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China s Zespri - kiwifruit horticultural tech play
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hopeful7703
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01-Jul-2022 10:07
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I just noticed that China Shenshan took part in Smart Karma Corporate Webinar on Tuesday. Did anyone join? https://www.linkedin.com/feed/update/urn:li:activity:6947785640834932736/?actorCompanyId=74280743 |
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hopeful7703
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13-May-2022 09:49
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https://www.theedgesingapore.com/news/corporate-moves/dukang-distillers-morphs-kiwifruit-producer-china-shenshan-orchardDukang Distillers morphs into kiwifruit producer China Shenshan OrchardWhen Dukang Distillers Holdings, the producer of baijiu or Chinese liquor languishing on the Singapore Exchange Watchlist, decided to exit the business, it looked at one involving the humble Kiwifruit as replacement. Despite its premium positioning among fruits, demand for kiwifruit has been growing over the years in China. Also known as Chinese gooseberry or monkey peach, the kiwifruit is high in vitamin C and dietary fibres and Chinese consumers have just been made aware of its health benefits, making them one of the largest consumers globally. In fact, China is now the largest market for the renowned New Zealand kiwifruit brand Zespri, with China contributing 30% of global sales. In 2021, Zespri achieved record-high sales in China of over 70 million boxes. David Zhao, executive director of China Shenshan Orchard, tells The Edge Singapore that the fresh fruit business is one with a &ldquo brighter future&rdquo and is more profitable as profit margins are at least 50%. And kiwifruits are hardy fruits with a longer shelf life compared to other fruits. &ldquo The kiwifruit can be stored in our cold rooms for up to six months while it can stay fresh for one month under room temperature. It also is quite easy to handle,&rdquo says Zhao. On the other hand, although China&rsquo s alcohol market enjoyed boisterous growth for years, a growing number of consumers have become more health-conscious and the sale of alcohol products has been declining globally. In its last 1HFY2020 ended December 2020, just before the restructuring, Dukang saw revenue fall 10.6% to RMB40.5 million from a year ago. It also suffered a loss of RMB33.4 million, although this was 6.6% smaller than a year ago. In its results announcement, Dukang attributed its lacklustre results to &ldquo a drastic change in consumers&rsquo consumption habits and spending patterns on discretionary consumer goods&rdquo as a result of the Covid-19 pandemic which also disrupted the sale of baijiu. In November 2018, Dukang disposed of its baijiu business and acquired Great Resolute in a transaction totalling RMB1.11 billion. Incorporated in the same year, Great Resolute is an investment holding company with a paid-up capital of US$100 and through a subsidiary owns the kiwi cultivation business Xingnong Agriculture. After Dukang&rsquo s baijiu business has been privatised, China Shenshan Orchard will operate the kiwifruit cultivation business in China through its 100%-owned subsidiary, Xingnong Company. Dukang will also change its name to China Shenshan Orchard. New business bearing fruit In its first 18-month period from July 1, 2020, to Dec 31, 2021, which represents China Shenshan Orchard&rsquo s FY2021 results, the company recorded earnings of RMB92.2 million ($19.14 million), reversing from a loss of RMB73.9 million in the same period a year ago. The company&rsquo s FY2021 has 18 months as it is changing the end of its financial year to Dec 31 from June 30 previously. Revenue for the period came in at RMB111.1 million from the sales of about 3.8 million kg of kiwifruits at an average selling price of RMB29.5 per kg to food and fruits distributors, corporate distributors and corporate customers in China. Consequently, the company registered an adjusted gross profit of RMB105.6 million and an adjusted gross profit margin of 95.0%. Raymond Ho, CFO of China Shenshan Orchard, says that one of the main goals of the company now is to exit the SGX Watchlist. &ldquo We have tackled a key obstacle, which is to be profitable and now we have to slowly focus on maintaining a good performance to enhance value and allow profits to grow. With that, I aim for the company to get its market capitalisation up to over $40 million by the end of this year.&rdquo Year to date, the company&rsquo s share price has gained more than a third to close at 38 cents on May 18, giving it a market value of $30.0 million. In its results announcement, Hu Chao, executive director and CEO of China Shenshan Orchard, says, &ldquo The kiwifruit industry in China is experiencing rapid growth and demonstrating bright prospects which are fuelled by rising disposable income as well as burgeoning domestic consumer demand for premium-quality kiwifruits. Thus, the company will continue to focus on strengthening its presence in China&rsquo s domestic market and expanding its market share in the premium kiwifruit market segment.