EQUITY

RESEARCH
REPORT

SkyPeople Fruit Juice, Inc. February 01, 2010

DJIA: 10,185.53
S&P 500: 1,089.18
AMEX : SPU NASDAQ Comp: 2,171.20
Russell 2000: 609.25

Randy D. Lewis, CFA, MBA – Analyst

818.783.5006 / rlewis@equitynet.net

Recommendation: BUY
12 Mo. Price Target: $13.29
COMPANY AND MARKET DATA
Stock Price: $5.38 Market Cap.: $96.59 M 2–mo. Avg. Vol. (est.) 106,000
52 Week Price Range: $2.84 - 7.36 Shares Outstanding: 17.95 M Current Ratio 2.12
Industry/Sector: Food & Beverage Float (est): 4.75 M P/S TTM 2.40

BASIS FOR RECOMMENDATION

• We are initiating a BUY rating for SkyPeople

Fruit Juice, Inc. (AMEX: SPU). The
Company's modern processing and
manufacturing facilities feature cutting edge
equipment used to produce a diverse array of
fruit juice and fruit products including kiwi,
pear, mulberry and apple juices, as well as
fast frozen and freeze dried fruits and
vegetables.

• Huge Market: According to Beijing Business

& Intelligence Consulting Co. Ltd. total sales
value and net income of fruit processed
products in China will reach $37.2 billion and $2.5 billion in 2010, respectively - CAGRs of 43% and 67%,
during the four-year period from 2007 to 2010 – phenomenal growth rates in the throes of a global
downturn.

• Strong competitive advantages: With a focus on food processing technology and R&D, product
diversification and enhancement, “hub and spoke” geography, superior quality and advantageous
distribution methods, SkyPeople is clearly pursuing a solid business model for expansion.

• Solid Year-over-Year Growth: The Company has shown strong revenue and earnings growth in the last
three years, growing revenue and earnings from $29.4MM and $7.6MM, respectively in 2007 to giving
guidance recently for fiscal 2009 of approximately $59MM and $15.2MM – roughly doubling both during that
timeframe.

• Government Subsidies: SkyPeople has been recognized as a High and New Technology Enterprise in
Shaanxi Province for the past three years. Through the first nine months of 2009, the Company booked
provincial government subsidies of over $1.5MM, further funding its processing R&D efforts.

©2010 EquityNet Research

 SkyPeople Fruit Juice, Inc.
NYSE AMEX : SPU

BUSINESS / PRODUCT OVERVIEW

SkyPeople Fruit Juice, Inc., a Florida corporation, was

established in 2001 in central China's Shaanxi province,
conveniently located in one of China's primary fruit-
growing regions. The area is particularly well known for
kiwifruit, and SkyPeople is home to the largest kiwifruit
plantation in Asia. The Company's modern processing Apple
production
and manufacturing facilities feature cutting edge
equipment used to produce a diverse array of fruit juice
and fruit products including kiwi, pear, mulberry and
apple juices, as well as fast frozen and freeze dried
fruits and vegetables. SkyPeople's distribution network,
already one of the largest in China, is rapidly expanding
and now includes the U.S., Japan, the European Union,
the Middle East, Russia, Israel and South Korea. In
June 2009, the Company formed Harmony MN Inc.
(“HMN”) to be a wholly-owned sales subsidiary of the
Company with offices in California.

Product Lines
Corporate Structure
SkyPeople’s product lines can be divided (ownership %, Domicile)
into four major categories:

a) fruit juice concentrates, including apple,

kiwi and pear juices;
(FL)

b) branded juice beverages, under the

brand name, Hedetang®, including bottled PacificIndustry
Pacific IndustryHolding
Holding HarmonyMN,
Harmony MN,Inc.
Inc.
kiwifruit and mulberry juices and ciders. GroupCo.,
Group Co.,Ltd.
Ltd.
(100%, DE)
(100%)
c) fruit and vegetable byproducts,
including dried and dehydrated fruits and
ShaanxiTianren
Shaanxi TianrenOrganic
Organic
vegetables, apple aroma and kiwi seeds.. FoodCo.,
Co.,Ltd.
Ltd.
Food
(99%, PRC)
d) fresh fruits and vegetables, including
fresh kiwi fruit.
ShaanxiQjyiwangguo
Qjyiwangguo HuludaoWonder
Wonder YingkouTrusty
Trusty
SkyPeople distributes its concentrated fruit Shaanxi
ModernOrganic
Organic
Huludao
FruitCo.,
Co.,Ltd.
Ltd.
Yingkou
FruitsCo.,
Co.,Ltd.
Ltd.
Modern Fruit Fruits
juice products to a growing list of leading AgricultureCo.,
Agriculture Co.,Ltd.
Ltd.
(100%, PRC) (100%, PRC)
domestic and international fruit juice drink (91.15%, PRC)
processors, such as Huiyuan, LOTTE, and
Mengniu. In order to take advantage of
economies of scale and to enhance production efficiency, each of SkyPeople's manufacturing facilities has a
focus on juice products centering around one particular fruit based on the proximity to that fruit’s supply. All of its
concentrated juice products are manufactured through similar production lines with slight variations in
processing methods.

