Category Archives: Food & Beverage

Sizing up the ‘short’ Pinoys

Did you know that Filipino shortness is not a racial or a genetic trait? It is true. Filipinos are short because of the impact of poverty and malnutrition on generations of Filipino children. Populations grow in height, and they can grow quickly when stable growing economies address and reduce poverty and improve nutrition for children. But when poverty is pervasive and access to food limited, populations will stay short and can actually shrink.

Did you know that the average height of Singaporean men is 5’7, versus slightly less than 5’4 for Filipino men? Singaporeans are not genetically taller than Filipinos, yet the average height of men in Singapore has increased by more than an inch in the last 10 years. The Philippine population is currently tied for the second shortest in Southeast Asia with Vietnam, and just ahead of Indonesia. All the other Asean countries have taller populations.

Why are Filipinos short? In the Philippines, 30 percent of all children under the age of 5 are stunted or short for their age, which is an improvement from any previous time in its history. Regardless, hundreds of years of widespread poverty and malnutrition have led to high levels of childhood stunting. Being stunted means that a child has been chronically malnourished during the critical growth period, the first 1,000 days of life: from conception through the second birthday.

To be a stunted child means that you will not achieve your physical growth potential, but more importantly, you will not achieve your cognitive potential.

We know that poverty creates the conditions leading to stunting in children, but stunting keeps children in poverty for their entire lives.

There are 3.6 million stunted children in the Philippines today-the ninth highest number of any country in the world. There are many sub-Saharan African countries that have lower percentages of stunted children than the Philippines. In fact, Mindanao has 40 percent childhood stunting, which is the average for all of sub-Saharan Africa. The Autonomous Region in Muslim Mindanao is the region with the highest level of stunting in the entire country: 63 percent of all children. Almost two-thirds of all children in the ARMM are stunted, which is equal to stunting in Ethiopia. This is not a theoretical problem; this is a nutritional emergency.

Today, 1.5 million Filipino children will wake up in the morning and go to bed at night without having anything to eat the entire day.

Today, 2.7 million Filipino children will miss a meal because the family didn’t have enough money for three meals.

Almost half of all preventable child deaths (approximately 27,000 per year) in the Philippines have malnutrition as the underlying cause, yet this is never mentioned on any death certificate.

A recent Save the Children Philippines report, titled Sizing Up the Stunting and Malnutrition Problem in the Philippines, documents why height matters. The report finds that height is a proxy indicator of how well the Philippines is doing as a society to reduce childhood poverty and improve access to nutrition. If the Philippines is to progress economically, we must not leave the poorest children behind.

A minimum wage earner in Metro Manila spends P151 to feed a family of five per day, and yet approximately P459 a day is needed to cover three daily meals that will ensure them a balanced diet. For most workers making minimum wage in Metro Manila, it is nearly impossible to keep a family of five well-nourished.

With the upcoming elections, we need strong political will and public awareness to ensure that no child dies or suffers from hunger and malnutrition. The proposed First 1,000 Days Act pending at the health committees of the Senate and the House of Representatives aims to address this concern. There is broad civil-society support for the immediate passage of this bill that will tackle undernutrition among children aged two years and below, and nursing mothers, by scaling up the provision of nutrition supplements, vaccinations and checkups, and promotion of exclusive breastfeeding, maternal nutrition and appropriate complementary feeding.

To date we have not heard of a clear agenda among candidates addressing the prevalence of malnutrition. We hope the candidates will declare their proposed solutions to childhood stunting and finally put an end to intergenerational transmission of poverty.

Candidates, please make a stand that as president you will support the proposed First 1,000 Days Act and prioritize reducing stunting and improving nutrition nationwide. All children have the right to fair and equal access to nutritious food, and this is something that we should expect from any future administration.

It is time to rethink Filipino shortness.

Constellation Brands Beer Division Voluntarily Recalls Select Packages of 12 oz Corona Extra

CHICAGO, Aug. 24, 2014 /PRNewswire/ — Constellation Brands Beer Division today announced a voluntary recall of select packages in Guam containing 12-ounce clear glass bottles of its Corona Extra beer that may contain small particles of glass. The voluntary recall covers 12-ounce clear bottles in select six-pack, 12-pack and 18-pack packages containing bottles with the production codes listed below.

