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Continued Strong Revenue Growth as a Result of Premium Brand Recognition Obtained HK$450 Million Loan to Support Continued Expansion For the six months ended 30 June Financial Highlights (HK$ in millions) 2008 2007 Change(%) Turnover 6,043 3,450 +75.2% Gross profit 821 512 +60.3% (Gross profit margin) (13.6%) (14.8%) -- Profit attributable to shareholders 672 393 +70.9% (Net profit margin) (11.1%) (11.4%) -- Diluted earning per share HK$0.435 HK$0.270 +61.1% Proposed interim dividend per share HK$0.110 HK$ 0.070 +57.1%

HONG KONG , Aug. 26 /Xinhua-PRNewswire-FirstCall/ -- China Yurun Food Group Limited ("Yurun" or the "Company", together with its subsidiaries, collectively the "Group") (HKEx: 1068.HK), a leading and well-established food brand in China , today announced its interim results for the six months ended 30 June 2008 (the "Period").

During the Period, Yurun's turnover amounted to HK$6,043 million (1H2007: HK$3,450 million), representing a significant increase of 75.2% as compared to the corresponding period last year. The chilled meat business and low temperature meat product ("LTMP") business remained the main revenue drivers for the Group during the Period. Gross profit and net profit during the Period amounted to HK$821 million (1H2007: HK$512 million) and HK$672 million (1H2007: HK$393 million) respectively, representing a significant growth of 60.3% and 70.9% respectively over the first half of 2007. Gross profit margin and net profit margin remained stable at 13.6% (1H2007: 14.8%) and 11.1 %( 1H2007: 11.4%).

The board of directors of the Group has proposed an interim dividend of HK$0.110 per share for 2008 (1H2007: HK$0.070).

Mr. Zhu Yicai , Chairman of Yurun, said, "Our robust 2008 interim results were mainly driven by our premium "Yurun" brand and sophisticated operating system which includes our nationwide production network, highly efficient supply chain system and outstanding sales and marketing strategies. Operating in an environment of tight domestic hog supplies and high procurement costs during the Period, we maintained our strong revenue growth and stable margins by expanding our marketing and sales efforts at CCTV and other mobile media platforms, focusing on mid to high-end markets and enhancing our product mix. At the same time, we optimized our product distribution network, production facilities and production capacities, which continued to strengthen our operation. Going onward, we will continue to strengthen our brand recognition, enhance our pricing abilities and expand our market penetration. Our strong financial performance coupled with the opportunities created from the acceleration in the industry consolidation gives us confidence that we will maintain our leadership position as we strive to maximize our shareholders' returns."

Mr. Zhu added, "Subsequent to the announcement of the remarkable interim results, the Group successfully entered into a loan agreement with a syndicate of banks for up to HK$450 million at an interest rate of approximately 4%. The loan will be used to support the Group's future development by providing capital to further expand its production capacity and marketing and sales efforts. Our ability to obtain financing in today's tight credit environment is a testament to the strength of our operations and our future prospects."

Segmental Information

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

For the six month ended 30 June (HK$ in millions) Revenue Change Proportion to (Gross Profit Margin) Total Revenue 2008 2007 % 2008 2007 Downstream Processed Meat Products, inter alia: -- LTMP 1,273(27.5%) 771(27.0%) +65.2% 90.6% 87.5% -- HTMP 132(18.5%) 110(18.3%) +19.8% 9.4% 12.5% -- Segment Total 1,405(26.7%) 881(25.9%) +59.5% 100% 100% Upstream Chilled and Frozen Meat, inter alia: -- Chilled Pork 3,728(9.5%) 1,702(11.5%) +119.0% 72.3% 60.7% -- Frozen Pork 1,425(6.4%) 1,104(8.1%) +29.1% 27.7% 39.3% -- Segment Total 5,153(8.6%) 2,806(10.1%) +83.6% 100% 100% Inter-segment Elimination (514) (237) N/A -- -- Total Revenue 6,043 3,450 +75.2% -- --

The Group was able to slightly increase its gross profit margin in the downstream segment as a result of the Group's ability to rapidly adjust the price of its LTMP in response to market conditions as well as optimize its product mix. The Group also successfully maintained a stable gross profit margin for its upstream segment due to its premium brand position and strong pricing ability, optimized production scale and quick response to market fluctuations despite the challenging environment.