Note Regarding Forward-Looking Statements

This quarterly report on Form 10-Q and other reports filed by Registrant from time to time with the Securities and Exchange Commission (collectively the "Filings") contain or may contain forward-looking statements and information that are based upon beliefs of, and information currently available to, Registrant's management as well as estimates and assumptions made by Registrant's management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used in the filings, the words "anticipate", "believe", "estimate", "expect", "future", "intend", "plan", or the negative of these terms and similar expressions as they relate to Registrant or Registrant's management identify forward-looking statements. Such statements reflect the current view of Registrant with respect to future events and are subject to risks, uncertainties, assumptions, and other factors (including the risks contained in the section of this report entitled "Risk Factors") relating to Registrant's industry, Registrant's operations and results of operations, and any businesses that Registrant may acquire. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

Although Registrant believes that the expectations reflected in the forward-looking statements are reasonable, Registrant cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Registrant does not intend to update any of the forward-looking statements to conform these statements to actual results. Readers are urged to carefully review and consider the various disclosures made throughout the entirety of this quarterly report, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations, and prospects.

In this Form 10-Q, references to "we", "our", "us", "our company", "Energroup" or the "Registrant" refer to Energroup Holdings Corporation, a Nevada corporation.

OVERVIEW

Headquartered in the City of Dalian, Liaoning Province of the People's Republic of China (the "PRC" or "China"), we are a meat processing company primarily involved in the slaughtering, processing, packaging and distribution of pork and pork products. We also process and sell seafood, such as minced fillet products, which accounted for a small portion of our revenue (approximately 7%) in the first quarter of 2009.

We are the first pork producer in China to receive "Green Food" certification from China's Ministry of Agriculture. Green Food is an innovative certification program unique to China that is awarded to food processors who produce using environmentally sustainable methods and meet certain high technical standards of quality control, safety, and product quality, and generate low levels of pollution. The Green Food certification is based on standards defined by the Codex Alimentarius Commission ("CAC"), a joint body of the United Nations Food and Agriculture Organization and the World Health Organization. We also received ISO 9001:2000 certification that covers our production, research and development and sales activities.

Currently we have a wholesale and retail distribution network and sell either directly or indirectly across northeast China, including supermarkets and hypermarkets.

As of March 31, 2009, we had 697 employees, of whom 376 were operating personnel, 234 were sales personnel, 35 were research and development personnel and 52 were administrative personnel.

Dalian Precious Sheen Investments Consulting Co., Ltd., or Chuming WFOE, is our holding company established in China for our three PRC operating subsidiaries, collectively referred to elsewhere in this report as the "Chuming Operating Subsidiaries":

1. Dalian Chuming Slaughter and Packaging Pork Company Ltd. ( "Meat Company"), whose primary business activity is acquiring, slaughtering and packaging of pork and cattle;
2. Dalian Chuming Processed Foods Company Ltd. ( "Food Company"), whose primary business activity is the processing of raw and cooked meat products; and
3. Dalian Chuming Sales Company Ltd. ("Sales Company"), which is responsible for our sales, marketing and distribution operations.

The Chuming Operating Subsidiaries are spin-off constituents of a former parent company, Dalian Chuming Group Co., Ltd., or the "Group." Our primary business activities are the production and packing of fresh pork and production of processed meat products for distribution and sale to clients throughout the PRC. Chuming WFOE was incorporated in China as wholly foreign owned enterprise on in December 2007. Chuming WFOE is 100% owned by Precious Sheen Investments Limited ("PSI"), a holding company established in the British Virgin Islands in May 2007.

Pork is widely regarded as China's most important source of meat and is consumed at a much higher rate than other categories of meat. Accordingly to a U.S. Department of Agriculture report, China, which is the largest pork-consuming nation in the world, consumed a total of 42.7 million metric tons in 2007, and the preliminary estimate for 2008 is 44.9 million metric tons. We believe that increasing levels of consumption of pork products in China is linked to the rapid development of the Chinese economy, urbanization and strong income growth.

Aside from increasing aggregate consumption, based on management's research, pork consumption patterns in recent years have shown two main characteristics. The first is that per capita pork is consumed at higher rates in the urban areas of China as opposed to rural areas, although the rate of growth in these urban consumption rates is relatively slight. The second is that consumers' consumption preferences appear to have shifted from frozen meat to fresh meat, and from fat meat to lean meat, with a tendency toward high quality cuts. Management believes these trends continue to be very favorable to our business which is based on mechanized meat processing and sales to urban consumers.

Our total sales volume was 18,512 tons in the first quarter of 2009, 18,007 tons in the fourth quarter of 2008, and 17,513 tons for the first quarter of 2008.

