SOURCE: China Modern October 05, 2011 09:36 ET

China Modern Reports 2011 Fiscal Year End EPS of $0.23

HARBIN, CHINA--(Marketwire - Oct 5, 2011) - China Modern Agricultural Information Inc. ("the Company") (OTCQB: CMCI) (PINKSHEETS: CMCI), a high-tech livestock company specializing in the breeding of cows and calves, the production and sale of milk and the sale of organic fertilizer, today announced net income for the 2011 fiscal year end totaled $9 million, or earnings per share of $0.23. Financial Highlights for the Fiscal Year Ended June 30, 2011 Revenue increased 74.3% year-over-year to $25 million from $14.4 million Gross profit increased 96.5% to $13.1 million; gross margin improved to 52.3% from 46.4%; Net income increased 96.9% to $9 million versus $4.6 million in 2010; Earnings per share of $0.23 based on 38 million shares outstanding; Cash and cash equivalents totaled $5.5 million or $0.15 per share; Working capital increased year-over-year 132.2% to $8.2 million. Operational Highlights for the Fiscal Year Ended June 30, 2011 Signed Letter of Intent to acquire Shangzhi Yulong Cattle Co., which has annual production capacity of 30,000 tons of fresh milk and is expected to add approximately $4.5 million in net income in 2012. Received several raw milk orders including 3,500 tons from Qiqihar Heshan Dairy Co. , 4,000 ton raw milk order from Heilongjiang Nongkendelong Dairy Co., 4,300 ton raw milk order from LongXing Dairy Co., and 4,700 ton raw milk order from Suihua Dongxing Dairy. Total tons of raw fresh milk sold increased 58% to 82,785 for the 2011 fiscal year as compared to 52,383 for the 2010 fiscal year. Mr. Youliang Wang, Chief Executive Officer of China Modern Agricultural Information, commented, "China Modern has been engaged in the breeding of livestock and in the production and sale of fresh milk since January 2005. Today we have approximately 9,200 adult cows and for the fiscal 2011 year we sold approximately 82,785 tons of fresh milk, an increase of 58% year over year. This growth including the price appreciation of raw milk has yielded an increase in revenue and net income of 74% and 97% to $25 million and $9 million respectively. Recently we signed a letter of intent to acquire Shangzhi Yunlong which would increase our production capacity by 30,000 tons and add approximately $4.5 million in net income in 2012. We will continue to aggressively seek other opportunities to fuel the growth of our business." Mr. Wang, continued, "In June 2011 the management team of China Modern adjusted our business model to increase the Company's profitability. We now sell our cows directly to farmers under a five year lease to own program. The two distinct advantages are that the asset is now moved off our balance sheet which enables the company to make additional return on the sale of the livestock, and farmers are further incentivized to produce more milk because they now have ownership of the cow. The new model has already increased profit margins and allowed us to focus more on the distribution of our raw milk product. Management will now be able to focus additional time and resources on building our customer base and cultivating industry relationships." Financial Results for the Fiscal Year Ended June 30, 2011 Revenue for the fiscal year ended June 30, 2011 totaled $25 million, an increase of 74.3% as compared to $14.4 million for the same period in 2010. Revenue is generated predominately from the sale of natural milk and natural milk sales commissions from farmers. Revenue increased year-over-year due to an increase in the number of adult cows cared for and the increase in sales price of milk per kg. Since November 2010 the price of milk has increased from $0.30 per kg to $0.35 per kg as of May 2011, an increase of 16.7%. Total tons of raw fresh milk sold increased 58% to 82,785 for the 2011 fiscal year as compared to 52,383 for the 2010 fiscal year. Cost of sales for the fiscal year ended June 30, 2011 totaled $11.9 million, or 47.7% of revenue, an increase of 55.1% compared to $7.7 million, or 53.6% of revenue, for the fiscal year ended June 30, 2010. Cost of goods sold consists of feed, feeding expenses, and other working capital. The increase in cost of sales was a direct result of the increase in number of adult cows cared for. Gross profit for the fiscal year ended June 30, 2011 totaled $13.1 million, an increase of 96.5% compared to $6.7 million for the fiscal year ended June 30, 2010. Gross profit margin improved to 52.3% for the 2011 fiscal year as compared to 46.4% for the 2010 fiscal year. Management expects under the new business model for gross profit margins to increase due to the reduction in costs associated with maintaining the livestock. Additionally, management expects the price of raw milk to continue rising over the next one to three years. Operating expenses for the fiscal year ended June 30, 2011 totaled $1.4 million as compared to $602,000 for the fiscal year ended June 30, 2010. Operating expenses increased due to the costs and services associated with going public in January 2011 including fees for advisors, legal, audit and filings. Net income for the 2011 fiscal year ended June 30, 2011 totaled $9 million, an increase of 96.9% compared to $4.6 million for the 2010 fiscal year ended June 30, 2010. Earnings per share for fiscal 2011 were $0.23, based on 38 million shares outstanding versus earnings per share of $0.13 for fiscal 2010, based on 36 million shares outstanding. Liquidity and Capital Resources As of June 30, 2011, China Modern had approximately $5.5 million in cash and cash equivalents or $0.15 per share. As of June 30, 2011, total current assets and total assets were approximately $8.6 million and $30.5 million, respectively. During the same period, total current liabilities and total liabilities were approximately $354,000 and $7.4 million, respectively. Working capital increased year-over-year by $4.7 million to $8.2 million as of June 30, 2011, as compared to $3.5 million as of June 30, 2010. Shareholder's equity increased 80.5% to $23.1 million as of June 30, 2011, compared to $12.8 million as of June 30, 2010. Cautionary Statement Regarding Forward Looking Information Certain statements in this release concerning our future growth prospects are forward-looking statements, within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding the success of our investments, risks and uncertainties regarding fluctuations in earnings, our ability to sustain our previous levels of profitability including on account of our ability to manage growth, intense competition, wage increases in China, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, our ability to successfully complete and integrate potential acquisitions, withdrawal of governmental fiscal incentives, political instability and regional conflicts and legal restrictions on raising capital or acquiring companies outside China. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our 8K/A dated March 31, 2011, and other recent filings. These filings are available athttp://www.sec.gov/.

