U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

 /X/QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934


                       FOR THE PERIOD ENDED JUNE 30, 2005

     / /TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                  FOR THE TRANSITION PERIOD FROM _____ TO_____

                        COMMISSION FILE NUMBER: 814-00063

                     CHINA BIOPHARMACEUTICALS HOLDINGS, INC.
              ----------------------------------------------------
              (Exact name of small business issuer in its charter)

           DELAWARE                                               13-2949462
-------------------------------                              -------------------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

Suite 1601, Buliding A, Jinshan Tower
No. 8, Shan Xi Road
Nanjing, Jiangsu
China
                                                                   210009
----------------------------------------                          ----------
(Address of principal executive offices)                          (Zip Code)


                REGISTRANT'S TELEPHONE NUMBER: (86) 25 8320 5758
                                              ------------------

                            (Former Name and Address)

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days. YES /X/ NO / /

There were 28,133,757  shares of the  registrant's  common stock  outstanding on
June 30, 2005.


<PAGE>

                                TABLE OF CONTENTS

                                                                            Page


PART I - FINANCIAL INFORMATION.................................................2

  ITEM 1. FINANCIAL STATEMENTS.................................................2

  ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS...............................................22

  ITEM 3. CONTROL AND PROCEDURES..............................................35

PART II - OTHER INFORMATION...................................................35

  ITEM 1. LEGAL PROCEEDINGS...................................................35

  ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.........35

  ITEM 3. DEFAULTS UPON SENIOR SECURITIES.....................................35

  ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.................35

  ITEM 5. OTHER INFORMATION...................................................35

  ITEM 6. EXHIBITS ...........................................................36














<PAGE>







                     CHINA BIOPHARMACEUTICALS HOLDINGS, INC.

              (FORMERLY GLOBUS GROWTH GROUP INC.) AND SUBSIDIARIES


                        CONSOLIDATED FINANCIAL STATEMENTS


                                  June 30, 2005














<PAGE>

                     CHINA BIOPHARMACEUTICALS HOLDINGS, INC.
                                AND SUBSIDIARIES


PART 1 - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


The consolidated financial statements of China Biopharmaceuticals Holdings, Inc.
and subsidiaries  (collectively,  "CBH" or the "Company"),  included herein were
prepared, without audit, pursuant to rules and regulations of the Securities and
Exchange Commission.  Because certain information and notes normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America were  condensed or omitted  pursuant to
such  rules  and  regulations,  these  financial  statements  should  be read in
conjunction  with the financial  statements  and notes  thereto  included in the
audited  financial  statements of the Company as included in the Company's  Form
10-KSB for the year ended December 31, 2004.


























                                       1

<PAGE>

                     CHINA BIOPHARMACEUTICALS HOLDINGS, INC.
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 2005
                                   (Unaudited)

                                     ASSETS
Current Assets:
   Cash                                                              $ 2,282,604
   Accounts receivable-net (Note 3)                                   11,282,328
   Prepaid expenses                                                       42,334
   Inventory (Note 4)                                                  4,421,649
   Loan to shareholders                                                  135,963
                                                                     -----------
        Total current assets                                          18,164,879

Fixed Assets, net (Note 5)                                             4,971,688

Other Assets (Note 6)                                                 10,318,566
                                                                     -----------
        Total Assets                                                 $33,455,133
                                                                     ===========

                 LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
   Bank Loan                                                         $ 4,144,014
   Accounts Payable                                                    8,018,515
   Other Payable                                                       1,557,378
   Income taxes payable                                                  809,758
   Deferred revenue                                                      889,746
   Due to Related Parties                                              1,928,064
   Due to Shareholders                                                 1,627,844
   Payable to Erye Shareholders                                          600,000
   Bond Payable                                                          475,000
                                                                     -----------
        Total Current Liabilities                                     20,050,319

Long-term Liabilities
     Long-term  Loan                                                   2,350,130
Minority interests                                                     3,534,575

Shareholders' Equity:
   Preferred stock, $0.01 par value, 10,000,000 shares authorized;
      1,090,000 shares issued and outstanding as of June 30, 2005
                                                                          10,900
   Common stock, $0.01 par value, 200,000,000 shares authorized;
      28,133,757 shares issued and outstanding as of June 30, 2005
                                                                         281,338
   Common stock to be issued                                                 890
   Additional Paid-in capital                                          6,102,245
   Retained earnings                                                   1,124,736
   Accumulated comprehensive (loss)
                                                                     -----------
      Shareholders' Equity                                             7,520,109
                                                                     -----------
                                                                     $33,455,133
                                                                     ===========


                        See Notes to Financial Statements

                                       2
<PAGE>
<TABLE>
<CAPTION>

                     CHINA BIOPHARMACEUTICALS HOLDINGS, INC.
                                AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME


                                                  For the Three Months Ended    For the Six Months Ended
                                                           June 30,                     June 30,
                                                     2005           2004          2005           2004
                                                  -----------    -----------   -----------    -----------
                                                  (unaudited)    (unaudited)   (unaudited)    (unaudited)
<S>                                               <C>            <C>           <C>            <C>
Revenues
     Sales                                        $ 3,642,565    $   536,984   $ 5,631,073    $   994,591
     Cost of sales                                  2,832,828        161,191     3,931,895        287,768
     Business tax                                       2,602           --           2,602           --
                                                  -----------    -----------   -----------    -----------
          Gross Profit                                807,135        375,793     1,696,576        706,823

Operating Expenses
     General and administrative                       604,177        211,991       961,545        399,594
                                                  -----------    -----------   -----------    -----------
          Income from operations                      202,958        163,801       735,031        307,228

Other income:

     Other income, net                                 24,524            134       (12,575)           277
                                                  -----------    -----------   -----------    -----------
          Income before income taxes                  227,482        163,935       722,456        307,505

Income taxes

Minority interest                                     102,023         16,732       189,330         30,239
                                                  -----------    -----------   -----------    -----------

Net income                                            125,459        147,203       533,126        277,266

Foreign currency translation gain(loss)
                                                  -----------    -----------   -----------    -----------

Comprehensive income                              $   125,459    $   147,203   $   533,126    $
                                                  ===========    ===========   ===========    ===========
</TABLE>







                        See Notes to Financial Statements

                                       3
<PAGE>
<TABLE>
<CAPTION>

                     CHINA BIOPHARMACEUTICALS HOLDINGS, INC.
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                           INCREASE (DECREASE) IN CASH

                                                     For the Three Months Ended    For the Six Months Ended
                                                              June 30,                      June 30,
                                                        2005           2004           2005           2004
                                                     -----------    -----------    -----------    -----------
<S>                                                  <C>            <C>            <C>            <C>
Operating Activities
Net income                                           $   125,459    $   147,203    $   533,126    $   267,246
Adjustments to reconcile net income to net cash
   provided by operating activities:
Depreciation                                              36,195          5,012         70,666          9,528
Minority interest                                        189,330         15,679        479,675         43,296
Changes in operating assets and liabilities:
Accounts receivable                                    1,395,291        (12,659)     3,255,680         52,418
Inventories                                             (338,608)        (8,824)      (408,946)        (2,290)
Prepaid expense and other receivables                    885,259          4,591       (137,387)         1,003
Other assets                                             623,272       (397,877)       307,974       (397,109)
Payable and accrued expenses                          (2,430,885)       157,893     (4,007,403)       245,846
Due to Shareholders                                         --             --              (22)          --
Customer deposit                                         133,362        178,961        186,963        246,793
Taxes payable                                            (17,552)         9,941        (19,029)         9,132
                                                     -----------    -----------    -----------    -----------
Net cash provided by operating activities                601,123         99,920        261,297        475,863

Investing Activities
Business acquisitions-cash paid                         (200,000)          --         (200,000)          --
Acquisition of fixed assets                              (28,220)      (136,473)      (164,693)      (136,473)
                                                     -----------    -----------    -----------    -----------
Net cash used by investing activities                   (228,220)      (136,473)      (364,693)      (136,473)

