Third Quarter 2010 Financial Highlights:

• Exceeding guidance, revenue of $61.1 million in 3Q10 vs. $72.1 million in 3Q09, up 17.1% sequentially from $52.2 million in 2Q10:
  • Revenue from branded milk powder products was $40.9 million in 3Q10 vs. $55.9 million in 3Q09, up 16.8% sequentially from $35.0 million in 2Q10;
  • Revenue from raw milk powder was $14.4 million in 3Q10 vs. $9.2 million in 3Q09, up 5.7% sequentially from $13.6 million in 2Q10;
• Gross profit of $27.3 million in 3Q10 vs. $37.0 million in 3Q09, up 47.9% sequentially from $18.5 million in 2Q10;
• Gross margin was 44.7% in 3Q10 vs. 51.3% in 3Q09, up from 35.4% in 2Q10;
• Net income of $3.6 million in 3Q10 vs. net income of $11.1 million in 3Q09, up from net loss of $(20.7) million in 2Q10; and
• EPS per diluted share was $0.16 vs. $0.52 in 3Q09, up from a loss of $(0.92) in 2Q10.

Mr. Leng You Bin, the Company's Chairman and Chief Executive Officer, stated, "We are continuing to make measurable progress with our operations across our sales and marketing to our dairy farms. Our results of $61.1 million in revenue and $3.6 million in net income are excellent indications of our footprint in the Chinese milk powder space. We are continuing to make improvements including strengthening our team through training of existing talent and recruitment and adjusting existing retail sales points to drive greater profitability. We believe that we are well positioned to execute our strategic initiatives to grow sales at existing retail outlets throughout the remainder of the year and capitalize on market opportunities."

The decrease in revenue in the third quarter of 2010 compared to the third quarter of 2009 was primarily attributable to a decrease in sales of milk powder and an increase in sales of raw milk powder, which has a lower gross profit margin, as well as increased competition from new competitors entering into the Company's industry and old competitors aggressively attempting to reclaim market share. The revenue in the third quarter of 2010 increased 17.1% sequentially from $52.2 million in the second quarter of 2010, primarily reflecting the Company's efforts to increase sales of existing retail points and targeted new sales points.

Gross profit was $27.3 million in the third quarter of 2010 compared to $37.0 million in the third quarter of 2009, up 47.9% sequentially from $18.5 million in the second quarter of 2010. Gross margin for the third quarter of 2010 was 44.7%, compared to 51.3% in the third quarter of 2009, up from 35.4% in the second quarter of 2010. Gross profit in the third quarter of 2010 was lower than gross profit in the third quarter of 2009 primarily due to changes in the Company's revenue mix and increased costs of raw milk supply.

Income from continuing operations was $2.0 million in the third quarter of 2010, compared with income from continuing operations of $4.0 million in the third quarter of 2009, up significantly from a loss of $(24.0) million in the second quarter of 2010. Sales and marketing expenses decreased 31.8% to $18.7 million in the third quarter of 2010 from $27.5 million in the third quarter of 2009, and decreased 36.7% compared to $29.6 million in the second quarter of 2010, primarily reflecting a decrease in promotional fees and the Company's efforts to improve the effectiveness of its selling expenses. General and administrative expenses increased 8.4% to $6.1 million in the third quarter of 2010 from $5.7 million in the third quarter of 2009, primarily reflecting increased salary offset in part by a decrease in professional service fees.

The Company recognized other income of $1.4 million during the third quarter of 2010. In the third quarter of 2009, the Company had other income of $5.4 million. The lower other income was primarily attributable to a decrease of government subsidy of approximately $6.1 million from the third quarter of 2009, offset in part by a decrease in interest and finance costs of approximately $1.3 million from the third quarter of 2009.

Net income attributable to the Company for the third quarter of 2010 was $3.6 million, or $0.16 per diluted share, compared to net income attributable to the Company of $11.1 million, or $0.52 per diluted share, in the third quarter in 2009, but improved significantly from net loss attributable to the Company of $(20.6) million, or $(0.92) per diluted share in the second quarter of 2010.

Nine Months Ended September 30, 2010

Revenue decreased 14.2% to $194.8 million in the nine months ended September 30, 2010 from $227.1 million in the same period of 2009. Contributions from milk powder products were approximately $140.7 million, or 72.2%, of sales in the nine months ended September 30, 2010, down 28.0% from $195.5 million, or 86.0% of sales, in the corresponding period in 2009. This decrease is largely due to increased competition from new competitors entering into Chinese dairy industry and old competitors aggressively attempting to reclaim market share following the' melamine crisis. Gross profit decreased 37.0% to $84.2 million in the nine months ended September 30, 2010 from $133.7 million in the same period of 2009. Gross margin for the nine months ended September 30, 2010 was 43.2%, compared to 58.9% in the corresponding period in 2009, primarily attributable to increases in the price for both internally and externally sourced raw materials, and also to a decrease in sales of milk powder and an increase in sales of raw milk powder, which has a lower gross profit margin. Income from continuing operations decreased to a loss of $(19.7) million in the nine months ended September 30, 2010, compared to a profit of $37.8 million in the corresponding period in 2009. Net income from continuing operations for the first nine months of 2010 decreased to a loss of $(11.6) million, or $(0.52) per diluted share, from a profit of $43.2 million, or $2.21 per diluted share, in the prior year period. Net income attributable to the Company for the first nine months of 2010 decreased to a loss of $(11.5) million, or $(0.52) per diluted share, from a profit of $46.6 million, or $2.38 per diluted share in the corresponding period in 2009.

As of September 30, 2010, the Company had cash and cash equivalents of $22.2 million and total current assets of $161.8 million, compared with cash and cash equivalents of $48.2 million and total current assets of $177.7 million as of December 31, 2009.

This decrease was mainly led by the Company's payoff of bank debt facilities more than borrowed of approximately $23.5 million, expenditure on property and equipment related to the construction of Gannan Dairy Phase II production factory facilities and Longjiang production factory facilities of approximately $15.3 million and expenditure on biological assets of the Company's two farms of approximately $9.3 million, which was offset by the cash provided by operating activities of approximately $21.7 million.

As of September 30, 2010, the Company had a working capital deficit, its current liabilities exceeded its current assets by approximately $24.9 million. The Company has taken various actions to conserve cash, procure financing and improve liquidity. Such actions include reducing working capital requirements in operations through improving the Company's sales process, accelerating accounts receivables collection, strengthening control on operating expenditure and renewing short term borrowings.

Financial Guidance

Mr. Jonathan H. Chou, the Company's Chief Financial Officer, stated, "We are pleased to report three month revenue growth of 17.1% compared to the second quarter of 2010. Specifically, sales of our branded milk powder products grew 16.8% to $40.9 million compared to the second quarter of 2010. As we approach the middle of the fourth quarter of 2010, we are confident that we are taking effective measures to continue to improve our operations across all functions. Based on cash and actual purchase orders received this quarter to date, we project our total revenue will be between $54 million to $56 million in the fourth quarter of 2010."

Conference Call Details

The Company will also hold a conference call on November 8, 2010 at 9:00 am Eastern Standard Time to discuss its third quarter results. Listeners may access the call by dialing the following numbers:

The replay will be accessible through November 15, 2010 by dialing the following numbers:

About Feihe International, Inc.

Feihe International, Inc. (NYSE:ADY - News) (formerly known as American Dairy, Inc.), is one of the leading producers and distributors of premium infant formula, milk powder, and soybean, rice and walnut products in the People's Republic of China. Feihe International conducts operations in China through its wholly owned subsidiary, Feihe Dairy, and other subsidiaries. Founded in 1962, Feihe Dairy is headquartered in Beijing, China, and has processing and distribution facilities in Kedong, Qiqihaer, Baiquan, Gannan, Longjiang, Shanxi, and Langfang. Using proprietary processing techniques, Feihe International makes products that are specially formulated for particular ages, dietary needs and health concerns. Feihe International has over 200 company-owned milk collection stations, two dairy farms, seven production facilities with an aggregate milk powder production capacity of approximately 1,250 tons per day and an extensive distribution network that reaches over 90,000 retail outlets throughout China. For more information about Feihe International, Inc., please visit http://ady.feihe.com.

Cautionary Note Regarding Forward-Looking Statements

This document contains forward-looking information about the Company's operating results and business prospects that involve substantial risks and uncertainties. Statements that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These statements include, but are not limited to, statements about the Company's plans, objectives, expectations, strategies, intentions or other characterizations of future events or circumstances and are generally identified by the words "may," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "targets," "could," "would," and similar expressions. Because these forward-looking statements are subject to a number of risks and uncertainties, the Company's actual results could differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the heading "Risk Factors" in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2009 and in other reports filed with the United States Securities and Exchange Commission and available at www.sec.gov. The Company assumes no obligation to update any such forward-looking statements.

    Second Quarter 2010 Financial Highlights
    -- Revenue up 26.7% to $52.2 million vs. $41.2 million in 2Q09
        - Revenue from branded milk powder products up 9.0% to $35.0 million
          vs. $32.1 million in 2Q09
        - Revenue from raw milk powder up 223.8% to $13.6 million vs. $4.2
          million in 2Q09
    -- Gross profit down 23.2% to $18.5 million vs. $24.1 million in 2Q09
    -- Gross margin 35.4% in 2Q10 vs. 58.6% in 2Q09
    -- Net loss of $(20.7) million in 2Q10 vs. net income of $7.6 million in
       2Q09
    -- EPS per diluted share down to a loss of $(0.92) vs. $0.40 in 2Q09

The increase in revenue in the second quarter of 2010 compared to the second quarter of 2009 is primarily attributable to expanding the Company's market areas and distribution network throughout China, as well as increased demand for high quality products and increased sales quantities of certain of the Company's milk powder and raw milk powder products.

Gross profit was $18.5 million in the second quarter of 2010 compared to $24.1 million in the second quarter of 2009. Gross margin for the second quarter of 2010 was 35.4%, compared to 58.6% in the second quarter of 2009. Gross profit in the second quarter of 2010 was lower than gross profit in the second quarter of 2009 primarily due to changes in the Company's revenue mix, increased costs of raw milk supply, and increased sourcing of higher quality but higher cost raw milk from the Company's organic dairy farms. The costs of the higher quality raw milk sourced from the Company's organic dairy farms and from local farmers increased 22.0% compared to the prior year period.

Mr. Leng You Bin, the Company's Chairman and Chief Executive Officer, stated, "2010 has been a unique year of fine-tuning of our operations. After 2009's significant growth and build up of our platform and distribution network, we are continuing to strengthen our sales and marketing operations so that we fully leverage our unique vertically integrated business model with state-of-the-art production facilities. This quarter's results were softer than anticipated, but we are addressing this with certain initiatives to improve future results. Steps taken and being implemented include our plan to modify our selling approach to be more cost-effective, and improve overall sales operations to drive higher returns from existing retail sales points, including actions to adjust existing retail sales points in focused regions."

Mr. Leng continued, "We remain committed to producing the highest quality products for infants and children going forward. With the steps we are taking and our strong fundamentals, we are confident that we will improve profitability and secure our long term position."

Loss from continuing operations was $24.0 million in the second quarter of 2010, compared with income from continuing operations of $0.7 million in the second quarter of 2009. Sales and marketing expenses increased 43.0% to $29.6 million in the second quarter of 2010 from $20.7 million in the second quarter of 2009, primarily reflecting the Company's increased sales and additional promotional activities in the second quarter of 2010. General and administrative expenses increased 208.7% to $7.1 million in the second quarter of 2010 from $2.3 million in the second quarter of 2009, primarily reflecting reversals of bad debt of $2.0 million in 2009, share-based compensation expenses of $0.9 million in 2010, and various additional fees and expenses. In addition, in the second quarter of 2010 the Company disposed of under-performing cows, which failed to meet the Company's dairy farms yield requirements. The loss of disposal of cows was approximately $5.8 million.

The Company recognized other income of $2.6 million during the second quarter of 2010. In the prior year period, the Company had other income of $5.0 million. The lower other income was primarily attributable to a decrease of government subsidy of approximately $2.6 million from the second quarter of 2009, offset in part by a decrease in interest and finance costs paid related to convertible notes that matured in 2009 of approximately $1.1 million from the prior year period.

Net loss attributable to the Company for the second quarter of 2010 was $(20.6) million, or $(0.92) per diluted share, compared to net income attributable to the Company of $7.6 million, or $0.40 per diluted share, in the prior year period.

First Half of 2010 Financial Highlights

Revenue decreased 13.8% to $133.6 million in the six months ended June 30, 2010 from $155.0 million in the same period of 2009. Contributions from milk powder products were approximately $99.8 million, or 74.7%, of sales in the six months ended June 30, 2010, down 28.5% from $139.6 million, or 90.1% of sales, in the prior year period. This decrease is largely due to increased competition from new competitors entering into the Company's industry and old competitors aggressively attempting to reclaim market share following the melamine crisis. Gross profit decreased 41.2% to $56.9 million in the six months ended June 30, 2010 from $96.7 million in the same period of 2009. Gross margin for the six months ended June 30, 2010 was 42.6%, compared to 62.4% in the prior year period, primarily attributable to increases in the price for both internally and externally sourced raw materials, and also to a decrease in sales of milk powder and an increase in sales of raw milk powder, which has a lower gross profit margin. Income from continuing operations decreased to a loss of $(22.1) million in the six months ended June 30, 2010, compared to a profit of $32.3 million in the prior year period. Net income from continuing operations for the first six months of 2010 decreased to a loss of $(15.2) million, or $(0.68) per diluted share, from a profit of $32.1 million, or 1.67 per diluted share, in the prior year period. Net income attributable to the Company for the first six months of 2010 decreased to a loss of $(15.0) million, or $(0.68) per diluted share, from a profit of $35.4 million, or $1.84 per diluted share in the prior year period.

Balance Sheet

As of June 30, 2010, the Company had cash and cash equivalents of $12.7 million and total current assets of $143.4 million, compared with cash and cash equivalents of $48.9 million and total current assets of $177.6 million as of December 31, 2009.

The decrease in cash on the balance sheet was primarily attributable to the Company's repaying selected short-term and long-term debt facilities during the past six months, and a transfer to restricted cash of cash committed for certain dairy cow purchases. The Company continues to strengthen its balance sheet through improvements in the quality of its biological assets, pay down of selected debt obligations, and increased capital assets.

