Kun Tao, CFA, (949) 720-7149 ktao@roth.com Panhua Xu, pxu@roth.

com Sales (800) 933-6830, Trading (800) 933-6820

CHINA FLASH NOTE | EQUITY RESEARCH | July 19, 2011

China: Consumer Goods

Zhongpin Inc.
Company Update
Stock Data 52-Week Low - High Shares Out. (mil) Mkt. Cap.(mil) 3-Mo. Avg. Vol. 12-Mo.Price Target Cash (mil) Tot. Debt (mil) Est. 3Yr. EPS Growth
EPS $ Yr Dec 1Q 2Q 3Q 4Q YEAR P/E 2010 0.38A 0.38A 0.42A 0.51A 1.68A 6.1x

| HOGS - $10.25 - NASDAQ | Buy Takeaways from HOGS conference call

$9.03 - $25.00 40.36 $413.6 839,115 $18.00 $84.2 $308.5 15%

Management hosted a conference call today to address accusations from a recent short report. Based on our third-party verifications, we are comfortable with HOGS reported annual hog slaughtering numbers. While we believe the reported retail store count is accurate, we plan to verify store counts in twoto-three cities in the next week. Accusation 1 Fewer hogs purchased from suppliers than reported Company response HOGS purchased 1.4mm head of hogs, accounting for 27% of total purchases in 2010 from 315 suppliers with average of 4,000+ hogs per supplier. The company purchased the remaining hogs from hundreds of small, individual wholesale distributors, each of which supplied 1,000-2,000 hogs annually. The largest supplier, Henan Chuying (002477-sz), sold 30,000+ head of hogs to Zhongpin in 2010. Our verifications: s Chuying's hog sales to Zhongpin in its filings match management's number. According to Chuyings 2010 filing, revenue from HOGS, its third largest customer, was 38.7mm RMB (up 318% y/y) or 30,397 hogs in 2010. We are encouraged that Chuyings reported numbers matched what management said in the conference call, which was different from the 10,000 figure in the short report. s Output from Henan province matches Zhongpin's reported output. According to the National Bureau of Statistics (www.hadc.gov.cn), Henan province produced 53.9mm hogs or 408K tons in 2010. According to the Ministry of Commerce, large facilities (20K+ annual hogs slaughtering capacity) slaughtered 70% of Chinas hog output in 2010. Based on slaughtering capacity, we conservatively assume HOGS accounted for 10% of large-facility market share in Henan. This implies HOGS should purchase 3.8mm hogs from Henan in 2010, which is in line with the 3.4mm figure reported by the company.

Auditor: BDO CHINA LI XIN DA HUA CPA, CO. LTD

2011E Curr 0.47A 0.38E 0.44E 0.52E 1.81E 5.7x

2012E Curr 0.54E 0.42E 0.58E 0.60E 2.14E 4.8x

Revenue ($ millions) Yr Dec 1Q 2Q 3Q 4Q YEAR 2010 204.3A 215.1A 241.1A 286.3A 946.7A 2011E Curr 285.8A 289.2E 317.3E 362.1E 1,254.3E 2012E Curr 381.4E 337.5E 417.3E 428.7E 1,564.9E

4.0 3.2 2.4 1.6 0.8 0.0

HOGS One-Year Price and Volume History

30 25 20 15 10 5

Aug-10

Sep-10

Nov-10

Dec-10

May-11

Feb-11

Mar-11

Jan-11

Oct-10

Jun-11

Apr-11

Jul-11

Price

Important Disclosures & Regulation AC Certification(s) are located on page 4 to 5 of this report.
Roth Capital Partners, LLC | 24 Corporate Plaza | Newport Beach CA 92660 | 949 720 5700 | Member FINRA/SIPC

ZHONGPIN INC.

