Zhongpin Poised For Long-Term Growth

Citi has published its research report on Zhongpin HOGS following evidence of the company's long-term growth. In a note to clients, Citi writes, "Zhongpin is the No.4 pork processor in China. The company has 7.5m heads slaughtering capacity and plans to increase by 2.5m heads by 2011, and 110k tons downstream capacity and plans to increase this by 96k tons by 3Q2012. The company has 85% sales from upstream frozen pork and chilled pork, and 15% from downstream prepared pork. Mgt expect gross margin to be stable, with sales growth and net profit growth to reach 30% in the next three years." HOGS's management expects hog prices to stay around current levels next year. HOGS closed Monday at $18.78.