Photo – http://photos.prnewswire.com/prnh/20140823/139054
Photo – http://photos.prnewswire.com/prnh/20140823/139053

This recall comes after routine inspections in the company’s quality control laboratory detected defects in certain bottles that could cause small particles of glass to break off and fall into the bottle. The affected bottles came from one of four glass plants run by a third party manufacturer, which supplies the company the bottles. While the company believes that less than 1 percent of the bottles produced from the plant may be affected, it is recalling select packages that may contain defective bottles to ensure the safety of consumers.

Affected Production Codes:
The following production codes for select Corona Extra 12-ounce bottle packages are included in the recall:

  • Any code that starts with "G" and also ends with "9" on six- and 12-packs
  • Any code that starts with "F29" and also ends with "9" on 18-packs only
  • Any code that starts with "F30" and also ends with "9" on 18-packs only

To date the company has received no reports of injuries resulting from the affected bottles.

The following products are not being recalled:

Corona Extra cans
Corona Extra 24-pack loose bottles
Corona Extra 24 oz. bottle
Corona Extra draft beer
Corona Light bottles
Corona Light cans
Corona Light draft beer
Corona Familiar
Coronitas

"We are troubled by this development and are working proactively with our distributors, retailers and consumers to resolve this situation as quickly as possible," said Bill Hackett, President of Constellation Brands Beer Division. "Throughout its history, Corona Extra is a brand that has been synonymous with quality, consistency and refreshment. Our entire organization, including our brewers, our production team, and all our employees across our system, is absolutely committed to doing everything possible to complete this recall quickly, and ensure the safety of our consumers and integrity of our product."

Upon discovering the issue, Constellation took prompt action to identify and secure potentially affected product and will work closely with distributors and retailers to minimize the impact on consumers. The company is diligently working to recover potentially affected product that is in retail stores and may have reached consumers.

Consumers who have bottles marked with the listed production codes can visit http://www.coronausa.com/recall for more information, and email corona@premiereresponse.com for instructions on reimbursement.

About Constellation Brands Beer Division
Constellation Brands Beer Division is the #3 beer company in the U.S. and the exclusive brewer, marketer and supplier of a growing portfolio of high-end, iconic, imported beer brands for the U.S. market. The portfolio includes Corona Extra (the #1 imported beer in the U.S. and #5 beer overall), Corona Light, Modelo Especial, Negra Modelo, Pacifico and Victoria beer brands. The Beer Division also imports the Tsingtao beer brand in the U.S. For more information, visit www.cbrands.com.

Maybank PE Leads Series D Financing For YPX Cayman Holdings

Looking to capitalize on the strong growth opportunities in China’s food & beverage industry, Maybank PE, the private equity arm of Maybank, made its maiden investment in China by investing in YPX

SHANGHAI, Aug. 22, 2014 /PRNewswire/ — YPX Cayman Holdings Co. ("the Company" or "YPX"), a leading quick service restaurant company headquartered in Shanghai, announced today the closing of its series D financing round of USD 25M. MAM PE Asia Fund I (Labuan) LLP, a fund managed by Maybank Private Equity Sdn Bhd ("Maybank PE"), is the lead investor in the latest financing round, with follow-on investments from existing investors such as LionRock Capital, Ignition Capital, as well as renowned individual investors such as Mr. Koh Boon Hwee, former DBS Bank and Singapore Airlines Chairman, and Mr. Peter Tan, former President of McDonalds Greater China and ex-CEO of Burger King for Asia Pacific. Series D financing proceeds will be utilized to grow YPX directly-owned stores and to expand YPX’s franchising system.

