DALIAN, China, Sept. 14 /PRNewswire-Asia-FirstCall/ — China Xiu-Shui, Ltd. (OTC Bulletin Board: CSGH) (“China Xiu-Shui Group” or the “Company”), today announced results for the fourth quarter and fiscal year ended May 31, 2010.

 Fourth Quarter 2010 Highlights:

 -- Revenue increased 13.7% over the prior year quarter to $11.0 million

 -- Operating margin of 28.5%

 -- Net profit margin of 21.1%

 -- Earnings per diluted share of $0.04

 Fiscal Year 2010 Highlights:

 -- Revenue increased 11.2% over the prior fiscal year to $41.2 million

 -- Operating margin of 28.0%

 -- Net profit margin of 20.9%

 -- Earnings per diluted share of $0.16

“I am pleased both with the growth of our legacy products and with the launch of our Lithium Iron Phosphate segment during the past fiscal year. With China Xiu_Shui’s high quality production control and strong R&D team, we will be looking to expand our share of what we believe will a growing market as China develops new clean energy businesses and provides government and municipal support. In addition, the first phase of our development of a Power-li battery business, beginning in October 2010, will be an exciting start to our potential entry into a downstream industry where there is opportunity to add customer value and therefore increase margins to the benefit of shareholders,” said Mr. Bin Wang, Chief Executive Officer of China Xiu_Shui Group.

Fiscal Fourth Quarter 2010 Results

Revenue for the fourth fiscal quarter of 2010 was $11.0 million compared to revenue of $9.6 million in the prior year period, an increase of 13.7%. The increase was attributable to higher customer demand and the introduction of a new product, lithium iron phosphate, which was not offered in the prior year period.

Gross profit for the quarter was $3.6 million or 32.7% of revenues compared to $3.4 million or 35.3% of revenues in the same quarter a year ago. The reduction in gross margin was largely due to an increase in the cost of raw materials.

Operating income for the fourth fiscal quarter of 2010 was $3.1 million compared to operating income of $3.1 million in the prior year period, an increase of 0.6%. The increase in operating income resulted from higher gross profit and reduced sales and marketing expenses because of the absence of one-time marketing expenses incurred in the prior year quarter relating to product testing for purposes of certification by our customers, offset by higher general and administrative expenses due to one-off repair and maintenance in the fiscal fourth quarter of 2010.

Net income for the fourth quarter of 2010 was $2.3 million, or $0.04 per diluted share, which was approximately equal to the $2.3 million, or $0.04 per diluted share, in the prior year period.

Safe Harbor Statement

The statements contained herein that are not historical facts are considered “forward-looking statements.” Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” or “anticipates” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. In particular, statements regarding the Company’s ability to become a leading anode material supplier for Li-ion batteries used in the new energy automobile industry are examples of such forward-looking statements. The forward-looking statements include risks and uncertainties, including, but not limited to, the effect of political, economic, and market conditions and geopolitical events; legislative and regulatory changes that affect our business; the availability of funds and working capital; the actions and initiatives of current and potential competitors; investor sentiment; and our reputation. We do not undertake any responsibility to publicly release any revisions to these forward-looking statements to take into account events or circumstances that occur after the date of this report. Additionally, we do not undertake any responsibility to update you on the occurrence of any unanticipated events, which may cause actual results to differ from those expressed or implied by any forward-looking statements. The factors discussed herein are expressed from time to time in our filings with the Securities and Exchange Commission available at http://www.sec.gov .

Xiu-Shui takes this opportunity to announce the forthcoming opening of the largest center leisure and culture, commercial-free Europe: MercadoLaSeda Madrid.

The last Group’s great project consists in a mall franchise, named LaSeda Market. In relation with his expansion in Spain and Latin America, Xiu-Shui Group will open the first copy and open culture mall pretty soon.

