[中报]新 希 望:2021年半年度报告（英文版）
原标题:新 希 望:2021年半年度报告（英文版） New Hope Liuhe Co., Ltd 2021 Semiannual Report 2021-99 August 2021 Section 1 Important Note, Table of Contents and Definitions The board of directors, board of supervisors, directors, supervisors and senior executives of the company warrant that the contents of this semiannual report are true, accurate and complete and free of any false recordings, misleading statements or significant omissions and will be jointly and severally liable for the legal consequences. The company’s CEO Liu Chang, chief accountant Chen Xingyao and person in charge of accounting organization (accountant in charge) Chen Jing state that the financial report in the semiannual report is true, accurate and complete. All directors of the company attended the board meeting deliberating this report. Investors are advised to particularly note that the annual financial budget, business plan and business objectives of the company for 2021 don’t represent the profit forecast of the company for 2021 and that whether they can be realized depends on many factors such as changed market condition and level of effort of the operating team, with huge uncertainties. The company shall comply with the disclosure requirements set forth in “Shenzhen Stock Exchange’s Industry Information Disclosure Guidance No. 1---Listed Companies Engaged in Livestock, Poultry and Aquaculture Businesses”. I. Epidemic and natural disaster risks The animal epidemic disease is the main risk faced in the development of livestock industry. There are three kinds of risks arising out of the occurrence of epidemic disease. First, the occurrence of epidemic disease is likely to result in death of livestock, and leads directly to the reduction in yield, rising costs and drop in prices. Second, the occurrence and prevalence of epidemic disease on a large scale easily influence the consumer psychology, lead to shrinking market demand, and affect the feed production and operation. Third, after the outbreak of some infectious epidemic diseases endangering the public health and safety, the government will take lockdown and other measures to contain the spread of epidemic disease. These epidemic containment measures will seriously hinder the transportation of feed, animal healthcare products and live livestock, and the workers returning to work, and have a great impact on the production and operation of breeding industry. In addition, the outbreak of infectious epidemic diseases will force most catering enterprises to close business, some agricultural product markets to shut down, and consumers to reduce shopping activities outdoors, resulting in reduced meat demand and consumption. For example, the African Swine Fever (ASF) with an enormous impact on the entire industry broke out in 2018. As the ASF is characterized by long latency and high mortality after onset of the disease, and the effective and reliable vaccine has not yet been developed successfully, coupled with the fact that it was also the concentrated outbreak on a large scale in China for the first time, both the large-scale breeding enterprises and small farmers lacked effective containment measures at the onset of epidemic, thereby suffering losses to varying degrees. From the late 2020 to the first quarter of 2021, attenuated ASF virus bounced back once again, especially hitting Hebei, Shandong, Henan and other places, and once again causing prevalent effects to farming companies and farming households in these areas. The COVID-19 outbreak at the beginning of 2020 also posed daunting challenges to the livestock and poultry breeding industry in China. The anti-epidemic measures such as lockdown, delay in return to work, suspension of live poultry trading, and shutdown of slaughter houses led to unavailability of feed to farms and livestock farmers, newborn livestock nowhere to sell, inability to slaughter livestock and poultry, and difficulties to conduct breeding production activities normally. After entry into 2021, despite the stable epidemic containment situation in China, scattered episodes of the epidemic across the country and regional lockdown policies would also cause hindrances to movement of personnel and materials related to business operations. In terms of the natural disaster risk, the feed and slaughter are closely related to planting and livestock breeding industry, so the natural disasters such as temperature anomalies, drought, flood, earthquake, hail, and snow disaster will all adversely affect the industry operation and development. The natural disasters occurring on the production bases of the company and surrounding areas may cause substantial damages to production facilities or equipment, and the natural disasters and extreme climate may also drive the prices of some feed ingredients and meats up. For example, serious flood disasters broke out in many places of South China in 2020, adversely affecting the planting, breeding, farm produce logistics, project implementation and meat prices along the industry chain to varying degrees: in terms of planting, continuous catastrophic floods hitting some areas result in decreased output of feed ingredients, thus impacting the feed ingredients prices, while at the same time decreasing the quality of raw materials; in terms of breeding, flood might cause pathogenic microorganisms buried in the land surrounding breeding farms to be exposed in air and drinking water, and result in spread of pathogenic microorganisms and trigger epidemic diseases. In addition, several provinces hardest hit by the floods are major aquatic breeding areas in China, where the impact of floods not only would destroy fishery production equipment but also is highly likely to wash off fish-barring facilities and bring away fry and adult fishes, causing losses to economic income of farmers and thus affecting feed ingredients sales of the company; in terms of logistics, roads are flooded and roadbeds and road surfaces destroyed wherever flood sweeps, forcing the freight costs of