China Linen Textile Industry Announces Annual Financial Results for the Year Ended December 31, 2009

China Linen Textile Industry, Ltd. (OTC Bulletin Board: CTXIF), a China-based company engaged in the production and sale of linen yarn and various types of linen fabric, today announced operating results for the fiscal year ended December 31, 2009. The Company expects to file these audited results on Form 20-F with the Securities and Exchange Commission in the near future.
On a consolidated basis, net revenues for the fiscal year ended December 31, 2009 totaled $30.11 million, an increase of 31.2 percent compared to the last fiscal year. Operating income increased from $3.96 million to $7.37 million, and income before taxes increased from $4.91 million to $8.17 million. For 2009, net income increased 62.8 percent to $6.02 million, compared to $3.7 million in fiscal 2008. And for 2009, earning per share increased 67 percent to $0.30, compared to $0.18 in fiscal 2008.

Mr. Gao Ren, chairman and chief executive officer of China Linen Textile Industry, commented on the results: "We are very pleased to report a strong year with double-digit revenue and earnings growth, which reflects are aggressive and systematic movement into new markets and our lower-cost, efficient production technologies."

OVERVIEW AND 2010 BUSINESS OUTLOOK

China Linen Textile Industry, Ltd. is principally engaged in the business of production and distribution of various types of linen products, such as linen clothing, linen yarn, linen hemp, and blending linen. The Company produces 50 different types of yarn and 110 types of linen fabrics with gray fabric being the Company's biggest seller, making up approximately 42 percent of total revenue. Semi-bleached fabric is the second biggest seller, accounting for nearly 29% of total revenue. Yarn-dyed fabric is the third largest seller, making up around 13% of total revenue. The Company is also involved in consultation and research and development related to of linen technology and linen products.

China is the largest linen textile producer in the world, and China Linen accounts for approximately five percent of China's total linen exports. In 2009, the Company's total exports were valued at $17.72 million, and were growing at a CAGR of 28.9 percent.

Nearly two-thirds of China Linen's products are exported to more than ten countries including France, Korea, Italy, Belgium, Greece, Turkey, Egypt, Brazil, Canada, Japan, and the United States. In the next 5 to 10 years, global market demand for linen clothing and products is estimated to be more than $20 billion, of which the Chinese domestic market will make up around 20%, or $4 billion.

The Company's yarn-spinning factory has annual production capacity of approximately 1,600 tons of pure semi-bleached linen yarn and gray yarn, while the Company's two fabric-weaving factories have an annual production capacity of approximately 8 million meters of linen gray fabric used for linen face fabric. The factories are equipped with 7,680 wet spinning spindles, 192 sets of rapier looms and 300 sets of main textile processing machines and are capable of producing yarn using various specifications ranging from Nm 8.5 to Nm 36 to meet the needs of its 50-60 clients in the domestic and overseas markets.

For 2010, the Company is working to complete a production line of yarn-dyed fabric, and with this, expects to capture additional textile market share. China Linen is also working to expand its production capacity for lower-cost, higher-profit products while doubling productivity and consolidating resources to upstream and down stream.

The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). This information is intended to be reviewed in conjunction with the Company's Form 20-F filings with the Securities and Exchange Commission.

About China Linen Textile Industry, Ltd.

China Linen Textile Industry Co., Ltd., is principally engaged in the production and sale of linen yarn and various types of linen fabric. It is also involved in consultation, research and development related to of linen technology and linen products. The Company carries on all of its business activities through its subsidiary, Heilongjiang Lanxi Sunrise Linen Textile Industry Co., Ltd., which was established as a privately owned business enterprise in June 2002. Its manufacturing facility is located in Lanxi County, Heilongjiang Province, in the northeast section of the People's Republic of China near the city of Harbin.