July 19, 2011

Chuying's 2010 Annual Report: Top Five Customers

Source: www.chu-ying.com Accusation 2 Fewer retail stores than company claimed Company response HOGS has 1,312 retail stores in China, 42% of which are located in Henan province. Our take: s From the companys store list on its website, we found HOGS only claims to have 31 retail stores in Luoyang, in line with the 33 stores found in the short report. The short report claims HOGS should have over 100 stores in the city. s We believe retail store and supermarket sales should be counted as wholesale revenue given the company sells to the majority of retail stores through third-party regional distributors. In conclusion, we believe the recent pressure relating to the short report is unwarranted and recommend investors use this weakness to add to positions. Intraday Price: $9.38 @ 3:12 p.m ET

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VALUATION
We maintain our BUY rating and $18.00 PT, applying a 9.9x multiple to our 2011 EPS. Our PT reflects recent market multiple contraction, margin pressure, and aggressive CapEx from debt and/or equity financing. Factors that may impede share prices from reaching the target include unpredictable natural disasters or diseases that sharply decrease hog supply, government price caps on pork due to inflation control, and increased international competitions.

RISKS
s s s s s s s

Livestock Disease Outbreak Commodity Price Volatility Regulatory and Tax Changes Permits and Licenses Increasing International Competition Appreciating RMB Risks related to doing business in China

For a full discussion of risks, please see our initiation report dated February 16, 2007.

COMPANY DESCRIPTION
Zhongpin is a meat and food processing company that specializes in pork and pork products and vegetables and fruits. It has a unique wholesale and retail distribution model and sells directly to retail outlets, including supermarkets and hypermarkets across China.

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Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Disclosures:
ROTH makes a market in shares of Zhongpin Inc. and as such, buys and sells from customers on a principal basis. On September 28, 2010, ROTH changed its rating system in order to replace the Hold rating with Neutral. On May 26, 2011, ROTH changed its rating system in order to incorporate coverage that is Under Review.

Each box on the Rating and Price Target History chart above represents a date on which an analyst made a change to a rating or price target, except for the first box, which may only represent the first note written during the past three years. Distribution Ratings/IB Services shows the number of companies in each rating category from which Roth or an affiliate received compensation for investment banking services in the past 12 month. Distribution of IB Services Firmwide IB Serv./Past 12 Mos. as of 07/19/11 Count Percent 51 24.4 6 10.5 0 0 0 0

Rating Buy [B] Neutral [N] Sell [S] Under Review [UR]

Count 209 57 2 0

Percent 77.7 21.2 0.7 0.0

Our rating system attempts to incorporate industry, company and/or overall market risk and volatility. Consequently, at any given point in time, our investment rating on a stock and its implied price movement may not correspond to the stated 12month price target. Ratings System Definitions - ROTH employs a rating system based on the following: Buy: A rating, which at the time it is instituted and or reiterated, that indicates an expectation of a total return of at least 10% over the next 12 months. Neutral: A rating, which at the time it is instituted and or reiterated, that indicates an expectation of a total return between negative 10% and 10% over the next 12 months. Sell: A rating, which at the time it is instituted and or reiterated, that indicates an expectation that the price will depreciate by more than 10% over the next 12 months. Under Review [UR]: A rating, which at the time it is instituted and or reiterated, indicates the temporary removal of the prior rating, price target and estimates for the security. Prior rating, price target and estimates should no longer be relied upon for UR-rated securities. Not Covered [NC]: ROTH does not publish research or have an opinion about this security. ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months. The material, information and facts

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discussed in this report other than the information regarding ROTH Capital Partners, LLC and its affiliates, are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used as a complete analysis of the company, industry or security discussed in the report. Additional information is available upon request. This is not, however, an offer or solicitation of the securities discussed. Any opinions or estimates in this report are subject to change without notice. An investment in the stock may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additionally, an investment in the stock may involve a high degree of risk and may not be suitable for all investors. No part of this report may be reproduced in any form without the express written permission of ROTH. Copyright 2011. Member: FINRA/SIPC.

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