Deer Consumer Products Inc (OTC:DEER)

SHENZHEN, China, October 16, 2012 /PRNewswire/ -- Deer Consumer Products, Inc. (NASDAQ: DEER) ("Deer" or the "Company"), a leading provider of "DEER" branded consumer products, announced today that on October 10, 2012, the Company received a letter dated October 10, 2012 from the NASDAQ Listing Qualifications Staff ("NASDAQ Staff"). In addition, on October 12, 2012, the board of directors of the Company appointed Mr. Hardy Zhang as a director of the Company, as Chairman of the Board's Audit Committee being the Audit Committee Financial Expert, and as a member of each of the Board's Compensation and Nominating and Corporate Governance Committees.

Receipt of NASDAQ Notification Letter

As previously disclosed, on October 1, 2012, Arnold F. Staloff resigned as a member of the Board of Directors of the Company, as Chairman of the Board's Audit Committee, and as a member of the Board's Compensation and Nominating and Corporate Governance Committees. In the NASDAQ letter dated October 10, 2012, NASDAQ Staff informed the Company that due to the resignation of Mr. Staloff, the Company no longer complies with NASDAQ's independent director and audit committee requirements under NASDAQ Listing Rule 5605. In addition, NASDAQ Staff stated in the letter that given its delisting determination made on October 2, 2012, and the related public interest concerns cited, NASDAQ Staff has determined to apply more stringent criteria under NASDAQ Listing Rule 5101 and deny the Company the cure periods. Accordingly, Mr. Staloff's resignation serves as an additional basis for delisting the Company's securities from The Nasdaq Stock Market.

Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

 
On October 3, 2012, Deer Consumer Products, Inc. (the “Company”) received a letter dated October 2, 2012 from the NASDAQ Listing Qualifications Staff (“NASDAQ Staff”), informing the Company that NASDAQ Staff has made a determination to delist the Company’s securities from The NASDAQ Stock Market pursuant to NASDAQ Listing Rules 5101 and 5250(a)(1).

According to the NASDAQ letter, the NASDAQ Staff’s delisting determination is based on the following allegations: the Company’s false and misleading disclosures regarding the operational status of its manufacturing facilities in Yangjiang, China; the Company’s failure to provide complete responses to NASDAQ Staff’s questions regarding the Company’s customers, suppliers and shipping providers; and the Company’s involvement in a scheme to illicitly transfer corporate funds to a group of stockbrokers through a bogus consulting contract.

Pursuant to the NASDAQ Letter, the Company may request for a hearing and appeal NASDAQ Staff’s determination.  If such request by the Company is not received by NASDAQ Hearings Department by 4:00 p.m. Eastern Time on October 9, 2012, the trading of the Company’s common stock will be suspended at the opening of business on October 11, 2012, and a Form 25-NSE will be filed by NASDAQ with the SEC, which will remove the Company’s securities from listing and registration on The NASDAQ Stock Market.  The Company’s securities may become eligible to be quoted on the OTC Bulletin Board or in the “Pink Sheets” thereafter.

First Quarter 2012 Results

• Our revenues for the three months ended March 31, 2012, were $49.9 million, an increase of $15.2 million, or 44%, from $34.7 million for the three months ended March 31, 2011.
• First quarter net income was $7.8 million, an increase of 35% from Q1/2011. Fully diluted earnings per share were $0.23, an EPS increase of 35% from Q1/2011.

MANAGEMENT COMMENTS ON 2012 FIRST QUARTER FINANCIAL RESULTS

Bill He, Chairman & CEO of Deer, commented: "Deer is pleased to report record first quarter 2012 financial results. In 2010, Deer entered China's domestic markets with a strong push by putting our "DEER" branded products on the shelves of retail locations across China. In 2012, Deer is continuing to expand its store presence across China while adding in-store promotional staff to further enhance its sales. Deer currently has access to approximately 4,000 retail locations across China and has developed a well-recognized brand by working with various retail channels.

We believe China remains the world's largest and fastest growing consumer retail market and has strong domestic demand for small household appliances. There are approximately 35,000 retail locations across China that Deer could potentially penetrate. Deer has significant growth potential in China."

AFFIRMS 2012 FINANCIAL GUIDANCE

In 2012, Deer anticipates revenues from the high margin China domestic sales will continue. Deer affirms its 2012 revenue guidance of between $270 and $290 million, net income guidance of between $45 million and $47 million, and targets EPS (Earnings per Share) between $1.37 and $1.42.

3-YEAR INSIDER SHARE LOCKUP, TOTAL MANAGEMENT COMMITMENT

As disclosed previously, Deer's entire management team has voluntarily entered into 3-year share lockup agreements, which prohibit them from selling any shares to the general public through at least 2013. The lockup agreements represent approximately 47% of Deer's entire outstanding shares. Deer management's vested interests are aligned with those of Deer's public shareholders. Deer has been led by its original founders since the inception of its operating business 17 years ago.

Full Year 2011 Results

• 2011 revenue was $226.7 million, an increase of $50.9 million, or 28.9%, from $175.8 million in 2010.
• 2011 net income was $39.8 million, an increase of 31% from 2010. Fully diluted earnings per share were $1.18, an EPS increase of 31% from 2010.
• Fourth quarter EPS were $0.39 vs $0.33 in prior year

MANAGEMENT COMMENTS ON 2011 FINANCIAL RESULTS

Bill He, Chairman & CEO of Deer, commented: "Deer is pleased to report record 2011 financial results. In 2010, Deer entered China's domestic markets with a strong push by putting our 'DEER' branded products on the shelves of retail locations across China. In 2011, Deer is continuing to expand its store presence across China while adding in-store promotional staff to further enhance sales. Deer currently has access to approximately 4,000 retail locations across China and has developed a well-recognized brand by working with various retail channels.

"We believe China remains the world's largest and fastest growing consumer retail market and has strong domestic demand for small household appliances. There are approximately 35,000 retail locations across China that Deer could potentially penetrate. Deer has significant growth potential in China."

Deer's shareholders' equity increased to approximately $185.4 million, or $5.52 per share in net assets. Deer had more than $13.9 million in cash and equivalents at the end of the 2011 without any long-term debts. Deer has sufficient cash on hand to meet its liquidity requirements and has no plan to dilute our shareholders.

AFFIRMS 2012 FINANCIAL GUIDANCE

In 2012, Deer anticipates revenues from the high margin China domestic sales will continue to surpass export sales. Deer provides 2012 revenue guidance of between $270 and $290 million, net income guidance of between $45 million and $47 million, and targets EPS (Earnings per Share) between $1.37 and $1.42.

3-YEAR INSIDER SHARE LOCKUP, TOTAL MANAGEMENT COMMITMENT

As disclosed previously, Deer's entire management team has voluntarily entered into 3-year share lockup agreements, which prohibit them from selling any shares to the general public through at least 2013. The lockup agreements represent approximately 47% of Deer's entire outstanding shares. Deer management's vested interests are aligned with those of Deer's public shareholders. Deer has been led by its original founders since the inception of its operating business 17 years ago.

Deer Consumer Products, Inc. is a NASDAQ Global Select Market listed U.S. company with its primary operations in China. Deer has a 17-year operating business as well as a strong balance sheet. Operated by Deer's founders and supported by more than 100 patents, trademarks, copyrights and approximately 1,000 staff, Deer is a leading provider of "DEER" branded consumer products to Chinese consumers and a leading vertically integrated manufacturer of small home and kitchen appliances for global customers. DEER's product lines include a series of small household and kitchen appliances as well as personal care products designed to make modern lifestyles easier and healthier.

