Makes Steady Progress in Three Major Businesses and Proactively Engages in Mergers, Acquisitions of Agricultural Businesses and Upgrade of Industry Chain

National Agricultural Holdings Limited (“National Agricultural”, or together with its subsidiaries, the “Group”; stock code: 1236.hk) today announced the annual results of the Group for the year ended 31 December 2014.

In 2014, leveraging government policies that support the “Agriculture, Rural Areas and Farmers” sector, the Group aimed to build a highly-effective agricultural industry chain through partnering with leading enterprises in the market. It also focused on mergers and acquisitions involving high-quality agri-related enterprises by tapping the resources of the system of supply and marketing cooperatives. During the year, the Group’s revenue rose on the back of the establishment of agricultural business platforms, and the commencement of parts of the operations. For the year ended 31 December 2014, the Group recorded revenue of RMB116.8 million, representing an increase of 22% compared with the previous year, attributable to the acquisition of China Coop Mengda, and the Group’s increasing engagement in financial leasing businesses. With cost of sales remaining steady, gross profit increased by 31% to RMB88.1 million.

During the period under review, the Group proactively worked in tandem with the system of supply and marketing cooperatives in integrating, optimizing and upgrading various segments along the industry chain of agri-related transactions. The Group further promoted the development of “Rural Financial Services”, “Trading in Agricultural Means of Production” and “Planning, Operation and Management on Urbanization Development”.

Rural Financial Services

In 2014, the Group entered into joint venture agreements with Xinyuan Taifeng Agricultural Asset Management (Beijing) Company Limited (新源泰豐農業資產管理（北京）有限公司) and injected capital into China Coop Mengda Financial Leasing Company Limited (中合盟達融資租賃有限公司). These initiatives not only strengthened the Group’s capabilities in various business segments including asset management, project investment and mega data management, but also generated new sources of revenue by solving the financing problems of agricultural enterprises. The Group also jointly operated the “Agripay” (農匯通) system with Guangzhou Unionpay Network Payment Co., Ltd. (廣州銀聯�絡支付有限公司), which was mainly designed for professional agriculture-related market payments and cash sweep services. The Group aims to expand the scope of application for the system nationwide, so as to proactively tap the strong needs of rural enterprise financing and financial services.

Trading in Agricultural Means of Production

The electronic trading platform for agricultural products jointly established by the Group and Guangzhou Exchange Group Co., Ltd. (廣州交易所集團有限公司) was officially launched at the beginning of 2015. The first batch of products traded on this platform – chemical fertilizers – recorded turnover on the first half day of launch exceeding RMB200 million. The Group believes that the financial benefits of the platform will emerge next year. The Group has started to expand the scope of trading in terms of product variety, and to explore business opportunities for agricultural machinery which will be available on the trading platform. Its innovative e-commerce model has not only helped companies reduce logistics costs and stabilized market prices, but also enhanced the growth potential of the Group itself.

Planning, Operation and Management on Urbanization Development

The progress in domestic industrialization, informatization, urbanization and agricultural modernization continued to speed up the development of rural land property rights transfer, which is key to the development of “Agriculture, Rural Areas and Farmers”. In light of such circumstances, the framework agreement signed by the Group and the Guangzhou Exchange also covers the rural land operation rights transfer business, which will be launched in the future by both parties. While providing services for “Agriculture, Rural Areas and Farmers”, both parties are jointly exploring other potential businesses in the sector.

Mr. Chen Li-jun, Chairman of National Agricultural, said, “The year 2015 marks the 12th consecutive year that the No. 1 Document of the Central Government has focused on the ‘Agriculture, Rural Areas and Farmers’ sector, emphasizing the promotion of the comprehensive reform of Supply and Marketing Cooperatives. The government has continued its support for the development of rural finance, and the transaction volume of agricultural means of production and agricultural products is set for explosive growth. The goal of reaching an urbanization rate of 60% by 2020 is coming to fruition. All these demonstrate the enormous opportunities arising from the market National Agriculture is operating in. The Group is actively engaged in mergers and acquisitions to expand our footprint in ‘Agriculture, Rural Areas and Farmer’ sector at a faster pace. Some of the related businesses have started operations and are making preliminary revenue contributions to the Group, raising our confidence in the Group’s prospects.”

“Through the resources network and talent pipeline of the supply and marketing cooperatives system and the Group’s scientific and innovative business model, we are confident that the Group will continue to develop innovative financial services, strengthen the trading platform for agricultural products and improve the rural land property rights transfer business. Further, we will work in tandem with cooperatives to integrate the agri-related sector’s industry chain by carrying out acquisitions and mergers. We are confident of maximizing returns for our shareholders in the New Normal of China’s economy,” Mr. Chen Li-jun added.

About National Agricultural Holdings Limited

National Agricultural Holdings Limited (SEHK code: 1236.HK) is a rural market-based company that integrates financial services, agri-related trade, information, industry and science research. Its principal businesses are rural financial services, trading in agricultural means of production, planning, operation and management on urbanization development and high-tech information technology, etc. These directives are fully implemented to accommodate China's strategic goal of vigorously developing “Agriculture, Rural Areas and Farmer” sector and a new model of urbanization. Hebei Supply and Marketing Cooperative made an equity investment in National Agricultural Holdings through its subsidiary Parko (HongKong) Ltd. in November 2013.

For National Agricultural Holdings Limited:Hill+Knowlton StrategiesIris Wong, +852-2894-6263hl.wong@hkstrategies.comorJackie Hua, +852-2894-6256jackie.hua@hkstrategies.com