Seeking Alpha

RedChip's  Instablog

RedChip
Send Message
RedChip's long history of success includes the first to issue independent research coverage on Starbucks in 1992. Other names RedChip discovered as they were on the cusp of becoming Blue-Chip stocks were: Nike™, MarketWatch.com™, Daktronics™. Over the years, RedChip has evolved into a... More
My company:
RedChip Companies, Inc.
My blog:
Smallcap Ideas
  • Chestnut Seller American Lorain (ALN) Expands Its Reach Across China 0 comments
    May 26, 2010 11:44 AM | about stocks: ALN
    American Lorain Corporation (NYSE Amex: ALN) is an international processed foods company based in the People’s Republic of China. The Company develops, manufactures, and sells chestnut products, convenience foods, and frozen, canned and bulk food. The leading items sold to convenience stores are open-bottom and sweetheart chestnuts, and various bean and rice products. 

    American Lorain is the leading producer and distributor of chestnut products in China. The worldwide chestnut market is an estimated $2.1 billion, and China accounts for approximately 60% of sales. With rising operation costs causing chestnut production to decline in South Korea and Japan, Chinese companies such as American Lorain are positioned to gain a larger share of the international chestnut market.

    Lorain-branded products are carried by 4,980 retail stores across 26 provinces and administrative regions in China. Data collected on March 23, 2010 indicated that American Lorain added 1,312 stores to its retail network over the previous month, a 36.7% increase in a one-month period and an approximate 144% increase over the number of stores that carried Company products in the middle of 2009. Two agreements signed in the first quarter promise to expand the company’s reach even further. The Company signed an agreement in March with Jinluo Group to distribute Lorain Candied Bean and Bean Paste through Jinluo’s network of approximately 3,000 retail food stores in China. Also in March, 7-Eleven agreed to sell American Lorain’s ready-to-heat-and-eat “Lunch Box” products in 550 7-Eleven stores located in Guangzhou. American Lorain’s strategy of diversification appears to be paying off, as convenience foods sales were up 586% year-over-year in the first quarter of 2010, reaching $7.1 million.

    In May, the Company announced that it had begun promoting sales of open-bottom frozen chestnuts at Lorain-branded retail food counters in 40 locations in Beijing and Chongqing, which it plans to expand to 70. The promotion, designed to counter the seasonality of chestnut sales, is expected to generate approximately $3.6 million in revenues for the fiscal year.

    Based on current growth, the Company expects to meet its full year 2010 goal of having 5,000 stores selling American Lorain products sometime in the second quarter of 2010. The Company projects sales growth of 24.1% to 29.5% and net income growth of 23.6% to 31.9% for the year.

    Disclosure: The subject security is a client of RedChip Companies, Inc. RedChip Companies, Inc., employees and affiliates may have positions and affect transactions in the securities or options of the issuers mentioned herein. For full financial disclosures for all RedChip clients, please visit http://www.redchip.com/disclosures.asp?src=rcv.




    Disclosure: We are Long
    Stocks: ALN
Back To RedChip's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.