(Incorporated in the Cayman Islands with limited liability)

Chaoda Announced FY2010/2011 Interim Results
Turnover grew steadily on the back of increase in farm land

(28 February, Hong Kong) Chaoda Modern Agriculture (Holdings) Limited (the "Company" or "Chaoda", together with its subsidiaries, collectively the "Group"; HKEx: 682) is pleased to present the unaudited interim results for the six months ended 31 December 2010.

The Group continued to achieve sound results for the six months ended 31 December 2010. The Group maintained a growth of 18% in turnover to RMB3,835 million (31 December 2009: RMB3,237 million). Gross profit of the Group increased by 15% to RMB2,382 million (31 December 2009: RMB2,069 million).

Profit from operations rose 12% to RMB1,531 million (31 December 2009: RMB1,363 million). In respect of the major operating expenses, selling and distribution expenses amounted to RMB432 million (31 December 2009: RMB344 million), maintained at the same level of 11% of the turnover as the last financial period. General and administrative expenses increased to RMB236 million (31 December 2009: RMB74 million). The total operating expenses amounted to RMB858 million (31 December 2009: RMB543 million), representing approximately 22% of the turnover (31 December 2009: 17% of the turnover). The increase in general and administrative expenses and total operating expenses was mainly due to an increase in employee share option benefits to RMB160 million as share options were granted by the Company during the financial period.

Profit for the period attributable to owners of the Company increased by 13% to RMB1,547 million (31 December 2009: RMB1,364 million). Such profit included a loss of RMB42 million (31 December 2009: a loss of RMB184 million) arising from changes in fair value of biological assets. The loss in fair value of biological assets was mainly due to the seasonal effect brought by the fallow agricultural land of the Group located in the north at the end of the financial period. Excluding changes in fair value of biological assets, profit for the period attributable to owners of the Company rose by 3% to RMB1,589 million (31 December 2009: RMB1,548 million).

The Board has resolved to declare an interim dividend of HK$0.03 per share for the six months ended 31 December 2010 (six months ended 31 December 2009: Nil).

The Group's net cash generated from operating activities for the financial period under review increased to RMB1,803 million from RMB1,655 million over the same period last year. As at 31 December 2010, cash and cash equivalents of the Group amounted to RMB3,886 million, increased by RMB1,842 million when compared with the Group's cash and cash equivalents of RMB2,044 million as at 30 June 2010. Apart from revenue generated from operating activities, additional funds came during the financial period under review from the placing of existing shares and top-up subscription of new shares, the issue of US$200 million 3.7% secured guaranteed convertible bonds due 2015 and the issue of call options.

As at 31 December 2010, the total equity of the Group (including non-controlling interests) amounted to RMB24,873 million (31 December 2009: RMB18,050 million). The debt of the Group comprised the convertible bonds. As at 31 December 2010, the debt to equity ratio of the Group was 4% (31 December 2009: 9%) and the current ratio was 27 times (31 December 2009: 3 times).

As at 31 December 2010, the production base area of the Group's core business, including vegetable land, tea garden and fruit garden, amounted to 714,933 mu (47,662 hectares), increased steadily by 17% when compared with 609,375 mu (40,625 hectares) as at 31 December 2009. It also recorded an increase of 8% in production base area when compared with 664,225 mu (44,282 hectares) as at 30 June 2010.

The weighted average production base area for vegetables as at 31 December 2010 increased by 13% to 544,520 mu (36,301 hectares) when compared with 479,837 mu (31,989 hectares) as at 31 December 2009. It also represented an increase of 9% when compared with 497,995 mu (33,200 hectares) as at 30 June 2010.


In 2010, China achieved stable economic growth as the global economy shrugged off the lingering effect of the financial crisis. During the financial period under review, the overall market supply and demand of vegetables was generally in balance, although there were significant fluctuations in vegetable prices, underpinned by initial hikes and subsequent declines, owing to abnormal weather, operating costs and other factors.

The government continued to introduce favorable policies for agricultural development with increased investments. In 2010, the central government budget continued to increase expenditure on the "Three Rural Issues" to RMB818.34 billion, representing an increase of 12.8% comparing to the previous year. In January 2011, the CPC Central Committee and the State Council jointly promulgated Document No.1 relating to the "Decision on Expediting the Reform and Development of Water Conservancy", identifying the "Three Rural Issues" as the key issues for eight consecutive years. The document highlighted water conservancy as the essential prime condition for modern agricultural development. A number of issue-specific and comprehensive new policies and measures on expediting the reform and development of water conservancy were formulated and announced, confirming water conservancy as a priority area in the nation's infrastructure development and water conservancy for farmland as a key task in rural infrastructure development.

As a leader in modern agricultural industry, Chaoda will have enormous opportunities for development given favourable government policies and ongoing improvements in the operating environment of the agricultural industry. With consistent recognition and support from the government, Chaoda's business model of "Company + Production Bases + Farmers" has become a paradigm for modern development of vegetable cultivation in China. The Group will continue to focus on vegetable and fruit cultivation as its core business. We will seek further expansion of our production bases and optimise the geographical distribution of our production bases, while enhancing our modern agricultural system with further technological innovations. By pioneering in the industrialisation, standardisation and modernisation of the vegetable cultivation sector, the Group will reinforce its leadership in modern agriculture with ongoing growth in competitive strengths and shareholders' value.


About Chaoda Modern Agriculture (Holdings) Limited
Chaoda Modern Agriculture (Holdings) Limited ("Chaoda", HKSE: 00682) is a leading enterprise in the production and distribution of ecologically grown vegetables and other agricultural products. It was listed on the main board of the Stock Exchange of Hong Kong in 2000. Devoted to the establishment of large-scale and standardized farming production bases in various areas, Chaoda ensures year-round supplies of high-quality products to domestic and international customers through wholesale, institutional delivery and export trading. As a modern agricultural enterprise, Chaoda's mission is to supply healthy and nutritious products to consumers globally.

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Source: Chaoda Modern Agriculture (Holdings) Limited
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