Due to a shortage in supply, live hog prices rose significantly in 2008. Retail pork prices are an important component of China's Consumer Price Index (CPI), a key inflation indicator. In order to moderate increases in the CPI and maintain the living standard of its lower-income population, the Chinese government (as it pertains to the pork industry) has implemented a number of policies to encourage pork production. These policies have now taken effect, and as a result, the price of pork to consumers has stabilized temporarily at lower levels. We expect pork prices to continue to remain stable, or perhaps trend lower, potentially through the first quarter of 2010.

In China, the pork processing industry remains fragmented, and we believe, inefficient. As smaller players experience pressure from margin compression and stricter government regulations, we believe scaled pork processors, like ourselves, will be positioned to make acquisitions on favorable terms in order to capture market share, gain scale, secure raw material, and access more customers. We expect that the combined factors of stricter hygiene regulations, increasing competition from well-financed players, and struggling meat suppliers, will induce industry consolidation in the coming years. We believe we are in a strong position to continue to take advantage of the Chinese government's support for leading pork producers, these market consolidation trends, and the emerging hog supply situation. Management believes that this is a long-term trend.

Given the current competitive market conditions, we constantly strive to impose strict quality control in our products and utilize state-of-art slaughtering and cutting lines (which are imported from Stork Co. of the Netherlands), to ensure our product quality, increase awareness of our brand and develop customer loyalty. Our research suggests that consumers in China are increasingly conscious of food safety and nutrition, and they using their purchasing power to demand safer and higher quality food products for their families.

We place a very high priority on food safety and integrity. For the feeds which are used for our hogs, we control and monitor our feed sources by acquiring feeds only from qualified suppliers who are licensed in the nation or the province, and then carry out comprehensive tests to ensure quality. All of our production lines have also passed the Hazard Analysis and Critical Control Point (HACCP) test, which is certified by Moody International Certification Ltd. Management anticipates that companies such as ours, with quality meat processing and modern logistics systems, will benefit as they capture market share and build consumer brand loyalty.

Management believes that we need to broaden our geographic sales network and diversify our customer base. Currently our distribution network is principally located in Liaoning Province, especially Dalian city. We have however expanded our sales network for processed food products to almost all large and medium cities in northeast China. In the near future we need to further extend this network and penetrate all the northeast provinces of China with all our products. A broader customer base can not only mitigate our reliance on certain big customers, but also bring us more opportunities. We believe a broader market for our products can increase demand for our products, reduce our vulnerability to market changes, and provide additional areas of growth in the future.

Our top five customers accounted for 37.2% for our total sales for the quarter ended March 31, 2009. We plan to position our business to diversify our customer base, which is expected to lower this percentage gradually in the future.

Management presently anticipates continued growth in volume of sales. Nevertheless, our ability to meet increased customer demand and maintain profitability will however continue to depend on factors such as our production capacity, availability of working capital, input costs, as well as the other factors described throughout this report.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our management's discussion and analysis of our financial condition and results of operations are based on our combined financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported net sales and expenses during the reporting periods. On an ongoing basis, we evaluate our estimates and assumptions. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are more fully described in Note 2 to our combined financial statements included in this report, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating this management discussion and analysis:

Method of Accounting

We maintain our general ledger and journals with the accrual method accounting for financial reporting purposes. The financial statements and notes are representations of management. Accounting policies adopted by us conform to generally accepted accounting principles in the United States of America and have been consistently applied in the presentation of financial statements, which are compiled on the accrual basis of accounting.

Principles of Consolidation

The consolidated financial statements, which include the Company and its subsidiaries, are compiled in accordance with generally accepted accounting principles in the United States of America. All significant inter-company accounts and transactions have been eliminated. The consolidated financial statements include 100% of assets, liabilities, and net income or loss of those wholly-owned subsidiaries.

Our founders have directly or indirectly owned the three operating subsidiaries since their inception. We also own two intermediary holding companies. As of March 31, 2009, the detailed identities of the consolidating subsidiaries are as follows:

                                                      Attributable
                                       Place of          Equity
Name of Company                      Incorporation      Interest        Registered Capital

Precious Sheen Investments
Limited                                   BVI                  100 %    USD 10,000

Dalian Chuming Precious Sheen
Investment Consulting Co., Ltd.           PRC                  100 %    RMB 91,009,955

Dalian Chuming Slaughtering &
Pork Packaging Co. Ltd.                   PRC                  100 %    RMB 10,000,000

Dalian Chuming Processed Foods
Co. Ltd.                                  PRC                  100 %    RMB 5,000,000

Dalian Chuming Sales Co. Ltd.             PRC                  100 %    RMB 5,000,000

The consolidation of these operating subsidiaries into a newly formed holding company i.e. "the Company" is permitted by United States GAAP: ARB51 paragraph 22 and 23.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management makes these estimates using the best information available at the time the estimates are made; however, actual results could differ materially from these estimates.