Financing Activities
Proceeds from issuance of common stock                      --             --          397,000           --
Proceeds from issuance of preferred stock              1,090,000           --        1,090,000           --
Payment (proceeds) from convertible notes                (25,000)          --          475,000           --
Bank loan                                                   --          120,781        156,962        120,781
                                                     -----------    -----------    -----------    -----------
Net cash provided by financing activities              1,065,000        120,781      2,118,962        120,781

Net increase in cash and cash equivalents              1,437,903         84,228      2,015,566        460,171
Effects of exchange rates on cash                           --             --             --             --
Cash at beginning of period                            1,044,699        412,191        467,036         36,247
                                                     -----------    -----------    -----------    -----------
Cash at end of period                                $ 2,482,602    $   496,419    $ 2,482,602    $   496,419
                                                     ===========    ===========    ===========    ===========

Supplemental Disclosures of Cash Flow Information:
  Cash paid during year for:
     Interest                                        $   112,314    $      --      $   149,591    $      --
                                                     ===========    ===========    ===========    ===========
     Income taxes                                    $    72,493    $    64,788    $    72,493    $   122,348
                                                     ===========    ===========    ===========    ===========

Supplemental Cash Flow Information:
Non-cash  investing activities:
     Issuance of 26,666 three-year warrants to
purchase common stock at $1.50 per share
valued at $3,200 for consultant service              $     3,200    $      --      $     3,200    $      --
                                                     ===========    ===========    ===========    ===========
par value $0.01 per share for consultant service
     Issuance of 65,000 shares of common stock
par value $0.01 per share for consultant service     $    65,000    $      --      $    65,000    $      --
                                                     ===========    ===========    ===========    ===========
     Issuance of 110,000 shares of common stock
par value $0.01 per share for consultant service               $    $      --      $   110,000    $      --
                                                     ===========    ===========    ===========    ===========
     Issuance of 300,000 shares of common stock
par value $0.01 per share for laboratory usage       $   300,000    $      --      $   300,000    $      --
                                                     ===========    ===========    ===========    ===========
     Issuance of 3,300,000 shares of common stock
par value $0.01 per share for acquisition of Erye    $      --      $      --      $ 3,300,000    $      --
                                                     ===========    ===========    ===========    ===========
</TABLE>

                        See Notes to Financial Statements

                                        4
<PAGE>

                     CHINA BIOPHARMACEUTICALS HOLDINGS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




Note 1- ORGANIZATION AND OPERATIONS

        CBH was  incorporated  under  the laws of the State of  Delaware  in the
        United  States.  The  consolidated   financial  statements  of  CBH  and
        subsidiaries  reflect the activities and financial  transactions  of its
        subsidiary,  CBC,  a British  Virgin  Islands  corporation  which is the
        parent,  management  company and holder of a 90%  ownership  interest in
        Chemsource,  a company  established  in the People's  Republic of China.
        Suzhou  Hengyi  Pharmaceuticals  of  Feedstock  Co., Ltd  ("Hengyi"),  a
        Chinese company established in Suzhou Province, China, which the Company
        acquired  a  75.76%  ownership  on  September  30,  2004.   Suzhou  Erye
        Pharmaceutical  Limited Company ("Erye"),  a Chinese company established
        in Suzhou Province, China, which the Company acquired a 51% ownership on
        June 11, 2005.

        On  August  28,  2004,  the  Company  completed  a share  exchange  (the
        "Exchange")  with the  stockholders  of CBC  pursuant to the terms of an
        Agreement  for Share  Exchange,  dated August 28, 2004. In the Exchange,
        the Company acquired 100% of the issued and outstanding  stock of CBH in
        exchange of the issuance of 20,842,779  shares of its restricted  common
        stock, par value at $0.01 per share.  The Exchange  resulted in a change
        of voting  control of the  Company.  After the  Exchange,  the  previous
        shareholders of CBC owned 90% of outstanding common shares of CBH.

        CBC  owns 90% of  Chemsource,  a  company  established  in the  People's
        Republic  of  China.  From  2001  to  2004,  Chemsource  engaged  in the
        discovery,  development and  commercialization  of innovative  drugs and
        related bio-pharmaceutical products in China.

        The  principal  activities  of Hengyi  are sales  and  manufacturing  of
        pharmaceutical  intermediates,  such as  carbamazephine,  flumequine and
        iminostilbene carbonyl chloride in Mainland China.

        The  principal  activities  of  Erye  are  sales  and  manufacturing  of
        pharmaceutics approved for sale in Mainland China.



Note 2- SIGNIFICANT ACCOUNTING POLICIES

        Economic and Political Risks

        The Company faces a number of risks and challenges  since its assets are
        located in China and its  revenues are derived  from its  operations  in
        China. China is a developing country with a young market economic system
        overshadowed by the state.  Its political and economic  systems are very
        different from the more  developed  countries and are still in the stage
        of  change.  China  also  faces  many  social,  economic  and  political
        challenges  that may produce  major  shocks and  instabilities  and even
        crises,  in both its  domestic  arena and its  relationship  with  other
        countries,  including but not limited to the United States. Such shocks,
        instabilities and crises may in turn significantly and negatively affect
        the Company's performance.










                                       5
<PAGE>

                     CHINA BIOPHARMACEUTICALS HOLDINGS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




Note 2- SIGNIFICANT ACCOUNTING POLICIES (continued)

        Basis of Presentation

        The  consolidated  financial  statements  include  the  accounts  of the
        Company  and  all  its   majority-owned   subsidiaries   which   require
        consolidation.   Inter-company  transactions  have  been  eliminated  in
        consolidation.

        The  accompanying  financial  statements are prepared in accordance with
        generally accepted accounting principles in the United States of America
        ("US  GAAP").  This basis of  accounting  differs  from that used in the
        statutory accounts of the Company, which are prepared in accordance with
        the  "Accounting  Standards for Business  Enterprises"  and  "Accounting
        system for Business Enterprises" in the PRC ("PRC GAAP").

        Cash and Cash Equivalents

        Certain accounting principles,  which are stipulated by US GAAP, are not
        applicable in the PRC. The  difference  between PRC GAAP accounts of the
        Company and its US GAAP financial statements was immaterial.

        Fixed Assets

        Fixed  assets  are  stated  at  cost  less   accumulated   depreciation.
        Depreciation on fixed assets is provided on the straight-line basis over
        their respective  estimated useful lives.  Estimated useful lives are as
        follows.

                  Equipment and machinery           6 years
                  Motor vehicles                    8 years
                  Furniture and fixtures            5 years
                  Land use right                    50 years

        The  cost  and  related  accumulated  depreciation  of  assets  sold  or
        otherwise  retired are eliminated from the accounts and any gain or loss
        is included in the statement of operations.  The cost of maintenance and
        repairs is charged to income as incurred,  whereas significant  renewals
        and betterments are capitalized.

        Long-term  assets of the  Company  are  reviewed  annually as to whether
        their  carrying  value has become  impaired,  pursuant to the guidelines
        established in Statement of Financial  Accounting Standards ("SFAS") No.
        144,  "Accounting for the Impairment or Disposal of Long-Lived  Assets".
        The Company also  re-evaluated  the periods of amortization to determine
        whether subsequent events and circumstances are warrant revised estimate
        of useful lives.








                                       6
<PAGE>

                     CHINA BIOPHARMACEUTICALS HOLDINGS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




Note 2- SIGNIFICANT ACCOUNTING POLICIES (continued)

        Cash and Cash Equivalents

        For  financial  reporting  purposes,  the Company  considers  all highly
        liquid  investment  purchased with original  maturity of three months or
        less to be cash  equivalents.  The Company maintains no bank accounts in
        the United States of America.