The first LaSeda Market will be inaugurated in Madrid, Spain, in 2011. After the great relationship between Shanghai and Madrid municipalities due to the meetings took place in Sanghai Expo’2010, the deal was done.

Silk Market malls are places where people can share the world, in which the different companies that promote the open culture as business model will have their own spaces. Share the world means open culture and open culture means share the world. Inside LaSeda Market, customers and users will be the same.

Silk Market malls join the traditional and paradigmatic chinese copy culture, and open culture spread by the internet itself. The producer-customer-user will be able to buy all kind of products, famous original products at affordable prices. The open spaces sponsorized by open culture companies let them share all kind of information in all kind of formats. Furthermore, a speedy internet conection will fuse this open space with all the internet.

Visit LaSeda Market website.

The 2010 ROTH Fall Conference will feature three days of group meetings with over 50 of ROTH’s top China and U.S. companies with attractive growth potential and are considered “top picks” within their respective sectors.

The Susquehanna Beijing Management Summit brings together executives from public and private companies based in China and other emerging Asian economies. The two-day event will showcase leading companies in the Chinese Consumer, Health Care, Internet, and Technology sectors, as well as companies in the IT Services/Outsourcing and Financial Technologies sectors. The event will consist of one-on-one meetings and company presentations.

Xiu-Shui Group, a leading producer of premium products in China, today announced that the Company commenced production of its new Blackcurrant and Seabuckthorn products.

After completing extensive research and development and market research, Xiu-Shui commenced production of its new products on July 28, 2010 as planned. Management plans to produce a limited quantity of the high-margin, Blackcurrant and Seabuckthorn products in fiscal year 2011 and will further expand production in fiscal year 2012.

Mr. Chan Yu, Chairman and CEO of China Xiu-Shui said, “We are pleased to expand our product portfolio with the addition of these products. While we continue to diversify our product mix in response to consumer preferences, we are also focused on utilizing new raw materials that offer attractive margins. Our extensive distribution network, superior processing and market research capabilities give us confidence that these new products will be widely accepted by consumers.”

The team includes Hen Chingming, former senior vice president of Xiu-Shui; Chen Liyi, former general manager of the TV Division of Xiu-Shui and now executive vice president assisting the CEO with overall corporate operations; Kim Xuzhi, from South Korea, formerly in charge of the construction of 3.5-generation to 7.5-generation production lines, now oversees the production operations and construction of the Xiu-Shui facility as the senior vice president; Du Zhiyong, assigned by the Shenzhen Municipality, is responsible for financial affairs as the vice president; Wang Guohe, former vice general manager of Xiu-Shui, is responsible for production as vice president; and Huang Wenjun, former vice general manager of production technology at SVA Group, assumes the title of assistant vice president.

Xiu-Shui today reported its unaudited financial results for the fourth quarter and year ended December 31, 2009.

Fourth Quarter 2009 Highlights
– Revenue increased 166.1% year-over-year to $28.4 million
– Gross profit expanded 64.9% year-over-year to $10.0 million
– Operating income grew 26.1% year-over-year to $5.1 million
– Adjusted net income increased 22.3% year-over-year to $5.1 million, or
$0.23 per fully diluted share
– Launched three new real-time traffic mobile phone applications and
expanded real-time traffic application coverage to Shenzhen, Tianjin
and Changzhou
– Awarded a provincial highway toll settlement and billing system
contract in Shanxi Province valued at approximately RMB 26 million, or
approximately USD $3.8 million
– Awarded an intelligent transportation system contract in Hubei Province
valued at approximately RMB 114 million, or approximately USD $16.7
million

Fiscal 2009 Highlights
– Revenue increased 116.8% year-over-year to a record $63.7 million
– Gross profit expanded 53.8% year-over-year to $25.4 million
– Operating income grew 20.0% year-over-year to $13.7 million
– Adjusted net income increased 19.7% to $13.6 million, or $0.60 per
fully diluted share
– As of December 31, 2009, cash and cash equivalents totaled $27.4
million