China Yurun Food Group Limited Announces its Annual Results for the Year Ended 31 December 2009

Leading Production Network to Seize Opportunities from Industry Consolidation

HONG KONG, March 29, 2010 -

    Financial Highlights                For the year ended 31 December
     (HK$ in million)                  2009         2008        Change
    Turnover                         13,870       13,024          +6.5%
    Gross profit                      2,161        1,690
     (Gross profit margin)            (15.6%)      (13.0%)       +27.9%
    Profit attributable to            1,745        1,138
     shareholders (Net profit
     margin)                          (12.6%)       (8.7%)       +53.4%
    Diluted earnings per share     HK$1.074     HK$0.736         +45.9%
    Proposed final dividend per
     share                          HK$0.15      HK$0.08         +87.5%

China Yurun Food Group Limited ("Yurun Food" or "the Company", and
together with its subsidiaries, the "Group")(HKEx: 1068), a leading
vertically-integrated meat-product processor and supplier in China, today
announced its annual results for the year ended 31 December 2009 (the
"Year").

During the Year, the Group recorded a turnover of HK$13,870 million
(2008: HK$13,024 million), representing a 6.5% growth over the same period
last year. In spite of over 20% decrease in hog prices during the Year, the
Group was able to significantly increase the sales volume of its products by
leveraging on the competitive edge of its "Yurun" brand, as well as its
optimized nation-wide production network, therefore boosted the stable growth
of its business.

During the Year, the Group's gross profit and net profit were HK$2,161
million (2008: HK$1,690 million) and HK$1,745 million (2008: HK$1,138
million) respectively, representing a considerable growth of 27.9% and 53.4%
respectively as compared to that of 2008. The Group's gross profit margin and
net profit margin increased to 15.6% (2008: 13.0%) and 12.6% (2008: 8.7%)
respectively. The increases were mainly attributable to the Group's flexible
strategies and strong market position. Under the highly volatile market
conditions, by proactively adjusting the strategies of its two main business
segments, as well as successful production planning, the Group was able to
take advantage of its strong "Yurun" brand and pricing power to drive the
growth of its overall gross margin. At the same time, the Group further
realized economies of scale by enlarging its market share, and thus achieving
further improvement in gross margins of its upstream and downstream
businesses.

The Board of Directors of the Company recommended a final dividend of
HK$0.15 per share for the Year (2008: HK$0.08). This final dividend together
with the interim dividend of HK$0.15 per share (2008: HK$0.11), will make a
total dividend of HK$0.30 (2008: HK$0.19) per share for the year ended 31
December 2009.

Mr. Zhu Yicai, Chairman of Yurun Food said, "Amid the challenging market
conditions in 2009, the Group achieved remarkable results due to the
experienced management team's thorough understanding of the hog breeding
cycles and the meat products market. The Group managed to overcome the
challenge of fluctuating hog prices by adopting flexible strategies for its
chilled meat and low temperature meat products ("LTMP") businesses, as well
as utilizing its optimized nation-wide production network. Following the
promulgation of guidelines by the Chinese Government to restructure China's
hog slaughtering industry in late 2009, which aims to accelerate industry
consolidation and systematically increase the sales of chilled meat and small
packaged pork products, the Group will be well positioned to further increase
its market share, which will drive long-term business development and
continue to enhance the "Yurun" brand. Looking forward, by leveraging on its
established business model and sophisticated management team, the Group will
continue to implement its long-term development strategies and further
enhance its brand recognition and production network in order to achieve
economies of scale, increase market share, and drive business growth to
maximize value for our shareholders."

Business Review

The Group's business is divided into downstream processed meat products
and upstream chilled and frozen meat segments.

                                     For the year ended 31 December
    (HK$ in million)         Turnover    Change  Percentage to Total Turnover
                          2009     2008     %          2009        2008
    Downstream
     Processed
    Meat Products:
      - LTMP             3,081    2,644  +16.5 %       93.7 %      89.8 %
      - HTMP*              208      302  -31.3 %        6.3 %      10.2 %
      - Segment Total    3,289    2,946  +11.6 %        100 %       100 %
    Upstream Chilled
     and Frozen Meat:
      - Chilled Pork     9,421    8,130  +15.9 %       80.2 %      73.9 %
      - Frozen Pork      2,325    2,877  -19.2 %       19.8 %      26.1 %
      - Segment Total   11,746   11,008   +6.7 %        100 %       100 %
    Inter-segment
     Elimination        (1,165)    (930)
    Total Revenue       13,870   13,024   +6.5 %
    *HTMP is defined as high temperature meat product.

                                         For the year ended 31 December
                                    Gross Margin             Change
                                  2009        2008      Percentage Points
    Downstream Processed Meat
     Products, inter alia:
      - LTMP                      29.0 %      28.0 %             +1.0ppt
      - HTMP                      21.4 %      16.8 %             +4.6ppt
      - Overall                   28.6 %      26.9 %             +1.7ppt
    Upstream Chilled and Frozen
     Meat, inter alia:
      - Chilled Pork              11.5 %       9.6 %             +1.9ppt
      - Frozen Pork                6.3 %       4.3 %             +2.0ppt
      - Overall                   10.4 %       8.2 %             +2.2ppt

Sales and Distribution

As the Group's high value-added and high-end products with relatively
higher gross margins, LTMP and chilled meat continued to play an important
role in contributing to the Group's overall sales and profits.