Cloud 9 Store


Cloud 9 Store

 

Three-cup Chicken


Three-cup Chicken

"We are truly excited to have an investment from a fund seeded by Malayan Banking Berhad, or better known as Maybank. Maybank is one of South East Asia’s largest banks, and the largest in Malaysia by market capitalisation. Named one of the Top 20 strongest banks in the world consecutively in 2013 & 2014 (by Bloomberg Markets Magazine July / August 2014), Maybank through its private equity arm has a very rigorous due diligence process, and we are honored to have passed their stringent test on our business and management. It is a very significant event for me and the Company to have the fund investing in us. Maybank PE brings a wealth of experience to help us grow our business," says Chris Tay, CEO and founder of YPX Cayman Holdings.

Mr. Pneh Tee Keong, CEO of Maybank PE, says, "We are very pleased with this outcome. The upside for this segment in China is enormous, given the increasing middle class population. We are also comforted by the fact that we are investing in a sound business, and backing an experienced management team to help us navigate through the intricacies of operating in this market. We are very excited to be a part of what I believe will be a successful partnership with Chris, his team and all the other shareholders."

With this fresh funding, YPX will be able to grow more stores via direct-owned operations as well as franchisees across China. The company will also allocate some proceeds for R&D to diversify its menu offering, brand awareness and information technology to support its future growth. "Serving good quality, value for money food has been the hallmark of YPX since its inception. This year, we have continued to focus on improving our food quality and safety standards; we see this as an ongoing pursuit that will continue to underpin all that we do at YPX. 2014 is also our inaugural year for franchising, and we are very committed to being a responsible franchisor. We will set up a robust system to support and train our franchisees as they are in all ways business people and want a good return on their investments," says Tay.

"In the past, franchising had an undesirable reputation in China, due to a laggard monitoring system and a mismatch of values between franchisors and franchisees. The industry was further tarnished by unethical practices by franchisors who emphasized short-term gains over creating a sustainable brand name. However things are changing, albeit slowly, and the market is maturing for the better; franchisees are more informed and educated than before. We want to be the first one to stand out as the most sought after and most responsible franchisor in China. Needless to say, this will not slow down our own corporate-owned stores. Not only will this positively add to our revenue growth, it will also provide support to our franchised stores. In addition to this, we are true believers in the use of information technology in the F&B industry, when often times IT takes a back seat in our kind of business. So we will invest heavily on IT in the coming years. The hottest potential is that China is still urbanizing rapidly and its consumer market is going to be the largest in the world in the next few years, if it isn’t already," adds Tay.

YPX’s first brand is Cloud9, a Taiwanese Fast Casual Restaurant chain, which currently has more than 40 stores in 12 cities. Founded in late 2010, Cloud9 was seed-funded by Qiming Venture Partners, well known for its highly successful investment in Xiaomi. Over the next year, YPX hopes to add two more brands, be it from the USA or another country that has good brand equity amongst Chinese consumers. Tay says, "We will not add another brand for the sake of adding a brand. It has to have the same core values as the first brand: serving a majority of the Chinese customers with the best food at the most affordable pricing. We have strict principles that we adhere to when developing and nurturing a brand. We do not want to segregate any spectrum of the customers. We want brands that can understand the Chinese consumers’ needs and always staying relevant. And it has to be scalable at the same time. We have a solid management team and our reputation of being professional, reliable and accountable attracts many brands from overseas to want to work with us to expand in China."

On the topic of food safety, Tay adds, "food safety is of paramount concern in China. YPX will not compromise on food safety for the sake of growth as these two important objectives are not contradicting. We can do both. A high moral standard and superior transparent management culture are held in very high esteem in YPX."

Mr. Daniel Tseung, MD of LionRock Capital, says, "We are delighted to have a Maybank associated fund as the lead investor in the latest Series D round and look forward to working with Maybank PE, other YPX shareholders, and the company management team in strengthening YPX leading position in the Quick Service Restaurant industry in China."

Mr. Rich Tong of Ignition Partners says, "This latest investment shows that YPX is one of the best teams in the highly competitive food and beverage market. We congratulate them on this great milestone."

About YPX www.ypxfood.com

Founded in Shanghai in 2010, YPX Cayman focuses on the management of casual F&B chains in China. CLOUD 9, the Company’s first brand, mainly focuses on the Taiwanese casual F&B and snacks segment. The brand now has more than 40 stores across China including Shanghai, Beijing, Tianjin, Hangzhou, Nanjing, Changzhou, and Hefei. The Company’s management team has a combined F&B chain management experience of over 80 years, having worked in brands like KFC, McDonald’s, Burger King, Dicos, Dairy Queen and Yoshinoya. The Company aims to be a leading casual F&B platform in China.

