China Green reports profit growth of 26.6pc to meet results deadline

PUBLISHED : Tuesday, 31 August, 2010, 12:00am
UPDATED : Tuesday, 31 August, 2010, 12:00am

China Green (Holdings) got in under the wire yesterday to report an annual profit rise of 26.6 per cent, just days after shares of the mainland fruit and vegetable producer plunged because of a delay in the results announcement.

The stock, which had plummeted as much as 45 per cent on Friday, rebounded 26 per cent yesterday to close at HK$6.98.

Chairman Sun Shaofeng apologised for postponing the release of the results for the year, which had been scheduled to be announced after a board meeting on August 26.

However, the company did not fully explain why it failed to inform investors and analysts in advance after it was notified by its auditor four days before the board meeting that information regarding its customers was still missing.

'We apologised for the delay and the distress it caused investors,' Sun said. 'We have learnt from this experience and will improve the way we manage and control this kind of situation.'

Analysts at brokerage Oriental Patron Research yesterday said in a report the delay had escalated into a mini-crisis, caused by poor investor communication in a fragile market.

A China Green management meeting with analysts to discuss the company's performance was called off at the last minute last Thursday without any explanation. The next day, China Green shares dived 36.9 per cent from HK$8.78 to close at HK$5.54.

According to China Green, its auditor CCIF told the company on August 22 that it was still waiting for information regarding its customers so it could prepare the annual report. China Green said it expected the auditor to be able to gather the data on time and therefore did not believe there was a problem then.

After the postponement, China Green faced a busy weekend to make sure the results were released before the four-month deadline expires today, which could have seen the company face disciplinary action from the securities regulator.

The company said net profit for the year to April was 576 million yuan (HK$658.65 million), up from 454.93 million yuan in the previous year. Turnover rose 22.8 per cent to 1.9 billion yuan.

Revenue from its own branded beverages was 409.08 million yuan - a surge of 74.2 per cent and the sharpest growth among all its products.

China Green has 43 cultivation bases producing 380,000 tonnes of fruit and vegetables every year.