        Patent and Development Costs

        The patent  and  development  costs  represent  patented  pharmaceutical
        formulas,  which have  obtained  official  registration  certificate  or
        official approval for clinical trials. No amortization is provided as it
        is held for  sale.  Such  costs  comprise  purchase  costs  of  patented
        pharmaceutical  formulas,  development  costs,  raw  materials and other
        related  expenses of  pharmaceutical  formulas.  Patent and  development
        costs are accounted for on an individual  basis.  The carrying  value of
        patent and development  costs is reviewed for impairment  annually,  and
        otherwise  when  events  changes  in  circumstances  indicate  that  the
        carrying value may not be recoverable.

        Research and Development Costs

        Research and development costs of pharmaceutical formulas for contracted
        projects are expensed when incurred.

        Research  costs of  pharmaceutical  formulas  held for sale are expensed
        whereas the  development  cost are  expensed  until the project  attains
        technical  feasibility  (i.e.  obtained  official  approval for clinical
        trials), and then such development costs are capitalized.

        Fair Value of Financial Instruments

        The  Company's  financial  instruments  primarily  include cash and cash
        equivalents,  accounts receivable,  accounts payable,  accrued expenses,
        customer  deposits and amounts due to related parties and  shareholders.
        Management has estimated  that the carrying  amounts  approximate  their
        fair values due to their short-term nature.







                                       7
<PAGE>

                     CHINA BIOPHARMACEUTICALS HOLDINGS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




Note 2- SIGNIFICANT ACCOUNTING POLICIES (continued)

        Revenue and Revenue Recognition

        For fixed-price  refundable new drugs contracts,  the Company recognizes
        revenue on a milestone basis. Progress payments received/receivables are
        recognized  as revenue only if the  specified  milestone is achieved and
        accepted by the customer,  the payment is not refundable,  and continued
        performance of future research and development  services  related to the
        milestone are not required.

        For sales of patented  pharmaceutical  formulas,  the Company recognizes
        revenue upon the delivery of the patented formulas.

        Income Taxes

        Income taxes are provided on the liability  method whereby  deferred tax
        assets and liabilities are recognized for the expected tax  consequences
        of temporary  differences  between the tax bases and reported amounts of
        assets and liabilities. Deferred tax assets and liabilities are computed
        using  enacted  tax rates  expected  to apply to  taxable  income in the
        periods in which  temporary  differences are expected to be recovered or
        settled. The effect on deferred tax assets and liabilities from a change
        in tax rates is  recognized  in income in the period  that  include  the
        enactment date. The Company  provides a valuation  allowance for certain
        deferred tax assets, if it is more likely than not that the Company will
        not realize tax assets through future operations.

        Use of Estimates

        The preparation of the financial statements in conformity with generally
        accepted accounting  principles in the United States of America requires
        management to make  estimates and  assumptions  that affect the reported
        amounts of assets and  liabilities  and disclosure of contingent  assets
        and liabilities at the date of the financial statements and the reported
        amounts  of  revenues  and  expenses   during  the  reporting   periods.
        Management makes these estimates using the best information available at
        the time the  estimate are made;  however  actual  results  could differ
        materially form those estimates.








                                       8
<PAGE>

                     CHINA BIOPHARMACEUTICALS HOLDINGS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




Note 2- SIGNIFICANT ACCOUNTING POLICIES (continued)

        Comprehensive Income(Loss)

        SFAS No. 130, Reporting  Comprehensive Income,  established standard for
        the reporting and display of  comprehensive  income,  its components and
        accumulated  balances  in  a  full  set  of  general  purpose  financial
        statements.  SFAS No. 130  defines  comprehensive  income to include all
        changes in equity excepts those resulting form investments by owners and
        distributions to owners. Among other disclosures,  SPAS No. 130 requires
        that  all  items  that  are  required  to be  recognized  under  current
        accounting  standards as components of comprehensive  income be reported
        in financial  statement  that is presented  with the same  prominence as
        other  financial  statements.  The Company's  only current  component of
        comprehensive income is the foreign currency translation adjustment.

        Foreign Currency Translation

        The  Company  maintains  its books and  accounting  records  in  Renminb
        ("RMB"),  thePRC's currency.  Translation of dmcontracts.  RMB in United
        States  dollars  ("US$") has been made at the single rate of exchange of
        US$1.00:RMB8.277.  No representation is made that RMB amounts could have
        been or could be,  converted  into US dollar at that rate. On January 1,
        1994, the PRC government  introduced a single rate of exchange as quoted
        daily by the People's Bank of China (the "Unified  Exchange Rate").  The
        quotation of the exchange  rates does not imply free  convertibility  of
        RMB to other  foreign  currencies.  All  foreign  exchange  transactions
        continue to take place  either  through the Bank of China or other banks
        authorized  to buy and sell foreign  currencies  at the  exchange  rates
        quoted by the  People's  Bank of China.  Approval  of  foreign  currency
        payments by the Bank of China or other institutions  requires submitting
        a payment application form together with supplier's  invoices,  shipping
        documents and signed contracts.

        One July 21, 2005,  the People's  Bank of China,  China's  central bank,
        announced  that,beginning  from July 21,  2005,  China will  implement a
        regulated,  managed floating exchange rate system based on market supply
        and demand and in  reference  to a package  of  currencies.  RMB will no
        longer be pegged to the US dollar and the RMB exchange  rate regime will
        be improved with greater flexibility.

        The People's  Bank of China will announce the closing price of a foreign
        currency such as the US dollar traded  against the RMB in the inter-bank
        foreign  exchange market after the closing of the market on each working
        day, and will make it the central parity for the trading against the RMB
        on the following working day.

        The exchange  rate of the US dollar  against the RMB will be adjusted to
        8.11 yuan per US dollar on July 21, 2005.

        The  daily  trading  price  of  the US  dollar  against  the  RMB in the
        inter-bank  foreign exchange market will continue to be allowed to float
        within a band of 0.3 percent around the central parity  published by the
        People's  Bank of China,  while the trading  prices of the non-US dollar
        currencies against the RMB will be allowed to move within a certain band
        announced by the People's Bank of China.

        The People's Bank of China will make adjustment of the RMB exchange rate
        band  when  necessary  according  to market  development  as well as the
        economic  and  financial   situation.The   People's  Bank  of  China  is
        responsible for maintaining the RMB exchange rate basically stable at an
        adaptive and equilibrium level.






                                       9
<PAGE>

                     CHINA BIOPHARMACEUTICALS HOLDINGS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



Note 2- SIGNIFICANT ACCOUNTING POLICIES (continued)

        Earnings (Loss) Per Share

        Basic  earning(loss)  per share is  computed  by  dividing  income(loss)
        available  to  common  shareholders  by the  weighted-average  number of
        common shares outstanding during the period.  Diluted earnings per share
        is  computed  similar  to  basic  earnings  per  share  except  that the
        denominator  is  increased  to include the number of  additional  common
        shares that would have been  outstanding if the potential  common shares
        had been issued and if the additional common shares were dilutive. Since
        the Company's common stock currently does not trade, the dilutive effect
        of any warrants or convertible notes outstanding can not be determined.

Note 3- ACCOUNTS RECEIVABLE

        Accounts receivable consist of the following:

                                                       June 30,     December 31,
                                                         2005           2004
                                                     ------------   ------------

       Accounts receivable                           $ 12,055,241   $  5,335,998
       less: Allowance for bad debt                       772,913        247,689
                                                     ------------   ------------
       Accounts  receivable, net                     $ 11,282,328   $  5,088,309
                                                     ============   ============

        During  2004,  the  Company  recognized  bad debt  expenses  of $538,843
        relating to sales record in 2003. In 2003, the Company believed that all
        of the criteria for revenue recognition  existed.  However,  during 2004
        certain customers  experienced  deteriorating  financial condition which
        resulted in  non-payment  of  accounts  receivable.  While,  the Company
        continues to pursue payment,  due to the uncertainty of collection,  the
        Company recorded a bad debt allowance for the accounts.