Financial Guidance

Mr. Jonathan H. Chou, the Company's Chief Financial Officer, stated, "Despite the softness in this quarter's results, we are pleased to report three month revenue growth of 26.7% compared to the prior year period. Specifically, sales of our branded milk powder products grew 9.0% to $35.0 million compared to the prior year period. As we approach the middle of the third quarter of 2010, we are confident that we are taking effective measures to continue to improve our operations across all functions. With respect to our balance sheet, we continue to address the Company's cash needs versus debt level, which resulted in repayment of approximately $20 million equivalent in selected RMB and USD debt facilities. We will continue strengthen our balance sheet and match most ideal liabilities available to our PRC assets. Based on cash and actual purchase orders received this quarter to date, we project our total revenue will exceed $55 million in the third quarter of 2010."

Conference Call Details

The Company will hold a conference call on August 9, 2010 at 9:00 am ET to discuss its results.

    Listeners may access the call by dialing the following numbers:


    United States toll free:  1-888-455-2265
    Hong Kong toll free:      800-901-111
    Northern China toll free: 10-800-714-1202
    Southern China toll free: 10-800-140-1181
    International:            1-719-325-2199


    The replay will be accessible through August 16, 2010 by dialing the
following numbers:

    United States toll free:  1-888-203-1112
    International:            1-719-457-0820
    Password:                 9050942

About American Dairy, Inc.

American Dairy, Inc. (NYSE:ADY - News) is one of the leading producers and distributors of premium infant formula, milk powder, and soybean, rice and walnut products in the People's Republic of China. American Dairy conducts operations in China through its wholly owned subsidiary, Feihe Dairy, and other subsidiaries. Founded in 1962, Feihe Dairy is headquartered in Beijing, China, and has processing and distribution facilities in Kedong, Qiqihaer, Baiquan, Gannan, Longjiang, Shanxi, and Langfang. Using proprietary processing techniques, American Dairy makes products that are specially formulated for particular ages, dietary needs and health concerns. American Dairy has over 200 company-owned milk collection stations, two dairy farms, seven production facilities with an aggregate milk powder production capacity of approximately 1,250 tons per day and an extensive distribution network that reaches over 95,000 retail outlets throughout China. For more information about American Dairy, please visit http://www.americandairy....

Cautionary Note Regarding Forward-Looking Statements

This document contains forward-looking information about the Company's operating results and business prospects that involve substantial risks and uncertainties. Statements that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These statements include, but are not limited to, statements about the Company's plans, objectives, expectations, strategies, intentions or other characterizations of future events or circumstances and are generally identified by the words "may," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "targets," "could," "would," and similar expressions. Because these forward-looking statements are subject to a number of risks and uncertainties, the Company's actual results could differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the heading "Risk Factors" in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2009 and in other reports filed with the United States Securities and Exchange Commission and available at www.sec.gov. The Company assumes no obligation to update any such forward-looking statements.

    For more information, please contact

    In the U.S.:
     ir@americandairyinc.com

    In China:
     May Shen
     Tel:   +86-10-8457-4688 x8810
     Email: shenchunmei@americandairyinc.com



                             AMERICAN DAIRY, INC.
                    CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (unaudited)

                                                 June 30,        December 31,
                                                   2010             2009
                                                   US$               US$

    Assets
    Current assets:
      Cash and cash equivalents                 12,695,511        48,949,524
      Restricted cash                            9,607,045               --
      Notes and loans receivable, net of
       allowance of $4,000,000                     155,245           438,776
      Trade receivables, net of allowance of
       $594,666 and $791,119, respectively      23,038,198        27,495,190
      Due from related parties                   2,409,029         2,188,243
      Employee receivables                       1,214,838           396,724
      Advances to suppliers                     23,395,479        24,417,968
      Inventories, net of allowance of
       $87,068 and $518,561, respectively       58,284,823        59,044,665
      Prepayments and other current assets         280,972         1,814,472
      Refundable taxes                           7,400,017         8,532,629
      Other receivables                          1,932,667         4,307,680
      Short term investment                      2,937,461                --
    Total current assets                       143,351,285       177,585,871

    Investments:
      Investment in mutual funds - available
       for sale                                    102,581           136,466
      Investment at cost                           264,370           263,264
                                                   366,951           399,730
    Property and equipment:
      Property and equipment, net              155,747,540       154,572,409
      Construction in progress                  33,059,104        23,170,909
                                               188,806,644       177,743,318
    Biological assets:
      Immature biological assets                35,137,414        35,672,123
      Mature biological assets, net             19,288,183        13,232,124
                                                54,425,597        48,904,247

    Other assets:
      Deferred tax assets                        3,632,815         3,632,815
      Prepaid leases                            28,786,650        29,016,486
      Other intangible assets, net                 664,139           821,331
      Goodwill                                   1,796,470         1,784,331
      Deferred debt issuance cost, net                  --           369,608
    Total assets                               421,830,551       440,257,737

    Liabilities
    Current liabilities:
      Current maturities of long term debt       7,343,654         7,312,935
      Notes and loans payable                   45,515,008        62,372,922
      Accounts payable                          41,385,640        37,956,046
      Accrued expenses                          10,834,587         8,365,245
      Income tax payable                         1,108,661         2,980,774
      Advances from customers                    6,876,878         6,893,947
      Due to related parties                       119,026        10,531,851
      Advances from employees                      443,071           483,647
      Accrued employee benefits                  4,696,307         4,120,053
      Other payables                            43,807,803        23,693,617
      Current portion of capital lease
       obligation                                  155,624                --
    Total current liabilities                  162,286,259       164,711,037

    Long term debt, net of current portion      28,522,751        32,427,230
    Capital lease obligation, net of
     current portion                               602,122                --
    Long term tax payable                        5,057,504         4,747,083
    Deferred income                              8,897,018        10,538,313
    Performance share obligation                        --        11,382,000
    Total liabilities                          205,365,654       223,805,663

    Commitments and contingencies

    Redeemable common stock (US$0.001
     par value, 2,625,000 and 2,100,000
     shares issued and outstanding as of
     June 30, 2010 and December 31, 2009,
     respectively)                              65,027,093        53,645,093

    Equity
    American Dairy, Inc. shareholders'
     equity:
      Common stock (US$0.001 par value,
       50,000,000 shares authorized;
       19,654,376 and 19,607,376 issued and
       outstanding as of June 30, 2010
       and December 31, 2009, respectively)         19,654            19,607
      Additional paid-in capital                57,256,826        54,482,098
      Common stock warrants                      1,774,151         1,774,151
      Statutory reserves                         6,861,224         6,861,224
      Accumulated other comprehensive
       income                                   26,534,044        25,651,571
      Retained earnings                         58,631,883        73,672,879
    Total American Dairy, Inc.
    shareholders' equity                       151,077,782       162,461,530
    Noncontrolling interests                       360,022           345,451

    Total equity                               151,437,804       162,806,981

    Total liabilities, redeemable common
     stock, and equity                         421,830,551       440,257,737



                             AMERICAN DAIRY, INC.
               CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (unaudited)

                   Three months ended June 30,   Six months ended June 30,
                       2010           2009          2010           2009
                        US$            US$           US$            US$

    Sales            52,194,506    41,186,466    133,630,409    155,008,313

    Cost of goods
     sold           (33,730,167)  (17,054,053)   (76,728,349)   (58,298,322)

    Gross profit     18,464,339    24,132,413     56,902,060     96,709,991

    Operating
     expenses:
    Sales and
     marketing
     expenses       (29,571,923)  (20,676,176)   (57,853,747)   (52,316,064)
    General and
     administrative
     expenses        (7,080,692)   (2,322,879)   (12,574,515)   (11,301,083)
    Loss on
     disposal of
     biological
     assets          (5,788,171)     (457,942)    (8,573,433)      (820,801)
    Total operating
     expenses       (42,440,786)  (23,456,997)   (79,001,695)   (64,437,948)

    (Loss) income
     from
     continuing
     operations     (23,976,447)      675,416    (22,099,635)    32,272,043

    Other income
    (expenses):
    Interest income     109,550       118,768        207,186        211,085
    Interest and
     finance
     costs             (714,099)   (1,828,430)    (1,558,962)    (3,413,977)
    Amortization of
     deferred
     debt issuance
     cost              (356,737)      (33,914)      (376,057)       (67,828)
    Government
     subsidy          3,419,709     6,014,120      9,158,482      6,744,408
    Other income,
     net                155,343       727,685        364,025      1,514,681

    (Loss) income
     before
     income tax     (21,362,681)    5,673,645    (14,304,961)    37,260,412

    Income tax
     expense            642,196    (1,345,393)      (943,621)    (5,174,741)
    (Loss) income
     from
     continuing
     operations,
     net of tax     (20,720,485)    4,328,252    (15,248,582)    32,085,671

    Net income from
      discontinued
     operations,
     net of tax              --     3,286,694             --      3,289,908
    Net (loss)
     income         (20,720,485)    7,614,946    (15,248,582)    35,375,579
    Add: Net loss
     attributable to
     noncontrolling
     interests          145,893        16,497        207,586         42,645
    Net (loss)
     income
     attributable to
     American
     Dairy, Inc.    (20,574,592)    7,631,443    (15,040,996)    35,418,224

    (Loss) earnings
     per
     share of common
     stock -
    Basic
    (Loss) income
     from
     continuing
     operations
     attributable to
     American
     Dairy, Inc.          (0.92)        0.25           (0.68)          1.86
    Income from
     discontinued
     operations
     attributable to
     American
     Dairy, Inc.,
     net of tax              --         0.19              --           0.19
    Net (loss)
     income
     attributable to
     American
     Dairy, Inc.          (0.92)        0.44           (0.68)          2.05
    (Loss) earnings
     per
     share of common
     stock -
    Diluted
    (Loss) income
     from
     continuing
     operations
     attributable to
     American
     Dairy, Inc.          (0.92)        0.24           (0.68)          1.67
    Income from
     discontinued
     operations
     attributable to
     American
     Dairy, Inc.,
     net of tax              --         0.16              --           0.17
    Net (loss)
     income
     attributable to
     American
     Dairy, Inc.          (0.92)         0.4           (0.68)          1.84

    Weighted
     average shares
     of common stock
     outstanding
    Basic            22,273,266   17,339,311      22,009,564     17,296,845
    Diluted          22,273,266   20,161,916      22,009,564     19,712,263

The Baby and Infant Industry Ceremony is one of the largest annual events in the industry and awards companies involved in all aspects of infant care, ranging from infant formula producers to baby food and clothing manufacturers. Participating companies are evaluated by the public via online voting as well as a group of industry experts and chief editors from major media organizations. Awards include "Most Socially Responsible," "Most Competitive," and "Most Energetic," and accurately reflect the opinions of the public.

Mr. Leng You Bin, Chief Executive Officer of American Dairy, stated, "The award speaks to the success of our growth strategy. Our quality milk supply from our dairy farms as well as trusted sources, our commitment to the highest quality products and advanced manufacturing techniques will continue to provide us the competitive advantage to grow our market share in this increasingly competitive market."

About American Dairy, Inc.

American Dairy, Inc. (NYSE: ADY) is one of the leading producers and distributors of premium infant formula, milk powder, and soybean, rice and walnut products in the People's Republic of China. American Dairy conducts operations in China through its wholly owned subsidiary, Feihe Dairy, and other subsidiaries. Founded in 1962, Feihe Dairy is headquartered in Beijing, China, and has processing and distribution facilities in Kedong, Qiqihaer, Baiquan, Gannan, Longjiang, Shanxi, and Langfang. Using proprietary processing techniques, American Dairy makes products that are specially formulated for particular ages, dietary needs and health concerns. American Dairy has over 200 company-owned milk collection stations, two dairy farms, six production facilities with an aggregate milk powder production capacity of approximately 1,220 tons per day and an extensive distribution network that reaches over 90,000 retail outlets throughout China. For more information about American Dairy, please visit http://www.americandairy....

Cautionary Note Regarding Forward-Looking Statements

This document contains forward-looking information about the Company's operating results and business prospects that involve substantial risks and uncertainties. Statements that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These statements include, but are not limited to, statements about the Company's plans, objectives, expectations, strategies, intentions or other characterizations of future events or circumstances and are generally identified by the words "may," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "targets," "could," "would," and similar expressions. Because these forward-looking statements are subject to a number of risks and uncertainties, the Company's actual results could differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the heading "Risk Factors" in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2008, quarterly report on Form 10-Q for its third quarter in 2009, and in current reports on Form 8-K filed with the United States Securities and Exchange Commission and available at www.sec.gov. The Company assumes no obligation to update any such forward-looking statements.

Mr. Zhang joined American Dairy in May 2009 as special assistant to the Company's CEO and has been working closely with the CEO in developing sales and marketing strategies before transitioning to this position. Mr. Zhang has more than 15 years of experience in sales and marketing. From 2001 to 2006, Mr. Zhang served as General Manager of Want-Want China Holdings' ("Want-Want") Want Zai (Hot Kid) business. Under his leadership, Want Zai grew its annual revenue from RMB300 million in 2002 to RMB 3 billion in 2006, becoming China's number one dairy drinks company in terms of net profits for four consecutive years since 2003. His experience also includes serving in various managerial positions in Want-Want from 1992 to 2001. Mr. Zhang received his Bachelor's Degree in Economics from National Chung Hsing University in Taiwan and his EMBA from Tsinghua University in Beijing.

"We are pleased to welcome Mr. Zhang as the new Head of Sales and Marketing. His rich experience with multinational companies and profound understanding of the Chinese dairy market will enable us to further build on our strong foundation with improved international 'best practices' and compete more effectively with foreign competitors on a larger scale than ever before. We believe 2010 will be a very important year for the dairy market, which makes Mr. Zhang's addition to the team all the more valuable. With his expertise, we feel confident that we will be able to drive our growth in 2010 and beyond," stated Mr. Leng You-Bin, Chief Executive Officer of American Dairy.

Mr. Nie Bo has resigned to pursue other interests. The Company thanks Mr. Nie for his dedication and contribution during his tenure and wishes him great success in his future endeavors.

About American Dairy, Inc.

American Dairy, Inc. (NYSE: ADY - News) is one of the leading producers and distributors of premium infant formula, milk powder, and soybean, rice and walnut products in the People's Republic of China. American Dairy conducts operations in China through its wholly owned subsidiary, Feihe Dairy, and other subsidiaries. Founded in 1962, Feihe Dairy is headquartered in Beijing, China, and has processing and distribution facilities in Kedong, Qiqihaer, Baiquan, Gannan, Longjiang, Shanxi, and Langfang. Using proprietary processing techniques, American Dairy makes products that are specially formulated for particular ages, dietary needs and health concerns. American Dairy has over 200 company-owned milk collection stations, two dairy farms, six production facilities with an aggregate milk powder production capacity of approximately 1,220 tons per day and an extensive distribution network that reaches over 90,000 retail outlets throughout China. For more information about American Dairy, please visit http://www.americandairy....