NEW YORK, Dec. 21, 2011 /PRNewswire/ -- Deer Consumer Products, Inc. (Nasdaq: DEER) (website: http://www.deerinc.com/), a leading provider of "DEER" branded household consumer products and a vertically integrated manufacturer of small household and kitchen appliances for global customers, announced today that threats from a group of U.S. and China based short sellers led by a fictitious group known as "Alfred Little", have been carried out due to Deer's refusal to withdraw a pending United States lawsuit pending in the Supreme Court of the State of New York.

Of further interest is a press related dated December 20, 2011 issued by the New York Stock Exchange listed Silvercorp Metals, Inc. (NYSE: SVM), titled Silvercorp Metals Inc.: Chinese Law Enforcement Agents Open Criminal Case to Investigate Creators of Falsified Reports.

Deer believes that short sellers established short positions in order to benefit from a purportedly upcoming "Alfred Little" report which caused the sudden drop in the price of Deer's common stock during the last 30 minutes of trading before market close on December 15, 2011, as well as drop in Deer's share prices on December 19 and December 20. This is the same conduct that caused dramatic drops in Deer stock prices in March of this year and the very reason for the lawsuit demanding justice against the "Little" conspirators that this same group is now attempting to have dismissed, not via legitimate judicial process, but via intimidation, coercion and in terrorum threats.

Deer remains fully committed to protecting and preserving the legal rights of the Company and its shareholders from these short and distort activities and will not be terrorized by this group of bandits.

NEW YORK, Dec. 20, 2011 /PRNewswire/ -- Deer Consumer Products, Inc. (Nasdaq: DEER) (website: http://www.deerinc.com), a leading provider of "DEER" branded household consumer products and a vertically integrated manufacturer of small household and kitchen appliances for global customers, announced today that late yesterday it was the victim of a threat by "Alfred Little" a group disguised through fabricated identities and fake addresses and phone numbers, that have engaged in a series of "short and distort" schemes against more than a dozen U.S.-listed companies.

As reported in Deer's most recent 10-Q, "on March 28, 2011, Deer filed suit in the Supreme Court of the State of New York, captioned Deer Consumer Products, Inc. v. Alfred Little, et al., Index No. 650823/2011, against "Alfred Little," the website SeekingAlpha.com and others. Our claims in this action allege the publishing of false and defamatory statements by the defendants as part of an orchestrated scheme to manipulate and depress the market for our common stock. We are claiming compensatory and punitive damages totaling at least $11 million, not including claims for attorneys' fees, and other equitable remedies, including disgorgement of any illicit trading profits received by the defendants in connection with the alleged market manipulation scheme. On August 29, 2011, we obtained a Court order allowing us to effect service of the summons and complaint upon defendant Alfred Little via email and related notice. We effected service on Alfred Little pursuant to that order."

The December 19 threat, circulated by electronic transmission on one of the Alfred Little websites, demanded that Deer either withdraw its lawsuit against Little now pending in the Supreme Court of the State of New York, or suffer the consequences of a reign of terror that would begin today December 20 via additional attacks upon Deer by Little via electronic publications on the internet.   The threat caused a sharp drop in Deer's share price on December 19, 2011.

In a recent blog post, "Alfred Little" threatened to continue publishing what Deer believes are false statements about the company based on fabricated data. The "Alfred Little" blog post further stated that "[i]f DEER wishes to prevent further investigative research from appearing on A*L [the "Alfred Little" website] the company needs to halt its legal proceedings and leave our contributors and us alone." Deer believes that this recent blog post by "Alfred Little" is an attempt to force the company, as well as other plaintiffs, into withdrawing pending lawsuits against "Alfred Little," and its conspirators.

Deer views the new actions of "Alfred Little" and others as an attempt to subvert the normal course of the judicial process. They will not succeed in coercing Deer to withdraw its lawsuit and bring the culpable parties to justice for their relentless unsubstantiated attacks.   Deer remains in full compliance with U.S. securities laws.

NEW YORK, Dec. 16, 2011 /PRNewswire/ -- Deer Consumer Products, Inc. (Nasdaq: DEER) (website: http://www.deerinc.com/), a leading provider of "DEER" branded household consumer products to Chinese consumers and a vertically integrated manufacturer of small household and kitchen appliances for global customers, announced today that it has received calls from concerned shareholders regarding the sudden drop in the price of its common stock during the last 30 minutes of trading before market close on December 15, 2011.

Deer believes yesterday's events relate to and it is aware of the spreading of false market rumors by a distressed online blogger with a recent history of falsifying facts and records against public companies in which he and his network of relationships had short interests. Deer will not hesitate to take immediate action against individuals involved in the manipulation of Deer's share price and hurting the general public in a classic "short and distort" scheme.

Deer affirms that it is conducting its normal course of business and is not aware of any negative developments within the company or in its operations.

Deer remains on schedule to pay a quarterly cash dividend of $0.05 per share to shareholders of record at the close of business on December 31, 2011. Deer has announced a total cash dividend payment of $0.20 per share for the year 2011.

Deer reported a solid balance sheet for the third quarter ended September 30, 2011, as follows:

$5.12 PER SHARE IN NET ASSETS, STRONG BALANCE SHEET, NO LONG-TERM DEBTS

As of Q3/2011, Deer's shareholders' equity increased to approximately $172 million, or $5.12 per share in net assets. Deer had more than $26 million in cash and cash equivalents at the end of the third quarter without any long-term debts. Deer has sufficient cash on hand to meet its liquidity requirements and has no plan to dilute its shareholders.

AFFIRMS 2011 FINANCIAL GUIDANCE

In 2011, Deer anticipates revenues from the high margin China domestic sales to surpass export sales. Deer provides 2011 revenue guidance of between $200 and $220 million, net income guidance of between $35 million and $37 million, and targets EPS (Earnings per Share) between $1.08 and $1.12.

The Financial Investigator

For four months between November 2010 and February 2011 the shares of Deer Consumer Products, a Chinese manufacturer of household applicances, remained ironbound in a range between $11 and $12. It’s notable for several reasons, not the least of which is that a widespread rout was then well underway among Chinese reverse merger stocks. Yet as the chart shows, DEER’s share price barely wavered even as short-sellers began to increasingly bet against it and the market for similar high-fliers collapsed.

Rather than supposing DEER had a uniquely loyal shareholder base who refused to sell because of an evangelical belief in the value of their investment–similar to those holding Berkshire Hathaway–a more likely explanation is that DEER is alleged to have paid $350,000 to a Manhattan penny stock brokerage to peddle its shares during this period. DEER is essentially running up a massive red flag: On Wall Street, a company that pays a brokerage to sell its shares is considered even more desperate a move than than hiring a firm to provide research coverage. It is a virtual acknowledgment that its shares cannot be sold through traditional means and as such, has long been relegated to the far fringes of even the penny stock world.

Third Quarter 2011 Results

• Q3/2011 revenue of $73.0 million, an increase of 32% from Q3/2010
• Q3/2011 net income of $13.2 million, an increase of 43% from Q3/2010
• Fully diluted earnings per share of $0.39, an EPS increase of 39% from Q3/2010
• Anticipates favorable Chinese domestic consumer market environment for continued growth in 2012
• Board of Directors declares $0.05 per share quarterly dividend for the 4th quarter
• Affirms and potentially exceeds the current 2011 financial guidance

Bill He, Chairman & CEO of Deer, commented: "Deer is pleased to report record third quarter financial results. In 2010, Deer entered China's domestic markets with a strong push by putting our 'DEER' branded products on the shelves of retail locations across China. In 2011, Deer is continuing to expand its store presence across China while adding in-store promotional staff to further enhance sales. Deer currently has access to approximately 3,200 retail locations across China and has developed a well-recognized brand by working with various retail channels.