&rdquo The company intends to continue investing in its research and development to cultivate premium-grade varieties while modernising and digitalising its agriculture infrastructure and core processes as part of its ongoing innovative efforts and initiatives to expand its market share in China&rsquo s kiwifruit industry. Additionally, the company will also invest in its branding and marketing development to unlock greater demand for its products. Currently, China Shenshan Orchard holds 83 trademarks and 56 patents for grafting and harvesting methods and devices such as fertilisation mechanism and windproof device for kiwifruit planting, artificial pollination device, cutting device for grafting branches of fruit trees and more. With its technology and patented methods, the company has developed over 60 kiwifruit varieties and has been granted six premium kiwifruit variety rights. However, Ho explains that due to the nature of the company&rsquo s business, revenue recognition will be rather lumpy for the company. &ldquo You have to understand the nature of our business and for those like us in the agriculture industry, it is common for cash flow to not come in every day,&rdquo he explains. The company will only recognise revenue once the fruits have been harvested. And in this case, Zhao elaborates that the kiwifruit harvesting season in China typically starts sometime in September and goes on for several months, depending on the weather. Sale channels and plantations China Shenshan Orchards&rsquo kiwifruits are sold through three primary channels &mdash distributorship, wholesale and e-commerce platforms. Although wholesaling commands the lion&rsquo s share of the sales channel, the company is currently looking at expanding its e-commerce sales channel, says Zhao. &ldquo Although the percentage of our sales via e-commerce is merely 5%, we think it has a lot of potential for future growth,&rdquo he adds. Currently, the company sells their kiwifruits on major e-commerce platforms such as Tmall, Taobao and JD.com. Despite the direct selling model, Zhao clarifies that the profit margin from e-commerce is similar to its other sales channels as it is offset by advertisements and promotional expenses on the respective e-commerce platforms. The marketing spend, according to Zhao, is necessary so that the brand of the company can stand out from the competition. In FY2021, China Shenshan Orchard&rsquo s selling and distribution expenses stood at RMB4.6 million, mainly for advertising and promotional expenses as well as sales and marketing activities. One of its primary focuses is to build the brand and enhance its marketing efforts &mdash both offline and online &mdash to become a household name, says Zhao. In addition, the company is also looking to boost its production level. This is done via a two-pronged strategy of jointly developing farmlands with landowners as well as engaging smallholder farmers to provide contract farming services. For instance, its wholly-owned subsidiary Chibi Shenshan Xingnong Agriculture Technology entered into a 30-year agreement with Chibi Green Industry Development Investment on July 5, 2021, to jointly develop a land area spanning up to 333ha land in Chibi City for kiwifruit planting and cultivation. Chibi Green will provide RMB150 million investment while Chibi Shenshan is responsible to develop and operate the plantation. Next year, China Shenshan Orchard is looking to further expand its engagement with smallholder farmers as it could rapidly increase the company&rsquo s production volume. &ldquo In China, we can supply our technologies and teach our management skills to so many smallholder farmers. We also acquire the qualified fruits they harvest at a greater price compared to the variety they grow by themselves. Hence, the farmers are able to see the benefits of cooperating with us,&rdquo says Zhao. Currently, the company holds the forest use rights for eight orchards, spanning a total land area of some 653ha. Due to its focus on increasing its kiwifruit production and promotional efforts, the company will not expand its products to include other fruits or look to introduce downstream products such as processed fruit products shortly. &ldquo China&rsquo s kiwifruit business is growing very fast and big &mdash our production volume is only a tiny part of it. There is a lot more room for our business to grow. We will consider exporting our kiwifruits outside of China depending on the outcome of our production expansion efforts,&rdquo says Zhao. Looking ahead, Zhao also intends to leverage the company&rsquo s more than 10 years of expertise and technical knowledge in the kiwifruit cultivation business and offer consulting services to other farmers soon. Perhaps, this could bring in additional revenue to offset its lumpy revenue recognition. |
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hopeful7703
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09-May-2022 14:13
