The higher prices are consistent with the rise in demand for chilled and frozen pork as China approaches the start of the Chinese New Year on 14 February. China's Spring Festival then will continue for two weeks of celebration, ending this year on 28 February. As families and friends gather over these two weeks, demand for pork, China's favorite protein food, is traditionally at its annual peak.

Zhongpin's new chilled and frozen pork plant in Tianjin, which opened on 20 January, is producing and operating smoothly. The plant's opening was timed to capture the peak holiday demand for pork products during the Chinese New Year and Spring Festival. The new plant's production capacity is 100,000 metric tons each year, of which 70 per cent will be chilled pork and 30 per cent will be frozen pork. With this addition, Zhongpin has an annual production capacity of 541,760 metric tons for chilled and frozen pork.

On 21 January 2010, China's National Bureau of Statistics reported that China's GDP grew 8.7 per cent in the year 2009 and 10.7 per cent in the fourth quarter of 2009. China's Center for Forecasting Science at the Chinese Academy of Sciences reported last week that it expects China's GDP to grow 11 per cent in the first quarter 2010 and around 10 per cent for the year 2010.

This continuing economic expansion is the foundation of Zhongpin's growth, since higher GDP generally results in more jobs, higher income, and greater affordability for pork products.

Hog and pork prices have been trending upward over the last two weeks, and we expect this is the turning point of the hog and pork prices in year 2010.

Considering all factors, the outlook for Zhongpin continues to be very encouraging for higher sales, profits, cash flow, and return on assets.