We believe China remains the world's largest and fastest growing consumer retail market and has strong domestic demand for small household appliances. There are approximately 35,000 retail locations across China that Deer could potentially penetrate. Deer has significant growth potential in China."

FFIRMS 2011 FINANCIAL GUIDANCE

In 2011, Deer anticipates revenues from the high margin China domestic sales to surpass export sales. Deer provides 2011 revenue guidance of between $200 and $220 million, net income guidance of between $35 million and $37 million, and targets EPS (Earnings per Share) between $1.08 and $1.12.

EXTORTION ATTEMPTS AND FALSE ALLEGATIONS BY ILLEGAL STOCK SHORT SELLERS

Deer is fully aware of the latest desperate illegal short seller attacks on its stock, including repeated publication of the same misstatements by fictitious figure "Alfred Little" and so-called bloggers called "GeoInvesting". Deer management emphatically and categorically denies the allegations and imputations in these stories which are based on fabricated information credited to sources with false identities and include inaccurate statements regarding China land use rights and Deer's business. The authors of these publications, "Alfred Little" and "GeoInvesting," have failed to reveal their true identities and conflicts of interest to avoid responsibility for their spreading of false statements, continued defamation of Deer and engaging in market manipulation.

In connection with these publications, the entities behind them have approached Deer with questionable offers to cease their "attacks". For example, "Alfred Little" offered to issue retractions of various articles in exchange for Deer dropping its ongoing subpoena and discovery efforts in the Superior Court of the State of New York and "GeoInvesting" offered to provide paid "consulting services" to Deer several months ago. Deer refuses to compromise its vigorous efforts against these entities that the Company believes are operating for the benefit of short sellers.

NEW YORK, Sept. 16, 2011 /PRNewswire/ -- Deer Consumer Products, Inc. (Nasdaq: DEER) (website: http://www.deerinc.com), a leading provider of "DEER" branded household consumer products to Chinese consumers and a vertically integrated manufacturer of small household and kitchen appliances for global customers, today announced that Deer is scheduled to pay on October 14, 2011, its regular quarterly cash dividend of $0.05 per share to shareholders of record as of September 30, 2011.

In 2011, Deer has consistently made quarterly cash dividend payments of $0.05 per share to its shareholders. Deer anticipates reporting strong 3rd quarter product sales as it continues to conduct its normal course of business.

EXTORTION ATTEMPTS AND FALSE ALLEGATIONS BY ILLEGAL STOCK SHORT SELLERS

Deer is fully aware of the latest desperate illegal short seller attacks on its stock, including repeated publication of the same misstatements by fictitious figure "Alfred Little" and so-called bloggers called "GeoInvesting". Deer management emphatically and categorically denies the allegations and imputations in these stories which are based on fabricated information credited to sources with false identities and include inaccurate statements regarding China land use rights and Deer's business. The authors of these publications, "Alfred Little" and "GeoInvesting," have failed to reveal their true identities and conflicts of interest to avoid responsibility for their spreading of false statements, continued defamation of Deer and engaging in market manipulation.

In connection with these publications, the entities behind them have approached Deer with questionable offers to cease their "attacks". For example, "Alfred Little" offered to issue retractions of various articles in exchange for Deer dropping its ongoing subpoena and discovery efforts in the Superior Court of the State of New York and "GeoInvesting" offered to provide paid "consulting services" to Deer several months ago. Deer refuses to compromise its vigorous efforts against these entities that the Company believes are operating for the benefit of short sellers.

GeoTeam Corroborates AlfredLittle.com Findings on Harbin and Deer

Through its own set of recordings, GeoInvesting ("The GeoTeam" or "GEO") has confirmed details regarding the claims made by AlfredLittle.com that Harbin Electric (NASDAQ: HRBN) and Deer Consumer Products (NASDAQ: DEER) have likely misappropriated a combined approximately $44.0 million by exaggerating the price paid for land use rights. The GeoTeam is very familiar with issues surrounding land use rights. We have seen similar cases of misrepresentation of land use rights with stories we broke such as China Redstone (CGPI) and Lotus Pharmaceuticals (LTUS). CGPI denied our claims of land use right misrepresentations despite recordings with government officials and the publication of a PRC newspaper article, after our research report, which agreed with our findings. Our findings were even supported by quotes from employees of CGPI! The stock now trades near $0.70 per share. The key lesson to be learned is that ChinaHybrid paper and words cannot be trusted at face value.

HRBN Summary of Findings

1. We confirmed that Ms. Wang actually does exist and works at Xi’an Lintong Tourism & Business Development Zone Management.
2. Ms. Wang confirmed a much lower land price than indicated by HRBN.

DEER Summary of Findings

1. Contrary to DEER’s claims, we confirmed that Mr. Zhuang and Mr. Fei Li actually do exist and work at Wuhu Economic & Technological Development Area.
2. They both confirmed much lower land prices than indicated by DEER.

Please see the rest of the report here,(http://geoinvesting.com/companies/duediligence/hrbn_report2.aspx), as well as the supporting recordings and transcripts.

Sincerely,

The GeoTeam

The GeoTeam has learned that Alfredlittle.com is probing into the issues regarding Harbin Electric (NASDAQ:HRBN) and Deer Consumer Products (NASDAQ:DEER); Issues revolve around the misappropriation of a combined $44 million. Through the use of recordings, emails and face to face meetings with PRC government officials, Alfredlittle.com provides evidence that supports allegations that massive fraud issues exist regarding the purchase of land use rights by both HRBN and DEER. While these allegations seem very damming at face value, the GeoTeam is actively trying to confirm the findings.  Please stay tuned for more details as the story develops.

HRBN findings:

1.       Alfredlittle.com HRBN findings purport that the company made a $23 million prepayment to government for land use rights on June 30th 2011.

2.       Frazer Frost has not responded to allegations.  Frazer Frost is notorious for auditing companies accused of fraud.

3.       HRBN has exaggerated the true cost of the land use rights by at least 92%.

4.       Article shows evidence of some corruption that takes place at government level dealing with land use rights.

5.       Evidence sent to SEC and NASDAQ.

DEER findings:

1.       Alfredlittle.com DEER findings purport that the company paid $37 million to purchase land use rights but failed to disclose receipt of $21 million in rebates.

2.       Management has repeatedly refused to address findings.

3.       Still no construction activity at DEER’s 660 Mu project a year after the first parcel was purchased.  Local government is angered by this issue.

4.       Article shows evidence of some corruption that takes place at government level dealing with land use rights.

5.       Evidence sent to SEC and NASDAQ.

Disclosure: Short HRBN and DEER

Alert originally available to Premium Members only!!  You too can be the first to know.

NEW YORK, Sept. 6, 2011 /PRNewswire/ -- Deer Consumer Products, Inc. (Nasdaq: DEER) (website: http://www.deerinc.com/), a leading provider of "DEER" branded household consumer products to Chinese consumers and a vertically integrated manufacturer of small household and kitchen appliances for global customers today announced that Deer is fully aware of the latest desperate short seller attacks on Deer on September 6, 2011, including another publication of the same old lies by a fictitious figure "Alfred Little," including totally fabricated information, false identities, and false allegations against the Company. Deer has repeatedly filed relevant land acquisition related documents with the Securities and Exchange Commission (SEC), and Deer stands by the accuracy of its public filings.