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Brokers' take: SAC Capital initiates ' buy' on undervalued kiwifruit producer Shenshan SAC Capital initiated coverage with a &ldquo buy&rdquo call and target price of S$0.70. The target price implies a potential upside of 84.2 per cent from the kiwifruit producer&rsquo s Friday closing price of S$0.38. Shares of watch-listed Shenshan were up 11.8 per cent or S$0.04 at the time. The target price is also 5.1 times SAC Capital&rsquo s FY2022 earnings estimates, after accounting for Shenshan&rsquo s nascent brands, shorter operating history and trading track record compared to competitors. Its earnings estimate only factored in organic growth from Shenshan&rsquo s own plantations over the next 2 years. The research team noted that the stock is &ldquo undervalued&rdquo and expects volume harvested to increase by 10 per cent annually as more plants mature. The average selling price is projected to be between 30 and 35 yuan per kg. The research team projects an enterprise value to earnings before interest, taxes, depreciation and amortisation (EV/Ebitda) ratio of 2.6 times for Shenshan, compared to competitor Seeka. Seeka, the largest kiwifruit producer in Australia and New Zealand, is currently trading at a forward price-to-earnings ratio of 12.3 times and an EV/Ebitda ratio of 6.4 times. https://www.businesstimes.com.sg/companies-markets/brokers-take-sac-capital-initiates-buy-on-undervalued-kiwifruit-producer-shenshan |
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hopeful7703
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27-Apr-2022 09:41
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10 in 10 &ndash China Shenshan Orchard (SGX Code: BKV)10 Questions in 10 Minutes with SGX-listed companieshttps://api2.sgx.com/sites/default/files/market-dialogues/migration/10%20in%2010%20with%20China%20Shenshan%20Orchard%20-%20China%27s%20Leading%20Kiwi%20Producer%20%2819Apr2022%29.pdf |
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hopeful7703
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04-Apr-2022 12:19
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A Chinese kiwifruit producer Established in 2009 Shenshan cultivates and sells kiwifruits in China. Its output accounts for 0.1% of China&rsquo s total kiwifruit production of ~3m tonnes in 2019. It develops varieties in house and owns 6 premium kiwifruit variety rights, holding 83 trademarks and 56 patents. Shenshan (previously Dukang Distillers Holdings Ltd) was listed in July 2021 when baijiu operations were sold back to major shareholder Wang Peng, in return for the kiwifruit operations at a valuation of RMB 1.1 bn. No cash or shares were issued. A new management team came on board. About 40 of planted areas are mature acreage. Shenshan operates 9 plantations in Chibi City, Hubei Province, the PRC, with total planted area of 241 hectares. Of these, about 40 are mature acreage (between 5 to 10 years). The remainder are immature plants of below 4 years. Harvesting of kiwifruits begins after 4 years of cultivation, and harvest takes place every Sep/Oct. It produced 3769 tonnes in FY21 at a yield of 40.3 tonnes /mature hectare. The products are sold in China via wholesalers, distributors and e commerce retailers. About 34.6% of total 696 hectares have been planted. The land use rights expire in 2058 and 2059. This includes a 42-hectare plot of land which it does not yet have valid rights of use, which accounts for 6 of total acreage and 11-13% of production volume. Shenshan also holds the rights to 65,000 sqm of industrial land which houses the office and packing facilities. To raise production output, Shenshan jointly develops farmland with land owners, or engages farmers to provide contract farming. For instance, it have a non-binding 30 year MOU with Chibi Green Industry Development Investment Co., Ltd to develop a 333 hectare land Chibi Green will provide RMB 150m investment while Shenshan will develop and operate the plantation. Earnings are seasonal. Bulk of sales take place in late 3Q/early 4Q. Gross margin have risen steadily to 13.3% from economies of scale with growing mature acreage. Excluding non recurring gain on bargain purchase (RMB 10.5m) and profit from discontinued operations (RMB 34.8m), the share trades at FY21 adjusted PE of 3.8 x and EV/EBITDA of 0.7 x Seeka Ltd, the largest kiwifruit producer in Australia and New Zealand with a 26% market share, trades at 13.6x and 5.3x respectively. Both companies generated similar ROIC of 3-4%, though Shenshan&rsquo s sales were only 8% that of Seeka&rsquo s. Dukang was placed on SGX watchlist on 4 Dec 2019 Shenshan&rsquo s listing status will be in doubt by 4 Dec 2022 if its market cap does not hold above S$40m on average for a 6 month period, unless SGX grants an extension. https://mcusercontent.com/56cb56539640b976a7f3cb295/files/6220a60c-5d8a-85a9-048f-078c163a79c9/Shenshan_non_rated_Apr_2022_final.pdf |
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dloh1368
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11-Mar-2022 11:31
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Director and CEO bought over 10 mil shares at S$0.35! Should set a base at that level... | ||
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LowLow12
Elite |
07-Mar-2022 16:50
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Scripts in strong hands
Quite determined to push up Looking good but hopefully the pushers have enough accounts to prevent another catastrophe of trade with caution yet again Otherwise, it?s looking good the share price |
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hopeful7703
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07-Mar-2022 09:21
