June 28, 2011


Yurun reports decrease in profit margin on rising pork prices



Yurun Food Group Ltd, a major supplier of meat products in mainland China, reported a "slight decrease" in its gross profit margin in the first five months of this year, following a record plunge in its stock after a website report.


Yurun's stocks slid by HK$5.10 (US$0.66), or 20%, to HK$20.60 (US$2.65) at the close of trading in Hong Kong on Monday (Jun 27).


The drop was the biggest since the company first sold shares in October 2005 and the steepest decline of the day on the MSCI Asia Pacific Index.


Rising pork prices will erode Yurun's profit margin, the Chinese-language financial website JRJ.com reported earlier today.


The company's sales had "significant growth" in the period up to May 31 compared with 2010 on higher hog prices and greater slaughtering volume, Yurun said in a statement to the Hong Kong Stock Exchange, citing unaudited financial information.


The price of marbled pork in China rose as much as 4.3% to RMB28.20 (US$4.36) a kilogramme in the 10 days from June 11 to June 20 compared with the previous 10 days, the National Bureau of Statistics said in a June 24 statement on its website. Prices for pork thigh rose 4.1% to RMB29.05 (US$4.49) a kilogramme in the period, the statement said.

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