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Yuhe Reports Revenue up by 31 Per Cent in 2009

by 5m Editor
7 April 2010, at 9:34am

CHINA - At $47.2 million, Yuhe International has reported 2009 revenue up by 31 per cent on its previous year's performance.

Yuhe International Inc. has announced its fourth quarter and fiscal year 2009 results, and provided guidance on its 2010 performance. The company is a leading supplier of day-old chickens raised for meat production in the People's Republic of China. It has announced financial results for the fourth quarter and fiscal year ended 31 December 2009.

2009 highlights

Net revenue was $47.2 million, up 30.8 per cenr from 2008 pro forma net revenue, while gross profit was $16.7 million, up 26.8 per cent from 2008.

Operating income was $13.3 million, up 19.9 per cent from the figure of the previous year, while net income reached $12.8 million, up 19.9 per cent from 2008.

Diluted earnings per share were $0.81, up from pro forma diluted earnings per share of $0.74 in 2008.

The company completed the construction of 14th new breeder farm in December 2009, and it entered into a $15.2 million agreement to purchase 13 breeder farms from Weifang Dajiang Corporation, as well as an agreement to purchase land use rights for a 5.3-hectare parcel of land at a cost of approximately $2.6 million.

Zhentao Gao, Chairman and Chief Executive Officer of Yuhe International, commented: "Our 2009 financial results were near our expectations. Our growth this year was driven by the rapid increase in sales volume, resulting from capacity expansions in 2008 and 2009. We sold approximately 110 million day-old broilers in 2009, up 43 per cent from 2008. Although the average selling price for the full year 2009 declined 5.5 per cent year-over-year to RMB2.74, we achieved solid growth in net income due to economies of scale and strategic decisions to retire some parent breeders early and purchase high quality eggs at lower costs from outside suppliers."

2010 Outlook

In March 2010, the Company completed construction of a new breeder farm, bringing its total number of breeder farms to 28, with 15 in operation today. The new breeder farm, along with the 13 additional ones expected to come on- line in the second half of 2010, should increase the Company's ability to meet its 2010 production goal of 150 million day-old broilers. For the fiscal year 2010, Yuhe International is forecasting net income of approximately $17 million.

Mr Gao commented: "We plan to introduce a new hatchery in May 2010 and install 20 sets of hatchers by June 2010 and another 40 sets in the second half of 2010, which will increase our total to 160 sets. These increased hatchers will not only facilitate the expansion of our breeder farms, but also provide us with the flexibility to adjust production based on the price fluctuations of eggs and day-old broilers.

"Looking ahead, we will continue to leverage our expertise in the day-old broiler industry to expand our market share in Shandong Province and adjacent areas. We believe the demand for high quality day-old broilers remains strong. Our solid and stable customer relationships will enable us to achieve our projected 2010 guidance and identify strategic opportunities for horizontal integration."