Cautionary Note Regarding Forward-Looking Statements

This document contains forward-looking information about the Company's operating results and business prospects that involve substantial risks and uncertainties. Statements that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These statements include, but are not limited to, statements about the Company's plans, objectives, expectations, strategies, intentions or other characterizations of future events or circumstances and are generally identified by the words "may," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "targets," "could," "would," and similar expressions. Because these forward-looking statements are subject to a number of risks and uncertainties, the Company's actual results could differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the heading "Risk Factors" in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2008, quarterly report on Form 10-Q for its third quarter in 2009, and in current reports on Form 8-K filed with the United States Securities and Exchange Commission and available at www.sec.gov. The Company assumes no obligation to update any such forward-looking statements.

CONTACT
Company Beijing Office:
86-10-6431-9357

ICR, Inc.:
In the New York: Ashley M. Ammon: 1-646-277-1227
In Beijing: Wei-Jung Yang: 86-10-6599-7968

Third Quarter 2009 Financial Highlights

• Revenue increased 94.1% to $72.1 million from $37.2 million in 3Q08
• Gross profit increased 196.6% to $37.0 million from $12.5 million in 3Q08
• Gross margin was 51.3% in 3Q09 compared to 33.6% in 3Q08
• Income from continuing operations increased to $3.9 million from a loss of $8.5 million in 3Q08
• Net income from continuing operations increased to $11.1 million from a loss of $22.1 million in 3Q08
• EPS per diluted share increased to $0.52 from a loss of $1.19 in 3Q08

Mr. Leng You-Bin, the Company's Chief Executive Officer, stated, "We are pleased with our third quarter results, which reflected our strengthening competitive position and our trusted, premium national brands. In the third quarter we continued our focus on expanding our presence, consumer education and quality control. Additionally, we remain focused on driving long term profitability through the growth of our premium brands, which we continue to strengthen through our ongoing investment in advertising and media, including national as well as provincial television commercials."

Revenue increased 94.1% to $72.1 million in the third quarter of 2009 from $37.2 million in the third quarter of 2008. Contributions from milk powder products, which consist primarily of the Company's higher margin infant formula products, were approximately $55.9 million, or 77.5%, of sales in the third quarter of 2009, up 209% from $18.1 million, or 48.7% of sales, in the prior year period. Revenue performance was primarily attributable to an ongoing demand for the Company's high quality products, the strong market acceptance of these products, and the Company's increased distribution network and presence in new geographic areas in China. On a year over year basis, the Company continued to increase its market share in the infant formula market, which was disrupted in the wake of the melamine crisis.

Gross profit increased 196.6% to $37.0 million in the third quarter of 2009 from $12.5 million in the third quarter of 2008. Gross margin for the third quarter of 2009 was 51.3%, compared to 33.6% in the third quarter of 2008, reflecting a product mix shift to higher margin infant formula products. On a sequential basis, compared to gross margin of 58.6% in the second quarter of 2009, gross margin for the third quarter of 2009 reflects an increase in the cost of raw milk and select nutritional ingredients.

Income from continuing operations increased to $3.9 million in the third quarter of 2009 from a loss of $8.5 million in the prior year period. Sales and marketing expenses increased 75.2% to $27.5 million in the third quarter of 2009 from $15.7 million in the third quarter of 2008. General and administrative expenses increased 7.8% to $5.7 million in the third quarter of 2009 from $5.2 million in the third quarter of 2008. Operating expenses reflected costs associated with the Company's continued expansion of its distribution network throughout China, efforts to drive brand awareness, and non-cash expenses related to the issuance of performance stock options under the Company's 2009 Stock Incentive Plan.

The Company recognized other income of $5.6 million during the third quarter of 2009, which included a government tax refund of approximately $7.9 million received in the quarter. In the prior year period, the Company had other expense of $16.1 million, which included an $8.7 million non-cash loss on derivatives.

Net income from continuing operations for the third quarter of 2009 was $11.1 million, or $0.52 per diluted share, compared to a loss of $22.1 million, or ($1.32) per diluted share, in the prior year period. Net income attributable to ordinary shareholders increased to $11.1 million, or $0.52 per diluted share, from a loss of $20.2 million, or ($1.19) per diluted share in the prior year's period.

Nine Months Ended September 30, 2009 Financial Highlights

Revenue increased 100.0% to $227.1 million in the nine months ended September 30, 2009 from $113.6 million in the same period of 2008. Contributions from milk powder products, which consist primarily of the Company's higher margin infant formula products, were approximately $195.5 million, or 86.0%, of sales in the nine months ended September 30, 2009, up 215.6% from $61.9 million, or 54.5% of sales, in the prior year period. Gross profit increased 238.9% to $133.7 million in the nine months ended September 30, 2009 from $39.4 million in the same period of 2008. Gross margin for the nine months ended September 30, 2009 was 58.9%, compared to 34.7% in the prior year's period, primarily reflecting a product mix shift to higher margin infant formula products and a decrease in sales of low margin raw milk powder. Income from continuing operations increased to $37.0 million in the nine months ended September 30, 2009, compared to a loss of $3.2 million in the prior year's period. Net income from continuing operations for the first nine months of 2009 increased to $43.3 million, or $2.21 per diluted share, from a loss of $11.4 million, or ($0.67) per diluted share, in the prior year's period. Net income attributable to ordinary shareholders increased to $46.6 million, or $2.38 per diluted share, from a loss of $8.1 million, or ($0.47) per diluted share in the prior year's period.

Balance Sheet

As of September 30, 2009, the Company had cash and cash equivalents of $43.5 million and total current assets of $181.7 million, compared with cash and cash equivalents of $42.2 million and total current assets of $160.0 million as of June 30, 2009.

In September 2009, the Company paid down $34.0 million, or 75%, of the $46.0 million outstanding of its 1% Guaranteed Senior Secured Convertibles Notes due 2012. The remaining payment, which was approximately $11.5 million, was completed at the end of October 2009. Additionally, the Company's 7.75% Convertible Notes due 2009 were fully converted as of October 2, 2009 and the Company has no convertible notes remaining.

On August 26, 2009, the Company issued 2.1 million shares of its common stock to Sequoia Capital for an aggregate purchase price of $63.0 million. The aggregate purchase price included $47.0 million in cash as well as the conversion of a $16.0 million bridge loan into equity.

Jonathan H. Chou, the Company's Chief Financial Officer, stated, "We are delighted to share with investors our financial results and operational improvements we achieved during the third quarter of 2009. We strengthened our balance sheet and enhanced our financial flexibility so that we support our future growth in this unique and dynamic infant milk formula market."

Financial Outlook

Today, the Company adjusted its full year 2009 revenue guidance. The Company now anticipates that revenue for the full year 2009 will be between $270 million to $290 million, which represents year over year growth of 40% to 50%.

Mr. Chou concluded, "We believe it is prudent to adjust our full year revenue expectation today after reviewing our preliminary October results, combined with recent industry data that suggests that the seasonal strength we typically experience in the fourth quarter may be less than previously expected. Additionally, our fourth quarter comparison is particularly difficult due to the exceptional growth we exhibited last year, in the wake of the melamine crisis. With this in mind, our revised guidance anticipates at least 40% year over year revenue growth, and we remain confident in our leading competitive position based on our unique vertically integrated business model. Our addressable market remains exciting and continues to exhibit strong fundamentals with compelling long term growth opportunities for American Dairy."

Conference Call Details

The Company will hold a conference call to discuss third quarter results today at 8:00 am ET. Listeners may access the call by dialing 1-800-211-3767 or 1-719-457-2600 for international callers, access code: 3746752. A live webcast will also be available through the Company's website at www.americandairyinc.com and http://www.americandairy....

Cautionary Note Regarding Forward-Looking Statements

This document contains forward-looking information about the Company's operating results and business prospects that involve substantial risks and uncertainties. Statements that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These statements include, but are not limited to, statements about the Company's plans, objectives, expectations, strategies, intentions or other characterizations of future events or circumstances and are generally identified by the words "may," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "targets," "could," "would," and similar expressions. Because these forward-looking statements are subject to a number of risks and uncertainties, the Company's actual results could differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the heading "Risk Factors" in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2008, quarterly report on Form 10-Q for its third quarter in 2009, and in current reports on Form 8-K filed with the United States Securities and Exchange Commission and available at www.sec.gov. The Company assumes no obligation to update any such forward-looking statements.

    CONTACT
    Integrated Corporate Relations, Inc.
    In the New York: Ashley M. Ammon: 1-646-277-1227
    In Beijing: Wei-Jung Yang: 86-10-6599-7968

                               AMERICAN DAIRY, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                                  (unaudited)

                             Three months ended        Nine months ended
                               September 30,             September 30,
                             2009         2008         2009         2008
                              US$          US$          US$          US$

    Sales                 72,110,934   37,153,003  227,119,247  113,568,304

    Cost of goods sold    35,129,532   24,685,354   93,427,854   74,119,818

    Gross profit          36,981,402   12,467,649  133,691,393   39,448,486

    Operating and
     administrative
     expenses:
    Sales and marketing   27,455,572   15,674,769   79,771,636   32,448,651
    General and
     administrative        5,656,116    5,248,778   16,957,199   10,165,737
    Total operating
     expenses             33,111,688   20,923,547   96,728,835   42,614,388

    Income (loss) from
     Continuing
     operations            3,869,714   (8,455,898)  36,962,558   (3,165,902)

    Other income
     (expenses):
    Interest income           62,248      138,320      273,333      369,739
    Interest and finance
     costs                (1,700,702)  (5,152,481)  (5,114,679) (15,525,803)
    Amortization of
     deferred charges        (33,914)    (184,897)    (101,742)    (554,691)
    Registration rights
     penalty                       -     (720,324)           -   (2,160,974)
    Gain (loss) on
     derivatives            (790,000)  (8,692,027)    (790,000)   7,015,618
    Government
     subsidy-tax
     refund (reversal)     7,895,626   (1,495,494)  14,640,034    2,375,240
    Other income
     (expenses), net         158,410      (22,331)     852,290      421,944

    Income (loss) from
     Continuing
     operations before
     income tax
     expense and
     noncontrolling
     interests             9,461,382  (24,585,132)  46,721,794  (11,224,829)

    Income tax expense
     (benefit)            (1,672,167)  (2,479,496)   3,502,574      153,879
    Net income (loss)
     from continuing
     operations before
     noncontrolling
     interests            11,133,549  (22,105,636)  43,219,220  (11,378,708)

    Noncontrolling
     interests                 7,548      (14,200)      50,193      (24,402)
    Net income (loss)
     from continuing
     operations          (22,119,836)  43,269,413  (11,403,110)  11,141,097
    Net income from
     Discontinued
     operations            1,963,565    3,289,908    3,315,595            -
    Net income (loss)
     attributable to
     ordinary
     shareholders         11,141,097  (20,156,271)  46,559,321   (8,087,515)

    Other comprehensive
     income (loss):
    Cumulative currency
     translation
     adjustments             254,556   (3,139,688)     593,949    9,138,266
    Change in fair
     value of available
     for sale
     investments              (2,429)     (20,159)      40,933      (99,226)

    Total comprehensive
     income (loss)        11,393,224  (23,316,118)  47,194,203      951,525

    Earnings (loss)
     per ordinary
     share - Basic
    Net income (loss)
     from continuing
     operations                 0.57        (1.32)        2.39        (0.67)
    Net income from
     discontinued
     operations,
     net of tax                    -         0.13         0.18         0.20
    Net income (loss)           0.57        (1.19)        2.57        (0.47)
    Earnings (loss)
     per ordinary
     share - Diluted
    Net income (loss)
     from continuing
     operations                 0.52        (1.32)        2.21        (0.67)
    Net income (loss)
     from discontinued
     operations,
     net of tax                    -         0.13         0.17         0.20
    Net income (loss)           0.52        (1.19)        2.38        (0.47)

    Weighted average
     ordinary shares
     outstanding
    Basic                 19,659,657   16,964,768   18,093,104   16,964,122
    Diluted               21,597,188   16,964,768   19,541,775   16,964,122

                               AMERICAN DAIRY, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (unaudited)

                                           September 30,      December 31,
                                               2009               2008
                                                US$                US$
    ASSETS
    Current assets:
    Cash and cash equivalents                43,491,803        11,785,408
    Notes and loans receivable, net                   -         1,493,245
    Trade receivables, net of allowance
     of $1,002,883 and $1,311,331,
     respectively                            32,308,418        12,275,497
    Due from related parties                  2,250,874           265,479
    Employee receivables                        199,563           307,249
    Advances to suppliers                    27,120,715        24,943,046
    Receivable from discontinued operations           -        31,002,897
    Inventories, net of allowance of
     $546,503 and $575,916, respectively     65,959,828        52,330,333
    Prepayments and other current assets         97,218            63,711
    Refundable taxes                          4,135,779           488,938
    Other receivables                         6,138,410         4,598,359
    Current assets of discontinued
     operations                                       -        12,392,384
    Total current assets                    181,702,608       151,946,546

    Investments:
    Investment in mutual funds -
     available for sale                         118,437            77,504
    Investment at cost                          263,249           262,611
                                                381,686           340,115
    Property and equipment:
    Property and equipment, net              96,780,672        88,289,858
    Construction in progress                 62,272,749        28,847,959
                                            159,053,421       117,137,817
    Biological assets:
    Immature biological assets               35,901,697        23,784,479
    Mature biological assets, net            11,589,288         1,483,355
                                             47,490,985        25,267,834

    Other assets:
    Deferred tax assets                         730,491           730,490
    Prepaid leases                           29,367,017        29,146,748
    Goodwill                                  2,288,380         2,282,838
    Deferred charges, net                         5,653           107,396
    Long term assets of
     discontinued operations                          -        31,587,018
    Total assets                            421,020,241       358,546,802

    LIABILITIES AND EQUITY
    Liabilities
    Current liabilities:
    Current maturities of long term debt      3,919,504         4,018,704
    Convertible debt redeemable
     within one year                          4,500,000        17,732,033
    Short term debt                          11,106,018        73,809,893
    Notes and loans payable                  39,634,714         8,055,450
    Accounts payable                         42,127,814        36,643,041
    Accrued expenses                          9,298,412        10,620,393
    Income tax payable                        1,367,039         1,185,528
    Advances from customers                   3,958,534         9,864,080
    Due to related parties                      594,057         1,017,399
    Advances from employees                     469,731         1,016,173
    Accrued employee benefits                 2,760,033         2,873,889
    Other payable                            20,076,776        19,513,681
    Current liabilities of\
     discontinued operations                          -        35,063,603
    Total current liabilities               139,812,632       221,413,867

    Long term debt, net of current portion   19,626,770         9,146,034
    Long term tax payable                     5,883,747         2,750,887
    Deferred income                           7,695,346         8,416,492
    Contingent share obligation              10,010,000                 -
    Long term liability of
     discontinued operations                          -           395,176
    Total liabilities                       183,028,495       242,122,456
    Commitments and contingencies                     -                 -

    Temporary equity
    Redeemable ordinary shares
     (2,100,000 and 0 shares issued
     and outstanding, respectively)          53,780,010                 -

    Equity
    Shareholders' equity:
    Ordinary shares (US$0.001 par value,
     50,000,000 shares authorized;
     19,183,492 and 17,253,907 issued
     and outstanding)                            19,184            17,254
    Additional paid-in capital               48,366,564        26,758,425
    Ordinary share warrants                   2,119,485         3,003,448
    Statutory reserves                        6,861,224         6,861,224
    Accumulated other comprehensive income   25,780,937        25,146,055
    Retained earnings                       100,650,814        54,091,493
    Total shareholders' equity              183,798,208       115,877,899
    Noncontrolling interests                    413,528           546,447

    Total equity                            184,211,736       116,424,346

    Total liabilities and equity            421,020,241       358,546,802

• Bank of America Merrill Lynch China Investment Summit, to be held November 4-6, 2009 at the Ritz-Carlton (Chaoyang District) in Beijing, China.
• Morgan Stanley's Eighth Annual Asia Pacific Summit, to be held November 18-20, 2009 at the Mandarin Oriental in Singapore.

