural Corporation (TSX VENTURE:GRE) ("Green Star" or the "Company"), an advanced processor of agricultural products such as canned fruits and vegetables for distribution to international and domestic markets, today announced financial results for the three and six months period ended June 30, 2012.

Q2 2012 Key Financial Metrics

In thousands except share data and EPS	Q2 2012			Q2 2011			Change			YTD 2012			YTD 2011			Change
Key Operation Results
Total revenue	$	7,028		$	6,613		6.28	%		$	16,003		$	14,829		7.92	%
Gross profit	$	3,182		$	2,686		18.47	%		$	7,046		$	5,689		23.85	%
EBITDA[1]	$	3,010		$	2,451		22.81	%		$	6,582		$	5,154		27.71	%
Net profit before income tax	$	2,813		$	1,120		151.16	%		$	6,194		$	3,660		69.23	%
Profit for the period	$	2,066		$	523		295.03	%		$	4,575		$	2,426		88.58	%
EPS - basic	$	0.14		$	0.04		250.00	%		$	0.30		$	0.19		57.89	%
EPS - diluted2	$	0.07		$	0.02		250.00	%		$	0.15		$	0.08		87.50	%
		30-Jun-12			Dec. 31, 2011
Key Balance Sheet Highlights
Cash and cash equivalents	$	11,297		$	7,602		48.61	%
Total assets	$	40,532		$	36,761		10.26	%
Total Liabilities	$	5,070		$	6,491		-21.89	%
Shareholders' Equity	$	35,462		$	30,270		17.15	%

1 Earnings before interest, taxes, depreciation and amortization (EBITDA) is often used as a measure of financial performance. However, EBITDA is a not a term that has specific meaning in accordance with IFRS, and may be calculated differently by other companies. EBITDA excludes cost associated with the IPO.

2 Includes the effect of the 16,069,892 special warrants granted on completion of the Qualifying Transaction. Each special warrant is convertible into one common share for no additional consideration.

"Our second quarter of 2012 results, traditionally our slowest quarter, demonstrates the successful execution of our business plan to maximize our production capacity, for canned tomato paste and increase sales to the local Chinese market," said Guan Lianyun, Chairman and CEO of Green Star. "We are making progress towards eventually marketing and developing our own brand. With our significant cash balance of $11.3 Million, we remain on track and committed to investing in future expansion plans which include the acquisition of a raw tomato pulp producer to secure our own raw tomato pulp supply".

Q2 2012 Operational and Financial Highlights

• Revenue of $7.0 million, an increase of approximately 6.3% over $6.6 million in Q2 2011
• EBITDA of $3.0 million, up 22.8% from approximately $2.5 million in Q2 2011
• Profit of $2.1 million, up 295% from $523,000 in Q2 2011

Review of Financial Results

Green Star's principal sources of revenue are from the sale of canned food and fresh agricultural produce. The canned food division mainly consists of canned food processing which includes the manufacturing of canned tomato paste, canned boiled bamboo shoots, canned oranges, canned yellow peaches, canned grapes and various other types of fruit. The agricultural produce division consists of the cultivation and harvesting of agricultural produce such as fresh oranges and bamboo shoots for sale directly as fresh produce or through various distribution channels as processed and canned product.

Green Star reported its consolidated revenue of $7.0 million for Q2 2012, up approximately 6.3% from $6.6 million for Q2 2011. The revenue growth is the combined effect of the overall increase in selling prices for both canned products and the agricultural produce and slight decrease of sales quantity in canned products caused by the market demand fluctuation.

Revenue from the canned food division increased 4.8% in Q2 2012 compared to Q2 2011 while revenue from the agricultural produce division increased 12.4% in Q2 2012 versus Q2 2011.

The growth in the canned food division was primarily due to $225,000 increase in canned tomato paste sales, a $70,000 increase in canned bamboo shoots sale compared to Q2 2011. The average increase in the selling price of canned food was 2.9% compared to Q2 2011. Canned food sales volume declined by 5.1% as compared to Q2 2011.

The growth in the agricultural produce division was primarily due to a 7.5% average increase in the selling price of fresh orange and bamboo shoots offset by a 2.7% decrease in sales volume compared to Q2 2011, caused by the seasonality of the agricultural products.

The revenue mix for Q2 2012 was 79.5% canned foods and 20.5% agricultural produce compared to 80.6% canned foods and 19.4% agricultural produce for Q2 2011.

On a six month basis, the Company generated consolidated revenue of $16 million to June 30, 2012, up 7.9% from $14.8 million to June 30, 2011. The revenue growth on a six-month basis was mainly due to increased sales of canned tomato paste and canned bamboo shoots within the canned food division in 2012, as well as a higher selling prices.

The revenue mix for the six months ended June 30, 2012 was 80.1% canned foods and 19.9% agricultural produce compared to 80.4% and 19.6% respectively for the same period of 2011.