Note 4- INVENTORY

        Inventory consists of following:

                                                       June 30,     December 31,
                                                         2005           2004
                                                     ------------   ------------

       Finished goods                                $  2,938,210   $  1,154,723
       Packing materials and supplies                     722,356        287,398
       Work in progress                                   761,082         31,900
                                                     ------------   ------------
                                                     $  4,421,649   $  1,474,021
                                                     ============   ============

Note 5- FIXED ASSETS

        Fixed assets consists of the following:

                                                         June 30     December 31
                                                           2005          2004
                                                       -----------   -----------

       Plant, Equipment                                $ 8,256,497   $ 2,209,399
       Less: Accumulated depreciation                    3,835,218       521,850
                                                       -----------   -----------
                                                        12,091,715     1,687,549

       Construction in progress                            550,409          --
                                                       -----------   -----------
                                                       $ 4,971,688   $ 1,687,549
                                                       ===========   ===========





                                       10
<PAGE>

                     CHINA BIOPHARMACEUTICALS HOLDINGS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 6- OTHER ASSETS

        Other assets consists of the following:

                                                         June 30     December 31
                                                           2005          2004
                                                       -----------   -----------

       Cost of land use right                          $ 4,670,389   $ 1,473,964
       Less: Accumulated amortization                       61,415        57,453
                                                       -----------   -----------
                                                         4,608,974     1,416,511

       Deferred consultant expenses                        179,250          --
       Less: Accumulated amortization                       62,670          --
                                                       -----------   -----------
                                                           116,580          --

       Laboratory use right                                344,750          --
       Less: Accumulated amortization                       50,000          --
                                                       -----------   -----------
                                                           294,750          --

       Computer software                                     6,343          --
       Less: Accumulated amortization                        4,581          --
                                                       -----------   -----------
                                                             1,762          --

       Goodwell                                          5,255,439       305,774

       Deferred taxes                                       84,024        84,029
                                                       -----------   -----------
                                                       $10,361,529   $ 1,806,314
                                                       ===========   ===========

Note 7- AMOUNT DUE TO SHAREHOLDERS

        Amounts due to shareholders consist of the following:

                                                         June 30     December 31
                                                           2005          2004
                                                       -----------   -----------

       Due to shareholders                             $ 1,627,844   $   313,145



        The amounts due to shareholders are unsecured, interest-free and have no
        fixed repayment terms.




                                       11
<PAGE>

                     CHINA BIOPHARMACEUTICALS HOLDINGS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




Note 8- BUSINESS COMBINATIONS

        Effective August 28, 2004, the Company completed the acquisition of CBC,
        a British Virgin  Islands  corporation  which is the parent,  management
        company  and  holder  of a 90% of the  ownership  interest  in its  only
        operating subsidiary,  Chemsource, a company established in the People's
        Republic  of  China  and  engaged  in  the  discovery,  development  and
        commercialization  of  innovative  drugs and related  bio-pharmaceutical
        products  in  China.  The  Company  exchanged  20,842,779  shares of its
        restricted  common stock,  par value $0.01 per share, for that number of
        shares  of CBC that  constitutes  100% of the  equity  interest  of CBC,
        valued  at  $447,431  which  represented  the  net  asset  of CBC at the
        acquisition date.

        The following summarizes the acquisition:

        Assets acquired                                             $ 1,077,242
        Liability assumed                                              (629,811)
                                                                    -----------
        Net assets of CBC at the acquisition date                   $   447,431
                                                                    ===========

        On  September  29,  2004,  the  Company  acquired a  75.7606%  ownership
        interest  of  Suzhou  Hengyi   Pharmaceuticals  of  Feedstock  Co.,  Ltd
        ("Hengyi"), a Chinese company established in Suzhou, China for 1,200,000
        of common shares valued at $1.00 per share or $1,200,000  and additional
        $1,600,000 as an additional  contribution  into the acquired  Hengyi for
        working capital and/or expansion  purposes.  The cash contribution is to
        be made in installments beginning in 2005.

        On June 11,  2005,  the  Company  acquired a 51%  ownership  interest of
        Suzhou Erye Pharmaceutical  Limited Company ("Erye"),  a Chinese company
        established  in Suzhou,  China for  $800,000  in cash and  3,300,000  of
        common shares valued at $1.00 per share or $3,300,000. Also, the Company
        will  contribute  an additional  $2,200,000 to Erye for working  capital
        and/or  expansion  purposes.  The  cash  contribution  is to be  made in
        installments. The current shareholders will be entitled all profits made
        from June 11,  2005 to the date  Government  approval is granted for the
        change  in  ownership.  On  June  30,  2005,  the  Company  owes  Eyre's
        shareholders $600,000 of the purchase price.










                                       12
<PAGE>

                     CHINA BIOPHARMACEUTICALS HOLDINGS, INC.
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 9- COMMON STOCK

        On December 17, 2004,  the Company issued 600,000 shares of common stock
        to Gang Zhu and another  600,000 shares of common stock to Fu Ying Chou,
        both are  shareholders  of Suzhou Hengyi  Pharmaceutical  Feedstock Co.,
        Ltd. pursuant to the acquisition of Hengyi effective October 1, 2004.

        During  October  2004 the Company  engaged a  consultant  for six months
        ending March 31, 2005. The terms of the agreement are for the consultant
        to receive a cash  payment of $4,000 plus 2,500  shares of common  stock
        valued at $2,500 and 10,000 three year warrants to purchase common stock
        at $0.50 per share, each month during the agreement with the first month
        free.  The  common  shares  are being  valued at $1.00 per share and the
        warrants are valued at $0.58 per warrant for a total monthly cost to the
        Company of $10,205 for the consulting services.

        During January 2005, the Company issued $500,000 face value  convertible
        notes  payable  180 days from the date of issue with  interest at 7% per
        annum.  The notes are  convertible  into common  stock of the Company at
        $1.00 per  share.  Attached  to the notes are three year  warrants  that
        allow the holder to purchase  shares of common stock at $1.50 per share.
        Relating to the convertible notes issuance,  the Company paid investment
        banking fees of $40,000 in cash and issued  65,000  shares  common stock
        valued at  $65,000  and 26,666  three  year  warrants  to  purchase  the
        Company's  common  stock at $1.50 per share  valued at $3,200  using the
        Black-Schole  pricing  model for a total of  $108,200  of note  issuance
        expense to be amortized over the life of the note.

        On March 8, 2005,  the Company  issued 300,000 shares of common stock to
        China Pharmaceutical University located in Nanjing, China, pursuant to a
        joint  laboratory  agreement  and  agreed  to  invest  $36,245  into the
        laboratory in the next five years.  The value of the 300,000  shares has
        not been stated in the agreement.  However, the management estimated the
        stock as $1.00 per share.

        During  April 2005 the Company  engaged a  consultant  for seven  months
        ending  October  31,  2005.  The  terms  of the  agreement  are  for the
        consultant  to receive a cash payment of $50,000  plus 50,000  shares of
        common  stock  valued at  $50,000.  The  Company  also  engaged  another
        consultant for one year ended March 31, 2006. The term of this agreement
        is for the consultant to receive 60,000 shares of common stock valued at
        $60,000 and 35,000 three year warrants to purchase common stock at $2.00
        per share valued at $19,250.

        During June 2005, the Company issued  $1,090,000 face value  convertible
        preferred  with  interest at 7% per annum to the  investor.  The Company
        issued to the investors shares of Series A Convertible  Preferred Stock,
        face  value  $1.00  per  share,   purchase   price  US$1.00  per  share,
        convertible  at a ratio of 1:1 into  shares of the  common  stock of the
        Company.  The Company also issued to the investors one warrant for every
        one share of Series A Convertible  Preferred Stock  subscribed under the
        subscription  agreement.  The exercise  price of these Warrants is $2.00
        per share of common stock. Pursuant to these Warrants, the investors are
        entitled to  purchase an  aggregate  amount of  1,090,000  shares of the
        Company's  common stock.  Relating to the convertible  preferred  shares
        issuing,  the Company  paid fees of $80,750 in cash,  and issued  76,500
        shares of common stock valued at $76,500, and 76,500 three year warrants
        to purchase the Company's common stock at $2.00 per share.