NEW YORK, Aug. 9, 2011 /PRNewswire/ --

• Q2/2011 revenue of $45.1 million, an increase of 31% from Q2/2010
• Q2/2011 net income of $7.3 million, an increase of 22% from Q2/2010
• Fully diluted earnings per share of $0.22, an EPS increase of 22% from Q2/2010
• Anticipates favorable Chinese domestic consumer market environment for continued growth in 2011
• Board of Directors declares $0.05 per share quarterly dividend for the 3rd quarter  
• Affirms and potentially exceeds the current 2011 financial guidance

Bill He, Chairman & CEO of Deer commented: "Deer is pleased to report record second quarter financial results. In 2010, Deer entered China's domestic markets with a strong push by putting our 'DEER' branded products on the shelves of approximately 3,000 retail locations across China. 'DEER' branded products did especially well in the Guandong Province, Sichuan Province, Shaanxi Province, Zhejiang Province and Shandong Province. In 2011, Deer plans to continue to expand such store presence across China while adding in-store promotional staff to further enhance sales and sell-through. During the second quarter, we experienced strong customer product re-ordering from existing and new customers, as well as various levels of product sell-through. In certain product lines and during Chinese holidays, some of our products sold out completely. We made great efforts to replenish empty shelf space in some markets."

"China remains the world's largest and fastest growing consumer retail market and the most profitable marketplace in the world for small household appliances. There are approximately 35,000 retail locations across China that Deer could potentially penetrate. Deer has significant growth potentials in China for years to come."

"Deer anticipates significant revenue and net income growth for the remainder of 2011. We are comfortable with meeting and potentially exceeding our earnings guidance for 2011."

AFFIRMS 2011 FINANCIAL GUIDANCE

In 2011, Deer anticipates revenues from the high margin China domestic sales to surpass export sales. Deer provides 2011 revenue guidance of between $200 and $220 million, net income guidance of between $35 million and $37 million, and targets EPS (Earnings per Share) between $1.08 and $1.12.

• Q1/2011 revenue of $34.7 million, an increase of 45% from Q1/2010
• Q1/2011 net income of $5.8 million, an increase of 44% from Q1/2010
• Fully diluted earnings per share of $0.17, an EPS increase of 42% from Q1/2010
• Anticipates favorable Chinese domestic consumer market environment for continued growth in 2011
• Board of Directors declares $0.05 per share quarterly dividend for the 2nd quarter  
• Affirms and potentially exceeds the current 2011 financial guidance

Geoteam® Note: 2011 First quarter analyst EPS estimates were $0.16.

Bill He, Chairman & CEO of Deer commented: "Deer is pleased to report record first quarter financial results. In 2010, Deer entered China's domestic markets with a strong push by putting our "DEER" branded products on the shelves of approximately 3,000 retail locations across China. In 2011, Deer plans to continue to expand such store presence across China while adding in-store promotional staff to further enhance sales and sell-through. During the first quarter, we experienced strong customer product re-ordering from existing and new customers, as well as various levels of product sell-through. In certain product lines and during Chinese holidays, some of our products sold out completely. We made great efforts to replenish empty shelf space in some markets."

2ND QUARTER DIVIDEND APPROVED BY THE BOARD OF DIRECTORS

Deer's Board of Directors approved a $0.05 per share quarterly cash dividend for the second quarter from future earnings. The dividend will be paid on July 15, 2011, to shareholders of record at the close of business on June 30, 2011. Declaration and payment of future quarterly dividends will be made at the discretion of the Board of Directors.

AFFIRMS 2011 FINANCIAL GUIDANCE

In 2011, Deer anticipates revenues from the high margin China domestic sales to surpass export sales. Deer provides 2011

• Revenue guidance of between $200 and $220 million
• Net income guidance of between $35 million and $37 million
• EPS targets (Earnings per Share) between $1.08 and $1.12.

3-YEAR INSIDER SHARE LOCKUP, TOTAL MANAGEMENT COMMITMENT

As disclosed previously, Deer's entire management team has voluntarily entered into 3-year share lockup agreements, which prohibit them from selling any shares to the general public through at least 2013. The lockup agreements represent approximately 47% of Deer's entire outstanding shares. Deer management's vested interests are aligned with those of Deer's public shareholders. Deer has been led by its original founders since the inception of its operating business 16 years ago.

NEW YORK, May 2, 2011 /PRNewswire/ -- Deer Consumer Products, Inc. publicly announces today that the Company has received additional evidence of continuing illegal short selling in DEER stock.  

The Company believes its common stock has been manipulated in collusion among "naked" short sellers, which may include U.S. and off-shore based hedge funds/individuals that distribute false and fabricated information concerning the Company via various websites and blogs, including through SeekingAlpha.com, a website owned by Seeking Alpha Ltd., an Israeli company.

In what appears to be a part of this attempted manipulation, a purported class action complaint was filed against the Company by The Rosen Law Firm. This complaint is expressly based upon the false and defamatory reports concerning the Company that were authored by a fictitious character - "Alfred Little" and published by Seeking Alpha Ltd. even though Seeking Alpha Ltd. had deleted certain false reports prior to the filing of the complaint. Litigation counsel for DEER has notified The Rosen Law Firm that the complaint contains numerous false and inaccurate allegations and the Company will seek sanctions against the plaintiff and The Rosen Law Firm if the complaint is not withdrawn in its entirety.      

BACKGROUND FACTS:  

During the months of March and April 2011, the Company believes that an attempted market manipulation scheme by illegal short sellers acting in collusion caused DEER's share price to plunge from more than $11 per share on March 21 to as low as$6.12 on April 4 on heavy daily volume, causing a temporary loss of approximately $165 million in market capitalization for DEER's shareholders.

To protect DEER's shareholders and as a matter of good corporate governance, DEER has repeatedly confirmed that its filings with the Securities and Exchange Commission, including its latest annual report, 10-K filing with audited financials are accurate and are in full compliance with SEC disclosure requirements. DEER has also affirmed its 2011 earnings guidance and a dividend policy. In addition, DEER paid initial quarterly cash dividend of $0.05 per share on April 14 to shareholders of record on March 31. DEER has hosted numerous visits by independent research analysts, institutional investors and global investment banks. The Company notes that DEER's share price has recovered approximately 66% since April 4 to a closing price of $10.14on April 29.

ADDITIONAL EVIDENCE OF ILLEGAL SHORT SELLING:

At present, a large number of DEER shares sold short have failed to settle for 30 consecutive settlement days, which indicates naked short positions that still exist today. The number of such shares has exceeded 700,000 shares on certain trading days. Also, according to publicly available market data, DEER's common stock has been on the list of Nasdaq's "Threshold" securities under the SEC REG SHO rules, for at least 30 consecutive settlement days, indicating failure to settle trades among securities clearing firms for more than 30 consecutive settlement days.

As one part of a broader plan to take steps to protect the Company and its shareholders from this apparent illicit short selling activity,  DEER's litigation counsel has communicated and will continue to communicate with the legal and compliance departments of various  securities clearing and custodian firms to warn them of possible illegal short selling activities still taking place in DEER's common stock and to discover information concerning share delivery obligations and compliance with U.S. securities laws. DEER is optimistic about receiving full cooperation from these registered clearing firms.

DEER intends to discover and take legal actions against all parties that assist and abet in the illegal short selling activities in DEER.  