About Maybank PE www.maybank-am.com

Maybank PE is a wholly owned subsidiary of Maybank Asset Management Group Berhad ("MAMG"), which in turn is a wholly owned subsidiary of Malaysian Banking Berhad (Maybank). Maybank PE targets minority investments in the consumer and consumer related segments across the Asian region.

Its parent, MAMG, is Maybank’s asset management business unit and offers investors a diverse range of investment solutions. MAMG has in-depth experience in managing investments ranging from equity, fixed income to money market instruments mainly on behalf of and for corporations, institutions, insurance and takaful companies and individual clients. In addition to that, MAMG also offers unit trust and wholesale funds. It has regional footprint and on-the-ground presence in key markets of the region – Malaysia, Singapore, Thailand and Indonesia.

About LionRock Capital http://www.lionrockcapitalhk.com

LionRock Capital provides strategic, financial, and corporate governance support for growth stage companies in Greater China. It is supported by some of the world’s most successful entrepreneurs and family organizations, who also serve as valuable resources for LionRock’s investee companies and investment partners. LionRock seeks to build active, value-added, long-term relationships with company management teams and investors; its Managing Directors & Senior Advisors are internationally recognized leaders in business, investment, and corporate governance. The firm’s team of seasoned Asian professionals has a demonstrated track record of successfully helping management teams build & develop their businesses in Greater China and beyond.

About Ignition Capital http://www.igncap.com

Ignition Capital is the growth equity arm of a $3 billion global fund group which provides emerging industry leaders the investment and operations support to help them reach their long-term potential, in the technology, communications, consumer and healthcare sectors. Over the last 14 years, they’ve been working with a broad array of companies that have become market leaders in technology, telecommunications, consumer services and healthcare. They have seen their companies deal with difficult economic situations while still growing dramatically to either become public companies, or be sold to larger market leaders.

Photo: http://photos.prnasia.com/prnh/20140822/0861406013-a
Photo: http://photos.prnasia.com/prnh/20140822/0861406013-b

China New Borun Announces Second Quarter 2014 Unaudited Financial Results

BEIJING, August 22, 2014 /PRNewswire/ — China New Borun Corporation (NYSE: BORN; “Borun” or the “Company”), a leading producer and distributor of corn-based edible alcohol in China, today announced its unaudited financial results for the second quarter of 2014.

Mr. Jinmiao Wang, Chairman and Chief Executive Officer of Borun, commented on the results, “Although demand and average selling price for edible alcohol were solid in the first half of the second quarter, the market encountered an unexpected sharp drop nation-wide in demand and average selling price this June. As a result, even though we recorded revenue growth at the high end of our second quarter guidance on better-than-expected volume shipment, our gross profits contracted year-over-year.”

“Despite the challenging month of June, we continued to make progress in ramping up our chlorinated polyethylene (“CPE”) and foam insulation businesses. During the quarter, we successfully scaled our CPE plant to full production capacity and grew total revenue from CPE and foam insulation by 47% sequentially to RMB23.4 million. It is worth noting that the new business has surpassed its gross breakeven point during the second quarter, and therefore we anticipate incremental positive contributions to profitability from the new business in the months ahead,” Mr. Wang concluded.

Second Quarter 2014 Quick View

  • Total revenue increased 6.4% to RMB668.9 million ($108.7 million[1]) from RMB628.5 million in the second quarter of 2013.
  • Gross profit decreased 5.4% to RMB67.5 million ($11.0 million) from RMB71.4 million in the second quarter of 2013.
  • Net income decreased 17.8% to RMB21.0 million ($3.4 million) from RMB25.5 million in the second quarter of 2013.
  • Basic and diluted earnings per American Depositary Share (“ADS”) were RMB0.82 ($0.13) for the quarter ended June 30, 2014. Each ADS represents one of the Company’s ordinary shares.

