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New Dragon Asia Corp. Acquires Chinese Distributor

Complements Focus on Vertical Integration; Enhances Growth and Profitability

SHENZHEN, China, Dec. 12, 2005 -- New Dragon Asia Corp. (AMEX:NWD) today announced it has acquired Shandong Xinlongya Distribution Co. Ltd., a state-owned enterprise based in China's Shandong Province that has served as the company's sole export distributor. Terms were not disclosed.

"The acquisition underscores the company's ongoing success at identifying state-owned acquisition candidates that complement and leverage our vertically integrated operations," said Li Xia Wang, chief executive officer of New Dragon Asia.

Wang indicated that the acquisition is expected to enhance the profitability of the company's export business, supported by favorable tax benefits and more direct control over foreign currency income and product sales activities. She indicated that profitability is expected to improve by $400,000 on a twelve-month basis, with export sales increasing to eight percent in 2005 from five percent in 2004, and to 12 percent in 2006. Shandong Xinlongya Distribution Co. has a team of ten employees.

About The Company

New Dragon Asia Corp. is engaged in the milling, sale and distribution of flour and related products, including instant noodles and soybean-derived products, to retail and commercial customers throughout China. The company markets its well-established product line through a network of more than 200 key distributors and 16 regional offices in 27 Chinese provinces with an aggregate production capacity of approximately 110,000 tons of flour and more than 1.1 billion packages of instant noodles.

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the company's operations and financial performance and condition. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products and pricing; changes in consumer preferences and tastes or perceptions of health-related issues; effectiveness of advertising or market-spending programs; changes in laws and regulations; fluctuations in costs of production, foreign exchange and interest rates; and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time.

CONTACTS:  Maier & Company, Inc.
           Gary S. Maier/Crystal Chang Warner
           (310) 442-9852