Zhongpin Inc. (HOGS) reported double-digit increases in revenue and earnings in the past quarter as estimates continue to rise.

Company Description

Zhongpin produces and processes pork, vegetables, and fruit products in China. The company had developed refrigeration systems that allow delivery to rural areas as well as Europe.

Increasing Revenue

On Aug 10 Zhongpin reported solid second-quarter results that included an 18% increase in revenue, to $1662 million. Net income also grew, this time 26% to $10.7 million, or 36 cents per share.

With adjustments the earnings per share were 34 cents, a penny lower than the Zacks Consensus Estimate. Despite the miss, estimates are rising.

Bullish Revisions

Over the past 3 months the Zacks Consensus Estimate for full-year 2009 is up 4 cents, to $1.58. Next year’s estimates are averaging $1.95, up a dime over that period.

Given these forecasts, analysts are expecting growth rates of 33.5% and 23.5%, respectively.

Trading at a Discount?

Shares of HOGS are trading at incredible valuations. The P/E is 11 times and is just 9 times the forward estimates. Zhongpin is dominating its industry when it comes to ROE and margins.

The top rated meat producer currently generates and ROE of nearly 20%, almost double the 11% its peers are averaging. Zhongpin’s net profit margin is 5.9%, 10 times the industry norm.

The Chart

Zhongpin’s shares are surging on increased volume as the next report date, Nov 9, approaches. The stock is hitting its all-time highs but has plenty of momentum. Take a look at the chart below.

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