"ALFRED LITTLE" DOES NOT EXIT, USES FABRICATED BIOGRAPHY TO DEFRAUD THE GENERAL PUBLIC

The Company believes that "Alfred Little" is a fictitious character - a disguise used by one or more illegal short sellers in the short sale scheme against DEER and other public companies. According to our investigation, "Alfred Little" is not a real person. His "professional biography" published on his website and on SeekingAlpha.com was fabricated, with the purpose to mislead and defraud the investing public. "Alfred Little's" published biography includes claims that he had years of experience as an auditor at Deloitte, worked for large global companies and had years of investment experience in China, published a book onChina, etc. cannot be verified. Further, in the attack on DEER, "Alfred Little" published a 3 month old prepaid phone card that was never used as his purported contact number for concerned investors. In addition, "Alfred Little" quoted statements from several Chinese government officials as witnesses to support his various false allegations against DEER. These Chinese officials in fact do not exist. "Alfred Little" further made false allegations on his "channel checks" of Chinese retail stores while he failed to disclose his naked short positions in DEER and ignored DEER's repeated public disclosure about the Company's product distribution process as well as its corporate structure. "Alfred Little's" various articles, timely published in collusion with short sellers who immediately sold large blocks of DEER's stock in market orders that intentionally created fear in the general public to drive down DEER's share price. Short sellers have profited handsomely at the expense of DEER's thousands of shareholders. DEER will continue its vigorous investigation and discovery of the network of illegal short sellers that have damaged the reputation and destroyed value in U.S. listed public companies.

DEER TO SEEK SANCTIONS AGAINST PURPORTED "CLASS ACTION" PLAINTIFF'S LAW FIRM

On April 29, 2011, "The Rosen Law Firm" filed a "class action" complaint against the Company on behalf of "James Rose", an individual who allegedly purchased 2,000 shares of DEER common stock during 2010.  The Company strongly denies the allegations in the complaint and counsel for DEER has already notified The Rosen Law Firm that the Company intends to seek sanctions under Rule 11 of the Federal Rules of Civil Procedure against The Rosen Law Firm if the complaint is not withdrawn in its entirety.

The Company also notes the following concerning the purported class action complaint by The Rosen Law Firm:

1.  The complaint was filed in total disregard of the Company's prior warnings concerning illegal short selling activities in DEER.

2.  The complaint is explicitly based on the false and defamatory reports authored by an "Alfred Little" and published by Seeking Alpha Ltd. But the Company believes that "Alfred Little" does not exist and is a fictitious character - a disguise used by one or more illegal short sellers in the short sale scheme against DEER and other companies publicly traded on U.S. stock exchanges.

3.  The complaint includes false and defamatory allegations that were contained in an article published on SeekingAlpha.com that Seeking Alpha Ltd. removed from the web-site after receiving true and accurate information from the Company. The Company believes that The Rosen Law Firm's willingness to include such allegations in the complaint under such circumstances demonstrates extreme recklessness and an utter disregard of the truth.

DEER IS FOCUSED ON GROWING A STRONG COMPANY

DEER's management remains totally committed to corporate governance and enhancing long term shareholder value through our continued pursuit of corporate excellence and business expansion. DEER looks forward to another year of record sales and earnings growth in 2011.

Rodman and Renshaw on DEER                       04/01/2011

DEER – Termination of Coverage

TERMINATION OF COVERAGE

Effective immediately, we are terminating coverage of Deer Consumer Products (NASDAQ: DEER) to allocate resources more efficiently within our coverage universe. We are restructuring our coverage along key consumer/retail verticals in which U.S.-listed Chinese companies have a more significant presence. Effective upon the termination of coverage, any of our prior financial projections on this stock should not be relied upon.

VALUATION. Our last rating on DEER shares was ‘Market Outperform.’ Our previous 12-month price target of $13 was based on ~12x our prior 2011 EPS estimate of $1.05, compared to the blended 2011 P/E average of 13.5x for U.S.-listed U.S. and emerging markets consumer electronics manufacturers and distributors. The key opportunity, challenge, and point of controversy for Deer are its penetration into the domestic China markets, both for its private label and Deer-branded products.

COMPANY DESCRIPTION

Founded in 1994 and headquartered in Shenzhen, China, Deer Consumer Products is a designerand manufacturer of small kitchen appliances with its core product lines in blenders and juicers. Untilrecently in 2009, the company acted exclusively as an original design manufacturer (“ODM”) and/or anoriginal equipment manufacturer (“OEM”), and distributed a majority of its products through third-partydistributors (e.g., Focus Electrics Group, Applica Inc., and Sattar) to international blue-chip householdappliance brand giants such as Back to Basics, Black & Decker, Betty Crocker, and Kenwood.Recognizing the emerging affluence of the middle class in China, the company began focusing on thedomestic consumer end markets in early 2009. In conjunction, Deer’s entryinto the China markets presented the company an opportunity to develop its brand name in a still-nascent and fragmented market. In accordance with the company’s 10-K filing, China domestic sales accounted for roughly 43.7% of total revenues in 2010.

Notice Regarding Privacy and Confidentiality:

This material has been prepared for informational purposes only. While it is based on information generally available to the public from sources we believe to be reliable, no representation is made that the subject information is accurate or complete. Past performance is not a guarantee nor does it necessarily serve as an indicator of future results. Price and availability are subject to change without notice. Additional information is available upon request.

Since Rodman & Renshaw, LLC is not a tax advisor, transactions requiring tax consideration should be reviewed carefully with your tax advisor. Similarly, Rodman & Renshaw, LLC is not a law firm and provides no legal opinions or legal advice.

Rodman & Renshaw, LLC may make a market in the securities being discussed.

Rodman & Renshaw, LLC and/or its officers or employees may have positions in any of the securities of this (these) issuer(s).

Member FINRA.
Member SIPC

NEW YORK, March 21, 2011 /PRNewswire/ -- Deer Consumer Products, Inc. announced today that the Company is not aware of any facts regarding its business operations that may have negatively contributed to Deer's share price decline today.

DEER has noticed dramatically increased naked short activity in DEER's common stock as well as activities of several website bloggers, namely from a person writing under the name of "Alfred Little," a blogger on SeekingAlpha and others.  The Company believes that it is possible that such persons and others may be colluding in efforts to bring down DEER share price through intimidation of research analysts, institutional investors and their broad spreading of fabricated market information and rumors with the goals of market and share manipulation of Deer's common stock and stock options.

Deer also confirms that its filings with the Securities and Exchange Commission, including its latest 8-K regarding its land ownership and its recent 10-K filing, are accurate and comply with the law.

Questions Regarding the True Identity and Intentions of "Alfred Little"

The Company has serious questions regarding the true identity of the person or persons writing under the name "Alfred Little." "Alfred Little's" purported biography on SeekingAlpha stated that he had years of experience in China as well as years of accounting experience at Deloitte. The Company has not been able to verify "Little's" claims thus far and believes that the conduct of "Little," and surrounding circumstances, may fit a pattern common to the general nature of short selling/false rumor schemes highlighted by the SEC as a subject for immediate investigation.  If so, "Little's" claim, and possibly the very identity of the persons behind "Alfred Little," would be open to serious question. The Company intends to investigate whether the recent events may be part of broad manipulative efforts by others, including several hedge funds based in California and elsewhere with the assistance of bloggers.

2010 Fourth quarter earnings review:

Reports fourth quarter EPS of $0.31, beating estimates buy $0.03., but guides 2011 EPS to be around $1.10, which is a little lower than analyst estimate of $1.15. Company announced a couple more shareholder friendly moves: Dividend and management/insider share lock up. The fact that SAIC filings do not match SEC filings and that Ben Wey has a history with this company, leave it open to short attacks.