Second Quarter 2014 Financial Performance

For the second quarter of 2014, revenue increased by 6.4% year-over-year to RMB668.9 million ($108.7 million) from RMB628.5 million in the same period of 2013. The increase in revenue was mainly attributable to higher sales volume of edible alcohol, partially offset by lower average selling prices, as well as incremental revenue contribution from the Company’s CPE and foam insulation businesses that were introduced in the fourth quarter of 2013.

Revenue breakdown by product lines is as follows:

  • Revenue from edible alcohol increased by 4.1% to RMB425.9 million ($69.2 million) in the second quarter of 2014, compared to RMB409.0 million in the second quarter of 2013. Driven by higher production, the sales volume of edible alcohol in the second quarter of 2014 increased by 6.1% year-over-year to 83,505 tons, while the average selling price of edible alcohol decreased by 1.9% year-over-year to RMB5,100 per ton.
  • Revenue from DDGS Feed increased by 2.1% to RMB159.8 million ($26.0 million) in the second quarter of 2014, compared to RMB156.5 million in the second quarter of 2013. The sales volume of DDGS Feed in the second quarter of 2014 decreased by 1.2% year-over-year to 74,155 tons, while the average selling price increased by 3.3% year-over-year to RMB2,155 per ton.
  • Revenue from liquid carbon dioxide decreased by 17.0% to RMB11.4 million ($1.8 million) in the second quarter of 2014 compared to RMB13.7 million in the second quarter of 2013. The sales volume of liquid carbon dioxide in the second quarter of 2014 decreased by 2.6% year-over-year to 32,751 tons, and the average selling price decreased by 14.8% year-over-year to RMB347 per ton.
  • Revenue from crude corn oil decreased by 1.4% to RMB48.5 million ($7.9 million) in the second quarter of 2014 compared to RMB49.2 million in the second quarter of 2013. The sales volume of crude corn oil in the second quarter of 2014 increased by 4.0% year-over-year to 6,746 tons, while the average selling price decreased by 5.3% year-over-year to RMB7,185 per ton.
  • Revenue from CPE was RMB21.3 million ($3.5 million) in the second quarter of 2014, and the sales volume was 2,448 tons at an average selling price of RMB8,718 per ton. Revenue from foam insulation was RMB2.0 million ($0.3 million) in the second quarter of 2014, and the sales volume was 1,868 cubic meters at an average selling price of RMB1,094 per cubic meter.

During the second quarter of 2014, gross profit decreased by 5.4% to RMB67.5 million ($11.0 million) from RMB71.4 million in the same period of 2013. Gross margin for the second quarter of 2014 decreased to 10.1%, from 11.4% in the same period of 2013, which was primarily attributable to a decrease in average selling price of edible alcohol, as well as lower gross margin from the new CPE and foam insulation businesses during its initial production ramp up.

Operating income decreased by 7.8% to RMB55.3 million ($9.0 million) in the second quarter of 2014, from RMB60.0 million in the same period of 2013, primarily due to lower gross profit earned.

Selling expenses were RMB1.5 million ($0.2 million) in the second quarter of 2014, which remained stable with that in the same period of 2013.

General and administrative expenses increased by RMB0.8 million, or 8.0% to RMB 10.7 million ($1.7 million) in the second quarter of 2014, from RMB9.9 million in the same period of 2013, mainly due to the increasing management cost for our new CPE and foam insulation businesses.

Income tax expenses in the second quarter of 2014 were RMB7.0 million ($1.1 million), representing an effective tax rate of 25.0%.

Net income decreased by 17.8% to RMB21.0 million ($3.4 million) in the second quarter of 2014, compared to RMB25.5 million in the same quarter of 2013. In the second quarter of 2014, basic and diluted earnings per share and per ADS were RMB0.82 ($0.13), and the Company had 25.7 million weighted average basic and diluted shares outstanding.

As of June 30, 2014, cash and bank deposits of RMB361.8 million ($58.8 million) decreased by RMB159.5 million, compared with RMB521.3 million as of December 31, 2013. Cash flows provided by operating activities for the second quarter of 2014 were RMB77.3 million ($12.6 million), compared with operating cash outflow of $148.1 million in the second quarter of 2013.

