Zhongpin, the Chinese pork specialist processor and food group, has reported a 39% increase in revenues for the fourth quarter to US$139.8m, with gross profit up 48% at $17.7m.

Non-GAAP net income, excluding non-recurring and non-cash charges, grew by 65% to $9.3m, or $0.31 per fully-diluted share, while fourth-quarter net income increased by 9% to $5.5m.

For 2008 as a whole, revenues were up 85% at a record $539.8m, gross profit rose by 83% to $68.6m and non-GAAP net income, excluding non-recurring and non-cash charges, rose by 69% to $35.1m. Net income rose by 69% to a record $31.4m, the company stated.

"We are excited to report another year of record financial results that reflect our leading market position and increasing brand recognition as a high-quality provider of pork products in China," said CEO Xianfu Zhu.

During the year, the company reported that it had successfully executed a capacity expansion strategy, adding some 126,000 metric tons of annual production capacity for chilled and frozen pork, and more than doubling its annual production capacity of high-margin processed meat products.

"We have effectively expanded our presence in new markets through strategically identifying attractive locations for our new facilities," Zhu continued. "During the fourth quarter, we
successfully ramped up capacity utilisation at our new facilities in Luoyang city and Changge City, as we aggressively expanded our presence in our target markets."

While the Chinese pork industry had experienced "a high degree of volatility in terms of price and supply" during 2008, Zhongpin said it expects prices and supply of hogs to remain "fairly stable" in the first half of 2009.

Zhongpin reaffirmed its full-year 2009 guidance for revenues in the range of $780m to $810m with a gross margin of approximately 12%, a net profit margin of at least 6.0% and fully-diluted earnings per share in the range of $1.50 to $1.63.

"We believe China's pork industry will continue to experience robust growth as the Chinese government is encouraging the modernisation of the meat processing industry, improving the hygiene and quality standards, and supporting the transition from traditional wet markets to modern dry markets. Despite the temporary slight decline in pork consumption due to the impact of the worldwide economic slowdown on the Chinese economy, we believe the market fundamentals of the Chinese pork industry continue to remain strong," Zhu said.