        During  June  2005,  the  convertible  notes  due on June 30,  2005 were
        extended 90 days.  Additionally,  since the Company did not register the
        underlying  stock for the  conversion  of the notes and warrants by July
        30, a penalty provision was trigged, whereby the conversion price of the
        warrants  drops $0.05 per month (at August1,  the  conversion  price was
        $0.80 per share)  and the number of  warrants  the note  holders  was to
        receive increases 5% per month.








                                       13
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Forward-Looking Statements:

The following  discussion  of the financial  condition and results of operations
should be read in conjunction  with the  consolidated  financial  statements and
related  notes  thereto.  The  following  discussion  contains   forward-looking
statements.  China  Biopharmaceuticals  Holdings,  Inc. is referred to herein as
"we" or "our."  The words or phrases  "would  be," "will  allow,"  "expect  to",
"intends to," "will likely  result," "are  expected  to," "will  continue,"  "is
anticipated,"  "estimate,"  or similar  expressions  are  intended  to  identify
"forward-looking  statements.  Such  statements  include  those  concerning  our
expected  financial  performance,  our corporate strategy and operational plans.
Actual   results   could  differ   materially   from  those   projected  in  the
forward-looking  statements as a result of a number of risks and  uncertainties,
including:  (a) those  risks  and  uncertainties  related  to  general  economic
conditions in China,  including regulatory factors that may affect such economic
conditions; (b) whether we are able to manage our planned growth efficiently and
operate profitable operations,  including whether our management will be able to
identify,  hire, train,  retain,  motivate and manage required personnel or that
management  will  be  able to  successfully  manage  and  exploit  existing  and
potential market  opportunities;(c)  whether we are able to generate  sufficient
revenues or obtain financing to sustain and grow our operations; and (d) whether
we are able to successfully  fulfill our primary requirements for cash which are
explained below under "Liquidity and Capital  Resources.  Statements made herein
are as of the date of the filing of this Form  10-QSB  with the  Securities  and
Exchange  Commission  and should not be relied upon as of any  subsequent  date.
Unless  otherwise  required  by  applicable  law,  we do not  undertake,  and we
specifically disclaim any obligation,  to update any forward-looking  statements
to reflect  occurrences,  developments,  unanticipated  events or  circumstances
after the date of such statement.

OVERVIEW

China Biopharmaceuticals  Holdings, Inc. ("we", "us", "our" or "the Company") is
a  bio-pharmaceutical  company  focused on research  discovery,  development and
commercialization  of innovative drugs in People's Republic of China ("China" or
"PRC").

The Company, a Delaware  corporation,  was originally organized as a corporation
under the laws of the  state of New York on  August  6,  1976  under the name of
Globuscope, Inc. On August 7, 1984, its name was changed to Globus Growth Group,
Inc.,  which was its name  until it was  merged  into  China  Biopharmaceuticals
Holdings,  Inc. ("CBH"), its wholly owned subsidiary in the state of Delaware on
August 28, 2004 through an internal  re-organizational  merger. Effective August
28, 2004,  CBH  completed  the  acquisition  of China  Biopharmaceuticals  Corp.
("CBC"),  a British  Virgin Islands  corporation  as the parent,  the management
company and holder of 90% of the ownership  interest in its then only  operating
subsidiary  and  asset,  NanJing  Keyuan  Pharmaceutical  R&D Co.,  Ltd.,  doing
business  in English  a.k.a.  Nanjing  Chemsource  Pharmaceutical  R&D Co.  Ltd,
("Keyuan" or  "Chemsource"),  a company  established in China and engaged in the
discovery,  development and  commercialization  of innovative  drugs and related
bio-pharmaceutical  products in China.  Nanjing Keyuan  Pharmaceutical  R&D Co.,
Ltd. was established in March 2000 in Nanjing City of Jiangsu  Province,  China.
It  was  founded  and  spear-headed  by  graduates  from  China   Pharmaceutical
University to engage in new drug  research and discovery and in the  development
of new drug screening technologies.



                                       14
<PAGE>

On February 27, 1986, the  stockholders of the Company  approved the divestiture
and sale of  those  assets  of the  Company  as  pertained  to its  then  camera
manufacturing  and photography  operations as well as the sale of certain shares
of stock in a photographic  related  company owned by it and its interest in the
Company's then owned premises. The sale was consummated as of February 28, 1986.
After such  divestiture,  the Company's  activities  consisted of the holding of
interests  in  various   companies  and  the  seeking  out  of  acquisition  and
joint-venture  opportunities in various fields of business  endeavor.  On May 27
1988,  the  Company  filed  with  the  Securities  and  Exchange   Commission  a
notification  of  election  to be treated as a  "Business  Development  Company"
("BDC") as that term is defined in the Investment Company Act of 1940 (the "1940
Act").  The decision to become a BDC was made  primarily  to better  reflect the
Company's anticipated future business and development relationships. A BDC is an
investment company designed to assist eligible portfolio  companies with capital
formation.  As a result of the reorganization the acquisition of CBC pursuant to
the Exchange  Agreement,  the Company is no longer a BDC and will continue as an
operating company.

On  August  4,  2004,  the  Company  filed  Definitive   Information   Statement
("Information  Statement")  pursuant to Section 14(c) of the Securities Exchange
Act of 1934, as amended,  notifying its  shareholders  the execution and pending
implementation  of an  Agreement  and Plan of Merger was  signed by and  between
Globus Growth Group, Inc., a New York corporation ("Globus") and the predecessor
of our company and its wholly owned  subsidiary  in the State of Delaware  under
the current name of the Company,  China  Biopharmaceuticals  Holdings,  Inc. The
Agreement and Plan of Merger  Agreement  provided for a tax-free  reorganization
pursuant  to  the  provisions  of  Section  368 of the  Internal  Revenue  Code,
according to which Globus,  Inc.  merged with and into the Company,  ceasing its
corporate  existence and having the Company as the surviving  corporation of the
merger (the "Merger").  In the Merger,  all issued and outstanding shares of the
common  stock of Globus have been  converted  into shares of common stock of the
Company. On August 28, 2004, the internal  reorganizational Merger was completed
with Globus merging into the Company as the surviving entity.

Pursuant  to a share  exchange  agreement  ("Exchange  Agreement")  between  the
Company,  CBC, Keyuan,  and MAO Peng as the sole shareholder of CBC, our company
received all of the issued and  outstanding  common stock of CBC in exchange for
20,842,779 shares of restricted (as defined in Rule 144 of the Securities Act of
1933, as amended "the  Securities  Act") common stock of our company,  par value
$0.01 per share,  representing  approximately  90% of the issued and outstanding
common  capital stock of our company  following the time of the issuance.  There
are currently  28,133,757  issued and outstanding  shares of common stock of the
reorganized Company.

On September 29, 2004, the Company signed a purchase agreement which was amended
on December 31, 2004 to acquire a 75.7606%  ownership  interest of Suzhou Hengyi
Pharmaceuticals of Feedstock Co., Ltd ("Hengyi"),  a Chinese company established
in Suzhou,  China for  1,200,000 of common shares and  additional  $1,600,000 as
additional  contribution  into the acquired  Hengyi for working  capital  and/or
expansion purposes. The cash contribution is to be made in installments.

On June 11, 2005, the Company signed a purchase  agreement  which was amended on
August 3, 2005 under which, the Company acquired controlling  ownership interest
(approximately  51%) in Suzhou Erye Pharmaceutical  Limited Company ("Erye"),  a
Chinese company  established in Suzhou,  China. Total  consideration paid by the
Company to acquire 51% ownership  interest in Erye is $3,000,000 cash to be paid
in  installments,  and  3,300,000 of common  shares valued at $1.00 per share or



                                       15
<PAGE>

$3,300,000.  Out of the  $3,000,000  to be  paid  in  cash,  $2,200,000  will be
contributed to the acquired Erye for working capital and/or expansion  purposes.
The acquisition is pending on the Company's listing on the NASD Over The Counter
Bulletin Board Market in a reasonable time.