For additional information, please contact Ashley M. Ammon at 646.277.1227 or your respective institutional sales representative.

About American Dairy, Inc.

American Dairy, Inc. (NYSE: ADY - News) is one of the leading producers and distributors of premium infant formula, milk powder, and soybean, rice and walnut products in the People's Republic of China. American Dairy conducts operations in China through its wholly owned subsidiary, Feihe Dairy, and other subsidiaries. Founded in 1962, Feihe Dairy is headquartered in Beijing, China, and has processing and distribution facilities in Kedong, Qiqihaer, Baiquan, Gannan, Longjiang, Shanxi, and Langfang. Using proprietary processing techniques, American Dairy makes products that are specially formulated for particular ages, dietary needs and health concerns. American Dairy has over 200 company-owned milk collection stations, two dairy farms, six production facilities with an aggregate milk powder production capacity of approximately 1,220 tons per day and an extensive distribution network that reaches over 84,000 retail outlets throughout China. For more information about American Dairy, please visit http://www.americandairy....

Cautionary Note Regarding Forward-Looking Statements

This document contains forward-looking information about the Company's operating results and business prospects that involve substantial risks and uncertainties. Statements that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These statements include, but are not limited to, statements about the Company's plans, objectives, expectations, strategies, intentions or other characterizations of future events or circumstances and are generally identified by the words "may," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "targets," "could," "would," and similar expressions. Because these forward-looking statements are subject to a number of risks and uncertainties, the Company's actual results could differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the heading "Risk Factors" in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2008, quarterly report on Form 10-Q for its second quarter in 2009, and in current reports on Form 8-K filed with the United States Securities and Exchange Commission and available at www.sec.gov. The Company assumes no obligation to update any such forward-looking statements.

    CONTACT
    Integrated Corporate Relations, Inc.
    In the United States: Ashley M. Ammon: 1-646-277-1227
    In China: Wei-Jung Yang: 86-10-6599-7968

• Roth Capital Partners China Conference, to be held October 12-14, 2009, at the Fontainebleau Miami Beach Hotel in Miami, FL. Management will present at 12:00 pm ET on October 13, 2009 and will meet with institutional investors throughout the day. A live webcast will be available on the Company's investor relations website at www.americandairyinc.com.
• Citi Greater China Investor Conference, to be held October 14-16, 2009 at The Ritz Carlton in Beijing, China. Management will speak on a panel discussion entitled "Food Safety in China," which will take place from 2:00 pm - 2:45 pm Beijing Time on October 15, 2009. Management will meet with institutional investors throughout the day.

About American Dairy, Inc.

American Dairy, Inc. (NYSE: ADY - News) is one of the leading producers and distributors of premium infant formula, milk powder, and soybean, rice and walnut products in the People's Republic of China. American Dairy conducts operations in China through its wholly owned subsidiary, Feihe Dairy, and other subsidiaries. Founded in 1962, Feihe Dairy is headquartered in Beijing, China, and has processing and distribution facilities in Kedong, Qiqihaer, Baiquan, Gannan, Longjiang, Shanxi, and Langfang. Using proprietary processing techniques, American Dairy makes products that are specially formulated for particular ages, dietary needs and health concerns. American Dairy has over 200 company-owned milk collection stations, two dairy farms, six production facilities with an aggregate milk powder production capacity of approximately 1,220 tons per day and an extensive distribution network that reaches over 84,000 retail outlets throughout China. For more information about American Dairy, please visit http://www.americandairy....

Cautionary Note Regarding Forward-Looking Statements

This document contains forward-looking information about the Company's operating results and business prospects that involve substantial risks and uncertainties. Statements that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These statements include, but are not limited to, statements about the Company's plans, objectives, expectations, strategies, intentions or other characterizations of future events or circumstances and are generally identified by the words "may," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "targets," "could," "would," and similar expressions. Because these forward-looking statements are subject to a number of risks and uncertainties, the Company's actual results could differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the heading "Risk Factors" in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2008, quarterly report on Form 10-Q for its second quarter in 2009, and in current reports on Form 8-K filed with the United States Securities and Exchange Commission and available at www.sec.gov. The Company assumes no obligation to update any such forward-looking statements.

For more information regarding the conference, please contact your Susquehanna Financial Group institutional sales representative.

About American Dairy, Inc.

American Dairy, Inc. (NYSE: ADY - News) is one of the leading producers and distributors of premium infant formula, milk powder, and soybean, rice and walnut products in the People's Republic of China. American Dairy conducts operations in China through its wholly owned subsidiary, Feihe Dairy, and other subsidiaries. Founded in 1962, Feihe Dairy is headquartered in Beijing, China, and has processing and distribution facilities in Kedong, Qiqihaer, Baiquan, Gannan, Longjiang, Shanxi, and Langfang. Using proprietary processing techniques, American Dairy makes products that are specially formulated for particular ages, dietary needs and health concerns. American Dairy has over 200 company-owned milk collection stations, two dairy farms, six production facilities with an aggregate milk powder production capacity of approximately 1,220 tons per day and an extensive distribution network that reaches over 84,000 retail outlets throughout China. For more information about American Dairy, please visit http://www.americandairy....

    CONTACT
    Integrated Corporate Relations, Inc.
    In the United States: Ashley Ammon: 1-203-682-8200
    In China: Wei-Jung Yang: 86-10-6599-7968

Jonathan Chou, Chief Financial Officer of American Dairy, stated, "We are very pleased with our agreement with Citadel to retire their 2012 Notes, which will allow us to improve our capital structure and create additional cost savings for the Company. Today's announcement is consistent with our ongoing efforts to strengthen our balance sheet and further enhance our financial flexibility to help us support our ongoing growth in this unique and dynamic infant milk formula market."

About American Dairy, Inc.

American Dairy, Inc. (NYSE: ADY - News) is one of the leading producers and distributors of premium infant formula, milk powder, and soybean, rice and walnut products in the People's Republic of China. American Dairy conducts operations in China through its wholly owned subsidiary, Feihe Dairy, and other subsidiaries. Founded in 1962, Feihe Dairy is headquartered in Beijing, China, and has processing and distribution facilities in Kedong, Qiqihaer, Baiquan, Gannan, Longjiang, Shanxi, and Langfang. Using proprietary processing techniques, American Dairy makes products that are specially formulated for particular ages, dietary needs and health concerns. American Dairy has over 200 company-owned milk collection stations, two dairy farms, six production facilities with an aggregate milk powder production capacity of approximately 1,220 tons per day and an extensive distribution network that reaches over 84,000 retail outlets throughout China. For more information about American Dairy, please visit http://www.americandairy....

Cautionary Note Regarding Forward-Looking Statements

This document contains forward-looking information about the Company's operating results and business prospects that involve substantial risks and uncertainties. Statements that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These statements include, but are not limited to, statements about the Company's plans, objectives, expectations, strategies, intentions or other characterizations of future events or circumstances and are generally identified by the words "may," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "targets," "could," "would," and similar expressions. Because these forward-looking statements are subject to a number of risks and uncertainties, the Company's actual results could differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the heading "Risk Factors" in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2008, quarterly report on Form 10-Q for its second quarter in 2009, and in current reports on Form 8-K filed with the United States Securities and Exchange Commission and available at www.sec.gov. The Company assumes no obligation to update any such forward-looking statements.

    CONTACT
    Integrated Corporate Relations, Inc.
    In the United States: Ashley Ammon: 1-203-682-8200
    In China: Wei-Jung Yang: 86-10-6599-7968

In connection with the closing of the transaction, American Dairy's Board of Directors approved the appointment of Neil N. Shen, Founding and Managing Partner of Sequoia Capital China, to its Board of Directors. Mr. Shen co-founded Ctrip, a NASDAQ-listed travel consolidator in China, and served as its Chief Financial Officer from 2000 to October 2005 and as its President from August 2003 to October 2005. He also co-founded Home Inns and Hotels Management ("Home Inns"), a NASDAQ-listed, leading economy hotel chain in China. Prior to founding Ctrip and Home Inns, Mr. Shen had worked for more than eight years in the investment banking industry in New York and Hong Kong. Currently, Mr. Shen is a Co-Chairman of Home Inns, a director of Ctrip and a director of E-House (China) Holdings Limited, an NYSE-listed leading real estate service company in China. He is also an independent director of Focus Media Holding Limited, a NASDAQ-listed media advertising company based in China, and a director of a number of privately owned companies based in China. Mr. Shen received his bachelor's degree from Shanghai Jiao Tong University in China and his master's degree from the School of Management at Yale University.

About American Dairy, Inc.

American Dairy, Inc. (NYSE: ADY - News) is one of the leading producers and distributors of premium infant formula, milk powder, and soybean, rice and walnut products in the People's Republic of China. American Dairy conducts operations in China through its wholly owned subsidiary, Feihe Dairy, and other subsidiaries. Founded in 1962, Feihe Dairy is headquartered in Beijing, China, and has processing and distribution facilities in Kedong, Qiqihaer, Baiquan, Gannan, Longjiang, Shanxi, and Langfang. Using proprietary processing techniques, American Dairy makes products that are specially formulated for particular ages, dietary needs and health concerns. American Dairy has over 200 company-owned milk collection stations, two dairy farms, six production facilities with an aggregate milk powder production capacity of approximately 1,220 tons per day and an extensive distribution network that reaches over 80,000 retail outlets throughout China. For more information about American Dairy, please visit http://www.americandairy....

About Sequoia Capital

Since 1972, Sequoia Capital, a leading private investment partnership, has provided early stage and growth stage venture capital for very smart founders and executives who have turned great ideas into sustainable companies of enduring value. As the "Entrepreneurs Behind the Entrepreneurs," Sequoia Capital's Partners have worked with accomplished innovators and operators who built great franchises such as Agile Software, Apple Computer, Aruba Wireless Networks, Cisco Systems, Flextronics, Google, Informix, Isilon Systems, Linear Technology, LSI Logic, Microchip, NetScaler, NetScreen, Network Appliance, nVidia, Oracle, PayPal, Pixelworks, Yahoo!, YouTube, Aruba Networks and Netezza. To learn more about Sequoia Capital visit www.sequoiacap.com.

Cautionary Note Regarding Forward-Looking Statements

This document contains forward-looking information about the Company's operating results and business prospects that involve substantial risks and uncertainties. Statements that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These statements include, but are not limited to, statements about the Company's plans, objectives, expectations, strategies, intentions or other characterizations of future events or circumstances and are generally identified by the words "may," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "targets," "could," "would," and similar expressions. Because these forward-looking statements are subject to a number of risks and uncertainties, the Company's actual results could differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the heading "Risk Factors" in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2008, quarterly report on Form 10-Q for its second quarter in 2009, and in current reports on Form 8-K filed with the United States Securities and Exchange Commission and available at www.sec.gov. The Company assumes no obligation to update any such forward-looking statements.

    CONTACT
    Integrated Corporate Relations, Inc.
    In the United States: Ashley Ammon: 1-203-682-8200
    In China: Wei-Jung Yang: 86-10-6599-7968

Additionally, the Company announced that it plans to release second quarter 2009 financial results on Friday, August 14, 2009, after the market closes. The Company will hold a conference call to discuss second quarter results on Monday, August 17, 2009, at 5:00 pm ET. Listeners may access the call by dialing the following numbers:

    United States: 1-888-466-4440
    China North: 10 800-712-0046
    China South: 10 800-120-0046
    Hong Kong:  800-968103
    International: 1-719-325-2117

A telephone replay will be available from two hours after the conclusion of the call through August 24, 2009. Listeners may access the replay by dialing 1-888-203-1112 or 1-719-457-0820 for international callers, access code: 4846950. A webcast will also be available through the Company's website at www.americandairyinc.com.

About American Dairy, Inc.

American Dairy, Inc. (NYSE: ADY - News) is one of the leading producers and distributors of premium infant formula, milk powder, and soybean, rice and walnut products in the People's Republic of China. American Dairy conducts operations in China through its wholly owned subsidiary, Feihe Dairy, and other subsidiaries. Founded in 1962, Feihe Dairy is headquartered in Beijing, China, and has processing and distribution facilities in Kedong, Qiqihaer, Baiquan, Gannan, Longjiang, Shanxi, and Langfang. Using proprietary processing techniques, American Dairy makes products that are specially formulated for particular ages, dietary needs and health concerns. American Dairy has over 200 company-owned milk collection stations, two dairy farms, six production facilities with an aggregate milk powder production capacity of approximately 1,220 tons per day and an extensive distribution network that reaches over 80,000 retail outlets throughout China. For more information about American Dairy, please visit http://www.americandairy....

