China-based Biostar Pharmaceuticals, a manufacturer of hep B medicine, Xin Aoxing Oleanolic Acid Capsules, has expanded its rural distribution network in the third quarter ended September 30, 2010 to 8,500 locations { an increase of approximately 21.4 percent from the second quarter ended June 30, 2010. Biostar sees significant opportunities created by the state-implemented New Rural Cooperative Medical System to expand its rural distribution network. As of September 30, 2010, 10 of the company's products were available for sale in approximately 8,500 rural retail locations across 22 provinces. Based on current internal projections, management expects the company's rural retail distribution to double over the next few years. Sales to rural markets grew 66 percent in the first half of 2010 to $4.8 million, representing approximately 15 percent of total sales. "We continue to expand our rural distribution network aggressively," commented Ronghua Wang, chairman & CEO of Biostar. "With the Chinese government allocating nearly $5.6 billion to expand basic medical services to all 900 million rural farmers by 2010, Biostar is well positioned to capitalize on this secular growth opportunity. We see many more years of healthy growth as more Chinese consumers have access to our products and our brand awareness continues to grow. Expanded rural distribution, coupled with strong growth in existing markets, makes us confident in reaching our 2010 sales and net income guidance of $80 million and $18 million, respectively."