Zhongpin net income, sales up

by Bryan Salvage
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CHANGGE, CHINA – Zhongpin Inc., a leading meat and food processing company in the People's Republic of China, announced net income increased 37.1% to $13.3 million in the first quarter 2010 from $9.7 million in the first quarter 2009. Net sales revenues increased 32.8% in the three months ended March 31 to $204.3 million from $153.8 million in the first quarter 2009.

Basic and diluted earnings per share increased 15.2% to $0.38 in the first quarter 2010 from $0.33 in the first quarter 2009. Hog and pork prices in the first quarter 2010 decreased about 10% from the fourth quarter 2009 due mainly to the hog supply temporarily exceeding market demand. Prices are expected to recover in the near future.

"Our first quarter of 2010 proves the wisdom of our aggressive expansion, since we were able to continue growing sales revenues, net income and earnings per share during a period of moderate but temporary declines in the prices of hogs and pork," said Xianfu Zhu, chairman and chief executive officer.

“By the end of 2010, we believe that Zhongpin's annual capacity will be at least 563,760 metric tons for chilled and frozen pork, 126,000 metric tons for prepared pork products, 20,000 metric tons for premium pork oil and 30,000 metric tons for vegetables and fruits, for a total production capacity of 739,760 metric tons,” Mr. Zhu added. “As we build additional plants, we also extend our cold-chain logistics system for delivery into our new markets. With this good start for the year, we believe our outlook for 2010 continues to be encouraging, and we remain comfortable with our previous performance guidance.”

"For the year 2010, we continue to believe that Zhongpin's sales revenues should be within a range of $900 million to $940 million, with gross profit within the range of $106 million to $115 million and net income within the range of $52 million to $57 million,” said Warren Wang, chief financial officer. “The resulting diluted earnings per share for the year 2010 is currently expected to be within the range of $1.49 to $1.64 per share."

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