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Stock picks: Strong quarter for Zhongpin

Zhongpin Inc., symbol HOGS on Nasdaq, is a China-based company that processes meat and other foods.

Zhongpin specializes in pork and pork products, as well as fruit and vegetables. It sells 358 meat products, including chilled pork, frozen pork and prepared meats, as well as 34 fruit and vegetable products. Zhongpin focuses on prepared meat, with its higher profit margins, rather than bulk pork.

In the three months ended March 31, 2011, the stock pick’s revenue jumped 39.9%, to $285.8 million from $204.3 million a year earlier. Earnings rose 27.1%, to $16.9 million from $13.3 million. Earnings per share rose 23.7%, to $0.47 from $0.38, on more shares outstanding. That beat the consensus earnings forecast of $0.45.

In January 2010, Zhongpin opened its pork-processing plant in the city of Tanjin. It will soon open the second phase of this plant.

The company plans to continue to build its brand through advertising. Because a competitor recently had contamination problems, Zhongin’s ads emphasize food safety, for which it believes consumers will be willing to pay higher prices.

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