Chaoda Modern Agriculture (Holdings), the mainland's biggest vegetable grower, said it would spend between 2.5 billion yuan (HK$2.84 billion) and 2.8 billion yuan to add farmland during this financial year, after reporting 13 per cent growth in annual profit yesterday. Chairman Kwok Ho said Chaoda would use internal resources to fund the expansion of 100,000 mu amid the global financial crisis. It currently has 494,800 mu of vegetable land, tea gardens and fruit orchards. One mu is one-fifteenth of a hectare. 'It's impossible to raise funds right now, so our plan is mapped out in accordance with our own ability,' Mr Kwok said. The Fujian-based company had enough cash to redeem its convertible bonds, worth 1.37 billion yuan, due in May 2009, he said. At the end of June, Chaoda had cash and equivalents of 1.28 billion yuan, down from 1.67 billion yuan a year earlier. 'I am a very conservative man,' said Mr Kwok. 'We have adequate financial resources for the bonds redemption.' Chief financial officer Andy Chan said the company's gearing was 30 per cent, and its strong net cash inflow would help fund the expansion. Chaoda said net profit for the year to June rose to 1.96 billion yuan, up from 1.73 billion yuan the year before. Excluding fair-value changes in biological assets and convertible bonds, net profit increased by 40 per cent to 2.57 billion yuan. Turnover climbed 31 per cent to 5.03 billion yuan from 3.85 billion yuan a year earlier. Gross profit margin rose slightly to 69.43 per cent from 68.48 per cent, but the annual yield per mu for vegetables fell to 5.53 tonnes from 5.88 tonnes. Chaoda shares, which have dropped 57.9 per cent since the beginning of the year, closed down 19.69 per cent at HK$3.06 yesterday. Mr Kwok, who owns 25.52 per cent of the company, said he would increase his holding 'whenever possible'. 'Normally at such turbulent times, people prefer keeping cash on hand, but since I promised to buy back shares earlier, I'll definitely do so this year,' he said.