Henan Zhongpin Food Share Co., Ltd.
Who We Are
Henan Zhongpin is principally engaged in the meat and food
processing business in the People’s Republic of China
Chosen as supplier by major supermarket chains, such as
Lianhua, Carrefour and fast-food operator McDonald’s®
Ranked 6th overall in the national meat industry
Wide distribution network in more than 20 provinces
Unique retail network with a total of over 2,100 showcase stores,
network stores and supermarket counters
Corporate History
1993 - Spin-off from a state-owned enterprise
1997 - Current management team acquired ownership as a private
enterprise
2001 - Purchased Yanling Yalin Meat Factory and established
Henan Zhongpin Industry Co., Ltd., a share holding
subsidiary
2004 - Established Henan Zhongpin Imports and Exports Trade
Co., Ltd.
2005 - Reorganized corporate holding structure for U.S. listing
and capital raise
China
The 21st Century’s Growth Engine
Since 1978 the annual real GDP has grown at an average rate of
9%, or a total of more than 700%
Foreign trade growth has averaged nearly 15% yearly or more
than 2,700% over the same period since 1978
China is now the world’s sixth largest economy
Morgan Stanley estimated that China may become the world’s next
$10 trillion economy by 2020
China’s new middle class is expected to reach 160 million in 2010
Meat Industry in China
China’s fresh meat sector was valued at $37.86 billion in 2004, an
estimated 13.23% of the total value of the retail food market
The market for pork in China is the largest in the world, accounting
for more than 52% of global production and consumption
Roughly one-third of every new dollar of income is spent on food,
and meat is a major target for much of the new spending
The meat industry is the second largest sector in China’s retail
food market
The meat industry is highly fragmented and supply is extremely
localized with limited distribution capability
Industry Outlook
Sales of fresh, processed meat and meat products has increased
46.74% from 1998 to 2005 (an average of 6.6% per year) and
continued growth is expected
Consolidation of the domestic meat industry will improve
productivity and profitability and raise the quality of supply
Development of integrated distribution systems and infrastructure
will lead to better distribution
Increased market penetration of more organized retail chains has
created a larger outlet for fresh meat and meat products
Favorable government policy to improve safety and processing
technology
Customers
Wholesale customers include China’s best known supermarket chains
and fast food companies:
Lianhua Supermarket Group
Carrefour
Metro (Mai De Long Group)
McDonald’s®
Tianjin Meat Processing Factory
Exclusive retail network for the Company’s fresh meat and meat
products – a total of 2,111 stores
Export markets include: European Union, Hong Kong, Japan, Korea,
Russia, and Eastern Europe
Competitive Advantages
Henan Zhongpin is one of the premier companies in the production
and processing of meat and meat products
Wide distribution network in 20 provinces
Unique, vertically integrated from supplying, processing and
wholesaling to retailing
Superior logistics management and efficient delivery system
Comprehensive brand building and brand equity management
Accelerated annual revenue growth of 40% (cumulative growth of
285.05%) and annual profit growth of 66.25% (cumulative growth of
663.97%) from 2000 to 2005
Proven growth strategy
Business Flowchart
Products
Pork products: chilled pork and frozen pork and prepared meats
Chilled pork: chilled at a temperature between 0o C to 4oC, usually to
be consumed within one week
Frozen pork: frozen at -35oC to - -40oC for 48 hours, generally can be
kept for 6 months
Prepared meats: sausages, hams, Chinese cured hams and 5 main
categories of quick-freeze prepared meats consisting of over 100
varieties
Over 20 varieties of high quality vegetables and fruit suitable for
export, including asparagus, sweet corn, broccoli, mushrooms, lima
beans and strawberries
Quality Assurance
Emphasis on quality control and management of all aspects of
quality assurance
Quality checks are conducted at all production stages
9 quality control engineers and 61 staff in quality assurance program
ISO 9001 certified
All production lines have passed HACCP (Hazard Analysis & Critical
Control Point) under GMP (Good Manufacturing Practice) and
SSOP (Sanitation Standard Operating Procedure) in China
U.S. FDA registration
Canada AIB certification
Domestic & International
Recognition
Recognized as one of the premier “Agricultural Industrial
Enterprises” at the national level by the Chinese government
Member of the Standing Council of the China Meat Association
Member of the Chinese Institute of Food Science and Technology
The PRC Import and Export Qualification Certificate
PRC Import and Export Producing Enterprise Sanitation Registration
ISO 9001 Certification
ISO 14001 Environmental Management System Certification
HACCP (hazard Analysis & Critical Control Point) Certification
U.S. FDA Registration
Canada AIB certification
Marketing & Distribution
Sales team and network of agents in 20 provinces throughout China
Exclusive meat supplier to over 2,100 Zhongpin network stores and
supermarket counters
Geographical Distribution
Retail Network
2,111 retail stores and supermarket counters in Company network
69 showcase stores that highlight all of the Company’s products
528 network stores with standardized design and merchandising
1,514 supermarket counters selling Company products on an
exclusive basis
Supplements wholesale channels with retail business
Creates brand awareness and brings additional benefits to
wholesale customers
Showcases all of the Company’s products
Increases overall number of satisfied Company customers
Strategy
Strategic goal is to become the leader in the meat and fresh food
industry in China
Build a strong brand image
Create a unique and sustainable competitive advantage
Access and penetrate new markets domestically and internationally
Expand market presence via expansion of Company network stores
Become the lead consolidator in the industry via acquisitions
Motivate employees, foster a caring, people-oriented corporate
culture
Gain global recognition
Selected Cities for Expansion
2005
Zhengzhou, nine second tier cities in Henan, Shanghai, Beijing,Wuhan, Xi’an,
Shijiazhuang, Tianjin, Qingdao, Guangzhou, Nanjing, Chengdu, Chongqing,
three second tier cities in Hubei and four second tier cities in Shanxi.
