China Stocks jumped despite the National Association of Home Builder’s index dropped

The National Association of Home Builders’ Housing Market index dropped to 14 from 16 the previous month; the lowest reading since April 2009. A reading below 50 indicates homebuilders have a negative view of the housing market. Construction jobs fell further, down 2.14 million or 28% since their peak in 2006 and the residential construction subset is down nearly 600,000 jobs, or 43%, since the market's peak.

However the US stock market closed with a moderate gain Monday after investors looked back at the earning season and showed optimism as they wait for more earnings figures to be released in the next few weeks. The China 100 stock index gained 5.98 points or 0.73% to 820.98. The Panda China Large Cap Stock Index jumped 6.50 points or 0.67 % to close at 978.44. The Tiger China Small & Mid Cap Stock Index won only 1.11 points or 0.14% to close at 797.95 and the Dragon China Undervalued Stock Index climbed back 14.78 points or 2.17 % to close at 695.12.

Yuhe International, Inc. (YUII) [8.93, 0.83, +10.25%] a leading supplier of day-old chickens raised for meat production, or broilers, in the People's Republic of China today announced that the Company's wholly owned subsidiary, Weifang Yuhe Poultry Co., Ltd., entered into an asset purchase agreement with Liaoning Haicheng Songsen Stock Farming and Feed Company Limited to purchase five breeder farms in Haicheng City, Liaoning Province for RMB 21.3 million (approximately $3.1 million).

Concurrently, Weifang Yuhe entered into a service agreement with Mr. Zhaolin Jiang, the controlling shareholder of Haicheng Songsen, who provides Weifang Yuhe with certain services related to completing the asset purchase transaction in exchange for 300,000 restricted shares of Yuhe common stock calculated at a price of $10 per share with total consideration equal to approximately RMB 20 million. The restricted shares are subject to a six-month lock-up period.

The five breeder farms have a total production capacity of 430,000 sets of parent breeders, covering an area of approximately 52 acres with building coverage of approximately 680,000 square feet. The assets to be purchased include the buildings and equipment for the acquired breeder farms, and the land leasing rights, which range from 14 years to 24 years. Upon the closing of the transaction, Yuhe will have a production capacity of 2.23 million sets of parent breeders to be the largest farmer of parent breeders and the largest producer of day-old broilers in terms of production capacity in China.

The Company plans to spend RMB 1.6 million (approximately $0.2 million) to upgrade the facilities and RMB 200,000 (approximately $29,400) for employee training. The average cost for the Company to acquire these breeder farms (including the expenses for facility upgrades and employee training but excluding land rent and new-issued-share price premium) is approximately 20% to 25% lower than the cost of building such farms from scratch. The unit cost of day-old broilers in those farms is expected to decrease by 2% to 3% compared to the Company's current cost structure due to lower depreciation and operating expenses. The Company expects to have sufficient cash after the payment for this acquisition to fund the renovations and daily operations of the acquired facilities.

Solarfun Power Holdings Co., Ltd. (SOLF) [9.29, 0.69, +8.02%] a vertically integrated manufacturer of silicon ingots, wafers and photovoltaic ("PV") cells and modules in China, today announced its plan to increase its cell capacity by 50 MW through the enhancement of its manufacturing processes, and to convert 160 MW of its existing cell lines to high-efficiency selective emitter technology, both to be completed in the early first quarter of 2011. The Company's cell capacity is expected to reach 550 MW by the early first quarter of 2011. The addition of 50 MW incremental capacity will be achieved through debottlenecking and the enhancement of manufacturing processes without the purchase of any new cell lines.

Also by the early first quarter of 2011, the Company plans to finish converting 160 MW of its existing cell capacity to high efficiency cell capacity through the introduction of selective emitter technology. The Company's approach is expected to realize efficiency targets exceeding 18.5% and 17.0% for monocrystalline and multicrystalline cells, respectively. The Company also announced that new manufacturing complexes are currently under construction allowing for major future cell and module capacity additions. These facilities will be completed during the first half of 2011 and are expected to provide the ability to add 500 MW of cell capacity and 1.2 GW of module capacity.

Orient Paper (ONP) shares slid Monday despite the Chinese paper company's recent announcement that it had hired a third-party investigator to examine allegations about its revenue. Orient Paper shares were down 23 cents, or 3.9%, to 5.66 Monday after the company said Friday it has retained law firm Loeb & Loeb, which plans to work with its audit committee to retain a Big Four audit firm, to conduct an independent investigation into allegations of fraud by a research firm. In Friday's announcement, Orient Paper CEO Zhenyong Liu said that he is "confident that this investigation will vindicate the company's financial disclosures to be accurate in all material respects."

Mindray Medical International Limited (MR) [28.36, 0.86, -2.92%] a leading developer, manufacturer and marketer of medical devices worldwide, today announced updates on new product launches for the first half of 2010. In the first half of the year, the company successfully released a total of four products across its three product lines. These include: a lower-end surgical bed, an additional advanced biochemistry analyzer; a feature-enhanced hand-carried color ultrasound system; and a new digital radiography system model.

Yongye International, Inc. (YONG) [7.47, 0.31, +4.33%] a leading manufacturer, developer and distributor of "Shengmingsu" brand plant and animal nutrient products in China, today announced preliminary revenue results for the second quarter ended June 30, 2010, and updated its sales guidance. Yongye expects to report preliminary unaudited revenue for the second quarter of 2010 of approximately $89 million, a 93.5% increase from $46 million for the same period last year.

For the first half of 2010, approximately 39% of sales came from Guangdong, Henan, Hubei and other provinces in central and southern China that are outside of the five traditionally strong provinces in northern China where the Company's business originated and where the bulk of revenues have historically been generated.Yongye also updated its revenue outlook for 2010 and now expects full year 2010 revenue of between $180 million and $185 million, compared with the previously provided guidance of between $160 million and $165 million. The Company plans to provide updated net income guidance when it reports its second quarter financial results in full next month.