raw materials, feed, finished products and breeding pigs to rise and the transport capacity down, causing pressures on the supply chain of the company; in terms of project implementation, continuous rainstorms also cause part of capital investment construction projects of the company to suffer temporary shutdown, affecting the construction schedule; in terms of meat prices, flood would also impact the meat supply and directly contributed to the rising prices of pigs, while the gap in meat prices between affected areas and unaffected areas was growing, thus leading to increased allocation and transport of hogs, and resulting in spread of the pandemic to a certain extent. Risk countermeasures: In the face of animal epidemics, the livestock farms planned and constructed by the company’s breeding base are normalized and standardized farms staffed with professional breeding technologists and equipped with strict anti-epidemic measures to effectively prevent and control the occurrence of epidemic diseases. The company has also summarized some experience and measures responding to major epidemic diseases through years of exploration and accumulation, which allow the company to eliminates the impact of various epidemics by adjusting the product mix when appropriate, improving the product quality, conducting deep market development actively and reducing the costs. Since 2014, the company has been guiding technicians to better serve farmers by establishing animal healthcare laboratories in various areas, creating the cloud-based animal healthcare system, and conducting the monitoring and warning of epidemics and diseases in real time. In view of ASF outbreak in 2018, the company formulated all-round and system-wide prevention and control measures, covering existing self-run pig farms, fattening farms in cooperation with farmer households, new pig farms of the company, swine feed production units and internal animal healthcare laboratories, with a view to ensuring proper prevention and control at the source of animal nutrition. Meanwhile, actively participating in industry exchanges and exploring more effective containment methods with peers allowed the company’s bio-safety epidemic prevention system, pig survival rate and marketing rate to achieve industry-leading levels. From the end of the previous year to the first quarter of this year, a new round of attenuated ASF outbreak in many northern provinces is characterized by extensive outside contamination, numerous channels of spread, long latency periods and a long phase of effect, thus posing new challenges to the containment measures formed by the industry based on the past two years of ASF containment at the initial stage of the outbreak. However, the company continued summing up its experiences and upgrading containment and decontamination methods in the containment process, including whole-population serum double-antibody and double-screening, application of thermal imagers, and static attenuation and disinfection of materials; and the company added up its containment processes then subtracted so as to avoid slackness resulting from prolonged and excessively trivial containment processes, which helped restore normal production faster while ensuring containment, as well as reduce bio-safety containment costs at the same time. With the aforesaid measures, the number of ASF-affected farms at the end of the first half of the year has been kept below 1%. In response to the COVID-19, the company lost no time to react, formulated and carried out various containment policies and conducted emergency disposition in a coordinated manner. Secondly, the company actively communicates with the government at all levels, coordinates the transportation of goods such as livestock products, and raw and auxiliary materials of feed and products, secures vehicle passes, and implements the green channel policy enacted by the government at all levels. Thirdly, the company ensures sufficient procurement for feed plants and production supply through region-wide coordination, strengthens internal support for poultry industry integration, arranges its employees to return to work rapidly and orderly, contributes to the adequate supply of daily necessities across the country, adjusts its food industry strategy in real time and expands sales through supermarket channel and online channel. Fourthly, in light of its business practices, the company compiled the epidemic containment manual, published documents such as technical guidance on employee prevention and control and quarantine and guidance on engineering control amid epidemics, makes the epidemic prevention arrangements in a targeted manner and strengthens employee safety protection. In response to natural disasters, although unable to rule out the possibility that serious natural disasters will occur in areas where its subsidiaries operate, the company’s extensive business portfolio and presense both at home and abroad help ensure that the company’s business will not be materially affected when natural disasters occur in particular regions. Especially for the rainstorms and floods in south China, which have occurred frequently in these years, the company has accumulated a large wealth of experience, establishes proven contingency plans and maintains sufficient flood prevention supplies in stock at all times, which allow the company to flexibly guide farmers through production plan adjustments when the flood season begins in preparation for disaster relief together. At the same time, the company can also take the advantage of its nationwide presence to allocate funds, raw materials, equipment, and staff timely and effectively to resume production as soon as possible and reduce the losses caused by natural disasters. II. Risk of price fluctuations of feed ingredients The cost of main feed ingredients for feed production accounts for more than 90% of total cost of feed production. In the past, the proportion of feed business in the company’s revenue was large, but as the feed