Increased revenues resulted from more orders from its major customers, Beijing Dahongmen and Beijing Fifth Meat Factory. Hog sales increased to 397,255 head for the fiscal year from 294,226 for the fiscal year ended June 30, 2009. Net income increased mainly due to the higher revenues and continuing control over expenses.
"Our strong increases in revenues and net income for the fiscal year ended June 30, 2010, reflect the high pork consumption in the Chinese market due to China's economic expansion,” said Zhenyu Shang, founder and chief executive officer. “The consistency of our operating performance results from our established business model and effective execution. Our strategy, business model and actions have proven to be very effective, thereby delivering results. We continue to bring in talents to strengthen our financial structure and corporate governance."
Revenues from commercial hogs were up $20.82 million or 44% to $68.33 million for the fiscal year ended June 30, 2010, from $47.51 million for the same period last year. Revenues from other hogs decreased from $2.89 million or 30% to $2.02 million. The increase in the commercial hogs product line was primarily attributable to the company’s policy of committing all of its available cash resources to the commercial hogs market.
"China's economic outlook continues to be encouraging, and China's projected domestic pork consumption will approach 68 million metric tons in 2015, Shang said. “Government support and trade protection policies also encourage domestic pig production with tax exemptions, vaccines technology, feed costs cap, price control and providing use of lands. China consumes about 50% of the world's pork products. As a result, we believe that the high demand for hogs should continue for several years."