AgFeed profits from China’s stimulus plans
China’s stimulus plans begin taking effect and several foreign companies benefit from this.
US-listed (Nasdaq), but China based AgFeed Industries, a producer of pig feed, has been experiencing a significant boost of late as the price of feed increases and pig prices come off their highs of last year — giving it good reason to expect strong margins.
The stock has jumped 134.0% in the last two weeks, trading at $2.34 last week. Over the past 52 weeks, the company’s shares have traded between 90 cents and $21.31.
AgFeed reported earnings of $16.9 million over 2008, up from $6.7 million in 2007.
The company posted a 2008 profit of $23.2 million (excluding $6.26 million in one-time charges related to investor conversion of a note offering). Revenues nearly quadrupled, to $143.7 million, from $36.2 million the year before.
The company acquired pig farms last year. Analysts expect China’s economic growth to be back in double digits next year, which could further boost AgFeed’s performance.
As of December 31, 2008, AgFeed owns and operates 30 commercial pig farms and 5 premix feed plants. The operations are strategically located in south China where some of the most profitable feed and pig markets are located.
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