China Tracker - Details for Zhongpin (HOGS)

 Zhongpin
 Business Outlook

Zhongpin announced today that it disagrees with a recent story that appeared on the GeoInvesting homepage. The article contains numerous errors of fact and is riddled with unsupported speculation, innuendo, hyperbole, sensationalism, and leaps of logic. There are so many errors in the story, that most rational readers would easily conclude that the story was heavily slanted to support the writer's short position in Zhongpin shares. Zhongpin again states that the information contained in its filings with the SEC is accurate. The Company reserves all rights to take legal action against the writer and publisher of this inaccurate and misleading story.

(Source: PR Newswire, 2011-08-18)

Zhongpin approved an increase in the stock repurchase program of 30 million of its outstanding stock over the next 12 months. The stock repurchase program is authorized to be in effect through August 17, 2012. "We have strong confidence in our growth prospects as the Chinese economy continues to grow and our industry consolidates further, and in the fundamental strengths of the Company. This substantial increase in the size of our stock repurchase program is a clear sign of our strong commitment to create value for our loyal shareholders."

(Source: PR Newswire, 2011-08-18)

We are reaffirming our prior guidance for the year 2011 and have revised only the guidance earnings per share numbers to reflect the higher average shares that are outstanding as a result of our completed offering of 5 million common shares on March 22, 2011. For the year 2011, we expect that Zhongpin's sales revenues should be within a range of US$1.18 billion to $1.23 billion. Gross profit margin is expected to be within the range of 11.7% to 12.4%. Net profit margin is expected to be within the range of 5.7% to 6.3%.

Revising only for the higher average shares expected for the year 2011, the resulting diluted earnings per share for the year 2011 is currently expected to be within the range of $1.66 to $1.91 per share, assuming average diluted common shares outstanding of about 40.5 million shares in 2011. Zhongpin believes that China's meat and food industry will continue to consolidate in 2011 at a more rapid pace than in 2010, which may result in higher market shares for our main competitors. However, we believe that Zhongpin is equipped to meet the challenge of increasing competition and that our guidance for 2011 can be achieved.

(Source: PR Newswire, 2011-05-06)

For the year 2011, we expect that Zhongpin's sales revenues should be within a range of US$1.18 billion to $1.23 billion, with gross profit margin within the range of 11.7% to 12.4%, and net income margin within the range of 5.7% to 6.3%. The resulting diluted earnings per share for the year 2011 is currently expected to be within the range of $1.89 to $2.18 per share, assuming average diluted common shares outstanding of about 35.5 million shares in 2011.

"Zhongpin believes that China's food processing industry will continue to consolidate in 2011 at a more rapid pace than in 2010, which may result in higher market shares for our main competitors. However, we believe Zhongpin is equipped to meet the challenge of increasing competition and that our guidance for 2011 can be achieved. In 2011, we will continue to execute our proven strategic plan to expand our sales, profits, market share, and the geographic regions that we serve. We expect to sustain the trend-line growth we have achieved over the last five years."

Zhongpin expects to invest approximately $58.5 million to build a new production, research and development, and training complex in Changge, Henan province, excluding the cost of land use rights it has already obtained. When completed, this new facility will have a production capacity of approximately 100,000 metric tons for prepared pork products. Adjacent to this new facility, the company expects to develop a center for research and development, training, and quality control. Construction for the first phase with an annual production capacity of approximately 50,000 metric tons for prepared pork products is scheduled to start in the first quarter of 2011 and to be completed by the third quarter of 2011. The second phase, with a production capacity of approximately 50,000 metric tons for prepared pork products, is scheduled to be completed by the fourth quarter of 2012. Zhongpin plans to open the research and development and training center by the fourth quarter of 2012.

"To further expand our business and grow Zhongpin into a national brand, we intend to expand our production into other provinces in which pork is traditionally consumed in significant quantities and in which there is a sufficient hog supply. To minimize our risk when expanding into new markets, we, at times, enter certain markets by leasing, rather than purchasing or constructing our production facilities because we believe that, even after conducting comprehensive market research and professional due diligence, there can be a significant risk that a market will not generate the level of sales we expect. We are in the process of replicating our success in Henan province in other provinces in northern and eastern China where we expect to build capacity clusters similar to the cluster we have constructed successfully in Henan. We expect to lease, acquire, or build new facilities to support development in our northern and eastern target markets."

(Source: PR Newswire, 2011-03-04)

Zhongpin today announced that it would build a new production, research & development, test, and training complex in its home city of Changge in Henan province of China. The new facility will add 100,000 metric tons of capacity for prepared pork products, including Chinese-style, western-style, half-cooked, and easy-to-cook pork products. Adjacent to the production facility will be a new center for advanced research & development, test, training, and other support functions.

Zhongpin plans to invest $58.5 million on the construction, excluding the land use rights that Zhongpin already owns. More than 80% of the production equipment will be internationally sourced. Zhongpin consistently selects the best and most advanced equipment, processes, and integrated information systems for its plants. The company's advanced cold-chain logistics system will support the expanding capacity. The payback period for the project is expected to be about 5.75 years. Construction for the first phase of 50,000 metric tons for prepared pork products is scheduled to start in the first quarter 2011 and be completed by the third quarter 2011, and the second phase, also with an annual capacity of 50,000 metric tons for prepared pork products, is expected to be completed in the fourth quarter 2012. The R&D, test, and training center is also expected to open by the fourth quarter 2012.

