Low-priced Stocks Konlin Letter

November, 2010


YASHENG GROUP
OTCQB:HERB - 2.20

Now in its 40th year,HERB ,a diverse conglomerate rooted deeply within the evolutionof the agriculture,and chemical industries, is a U.S holding company that conducts primarily agricultural operations in the Northwest of China.HERB IS ONE OF China's leading producers,and markets over 30 major agriculture products under six major producers segments,including field crops,vegetables, fruits,specialty crops,hops,hemp,seeds,beef and poultry.HERB is a supplier of high-quality agricultural products to world-famous conglomerates such as McDonalds,KFC,Tsingtao Beer and Pepsi.HERB sells its products through an extensive nationwide sale and distribution network(over 200 regional distributors)covering 16-provinces and over 100 cities in China.Their products are also sold directly to food processors,processed within the company and then resold supermarkets or other distributors,or further processed into retail food products.

Priorities from HERB's inception have been to acquire a vast amount of land long-term for Large Scale Industrial Agro Bases, with the necessary natural resources to provide a long-term infrasttucture for people to work these basic ingredients to create high-end agriculture products. HERB is cultivating products on over 250,000 acres,Arable land rich in minerals,a secure water supply and clean natural atmostphere is a must when establishing the foundation for each agriculture base...theGreen Agriculture Model.
The GanSu Province climate,where HERB has the majority of agro operations,has long sunshine days and short nights during the growing seasons,allowing larger yields than other areas.The days are very warm and nights very cold,giving the agro products a more rich flavor. The air is dry with very little humidity,greatly reducing the threat from pests and the need for pesticides.The soil is very aerated and the chemical balance is suitable,making it very favorable for growing without heavy uses of artificial fertilizers.Ladisabundant with virtually no exposure to pollution,and much of HERB's agro bases are fed by the glaciers of the Qilian Mountains and the upper reaches of the Yellow Riverthe waters from these sources are pristine. In fact,with seven agro bases in eight agro segments,HERB produces over 100Green Foodsand many of its products are certified as Organic Food by the Natural Organic Food Development Center.

Sales fro FY'09 rose to $740mil.,with.51 per share.Sales for the 1st half of FY'10 rose to $40mil.,with net income increasing,or .24per share vs..24 fro the same period in the prior year.The company maintains a strong balance sheet with nearly $8 mil.in cash and cash equivalents(as of 6/30/10) and 155,097,355 shares out-standing, of which 90% are held by insders.The stock is in the process of breaking out,where we would purchase as it estab-lishes an uptrend for a 1st target of $4.50-5.00,especially with total assets nearing $1.7 bil.USD and book value of $10.37 per share.

Demand for agricultural products is forecasted to increase due to several key factors.World population is expected to increaseby approx. 1.2 bil.people by the year2020.Also,worldwide robust economic growth has and will continue to increase demand for agricultural products.Most of this global econnomic growth is occurring in non-OECD countries,where increasing per capita incomes lead to a movement away from staple diets sunch as rice to more diverse,higher calorie diets which include fruits, veg-etables and meat.The developing world's increasingly diverse diet impact on global agriculture demand is compounded by the fact that

population growth rates in developing countries are nearly double those of developed countries.UItimate target 8-9.