Financial Outlook

During the third quarters, the Company historically conducts an annual maintenance of its production facilities, which requires a temporary shut down of all production lines for edible alcohol for approximately one month.

Reflecting the annual maintenance period this summer, and lower average selling prices, the Company estimates that its revenue for the third quarter of 2014 will be in the range of RMB520 million ($84.5 million) to RMB540 million ($87.8 million), an increase of approximately 0.4% to 4.2% over the same quarter of 2013.

This guidance is based on the current market conditions and reflects the Company’s current and preliminary estimates of market and operating conditions and customer demand, which are all subject to change.

Conference Call

Borun’s management will hold a corresponding earnings conference call and live webcast at 8:00 a.m. EDT on Friday, August 22, 2014 (8:00 p.m. Beijing time on Friday, August 22, 2014) to discuss the results and highlights from the second quarter and answer questions from investors. A webcast of the call will be available at http://ir.chinanewborun.com. Listeners may access the call by dialing:

United States Toll Free:

1-866-519-4004

US Toll/International:

1-845-675-0437

Hong Kong Toll Free:

800-930-346

Hong Kong Toll:

852-2475-0994

China Toll Free:

800-819-0121

China Toll Free (Mobile):

400-620-8038

Conference ID:

85386554

A replay of the webcast will be accessible through August 30, 2014 on http://ir.chinanewborun.com or by dialing:

United States toll free:

1-855-452-5696

International:

61-2-8199-0299

Passcode

85386554

About China New Borun Corporation

China New Borun Corporation (NYSE: BORN) is a leading producer and distributor of corn-based edible alcohol sold as an ingredient to producers of baijiu, a popular grain-based alcoholic beverage in China. The Company also produces DDGS Feed, liquid carbon dioxide and crude corn oil as by-products of edible alcohol production, and CPE and foam insulation that are widely used in chemical industries. China New Borun is based in Shouguang, Shandong Province. Additional information about the company can be found at http://www.chinanewborun.com and in documents filed with the U.S. Securities and Exchange Commission, which are available on the SEC’s website at http://www.sec.gov.

Forward-looking Statements

All statements included in this press release, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management’s beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “would,” “could,” “potential,” “continue,” “ongoing,” similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.

[1]

This press release contains translations of certain Renminbi amounts into US dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to US dollars for the period ended June 30, 2014 were made at a rate of RMB6.1528 to USD1.00, the rate published by the People’s Bank of China on June 30, 2014. China New Borun Corporation makes no representation that the Renminbi or US dollar amounts referred to in this press release could have been or could be converted into US dollars or Renminbi, at any particular rate or at all.

Contact Information

Asia Bridge Capital Limited
Wendy Sun
Phone: +86-10-8556-9033 (China)
+1-888-870-0798 (U.S.)
Email: wendy.sun@asiabridgegroup.com


CHINA NEW BORUN CORPORATION

UNAUDITED CONSOLIDATED BALANCE SHEETS

December 31, 2013

June 30, 2014

RMB

RMB

US$

Assets

Cash

521,270,799

361,770,279

58,797,666

Restricted cash

42,040,667

32,000,000

5,200,884

Trade accounts receivable, net of allowance for doubtful accounts of nil and nil, respectively