CONSOLIDATED BALANCE SHEETS JUNE 30, 2011 AND 2010 ASSETS Current assets Cash Accounts receivable Inventories Prepaid expenses Notes receivable, current portion Total current assets Property, plant and equipment Less: accumulated depreciation Total property, plant and equipment, net Other assets Notes receivable Loan receivable Biological assets, net Total other assets TOTAL ASSETS LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable Accrued expenses and other payables Stockholder loans Total current liabilities Deferred income taxes Total liabilities Stockholders' equity Common stock, $0.001 par value; 75,000,000 shares authorized; 41,100,000 shares and 35,998,000 shares issued and outstanding at June 30, 2011 and 2010, respectively Additional paid-in capital Retained earnings Statutory reserve fund Other comprehensive income Sub-total Noncontrolling interests Total stockholders' equity TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

2011 $ 5,525,180 2,506,548 90,017 238,238 210,674 8,570,657 1,884,944 (430,096 1,454,848 1,127,707 2,165,800 17,204,616 20,498,123 30,523,628 2011 123,876 230,356 354,232 7,080,292 7,434,524 $

2010 2,959,661 1,358,448 112,220 618,660 5,048,989 1,769,295 (308,261 1,461,034 11,733,205 11,733,205 18,243,228 2010 2,235 165,476 1,344,129 1,511,840 3,939,662 5,451,502

41,100 1,603,170 19,477,303 190,011 1,498,692 22,810,276 278,828 23,089,104 30,523,628

35,998 1,170,802 10,624,119 190,011 606,341 12,627,271 164,455 12,791,726 18,243,228

CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME FOR THE YEARS ENDED JUNE 30, 2011 AND 2010 Revenues Cost of goods sold Gross profit Operating expenses Selling and marketing General and administrative Total operating expenses Operating income Other income and (expenses) Non-operating income Non-operating expenses Total other income Income before income taxes Provision for income taxes Net income before noncontrolling interests Noncontrolling interests Net income attributable to controlling interests Other comprehensive income Foreign currency translation adjustment Total comprehensive income Earnings per common share, basic and diluted Weighted average shares outstanding, basic and diluted $ 2011 25,021,612 (11,931,849) 13,089,763 (48,892) (1,348,669) (1,397,561) 11,692,202 158,201 158,201 11,850,403 2,866,622 8,983,781 (130,597) 8,853,184 892,351 9,745,535 0.23 38,038,022 $ 2010 14,357,334 (7,694,202 6,663,132 (156,589 (445,301 (601,890 6,061,242 7,642 (5,678 1,964 6,063,206 1,500,371 4,562,835 (61,721 4,501,114 64,184 4,565,298 0.13 35,998,000

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