China New Borun Corporation reported unaudited consolidated earnings results for the first quarter ended March 31, 2016. For the first quarter of 2016, revenue decreased by 14.8% year-over-year to RMB 486.6 million from RMB 570.9 million in the same period of 2015. The decrease in revenue was mainly due to the temporary shutdown in the Company's Shouguang facility as the local government conducted a safety check for all the chemical manufacturing facilities in Shouguang city, as well as a sharp decrease in ASP for edible alcohol and its by-products. Operating income increased by 0.4% to RMB 46.4 million, from RMB 46.2 million in the same period of 2015, primarily attributable to higher gross profit earned. Income before income taxes was RMB 33.668 million compared to RMB 21.048 million a year ago. Net income increased by 60.0% to RMB 25.3 million or $0.98 per basic and diluted, compared to RMB 15.8 million or $0.61 per basic and diluted in the same quarter of 2015. The increase in net income was primarily attributable to the decrease in interest expense of RMB 12.1 million, as the company repaid RMB 310.0 million Corporate Bond in the first quarter of 2016. Cash flows provided by operating activities for first quarter of 2016 was approximately RMB 143 million compared with RMB 14.1 million during the same period last year.

The Shouguang government's safety check for all the chemical manufacturing facilities in Shouguang took longer than expected, causing the Company's Shouguang facility to shut down for an additional two weeks (approximately 16% of quarterly production schedule) in April 2016. Reflecting the shorter production run and a lower ASP for edible alcohol and its by-products, the Company estimates that its revenue for the second quarter of 2016 will be in the range of RMB 460 million to RMB 500 million, a decrease of approximately 30.6% to a decrease of 36.2% over the same quarter of 2015.