    CONTACT
    Integrated Corporate Relations, Inc.
    In the United States: Ashley Ammon: 203-682-8200
    In China: Wei-Jung Yang: 86-10-6599-7968

The transaction is expected to close on or around August 27, 2009. Under the terms of the agreement, the Company has agreed to issue additional shares to Sequoia Capital if certain 2009 and 2010 earnings targets are not met, and Sequoia Capital may require a repurchase of its shares in certain circumstances. The Company also agreed that Sequoia Capital may nominate a representative to the Company's Board of Directors reasonably acceptable to the Company's Board of Directors.

"We are pleased to enter into a financial partnership with Sequoia Capital, a renowned private investment firm known for assisting high growth companies. We are also pleased to have Sequoia Capital's representative join our board of directors," said Mr. Leng You-Bin, the Chairman and CEO of American Dairy. "This transaction will allow us to increase our growth capital to fund our long-term strategic plan to achieve leadership position within our industry."

"We are very excited about becoming a shareholder of American Dairy, and look forward to working with the excellent management team, led by Mr. Leng, to build American Dairy into a leading consumer product company in China," said Neil Shen, Founding Managing Partner of Sequoia Capital China.

Oppenheimer & Co. Inc. acted as financial advisor to the Company in connection with the transaction. Please refer to the Company's Form 8-K for further details regarding the terms and conditions of the transaction.

The securities to be issued in the private placement have not been registered under the Securities Act of 1933, as amended, and may not be sold by Sequoia Capital in the United States, except pursuant to an effective registration statement or an applicable exemption from the registration requirements. The Company has agreed to file a registration statement covering the re-sale of the securities issued in this transaction.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

About American Dairy, Inc.

American Dairy, Inc. (NYSE: ADY - News) is one of the leading producers and distributors of premium infant formula, milk powder, and soybean, rice and walnut products in the People's Republic of China. American Dairy conducts operations in China through its wholly owned subsidiary, Feihe Dairy, and other subsidiaries. Founded in 1962, Feihe Dairy is headquartered in Beijing, China, and has processing and distribution facilities in Kedong, Qiqihaer, Baiquan, Gannan, Longjiang, Shanxi, and Langfang. Using proprietary processing techniques, American Dairy makes products that are specially formulated for particular ages, dietary needs and health concerns. American Dairy has over 200 company-owned milk collection stations, two dairy farms, six production facilities with an aggregate milk powder production capacity of approximately 1,220 tons per day and an extensive distribution network that reaches over 80,000 retail outlets throughout China. For more information about American Dairy, please visit http://www.americandairy....

About Sequoia Capital

Since 1972, Sequoia Capital, a leading private investment partnership, has provided early stage and growth stage venture capital for very smart founders and executives who have turned great ideas into sustainable companies of enduring value. As the "Entrepreneurs Behind the Entrepreneurs," Sequoia Capital's Partners have worked with accomplished innovators and operators who built great franchises such as Agile Software, Apple Computer, Aruba Wireless Networks, Cisco Systems, Flextronics, Google, Informix, Isilon Systems, Linear Technology, LSI Logic, Microchip, NetScaler, NetScreen, Network Appliance, nVidia, Oracle, PayPal, Pixelworks, Yahoo!, YouTube, Aruba Networks and Netezza. To learn more about Sequoia Capital visit www.sequoiacap.com.

Cautionary Note Regarding Forward-Looking Statements

This document contains forward-looking information about the Company's operating results and business prospects that involve substantial risks and uncertainties. Statements that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These statements include, but are not limited to, statements about the Company's plans, objectives, expectations, strategies, intentions or other characterizations of future events or circumstances and are generally identified by the words "may," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "targets," "could," "would," and similar expressions. Because these forward-looking statements are subject to a number of risks and uncertainties, the Company's actual results could differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the heading "Risk Factors" in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2008, quarterly report on Form 10-Q for its first quarter in 2009, and in current reports on Form 8-K filed with the United States Securities and Exchange Commission and available at www.sec.gov. The Company assumes no obligation to update any such forward-looking statements.

    CONTACT
    Integrated Corporate Relations, Inc.
    In the United States: Ashley Ammon: 1-203-682-8200
    In China: Wei-Jung Yang: 86-10-6599-7968

BEIJING and LOS ANGELES, July 13 /PRNewswire-FirstCall/ -- American Dairy, Inc. (NYSE: ADY - News; "American Dairy" or the "Company"), one of the leading producers and distributors of premium infant formula, milk powder and soybean, rice and walnut products in China, today provided preliminary second quarter 2009 revenue results, preliminary full year 2009 revenue guidance and a business update.

American Dairy expects second quarter 2009 revenue to increase by approximately 10% year over year to approximately $41.0 million from $37.3 million, the revenue reported in the second quarter of 2008 from continuing operations. The corresponding quarterly revenue numbers from continuing operations for the third and fourth quarters of 2008 were $37.2 million and $79.6 million, respectively. More importantly, sales in the Company's core infant formula business in the second quarter of 2009 should increase by more than 100% year over year. The Company also provided guidance for full year 2009 revenues of $330-$360 million, representing an annual growth rate of approximately 80% from 2008.

Mr. Jonathan H. Chou, the Company's Chief Financial Officer comments, "Second quarter 2009 sales performance continues to be strong notwithstanding the run down in inventories in the sales channel caused by newly-mandated SFDA safety disclosures on all food packaging in China to bring them more in line with international standards. In addition, China Investment Corp. (CIC) data recently reported American Dairy's Feihe brands market share at approximately 6.4% in China's infant formula market, as of May 2009."

Mr. Leng You-Bin, the Company's Chief Executive Officer states, "Our focus in the coming years is to become a top-tier producer of branded infant milk formula products. I believe we have only just begun to recognize growth in the infant milk formula market, and we recently made investments to help us achieve these market share goals."

Mr. Liu Hua, Vice Chairman explains, "We intend to achieve this through continued investment in brand awareness of our Feihe brand particularly in Tier 1 cities and other parts of China, while strengthening our existing, dominant presence in the North and East of the country. We will increase our point of sales presence to at least 100,000 retail locations throughout China, up from the 80,000 locations as of today and compared to 50,000 locations at the beginning of 2009. For example, we increased our distributor base to over 550 from 450 at the start of the year. We increased our sales force by 50% in six months to 1,500 sales people today compared with 1,000 at the start of the year. We also invested in additional milk supply, which we control for quality purposes, and now have 10,000 Australian Holstein milk producing cows, up from 8,000 at the start of the year. We will aggressively manage all of these efforts to drive our market share higher over time, and ultimately create one of the leading infant formula brands in China."

About American Dairy, Inc.

American Dairy, Inc. (NYSE: ADY - News) is one of the leading producers and distributors of premium infant formula, milk powder, and soybean, rice and walnut products in the People's Republic of China. American Dairy conducts operations in China through its wholly owned subsidiary, Feihe Dairy, and other subsidiaries. Founded in 1962, Feihe Dairy is headquartered in Beijing, China, and has processing and distribution facilities in Kedong, Qiqihaer, Baiquan, Gannan, Longjiang, Shanxi, and Langfang. Using proprietary processing techniques, American Dairy makes products that are specially formulated for particular ages, dietary needs and health concerns. American Dairy has over 200 company-owned milk collection stations, two dairy farms, six production facilities with an aggregate milk powder production capacity of approximately 1,220 tons per day and an extensive distribution network that reaches over 80,000 retail outlets throughout China. For more information about American Dairy, please visit http://www.americandairy....

Cautionary Note Regarding Forward-Looking Statements

This document contains forward-looking information about the Company's operating results and business prospects that involve substantial risks and uncertainties. Statements that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These statements include, but are not limited to, statements about the Company's plans, objectives, expectations, strategies, intentions or other characterizations of future events or circumstances and are generally identified by the words "may," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "could," "would," and similar expressions. Because these forward-looking statements are subject to a number of risks and uncertainties, the Company's actual results could differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the heading "Risk Factors" in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2008, quarterly report on Form 10-Q for its first quarter in 2009, and in current reports on Form 8-K filed with the United States Securities and Exchange Commission and available at www.sec.gov. The Company assumes no obligation to update any such forward-looking statements.

    CONTACT
    Integrated Corporate Relations, Inc.
    In the United States: Ashley Ammon: 1-203-682-8200
    In China: Wei-Jung Yang: 86-10-6599-7968

The letter concludes the SEC's informal inquiry, which commenced in 2007 and related to individuals and entities that had provided accounting or certain advisory services to the Company, including Murrell, Hall, McIntosh & Co. PLLP and Henny Wee & Co., who the Company terminated in December 2007.

Mr. Leng You-Bin, the Company's Chief Executive Officer, stated, "We are extremely pleased to announce the termination of the investigation. We believe this marks an important milestone in our efforts to restore investors' confidence in our Company."

Mr. Jonathan Chou, the Company's Chief Financial Officer, commented, "With the informal investigation behind us, we remain committed to building the leading infant formula company in China going forward."

About American Dairy, Inc.

American Dairy, Inc. (NYSE: ADY - News) is one of the leading producers and distributors of premium infant formula, milk powder, and soybean, rice walnut products in the People's Republic of China. American Dairy conducts operations in China through its wholly owned subsidiary, Feihe Dairy. Founded in 1962, Feihe Dairy is headquartered in Beijing, China, and has processing and distribution facilities in Kedong, Qiqihaer, Baiquan, Gannan, Shanxi, and Langfang. Using proprietary processing techniques, American Dairy makes products that are specially formulated for particular ages, dietary needs and health concerns. American Dairy has over 200 company-owned milk collection stations, six production facilities with an aggregate milk powder production capacity of approximately 1,220 tons per day and an extensive distribution network that reaches over 50,000 retail outlets throughout China. For more information about American Dairy, please visit http://www.americandairy....

    CONTACT
    Integrated Corporate Relations, Inc.
    In the United States: Ashley Ammon: 203-682-8200
    In China: Wei-Jung Yang: 86-10-6599-7968

BEIJING, and LOS ANGELES, June 9 /PRNewswire-FirstCall/ -- American Dairy, Inc. (NYSE: ADY) ('American Dairy' or the 'Company'), one of the leading producers and distributors of premium infant formula, milk powder and soybean, rice and walnut products in China, today announced that it has entered into an agreement ('Agreement') with the GEA Group, Germany ('GEA'). Under the Agreement, GEA has agreed to provide the Company with infant formula production equipment, along with the related installations and training, at American Dairy's Gannan production facility, Flying Crane Dairy Products Co., Limited ('Gannan Feihe'). The Company expects the Agreement to increase production capacity at Gannan Feihe from 300 tons/day to 1,000 tons/day by August 2010.

Under the Agreement, American Dairy has agreed to make payments totaling approximately $24.6 million. The Company plans to fund the purchase partially from cash on hand and cash generated from operations, and partially from existing credit facilities available to the Company.

Mr. Leng You-Bin, the Company's Chief Executive Officer, stated, 'We are glad to continue our partnership with GEA, and ultimately to enhance our Gannan production facility using new equipment in accordance with the current standards of the European Union. We believe the equipment from trusted manufacturers like GEA will better ensure that we continue our rigorous quality standards.'

The Company also announced that it has completed the acquisition of a dairy processing plant located in Longjiang County, Heilongjiang Province, China, or 'Longjiang Feihe.' The total cash consideration of $4.4 million has been partially paid-for and subsidized by the Government of Longjiang County. Under the Agreement, GEA will assist in remodeling the Longjiang Feihe facilities and in the construction of a 900 tons/day production facility, estimated to be completed by May 2011.

The enhancements at the Gannan Feihe and Longjiang Feihe facilities will expand American Dairy's infant formula production capacity from approximately 1,220 tons/day, as of today, to approximately 1,920 tons/day by August 2010, and to approximately 2,820 tons/day by May 2011.

About GEA Group

The GEA Group, Germany, is a globally successful technology group with more than 250 companies in 50 countries. The company focuses on specialty mechanical engineering, especially process engineering and equipment. The GEA Group is one of the world's market and technology leaders in 90 percent of its businesses.

About American Dairy, Inc.

American Dairy, Inc. (NYSE: ADY) is one of the leading producers and distributors of premium infant formula, milk powder, and soybean, rice walnut products in the People's Republic of China. American Dairy conducts operations in China through its wholly owned subsidiary, Feihe Dairy. Founded in 1962, Feihe Dairy is headquartered in Beijing, China, and has processing and distribution facilities in Kedong, Qiqihaer, Baiquan, Gannan, Shanxi, and Langfang. Using proprietary processing techniques, American Dairy makes products that are specially formulated for particular ages, dietary needs and health concerns. American Dairy has over 200 company-owned milk collection stations, six production facilities with an aggregate milk powder production capacity of approximately 1,220 tons per day and an extensive distribution network that reaches over 50,000 retail outlets throughout China. For more information about American Dairy, please visit http://www.americandairy....

Cautionary Note Regarding Forward-Looking Statements

This document contains forward-looking information about the Company's operating results and business prospects that involve substantial risks and uncertainties. Statements that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These statements include, but are not limited to, statements about the Company's plans, objectives, expectations, strategies, intentions or other characterizations of future events or circumstances and are generally identified by the words 'may,' 'expects,' 'anticipates,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' 'could,' 'would,' and similar expressions. Because these forward-looking statements are subject to a number of risks and uncertainties, the Company's actual results could differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the heading 'Risk Factors' in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2008, quarterly report on Form 10-Q for its first quarter in 2009, and in current reports on Form 8-K filed with the United States Securities and Exchange Commission and available at www.sec.gov. The Company assumes no obligation to update any such forward-looking statements.

    CONTACT
    Integrated Corporate Relations, Inc.
    In the United States: Ashley Ammon: 1-203-682-8200
    In China: Wei-Jung Yang: 86-10-6599-7968

SOURCE American Dairy, Inc.

Source: PR Newswire (June 9, 2009 - 9:02 AM EDT)

Mr. Leng You-Bin, the Company's Chief Executive Officer, stated, 'We are extremely pleased about our pending transfer to the NYSE. Trading on the NYSE has always been one of our long term goals and we believe this move is in the best interest of our Company and our shareholders.'

About American Dairy, Inc.

American Dairy, Inc. (NYSE Arca: ADY) is one of the leading producers and distributors of premium infant formula, milk powder, and soybean, rice walnut products in the People's Republic of China. American Dairy conducts operations in China through its wholly owned subsidiary, Feihe Dairy. Founded in 1962, Feihe Dairy is headquartered in Beijing, China, and has processing and distribution facilities in Kedong, Qiqihaer, Baiquan, Gannan, Shanxi, and Langfang. Using proprietary processing techniques, American Dairy makes products that are specially formulated for particular ages, dietary needs and health concerns. American Dairy has over 200 company-owned milk collection stations, six production facilities with an aggregate milk powder production capacity of approximately 1,220 tons per day and an extensive distribution network that reaches over 50,000 retail outlets throughout China. For more information about American Dairy, please visit http://www.americandairy....