Company Strategy Brief

Supply Chain Control. The move from just concentrates to branded fruit juices gives the Company more
control over the supply chain. SkyPeople’s goal is to increase sales of its higher-margin Hedetang® branded
fruit juice beverages from approximately 12% in 2008 to 50% of sales in the next three years.

2 ©2010 EquityNet Research

 SkyPeople Fruit Juice, Inc.
NYSE AMEX : SPU
New Product Development / R&D. The Company has a highly focused development team that is in the
process of developing new products and expanding and diversifying the product line(s). In recent years,
SkyPeople has undertaken over 20 state and provincial level research projects, including various projects
specifically developed for the National 863 Project, a large government-sponsored economic initiative, and for
the Ministry of Science.

Sales and Marketing. The Company is employing both warehouse-direct and a “push” strategy with
independent distributor channels for its fruit juices. The utilization of both strategies maximizes exposure,
branding and point-of-sale locations.

Move to Organic. SkyPeople’s goal is to have its entire fresh fruit operation (which is mostly the raw material
itself) completely organic within five years. The increasing demand for, and cost-efficiency in production of,
organic products could lead to further global market penetration.

Increase Capacity. Of course, as demand and distribution grow, the Company must increase capacity,
particularly with respect to apple and pear juices.

MARKET SNAPSHOT

Chinese Demand

Similar to most industries in China, as well as its economy, standard-of-living and consumption overall, the
country’s fruit processing industry has grown significantly in the past several years. Due to low labor costs and
an abundant supply of fruit, most notably apples, pears, and kiwifruit, China is a huge fruit juice concentrate
force in the world and the largest apple juice concentrate producer in the world (as well as the third largest
producer of oranges, and one of the top producers of pears and peaches).

While most estimates pin China’s fruit juice consumption as relatively low, statistics show it is growing and
accounts for 10% of worldwide consumption. According to Beijing Business & Intelligence Consulting Co. Ltd.
(“BBIC”), an independent market research firm, total output of fruit processed products in China grew from $16.8
billion in 2005 to $27.5 billion in 2007, representing a compound annual growth rate (“CAGR”) of 28%. BBIC
projected that the total sales value and net income of fruit processed products in China will reach $37.2 billion
and $2.5 billion in 2010, respectively - CAGRs of 43% and 67%, during the four-year period from 2007 to 2010.

If production is large and consumption

is low, which we feel could change as SALES OF FUNCTIONAL BEVERAGES IN THE U.S. BY CATEGORY: 2005 – 2011E
tastes follow those of more developed
countries, it follows that the export of $ in millions FORECASTED U.S. SALES
fruit products must be a growing CATEGORY 2005 2007E 2011E
aspect of the fruit processing industry Carbonates - Fortified/Functional $80 $208 $351
in China. With improvements in the Fruit/Vegetable Juice - Fortified/Functional 2,413 2,452 2,461
quality and quantity of the production, Sports Drinks - Fortified/Functional 6,657 7,894 9,508
marketing, and transportation Energy Drinks - Fortified/Functional 2,282 2,899 3,043
technologies, China has strengthened
its position in the world market. Elixirs - Fortified/Functional 615 666 731
According to the BBIC Report, Bottled Water - Fortified/Functional 760 1,248 1,639
processed fruit export sales are RTD Tea - Fortified/Functional 264 341 420
expected to reach $10.9 billion in Soft Drinks - Better For You 13,403 15,323 17,931
2010, representing a 42.72% growth Carbonates - Better For You 11,681 13,159 15,416
over that in 2007.
Fruit/Vegetable Juice - Better For You 166 189 213
Global Demand Bottled Water - Better For You 349 612 812
Concentrates - Better For You 316 321 316
Obviously the reason that the Chinese RTD Tea - Better For You 872 1,022 1,156
export market is so strong is that TOTAL $39,858 $46,335 $53,995
global demand is so large. Global