358,463,468

353,450,451

57,445,464

Available-for-sale securities

16,783,869

————

————

Inventories

353,206,120

915,014,772

148,715,182

Advance to suppliers

276,245,034

191,099

31,059

Other receivables

58,510,165

114,562,500

18,619,572

Prepaid expenses

3,773,980

2,299,637

373,755

Deferred income tax assets

248,712

————

————

Total current assets

1,630,542,814

1,779,288,738

289,183,582

Property, plant and equipment, net

1,143,722,628

1,106,121,274

179,775,269

Land use right, net

138,944,251

137,541,648

22,354,318

Intangible assets, net

9,648,771

7,735,649

1,257,257

Other non-current assets

10,697,712

8,130,261

1,321,392

Total assets

2,933,556,176

3,038,817,570

493,891,818

Liabilities and shareholders’ equity

Trade accounts payable

29,272,232

15,877,284

2,580,497

Accrued expenses and other payables

106,574,084

66,479,333

10,804,728

Income taxes payable

9,119,258

7,038,216

1,143,905

Short-term borrowings

620,200,000

732,000,000

118,970,225

Current portion of long-term borrowings

24,000,000

24,000,000

3,900,663

Total current liabilities

789,165,574

845,394,833

137,400,018

Long-term borrowings

48,000,000

36,000,000

5,850,995

Bonds Payable

500,000,000

500,000,000

81,263,815

Total liabilities

1,337,165,574

1,381,394,833

224,514,828

Shareholders’ equity

Ordinary share – (December 31, 2013 and June 30, 2014: par value of RMB0.0068259, 25,725,000 shares issued and outstanding)

175,596

175,596

25,725

Additional paid-in capital

468,132,187

468,132,187

76,084,415

Retained earnings – appropriated

126,356,029

126,356,029

20,536,346

Retained earnings – unappropriated

1,002,921,340

1,063,215,301

172,801,863

Accumulated other comprehensive loss

(1,194,550)

(456,376)

(71,359)

Total shareholders’ equity

1,596,390,602

1,657,422,737

269,376,990

Total liabilities and shareholders’ equity

2,933,556,176

3,038,817,570

493,891,818

CHINA NEW BORUN CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

For the three-month period ended,

June 30,

March 31,

June 30, 2014

2013

2014

(RMB)

(RMB)

(RMB)

(US$)

Revenues

628,493,979

625,731,081

668,887,775

108,712,745

Cost of goods sold

557,088,612

535,247,941

601,348,437

97,735,736

Gross profit

71,405,367

90,483,140

67,539,338

10,977,009

Operating expenses:

Selling

1,509,414

1,214,951

1,534,527

249,403

General and administrative

9,912,973

10,490,866

10,703,722

1,739,651

Total operating expenses

11,422,387

11,705,817

12,238,249

1,989,054

Operating income

59,982,980

78,777,323

55,301,089

8,987,955

Other (income) expenses:

Interest income

(990,007)

(525,335)

(637,612)

(103,630)

Interest expense

26,418,467

26,024,958

26,695,034

4,338,681

Others, net

(105,210)

855,570

1,273,848

207,035

Total other expense, net

25,323,250

26,355,193

27,331,270

4,442,086

Income before income taxes

34,659,730

52,422,130

27,969,819

4,545,869

Income tax expense

9,142,375

13,105,533

6,992,455

1,136,467

Net income

25,517,355

39,316,597

20,977,364

3,409,402

Earnings per share:

Basic and diluted

0.99

1.53

0.82

0.13

Weighted average ordinary shares outstanding:

Basic and diluted

25,725,000

25,725,000

25,725,000

25,725,000

CHINA NEW BORUN CORPORATION

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

For the six-month period ended,

June 30, 2013

June 30, 2014

(RMB)

(RMB)

(US$)

Revenues

1,079,186,038

1,294,618,856

210,411,334

Cost of goods sold

960,690,062

1,136,596,378

184,728,315

Gross profit

118,495,976

158,022,478

25,683,019

Operating expenses:

Selling

2,558,750

2,749,478

446,866

General and administrative

19,721,770

21,194,588

3,444,706

Total operating expenses

22,280,520

23,944,066

3,891,572

Operating income

96,215,456

134,078,412

21,791,447

Other (income) expenses:

Interest income

(1,616,097)

(1,162,947)

(189,011)

Interest expense

46,298,133

52,719,992

8,568,455

Others, net

(131,154)

2,129,418

346,089

Total other expense, net

44,550,882

53,686,463

8,725,533

Income before income taxes

51,664,574

80,391,949

13,065,914

Income tax expense

13,393,586

20,097,988

3,266,478

Net income

38,270,988

60,293,961

9,799,436

Earnings per share:

Basic and diluted

1.49

2.34

0.38

Weighted average ordinary shares outstanding:

Basic and diluted

25,725,000

25,725,000

25,725,000