Cautionary Note Regarding Forward-Looking Statements

This document contains forward-looking information about the Company's operating results and business prospects that involve substantial risks and uncertainties. Statements that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These statements include, but are not limited to, statements about the Company's plans, objectives, expectations, strategies, intentions or other characterizations of future events or circumstances and are generally identified by the words 'may,' 'expects,' 'anticipates,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' 'could,' 'would,' and similar expressions. Because these forward-looking statements are subject to a number of risks and uncertainties, the Company's actual results could differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the heading 'Risk Factors' in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2008, quarterly report on Form 10-Q for its first quarter in 2009, and in current reports on Form 8-K filed with the United States Securities and Exchange Commission and available at www.sec.gov. The Company assumes no obligation to update any such forward-looking statements.

    CONTACT
    Integrated Corporate Relations, Inc.
    In the United States: Ashley Ammon: 203-682-8200
    In China: Wei-Jung Yang: 86-10-6599-7968

SOURCE American Dairy, Inc.

Source: PR Newswire (June 4, 2009 - 9:01 AM EDT)

• JMP 8th Annual Research Conference, held May 18-20, 2009 at the Ritz-Carlton in San Francisco. Management is currently scheduled to meet with institutional investors and to present at 8:30 am PT on Wednesday, May 20, 2009.
• Oppenheimer 3rd Annual China Dragon Call Conference, held May 19-21, 2009 at 300 Madison Avenue in New York City. Management is currently scheduled to meet with institutional investors and to present at 10:20 am ET on Thursday, May 21, 2009.

For further details, please contact your respective institutional sales representative.

About American Dairy, Inc.

American Dairy, Inc. (NYSE Arca: ADY) is one of the leading producers and distributors of premium infant formula, milk powder, and soybean, rice walnut products in the People's Republic of China. American Dairy conducts operations in China through its wholly owned subsidiary, Feihe Dairy. Founded in 1962, Feihe Dairy is headquartered in Beijing, China, and has processing and distribution facilities in Kedong, Qiqihaer, Baiquan, Gannan, Shanxi, and Langfang. Using proprietary processing techniques, American Dairy makes products that are specially formulated for particular ages, dietary needs and health concerns. American Dairy has over 200 company-owned milk collection stations, six production facilities with an aggregate milk powder production capacity of approximately 1,220 tons per day and an extensive distribution network that reaches over 50,000 retail outlets throughout China. For more information about American Dairy, please visit http://www.americandairy....

    CONTACT
    Integrated Corporate Relations, Inc.
    In the United States: Ashley Ammon: 203-682-8200
    In China: Wei-Jung Yang: 86-10-6599-7968

SOURCE American Dairy, Inc.

Source: PR Newswire (May 15, 2009 - 9:01 AM EDT)

- Income from Continuing Operations Up 523% to $32.0 million vs $5.1 million in 1Q08 -

- Net Income up 282% to $27.8 Million vs $7.3 Million in 1Q08 -

BEIJING and LOS ANGELES, May 14 /PRNewswire-FirstCall/ -- American Dairy, Inc. (NYSE Arca: ADY) ('American Dairy' or the 'Company'), one of the leading producers and distributors of premium infant formula, milk powder and soybean, rice and walnut products in China, today announced financial results for the first quarter 2009.

Sales increased 191.1% to $113.8 million in the first quarter 2009 from $39.1 million in the first quarter of 2008. Sales performance reflects the Company's expanding market areas and distribution network through China and increased demand for high quality products, as well as an increase in sales quantities of the Company's high profit margin products, such as infant formula and other milk powders. Specifically, the Company's milk powder sales increased 318.4% from the prior year period to $107.6 million, and contributed to 94.5% of total sales in the first quarter of 2009, up significantly from contributing 65.7% of total sales in the first quarter of 2008.

Mr. Leng You-Bin, the Company's Chief Executive Officer, stated, 'Our first quarter 2009 sales reflect consumers' flight to quality at the height of the melamine crisis in China. Feihe's consistent quality standards, trusted brand name, secure raw milk supply and ability to meet increased demand, allowed us to drive revenue growth and report record financial results caused by the short-term disruption in the market. The first quarter's growth rate was exceptional, and we expect the second and third quarters to trend in line with historical results, in which we deliver year over year growth. We are focused on consistent and sustainable growth over the long term, particularly measured on an annual basis and not quarter to quarter.'

Mr. Leng continued, 'We believe the addressable market for infant formula is currently about $5.5 billion in China, and is projected to grow to around $12.0 billion through 2014. Our goal is to capture as much of this addressable market as possible and to build American Dairy into the leading infant formula provider in China. To achieve these goals, we intend to enhance our distribution capabilities into first-tier PRC markets, strengthen our premium-quality brand awareness particularly in southern and western China, expand our production capabilities by investing in world-class production processes, and strategically align sourcing, production and distribution by region.'

Gross profit increased 401.5% to $72.6 million in the first quarter of 2009 from $14.5 million in the first quarter of 2008. Gross margin for the first quarter of 2009 was 63.76%, compared to 37.02% in the prior year's period. Gross profit margin performance reflects increasing sales of higher margin infant formula products.

Income from continuing operations increased 523.1% to $32.0 million in the first quarter of 2009 from $5.1 million in the prior year period. Sales and marketing expenses increased 322.3% to $31.6 million in the first quarter of 2009 from $7.5 million in the first quarter of 2008. General and administrative expenses increased 384.5% to $9.0 million in the first quarter of 2009 from $1.9 million in the first quarter of 2008. Operating expenses in the first quarter of 2009, as compared to the first quarter of 2008, reflect a number of new initiatives to reposition the Company's brand on a nationwide basis, in Tier I, II and III cities in China, as well as increased headcount versus the prior year period.

The Company recognized other expenses of $370,000 during the first quarter of 2009, compared to other income of $3.9 million in the first quarter of 2008. The year over year change is primarily attributable to a decrease in gain on derivatives of $9.0 million offset by a decrease in interest and finance costs of approximately $3.7 million.

Net income for the first quarter of 2009 increased 282.0% to $27.8 million, or $1.55 per diluted share, from $7.3 million, or $0.41 per diluted share, in the prior year's period.

As of March 31, 2009, the Company had cash and cash equivalents of $54.1 million and total current assets of $184.3 million, compared with cash and cash equivalents of $11.8 million and total current assets of $151.9 million as of December 31, 2008.

The Company believes that cash generated from operations and existing cash on hand is sufficient to fund current obligations. The Company paid $15.3 million in April 2009 related to the restructuring of its 1% Guaranteed Senior Secured Convertibles Notes, and remaining payments include $15.3 million due July 2009 and $46.0 million due October 2009. The Company also has access to a line of credit with the Construction Bank of China and other Chinese banks to fund its operations. Additionally, the Company received approximately $32.0 million in May 2009 related to the sale of the Company's Moveup subsidiary. Please refer to the Company's Form 10-Q for the first quarter 2009 for additional details.

Jonathan Chou, the Chief Financial Officer of American Dairy, stated, 'We believe much of the dairy market in China is underserved, particularly with respect to infant formula. We have successfully capitalized on the increased demand for high quality products in the recent past, operating our milk production facilities at maximum capacity, and aggressively branding our products in the premium and super-premium categories. Going forward, we believe we can continue to drive market share gains with increased production capacity and strengthened premium-quality brand awareness. These efforts will require a degree of reinvestment in our operations and our revenue performance and cash generation allows us to invest in key, strategic areas so that we ultimately drive long-term shareholder value.'

Chou concluded, 'As we move through the remainder of the year, we are confident that we have a solid team to navigate the growing dairy market in China. We recently adopted an option plan so that we attract and retain top talent across the organization. We have a stronger accounting and finance team than ever before, and in 2008 we engaged a big four accounting firm and made several new hires to address areas of improvement in our internal controls. We also intend to meet regularly with investors and host an analyst day in the U.S. or in China later this year.'

Investor questions and inquiries should be directed toward management by contacting the Company's investor relations representatives at 1-203-682-8208.

About American Dairy, Inc.

American Dairy, Inc. (NYSE Arca: ADY) is one of the leading producers and distributors of premium infant formula, milk powder, and soybean, rice walnut products in the People's Republic of China. American Dairy conducts operations in China through its wholly owned subsidiary, Feihe Dairy. Founded in 1962, Feihe Dairy is headquartered in Beijing, China, and has processing and distribution facilities in Kedong, Qiqihaer, Baiquan, Gannan, Shanxi, and Langfang. Using proprietary processing techniques, American Dairy makes products that are specially formulated for particular ages, dietary needs and health concerns. American Dairy has over 200 company-owned milk collection stations, six production facilities with an aggregate milk powder production capacity of approximately 1,220 tons per day and an extensive distribution network that reaches over 50,000 retail outlets throughout China. For more information about American Dairy, please visit http://www.americandairy....

Cautionary Note Regarding Forward-Looking Statements

This document contains forward-looking information about the Company's operating results and business prospects that involve substantial risks and uncertainties. Statements that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These statements include, but are not limited to, statements about the Company's plans, objectives, expectations, strategies, intentions or other characterizations of future events or circumstances and are generally identified by the words 'may,' 'expects,' 'anticipates,' 'intends,' 'plans,' 'believes,' 'seeks,' 'estimates,' 'could,' 'would,' and similar expressions. Because these forward-looking statements are subject to a number of risks and uncertainties, the Company's actual results could differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the heading 'Risk Factors' in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2008, quarterly report on Form 10-Q for its first quarter in 2009, and in current reports on Form 8-K filed with the United States Securities and Exchange Commission and available at www.sec.gov. The Company assumes no obligation to update any such forward-looking statements.

    CONTACT
    Integrated Corporate Relations, Inc.
    In the United States: Ashley Ammon: 1-203-682-8200
    In China: Wei-Jung Yang: 86-10-6599-7968

                               AMERICAN DAIRY, INC.
                       CONDENSED CONSOLIDATED BALANCE SHEETS

                                          March 31,     December 31,
                                             2009           2008
                                              US$            US$
                                          (unaudited)
     ASSETS
     Current assets:
      Cash and cash equivalents            54,112,534       11,785,408
      Notes and loans receivable, net               -        1,493,245
      Trade receivables, net of
       allowance of $3,491,543 and
       $670,113, respectively               9,628,016       12,275,497
      Due from related parties              1,902,701          265,479
      Employee receivable                     596,526          307,249
      Advances to suppliers                26,516,230       24,943,046
      Receivable from discontinuing
       operations                          31,041,845       31,002,897
      Inventories, net                     46,925,871       52,330,333
      Prepayments and other current
       assets                                  89,776           63,711
      Refundable taxes                        291,321          488,938
      Deposit for equity investment         2,191,189
      Other receivables                     1,427,143        4,598,359
      Current assets of discontinuing
       operations                           9,554,368       12,392,384
     Total current assets                 184,277,520      151,946,546

     Investments:
      Investment in mutual funds -
       available for sale                      97,631           77,504
      Investment at cost                      262,942          262,611
                                              360,573          340,115
     Property and equipment:
      Property and equipment, net          88,282,947       88,289,858
      Construction in progress             39,210,806       28,847,959
                                          127,493,753      117,137,817
     Biological assets:
      Immature biological assets           19,785,266       23,784,479
      Mature biological assets, net         7,454,456        1,483,355
                                           27,239,722       25,267,834
     Other assets:
      Deferred tax assets                     730,490          730,490
      Prepaid leases                       29,018,719       29,146,748
      Goodwill                              2,285,706        2,282,838
      Deferred charges, net                    73,483          107,396
      Long term assets of discontinuing
       operations                          31,626,665       31,587,018
     Total assets                         403,106,631      358,546,802

     LIABILITIES AND SHAREHOLDERS'
      EQUITY
     Liabilities
     Current liabilities:
      Current maturities of long term
       debt                                 4,023,752        4,018,704
      Convertible debt redeemable within
       one year                            17,888,021       17,732,033
      Short term debts                     71,683,981       73,809,893
      Notes and loans payable              13,908,184        8,055,450
      Accounts payable                     30,133,611       36,643,041
      Accrued expenses                     14,145,168       10,620,393
      Income tax payable                    3,309,098        1,185,528
      Advances from customers               6,259,924        9,864,080
      Due to related parties                  338,211        1,017,399
      Advances from employees                 484,259        1,016,173
      Accrued employee benefits             2,394,168        2,873,889
      Other payables                       29,141,932       19,513,681
      Current liabilities of
       discontinuing operations            32,250,818       35,063,603
     Total current liabilities            225,961,128      221,413,867

     Long term debt, net of current
      portion                              12,976,584        9,146,034
     Long term tax payable                  4,154,934        2,750,887
     Deferred income                       14,997,192        8,416,492
     Long term liability of
      discontinuing operations                395,176          395,176
     Total liabilities                    258,485,014      242,122,456


     Equity
     Ordinary shares (US$0.001 par
      value, 50,000,000 shares
      authorized; 17,253,907 issued and
      outstanding as of March 31, 2009
      and December 31, 2008)                   17,254           17,254
     Additional paid-in capital            26,899,114       26,758,425
     Ordinary share warrants                3,003,448        3,003,448
     Statutory reserves                     6,861,224        6,861,224
     Accumulated other comprehensive
      income                               25,442,002       25,146,055
     Retained earnings                     81,878,276       54,091,493
     Total shareholders' equity           144,101,318      115,877,899
     Minority interests                       520,299          546,447

     Total equity                         144,621,617      116,424,346

     Total liabilities and equity         403,106,631      358,546,802

                               AMERICAN DAIRY, INC.
     CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                                     (unaudited)

                                              For the period ended March 31,
                                                    2009          2008
                                                     US$           US$

    Sales                                       113,821,847     39,100,654

    Cost of goods sold                           41,244,269     24,627,183

    Gross profit                                 72,577,578     14,473,471

    Operating and administrative expenses:
      Sales and marketing                        31,639,888      7,491,684
      General and administrative                  8,978,204      1,852,921
    Total operating expenses                     40,618,092      9,344,605

    Income from continuing operations            31,959,486      5,128,866

      Other income (expenses):
      Interest income                                92,317         40,809
      Interest and finance costs                 (1,585,546)    (5,276,718)
      Amortization of deferred charges              (33,914)      (184,897)
      Registration rights penalty                         -       (720,325)
      Gain on derivatives                                 -      9,000,786
      Government subsidy-tax refund                 730,289        560,792
      Other income, net                             424,137        509,223
    Income from continuing operations
     before income tax expenses
     and minority interests                      31,586,769      9,058,536

    Income tax expenses                           3,829,348      1,772,076
    Net income from continuing
     operations before minority interests        27,757,421      7,286,460

    Minority interests                               26,148        (13,179)
    Net income from continuing operations        27,783,569      7,273,281
    Net income (loss) from discontinuing
     operations                                       3,214         (1,776)
    Net income attributable to ordinary
     shareholders                                27,786,783      7,271,505

    Other comprehensive income:
    Cumulative currency translation adjustments     275,917      7,763,882
    Change in fair value of available for
     sale investments                                20,030        (46,117)

    Total comprehensive income                   28,082,730     14,989,270

    Earnings per ordinary share - Basic
      Income from continuing operations               $1.61          $0.43
      Income from discontinuing operations,
       net of tax                                     $0.00          $0.00
      Net income                                      $1.61          $0.43
    Earnings per ordinary share - Diluted
      Income from continuing operations               $1.55          $0.41
      Income from discontinuing operations,
       net of tax                                     $0.00          $0.00
      Net income                                      $1.55          $0.41

    Weighted average ordinary shares outstanding
      Basic                                      17,253,907     16,962,823
      Diluted                                    17,926,990     17,588,852

SOURCE American Dairy, Inc.

