China Polypeptide (GREY:CHPN)

On March 23, 2011, Richard Liu submitted a letter notifying China Polypeptide Group, Inc. of his resignation from his position as the Company’s Chief Financial Officer, effective March 25, 2011. Mr. Liu’s resignation was for personal reasons and not due to any disagreement with the Company.

On March 23, 2011, the Board of Directors appointed Lirong Hu, the Company’s Treasurer and Director, to serve as the Company’s interim Chief Financial Officer until a suitable Chief Financial Officer can be found.

The decrease in operations is mainly attributable to the decrease of our business-to-consumer, or B2C, sales of our branded polypeptide-based nutraceutical products of $2,865,738, or 49.5%, while our business-to-business, or B2B, sales of polypeptide-based ingredients and private-labeled products to other nutraceutical manufacturers and marketers increased by $294,212, or 295.5%, as compared to those in the three months ended December 31, 2009. The decrease in our B2C sales is mainly due to reduced sales activities as a result of our B2C sales network restructuring and preparation for subsequent higher sale seasons. Management expects that revenues will rebound in future periods.

GeoTeam® Note: EPS for the 2010 fourth quarter was a -$0.09 vs $0.45.

• Our business-to-consumer (“B2C”) sales of own branded polypeptide-based nutraceutical products decreased by $1,178,044, or 3.3%, as compared to the fiscal year of 2009. Consumer sales of own branded products through our own sales network increased by $3,805,604 or 13.6% while such sales through third-party channels decreased by $4,983,648 or 66.1% as compared to those in the fiscal year ended September 30, 2009. Management has been redirecting our sales efforts to focusing on B2C sales through own network and restructuring the third-party channels so as to enhance future B2C sales. We believe that the increasing domestic income levels and corresponding awareness of health and quality of life, among other factors, will help us achieve sales growth going forward.

• The decrease in net income is mainly attributable to: the increase of $4,469,050 in selling and administrative expenses, especially the $3,859,826 increase in bad debt allowances for doubtful receivables; the $739,564 increase in costs of sales, the $1,086,061 increase in other expenses; and the $244,119 decrease in interest income during the fiscal year of 2010. Although no assurance can be given, management believes that our revenues and net income will resume growth in future periods resulting from, among other factors, growing market demands for anti-aging nutritional supplements, health foods and functional food products, our increased sales and marketing efforts after the restructuring of our sales offices, our newly added manufacturing capacity to meet such increasing demands, our expansion into other high margin peptide-based product categories, as well as improved economic conditions and the PRC government’s stimulus measures for domestic consumption.

China Polypeptide Group became public via a reverse merger transaction on On November 13, 2009,

The Company, through its PRC-based indirect operating subsidiaries Wuhan Anti-Aging and Tallyho, engage in the research and development, manufacturing and marketing of polypeptide-based nutritional supplements and health foods. Polypeptides are small molecular structures consisting of 10-50 amino acids and have been found to have high nutritional value and support body functions such as regulating immunological functions in humans.

GeoTeam® estimated post reverse merger shares outstanding: 10.0 million

Summary of Fincancials

Shareholder Equity: 14.12 million
Book Value Per Share: $1.41

The GeoTeam® could not locate an explanation as to why results were down for 2009.  We are probing data to determine if the company has approved a reverse split, not yet reflected in it share price.