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Energroup Holdings Corporation ('Chuming') Reports Second Quarter 2008 Financial Results
Wednesday September 3, 9:00 am ET
-- Second Quarter Total Revenues Increased 37.3 % to $ 43.1 Million
-- Q2 Net Income Increases 102% to $5.6 Million, with EPS of $0.27

DALIAN, China, Sept. 3 /Xinhua-PRNewswire-FirstCall/ -- Energroup Holdings Corporation (OTC Bulletin Board: ENHD - News), through its direct and indirect subsidiaries known as "Chuming," a premier processor and supplier of fresh and prepared pork products in Dalian, China, reported the Company's financial results for the second quarter ended June 30, 2008.

-- Supermarket and franchise stores drive sales 57.8% up for the first six
months versus prior year
-- Net income increased 70% to $9.9 million with EPS of $0.47 for the 6
months ended June 30, 2008

"Before discussing our financial results, we would like to address the reason for our requested extension for this quarter's report and subsequent late filing thereafter. As we continue to work through our S1 registration, it was necessary for us to adjust our internal reporting to more consistently categorize our sales by product category and sales channel. In doing so, we have spent considerable time ensuring our reporting remains consistent with both GAAP and SEC requests. We are confident this delay will not occur again in the future," stated Huashan Shi, Chairman and CEO of Chuming.

2008 Second Quarter Financial Results

Total revenues increased $11.7 million, or approximately 37.3% to $43.1 million for the three months ended June 30, 2008. Revenue increases in all product categories were driven by the organic growth in the company's product lines including; fresh pork, frozen pork and processed pork and seafood. Revenues were also buoyed by consumer consumption, particularly for meat products, as China's middle class continues to drive demand of high-quality, branded food products.

Revenues in the Company's supermarket and outlet stores showed the sharpest increase in sales and accounted for 79.4% of the $11.7 million increase in revenues. The top selling category of products in these channels is fresh pork which accounted for 69% of the sales increase and increased 44.4% year over year for the quarter ended June 30th 2008. Chuming's focus on the supermarket and branded store channel produced noteworthy gains in the number of supermarket and branded store locations the Company services. For the six months ended June 30th, the number of supermarkets selling Chuming's products increased 56% while branded franchise stores increased 36%, 140 and 682 stores respectively.

"We are extremely pleased with our second quarter and year to date results, where we experienced solid growth in both our core product segments and sales channels," Mr. Shi opened. "In particular, our profitability is not solely based on pork price increases, but also on the value attached to our brand name of high quality products. We anticipate continued robust demand, and as pork prices stabilize, we plan to eventually pass on all incremental increase in costs to the marketplace," Shi concluded.

Cost of goods sold was $36.6 million yielding gross profits of $6.5 million in the second quarter 2008. These profits represented an increase of $1.6 million or 33.3% from $4.9 million for the same period in 2007. The increase in gross profit was mostly due to a growth in sales volume. Gross profit margin was 15.03% compared with 15.49% for the same period in 2007, with the decrease resulting from an increase in the cost of raw materials, offset, in part, by an increase in the retail pricing for pork products. While costs of pork year over year increased 66.8% or $0.90 per kilogram during the second quarter, Chuming increased its sales prices to its customers by 18% thus buffering the consumer from a portion of the increase while still maintaining strong demand for its products.

Total operating expenses for the second quarter of 2008 decreased 30% to $1.4 million from $2.0 million for the same period in 2007. Operating expenses as a percentage of revenues were 3.28% compared with 6.22% for the same period 2007. The decrease in expenses was mainly due to a temporary reduction of advertising expense for the quarter. Subsequent advertising programs consistent with those in previous quarters are still planned for the remaining quarters in 2008. Balancing the decrease in advertising costs, general and administrative ("G&A") expenses increased $0.41 million for the quarter to $1.1million, which was mainly related to increased salaries to retain qualified talent for the Company.

Operating income and operating margins for the quarter were $5.1 million and 11.8%, versus $2.9 million and 9.3% in same period 2007. The 250-basis point improvement on operating margin resulted mainly from the increase in sales and prudent management of operating expenses.