Source: PR Newswire (May 14, 2009 - 4:18 PM EDT)

About American Dairy, Inc.

American Dairy, Inc. (NYSE Arca: ADY) is one of the leading producers and distributors of premium infant formula, milk powder, and soybean, rice walnut products in the People's Republic of China. American Dairy conducts operations in China through its wholly owned subsidiary, Feihe Dairy. Founded in 1962, Feihe Dairy is headquartered in Beijing, China, and has processing and distribution facilities in Kedong, Qiqihaer, Baiquan, Gannan, Shanxi, and Langfang. Using proprietary processing techniques, American Dairy makes products that are specially formulated for particular ages, dietary needs and health concerns. American Dairy has over 200 company-owned milk collection stations, six production facilities with an aggregate milk powder production capacity of approximately 1,220 tons per day and an extensive distribution network that reaches over 50,000 retail outlets throughout China. For more information about American Dairy, please visit http://www.americandairy....

SOURCE American Dairy, Inc.

Source: PR Newswire (May 13, 2009 - 4:01 PM EDT)

Each year, ten award winners are carefully selected from both private and public domestic Chinese companies. Nominated CFOs go through a three-step elimination process. A selection committee evaluates individuals based on criteria including their abilities to manage risk and maintain healthy cash flow for their companies, their achievements in guiding companies through crisis situations and their leadership skills and ethics.

This year, the theme of the CFO Summit was "Navigating through the financial crisis," with discussions that focused on maintaining and preserving steady growth through the downturn. Other award recipients for 2008 included the CFOs from Sany Heavy Industry, China Distance Education, Sanyuan Group, Airmedia Group and SAIC Motor.

Mr. Jonathan H. Chou stated, "I am particularly honored to be recognized by CFO World as one of China's top CFOs. Though the macro environment has been tough, it has also presented us the opportunity to prove the strength of our business. I believe the recognition demonstrates American Dairy's operational excellence and the management team's continuous efforts and dedication to enhance the Company's financial reporting capabilities."

About American Dairy, Inc.

American Dairy, Inc. (NYSE Arca: ADY) is one of the leading producers and distributors of premium infant formula, milk powder, and soybean, rice walnut products in the People's Republic of China. American Dairy conducts operations in China through its wholly owned subsidiary, Feihe Dairy. Founded in 1962, Feihe Dairy is headquartered in Beijing, China, and has processing and distribution facilities in Kedong, Qiqihaer, Baiquan, Gannan, Shanxi, and Langfang. Using proprietary processing techniques, American Dairy makes products that are specially formulated for particular ages, dietary needs and health concerns. American Dairy has over 200 company-owned milk collection stations, six production facilities with an aggregate milk powder production capacity of approximately 1,220 tons per day and an extensive distribution network that reaches over 50,000 retail outlets throughout China. For more information about American Dairy, please visit http://www.americandairyinc.com.

    CONTACT
    Integrated Corporate Relations, Inc.
    In the United States: Ashley Ammon: 203-682-8200
    In China: Wei-Jung Yang: 86-10-6599-7968

Identifies Adjustments to 2005 and 2006 Financial Statements

BEIJING, and LOS ANGELES, March 26 /PRNewswire-FirstCall/ -- American Dairy, Inc. (NYSE Arca: ADY) ("American Dairy" or the "Company"), one of the leading producers and distributors of premium infant formula, milk powder and soybean, rice and walnut products in China, today announced financial results for its 2007 fiscal year and identified adjustments to its previously filed audited financial statements for its 2005 and 2006 fiscal years. The announcement of the Company's 2007 results has been delayed for many months due to the dismissal of the Company's former independent registered public accountant, as discussed below. The Company intends to meet ongoing NYSE listing requirements and to file a Form 10-K for its 2007 fiscal year by March 31, 2009. Additionally, the Company announced today that it expects to file a Form 10-K for its 2008 fiscal year by April 15, 2009.

Financial Highlights for the Twelve Months Ended December 31, 2007 Include:

• Sales, up 44.2% year over year to $166.0 million, from $115.1 million in 2006
• Gross profit, up 46.3% year over year to $73.0 million, from $49.9 million in 2006
• Gross profit margin, up 63 basis points year over year to 44.0% in 2007
• Income from operations, up 13.5% year over year to $18.5 million, from $16.3 million in 2006
• Net income attributable to ordinary shareholders of $8.3 million, or $0.48 per diluted share, in 2007, compared to $16.4 million, or $0.98 per diluted share, in 2006

Mr. Jonathan H. Chou, Chief Financial Officer of American Dairy, stated, "We are pleased with our 2007 accomplishments. We are approaching the end of the re-audit process and our 2005, 2006 and 2007 results reflect the significant growth of our high-quality Feihe brand and our ongoing operational excellence. As we move through the final stages of the re-audit, we'll continue to forge ahead with our trusted brand, formidable distribution reach and increased production capacity so that we capitalize on China's compelling dairy and infant formula opportunity."

Mr. Chou continued, "Although in the course of our re-audit we have identified material weaknesses and significant deficiencies in our internal controls, we are actively working to remediate and improve our internal controls, including hiring additional accounting, internal audit and finance staff, engaging consultants to assist with these functions, upgrading our systems, and implementing additional financial and management controls, reporting systems and procedures. As we continue implementing these measures, we believe we have become a much stronger company with better accounting and finance infrastructure and that our financial reporting will be more reliable and effective. We look forward to speaking with investors and shareholders on a regular quarterly basis once we report our audited 2008 financial results in the near future."

Mr. Leng You Bin, the Company's Chief Executive Officer, stated, "We plan to continue expanding our production capabilities, enhancing our distribution network in the first-tier cities in China, and strengthening our premium-quality brand awareness. We are confident that our 2008 results will reflect growth and are excited about our 2009 prospects. We look forward to continuing to deliver consistent results."

Re-Audit and Restatement of 2005 and 2006 Financial Statements

As previously announced, in December 2007 the Company dismissed Murrell, Hall, McIntosh & Co. PLLP ("MHM") as its independent registered public accountant following notification of an informal SEC investigation related to MHM and other individuals and entities that provided accounting or advisory services to the Company. The Company has filed a lawsuit against MHM in the United States District Court for the Western District of Oklahoma alleging that MHM breached its duties of due care and professional competence when serving as the Company's independent registered public accountant. As previously announced, in January 2008, the Company engaged Grant Thornton, the Hong Kong member firm of Grant Thornton International ("GT"), as its new independent registered public accountants and initiated a voluntary re-audit of its historical financial statements for the 2006 and 2005 fiscal years.

During the course of the re-audit, the Company identified items that require reclassification and errors that require correction in certain financial statements line items in its financial statements as of and for the 2006 and 2005 fiscal years. On March 26, 2009, management of the Company, in consultation with GT and the Audit Committee of the Company's board of directors, concluded that the re-audit was sufficiently complete such that the Company could evaluate the materiality of these errors and reclassifications on the Company's previously filed financial statements. Accordingly, management of the Company, in consultation with GT and the Audit Committee, concluded that the Company's previously filed financial statements as of and for the fiscal years ended December 31, 2006 and 2005 should be restated and should no longer be relied upon.

The Company currently estimates that the adjustments made during the re-audit would result in:

• For 2005, an increase in current assets of approximately $2.1 million, an increase in total assets approximately $1.4 million, an increase in current liabilities of approximately $610,000, an increase in total liabilities of approximately $2.4 million, a decrease in shareholders' equity of approximately $700,000, an increase in gross profit of approximately $1.0 million, a decrease in net income attributable to ordinary shareholders of approximately $320,000, and a decrease in total comprehensive income of approximately $150,000.
• For 2006, an increase in current assets of approximately $1.6 million, an increase in total assets approximately $6.5 million, an increase in current liabilities of approximately $6.6 million, an increase in total liabilities of approximately $10.0 million, a decrease in shareholders' equity of approximately $3.6 million, a decrease in gross profit of approximately $2.7 million, a decrease in net income attributable to ordinary shareholders of approximately $3.5 million, and a decrease in total comprehensive income of approximately $2.6 million.

Results of 2007 Operations

The following discussion of the Company's 2007 results of operations compares its unaudited condensed consolidated statements of operations and comprehensive income for the fiscal year ended December 31, 2007 to its unaudited, restated condensed consolidated statements of operations and comprehensive income for the fiscal year ended December 31, 2006. The unaudited amounts are only current estimations and investors should only rely on the audited financial information, which the Company plans to finalize and present in its 2007 Form 10-K to be filed by March 31, 2009.

Sales increased by approximately $50.9 million, or 44.2%, from approximately $115.1 million in 2006 to approximately $166.0 million in 2007. This increase was primarily attributable to expanding the Company's market areas and distribution network throughout China, increased demand for high quality products and strong market acceptance of its products, as well as an increase in sales quantities of several high profit margin products.

Gross profit increased approximately $23.1 million, or 46.3%, from approximately $49.9 million in 2006 to approximately $73.0 million in 2007. Gross profit margin in 2007 was 44.0%, an increase of 63 basis points from 43.4% in 2006. The increase in gross profit margin was primarily attributable to the shift in product mix to higher end products.

Costs of goods sold increased approximately $27.8 million, or 42.6%, from approximately $65.2 million in 2006 to approximately $92.9 million in 2007. This increase was primarily attributable to an increase of approximately $13.9 million, or 52.2%, in raw milk cost.

Total operating expenses increased by approximately $20.9 million, or 62.2%, from approximately $33.7 million in 2006 to approximately $54.6 million in 2007. This increase was primarily attributable to an increase of approximately $12.7 million, or 45.2%, in sales and marketing expenses, and an increase of approximately $8.3 million, or 147.6%, in general and administrative expenses.

As a result of the foregoing, income from operations increased approximately $2.2 million, or 13.5%, from approximately $16.3 million in the 2006 to approximately $18.5 million in 2007.

The Company had other expenses of approximately $4.3 million in 2007, as compared to other income of approximately $5.0 million in 2006. This change was primarily attributable to an increase in interest and finance costs of approximately $11.9 million, associated with the Company's 1% Guaranteed Senior Secured Convertible Notes due 2012 and 7.75% Convertible Notes due 2009, as well as various changes in other income and expense accounts.

In 2007, net income attributable to ordinary shareholders was approximately $8.3 million, or $0.48 per diluted share, as compared to $16.4 million, or $0.98 per diluted share, in 2006.

AMERICAN DAIRY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(UNAUDITED)

                                              For the twelve months ended
                                                      December 31,
                                                   2007            2006
                                                   ----            ----
                                         (Amounts in US$, except share data)

                                                             (Restated)
    Sales                                   165,968,149     115,082,067
    Cost of goods sold                       92,937,418      65,169,853
    Gross profit                             73,030,731      49,912,214

    Operating and administrative expenses:
        Sales and marketing                  40,739,403      28,066,399
        General and administrative           13,840,318       5,590,246
        Total operating expenses             54,579,721      33,656,645
        Income from operations               18,451,010      16,255,569

    Other income (expenses):
        Interest income                         374,386         175,986
        Interest and finance costs          (13,404,171)     (1,520,856)
        Amortization of deferred charges       (369,794)              -
        Registration rights penalty          (2,540,000)              -
        Gain on derivative                    3,279,031               -
        Loss on extinguishment of debt                -        (687,578)
        Refunds of income tax and VAT taxes   8,140,145       7,491,808
        Other income (expenses), net            236,387        (435,318)
    Income before income tax expenses and
     minority interests                      14,166,994      21,279,611

    Income tax expenses                       5,879,535       4,857,561
    Net income before minority interests      8,287,459      16,422,050

    Minority interests                           (3,066)         11,322
    Net income attributable to ordinary
     shareholders                             8,284,393      16,433,372

    Other comprehensive income:
        Cumulative currency translation
         adjustments                          9,314,690       1,993,117

    Total comprehensive income               17,599,083      18,426,489

    Earnings per ordinary share:
        Basic                                     $0.51           $1.11
        Diluted                                   $0.48           $0.98

    Weighted average ordinary shares
     outstanding:
        Basic                                16,327,616      14,745,930
        Diluted                              17,696,997      17,651,713

About American Dairy, Inc.

American Dairy, Inc. (NYSE Arca: ADY) is one of the leading producers and distributors of premium infant formula, milk powder, and soybean, rice walnut products in the People's Republic of China. American Dairy conducts operations in China through its wholly owned subsidiary, Feihe Dairy. Founded in 1962, Feihe Dairy is headquartered in Beijing, China, and has processing and distribution facilities in Kedong, Qiqihaer, Baiquan, Gannan, Shanxi, and Langfang. Using proprietary processing techniques, American Dairy makes products that are specially formulated for particular ages, dietary needs and health concerns. American Dairy has over 200 company-owned milk collection stations, six production facilities with an aggregate milk powder production capacity of approximately 1,220 tons per day and an extensive distribution network that reaches over 50,000 retail outlets throughout China.

For more information about American Dairy, please visit http://www.americandairyinc.com.