The shares of common stock of the Company are  currently not quoted on any stock
exchange  but we have  applied  for trading  with the Over the Counter  Bulletin
Board  ("OTC  Bulletin   Board")  under  the  symbol  CBIO.OB  and  our  listing
application  has been  accepted.  We are being  considered  for approval of such
listing application although no assurance can be given in this regard.

Although  to date  we have  been  successful  in  developing  our  business  and
products,  we  face  many  challenges  typically  faced  by a  growing  company,
including  limited  access to capital,  competition,  research  and  development
risks,  among many other risks. Our inability to overcome these risks could have
an  adverse  effect  on  our  operations,  financial  condition  and  prospects.
Investments in our company may also be materially and adversely  affected by the
fluctuation of the Renminbi.

Brief Description of the Company's Subsidiaries and Business

CBC  is  a  bio-pharmaceutical   company  focused  on  research  and  discovery,
development  and  commercialization  of  innovative  drugs  in  China.  CBC  was
incorporated  in the  British  Virgin  Islands  (BVI) as a  holding  company  of
pharmaceutical  assets in China.  It entered  into a merger  agreement  with the
predecessor  of  the  Company.  CBC  currently  owns  approximately  90%  of the
ownership  interest in  Chemsource,  its drug discovery arm. CBC's mission is to
maximize  investment returns for its shareholders by integrating its strong drug
discovery and  development  strength with  manufacturing  and  commercialization
capabilities   and  by  actively   participating   in  the   consolidation   and
privatization  of the  pharmaceutical  industry  in China to  become a  dominant
player in the bio-pharmaceutical industry in China.

CBC has a robust  research and  development  ("R&D") team focused on discovering
new small and large  molecule  drugs as well as developing  generic and improved
drugs based on existing  products already on the market and traditional  Chinese
medicine products.  CBC has developed a solid discovery and development platform
with advanced R&D capabilities  based on post genome era technological  advances
to enable rapid drug  discovery  and  development.  CBC also has a rich existing
product  pipeline.   The  technological  backbone  of  the  CBC's  advanced  R&D
capabilities is a Drug Screening and Testing System--an  advanced drug screening
and testing  system based on certain  bio-technologies  that have only  recently
been made possible by rapid  technological  advances in the  Post-Genomics  Era.
This proprietary  gene-level technology platform enables CBC to deliver the next
generation of  drugs--which  are more effective and have fewer side effects in a
much shorter period than by traditional pharmaceutical developmental routes. The
technology  team  is  lead by some of the  best  drug  research  scientists  and
development  experts  in the  country.  CBC has a  product  pipeline  containing
approximately  twenty-five major products,  including sixteen new drugs that are
ready for  commercialization  in China, and nine other drugs undergoing  various
phases  of  clinical  trials  toward  approval  by the  SFDA.  CBC  also  offers
contractual  research and  development  products by licensing  the access to its
proprietary  screening and testing platforms to other pharmaceutical  companies.
CBC has built a  Library  of  Targeted  Drug  Candidates  ("LTDC")  with  20,000
chemical compounds.  Drug candidates undergo screening to reveal their potential
to become new drugs. CBC collaborates  with China  Pharmaceutical  University in
enhancing the resources of chemical compounds in the library. CBC builds LTDC to
both  accelerate its own drug  discovery and to generate  revenue in the form of
access fees paid by other pharmaceutical companies.




                                       16
<PAGE>

The  Company's  subsidiary  Hengyi  specializes  in  research  and  development,
production  and  sales  of  pharmaceutical  products  as well as  chemicals  and
intermediaries  used in  pharmaceutical  products.  Hengyi has extensive product
pipeline  containing  twenty  six  major  products  that  are raw  material  and
intermediaries  for making  pharmaceutical  products.  More than 90% of Hengyi's
products are exported to North  America,  South America and European  countries.
Among  the  end  user   customers  of  Hengyi  are   companies   such  as:  TEVA
Pharmaceutical  Industries Ltd., TARO  Pharmaceutical  Industries Ltd.  Euticals
SPA,  ARASTO   Pharmaceutical   Chemical  Inc.,  Globe  Chemicals,   Biesterfeld
Siemsgluess  International  and Beckman  Coulter Inc. Hengyi can manufacture and
provide most of the raw  materials for when the Company  starts  commercializing
its new  drugs,  enabling  the  Company  to lower its  production  cost and gain
competitive advantages over its competitors.

The  Company's  subsidiary,  Erye,  specializes  in  research  and  development,
production  and sales of  pharmaceutical  products as well as chemicals  used in
pharmaceutical  products.  The  acquisition of 51% of the ownership  interest of
Erye,  adds  new  drug  products  to  the  Company's   pipeline,   manufacturing
capabilities that comply with China Good Manufacturing  Practices (GMP) standard
and  marketing  network  that covers 25  provinces  in China.  Erye has obtained
production  certificates  for 68 drug items,  among which 27 are in  production,
mainly  antibiotics drugs such as Cefotaxime  Sodium for injection,  Ceftriaxone
Sodium for injection,  Amoxicillin for injection,  and Compound  Amoxicillin for
injection.  Erye's  sales  exceeded  $20  million  in 2004,  with  raw  material
Acetylspiramycin  per oral taking 15% of domestic market share,  and Cloxacillin
Sodium taking 80% of domestic market share.


GENERAL  RESULTS OF  OPERATIONS  FOR THE THREE  MONTHS  ENDED  JUNE 30,  2005 AS
COMPARED TO THE THREE MONTHS ENDED JUNE 30, 2004

On September 29, 2004, the Company signed a purchase agreement which was amended
on December 31, 2004 to acquire a 75.7606% ownership interest of Hengyi. On June
11, 2005, the Company signed a purchase agreement which was amended on August 3,
2005 to acquire  approximately  51%  ownership  interest  of Erye.  The  current
financial statements of the Company reflects Hengyi's revenue and profit for the
three  months  ended June 30,  2005 and the  revenue of Erye for the period from
June 11,  2005 to June 30,  2005.  Erye's  net  income is not  reflected  in the
current financial statements of the Company.

(1) REVENUE.
Revenue  for the three  months  ended June 30,  2005 was  $3,642,565,  while the
Company's  revenue  for the  three  months  ended  June 30,  2004 was  $536,984,
representing a 578% increase. The increase is attributable primarily to revenues
generated  by Hengyi  and Erye as well as to an  increase  in the R&D  services,
licensing  of access to Keyuan's  proprietary  screening  and testing  platforms
during the three months ended June 30, 2005.

(2) R&D.
R&D cost for the three  months  ended June 30, 2005 was  $130,232 as compared to
$37,861 for the three months ended June 30, 2004,  representing a 244% increase.
The increase is mainly  attributable to increase of R&D costs of Hengyi.  Keyuan
has been concentrating on the preparation of the  commercialization of new drugs
and  therefore,  most of the R&D cost during three months ended June 30, 2005 is
attributable to R&D costs of Hengyi.




                                       17
<PAGE>

(3) GROSS PROFIT.
Gross profit in the three months  ended June 30, 2005  amounted at $807,135,  as
compared to a gross profit of $375,793 for the three months ended June 30, 2004,
representing a 115% increase. The gross profit margin for the three months ended
June 30 was 22% as compared to 70% for the three months ended June 30, 2004.  In
the second quarter of 2005, the Company  increased  sales. The decrease in gross
profit margin is mainly due to Hengyi's and Erye's low gross profit margin.

(4) GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses for the three months ended June 30, 2005 was
$604,177  as  compared  to  $211,991  for the three  months  ended June 30, 2004
representing  a 185% increase.  General and  administrative  expenses  increased
significantly  for the three months  ended June 30, 2005 due to the  acquisition
related  transaction  costs  for  Erye as well as  financing  activities  of the
Company.  Auditing expense,  legal expenses,  commissions and other professional
expenses  are the main  reason  for the  significant  increase  in  general  and
administrative  expenses.  Some of these  expenses  are one  time  transactional
expenses.