2006
Hefei, Taiyuan, Jinan, Changsha, Xiamen, Hong Kong, Macao, eight second
tier cities in Henan, three second tier cities in Hubei, three second tier cities in
Shanxi and nine second tier cities in Shandong will be developed.
2007
Shenyang, Jilin, Haerbin, and Hebei, Shandong, Shanxi, Shanxi, other second
class tier cities of Anhui will be developed. European, American, and
Southeast Asian retail market will also be developed.
2008
Establish and operate retail businesses in all first tier cities, seventy percent of
second tier cities and thirty percent of third tier cities in China, and the
development of European, American, and Southeast Asian retail markets.
2009
Build retail networks in all second tier or above second tier cities and sixty
percent of third tier cities in China, and to establish retail operations in ten
countries and thirty cities in the European Union, America, and Southeast Asia.
Brand Equity
Brand positioning as the core of the Company’s competitive strategy
Projects the brand identity for “health, nutrition, freshness and
quality”
Product innovation
Focus on customer experience
Consistency of brand message
Continual high level of brand investment
Zhongpin
Shengpin
Management Team
ZHU, Xianfu
41
President, CEO & Chairman
BEN, Baoke
41
EVP & Director
LIU, Zhaoyang
36
EVP & Director
KONG, Ronald
42
SVP, Business Development
TANG, Shengyou
39
SVP
MA, Yuanmei
34
VP & Chief Financial Officer
WANG, Qinghe
42
VP, Quality Control & Director
WANG, Juanjuan
35
VP, Human Resources & Director
YANG, Bing
32
VP, Finance
TANG, Jinyang
54
Economist
WANG, Shouwei
43
Independent Director, China Meat Processing &
Engineering Technology Research Center
Sales Growth
(US$ in millions)
Key Financial Data
$56.829
$42.953
$14.5160
$8.182
$5.414
Equity
$100.190
$72.340
$53.254
$32.166
$27.528
Total Assets
$13.360
$22.624
$10.142
$5.205
$6.141
Cash
(as of 12/31)
$15.004
$10.117
$7.484
$2.768
$1.536
Net Profit
$29.446
$16.406
$12.179
$6.117
$3.449
Gross Profit
$185.221
$117.727
$73.400
$42.787
$29.593
Revenues
2007(F)
2006(F)
2005(A)
2004(A)
2003(A)
(US$Mil. FYE 12/31)
Ownership
Opportunity
THANK YOU FOR YOUR ATTENTION
ZHU, Xianfu
President, Chief Executive Officer & Chairman
Henan Zhongpin Food Share Co., Ltd.
21 Changshe Road
Changge City, Henan Province
The People’s Republic of China
Henan Zhongpin
The information contained in this presentation and any accompanying documentation (including without limitation the Confidential Memorandum
and PowerPoint® Presentation of Falcon Link Investment Limited and Henan Zhongpin Food Share Company Limited, a subsidiary of Falcon Link
Investment Limited dated January 16, 2006) is not and is not intended to be an offer to purchase, a solicitation of an offer to purchase or a
solicitation of any consents with respect to any security. Any formal offer and/or solicitation which may be made shall be made in accordance with
all applicable federal, state and other applicable securities laws, and will be accompanied by additional information regarding the company
including, without limitation, the Confidential Memorandum and purchase documentation. Some of the information contained in this presentation
and any accompanying documentation may contain “forward-looking” statements and projections, and you should not put undue reliance upon
these statements and projections. While the company makes certain statements of fact relating to our past operations, there can be no assurance
that its future operations will not materially differ from those described in this presentation or any accompanying documentation.. The company
offers no representation or warranty with respect to any third-party information referred to or incorporated in this presentation or any accompanying
documentation. The information contained herein is intended only for the party receiving such information and further distribution or dissemination
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