Putian Food Announces 2013 Annual Results

HONG KONG, March 28, 2014 /PRNewswire/ --

China Putian Food Holding Limited ("Putian Food" or the "Company", stock code: 01699.HK), a leading vertically-integrated pork supplier in China, is pleased to announce the audited consolidated results of the Company and its subsidiaries (collectively known as the "Group") for the year ended 31 December 2013 (the "Period").

During the Period, the Group's overall business performed well, with its revenue and profit achieving growth. Revenue of the Group was approximately RMB626 million, up 7.9% year-on-year. Net profit grew 1.3% year-on-year to approximately RMB106 million. The Group's revenue from retail of pork increased 11.0% to approximately RMB335 million, accounting for 53.5% of the total revenue. Revenue from wholesale of pork improved 4.6% to approximately RMB291 million, accounting for 46.5% of the total revenue. The steady growth of the Group's revenue was mainly attributable to the expansion of its points-of-sales to 100 in China, representing an increase of 14 points-of-sales as compared to 2012.

During the Period, the overall gross profit of the Group increased from approximately RMB150 million in 2012 to approximately RMB162 million in 2013. The Group adopted a vertically-integrated business model and strictly monitored hog farming, slaughtering and sales for effective cost control. Leveraging the Putian brand and its mid-to-high end market positioning, its pork products were able to stand against the slight volatility in pork market prices during the Period. With a view to gain market share while achieving a balanced gross profit margin, the Group's pricing varies among markets and according to different consumption habits. The overall gross profit margin of the Group remained stable to approximately 25.9% as compared to 2012.

Mr. Cai Chenyang, Chairman and Chief Executive Officer of the Group, said, "The global economic recovery remained sluggish, which hindered China's economic development. However, China still managed to maintain its GDP growth at 7.7%. The growing disposable income will boost consumers' demand for high-quality food. The Group achieved organic growth in the high-end pork products market in Fujian province, in which we maintained a leading position. The Group seized opportunities of China's economic growth; whilst developing pork retail business and gradually expanding its sales network to increase the revenue share of the pork retail business. Meanwhile, the Group also stepped up efforts in exploring customers from large-scale group-buying channels to create a stable income source."

The Group conducts its business with a vision of creating gratifying life for the general public and its corporate mission of "offering high-quality pork products" in mind. Pork products marketed under the "Putian" brand have been increasingly well received and well recognized by consumers; thus, the sales performance of the Group has been substantially enhanced. The Group steadily expanded its sales network to drive revenue growth. The number of points-of-sales increased from 86 as at the end of 2012 to 100 as at the end of 2013. Among these points-of-sales, there were 73 supermarket retail counters across the coastal regions in eastern Fujian Province, and 27 direct sales retail outlets which are mainly located in Putian and Fuzhou.

By implementing a stringent epidemic prevention system in the hog farms and safety control measures in every production stage, the Group continues to maintain health and safety in its farms to ensure the availability of nutritious and healthy pork products to consumers. During the Period, Separating lines of the Group's slaughterhouse have undergone a comprehensive upgrade and commenced operation since November 2013, thereby enhancing the production capability and hygiene monitoring of the slaughterhouse. In order to enhance its hog breeding and farming capacity, the Group will use the net proceeds raised from the listing in Hong Kong to build 6 additional hog farms as planned.

Since the commencement of operation of the Group's slaughterhouse in August 2009, a majority of income was generated by wholesale of pork to individual pork product traders. As of the end of 2013, the Group has entered agreement with 5 individual pork product traders for another stable source of income.

Pork product, as a necessity food in China's households, will see its consumption growing steadily in the future with the continued urbanization and rising income. The government made clear its target of "putting food safety first" and "China's food for Chinese" during the "National Conference on Rural Work" in December 2013, highlighting the importance of food safety and stable supply. In light of this, the Group addressed the market's need and set its future strategies. The Group will improve its pork product mix and expand its sales network by "chilled pork products", with a view to entering the Eastern China market. It will also prepare for the establishment of Beijing subsidiary, focusing on special high end farming and brand building for high quality pork; whilst enhancing value chain by commencing meat product deep processing project with added-value. Meanwhile, it strives to establish the top high quality pork e-commerce platform to foster the recognition and loyalty from mid-high end consumers to the "Putian" brand of pork.

Looking ahead, Mr. Cai said, "With the continued urbanization and improving living standard in China, consumers attach high importance of food safety and nutrition value. Leveraging the rising demand for high end food in China market, the Group will continue to embrace its vision of creating gratifying life for the general public and is committed to the highest standard of food safety and product quality. We are confident in our future development and believe that the sustainable business growth will generate shareholder returns."

About China Putian

China Putian Food Holding Limited is a leading vertically integrated pork products supplier in Fujian Province, China. The Group follows a vertically integrated business model with a complete coverage on the production chain comprising hog farming, hog slaughtering, and sales and distribution of pork. As at 31 December 2013, the Group had a total of 100 points of sales dispersedly located across Ningde City, Fuzhou City, Putian City, Quanzhou City and Zhangzhou City of Fujian Province. The Group upholds the corporate vision of "offering high-quality pork products" to provide customers with premium, safe and hygienic pork products.

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SOURCE China Putian Food Holding Limited