3 ©2010 EquityNet Research

 SkyPeople Fruit Juice, Inc.
NYSE AMEX : SPU
annual consumption of fruit juice is expected to reach 73 billion liters by 2020. It is estimated that this year the
global sales of fruit and vegetable juice will reach 53 billion liters. North America and Europe are the main
markets for fruit juice, where the sales of fruit juice account for approximately 60% of total beverage
consumption. The largest reason demand is so strong is the desire for healthier living and lifestyles, including
the rapidly increasing demand for functional beverages - especially the “better for you” category, of which fruit
juice concentrates are a major input.

The U.S. functional beverage market enjoys strong tailwinds which are expected to last for the next several
years. According to Euromonitor International, consumers in the U.S alone will purchase $54 billion of
functional beverages, up from $40 billion in 2005. Furthermore as the population in developing countries ages,
older persons are more likely to choose functional, “good for you” beverages in their quest to retain their youthful
vigor. Also, the millennial generation, commonly referred to as the “Echo Boom”, is culturally pre-disposed to
choosing functional, “good for you” beverages due to their collective conscience towards a healthy, well-
balanced lifestyle.

This is only one small segment of the fruit juice market, and the point is to illustrate that global demand (if the
U.S. is a good proxy for other developed countries, which we feel it is) is strong and will likely see continued,
above-average growth rates for the foreseeable future.

PRODUCTS

As stated earlier, SkyPeople’s product lines can be divided into four major categories:

a) fruit juice concentrates, including apple, kiwi and pear and juices;

b) branded juice beverages, under the brand name, Hedetang®, including bottled kiwifruit and mulberry,
juices and ciders. All of the Hedetang fruit drinks are mainly sold in the retail market within Shaanxi
Province. In the first quarter of 2010. SkyPoeple signed a distribution contract in Beijing with an
independent distributor, which set a targeted sale of $7 million., SkyPeople plans to expand distribution
of Hedetang branded products to neighboring provinces in the central China region.

c) fruit and vegetable byproducts, including dried and dehydrated fruits and vegetables, apple aroma and
kiwi seeds.

d) fresh fruits and vegetables, including fresh kiwi fruit. Launched in July 2009.

SkyPeople distributes its concentrated fruit juice products to a growing list of leading domestic and international
fruit juice drink processors, such as Huiyuan, LOTTE, and Mengniu. In order to take advantage of economies of
scale and to enhance production efficiency, each of SkyPeople's manufacturing facilities has a focus on juice
products centering around one particular fruit based on the proximity to that fruit’s supply. All of its concentrated
juice products are manufactured through similar production lines with slight variations in processing methods.

Sales and Distribution Strategy

While there might be some overlap at times, the

sales and distribution strategies for concentrate
and juices are different, as they have different
end users.

Sales of fruit juice products are mainly made in

Chinese markets. Most of the products are sold
through provincial level, city level and county
level agents and distributors. The Company also
sells directly to the retail channel, including
hotels, supermarkets and similar outlets.
In January 2010, the Company announced that it
had engaged a well-established beverage
4 ©2010 EquityNet Research
 SkyPeople Fruit Juice, Inc.
NYSE AMEX : SPU
distributor to develop sales and brand recognition of Hedetang® in the nation's capital. The distributor has been
appointed to sell Hedetang® to major retailers such as Wal-Mart, Jiale, Lotus and KA Supermarkets, as well as
to other wholesalers in the Beijing area. The distribution agreement includes a minimum sales commitment by
the distributor on a monthly and yearly basis. Based on the agreement, management expects to generate sales
of approximately US$7.0 million in 2010. This “push” strategy could in fact play out very well. In these
agreements, the Company sets up a sales target for the distributors and provides them with a net price. In order
to meet the sales target, the distributors are forced to invest in appropriate advertising that fits the local area.
The plan entails penetration beyond Shaanxi into top-tier cities, such as Shanghai, Guangzhou and Shenzhen.