(7) NET INCOME
Net income for the three  months ended June 30, 2005 was $125,459 as compared to
$147,203 for the three months  ended June 30, 2004,  representing  a decrease of
15%.  The  decrease  is mainly  attributable  to the fact that  during the three
months  ended June 30,  2005 the  Company  significantly  increased  general and
administrative expense, which includes acquisition related transaction costs for
Erye as well as financing  related costs.  Erye's net income is not reflected in
the current financial statements.

GENERAL RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2005 AS COMPARED
TO THE SIX MONTHS ENDED JUNE 30, 2004

On September 29, 2004, the Company signed a purchase agreement which was amended
on December 31, 2004 to acquire a 75.7606% ownership interest of Hengyi. On June
11, 2005, the Company signed a purchase agreement which was amended on August 3,
2005 to acquire  approximately  51%  ownership  interest  of Erye.  The  current
financial statements of the Company reflects Hengyi's revenue and profit for the
six months  ended June 30, 2005 and the revenue of Erye for the period from June
11,  2005 to June 30,  2005.  Erye's  net income is not  counted in the  current
financial statements of the Company.

(1) REVENUE.
Revenue  for the six months  ended on June 30, 2005 was  $5,631,073  compared to
$994,591 for the six months ended June 30, 2004,  representing  a 466% increase.
The increase is attributable  primarily to revenues generated by Hengyi and Erye
as well as to an increase in the R&D  services,  licensing of access to Keyuan's
proprietary screening and testing platforms during the six months ended June 30,
2005.

(2) R&D.
R&D cost for the six months  ended June 30,  2005 was  $153,306  as  compared to
$103,314 for the six months ended June 30, 2004,  representing  a 48%  increase.
The  increase  is mainly  attributable  to the  increase of R&D costs of Hengyi.
Keyuan has been concentrating on the preparation of the commercialization of new
drugs and therefore,  most of the R&D cost during six months ended June 30, 2005
is attributable to R&D costs of Hengyi.

(3) GROSS PROFIT.
Gross profit in the six months ended June 30, 2005  amounted at  $1,696,576,  as
compared to a gross  profit of $706,823  for the six months ended June 30, 2004,
representing a 140%  increase.  The gross profit margin for the six months ended
June 30, 2005 was 30% as compared to 71% for the six months ended June 30, 2004.
In the first two quarter of 2005, the Company significantly increased sales. The
decrease in gross  profit  margin is mainly due to Hengyi's and Erye's low gross
profit margin.



                                       18
<PAGE>

(4) GENERAL AND ADMINISTRATIVE EXPENSES
General and  administrative  expenses for the six months ended June 30, 2005 was
$961,545  as  compared  to  $399,594  for the six  months  ended  June 30,  2004
representing  a 141% increase.  General and  administrative  expenses  increased
significantly  for the six months ended June 30, 2005 due to the reverse merger,
reorganization of the Company and the acquisition  related transaction costs for
Hengyi and Erye as well as the  financing  activities  of the Company.  Auditing
expense,  legal expenses,  commissions and other  professional  expenses are the
main reason for the significant increase in general and administrative expenses.
Some of these expenses are one time transactional expenses.

(7) NET INCOME
Net income for the six months  ended June 30,  2005 was  $533,126 as compared to
$277,266 for the six months ended June 30, 2004,  representing  a 92%  increase.
The increase is  attributable  to the fact that during the six months ended June
30, 2005, the Company  significantly  increased sales, which also included sales
by Hengyi  and Erye and  decreased  its R&D  expenses.  Erye's net income is not
reflected in the current financial statement.

LIQUIDITY AND CAPITAL RESOURCES

For the three  months  ended  June 30,  2005,  net cash  provided  by  operating
activities was $601,123,  net cash used in investing activities was $228,220 and
net  cash  provided  by  financing  activities  was  $1,065,000.  Cash  and cash
equivalents  for the  three  months  ended  June 30,  2005 was  $2,482,602.  Net
increase in Cash and cash  equivalents  for the three months ended June 30, 2005
was  $1,437,903.  For the six months ended June 30, 2005,  net cash  provided by
operating  activities  was $261,297,  net cash used in investing  activities was
$364,693 and net cash provided by financing activities was $2,118,962.  Cash and
cash  equivalents  for the six months  ended June 30, 2005 was  $2,482,602.  Net
increase in Cash and cash equivalents for the six months ended June 30, 2005 was
$2,015,566.  This has brought concern to the Company's management because Keyuan
desires to  strengthen  its leading  position in new drug R&D and the Company is
planning to proceed with  further  acquisitions  for which the Company  requires
external sources of capital.

In January of 2005, the Company  raised gross  proceeds of $500,000  through the
sales of promissory note to accredited investors ("Note").  The Convertible loan
is 7% interest rate per annually and payable with interest.  The principle is to
be paid upon maturity, which is 180 days from the date of the sales of the Note.
The  Company  granted to holders of the Note the right to convert  all,  but not
less than all,  of the Note into  common  stock by  electing to convert the face
value of the Note at or prior to maturity  at one dollar per share.  The Company
further granted to holders of the Note with warrant right to purchase at a price
of $1.50 for a period  of three  years  from the date of sales of the Note.  The
purchase  price  shall be $1.50  per  share  with the  underlying  shares  to be
registered  within  120 days  after the date of sales of the Note.  The  Company
agreed to prepare and file with the SEC a  registration  statement  covering the
resale of the common stock on or before April 30, 2005 for certain investors. If
such  registration  statement  covering  the shares of common stock to which the
promissory  note can be converted was not declared  effective on or before April
30, 2005, then the conversion price will be reduced by 5% or $0.05 per share and
the warrant  amount will be increased  by 5% per month for every month.  To such
date there is no effective registration statement for the underlying securities.


                                       19
<PAGE>

In June of 2005,  pursuant to an exemption under the Securities Act, the Company
has conducted a private placement of approximately $1,090,000 with 28 accredited
investors,  one of which is a director  of the  Company  ("Investors"),  through
issuance of Series A  Convertible  Preferred  Stock.  The Company  issued to the
Investors shares of Series A Convertible Preferred Stock, ("Series A Convertible
Preferred  Stock") face value $1.00 per share,  purchase price US$1.00 per share
("Purchase  Price")  convertible  at a ratio of 1:1  ("Conversion  Ratio")  into
shares of the common stock  ("Common  Stock") of the  Company.  The Company also
issued  to the  Investors  one (1)  warrant  for every one (1) share of Series A
Convertible  Preferred Stock subscribed under the  subscription  agreement.  The
exercise price of these Warrants is $2.00 per share of common stock. Pursuant to
these  Warrants,  the Investors are entitled to purchase an aggregate  amount of
1,090,000 shares of the Company's common stock. These Warrants will expire three
(3) years from the effectiveness of the registration  statement that the Company
is  required  to file with the SEC.  The  Company is  required  to file with the
Securities and Exchange Commission a registration statement, covering the resale
of all the shares of common  stock to which the Series A  Preferred  Convertible
Stock may be converted and the shares underlying the Warrants issued or issuable
to  Investors  before  October 15, 2005 If such  registration  statement  is not
declared effective on or before October 15, 2005, then the conversion price will
be reduced by 5% or $0.05 per share and the warrant  amount will be increased by
5% per month for every month.  To such date there is no  effective  registration
statement for the underlying securities.

Going forward,  our primary requirements for cash consist of: (1) acquisition of
additional  pharmaceutical  manufacturing companies with GMP standard facilities
in order to  commercialize  new drugs in our  extensive  new drug  pipeline  and
further  extend of product  pipeline and expand the Company's  sales network (2)
Continued R&D for more selected new drug projects (3) Build up sales network for
new drug  distribution.  We anticipate that our internal source of liquid assets
may enable us to  continue  our  operation  activities  other  than  acquisition
activities  for next twelve  months.  However,  we  anticipate  that our current
operating activities may not enable us to meet the anticipated cash requirements
for future acquisition activities.  External source of capital may be needed for
Company's expansion. We are exploring bank loans and private equity financing to
finance such  expenditures and intend to raise equity through the capital market
once our shares are traded.