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https://nextinsight.net/story-archive-mainmenu-60/945-2022/14623-china-shenshan-orchard-china-s-largest-kiwifruit-producer-reports-profits
The kiwifruit industry in China is rapidly growing, is fueled by rising disposable income as well as burgeoning domestic consumer demand for premium-quality kiwifruits. Already, China accounts for 72% of the world&rsquo s total kiwifruit planting area. Its production volume equates to 55% of the world&rsquo s total kiwifruit production1. (1 China Kiwifruit Industry Development Report (2020)) After more than 10 years&rsquo experience in kiwifruit planting and cultivation in China, China Shenshan Orchard says it is more than just an ordinary producer:
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LowLow12
Elite |
04-Mar-2022 18:14
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From what I have been seeing
Only one or two big buyers have been scooping the shares just before and after results then it keep quiet then now scooped again End of day if keep scooping up ownself but can?t realise paper gains also not much use as retail participation is small or negligible here
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Frasers
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04-Mar-2022 17:00
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The Taiwan sellers overhang has cleared. Can start to make its way up to complete the recovery story from the restructuring done last year. | ||
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zhjyylbw
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01-Mar-2022 14:01
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Need come and sell kiwi here, otherwise no movement | ||
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dloh1368
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28-Feb-2022 21:23
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If one strips out the baijiu business and the one-off gain, the kiwi business generated rmb57 mil profit, equivalent to sgd 12 mil. with a market cap of sgd20 mil, p/e is only 1.7x...cheap cheap.
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hopeful7703
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28-Feb-2022 19:32
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https://links.sgx.com/FileOpen/China%20Shenshan_FY2021_PR_20220225_EN%20FINAL.ashx?App=Announcement& FileID=705298 China Shenshan Orchard achieves turnaround with RMB70.1 million and RMB57.4 million profit after income tax from kiwifruit business for 6M2021 and FP2021, respectively &bull Registered revenue of RMB111.2 million with adjusted gross profit1 of RMB105.6 million and adjusted gross profit margin of 95.0% for 6M2021 and FP2021 &bull China being the world&rsquo s largest kiwifruit producer2, domestic kiwifruit industry is rapidly growing and demonstrating bright prospects fueled by rising disposable income and burgeoning consumer demand &bull Aims to become China&rsquo s Zespri by commercialising its kiwifruit varieties and its expertise in kiwifruit planting to third-party kiwifruit growers Mr. Hu Chao, Executive Director and Chief Executive Officer of China Shenshan Orchard said, &ldquo 2021 was a remarkable year for us as we have completed our restructuring and successfully transformed into a horticultural marketing company and the first pure-play kiwifruit producer to be listed on the Mainboard of the SGX-ST. The kiwifruit industry in China is experiencing rapid growth and demonstrating bright prospects which is fueled by rising disposable income as well as burgeoning domestic consumer demand for premium-quality kiwifruits. Thus, the Group will continue to focus on strengthening its presence in China&rsquo s domestic market and expanding its market share in the premium kiwifruit market segment. The Group will continue to invest in research and development to cultivate premium grade varieties, modernise and digitalise the Group&rsquo s agriculture infrastructure and core processes as part of the Group&rsquo s ongoing innovative efforts and initiatives to expand its market share in China&rsquo s kiwifruit industry. Last but not least, the Group will continue to invest in branding and marketing development to unlock greater demand for its products while catering to the consumer&rsquo s tastes and nutritional needs.&rdquo Kiwifruit industry in China offers huge growth potential as the market has expanded from RMB17.8 billion in 2013 to RMB25.6 billion in 2018, representing a CAGR of 6.2% during the period. In addition, China&rsquo s kiwifruit planting area and production volume reached 4.4 million mu and 3.0 million tonnes respectively in 2019, being the world&rsquo s largest kiwifruit producer with planting area accounts for 72% of the world&rsquo s total kiwifruit planting area and production volume accounts for 55% of the world&rsquo s total kiwifruit production. On the demand side, China&rsquo s kiwifruit apparent consumption has grown by 27.3% from 2.09 million tonnes in 2014 to 2.66 tonnes in 2018. China is also a major importer of kiwifruit, ranking second globally in 2020. This demonstrated that premium kiwifruits are highly demanded by consumers in China owing to their superior flavor and texture. |
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dloh1368
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15-Feb-2022 10:16
