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Processed Food Business Segment Records Robust Growth


P rocessed Food Business Segment Records Robust Growth

 Overall Turnover Exceeds RMB10 Billion


Hong Kong, 23 March 2012 – DaChan Food (Asia) Limited (“DaChan Food” or the “Company”, SEHK stock code: 3999), China’s leading supplier of chicken meat products, today announced its annual results for the year ended 31 December 2011. The Company’s operating environment continued to improve as the price of pork remained at high level and price of chicken meat continued to increase. Also, China’s consumer market continued to grow, which in turn led to higher demand for animal protein products and feed products. As a result, the Company maintained growth momentum in its operation results in 2011, with turnover exceeding RMB10 billion. The turnover and gross profit of the processed food segment surged 5 7 % and 4 8.6 % year-on-year respectively.
During the year under review, the Company’s turnover increased by 17. 4 % year-on-year to RMB11.2 billion. Gross profit increased from RMB660 million to RMB8 6 0 million, representing a year-on-year increase of 30 . 1 %. Meanwhile, profit attributable to equity shareholders of the Company amounted to approximately RMB2 0 0 million, representing a significant growth of 79 . 3 % compared to 2010.
Among all business segments, the Company’s processed food business segment continued to maintain its strong growth momentum as it was driven by the rapid development of the Company’s branded food business. With the growing trend of urbanization in China, large-scale supermarkets have become popular destinations for household shopping. In response to this development, products under DaChan Food’s “Sisters’ Kitchen” brand have successfully expanded its sales channels to reach a number of famous international and domestic supermarket chains during the year. In addition, food safety has been emphasized on the agenda of the Chinese government. DaChan Food has always placed the same importance on food safety and developed a food security tracing system in 2009, which has been well-received by clients and customers. Backed by its vertically integrated business model, DaChan Food ensures that all products delivered to its customers are safe and of high quality, making it the first choice for consumers who demand safe and guaranteed products. The processed food business segment recorded a turnover of approximately RMB1.5 billion in 2011, while gross profit rose to approximately RMB180 million, representing year-on-year increases of 5 7 % and 4 8 . 6 % respectively.
Furthermore, benefiting from the rising price of chicken meat and the expansion of its sales channels, the Company’s chicken meat business segment recorded turnover of RMB5.1 billion, representing a 13. 5 % increase compared with 2010. Thanks to the Company’s effective cost controls, the gross profit also jumped by 8 0 % to approximately RMB200 million. On the other hand, the robust development of the livestock industry has fueled the development of the animal feeds industry, and the high-tech functional feed has been widely recognized in the market. This helped DaChan Food to expand its market share during the year. Turnover of the Company’s feeds business segment increased by 12. 5 % year-on-year to RMB4.6 billion, while gross profit increased by 1 2 . 8 % to approximately RMB4 9 0 million.
Han Jia-Hwan, Chairman of the Board of DaChan Food, said, “In 2011, the operating environment continued to improve, and we have adopted effective measures to enhance our operating efficiency. As a result, we recorded satisfactory results during the year. As a responsible corporation, we strive to uphold a high level of food safety to address the needs of our customers, and at the same time promote the image of food safety associated with our “Sisters’ Kitchen” products. Looking ahead, the central government has included supportive measures to promote food safety, the enhancement R&D capabilities of domestic food companies and the consolidation of the food industry in the “12th Five-Year Plan”. Together with the acceleration of urbanization and the enhancement of consumer spending, we believe that the meat consumption market has a huge development potential. DaChan Food will seize this opportunity to strengthen its reputation as a provider of safe, high-quality food. We will also strengthen our operations in different retail and supermarket channels and enhance our brand reputation. At the same time, we will also enhance our R&D capabilities, optimize the product portfolios of our feeds and processed foods business segments, and focus on high value-added products, so as to reinforce our leading position in the market.”
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