Accounts Receivable

We extend unsecured, non-interest bearing credit to our customers; accordingly, we carry an allowance for doubtful accounts, which is an estimate, made by management. Management makes its estimate based on prior experience rates and assessment of specific outstanding customer balances. Management may extend credit to new customers who have met the criteria of our revised credit policy.

Inventory Carrying Value

Inventory, consisting of raw materials in the form of livestock, work in progress, and finished products, is stated at the lower of cost or market value. Finished products are comprised of direct materials, direct labor and an appropriate proportion of overhead. Periodic evaluation is made by management to identify if inventory needs to be written down because of damage, or spoilage. Cost is computed using the weighted average method.

Property, Plant, and Equipment

Property, Plant, and Equipment are stated at cost. Repairs and maintenance to these assets are charged to expense as incurred; major improvements enhancing the function and/or useful life are capitalized. When items are sold or retired, the related cost and accumulated depreciation are removed from the accounts and any gains or losses arising from such transactions are recognized.

Property and equipment are depreciated using the straight-line method over their estimated useful life with a 5% salvage value. Their useful lives are as follows:

Fixed Asset Classification            Useful Life
Land Improvements                      10 years
Buildings                              20 years
Building Improvements                  10 years
Manufacturing Machinery & Equipment    10 years
Office Equipment                        5 years
Furniture & Fixtures                    5 years
Vehicles                                5 years

Land Use Rights

Land Use Rights are stated at cost less accumulated amortization. Amortization is provided over its useful life, using the straight-line method. The useful life of the land use right is 50 years.

Customer Deposits

Customer Deposits represents money we have received in advance for purchases of pork and pork products. We consider customer deposits as a liability until products have been shipped and revenue is earned. We collect a damage deposit (as a deterrent) recorded on other payable from showcase store operators as a means of enforcing the proper use of our trademark. We carry the amount of these deposits as a current liability because we will return the deposit to the operator when we cease to conduct business with the operator.

Statutory Reserve

Statutory reserve refers to the amount appropriated from the net income in accordance with laws or regulations, which can be used to recover losses and increase capital, as approved, and, are to be used to expand production or operations. PRC laws prescribe that an enterprise operating at a profit, must appropriate, on an annual basis, from its earnings, an amount to the statutory reserve to be used for future company development. Such an appropriation is made until the reserve reaches a maximum equaling 50% of the enterprise's registered capital.

Earnings Per Share

We compute earnings per share ("EPS") in accordance with Statement of Financial Accounting Standards No. 128, "Earnings per share" ("SFAS No. 128"), and SEC Staff Accounting Bulletin No. 98 ("SAB 98"). SFAS No. 128 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., contingent shares, convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

Recent Accounting Pronouncements

See Note 2(Z) to the consolidated financial statements included in Item 1 of this Quarterly Report of Form 10-Q for discussions on recently issued accounting announcements. We are currently evaluating the potential impact, if any, of the adoption of the above recent accounting pronouncements on our consolidated results of operations and financial condition.

RESULTS OF OPERATIONS

Comparison of Three Months Ended March 31, 2009 and March 31, 2008.

The following table sets forth the results of our operations for the periods
indicated as a percentage of net sales:

                          March 31,             % of            March 31,             % of
                             2009              Sales               2008              Sales

Sales                   $   40,893,923             100.00 %   $   43,507,098             100.00 %
Cost of Sales              (35,169,469 )            86.00 %      (36,474,424 )            83.84 %
Gross Profit                 5,724,454              14.00 %        7,032,674              16.16 %
Selling Expenses               864,959               2.12 %        1,825,277               4.20 %
General &
Administrative
Expenses                       559,113               1.37 %          492,973               1.13 %
Total Operating
Expense                      1,424,072               3.48 %        2,318,250               5.33 %
Operating Income /
(Loss)                       4,300,382              10.52 %        4,714,423              10.84 %
Other Income
(Expense)                   (3,608,153 )             8.82 %         (306,465 )             0.70 %
Earnings Before Tax            692,229               1.69 %        4,407,562              10.13 %
(Income Tax Expense)
/ Deferred Tax
Benefit                       (280,208 )             0.69 %         (166,345 )             0.38 %
Net Income              $      412,021               1.00 %   $    4,241,217               9.75 %
Earnings Per Share
Basic                   $        0.024                        $         0.25
Diluted                          0.019                                  0.20
Weighted Average
Shares Outstanding
Basic                       17,272,756                            17,272,756
Diluted                     21,136,392                            21,182,756