MANAGEMENT ASSUMPTIONS

Management anticipates,  based on internal forecasts and assumptions relating to
our current  operations,  that existing cash and funds generated from operations
may not be  sufficient  to meet  capital  requirements  for  future  acquisition
activities.  We could therefore be required to seek additional financing.  There
can be no assurance that we will be able to obtain such additional  financing at
acceptable terms to us, or at all.

EFFECT OF FLUCTUATION IN FOREIGN EXCHANGE RATES

Our operating  subsidiaries are located in China. Their business  activities are
mainly in China using Chinese Renminbi as the functional currency.  The value of
the Renminbi  against the U.S. dollar and other  currencies may fluctuate and is
affected by, among other  things,  changes in the PRC's  political  and economic
conditions.  As we rely entirely on revenues  earned in the PRC, any significant



                                       20
<PAGE>

revaluation of the Renminbi may materially and adversely  affect our cash flows,
revenues and  financial  condition.  For example,  to the extent that we need to
convert U.S. dollars we receive from an offering of our securities into Renminbi
for our operations,  appreciation of the Renminbi  against the U.S. dollar could
have a material adverse effect on our business,  financial condition and results
of operations.

Conversely,  if we decide to convert  our  Renminbi  into U.S.  dollars  for the
purpose of making  payments  for  dividends  on our  common  shares or for other
business purposes and the U.S. dollar appreciates against the Renminbi, the U.S.
dollar equivalent of the Renminbi we convert would be reduced. To date, however,
we have not engaged in transactions of either type.

Since 1994 the PRC has pegged the value of the Renminbi to the U.S.  dollar.  We
do not  believe  that this  policy  has had a material  effect on our  business.
However,   there  have  been   indications   that  the  PRC  government  may  be
reconsidering  its monetary  policy in light of the overall  devaluation  of the
U.S. dollar against the Euro and other currencies  during the last two years. In
July 2005,  the PRC  government  revalued  the Renminbi by 2.1% against the U.S.
dollar,  moving from Renminbi  8.28 to Renminbi 8.11 per dollar.  Because of the
pegging of the Renminbi to the U.S.  dollar is loosened,  we anticipate that the
value of the  Renminbi  appreciate  against  the  dollar  with the  consequences
discussed above.





















                                       21
<PAGE>

ITEM 3.  CONTROL AND PROCEDURES.


Evaluation  of  Disclosure  Controls  and  Procedures  - We maintain a system of
disclosure  controls  and  procedures  that are  designed  for the  purposes  of
ensuring  that  information  required  to be  disclosed  in our  Securities  and
Exchange  Commission  ("SEC")  reports is recorded,  processed,  summarized  and
reported  within the time periods  specified  in the SEC's rules and forms,  and
that  such  information  is  accumulated  and  communicated  to our  management,
including  our Chief  Executive  Officer  ("CEO")  and Chief  Financial  Officer
("CFO"),   as  appropriate  to  allow  timely   decisions   regarding   required
disclosures.


As of  the  end of  the  period  covered  by  this  report,  we  carried  out an
evaluation, under the supervision and with the participation of our CEO and CFO,
of the  effectiveness  of our  disclosure  controls and procedures as defined in
Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended. Based on that
evaluation,  our  CEO  and  CFO  concluded  that  our  disclosure  controls  and
procedures are effective.


Changes in Internal Control Over Financial  Reporting - There has been no change
in our internal  control over financial  reporting  during the second quarter of
2005 that has materially affected, or is reasonably likely to materially affect,
our internal control over financial reporting.



PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

None.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In May of 2004, the Company issued to consultants  and advisor in  consideration
for their services a total  aggregate of 110,000 shares of the Company's  common
stock, 35,000 warrants  exercisable at a price of $2 per share for a period of 3
years and 50,000 warrants  exercisable at a price of $0.5 per share for a period
of 3 years.

In June of 2005,  pursuant to an exemption under the Securities Act, the Company
has conducted a private placement of approximately $1,090,000 with 28 accredited
investors,  one of which is a director  of the  Company  ("Investors"),  through
issuance of Series A  Convertible  Preferred  Stock.  The Company  issued to the
Investors shares of Series A Convertible Preferred Stock, ("Series A Convertible
Preferred  Stock") face value $1.00 per share,  purchase price US$1.00 per share
("Purchase  Price")  convertible  at a ratio of 1:1  ("Conversion  Ratio")  into
shares of the common stock  ("Common  Stock") of the  Company.  The Company also
issued  to the  Investors  one (1)  warrant  for every one (1) share of Series A
Convertible  Preferred  Stock. The exercise price of these Warrants is $2.00 per
share of common stock. Pursuant to these Warrants, the Investors are entitled to
purchase an aggregate  amount of 1,090,000 shares of the Company's common stock.
These  Warrants  will  expire  three (3)  years  from the  effectiveness  of the
registration  statement  that the  Company  is  required  to file  with the SEC.
WestPark Capital,  Inc.  ("WestPark") acted as the Company's  placement agent in
the private placement described above. In consideration of WestPark's  services,
the Company issued to WestPark or its designees 76,500 shares of common stock of
the Company and 76,500 Warrants  representing the right to purchase up to 76,500
shares of the Company's common stock under the same terms as described above.




                                       22
<PAGE>

On June 11, 2005, the Company signed a purchase agreement which was amended on
August 3, 2005 under which, the Company acquired controlling ownership interest
(approximately 51%) in Suzhou Erye Pharmaceutical Limited Company ("Erye"), a
Chinese company established in Suzhou, China. As part of the consideration paid,
total of 3,300,000 shares of the common stock of the Company has been issued to
the shareholders of Erye and their designees.

All of the above  issuances and sales were deemed to be exempt under  Regulation
S,  Regulation D Rule 701 and Section 4(2) of the Securities Act. No advertising
or general  solicitation was employed in offering the securities.  The offerings
and sales were made to a limited number of persons,  all of whom were accredited
investors,  business associates of ours or our executive officers,  and transfer
was restricted by us in accordance with the requirements of the Securities Act.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None.

ITEM 5.  OTHER INFORMATION

None



ITEM 6.       EXHIBITS

(a) Exhibits

The following exhibits are filed as part of this report:


EXHIBIT
NUMBER             DESCRIPTION
-----------        -------------------------------------------------------------

10.1              Purchase  Agreement  dated  June 11,  2005 by and  between  38
                  persons  including and  represented by Shi Mingsheng and China
                  Biopharmaceuticals  Holdings,  Inc. (incorporated by reference
                  to Exhibit 10.1 to the  Company's  Current  Report on Form 8-K
                  filed with the Securities and Exchange  Commission on June 14,
                  2005.)

10.2              Amendment  to Purchase  Agreement  dated August 3, 2005 by and
                  between 38 persons  including and represented by Shi Mingsheng
                  and China Biopharmaceuticals Holdings, Inc.




                                       23
<PAGE>

31.1              Certification  of Chief Executive  Officer Pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.

31.2              Certification  of Chief Financial  Officer Pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.

32.1              Certification  of Chief Executive  Officer pursuant to Section
                  906 of the Sarbanes-Oxley Act of 2002

32.2              Certification  of Acting Chief Financial  Officer  pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002






















                                       24
<PAGE>

SIGNATURES



In accordance with the  requirements of the Securities  Exchange Act of 1934, as
amended,  the  registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

                                         CHINA BIOPHARMACEUTICALS HOLDINGS, INC.

Date: August 14, 2005
                                         By: /s/ MAO Peng
                                            ------------------------------
                                            Name:  MAO Peng
                                            Title: Chairman and
                                            Chief Executive Officer
Date: August 14, 2005
                                         By: /s/ HUNAG Chentai
                                            ------------------------------
                                            Name: HUANG Chentai
                                            Title: Chief Financial Officer
























                                       25