Net income for the three months ended June 30, 2008 was $5.6 million, representing an increase of 101.7% from $2.8 million reported in the same period prior year and a 32.4% improvement quarter to quarter in 2008. Corresponding net profit margins were 13.0% for the second quarter representing a 415-basis point increase versus the same quarter 2007. The company incurred $0.07 million in taxes during the second quarter. Located in a favorable economic zone in the Liaoning province, Chumming pays 0% corporate taxes on its profits from fresh and frozen pork and 25% on profits from processed foods.

Based on 21.2 million shares outstanding, earnings were $0.27 per diluted share for the quarter ended June 30th, which represents a 35% increase in earnings per share compared to the first quarter of 2008.

Six Month Results

Revenue increased approximately $ 32.0 million or 58.7% to $86.6 million for the six months ended June 30, 2008 as compared to $54.6 million for the same period last year. Operating expenses for the six months ended June 30, 2008 were $3.7 million compared to $2.5 million for the same period in 2007 and represented 4.3% and 4.6% of revenues respectively. Operating income for the six months ended June 30, 2008 was $9.8 million, an increase of 50.0% compared to $6.5 million for the six months ended June 30, 2007. Operating margins were for the six month period was 11.3%. Net income is $9.9 million for the six months ended June 30, 2008, an increase of approximately $4.1 million or 70.1% compared to same period last year. Earnings per diluted share totaled $0.47 based on 21.2 million shares for the six month period.

Financial Condition

Cash and cash equivalents by the end of second quarter were $11.3 million as of June 30th, 2008. The Company had $6.4 million in long term debt and $23.8 million in total liabilities. Net cash from operations was $16.3 million. Accounts receivables were $19.1 million for the period ended June 30th, 2008. Shareholders' equity totaled $60.3 million, which represents an increase of 23.1% from the period ended December 31st, 2007.

"Though several companies have been affected by the recent changes in meat standards in China and as we already exceeded these standards, we believe the new regulations present an opportunity for us to benefit from industry consolidation and capture additional market share," said Mr. Shi. "We remain focused on building additional brand awareness across the different market segments we serve, while further increasing our distribution footprint and sales to our installed customer base. We are confident in our continued earnings for the balance of the year and meeting investors' goals this year and after," Shi concluded.

About Chuming

We are a Nevada corporation quoted on the OTC Bulletin Board, with our operations based in the Liaoning Province in Northeastern China. Chuming is a leading regional producer and distributor of fresh and prepared meat products in Northeastern China which has a population of approximately 108 million. We operate through our subsidiaries, including Dalian Chuming Slaughter and Packaging Pork Company, Ltd., Dalian Chuming Processed Foods Company, Ltd., and Dalian Chuming Sales Company, Ltd., whose primary focus is on the processing and preparation of pork, the most consumed meat in China. We are a contract supplier of premium pork products to more than 3,600 retail locations in China, including Wal-Mart, Metro, Carrefour, New-Mart, Hymall and its own network of 500+ Chuming-branded franchise stores. Our processing and distribution facilities maintain ISO 9001 Quality Management System standards and carry a Hazard Analysis and Critical Control Point (HACCP) certification. Chuming is the first processing company in China's meat industry to receive "Green Food" Certification from the Ministry of Agriculture, meeting strict environmental, food safety and quality standards from slaughter to shelf.

FORWARD LOOKING STATEMENTS

This press release contains forward-looking information and statements. Forward-looking statements are statements that are not historical facts, including targeted net income. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," or "anticipate" or the negative thereof or comparable terminology, and statements which may include discussions of strategy, and statements about industry trends future performance, operations and products of the entities referred to above. Our actual results may differ materially depending on a number of risk factors including, but not limited to, our ability to timely and accurately complete orders for our products, our dependence on a limited number of major customers, political and economic conditions within the PRC, our ability to expand and grow our distribution channels, general economic conditions which affect consumer demand for our products, the effect of terrorist acts, or the threat thereof, on consumer confidence and spending, acceptance in the marketplace of our new products and changes in consumer preferences, foreign currency exchange rate fluctuations, our ability to identify and successfully execute cost control initiatives, and other risks outlined above and in the "risk factors" described in our other public filings. All forward-looking statements are expressly qualified in their entirety by this Cautionary Statement and the risks factors detailed in our reports filed with the Securities and Exchange Commission. We undertake no duty to revise or update any forward-looking statements to reflect events or circumstances after the date of this release.