"This expansion will add capacity for our higher-margin downstream products and will serve our central China market and adjacent markets. It will substantially enhance our R&D and further support our expanding market share in the growth regions of China. This new facility proves that we remain committed to doing everything possible -- using the most advanced technologies and processes -- to continue delivering new product innovations that will be desired by China's citizens, delivering food at the highest standards of product quality and safety to every customer, and delivering strong long-term returns to our shareholders."

(Source: PR Newswire, 2010-12-13)

Since early October 2010, hog prices have maintained a slight rise and in that period have hit a high for the year to date. Pork prices have generally also risen during this fourth quarter of 2010. Looking at the hog breeding sector, during the second half of 2010 the hog breeding industry in China is now profitable. Rising hog prices further increases breeders' profits and encourages farmers to replenish hog stocks. Currently in the hog market, supply and demand are essentially in balance. Therefore, the trend for hog prices is expected to be steady by the end of this year.

(Source: PR Newswire, 2010-11-22)

China's economy continues to expand, with pork at the top of the food buying list as China's preferred protein. The industry outlook for pork processing remains positive. Zhongpin's brand awareness and higher market share in the pork category continues to strengthen, and we are continuing to broaden into additional geographic markets and new products lines based on our research and development. The expansion of our processing plants and distribution networks is giving us the ability to satisfy the increasing market demand for our high quality products. Government and consumers take the food safety as one of their top priorities. With the government support, the consolidation of the industry is accelerating. We believe the government targets stated in Hog Slaughtering Industry Development Guidelines for 2010-2015 can be achieved in the next five years.

Because Zhongpin has a strong brand presence in the meat industry, high quality facilities and products, outstanding quality assurance, and rapid-responding logistics systems, the company believes it has the opportunity to expand its market share in China as the pork industry consolidates in the next several years.

"Through 2015, we expect to expand our production capacity within the government's selected markets and further increase our market share across China, while continuing to expand our leadership in the meat industry. Given our good performance during the first nine months this year, we believe the outlook for the remainder of 2010 continues to be good, so we are reaffirming our previous performance guidance. For the year 2010, we continue to believe that Zhongpin's sales revenues should be within a range of $900 million to $940 million, with gross profit within the range of $106 million to $115 million and net income within the range of $52 million to $57 million. The resulting diluted earnings per share for the year 2010 is currently expected to be within the range of $1.49 to $1.64 per share."

(Source: PR Newswire, 2010-11-08)

Hog and pork prices in the second quarter 2010 decreased about 10 percent from the second quarter 2009, primarily because the supply of hogs was higher than the market demand. Hog and pork prices appear to have reached bottom in mid-June, since prices have rebounded about 15 to 20 percent higher from mid-June through early August. Zhongpin believes prices will continue to increase gradually during the remainder of 2010.

"For the year 2010, we continue to believe that Zhongpin's sales revenues should be within a range of $900 million to $940 million, with gross profit within the range of $106 million to $115 million, and net income within the range of $52 million to $57 million. The resulting diluted earnings per share for the year 2010 are currently expected to be within the range of $1.49 to $1.64 per share."

(Source: PR Newswire, 2010-08-09)

Zhongpin today announced it will construct a new slaughtering and processing plant, low temperature prepared pork plant, logistics center, and research & development center in Nong'an county in the Jilin province of China. Zhongpin expects to invest about US$ 61.5 million in the new facility. The new plant's annual production capacity will be a total of 125,000 metric tons, with 70,000 for chilled pork, 25,000 for frozen pork, and 30,000 for prepared pork products. Zhongpin expects to process about 1.2 million hogs in its new plant each year. The first phase of construction, which includes the production lines and cold-chain logistics and distribution systems for chilled pork and frozen pork, R&D center, and employee living area, is scheduled to start construction in the third quarter of 2010, with trial pork production starting in the fourth quarter 2011. The second phase of construction, which will include production facilities for prepared pork products, will begin in the second quarter of 2011 and should be completed in the third quarter of 2012.

(Source: PR Newswire, 2010-07-26)

For the year 2010, we continue to believe that Zhongpin's sales revenues should be within a range of $900 million to $940 million, with gross profit within the range of $106 million to $115 million and net income within the range of $52 million to $57 million. The resulting diluted earnings per share for the year 2010 is currently expected to be within the range of $1.49 to $1.64 per share.

(Source: PR Newswire, 2010-05-07)

For the year 2010, we continue to believe that Zhongpin's sales revenues should be within a range of $900 million to $940 million, with gross profit within the range of $106 million to $115 million and net income within the range of $52 million to $57 million. The resulting diluted earnings per share for the year 2010 is currently expected to be within the range of $1.49 to $1.64 per share.

(Source: PR Newswire, 2010-03-11)
HOGS
Food
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Current Price:  n/a
F10k Day (2007-03-23): -100.00%$7.50
2009 Close: -100.00%$15.61
2010 Close: -100.00%$20.40
2011 Close: -100.00%$8.52
High (2012-10-11): -100.00%$11.76
Low (2012-04-09): -100.00%$8.26
Exchange: N/A
Market Capitalization: n/a
Total Shares: 35.27 mill
Float: n/a
Avg Volume: 1.46 mill
Short Interest: 6.29 mill
Short Ratio: 21.36%4.3 d
Last Quarter: 2010-12-31
Revenue (MRQ): 286.29 mill
Net Income (MRQ): 17.98 mill
Op. Cash Flow (MRQ): 48.04 mill
all financial data provided without warranty