Gross profit increased to approximately $3.2 million in Q2 2012 from approximately $2.7 million in Q2 2011, an increase of 18.6%. Gross profit as a percentage of sales increased to 45.3% in Q2 2012, compared to 40.6% for Q2 2011, with improvements for both the agricultural produce division and the canned food division. The agricultural produce division's gross profit improved to 69% in Q2 2012 compared to 65% in Q2 2011 and was the result of a general increase in the selling price of agricultural produce. The canned food division's gross profit margin improved to 39.2% in Q2 2012 compared to 34.7% in Q2 2011, a reflection of the combined effects of higher selling price and improved efficiency.

For the six-month period ended June 30, 2012, gross profit increased to $7.0 million from approximately $5.7 million for the comparative period in 2011, an increase of 24%.

Green Star generated net profit of approximately $2.1 million in Q2 2012, up 295% from $523,000 in Q2 2011. The Company's basic and diluted earnings per share were $0.14 and $0.07, respectively, in Q2 2012 compared to $0.04 and 0.02 respectively in Q2 2011. On a year-to-date basis, Green Star generated profit of approximately $4.6 million for 2012 compared to profit of $2.4 million for 2011, which after the offset of approximately $1.2 million of IPO costs.

At June 30, 2012, Green Star held cash of approximately $11.3 million and working capital of approximately $25.7 million compared to $7.6 million and $20.4 million, respectively as at December 31, 2011. The increase in both cash and working capital was a result of improved operating results.

Appointment of Audit Committee Member and Chair

On August 24, 2012, Green Star's board of directors appointed Mr. Ye Huoyun as a member of the Audit Committee and Mr. G. Michael Newman as the chair of the Audit Committee. Mr. Ye has been an independent director of Green Star since May 2011. Mr. Ye is the business director of Fujian Xinhua Beer Company, based in Pucheng, Fujian, PRC. He helped Fujian Xinhua Beer Company to become one of the major beer producers in the region. Previously, Mr. Ye was manager of Fujian Pucheng Beer Factory. Mr. Ye has been in food industry over 20 years. Mr. Ye has extensive knowledge of Chinese domestic food market and sales channels.

Mr. Newman has been an independent director of Green Star and an Audit Committee member since May 2011. Mr. Newman has over 35 years of senior management and public company experience. Mr. Newman is the Managing Director of Boardwalk Capital Inc., and currently serves on the Board of Directors of Gensource Capital Inc., Augustine Ventures Inc., Leo Acquisition Corp., Red Ore Gold, Pueblo Potash and Caldera Geothermal Inc. and on the Advisory Board of the Succession Fund. Mr. Newman was previously CEO of InterRent Real Estate Investment Trust and President and CEO of InterRent International Properties Inc. Mr. Newman has been a director of a number of public companies in Canada and has been a member of audit committees for several, including acting as committee chair for one.

Outlook

"In spite of softening demand in China, we keep achieving strong financial results and look forward to continue building on that success in the current fiscal year," said Mr. Guan.

About Green Star

Green Star operates two main divisions, agricultural and food processing. The agricultural division is involved in the cultivation and harvesting of agricultural products such as fresh fruit and vegetables, for sale either directly as fresh fruit and vegetables or canned, and sold overseas and domestically. The food processing division is primarily involved in the manufacturing of canned food which includes canned tomato paste, canned boiled bamboo shoots, canned oranges, canned peaches and various other types of fruits and vegetables. Currently, all of the Corporation's canned tomato paste is exported to countries such as; Russia, Lebanon, Dubai, Philippines, Germany, Romania and several African countries. 30% of the canned tomato paste is exported directly to end customers, while the balance of 70% is exported to ultimate customers through exporting agents.

The Company has been operating for over 18 years, and has focused on maintaining product and reputational excellence and a high standard of food quality, through the application of science and technology in production, quality control and assurance, business operations and management. Key assets include a well established management team, modern production facilities, and a close partnership with local farmers.

China Green Star Agricultural Corp. is listed on the TSX Venture Exchange under the symbol "GRE".

For more information on the Company, please visit our web site at www.cgsac.com.

Caution Regarding Forward-Looking Information:

Certain statements in this press release may constitute "forward looking" statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. When used in this press release, such statements may use such words as "may", "will", "expect", "believe", "plan" and other similar terminology. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this press release. These forward looking statements involve a number of risks and uncertainties. Some of the factors that could cause actual results to differ materially from those expressed in or underlying such forward looking statements are the effects of, as well as changes in: international, national and local business and economic conditions; political or economic instability in the Company's markets; competition; legislation and governmental regulation; and accounting policies and practices. The foregoing list of factors is not exhaustive. Please see the Company's annual MD&A dated April 30, 2012, available on www.sedar.com, for a more detailed description of the risk factors. The Company undertakes no obligation to update publicly or revise any forward looking information, whether a result of new information, future results or otherwise, except as required by law.