industry generally adopts the cost-plus pricing method, the fluctuations in prices of feed ingredients can be partly transmitted to the downstream breeding operations, to relieve the pressure from the rising prices of feed ingredients. However, with a growing percentage of livestock breeding business in the company’s revenue, the rising prices of feed ingredients will have a growing impact on the company. Since 2020, due to many influencing factors such as the COVID-19, changed purchase and storage policies and crop yield in main grain-producing areas of various countries, the prices of main feed ingredients such as corn and soybean meal continuously rose, with the average market prices of corn approaching 3,000 Yuan per ton in early 2021. Coupled with the continuous tension between China and the US, which brings great uncertainties to the bulk produce trade between the two countries and international trade of feed ingredients in the future, the risk of price fluctuations will exist in the long term. Moreover, against the background of longtime existence of ASF in China, the feed enterprises will reduce some high-risk feed ingredients for the safety of animal nutrition, such as usage of corn, pig blood, and pig bone meal, so as to make the demand for raw materials concentrate on other types of raw materials, which will also lead to rise in prices of such alternative raw materials. Risk countermeasures: The company is the largest domestic feed enterprise with the scale advantages and a considerable say in the raw material purchasing. The company started reorganizing and optimizing its raw material procurement system in 2017, combed through its supplier system actively, established strategic partnerships with many domestic and overseas best-run raw material suppliers, conducted the supply chain financing of various forms actively, and optimized its purchasing cost and related financial expenses. In 2019, the company continued to drive transformations in terms of central purchasing of raw materials, strategic purchasing channel optimization of partners, acquisition of corn produced in northeast China, and purchasing model upgrading, realizing a greater purchasing value despite the challenges. The COVID-19 crisis in 2020 has caused phase-specific impact on the prices of feed ingredients and feed additives, but the company applied hedging tools more to control the ingredient price fluctuation risk, while the company’s technology, purchasing, production and marketing departments worked closely with each other during the response to the pandemic, with these experiences already summarized and applied into the daily operation management of the feed business. In the first half of 2021, when prices of main feed ingredients such as corn and soybean meal continuously fluctuated at high levels, the company actively purchased imported low-price ingredients and alternative ingredients such as wheat, sorghum and brown rice while properly anticipating the market condition, in an effort to continually optimize ingredient costs. III. Risk of price fluctuations of livestock and poultry The finished products of livestock and poultry breeding business of the company mainly include baby chick, baby duck, white-feathered chicken, white-feathered duck, breeding pig, piglet, and hog. Especially since 2016, the pig farming business of the company has been growing rapidly, with 8.29 million hogs sold in 2020 and more than 500 million self-raised and outsourced commercial generation chicken and ducks sold, which allowed the livestock and poultry breeding to contribute greater to the entire revenue and profits of the company. Along with the further growth of breeding volume of the company in the future, the prices of livestock and poultry will affect the levels of revenue and profits of the company even more remarkably. In the first half of 2021, the domestic livestock and poultry markets saw remarkably delinking pork prices and low-level fluctuations of poultry prices. in the first half of 2021, the marketing rate of hogs rose 34% year-on-year, and fixed-point monitoring results at the end of the first half of the year showed that the fertile sows on hand grew 30% year-on-year, hogs on hand grew 29% year-on-year and the prices of hogs fell all the way from 36 Yuan/kg in early 2021 to the lowest point of 12 Yuan/kg in June, a decrease of over 60%, even falling back to the low levels before this pork price cycle began ascending in March 2019 for a time. In terms of the poultry business, the rising market condition in 2018 and 2019 resulted in industry overcapacity, as the grandparental breeding hens on hand, parental breeding hens on hand and sales volume of commercial-generation baby chicken across the country in the first half of 2021 were all sustained at the highest levels in the past six years. On the side of consumption, the rapidly declining pork prices coupled with weakened consumption demand caused by the COVID-19 allowed poultry meat prices to remain low for a long period of time, making it more difficult for the poultry business to profit. Risk countermeasures: apart from the impact of sporadic epidemics, the fluctuations in prices of livestock and poultry mainly depend on the periodic increase and decrease in breeding and supply quantities. As a result, the process of livestock and poultry prices going down itself is a process of the survival of the fittest in the industry. Against this backdrop, the company still can generate more revenue or suffer fewer losses than its rivals in the process of price decline as long as it increases its breeding efficiency and makes its breeding costs lower than its rivals. When some participants exit, the total supply declines and the prices rise again, the company might gain a greater market share and a higher return on investment than before. In recent years, the company has been committed to continuously increasing its breeding efficiency, and enjoying industry leadership in terms of production of healthy young breeding poultry and