March 18, 2009
China's Zhongpin reports strong financial growth in 2008
Zhongpin Inc, a China-based meat and food processing group, has reported a 39-percent increase in revenues for the fourth quarter to US$139.8 million, with gross profit up 48 percent at US$17.7 million.
The fourth quarter also saw the company's non-GAAP net income, excluding non-recurring and non-cash charges, grew by 65 percent to US$9.3 million while net income increased by 9 percent to US$5.5 million.
On the whole, Zhongpin's 2008 revenues were up 85 percent to a record US$539.8 million and gross profit rose 83 percent to US$68.6 million. Meanwhile, the company's non-GAAP net income, excluding non-recurring and non-cash charges, rose 69 percent to US$35.1 million and net income increased by 69 percent to a record US$31.4 million last year.
Zhu Xianfu, Zhongpin's CEO, said the record financial results reflect the company's leading market position and it is increasingly being recognised as a provider of high quality pork products in China.
Last year, the company reported that it had successfully executed a capacity expansion strategy, increasing its annual production capacity for chilled and frozen pork by 126,000 tonnes, which more than doubles its annual production capacity of high-margin processed meat products.
According to a statement from Zhongpin, it expects prices and supply of hogs to remain "fairly stable" in the first half of 2009 amid the "high degree of volatility in terms of price and supply" faced by the Chinese pork industry during 2008.
Zhongpin reaffirmed its full-year 2009 guidance for revenues in the range of US$780 million to US$810 million with a gross margin of approximately 12 percent and a net profit margin of at least 6 percent.
Zhu said China's pork industry will continue to experience strong growth on the back of the Chinese government's efforts to modernise the meat processing industry.
He added that the Chinese pork industry's market fundamentals will remain strong in the face of a temporary slight decrease in pork consumption caused by the global economic slowdown.