2010 Year Highlights:

• 2010 revenue of $175.8 million, an increase of 116% from 2009
• 2010 net income of $30.3 million, an increase of 145% from 2009.
• Basic earnings per share of $0.91, fully diluted EPS of$0.90, an EPS increase of 68% from 2009
• Strong Q1/2011 sales growth, anticipates favorable Chinese domestic and global market environment for continued earnings growth in 2011
• Declares quarterly cash dividend of $0.05 per share

GeoTeam® Note: 2010 vs. 2009 fourth quarter was $0.33 vs. $0.23

Management and insiders share lock up through 2013

"The initiation of a cash dividend demonstrates Deer's confidence in our growth potential, and reflects our strong financial position and strong balance sheet without any long-term debts. We believe Deer's dividend yield is in line with those of other global companies in our household appliances industry. The cash dividend allows us to reward our long-term shareholders while maintaining sufficient cash levels to aggressively grow our business in 2011 and beyond. We have sufficient cash on hand to continue to grow our business without diluting our current shareholders," said Bill He, Chairman and CEO of Deer

Mr. He commented: "As anticipated, the strategy for our China domestic market expansion was well executed in 2010, which resulted in significantly higher revenue growth and higher profit margins. Deer believes that our integrated 'production to market' business model and our in-depth understanding of the local Chinese culture and market insights towards China's domestic markets have positioned Deer as an efficient operator of a highly profitable growth company. We capture both manufacturing margins and end user distribution margins. As Deer continues to expand in the high margin China domestic markets, we see tremendous growth momentum well into 2011."

In 2011, Deer anticipates revenues from the high margin China domestic sales to surpass export sales. Deer provides 2011 revenue guidance of between $200 and $220 million, net income guidance of between $35 million and $37 million, and targets EPS (Earnings per Share) between $1.08 and $1.12.

3rd Quarter Financial Highlights:

• Revenues of $55.26 million, an increase of 108% from Q3/09

• Net income of$9.27 million, an increase of 125% from Q3/09, fully diluted EPS (Earnings per Share) of $0.28, an increase of 56% from EPS of $0.18in Q3/09

• Strong balance sheet: $54.4 millionin cash without any long term debts

• Record China domestic sales – high margin China domestic sales increased 708% to 42% of revenues compared to Q3/09

• Expanded gross profit margin to 28.7%, compared to 22.1% in Q3/09

• Expanded operating margin to 21.0%, compared to 16.9% in Q3/09

• Expanded net income margin to 16.8%, compared to 15.5% in Q3/09

• Initiated planning for Deer's 2nd production facility, which is located in China's eastern AnHui Province – positioned for significant China domestic customer demand in 2011

• Sees positive impact to earnings from China's currency appreciation and positive growth momentum from the current global economic environment

Management Comments on 3rd Quarter 2010 Financial Results:

Bill He, Deer's Chairman and CEO, commented: "Deer is pleased to report the best 3rd quarter financial results in our corporate history. During this quarter, we executed our China domestic market expansion strategies successfully, which resulted in higher revenue growth as well as higher profit margins. Deer believes that our integrated 'production to market' model and our in-depth local cultural and market knowledge have made Deer one of the most profitable and efficiently operated companies in the small household appliance industry in the world. We capture both manufacturing margins and end user distribution margins. We see positive earnings growth trend to continue well into 2011."

Raises 2010 Earnings Guidance to $29 Million in Net Income, EPS of $0.87:

Based on the current order fulfillment and product shipments to China domestic and global customers, Deer raises its 2010 earnings guidance to approximately $172 million in revenues, approximately $29 million in net income and Earnings per Share (EPS) of $0.87-$0.88. Deer's previous 2010 guidance was $160 million in revenues, $26 million in net income and EPS of $0.76.

Business Outlook for 2011: Targets Minimum 30% Revenues and Earnings Growth in 2011 from the Raised 2010 levels:

Deer anticipates no less than 30% growth in both revenues and net income in 2011 from the raised 2010 levels, mainly due to anticipated continued revenue growth in China's domestic markets. In 2010, Deer significantly expanded its China domestic market distribution footprints, which positions the Company for further market expansion in 2011. In addition, Deer sees better global market conditions in 2011 as the global economy continues to improve, which would benefit Deer's global market sales.

"Deer's strong financial performance in 2010 has set a positive tone for Deer's continued expansion in 2011. Chinese consumer wealth expansion in a favorable environment of high GDP growth and low inflation has created healthy market demand for Deer's small household appliances products, which directly enhance the lifestyles of China's rising middle class. Deer's strong balance sheet and significant cash position also provide ample strategic M&A opportunities in 2011. In addition, Deer plans to significantly increase our production capacity in 2011 through the opening of our second production facility, in order to stay closer to our China domestic customers as well as expanding distribution outlets. Our second factory should be completed in 2011 and it is strategically located in a region that can service more than 300 million people in one of China's most economically developed areas. Deer looks forward to continuing delivering high earnings growth for our shareholders for years to come," commented Mr. He.

GeoTeam® Note:

Following in CCME foot steps, DEER is the second of our tier one stocks that have come through with solid third financial results that eclipsed analysts estimates:

• Exceeded third quarter 2010 analyst estimates of $0.21

• At $0.30, EPS is expected to exceed fourth 2010 quarter analyst EPS estimates of $0.27

• 2011 EPS guidance $1.13 is above analyst EPS estimates of $0.97 

Company presentation from a week long non-deal road show across multiple U.S. cities through Wells Fargo Securities, during September.

Deer Consumer Products issued guidance in its most recent power point.

2010 guidance confirmed leading to EPS in line with analyst estimates of $0.77:

• Revenues of $160.0 million.
• Net income of $26.0 million.

2011 guidance implies higher EPS than analyst estimates of $0.97:

• Revenues of $254.4 million.
• Net income of $40.0 million, which implies EPS of $1.18.

2010 Second Quarter Conference Call notes (Still awaiting Q&A section)

Operator:

Good day, ladies and gentlemen, and welcome to the 2010 Second Quarter Earnings call for Deer Consumer Products, Inc., listed on the NASDAQ Global Select Market under stock symbol: DEER.

I’d now like to introduce the Deer’s Management team: With us here today is Bill He, Chairman & Chief Executive Officer, James Chiu, Head of Asia Pacific, Helen Wang, President, and Zhongshu Nie, Chief Financial Officer & Director.

I’d now like to turn the call over to the Company’s Council Robert Newman. Please proceed.

Robert Newman - Legal Disclaimer:

My name is Robert Newman of the Newman Law Firm, outside legal counsel of Deer Consumer Products.

This morning’s presentation contains "forward-looking statements" within the meaning of the “safeharbor” provisions of the Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to differ materially from the results expressed or implied by such statements, including changes from anticipated levels of sales, future national or regional economic and competitive conditions, changes in relationships with customers, access to capital, difficulties in developing and marketing new products, marketing existing products, customer acceptance of existing and new products, and other factors. Accordingly, although the Company believes that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. The Company has no obligation to update the forward-looking information contained in this presentation.

It is my pleasure to introduce Bill He Chairman & Chief Executive Officer of the Company.

BILL HE

Thank you all for participating in this call.

Good morning ladies and gentlemen. I am Bill He, Chairman, CEO and the founder of Deer 15 years ago. I am very happy today to announce record 2010 Q two earnings. I am very proud of our progress in China and our export markets. We look forward to building a strong brand in China and growing our export business.

I would now like to introduce Mr. James Chiu, our Head of Asia to discuss second quarter results for 2010.