PSY and full cost of pig breeding, which will ensure that the company will remain highly competitive during the price fall of livestock and poultry. Although the company’s rapid scale expansion on its pig business in the past year caused some of its competitiveness to be diluted temporarily, and some best practices failed to be replicated in time at newly commissioned pig farms, along with the company’s full transition to a stage of robust operation, the company is gradually improving its business operation efficiency, reducing farming costs and restoring its original competitiveness by enhancing its internal management capabilities through many measures. On the other hand, unlike most of agricultural and livestock companies, the company has slaughtering and food processing business at the downstream part of farming and feed business at the upstream part of farming, which happens to hedge against the farming process. The price decline of livestock and poultry means that the cost of raw meat in the slaughtering and processing businesses falls too and its profit margin will be increased; the declining prices of livestock and poultry also mean the farming volume of livestock and poultry is at high levels, which also helps increase the profitability of feed business. Such an industry chain presence can moderately mitigate the effects of declining prices of livestock and poultry on the company. IV. Impact of environmental protection policies In 2014, China started implementing the Regulations on Pollution Prevention for Large-scale Breeding of Livestock and Poultry, as the government was strongly determined to keep livestock farms in line and new regulations were enacted across the country to demolish livestock farms, ban or restrict livestock farming activities. At the level of central government, the new “Environmental Protection Law” was enacted in 2015; in 2016, the State Council issued the “13th Five-Year” Ecological Environment Protection Program”, even more specifically requiring “local governments to close or relocate livestock farms (communities) and breeding households within the banned areas according to law by the end of 2017”. In 2018, the first group of central environmental protection inspectors conducted the “follow-up reexaminations”, as the efforts to investigate pollution caused by livestock farms were intensified across the country, ordering some breeding households to shut down for environmental remediation or close once for all due to their livestock farming facilities failing to meet the environmental standards or discharging wastewater beyond the set standards. These pressures from the environmental protection policies will force some livestock and poultry farms failing to meet the environmental standards to exit the market, and lead to reduced breeding quantities, which impacted on the growth of feed business of the company and its acquisition of hogs and poultry for slaughtering business. Some branches and subsidiaries of the company fail to meet the environmental protection requirements economically through hardware transformation, or no longer have the market basis due to being located in the banned areas, which will lead to their shutdown. In the long run, however, the exit of these outdated capacities for incompliance with environmental standards will allow the best-run producers that remain in the industry to acquire higher profitability, which is still of a positive significance to the entire industry. Risk countermeasures: in light of the changes of the breeding market, the company makes every effort to maintain existing customers, and strengthens its cooperation with medium and large-sized farms and farmers that meet the environmental standards by changing its feed marketing model and making full use of its industrialized supporting and integrated services . While exploring a new way of breeding, the company regards ecology, environmental protection, efficiency and safety as primary considerations in its project design, helps farmers remodel and build sheds and stalls that meet the higher environmental standards, increase the profitability of breeding business and actively drive the domestic livestock and poultry farming industry to grow healthily. On the other hand, the company actively grows its inventories by cultivating new livestock and poultry farming bases in environmentally suitable areas through construction, acquisition, joint venture and cooperation using its existing business portfolio across the country, thus ensuring the stability of its breeding resources. V. Risk of food safety Food safety concerns the physical health and life safety of the general public, and is even a matter of life and death for food companies. Occurrence of food safety problems or accidents would cause food companies to face claims, actions or related penalties in a way that even affects their brands and reputations, thereby materially adversely affecting their business, financial condition, stock prices or business performance. The implementation of the revised “Food Safety Law” in 2015 also means that China has brought its focus on food safety to an unprecedented level. The outbreak of ASF in 2018 raised even more demanding requirements for food safety control. Although the ASF itself is not a zoonotic disease and the pork with ASF virus is not harmful at all to humans after conventional heating and cooking, as there is not yet fully effective containment measure against ASF at present, and the pork and its products are one of the main vectors of the virus, more costs are required to prevent and control ASF during the process of hog recovery and slaughter, pork transportation and vending. In 2019, the State Council issued the “Opinions on Deepening Reforms and Strengthening Food Safety Efforts”, making clear the need to further beef up food safety efforts and ensure the “safety on the dining table” of the general public with the most rigorous standards, the most stringent oversight, the most severe penalties and the most serious