Yayi International Inc., a leading producer and distributor of premium goat milk formula products in the People’s Republic of China, today said it expects to report strong sequential growth in the first quarter of its new fiscal year ended June 30, 2010, anticipating a 66% increase in revenues.

The company based expectations on preliminary results for the first quarter. Revenues for the three months ended March 31, 2010 are unaudited and have not been reviewed because the company changed its fiscal year-end from October 31 to March 31 earlier this year.

Yayi International said it expects revenues of approximately $7.5 million, up 66.7 percent from $4.5 million, for the three months ended March 31, 2010. The company attributes the projected increase to a strengthened focus on key markets and high-margin categories, as well as its aggressive marketing campaigns and resulting product order increases.

“We are pleased to see solid momentum in the launch of our new products in recent months. In conjunction with the Children’s Day in June, we have aggressively marketed our ‘Milk Goat’ brand through about 1,000 sales promotional activities across 23 provinces and municipalities in China. We remain optimistic about consumer confidence and acceptance of our high quality products and anticipate continued sales growth in the next few quarters, providing us with confidence that we are on track to achieve our financial goals for this year of net sales of $58.6 million to $65.9 million for Fiscal 2011,” Li Liu, CEO of Yayi International stated in the press release.

Liu also noted the company’s unique position in the market, as well as the quality of its products.

“Increasing health awareness among Chinese consumers and parents about the safety of infant formula, combined with the demonstrated health benefits of goat milk formula, have created a very attractive market opportunity for our premium ‘Milk Goat’ branded products. The company’s vertically integrated production and strict quality control have ensured our goat milk products a safe and reliable choice for consumers,” Lui stated.

The company also recently amended an existing agreement with its current shareholder SAIF Partners III L.P., a well-known private equity investor in Asia, modifying the terms of its Series A Preferred Stock to reflect Yali International’s new business focus, thereby providing for an aggregate net income of $20 million in the fiscal years ended March 31, 2011, and 2012.

“We are encouraged by the company’s performance and are confident that they have the right strategy to maximize long-term growth and profitability and, more importantly, establish a sustainable leadership position in the premium goat milk formula segment of China’s dairy market,” Kenneth Lee, principal at SAIF Partners, stated. “The amended agreement provides management with the flexibility to take full advantage of opportunities for the rapid market expansion, while reducing potential dilution for both management and existing shareholders.”

The company expects to report its full quarterly financial results by August 16, 2010.