James Chiu:

Thank you all for being here today. As this is just our third earnings call since we have become a Nasdaq listed company, we would like to give a brief introduction to the company.

Deer Consumer Products, Inc. is one of the world's largest vertically integrated branded and ODM/OEM manufacturers of small home and kitchen appliances marketing to both global and China domestic consumers. In recent years, we have rapidly increased the sales of our own Deer branded products which are primarily sold in mainland China. In 2010, we anticipate a balanced China and export revenue mix of 40 and 60%.

Revenues

Our revenue for Q2 of 2010 was $34.5 million, an increase of $19.1 million or 125 % from $15.3 million for Q2 of 2009. The increase in revenue was a result of our fast growing business in the China domestic market and our expansion in Asia excluding China, the Middle East and South America.

We have experienced strong sales in China. We increased our China domestic market sales from approximately $1.7 million in Q2 of 2009 to approximately $11.4 million for the same period in 2010, a 579 % increase in sales.

Sales in China exceeded our expectation. During the quarter, we ship our products on a daily basis to various retail customers. We ship at least once a week to traditional retailers like Gome and SuNing. In the second quarter, we have also increased the total number of shipments and the size of each shipment. To date, we have not experienced any returns. Although we do not have access to sales data at the store level, we are confident that our repeated shipments of the same products into the same warehouses can only mean one thing; the end customers are buying our products. From our conversations with the retailers, they are very happy with the in-store progress and they intend to increase product offerings.

In the second quarter, we increased our SuNing store counts from roughly 500 to over 700. SuNing is currently very happy with the sales of the products that we provide to them under their store brand called Mazuba. We are in constant conversation with SuNing about increasing product offerings. We are currently in roughly 140 Gome stores. We continue to add Gome stores. In anticipation to ramping up advertisement and promotion of Deer products in Gome stores, we worked very hard in the second quarter to make sure that the products are on the shelves, the sales people are properly trained, and the in-store banners are properly installed. In the second half, we anticipate to increase advertising spending for our Deer branded products. However, we anticipate our China profit margins to stay the same or expand as we have allocated 20% for SG&A expenses for our China sales.

Including SuNing, Gome, Wal-Mart, and other regional retailers, we are in roughly 1,000 stores which is 2/3 of our 2010 target of 1,500 stores.

Currently, many distributors are asking us to carry Deer products. There are several reasons. Due to our sales performance in SuNing, Gome, Wal-Mart, and other regional retailers, the distributors are eager to establish business relationships with us. Being a Nasdaq listed company with $74 million dollars of cash on the balance sheet has also been very helpful. We are working hard to identify the right distributors for regional retailers throughout China. We also look forward to attending a national distributors’ conference in August. We will be meeting with distributors from all over China and we plan to provide extensive training on Deer products to them.

Our export sales were $23.1 million for Q2 of 2010, a $9.4 million or 69% increase over the same period in 2009. We experienced stronger than expected sales in South America and Asia excluding China. We believe that increases in sales in Asia excluding China and South America were largely due to emerging wealth and the regions experiencing less impact from the financial crisis. In the longer term, we are optimistic about our Asian and South American export markets due to their fast GDP growth and large population.

We believe that many smaller suppliers with limited capital resources had gone out of business leading to further consolidation in the industry. We utilized this market opportunity to add new accounts and increase sales volume with our existing customers.

Cost of Revenue

Our cost of revenue for Q2 of 2010 increased to $24.6 million from $11.5 million in 2009. The increased cost of revenue in 2010 was due to the increase in sales.

Gross Margin

Our gross margin for Q2 of 2010 was 28.7 % compared to 24.8 % for the same period in 2009. The year over year increase in gross margin was due to higher sales in the China domestic market. Due to lower household penetration of small household products and trends of emerging wealth, our gross margin is substantially higher in the China domestic market. During the Q2 of 2010 we have also benefited from manufacturing efficiency as a result of higher unit volume.

Selling, General and Administrative Expenses

SG&A expenses increased from $1.5 million for Q2 of 2009 to $2.9 million for Q2 of 2010. Our SG&A expenses were higher in the Q2 of 2010 primarily due to higher revenue in the quarter. SG&A expenses have been lower than expected as we ramped up both our export and domestic market sales. We are confident that we can keep our SG&A expenses low as we gain economy of scale and further improve our operating efficiency.

Operating Profit and Margin

Operating income for Q2 2010 was $7.0 million, an increase of $4.7 million or 209% over the quarter in 2009. Operating margin increased from 14.7% to 20.2% year over year. The increase in operating margin is largely attributed to increased sales in China and higher manufacturing efficiency. We enjoy significantly higher gross margins in China. After adjusting for higher SG&A expenses associated with building a strong consumer brand, the operating margins in our China business is still considerably higher than our export business. China represented 33.0% of our overall revenue in Q2 of 2010. We expect
higher operating margins in subsequent quarter as we ramp up our sales in China to represent more than 40% of our 2010 overall revenue.

Taxes

Our effective tax rate for Q2 of 2010 was 15.5% versus 19.7% for the same period in 2009. In 2009, we were able to lower our tax rate to 15% as a result of Deer being granted high tech status by the local government. The tax benefits will last three years and we can renew our beneficial status prior to expiration.

Net Income

Net income for Q2 2010 was $6.0 million, an increase of $4.3 million or 251% over the same quarter in 2009. Our net margin improved from 11.2% in Q2 of 2009 to 17.5% in this quarter. We believe that we have one of the highest net margins in the small household appliance sector worldwide. Our high net margin is a result of years of strategic planning and a corporate culture that emphasizes efficiency and providing our clients with the best value in the small household appliances industry.

This brings us to the conclusion of our discussions. Thank you all for your time. We will be available to address questions if there are any.

While we are waiting for listeners with questions, please refer to our website www.deerinc.com for any additional questions you may have after the conclusions of today’s call.

• Revenues of $34.45 million, an increase of 125% from Q2/09
• Net income of $6.02 million, an increase of 251% from Q2/09
• Fully diluted EPS (Earnings per Share) of $0.18, an increase of 125% from EPS $0.08 in Q2/09
• Strong balance sheet: $74.3 million in cash (approximately $2.21 per common share in cash) without any long term debts or bank borrowing
• Better than expected China domestic sales - high margin China domestic sales increased 579% to 33% of revenue in Q2/2010
• Expanded gross profit margin to 28.7%, compared to 24.8% in Q2/09
• Expanded operating margin to 20.2%, compared to 14.7% in Q2/09
• Expanded net income margin to 17.5%, compared to 11.2% in Q2/09
• Sees positive impact to earnings from China's currency appreciation and positive growth momentum from the current global economic environment  
• Anticipates record earnings in the second half of 2010.

"The Chinese domestic marketing channels are delivering better than expected results. Consumer wealth expansion with high GDP growth and low inflation has created a favorable market environment for our products, which enhance the lifestyles of ordinary people. Revenue growth has come from multiple distribution venues, including rapidly expanding traditional retail outlets and third party independent dealer networks as well as online sales. Our China growth strategy is a simple and highly practical one: placing our products on the shelves of major retailers and creating product visibility as our initial steps in building awareness towards 'DEER' branded products. Once we reach our critical mass in product presence at some of China's key domestic retailers, Deer intends to launch regional and store-specific marketing campaigns in the 3rd and 4th quarters to further enhance individual store sales. Our strong cash position provides ample marketing opportunities. Deer anticipates continued strong China domestic market sales as well as record earnings in the second half," concluded Bill He, Chairman & CEO of Deer.