Sales. Our sales include revenues from sales of our fresh pork, frozen pork, and processed food products. During the quarter ended March 31, 2009, we had sales of $40,893,923 as compared to sales of $43,507,098 for the quarter ended March 31, 2008, a decrease of approximately 6%. Our sales for our various product categories in the first quarter of 2009 are summarized as follows:

                                                                                                      % of increase
    Sales by product       First Quarter       % of Total       First Quarter          % of               from
 category, in dollars:     2009 (amount)         Sales          2008 (amount)       Total Sales       2008 to 2009
Fresh Pork                 $   31,550,154            77.15 %   $    36,384,986             83.63 %            -13.29 %
Frozen Pork                     3,956,106             9.67 %         2,358,085              5.42 %             67.78 %
Processed Food Products         5,387,663            13.17 %         4,764,027             10.95 %             13.09 %

Total Sales                $   40,893,293              100 %        43,507,098               100 %             -6.01 %



                              First                              First
                             Quarter                            Quarter
    Sales by product           2009                               2008                            % of change
 category, by weight of     (Weight in          % of           (Weight in          % of               from
 product (metric tons):       tons)          Total Sales         tons)          Total Sales       2008 to 2009
Fresh Pork                       14,245             76.95 %         13,997             79.92 %             1.77 %
Frozen Pork                       2,581             13.94 %          1,086              6.20 %           137.66 %
Processed Food Products           1,686              9.11 %           2430             13.88 %           -30.62 %

Total Sales                      18,512               100 %         17,513               100 %             5.70 %

In the first quarter of 2009, we raised our average per-kilogram sale price for processed food products and decreased our average per-kilogram sale prices for fresh pork and frozen pork to our customers. These changes were inline with changes in the market price for these products. In the first quarter of 2009, our sales volume of fresh pork and frozen pork (by weight) increased, with the frozen pork category experiencing the highest growth in sales volume both by weight and in terms of sales revenue. We also increased our sales of fresh pork by weight, in the first quarter of 2009 as compared with the same period in the prior year. Our sales revenue for fresh pork decreased due to a reduction in the average per-kilogram price. For processed food products, our sales by weight decreased by 30.62%, but because of higher per-kilogram prices, our sales revenue for this product category increased by 13.09%. Management attributes the increases in sales revenue in our product categories to the continuing strength in consumer demand for our products in the periods presented.

The following table shows the change in the average price per kilogram for our product to consumers in the quarter ending March 31, 2009, as compared to the same quarter last year:

                                                     Average Per-Kilogram Price to Customers (in $US)
                                      First Quarter        First Quarter
                                         of 2009              of 2008            % change            Change in Price
Fresh Pork                            $         2.21       $         2.59              -14.76 %     $           -0.38
Frozen Pork                           $         1.53       $         2.17              -29.49 %     $           -0.64
Processed Food Products               $         3.20       $         1.96               63.27 %     $            1.24

Although we also sell our products through sales agents, our principal sales channels consist of Chuming-branded showcase stores, supermarkets and restaurants and canteens. The following table summarizes the changes in the number of participants within these sales channels:

                                   Sales Channels
                  Showcase                         Restaurants and
As of March 31,    Stores       Supermarkets          Canteens
2008                    635               122                 3,191
2009                    873               345                 4,726

As shown in the table above, as of March 31, 2009, as compared to March 31, 2008, we significantly increased the number of participants in all three of these sales channels. We believe the sales from supermarkets and hypermarkets are likely to continue to yield higher profit margins. Their orders tend to be large and stable in quantity, and they usually have better credit. The increase in the number of these participants has resulted in increased sales volume.

Cost of Sales. Cost of sales for the first quarter of 2009 decreased by $1,304,955 or approximately 3.58%, from $36,474,424 for the three months ended March 31, 2008 to $35,169,469 for the three months ended March 31, 2009. The decrease was principally attributable to the decrease in the average cost of live pigs in the first quarter of 2009 as compared to the same period in the prior year. Our cost of sales for our various product categories in the first quarter of each of 2009 and 2008 is summarized and shown as a percentage of overall cost of sales in the following chart:

                            Cost of Sales            % of            Cost of Sales            % of             % of increase
                            First Quarter       Overall Cost of      First Quarter       Overall Cost of           from
. . .