American Oriental Bioengineering Reports Record First Quarter Results for 2005.

HONG KONG -- Revenue Increases 63.3% Leading to a 91.1% Increase in Operating Income 

America Oriental Bioengineering Inc., (OTCBB:AOBO), a rapidly growing Chinese company which produces and distributes a broad range of pharmaceutical and nutriceutical products, announced today record first quarter results for the period ended March, 31, 2005. The Company reported revenue of $9.65 million, a 63.4% increase over first quarter 2004 revenue of $5.91 million. American Oriental had operating income of $3.02 million, an increase of 91.1% over operating income for the 2004 first quarter of $1.58 million. American Oriental generated net income of $2.18 million in the current quarter, or $0.05 per diluted share, an increase of 69.2% compared to $1.26 million, or $0.04 per diluted share for the same quarter last year.

The Company ended the quarter with $12.2 million in cash and cash equivalents, the strongest cash position in its history. AOBO's shareholder's equity increased to $35.3 million, its highest level ever.

AOBO's first quarter results demonstrated that the acquisition of Heilongjiang Songhuajiang Pharmaceutical Limited ("HSPL") has contributed significantly to both revenue and earnings. Through this acquisition, AOBO now offers a broader range of medicinal products in China, such as Shuanghuanglian Lyophilized Powder Injection, which has been in the market for over 15 years. The product is an important antiviral medicine and has become one of the most highly regarded herbal products certified by the Government.

"We continue to rapidly grow our product lines and distribution capabilities, both organically and through acquisition," said Tony (Shujun) Liu, Chairman and Chief Executive Officer of American Oriental Bioengineering, Inc. "Recently, we entered into a letter of intent to acquire Heilongjiang Qitai Pharmaceutical Limited ("HQPL"), a leading Chinese distributor of pharmaceuticals. The transaction will provide us, for the first time, with the ability to distribute our products throughout China because of HQPL's strong wholesale and retail distribution network, which should serve as a catalyst for future growth. We believe we are ideally positioned to continue to rapidly increase revenue and earnings."

About American Oriental Bioengineering, Inc.

American Oriental Bioengineering, Inc. (AOBO) is a leading Chinese biotechnology company that uses proprietary processes for producing soybean protein peptide more efficiently than traditional extracting techniques. These techniques are used to manufacture and formulate supplemental and medicinal products. Soybean peptides are used widely in general food, health food products and medicines, among other applications. AOBO also produces Cease-Enuresis Soft Gel, the only Chinese FDA-approved first grade, prescription medicine that is specially formulated to help alleviate bed-wetting and incontinence. The Company is a leading producer of products in both the nutriceuticals and pharmaceuticals areas in China. For more information, visit http://www.bioaobo.com.