BEIJING, March 24, 2011 /PRNewswire-Asia-FirstCall/ --
Yongye International, Inc. (NASDAQ: YONG), a leading agricultural
nutrient company in China
("Yongye" or the "Company"), today responded to a recent post on
the Seeking Alpha website. Although the author of the Seeking Alpha
post (the "Author") claims to have no position in Yongye's stock,
his attacks on the Company are typical of commentators who either
have a short position or are working with those who do. Thus, he
relies on innuendo and loaded questions rather than any factual
basis for his false and defamatory attacks. At the very least, the
Author drew conclusions based on an inadequate knowledge and
misunderstanding of the Company. Because we do not want his
misunderstandings to confuse our investors and others who follow
the Company, we provide the following factual clarifications of the
matters raised, and confused, by the Author.
Sales in Hebei
Province
The Author says that his experience tells him that the Company's
sales figures must be false because sales from Hebei province for a particular quarter
fluctuated over the last few years. Our sales figures are, in fact,
accurate. The fluctuations that we experienced resulted from
variable buying habits exhibited by our previous distributor in
that province (whose customer list and related customer
relationship we recently acquired). Our distributors' buying habits
are their business. The bottom line is that we enjoyed strong sales
in Hebei during the past several
years and, other than his guess work, the Author has no basis to
say otherwise.
Sales Force
Once again making allegation by innuendo, the Author suggests
that our sales figures must be lies because our sales force is not
large enough to support our sales figures. The allegation bespeaks
a misunderstanding of the Company and its business. The primary job
of the Company's sales force is managing 25 provincial level and
Hebei sub-provincial level
distributors and helping them with training over 700 county level
distributors who manage relationships with over 24,000
independently-owned, Yongye-branded retail stores. Yongye branded
stores were existing agriculture stores in local villages. As such,
no stores needed to be "opened." These are existing stores
recruited to join the Company's distribution network. In addition
to selling Yongye's products, these stores also carry other
agriculture products such as seeds, pesticides, and fertilizers.
The store recruiting work is primarily driven by thousands of staff
from the Company's various levels of distributors.
Manufacturing Personnel
The Author says that we must be lying about our production
because we claim to have increased production at a time when we
decreased the number of manufacturing personnel. Once again, the
Author has only innuendo and no facts to support his defamatory
charges. Yongye's manufacturing is not labor intensive. In
addition, we rely increasingly on contract workers, which gives us
economic flexibility and allows us to manage labor costs. We think
that is a good thing.
Names of Distributors
Employing one of the favorite tactics of the short sellers, or
those who conspire with them, the Author notes that we do not name
our distributors and then suggests that the fact that we seem to be
hiding something evidences our bad faith and "might" indicate that
there is "a chance" that our distributors are related parties. Our
decision not to publicize those names is for competitive reasons,
and there is nothing wrong with it. We provide those names to our
auditors to be used for their audit procedures on the financial
statements. Once again, the facts, not the Author's clever
innuendo, are important.
Previous Hebei Distributor
The Author says that as a result of a transaction with our
largest distributor then, that distributor came to own more than 5%
of our stock and should have, but did not, make the proper SEC
filing, implying that the distributor was owned by a related party.
Our Hebei distributor was not
owned by a related party. Also, it is the responsibility of the
greater-than-5% owner to make the filing. The Company discloses all
of its distributors to its auditors, on a quarterly basis as part
of the Company's audit and review procedures. This is a basic audit
area covered by our auditors, who has signed off the financial
statements. All related party transactions are properly disclosed
in the Company's SEC filings and there was no significant related
party transaction in 2010.
The Yongye Group
Finally, the Author presents, in very confusing fashion, the
various companies in the Yongye Group and suggests from the
existence of multiple companies that there must be some sort of
conflict of interest. The fact is that the Mr. Zishen Wu, the
Company's Chairman and Chief Executive Officer owns other
companies. That is not a secret. The website "www.china-yongye.com"
is the website of Yongye Group, listing all the businesses and
management teams of all the Yongye Group businesses. Yongye
International's business is focused on Shengmingsu products and has
no conflict with the other businesses under the Yongye Group name.
Yongye International has a separate management team. Mr. Wu spends
almost 100% of his time on Yongye International.
We hope that these facts will address any fears or concerns that
are raised by the Seeking Alpha Author's innuendo and loaded
questions. We encourage anyone who has real questions about our
businessto contact us.
About Yongye International
Yongye International is a leading agricultural nutrient company
headquartered in Beijing, with its
production facilities located in Hohhot, Inner Mongolia,
China. Yongye produces and markets
two lines of organic nutrient products: a liquid nutrient product
which is sprayed on plants and a powder nutrient product which is
added to animal feed. Both products are sold under the brand name
"Shengmingsu," which means "life essential" in Chinese. The
Company's patented technologies and formulas allow it to create
products that increase crop yields and improve the health of
livestock. The Company sells its products primarily to provincial
or regional level distributors, who then channel those products to
a carefully selected network of over 24,000 independently owned,
Yongye branded stores or directly to rural farmers and government
farms in China. For more
information, please visit the Company's website at
http://www.yongyeintl.com.
Safe Harbor Statement
This press release contains certain statements that may
include "forward-looking statements."
All statements other than statements of historical fact included
herein are "forward-looking statements."
These forward-looking statements are often identified by the use
of forward-looking terminology such as
"believes," "expects"
or similar expressions, involving known and unknown risks and
uncertainties. Although the Company believes that the expectations
reflected in these forward-looking statements are reasonable, they
do involve assumptions, risks and uncertainties, and these
expectations may prove to be incorrect. You should not place undue
reliance on these forward-looking statements, which speak only as
of the date of this press release. The Company's
actual results could differ materially from those anticipated in
these forward-looking statements as a result of a variety of
factors, including the risk factors discussed in the
Company's periodic reports that are filed with the
Securities and Exchange Commission and available on the
SEC's website (http://www.sec.gov). All
forward-looking statements attributable to the Company or persons
acting on its behalf are expressly qualified in their entirety by
these risk factors. Other than as required under the securities
laws, the Company does not assume a duty to update these
forward-looking statements.
Contact:
Yongye International
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CCG Investor
Relations
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Ms. Kelly Wang
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Mr. Athan Dounis
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Finance Director – Capital
Markets
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Phone:
+1-646-213-1916
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Phone:
+86-10-8231-9608
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Email:
athan.dounis@ccgir.com
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E-mail:
ir@yongyeintl.com
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Ms. Wendy Xuan – Business
Associate
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Phone: +86-10-8232-8866 x
8827
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E-mail:
ir@yongyeintl.com
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SOURCE Yongye International, Inc.