With respect to concentrate and byproducts, these are mostly sold to other food processors and thus have their
own marketing channel in each of the respective geographic regions the Company is targeting. Historically,
approximately 70% of SkyPeople’s concentrated juices were directly and indirectly exported, but this number is
difficult to track as some domestic distributors sell overseas. The number could drop, however, as the Company
focuses on domestic distribution of concentrates, and as Hedetang® becomes a larger part of the product mix.
Through the first nine months of 2009, only 18% of revenue was from foreign sales. Domestically, SkyPeople
distributes its concentrated fruit juice products to a growing list of leading fruit juice drink processors, such as
Huiyuan, LOTTE, and Mengniu.

The Company’s target markets for kiwifruit pulp, kiwifruit concentrated pulp and kiwifruit concentrated juice are
mainly in Europe, Southeast Asia, South Korea, Japan, the Middle East, mainland China and Taiwan. Its target
markets for concentrated apple juice and pear juice are in North America (especially in the U.S.), Europe and
the Middle East. Shaanxi Tianren uses the following marketing methods: directly marketing with foreign
businesses via its sales department; attendance at various international farm and sideline products sales
exhibitions; and sales made through SPU’s trade websites.

OUTLOOK / VALUATION

Historical and Projected Financials

$000s Fiscal Fiscal Q1 Q2 Q3 Q4 Fiscal Fiscal

Actual - A 2007-A 2008-A 2009-A 2009-A 2009-A 2009-E 2009-E 2010-E
Estimates - E 31-Dec-07 31-Dec-08 31-Mar-09 30-Jun-09 30-Sep-09 31-Dec-09 31-Dec-09 31-Dec-10
Total Revenue $ 29,362 100% $ 41,648 100% $ 6,671 $ 6,197 $ 10,605 $ 35,527 $ 59,000 100.0% $ 97,000 100.0%
Cost of Sales 18,467 63% 23,607 57% 3,746 4,274 6,753 20,606 35,379 60.0% 56,260 58.0%
Gross Profit 10,895 37% 18,041 43% 2,925 1,923 3,852 14,921 23,621 40.0% 40,740 42.0%
Operating Expenses
Research and Development 31 0% 450 1% 276 276 276 384 1,212 2.1% 4,365 4.5%
Selling, General & Administrative 1,846 6% 4,284 10% 685 657 690 3,243 5,276 8.9% 12,610 13.0%
Liquidated Damages - 254 1% - - - - - - - -
Total Operating Expenses 1,877 6% 4,988 12% 961 933 966 3,627 6,488 11.0% 16,975 17.5%
Operating Income (Loss) / EBITDA 9,018 31% 13,053 31% 1,964 990 2,886 11,294 17,134 29.0% 23,765 24.5%
Other Expense/(Income) 0%
Subsidy Income (501) -2% (316) -1% (88) (1,465) (5) - (1,558) 2.6% (1,558) 1.6%
Interest, net 52 0% 868 2% 219 228 176 150 773 1.3% 300 0.3%
Other 401 1% (354) -1% - (358) (334) (346) (680) 1.2% (800) 1.4%
Total Other Expense (Income) (48) 0% 198 0% 131 (1,595) (163) (196) (1,823) 3.1% (2,058) 2.1%
Income (Loss) Before Taxes 9,066 31% 12,855 31% 1,832 2,586 3,048 11,490 18,957 32.1% 25,823 26.6%
Provision for Income Taxes 1,109 4% 2,231 5% 494 722 783 1,013 3,012 8.5% 4,482 8.0%
Effective Tax Rate 12% 17% 27% 28% 26% 9% 16% 17%
Minority Interest 361 1% 613 1% 99 190 181 240 710 3.7% 967 3.7%

Net Income (Loss)* $ 7,596 26% $ 10,011 24% $ 1,239 $ 1,674 $ 2,084 $ 10,238 $ 15,235 25.8% $ 20,375 21.0%
Less Preferred Stock Participation $ - $ 1,717 $ 244 $ 245 $ 279 $ 1,628 $ 2,396 $ 2,727
Net Income (Loss) Used for Basic EP $ 7,596 $ 8,294 $ 995 $ 1,429 $ 1,805 $ 8,610 $ 12,839 $ 17,647

Basic EPS $ 0.35 $ 0.37 $ 0.04 $ 0.06 $ 0.12 $ 0.48 $ 0.66 $ 1.19
Fully Diluted EPS $ 0.35 $ 0.37 $ 0.04 $ 0.06 $ 0.11 $ 0.48 $ 0.62 $ 1.10

Weighted Average Shares:

Basic Shares Out. 22,006,173 22,230,334 22,271,684 22,271,684 14,847,789 17,952,894 19,336,013 14,847,789
Fully Diluted Shares Out. 22,006,173 26,831,961 28,394,863 29,542,529 18,502,518 21,480,216 24,480,032 18,502,518

4-Year Revenue CAGR (E) 34.8%

*Ignores foreign currency translation adjustments
Estimates based on previously disclosed management guidance

5 ©2010 EquityNet Research

 SkyPeople Fruit Juice, Inc.
NYSE AMEX : SPU
With a solid operating history and reasonable visibility in the coming year at least, we feel that multiple
comparisons, such as price-to-earnings ratio (P/E), and price-to-sales ratio (P/S), also have the best value in our
opinion in that they show the current market values of similar companies. To form the basis of our valuation we
are using the underlying assumption that the value of the Company should mirror that of its closest peers -
based on at least one of the following: product(s), target markets, sales and corporate strategies:

Peer Data
Fresh Fruit & Byproducts Beverage Chinese Operations

Fresh Del Hansen National China

Seneca Foods Monte Vaughn Natural Jones Soda Beverage Nutrifruit New Dragon
Corp. Produce Inc. Foods COTT CP Corporation Co. Corp. Group Limited Asia Corp.
(SENEB) (FDP) (FOOD) (COT) (HANS) (JSDA) (FIZZ) (CNGL) (NWD)

TTM Sales (000) $ 1,300,000 $ 3,460,000 $ 96,620 $ 1,580,000 $ 1,110,000 $ 27,840 $ 590,280 $ 62,830 $ 24,070
TTM EBITDA (000) $ 102,190 $ 252,200 $ 6 $ 143,000 $ 216,910 $ (8,580) $ 57,020 $ 12,230 $ (5,820)
EBITDA Margin 8% 7% 0% 9% 20% -31% 10% 19% -24%
Net Earnings (000) 27,910 138,600 (1,710) 55,400 131,910 (9,440) 28,630 5,210 (13,360)

Shares Outstanding (000) 10,640 63,600 4,620 79,400 89,090 26,470 46,050 36,130 83,360
Earnings Per Share $ 2.62 $ 2.18 $ (0.37) $ 0.70 $ 1.48 $ (0.36) $ 0.62 $ 0.14 $ (0.16)
Price as of 01/25/10 close $ 27.46 $ 20.25 $ 0.47 $ 7.82 $ 39.23 $ 0.54 $ 11.55 $ 4.01 $ 0.12
Market Capitalization (000) $ 292,174 $ 1,287,900 $ 2,176 $ 620,908 $ 3,495,001 $ 14,294 $ 531,878 $ 144,881 $ 10,003
Enterprise Value (000) $ 561,390 $ 1,560,000 $ 14,140 $ 878,070 $ 3,150,000 $ 8,570 $ 426,820 $ 140,270 $ 11,060

Price/Sales 0.22 0.37 0.02 0.39 3.15 0.51 0.90 2.31 0.42
Price/Earnings 10.47 9.29 N/A 11.21 26.50 N/A 18.58 27.81 N/A
EV/Sales 0.43 0.45 0.15 0.56 2.84 0.31 0.72 2.23 0.46
EV/EBITDA 5.49 6.19 2,356.67 6.14 14.52 N/A 7.49 11.47 N/A
Note: All figures as of 02/01/10. EV approximate

Note on peers: Beverage companies chosen all have juice operations and sales. New Dragon Asia sells soybeans and soybean products to
beverage processors. Source: CapitalIQ.

Peer Valuation Matrix

SPU Actual and Projected

Averages:

Fresh Fruit & Chinese

Weighted: Byproducts Beverage Operations
EV/EBITDA (TTM) 6.05 12.56 10.73
P/E 23.86 23.47 26.01
EV/Sales (TTM) 0.45 2.28 2.12
P/S 0.34 2.52 2.18

Weights Used in Valuation 30% 30% 40%

EV/EBITDA (TTM) 1.81 3.77 4.29 9.87

P/E 7.16 7.04 10.40 24.60
EV/Sales (TTM) 0.13 0.69 0.85 1.67
P/S 0.10 0.76 0.87 1.73