Cautionary Note Regarding Forward-Looking Statements

This document contains forward-looking information about the Company's operating results and business prospects that involve substantial risks and uncertainties. Statements that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These statements include, but are not limited to, statements about the Company's plans, objectives, expectations, strategies, intentions or other characterizations of future events or circumstances and are generally identified by the words "may," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "could," "would," and similar expressions. Because these forward-looking statements are subject to a number of risks and uncertainties, the Company's actual results could differ materially from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the heading "Risk Factors" in the Company's annual report on Form 10-K for the fiscal year ended December 31, 2006, quarterly reports on Form 10-Q for its fiscal quarters in 2007, and in current reports on Form 8-K filed with the United States Securities and Exchange Commission and available at www.sec.gov. The Company assumes no obligation to update any such forward-looking statements.

    CONTACT:
       In the U.S.:
         Ashley Ammon
         ICR, Inc.
         +1 203-682-8200

       In China:
          Wei-Jung Yang
          ICR, Inc.
          +86-10-6599-7968

- Announces Repurchase of Additional $3.77 Million of Convertible Notes -

BEIJING, Jan. 20 /PRNewswire-FirstCall/ -- American Dairy, Inc. (NYSE Arca: ADY), one of the leading producers and distributors of premium infant formula, milk powder and soybean, rice and walnut products in China, today provided a business update.

The Company continues to increase its production output and customer support to meet consumer demand for reliable, high quality, premium infant formula products. Since the dairy scandal in China broke in September 2008, a series of food-related product inspections have been carried out by China's General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ). With more than 10 tests conducted to date, American Dairy has successfully passed all inspections. As a result, the Company's Feihe branded products continue to sell out in many areas. The Company continues to operate production facilities at full capacity 24 hours a day to keep up with demand, and additional packaging equipment has been installed.

The Company continues its dominate position in second- and third-tier cities and has accelerated its presence in first-tier cities such as Beijing. In an effort to solidify and expand its increased brand recognition, the Company has continued its aggressive nationwide marketing campaigns, with television commercials running on Chinese Central Television Channels (CCTV) 1, 2, 3 and 6, and over six provincial stations that air all across China. In a recent survey by AC Nielsen, the Company was ranked No. 1 fast growing infant formula company after the dairy crisis occurred in September 2008.

The Company also provides training and support to its growing sales and marketing team nationwide. Most recently, American Dairy hosted its annual sales conference in Henan province, where Feihe is the best-selling infant formula brand, and more than 700 people participated in the sales training conducted by leading industry experts.

American Dairy's Feihe operation is the first infant formula company to build its own organic dairy farms that meet international standards, with each of its two farms able to accommodate approximately 10,000 to 12,000 cows. The Company plans to continue to import Australian Holstein cows to its Gannan and Kedong dairy farms in Heilongjiang Province, which currently have over 8,000 Australian Holstein cows. The Company anticipates that each farm will provide approximately 60,000 to 70,000 tons of organic milk a year to be used mainly in the Company's branded products when becoming fully operational.

Mr. Jonathan H. Chou, Chief Financial Officer, states, 'Our focus has always been on the pursuit of high quality products for consumers, and the construction of our dairy farms demonstrates the Company's dedication to that vision. An integrated strategy will ensure that our products remain the premiere infant formula manufactured in China.'

Since 1962, the Company's Feihe branded products have been recognized for their quality and, in its 47 year history, Feihe has consistently passed all government quality inspections, including the recent inspections for melamine. The Company has always adhered to a quality-first standard. As previously announced, the Company's production facilities exceed consumer goods manufacturing standards and are designed to meet and exceed pharmaceutical standards. American Dairy's facilities are one of the few that have processing areas which meet a 300,000 cleanliness purification standard, which means that there are less than 300,000 dust particles per cubic centimeter of air. In a standard room, dust particles can reach over two million dust particles per cubic centimeter of air. Continuing its commitment to quality, the Company has also added additional testing equipment to its already extensive testing and quality control procedures.

Domestic and International Recognition

American Dairy's Feihe brand was named one of China's 500 most influential brands at The World Brand Summit jointly hosted by World Famous Brands Assembly, the United States China Chamber of Commerce and the Universal City TV Stations Joint Research Center of the World Business on January 1, 2009. The selection committee evaluated more than 3,000 companies in Mainland China, Macau, Hong Kong and Taiwan based on the selection criteria including popularity, reputation, credibility, satisfaction, loyalty, influence, growth and innovation of the brands. American Dairy's Feihe brand is one of the seven dairy enterprises recognized at the conference.

The Company's flagship brand, Feihe, was recently voted as one of the top ten 'Most Trusted Brands' by consumers in an online poll conducted by SINA Corporation. Among products manufactured in China, Feihe was voted the No. 1 most trusted brand. Previously, Feihe was named one of the 'Top Ten Best Infant Formula' and the 'Most Energetic Brand' at the Annual Baby and Infant Industry Ceremony hosted by SINA.

Mr. Leng You Bin, Chief Executive Officer, states, 'I was honored to be interviewed by Cable News Network ('CNN') International recently, and provided CNN with a tour of our first class research, packaging and distribution center in Langfang, China. I believe this demonstrates that Feihe's brand is recognized not only domestically but also internationally. As the most trusted brand manufacturer in China, we will continue our commitment to adhere to international standards and high quality production and to bring our consumers the highest quality products.'

The Company was also recently invited by the Chinese government to attend a meeting to discuss the fate of the company at the center of the tainted milk scandal. While the Company has no plans to acquire that company, American Dairy was honored to be one of the five nationally recognized dairy companies invited to participate in the discussions.

Mr. Liu Hua, Vice Chairman, stated, 'The invitation is a testament to the fact that the Chinese government recognizes our Company as a key player in the dairy industry. We remain committed to this responsibility and will continue to produce high quality, premium products for consumers in China and worldwide.'

American Dairy's products are already one of China's most recognizable brands and have won awards including China's 'Top Brands' and 'Well Known Trademarks.' In July 2007, Feihe Dairy was named 'National Leading Enterprise of Agricultural Industrialization' by China's Ministry of Agriculture, National Development and Reform Commission, Ministry of Finance, Ministry of Commerce, The People's Bank of China, State Administration of Taxation, China Securities Regulatory Commission and the China Supply and Marketing Cooperative for specializing in agricultural production and processing. Only 580 enterprises in China have been awarded this certificate to date. The Company was awarded the certificate as a result of its influences on and contribution to China's agricultural industry.

Repurchase of an Additional $3.77 Million of Convertible Notes

The Company also announced that, as part of the restructuring of the Company's outstanding 1% Guaranteed Senior Secured Convertible Notes due 2012 (the '2012 Notes'), the Company completed the second phase in the repurchase of its outstanding 2012 Notes. As previously announced, in November 2008 the Company reached agreement with the holders of 100% of the $80 million in outstanding principal amount of the 2012 Notes to repurchase the Notes at 115% of the principal amount thereof, in a series of installments payable by October 15, 2009. In accordance with the terms of the agreement with those noteholders, on January 15, 2009 the Company repurchased an additional $3.77 million in principal amount of the 2012 Notes for an aggregate repurchase price of $4.33 million. The Company funded the repurchase using proceeds from operations. After giving effect to the completion of the first and second tranches of the repurchases, the Company now has approximately $66.1 million in principal amount of the 2012 Notes outstanding.

Under the terms of the restructuring, the Company has the right to repurchase the remaining 2012 Notes for an aggregate repurchase price of approximately $76.6 million, payable in installments of $15.33 million by each of April 15 and July 15, 2009, and the remaining $46.0 million by October 15, 2009. The 2012 Notes ceased accruing interest, and the right to convert the notes into shares of the Company's common stock was suspended, as of November 13, 2008, the date that the restructuring took effect, provided that the Company completes the repurchase of the 2012 Notes by the specified deadlines in accordance with the terms of the restructuring agreement. In the event that the Company does not make any of the payments due on April 15, July 15 or October 15, 2009, certain of the waivers granted as part of the restructuring by the holders of the 2012 Notes with respect to provisions of the notes would terminate, interest would begin to accrue again and would be subject to increases if certain requirements are not met, and the holders would again have the right to convert the 2012 Notes into shares of common stock.

Pending Re-audit of Historical Financial Statements

As previously announced, the Company engaged Grant Thornton, the Hong Kong member firm of Grant Thornton International, as its independent registered public accounting firm in 2008, and proactively initiated voluntary re-audits of the Company's financial statements for certain prior years (the 'Re-audits'). The Re-audits are continuing, and when they are completed, the Company expects to file reports with the SEC that will include financial statements for the periods that are the subject of the Re-audits, the 2007 fiscal year, and the 2008 fiscal year.

About American Dairy, Inc.

American Dairy, Inc. conducts operations in The People's Republic of China ('China') through its wholly owned subsidiary, Feihe Dairy. Founded in 1962, Feihe Dairy is one of the leading producers and distributors of premium infant formula, milk powder and soybean, rice and walnut products in China. Feihe Dairy is headquartered in Beijing, China, and has processing and distribution facilities in Kedong, Qiqihaer, Baiquan, Gannan, Shanxi, and Langfang. http://www.americandairyinc.com / http://www.feihe.com

Certain of the statements made herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements typically involve risks and uncertainties and may include financial projections or information regarding our future plans, objectives or performance. Actual results could differ materially from the expectations reflected in such forward-looking statements as a result of a variety of factors, including the risks associated with the effect of changing economic conditions in The People's Republic of China, variations in cash flow, reliance on collaborative retail partners and on new product development, variations in new product development, risks associated with rapid technological change, and the potential of introduced or undetected flaws and defects in products, and other risk factors detailed in reports filed with the Securities and Exchange Commission from time to time.

SOURCE American Dairy, Inc.

BEIJING, Nov. 18 /PRNewswire-FirstCall/ -- American Dairy, Inc. (NYSEArca: ADY), one of the leading producers and distributors of premium infant formula, milk powder and soybean, rice and walnut products in China, announced that it has completed a restructuring of the terms of its 1% Guaranteed Senior Secured Convertible Notes due 2012 (the 'Senior Secured Notes'). The restructuring provided holders of those notes with the option to elect to have their notes repurchased by the Company at 115% of the principal amount, in a series of installments payable by October 15, 2009, resulting in a lower overall cost of capital for the Company and providing greater flexibility for the Company in its capital structure. The holders of all of the outstanding Senior Secured Notes exercised their right to have the notes repurchased, and the Company paid $11 million to repurchase the initial installment of $9.56 million of principal of Senior Secured Notes from the holders on a pro rata basis. In connection with this restructuring, the holders also agreed to waive certain covenants and other requirements with which the Company is obligated to comply under the terms of the Senior Secured Notes.

The Company issued $80 million in aggregate principal amount of Senior Secured Notes in June 2007. The original terms of the Senior Secured Notes provided that, among other things, the notes (i) bear interest at 1% per annum, subject to increases if certain conditions under the terms of the notes were not met; (ii) are convertible into shares of the Company's common stock, at a current adjusted conversion rate of $12.00 per share; and (iii) mature on June 1, 2012, at which time the Company would be required to redeem the notes at a redemption price calculated to effect a gross yield on the principal of 18% per annum on a compounded basis, or $228,775.78 for every $100,000 of notes then outstanding. Under the modified terms of the Senior Secured Notes, holders of the notes who exercised their right to demand that the Company repurchase their notes will receive 115% of the principal amount thereof, or $115,000 for every $100,000 of notes. In addition, interest ceased to accrue on the notes on the day that the holder elected to exercise the early repurchase option, and the right to convert the notes into shares of common stock is suspended unless the Company fails to complete the repurchase. As a result of the holders of 100% of the outstanding $80 million in aggregate principal amount of notes exercising the early repurchase option, the Company can repurchase, and retire, the notes for an aggregate cost of $92 million.

Pursuant to the early repurchase right, in addition to the $11.0 million already paid, the Company is obligated to pay an additional $4.33 million by January 15, 2009, $15.33 million by each of April 15 and July 15, 2009, and the balance of $46.0 million by October 15, 2009. If the Company fails to make the payment due on January 15, 2009, it will constitute a default under the Senior Secured Notes, in which event holders would have the right to declare the entire $92 million early repurchase amount due and payable immediately. If the Company fails to make any of the payments due on April 15, July 15 or October 15, 2009, it would not constitute a default, but certain of the waivers granted by the holders with respect to provisions of the notes would terminate, interest would begin to accrue again and would be subject to increases if certain requirements are not met, and holders would again have the right to convert Senior Secured Notes into shares of the Company's common stock. The Company funded the initial repurchase payment using proceeds from borrowings by certain of its operating subsidiaries.

'We are very pleased to have been able to reach an agreement with the holders of our Senior Secured Notes to restructure our existing indebtedness and to provide us with the flexibility to refinance, repurchase and retire, these notes on terms that provide much more flexibility and a significant cost savings for American Dairy,' said Leng You-Bin, the Chairman, President and Chief Executive Officer of the Company. 'Our Company continues to make progress towards completion of the previously announced voluntary reaudits of certain of our historical financial statements, and to bring current our filings with the Securities and Exchange Commission as soon as possible. In addition, as one of the companies that was not implicated in the melamine crisis in China, we have had the opportunity to significantly increase sales and we continue to seek ways to further grow our product sales and brand loyalty and to build long term value for all of our shareholders,' Mr. Leng also said.

'We are delighted with the support we received from all holders of our outstanding notes in this process. We believe that the restructuring of the notes that we were able to implement is beneficial to all stakeholders, and will enable American Dairy to further work towards achieving a strengthened balance sheet and capital structure that support the long term growth of the Company,' said Jonathan Chou, Chief Financial Officer of American Dairy.

About American Dairy, Inc.

American Dairy, Inc. conducts operations in The People's Republic of China ('China') through its wholly owned subsidiary, Feihe Dairy. Founded in 1962, Feihe Dairy is one of the leading producers and distributors of premium infant formula, milk powder and soybean, rice and walnut products in China. Feihe Dairy is headquartered in Beijing, China, and has processing and distribution facilities in Kedong, Qiqihaer, Baiquan, Gannan, Shanxi, and Langfang. http://www.americandairyinc.com | http://www.feihe.com

Forward-Looking Statements

Certain of the statements made herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward looking statements represent current expectations or forecasts of future events and are not guarantees of future performance. Such statements typically involve risks and uncertainties and may include financial projections or information regarding our future plans, objectives or performance. Actual results could differ materially from the expectations reflected in such forward-looking statements as a result of a variety of factors, including the effect of changing economic conditions in The People's Republic of China, variations in cash flow, unanticipated fluctuations in sales, the Company's ability to generate cash from operations, or obtain financing from lenders, in sufficient amounts to repurchase its Senior Secured Notes as planned, and other risk factors detailed in reports filed with the Securities and Exchange Commission from time to time.

SOURCE American Dairy, Inc.