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Anyone taking a look at this counter? If the kiwifruit business can deliver ~S$10 million profit for FY2021 as shown in prior years, then the P/E is only 2x... |
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jcjc18
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21-Jan-2022 15:17
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Looks like the Taiwanese has completed the dumping of the TDR shares at 0.26.... Overhang going to be over soon. |
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winter3947
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21-Jan-2022 09:27
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China Shenshan Orchard, the Henan-based group that closed its distillery business last year to concentrate its efforts solely on kiwifruit production, says it expects to post a net profit for the year to 30 June 2021. &ldquo The board wishes to announce that the group is expected to record a net profit for FP2021,&rdquo it said, &ldquo comprising the Group&rsquo s baijiu business [Dukang Distillers] prior to the completion and the group&rsquo s kiwifruit business after the completion.&rdquo http://www.fruitnet.com/asiafruit/article/187297/chinese-kiwifruit-group-announces-net-profit |
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dloh1368
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20-Jan-2022 11:55
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Company issued profit guidance: https://links.sgx.com/FileOpen/CSS%20-%20Profit%20Guidance%20FY2021.ashx?App=Announcement& FileID=698086 The net profit for FP2021, as compared to the previous corresponding financial year ended 30 June 2020 (i.e. the period from 1 July 2019 to 30 June 2020), is mainly due to: (a) a non-recurring gain from bargain purchase arising from the acquisition of Great Resolute (b) a non-recurring gain from the disposal of Sea Will and (c) the operating profit recorded from the Kiwifruit Business after the Completion. according to the circular, kiwi fruit business has been making ~S$10 million, looks like a good bet |
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winter3947
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18-Jan-2022 11:40
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China Shenshan Orchard Holdings (China Shenshan) has established a specialised R& D centre focusing wholly on kiwifruit innovation and the modernisation of the sector, in accordance with the local government' s 2035 vision for agri-food development. China is the world' s largest consuming nation of kiwifruits, eating an estimated 2.2 million tonnes or 52% of the total global volume consumed an outnumbering closest competitor Italy by some seven times. https://www.foodnavigator-asia.com/Article/2022/01/17/Kiwifruit-modernisation-Chinese-firm-establishes-R-D-centre-to-develop-sector-alongside-government-s-2035-vision |
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winter3947
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25-Nov-2021 09:26
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China Shenshan Orchard sets up Research and Development Centre to develop new kiwifruit varieties and planting techniques with the adoption of technology &bull Seek for innovative ways to develop new kiwifruit varieties and improve planting and cultivation technique, making kiwifruits production more sustainable and environmentally friendly &bull Potential additional revenue stream from any future commercialised new kiwifruit varieties commercial use of patents as well as management and operation over third-party kiwifruit planting &bull Part of the Group&rsquo s ongoing innovative efforts to broaden its expansion into the kiwifruit industry and strive to become a leading agricultural biotechnology company Mr. Hu Chao, Executive Director and Chief Executive Officer of China Shenshan Orchard said, &ldquo Innovation has always been part of our culture as we firmly believe that constant innovation and openness to technology are one of the key engines of success. Thus, incorporating Hubei Shenshan Orchard and setting it up as an R& D Centre does not only serve as a part of our ongoing innovative efforts and initiatives to broaden our expansion into the kiwifruit industry and enhance our profitability but also demonstrate our commitment to contribute to the development and growth of kiwifruit industry in China. Moving ahead, we will continue to improve our kiwifruit varieties and develop new promising varieties, catering to the evolving consumers&rsquo preferences and demands. We will also work relentlessly towards the goal of establishing ourselves as a leading agricultural biotechnology company.&rdquo https://links.sgx.com/FileOpen/Annc_PR_20211124.ashx?App=Announcement& FileID=691939 |
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hopeful7703
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28-Sep-2021 13:55
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https://www.foodnavigator-asia.com/Article/2021/09/27/Global-kiwifruit-king-Demand-in-China-rising-rapidly-due-to-premiumisation-and-health-trendsGlobal kiwifruit king: Demand in China rising rapidly due to premiumisation and health trends |
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