At Yuhe International, we aim to be the dominant supplier for day old breeders. We intend to adopt the following growth strategy to support the increasing poultry industry in China.

Increase sales in existing markets: As the demand for day old broilers continues to increase with current demand outstripping supply, Yuhe expects to increase sales within its existing customer base. As of December 31, 2009, revenue generated by sales reaches $36.1 million and it is expected to increase to $47 million and the net income reaches about $12.8 million, and it is expected to increase a lot by the end of 2009.

Expand facilities: In the past, there were 15 breeder farms. In 2009, the company purchased 13 breeder farms which makes the number of breeder farms become 28 and the capacity become 1.8 million parent breeders.

Focus on high quality day old broilers: Throughout its planned expansion, Yuhe intends to maintain rigorous quality control measures while increasing output. This includes continuing to use the highest quality imported equipment and stringent quarantine and vaccination requirements for all birds. In this way, Yuhe expects to maintain a price premium over competitors of 10% to 15% and continue building brand equity.

Integrate into downstream business: Aside from consolidating and increasing market share in the day old broiler market, Yuhe is looking into the possibility of expanding its business activities into new market segments. More specifically, Yuhe aims to leverage its experience in the poultry raising industry to move into downstream operation activities such as meat processing.