SPU FY09(E)
TTM Sales (000) $ 59,000
TTM EBITDA (000) 17,134
EBITDA Margin 29%
Net Earnings (000) $ 15,235
95,820
AVERAGE $ 238,521
Enterprise Value
17,953
FMV PER SHARE $ 13.29
Shares Outstanding
Proj Market Cap based on
Wtd. P/E ($000) $ 374,851
Proj Market Cap based on
Wtd. P/S ($000) $ 102,190

6 ©2010 EquityNet Research

 SkyPeople Fruit Juice, Inc.
NYSE AMEX : SPU
For our final valuation, we divided the peers into three subsectors: 1) Fresh Fruit and Byproducts; 2) Juice
Beverages; and 3) Fruit Operations and/or Beverage Industry Suppliers in China. We have taken the average
of the P/S multiples, as well as the P/E six companies that had positive earnings and applied it SkyPeople to get
an estimate of the Company’s FMV. We have taken the midpoint of the Company’s FY09 revenue guidance
($59 MM) and our earnings estimate of $15.235 MM (in between the guidance of $15-16 MM issued by the
Company). Applying these figures to the weighted average of the peer multiples – on a weighted basis
according to the subsectors we laid out - we obtain our current fair value of $13.29 per share.

Capital Resources

SkyPeople has been profitable and had positive operating cash flow – with significant growth - the last two fiscal
years (as we expect this year to be as well). With no recent debt, all this leads to a show of self-sustainability.
Cash requirements for 2010 and beyond will depend primarily upon the level of product sales, inventory levels,
product research and development, sales and marketing expenses, and capital expenditures.

Risk Factors

Competitive Threat. The beverage industry is characterized by intense competition. The principal areas of
competition are pricing, product quality, packaging, and development of new products, as well as flavors and
marketing campaigns.

Political Risks. It is widely known that China has gone through a near-complete transformation when it comes to
business, namely the allowance of private enterprise after decades of a State-run economic system. The
Chinese central government, while making great strides in building a free-market system, still has a tendency to
be unpredictable. Furthermore, a unique form of political risk occurs in China - the constant battle between the
central government and the provincial and local governments over applicable law, and observance or non-
observance of it. This makes it difficult for companies operating in China to know exactly what the rules are. In
addition, the central bank has recently altered monetary policy to slow growth (inflation), which adds to the
uncertainty of future economic policy.

Loss of Proprietary Rights. The Company holds the patent for a device that crushes fruit and separates the peel
(Patent No.: ZL200620078461.1) and has developed kiwi concentrated clear juice production technologies.
While patent protection should minimize this threat, the protection of SkyPeople’s proprietary technology is
critical to its business prospects. The loss of any of the proprietary rights that the Company believes are
protected under intellectual property safeguards may result in the loss of its competitive advantage over present
and potential competitors with respect to production efficiency, capabilities and capacity.

Dilution. All else being equal, the raising of future equity capital, or issuance of additional stock for acquisitions
or compensation, could depress share price and could significantly affect our price target.

Supply Risks. The supply of the Company’s raw material fruits has traditionally been fragmented, as it generally
purchases directly from farmers. In addition, because the prices of raw material fruits change from season to
season based on the output of the farms, SkyPeople does not have long-term supply agreements with its
suppliers. Thus, the Company is subject to commodity pricing and its associated fluctuations.

Competitive Advantages

Despite the risk of current and potential competition, which will always be present in the ever-changing Chinese
economy, we believe that the Company holds several key, competitive advantages over its Chinese peers:

 Technology. With its technology, the Company has, to a large degree, an advantage relating to the
production of concentrated fruit juice of small breeds, including mulberry juice, kiwifruit juice and other
types of juice with limited raw material and output. In addition, because of this, SkyPeople has been
recognized as a High and New Technology Enterprise in Shaanxi Province for the past three years.
Through the first nine months of 2009, the Company booked subsidies of $1,557,340.

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 SkyPeople Fruit Juice, Inc.
NYSE AMEX : SPU
 R&D. By maximizing efficiency of use with raw materials, SkyPeople is leaving no stone unturned with
respect to full use of its produce, as well as new products, such as jujube juice, and other juices and
concentrates.

 Geography. As all its factories are located near the production area of the raw material of fresh fruits,
we believe that it stands to reason that transportation and storage costs are relatively lower than many
of its competitors.

 Diversification. Unlike many of its competitors, SkyPeople relies on a relatively diverse product line,
which enables it to exploit multiple markets and channels, as well as combat seasonal factors. Right
now, the bulk of sales come in Q4, the kiwi squeezing season, however, seasonality will be combated
through additional products and increased capacity. With new products, we could expect that kiwi
products will be a lesser percentage of overall sales in the future.