Our intent over the short-term is to build a check list to assess the risk position of firms in the ChinaHybrid space. For the time being this will consist of the following: (this list is likely to grow substantially)

- Is the company's auditor ranked in the top 100?
- Is the auditor located in the U.S.A? If located in China the PCAOB (Public Company Oversight Board) may be denied access to investigate the practices of the auditing firm.  Short sellers have been using this information as a tool to validate their opinions. 
- Are the company's internal controls satisfactory?
- Are their any outstanding legal issues?
- Do the company's top ten customers represent less than 10% of revenues?
- Annualized Operating cash flow divided by current liabilities is greater than one. The higher the better. (We will adjust current liabilities for Non-cash items).
- Cash divided by current liabilities is greater than one. This is the most conservative liquidity ratio. The higher the better.
- Is the company buying back stock?

There are also the following issues we must be aware of:

• Ownership structure:

"On April 1, 2008, Deer International acquired 100% of the equity interest in Winder from 50HZ Electric Limited. The transaction was approved by the EcoNomic Development Bureau of Yangjiang High-tech Industry Development Zone (the “Yangjiang Hi-Tech Zone”). Approval from a PRC government agency with higher authority may be required."

"Furthermore, the Regulation on Mergers and Acquisitions of Domestic Companies by Foreign Investors jointly issued on August 8, 2006 (the “New M&A Rule”) by six PRC regulatory agencies, including the Ministry of Commerce (“MOFCOM”), the State Assets Supervision and Administration Commission, the State Administration for Taxation, the State Administration for Industry and Commerce, China Securities Regulatory Commission (“CSRC”) and the State Administration of Foreign Exchange (“SAFE”), has a particular provision which requires that MOFCOM’s approval is required if a PRC domestic Non-foreign-invested enterprise or natural person acquires its/his affiliated Chinese company in the name of an offshore enterprise established or controlled by it or him. At the time of such acquisition, Deer International was an offshore enterprise controlled by some of our shareholders who are PRC residents. These same shareholders at the same time owned or controlled 50HZ Electric Limited, which made Winder an affiliated Chinese company of such shareholders. According to the New M&A Rule, this transaction might require the approval of MOFCOM. As the interpretation and implementation of the New M&A Rule are unclear, if the approval of MOFCOM is required, the approval that 50HZ Electric Limited has obtained from the Yangjiang Hi-Tech Zone may be deemed incomplete and the transferee, namely Deer International, may need to obtain further approval from MOFCOM."

• Currency Risk. An appreciation of the Renminbi(Chinese currency) against other currencies could hurt export sales.

"Historically, the majority of the Company’s sales are made as exports overseas with approximately 52% of our total sales made in North American and European markets in 2008 and 41% of our total sales made in North American and European markets in 2009."

Short term and risk adverse investors should be aware of the quality issues currently present in the ChinaHybrid Space, questioning the validity of what seem like solid fundamental stories. It is beginning to get ugly so be cautious and understand that more pain may have to be endured, as ChinaHybrids are easy prey for short investors. The broad brush that is being applied to theses stocks appears unfair, but we can’t ignore the psychological impact this can have on investors’ portfolio decisions. If history is our guide, fear will eventually create an immense opportunity to invest in the companies that prove they can meet quality litmus tests enact shareholder friendly moves. Credibility can also be restored if independent legal/SEC opinions validate accounting practices currently in question.

• Price = $9.31
• Trailing GAAP EPS = $0.62
• Fully-Taxed Trailing EPS^a = $0.56
• EPS Estimates (15% tax rate) = $0.77 (2010) , $0.96 (2011)
• Fully-Taxed EPS Estimates = $0.69 (2010) , $0.86 (2011)
• P/E based on Fully-Taxed Trailing EPS = 16.63

1. DEER meets 8 out of 10 GeoBargain® Requirements
   
   

   	Requirement	Comments
   	Recent 52-week High (generally within 3 months)	Must exceed $19.10
   	30% EPS Growth Rate	1st Qtr. 2010 EPS increased 300% over same quarter 2009 Full year 2010 estimates implies an EPS growth rate of 49.9%
   	10% Revenue Growth	1st Qtr. 2010 revenue increased 248%. Full year 2010 estimates implies a revenue growth rate of 93.6%
   	Strong Balance Sheet	As of 1st Qtr. 2010
   NO	Positive Cash Flow	(1,246,494 )
   YES	Debt to Equity Ratio less than 20%	0.0%
   YES	Current Ratio is at least 2:1	4.8:1
   	Return on Equity is at least 15%	Currently tracking at 12.8% (will likely exceed 15% if guidance is met).
   	Minimum Pre-tax Operating Margins of 8%	20% as of 1st Qtr. 2010
   	Preferably Under 50 Million Shares	33.8 Million shares as of 1st Qtr. 2010
   	High Insider Ownership (generally greater than 15%)	43% as of December 2009
   	Limited Institutional Ownership (generally less than 20%)	15% as of March 2010
   	P/E Divided by Growth Rate (PEG Ratio) is Less Than 1.	0.33

   
   
2. Has been extremely vocal regarding business prospects:
   
   
   • Reinforces that it "sees absolutely no signs of a consumer buying slowdown in the high margin Chinese markets for Deer's products."
     
   • Reassures that currency risk is minimal since DEER uses US dollars as the sole currency for its international sales.
     
   • Stated that it does not foresee any down side risk due to the European crisis.
     
   • Recently raised 2010 full year sales and earnings guidance:
     
     "We are comfortable with raising Deer's 2010 earnings guidance to approximately $26 million in net income on revenues of approximately $160 million, with significant growth anticipated in our seasonally strong second half of 2010. We see little execution risk in achieving and potentially exceeding these new earnings growth targets," concluded Mr. Bill He." (May 17 press)
     
     
3. Commitment to increase shareholder value and understands that EPS growth is the name of the game: DEER has initiated a $20.0 million stock repurchase program and DEER appears in no hurry to dilute.

   "Deer feels strongly about taking proactive actions in enhancing shareholder value. Deer has sufficient cash on hand to fund both the share buyback program and grow our business," commented Mr. Bill He, Chairman & CEO of Deer."
   
   "At March 31, 2010, we had $75.3 million in cash and cash equivalents on hand. Our principal demands for liquidity are to increase sales in China, adding capacity, inventory purchase, sales distribution, and general corporate purposes. We anticipate that the amount of cash we have on hand as of the date of this report as well as the cash that we will generate from operations will satisfy these requirements

4. DEER is set to exceed 2010 Analyst estimates.
   
   
   • Estimates have still not factored DEER's updated guidance.
     
   • Estimates likely do not factor Deer's stock buy back program.
     
     
5. As evidenced by the first quarter, net income is growing faster than sales.
   
   
   • Revenues of $23.9 million, an increase of 248% from Q1/09
     
   • Net income of $4.04 million, an increase of 515% from Q1/09
     

Note: We do require an explanation as to why cash flow from operations is negative. Also, DEER's P/E ratio is higher than many other U.S. Listed Chinese stocks. DEER's commitment to increase shareholder value and strong communication efforts with the street have given us reason to overlooke these two factors.

Potential Valuation Scenarios if the company can achieve its EPS growth goals

Short-Term Potential value based on fully taxed adjusted trailing EPS

P/E 25 * $0.56 = $14.00

^a DEER is not paying a full U.S. tax rate. Therefore, all EPS numbers have been adjusted by the GeoTeam to reflect a Chinese tax rate of 25%.

These scenarios are not intended to be investment advice, but are scenarios based on some commonly used investment guidelines. They are provided to aid investors in making their own investment decisions.