May 4, 2012

Zhongpin Inc. reported rising annual sales revenues of 54% increase to US$1.45 billion, with chilled and prepared pork products registering increases in both average prices and tonnage, while frozen pork sales increased in price on slightly lower volume.

Net income increased by 10% to US$64.2 million, with a gross profit margin of 10.4% and a net profit margin of 4.4%. Net income and profit margins were a little less than the company had provided in its guidance for the year, due to market and competitive pressures in hog and pork prices.

At the end of last year, the massive Chinese pork producer's distribution network covered 20 provinces and 3,428 retail outlets. The company launched 79 new pork products, bringing its current total products to more than 400 with about 90 new products under development currently.

"To benefit from the growth opportunities in the world's largest pork market that is in the throes of modernisation and industry consolidation, we will need to continue investing for the long term," Chairman and CEO, Xianfu Zhu, said in a letter to investors. "As a result, we have put substantial resources into two areas of strategic importance - processing capacity and cold-chain logistics."

In 2012, he said, the company will shift emphasis in capital expenditures, with a reduced rate of capacity expansion and greater focus on making use of existing facilities through business innovation.