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Deyu Agriculture (DEYU) Posts Solid Increases in Q2 Financial Performance

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Deyu Agriculture Corp., a vertically integrated producer, processor, marketer and distributor of organic and other agricultural products made from corn and grains operating in the Shanxi Province of the People’s Republic of China, yesterday reported its financial results for the second quarter ended June 30, 2011.

The company reported a 182 percent increase in revenue for the second quarter of 2011 to $52.0 million compared to $18.5 million reported in the comparable quarter of 2010.

Gross profit for the second quarter of 2011 improved 88 percent to $8.9 million compared to $.4.7 million in the second quarter of 2010. Deyu’s gross profit margin decreased 8.6 percent to 17.1 percent for the second quarter of 2011 compared to 25.7 percent reported in the comparable quarter of 2010.

Deyu’s net income increased 8 percent in the second quarter of 2011 to $3.1 million compared to $2.9 million in the second quarter of 2010.

Jianming Hao, Deyu’s CEO and chairman, said the company is pleased with its second quarter 2011 results, and noted that the company’s corn division more than doubled its sales, while its simple processed grains division improved revenues by more than 500 percent. The company has focused on promoting its brand names and products on a regional scale to drive sales, an initiative Hao says the company will continue throughout 2010.

“We are glad to see this strategy continue to work well for us this past quarter while we continued to utilize our regional strengths and environmental resources in Shanxi Province, our extensive production capacity, our established network of farmer agents, our steady supply of quality crops from excellent farmland, our bank loans and our efficient distribution network to gain further leverage in China’s agriculture sector,” Hao stated in the press release. “As we head toward 2012, we are confident that we can maintain our progress while we strive to provide our expanding customer base with what we believe to be delicious, healthy grain products.”

The company is utilizing all its distribution channels and networks, including its B2B and B2C ecommerce platforms, to drive brand recognition for further growth.

“We believe that enacting these strategies will further ease the requests from retail stores and many of our wholesalers. Our continuous growth relies on our ability to meet the rising demand for our current products and expanded product lines and as we head into 2012, we believe we have sound strategies in place to help us sustain our progress,” Hao stated.

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