March 5, 2005


China's Sichuan New Hope's 2004 net profit rises 12 per cent to RMB139 million


Revenue of China's Sichuan New Hope Agribusiness for financial year 2004 registered RMB2.64 billion, rising RMB657.57 million or 33.11 percent year-on-year. Gross profit climbed RMB84.48 million to RMB414.21 million, an increase of 25.62 percent compared with corresponding figures in the previous year, while net profit recorded a year-on-year growth of 12.35 percent, or RMB15.35 million to RMB139.70 million.


Sichuan New Hope sold 631,100 tons of animal feed in FY2004, up 27,000 tons or 4.47 per cent higher than in FY2003. This sector accounted for RMB1.33 billion of the company's revenue, rising 30.64 percent or RMB311.21 million year on year. Gross profit from feed sales was up 16.02 percent, or RMB20.41 to RMB147.76 million compared with the same period in the previous year.


The bird flu outbreak as well as the high price levels of raw feed materials in 2004 had a considerable effect on the management of feed production in China. However, New Hope had minimised the impact of rising raw material prices through the bulk procurement of corn and soymeal at end-2003. The company had also made changes to the structure and prices of its products, in addition to boosting sales of hog and fish feed in FY2004, thereby helping to raise the feed sales figures for the year.



High returns from investments in South-east Asia


Economic returns from the company's feed milling investments in Vietnam, the Philippines and other Southeast Asian countries have been encouraging. The Vietnam New Hope Company (Hanoi), of which Sichuan New Hope has a 64 per cent stake, has total assets of RMB67.39 million. The company's net profit for FY2004 and returns on equity register RMB13.89 million and 20.6 percent respectively. Main operations focus on the processing and sale of feed for livestock, poultry and aquatic products.


The core businesses of Vietnam New Hope's plant in Ho Chi Minh City involve the sale of feeds and feed additives, as well as the production and sale of raw feed ingredients. The total assets of the plant currently stand at RMB27.58 million, while its net profit and returns on equity for FY2004 were RMB4.50 million, and 16.3 percent respectively.


Sichuan New Hope's feed investments in the Philippines (Manila and Cebu) have also commenced trial production recently.