Furthermore, benefited from Yurun Food's strong brand and pricing power,
the Group was able to sustain stable product prices and competitive
advantages, leading to improved overall gross margin.

Research and Development and Production Capacity

The Group has always adhered to producing products of highest quality. We
implemented stringent internal quality control over every production process
ranging from procurement, production, and sales to logistics. In addition,
the Group continued to expand its R&D team, focus on research and development
of mid-to-high end products, develop products with market competitiveness and
create new trend in food consumption so as to maintain its competitive
advantage in the market and strengthening its leading position in the
industry.

To enlarge its market share and capture the growing demand for Yurun
Food's products, the Group continued to increase its capacity through
selective acquisitions, improvements in current production facilities and
construction of new plants. As at 31 December 2009, the Group's downstream
meat processing business achieved an annual production capacity of 278,000
tons. The Group will continue to expand its capacity in the coming years in
an orderly manner, targeting to increase market coverage, reduce bottlenecks
and upgrade key production facilities. By the end of 2009, slaughtering
capacity of the Group reached 25.55 million heads per year, representing an
increase of 7.5 million heads as compared to that as at the end of 2008.

Consolidation Opportunities Under New Industry Policy

Following the gradual recovery of the global economy and continued
improvement in business environment, as well as a series of favorable
policies by the Chinese Government to stabilize hog prices and support the
development of the hog slaughtering industry, the hog slaughtering and meat
products industry is set to maintain its ongoing development.

The Chinese Government promulgated the "Guideline for National Hog
Slaughtering Industry Development (2010-2015)" in late 2009. The plan aims to
accelerate industry consolidation and systematically increase the sales
percentage of chilled meat and small packaged pork products in China. 30% of
the outdated manual and semi-automated slaughtering plants will be eliminated
by 2013 and 50% by 2015. About 80% of slaughtering plants in major cities and
developed regions that are below hygienic standards will be eliminated.
Industry consolidation will optimize the market structure of meat products by
increasing sales ratio of chilled pork over fresh pork. Sales ratio of small
packaged meat in regions above county level are targeted to rise from the
current 10% to 15%; and that of chilled pork from 10% to 20% by 2013. These
ratios will reach to 20% and 30% respectively by 2015 in order to gradually
encourage customers' consumption of modernized meat products. Moreover, by
2015, no more than 4 licences will be issued in cities with a population of
over 5 million, and no more than 2 licences in regional cities and 1 at
county level. It is estimated that the total number of licences will
significantly decrease from the current over 20,000.

Following the implementation of the guideline, as a leading enterprise in
the hog slaughtering and meat products industry, the Group will further
strengthen its advantages in production network, brand, distribution and food
safety standards, which will become a strong driving force for future
development of its core businesses of chilled meat and LTMP, allowing the
Group to further expand its market share, and strengthening its leading
status in the industry to ensure long-term business development. In future,
Yurun Food will continue to implement its highly disciplined capacity
expansion strategies, so as to capture the business opportunities arising
from industry consolidation, increase its competitiveness and market share,
thus fuelling business development and maximizing returns for shareholders.

For further details about the Group's 2009 Annual Results Presentation,
please kindly click: www.todayir.com/webcasting/yurun_09ar/index.php .

About China Yurun Food Group Limited (Stock Code: 1068)

Leveraging on its vertically integrated business model and strategically
located production plants, Yurun Food is the leading meat-processor and meat
products supplier in China. With its well-established food brands,
state-of-the-art production facilities and diversified distribution channels,
Yurun Food has achieved a solid track record with robust growth for last
consecutive years. By further enhancing its brand names and product quality,
Yurun Food will further strengthen its leading market position. Yurun Food
was included in MSCI Global Standard Index (MSCI China Index) on 29 August
2008, which is an important recognition of Yurun Food as a leading company in
the meat processing industry by the investment community.

Company website: www.yurun.com.hk

    For further information, please contact:
    China Yurun Food Group Limited
     Email: ir@yurun.com.hk
     Fax:   +852-3927-3300
    Elite Investor Relations Limited
    (for and on behalf of China Yurun Food Group Limited)
     Investor Relations
     Ms Cindy Xin
     Tel:   +852-3183-0226
     Fax:   +852-2155-9165
     Email: cindy.xin@elite-ir.com
     Media Relations
     Mr Bunny Lee
     Tel:   +852-3183-0282
     Fax:   +852-2155-9165
     Email: bunny.lee@elite-ir.com

China Yurun Food Group Limited, Fax, +852-3927-3300, ir at yurun.com.hk; Investor Relations, Ms Cindy Xin, Tel, +852-3183-0226, Fax, +852-2155-9165, cindy.xin at elite-ir.com, Media Relations, Mr Bunny Lee, Tel, +852-3183-0282, Fax, +852-2155-9165, bunny.lee at elite-ir.com, both of Elite Investor Relations Limited for and on behalf of China Yurun Food Group Limited