 Quality. With respect to pear juice, which is widely used as a sweetener in the food industry, because of
the Company’s advanced technology, the quality of its pear juice ranks amongst the top in the market.
SkyPeople pear juice is recognized as a “famous product” of Shaanxi Province by the Shaanxi Food
Industry.

Recommendation and Conclusion

We are initiating coverage of SkyPeople Fruit Juice, Inc. with a BUY rating
and 12-month price target of $13.29 a share. Certainly from a
fundamental standpoint, the Company is exhibiting phenomenal growth
and financial strength in the midst of a global recession. We feel this is a
testament to the increasing industry demand and business model that
SkyPeople is executing, and certainly solidifies our confidence in the
Company moving forward.

Operating results and stock performance could be subject to greater

volatility as the Company grows, but with the stock at these levels, long-
term investors might be interested in using this period as an opportunity to
build positions with risk capital in anticipation of stronger performance in
FY2010 and beyond.

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 SkyPeople Fruit Juice, Inc.
NYSE AMEX : SPU

About EquityNet Research

EquityNet Research was formed to provide the investing public with professional, independent, objective
research on under-followed public companies. It does this by preparing detailed research that highlights the key
aspects of the subject company and its industry. Though some reports are commissioned, EquityNet prides
itself on eliciting the facts, both positive and negative, about the firms it chooses to cover. EquityNet strictly
maintains independence and objectivity according to the Standards of Professional Conduct of the CFA Institute
(CFAI). Price targets should be construed as fair-market-value (FMV) as of the date of this report, using
industry-standard methodologies. Many factors can cause stock prices to deviate from FMV, including supply
and demand issues, and general equity market conditions.

About the Analyst

Randy Lewis, CFA, founder and Senior Equity Analyst of EquityNet, has more than 10 years experience in
equity and portfolio analysis, as well as financial consulting and strategic planning. Prior to forming EquityNet,
Mr. Lewis served as an equity analyst at SSI Investment Management, Inc., a $500-million, money management
firm, specializing in sophisticated, hedged investment strategies, and serving institutional and high net worth
clients. Previous to SSI, Mr. Lewis was a financial analyst for Griffin Financial Services, the securities
brokerage arm of Home Savings of America, the then-largest savings and loan in the U.S. Mr. Lewis has had
several articles published, most recently in HFR Journal of Hedge Fund Research on the subject of merger
arbitrage. Mr. Lewis received his Bachelors Degree with honors in Finance from California State University,
Fullerton, his MBA at the Anderson School of Management at UCLA, and has earned the Chartered Financial
Analyst (CFA) designation. He is also an assistant professor of business at Pierce College in the Los Angeles
Community College District.

Explanation of Ratings

• STRONG BUY – The analyst feels that the stock is significantly undervalued and holds superior long-
term price appreciation potential.

• BUY — The stock appears attractively valued and the analyst feels the stock’s total return will exceed
that of the market over the next 12 months.

• SPECULATIVE BUY - Under current conditions, the stock appears to be appropriately valued, but short-
term event(s) could dramatically alter the future landscape of the company in terms of revenue, earnings
and cash flow.

• HOLD — The stock appears appropriately valued and the analyst believes the stock’s total return will be
relatively inline with the market over the next 12 months.

• SELL — The stock appears overvalued and the analyst believes the stock’s total return will be below the
market over the next 12 months.

EquityNet Research is an independent research firm and has been compensated $7,000 by Investor Relations Network for the due diligence and
preparation of this research report. The information contained herein has been obtained from sources which are believed to be reliable, but the
accuracy or completeness of the contents cannot be guaranteed. Any opinions and/or projections expressed herein are solely of the writer and are
subject to change without notice. This report under no circumstances is to be construed as an offer to sell or the solicitation of an offer to buy any
securities. This report contains forward-looking statements, including expressions of belief, expectation, contemplation, estimation and other
expressions not relating to historical facts and circumstances. These forward-looking statements are subject to numerous risks and uncertainties
that may cause such statements not to prove accurate. Any recommendations contained in this report may not be suitable for all investors and
contain a high degree of risk. Prospective investors are encouraged to review in detail the company’s prospectus, SEC filings, and/or other
additional information. Any projections or estimates made herein assume certain economic and industry conditions and parameters subject to
change.

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