accountability. Risk countermeasures: the company has always been highly concerned about food safety by seriously ensuring food safety in each link of its business practices. In 2015, the company established its safety and environmental protection department to ensure safety, health and environmental protection of its products, and upgraded the equipment in its “three-level” testing system, expanded the laboratories of its branches and subsidiaries in terms of human and material resources, guaranteed the allocation and input of funds, resources and personnel across the food industry chain, which upgraded the food safety organization management, equipment and facilities, process management and key process control., So far, the company has created a food safety control chain from feed, livestock and poultry breeding all the way to dining table. In 2014, the “Beiyouzi” branded duck meat produced by the company was the first in China to achieve end-to-end traceability; in 2015, Chengdu Xiwang Food Co., Ltd, a subsidiary of the company, became one of the second group of pilot companies for implementation of the national standard of “food cold chain logistics traceability management requirements”. In 2016, the company passed the food technical standard certification by the British Retail Council (BRC), and was elected the Vice President of the China Council at the first plenary session of the Global Food Safety Initiative (GFSI) in China, becoming the first Chinese private enterprise to be selected as a member of the global board of directors of GFSI. In 2019, the 8th GFSI Focus Day China organized by the company was held, marking the first time a private enterprise organized this event since GFSI began holding the Focus Day China in 2012. At present, all food businesses of the company have passed China-HACCP certification, and more than 60 food companies are finishing the BRC and Global-GAP certifications in succession. In addition, the company systematically explores the antibiotic-reducing and antibiotic-free possibilities in cooperation with multiple parties using the GFSI platform resources, and actively drives the popularization of antibiotic-reducing and antibiotic-free successful cases. VI. Risk of exchange rate fluctuations Currently, the global purchasing of raw materials for feed production is going deeper, and the feed enterprises have been increasingly affected by the exchange rate in terms of feed ingredients purchasing centered on foreign supply such as corn, soybean, whey powder, fish meal and DDGS. At the same time, the company has larger foreign operations than its Chinese peers, and in the foreign investment and overseas operations, the cross-border capital transaction and settlement amounts involved are growing, thus making the company more vulnerable to exchange rate fluctuations. Since 2019, the bumpy China-US relations caused the RMB/USD exchange rate to fluctuate frequently. Throughout 2020, the RMB exchange rate showed a trend of fall before rise and went down in a zigzag manner due to the impact of the COVID-19 in the first half of the year, but a new round of rapid appreciation started as China was the first to contain the pandemic and resumed work and business operations at a quickened pace in the second half of the year. Such violent turbulences produced impacts on the foreign exchange management of the company. Besides, in certain overseas countries where the company operates, the exchange rate of local currencies against USD depreciated remarkably due to the COVID-19, political turbulence, and foreign exchange policy adjustments, which also produced an adverse impact on the company. Risk countermeasures: In response to the growing needs for overseas raw material purchasing and investment and operation, the company started building its Singaporean branch into an overseas commercial and trading center and investment and financing center in 2016, actively conducted international centralized purchasing of raw materials, foreign direct financing, supply chain finance, foreign exchange risk management and raw materials purchasing risk management on its Singaporean platform, in order to reduce the impact of exchange rate fluctuations on its cash flow in overseas operations. Meanwhile, the company further strengthened its close connection and communication with overseas financial institutions, overseas agencies of the Chinese government and host governments to analyze the trends of local currencies’ exchange rates in host countries in time and ease the adverse impact of exchange rate fluctuations by means of direct investment in local currencies abroad, etc. VII. Risk of human resources The risk of human resources to the company is mainly manifested in the following four aspects. First, the pig farming scale of the company is now at a phase of leapfrog development. As at the end of the first half of 2021, the company’s pig farming team totaled 46,000 persons, and management radius of the company also increased as a result, therefore, there are tremendous pressures and challenges in terms of rapidly training and retaining a large number of qualified pig farming workers. If the personnel recruitment, training and retention prove inadequate, potential risks will arise for the subsequent pig farm management and operation. Second, as the company transforms from a traditional agricultural and animal husbandry enterprise to a agricultural, animal husbandry and food integrated enterprise, the company will face the risk of insufficient reserve of high-caliber operation and management personnel in new business domains and of personnel in food retail, engineering technology, IT and other emerging fields. Third, along with the rising human cost, employee compensation has become an important factor in cost increase of the company. Fourth, as a leading enterprise in China’s agricultural and animal husbandry industry, the company has cultivated a large number of outstanding employees in its multiyear history, but the competition for human resources