Despite the surge in hog price during the period, the gross profit margin of LTMP remained stable, mainly due to the Group's effective cost control on raw pork, increased selling prices of LTMP and enhanced sales of high margin and high value-added products.
We will take advantage of Yurun's established brand image as a 'healthy, quality, tasty and high-end' through advertising in mainstream media to achieve rapid sales growth of LTMP and chilled pork products over the next 3-5 years.
The Group was successful in marketing higher-margin chilled pork and LTMP segments, and lower hog prices created downward pressure on costs for downstream processed meat products.
In the downstream processed meat business, gross profit margin for LTMP during the period was 27.
In view of the fast growing domestic market for chilled pork and LTMP, the Group will continue to expand upstream production capacity, increase the share of chilled pork in its upstream business, strengthen its procurement network and enhance its hygienic control and disease prevention systems.
In 2005, the Group continued to develop the market for LTMP in its downstream business.
The Group's strategy for the coming year will focus on selling primarily chilled pork and LTMP in these regions of the Yangtze and other relatively affluent regions in China.