China MILK

China Milk's full-year profit up 41.1%
Strong sales growth in China Milk Products Group's three product segments pushed its net profit up 41.1 per cent for the year ended March 31, 2007. The group's bottom line increased from 268.2 million yuan (S$53.6 million) to 378.5 million yuan, translating to earnings per share of 0.51 yuan, up from 0.41. China Milk shares closed four cents up at $1.28 each yesterday. Full-year revenue went up by 47.1 per cent to 442.9 million yuan, with the sale of pedigree bull semen continuing to be the group's most significant core business. That rose by 48.1 per cent to 345.8 million yuan or 78.1 per cent of the group's total revenue. Sales of dairy cow embryos and raw milk, which contributed 8.2 per cent and 13.7 per cent of total revenue respectively, grew by 87.1 per cent to 36.3 million yuan and 26.3 per cent to 60.8 million yuan. The group attributed the good results to its expanded herd size and improved productivity.
As of March 31 this year, China Milk's herd size was 14,789 comprising Holsteins of Canadian, Australian and Chinese origin, compared with 8,275 a year ago. China Milk plans to expand its herd size by 6,000 by the end of this year by importing 3,000 mature Holsteins from Australia, known to have the highest milk yield after the Canadian breed, and the rest from Uruguay. The Holsteins from Australia are expected to arrive by October and from Uruguay by November. They will be able to produce milk immediately. China Milk said yesterday that it is close to signing a five-year agreement with one of China's largest dairy companies to process raw milk at its brand new dairy processing-plant in Daqing, Heilongjiang province, for making dairy products. These include yogurt drinks, UHT milk and milk beverages, and will be marketed under the dairy company's brand. Under the proposed agreement, the
group is expected to supply 350 tonnes of processed milk products daily - or 100,000 tonnes annually - starting from November. China Milk also plans to begin the production of gender-controlled semen and embryos by July. China Milk declared a final dividend of 0.05 yuan per share.