ALN’s third quarter result was marked by strong growth in its chestnut segment, its largest segment, followed by the convenience food segment, which the Company aims to expand. Net income of $4.8 million for the quarter was 6.6% higher than our estimate and EPS of $0.18 beat estimates by $0.04. A dominant position in the fast-growing Chinese market, a strong management team committed to growth, product expansion and innovation underpin our positive view on ALN. Structural distribution channel enhancements and the execution of the planned nationwide marketing campaign will help ALN register strong growth in FY10. Additionally, we believe that ALN has strong potential to expand its exports, particularly to the United States. Not only does ALN trade at a discount to its peers on a historical P/E basis, the stock trades at nearly half the forward P/E of the selected peer group. We reiterate our Buy rating on ALN shares and are raising our 12-month target price to $5.25.
Click Here For Full Report

Presentation from the RedChip
Shanghai China 2009 Conference

Shanghai China 2009 Conference Presentation - CEO and Chairman Si Chen

American Lorain Corporation (ALN) is an integrated food manufacturing company. The Company develops, manufactures, and sells chestnut products, convenience foods, and frozen, canned and bulk food (FCB food). The Company produces approximately 45 varieties of chestnut products. ALN’s convenience food product includes Ready-to-cook (RTC), Ready-to eat (RTE), and Meals ready-to-eat (MRE) food products including fish, meats and jams. The Company also produces various FCB food including frozen vegetables and fruits.

• ALN is the largest producer and distributor of chestnuts in China.
• The processed food industry in China is growing at 8% annually.
• China consumes more chestnuts than any other country.
• ALN produced 234 products in 2008, including 52 new products in the convenience foods segment.
• ALN operates five facilities, which include deep-freezing lines, canning lines, and convenience food lines.
• Currently, the stock trades at less than a 5x P/E, in a peer group that trades at a 10-12x P/E multiple.
• The projected value of the stock is approximately $7 - $8, representing a current upside of 150%.

• Net revenue increased 5.3% year-over-year to $38.7 million in 3Q09 from $36.7 million in 3Q08
• Gross profit increased 17.9% year-over-year to $9.1 million in 3Q09 from $7.7 million in 3Q08
• The Company reported $33.2 million in working capital as of September 30, 2009.
• ALN entered into a strategic agreement with Beijing K.P.I Hi-24 Convenience Stores Co., Ltd., for the development of MRE products. Revenue from this agreement could reach $1.5 million.
• In September ALN entered into cooperation agreements with two restaurant chains, KUNGFU Catering Management Co., Ltd and CSC Catering Management Co., Ltd. ALN will distribute its convenience food products to these companies. The agreements are estimated to be worth approximately $2.1M and $8.8M, respectively.
• On October 28, 2009, ALN completed a Securities Purchase Agreement, where ALN issued 5,011,169 shares of common stock, 1,753,909 series A warrants, and 501,115 series B warrants. The aggregate purchase price was $12 million, with common stock being sold at $2.40 per share and series A and series B warrants having strike prices at $3.70 per share. ALN intends to use the funds for a national campaign to market its brand and more specifically its convenience food products.