Energroup Holdings Corporation
Consolidated Balance Sheets
As of June 30, 2008 and December 31, 2007
(Stated in US Dollars)

June 30, 2008 December 31, 2007
ASSETS

Cash $ 11,270,730 $ 14,031,851
Restricted Cash 2,230,667 4,250,000
Accounts Receivable 19,120,753 622,433
Other Receivable 3,953,573 1,068,939
Related Party Receivable -- 3,964,357
Inventory 5,110,172 2,916,016
Purchase Deposit 795,418 267,807
Prepaid Expenses 141,767 46,401
Prepaid Taxes 199,893 --
Deferred Tax Asset 653,354 613,844
Total current assets 43,476,326 27,781,648

Property, Plant & Equipment,
net 25,934,159 24,836,496
Land Use Rights, net 13,539,743 12,855,980
Construction in Progress 1,016,693 927,866
Other Assets 92,928 32,619

TOTAL ASSETS $ 84,059,848 $ 66,434,609

LIABILITIES

Bank Loans & Notes 6,402,980 7,383,095
Accounts Payable 5,142,723 3,779,274
Related Party Payable 1,835,881 --
Accrued Liabilities 3,500,487 3,347,013
Taxes Payable 2,018,967 1,491,876
Other Payable 3,208,336 1,471,381
Customer Deposits 1,694,300 24,161
Total current liabilities 23,803,675 17,496,800

TOTAL LIABILITIES $ 23,803,675 $ 17,496,800

STOCKHOLDERS' EQUITY

Preferred Stock - $0.001
par value 10,000,000 shares
authorized; 0 shares issued
& outstanding at June 30,
2008 and December 31, 2007,
respectively -- --
Common Stock $0.001 par
value 21,739,130 shares
authorized; 21,136,392
shares issued &
outstanding at June 30,
2008 and December 31,
2007, respectively $ 21,136 $ 21,136
Additional Paid in Capital 15,440,043 15,440,043
Statutory Reserve 1,729,863 751,444
Retained Earnings 38,642,002 29,764,236

Accumulated Other
Comprehensive Income 4,423,129 2,960,951

60,256,173 48,937,810

TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 84,059,848 $ 66,434,610



Energroup Holdings Corporation
Consolidated Statements of Income
for the three and six months ended June 30, 2008 and 2007
(Stated in US Dollars)

3 months 3 months 6 months 6 months
ended ended ended ended
June 30, June 30, June 30, June 30,
2008 2007 2008 2007

Sales $43,076,524 $31,370,321 $86,583,622 $54,558,315
Cost of Sales 36,600,428 26,510,666 73,074,852 45,536,298
Gross Profit 6,476,097 4,859,655 13,508,771 9,022,017

Selling Expenses 759,778 1,570,001 2,585,055 1,799,420
General &
Administrative
Expenses 653,187 382,377 1,146,161 687,513

Operating Income 5,063,132 2,907,277 9,777,555 6,535,084

Other Income 358,850 4,276 383,119 7,004
Interest Income 631,707 -- 635,692 --
Other Expenses (72,085) (9,657) (100,735) (37,830)
Interest Expense (300,613) (117,663) (607,078) (710,641)

Earnings before Tax 5,680,991 2,784,233 10,088,553 5,793,617

Income Tax 66,023 -- 232,368 --

Net Income $5,614,968 $2,784,233 $9,856,185 $5,793,617

Earnings Per Share
Basic $0.33 $0.21 $0.57 $0.43
Diluted $0.27 $0.16 $0.47 $0.34

Weighted Average
Shares
Outstanding
Basic 17,272,756 13,409,120 17,272,756 13,409,120
Diluted 21,182,756 17,272,756 21,182,756 17,272,756



For more information, please contact:

Investor Relations Contact(s)
John Mattio & Feng Peng
HC International, Inc.
56 June Road
North Salem, NY 10560
Tel: [phone]
Email: [e-mail] / [e-mail]
Web: http://www.hcinternational.net