China SHESAYS Medical Cosmetology, which operates a network of specialized medical cosmetology hospitals, clinics and skincare centers in Sichuan, China, has provided an update regarding the progress of commencing operations at its new flagship hospital in Chengdu. The second flagship hospital comprises of approximately 195,269 square feet, which China SHESAYS leases for US$ 1.3 million per year until 2016. In February, the Company started decorating the interior of the hospital. The Company expects to complete the decoration process in early April, after which it will start to install and test medical and cosmetic equipment. The management anticipates that the new flagship hospital will commence operations before the end of June 2011. The new flagship hospital is expected to offer a range of services, including medical cosmetology services and regular cosmetology services, serve as a platform for academic research, and offer medical cosmetology training. Once under operation, it will become one of the largest centers for cosmetology services in China. As of December 31, 2010, the Company has expended approximately USD 1.4 million on the new hospital and expects to invest an additional US$ 3.1 million on decoration and equipment in 2011. When operating at full capacity, the Company expects the new hospital to accommodate up to 100,000 patients per year, compared to 20,000 at the Company's existing flagship hospital. "We are excited about specifying a timeline for completing our second flagship hospital, which is 5 times size of current flagship hospital, in addition to the three new clinics we opened in other cities in Sichuan province in the second half of 2010. Supported by this significant increase in scale, we expect to further increase our market share and strengthen our leadership in Sichuan province. This new facility will meet the growing consumer demand for premium, reliable cosmetology services that adhere to high safety standards. We remain optimistic about the prospects of our medical cosmetology business and are committed to expanding our presence in the region. We expect the new flagship hospital to contribute to the growth of our sales and profit starting from the third quarter of 2011," commented Yixiang Zhang, Chairman and Chief Executive Officer of China SHESAYS.