SHENZHEN, China, Aug. 23, 2011 /PRNewswire-Asia-FirstCall/ -- China Nepstar Chain Drugstore Ltd. (NYSE: NPD) ("Nepstar" or the "Company"), the largest retail drugstore chain in China based on the number of directly operated stores, today announced its unaudited financial results for the second quarter ended June 30, 2011.

Financial HighlightsFor the quarter ended June 30, 2011:

Revenue increased by 7.3% to RMB606.6 million (US$93.8 million), compared to revenue of RMB565.2 million in the second quarter of 2010. Same store sales increased by 9.8% over the same period in 2010. Gross margin was 47.8%. Net income was RMB6.5 million (US$1.0 million). Net cash flow from operations was RMB42.6 million (US$6.6 million).

Mr. Simin Zhang, Chairman of the Board of Nepstar, commented, "Our merchandise diversification efforts continue to help mitigate the negative impact of price cuts imposed by government on pharmaceutical products. During the quarter, we achieved a 9.8% increase in same store sales compared to that in the second quarter of 2010. While we are expanding our revenues, we remain focused on optimizing our product mix, both in pharmaceutical categories and in non-pharmaceutical categories, to protect gross margins."

"Driving revenue growth and remaining competitive with an optimal product mix remain the central themes of our strategy at this stage," continued Mr. Zhang. "We are encouraged that our existing customers are attracted to the new product categories we have introduced so far and we are utilizing this opportunity to highlight service quality and the overall shopping experience in an effort to improve average spending per customer visit and same store productivity."

Second Quarter ResultsDuring the second quarter of 2011, the Company opened 18 new stores and closed 40 stores. As of June 30, 201