is intensifying due to the increasing competition in the industry and entry of new players of different backgrounds into the industry over the past years, meaning the brain drain will cause losses to the company and subsequently affect the sustainable development of the company. Risk countermeasures: the company has looked at talent cultivation and organizational activation as a long-term strategic task of the company. In terms of recruiting talented pig farmers, the company expanded its recruitment channel beyond college graduates majored in agriculture and animal husbandry to recruit non-specialized college graduates and veterans. In terms of pig farmer training, the company broke down daily production processes according to standards and internalized them using IT means. It offers specialized courses of different levels for general manager, farm managers all the way down to the newly recruited frontline workers through in-house pig farming universities and pig industry research institutes that offer high-frequency learning, training and teaching possibilities. Moreover, through the modern apprenticeship system inside pig farms and one-to-one mentoring and reinforcement by sophisticated employees, the time to cultivate new employees has been greatly shortened. The company further perfected its pig industry talent motivation system, whereby personnel at all levels in pig industry will receive industry-leading economic return based on their value output. In addition, in order to reduce the pressure on human cost, the company intensified its efforts to carry out projects such as pig farming in multistory buildings, intelligent pig farms and things of internet, which will significantly increase its efficiency of personnel utilization. The company also intensified its efforts to recruit talented people in strategic, new businesses, while actively conducting cross-industry training and learning to enrich the knowledge structure and capability structure of its existing personnel. The company realized a continuous increase in per capita efficiency by efficiency improvement, lean management, optimization of industry chain design and organization flattening; created the professional manager development channel with survival of the fittest by constructing the competition, selection and elimination mechanisms; and creates the growth community of employees and the company by constructing reasonable evaluation and incentive mechanisms and value sharing mechanisms. In 2019, the company implemented its restricted stock and stock option incentive plan for the first time to motivate its key technologists and key members of pig farming teams more for increased cohesion and corporate competiveness and to fully motivate senior management personnel a part of key employees of the company at work. The company plans not to distribute cash dividends or allot bonus shares or transfer its capital reserve to share capital. Table of contents Section 1 Important Note, Table of Contents and Definitions........................................................ 2 Section 2 Company Profile and Key Financial Indicators ........................................................... 26 Section 3 Management Discussion and Analysis ........................................................................... 29 Section 4 Corporate Governance .................................................................................................... 72 Section 5 Environmental and Social Responsibilities ................................................................... 75 Section 6 Significant Events .......................................................................................................... 181 Section 7 Changes in Shares and Information about Shareholders .......................................... 222 Section 8 Details related to Preferred Shares .............................................................................. 232 Section 9 Details related to Corporate Bonds .............................................................................. 233 Section 10 Financial Report .......................................................................................................... 237 List of Reference Documents (I) Financial statements signed and stamped by the chief executive officer, person in charge of accounting and head of accounting organization (chief accountant) of the company. (II) Originals of all corporate documents and manuscripts of announcements publicly disclosed on China Securities Journal, Securities Times, Shanghai Securities News and Securities Daily during the reporting period. Definitions Term Refers to Definition This company, the company, listed company, New Hope Refers to New Hope Liuhe Co., Ltd CSRC Refers to Securities Regulatory Commission Sichuan CSRC Refers to Sichuan Office of Securities Regulatory Commission SZSE Refers to Shenzhen Stock Exchange CSDC Refers to China Securities Depository and Clearing Co., Ltd NAFMII Refers to National Association of Financial Market Institutional Investors Company Law Refers to Company Law of the People’s Republic of China Securities Law Refers to Securities Law of the People’s Republic of China New Hope Group Refers to New Hope Group Co., Ltd South Hope Refers to South Hope Industrial Co., Ltd China Minsheng Bank Refers to China Minsheng Banking Corp. New Hope Chemical Refers to New Hope Chemical Investment Co., Ltd Beishuo Investment Refers to Lhasa Economic and Technological Development Zone Beishuo Investment Center (L.P.) Finance Company Refers to New Hope Finance Co., Ltd Liuhe Group Refers to Shandong New Hope Liuhe Group Co., Ltd Polaris Bay Refers to Polaris Bay Co., Ltd Hope Group Refers to Hope Group Co., Ltd Besun Agricultural Refers to Yangling Besun Agricultural Industry Group Co., Ltd The 2019 incentive plan Refers to The 2019 restricted stock and stock option incentive plan The 2021 incentive plan Refers to The 2021 restricted stock incentive plan Section 2 Company Profile and Key Financial Indicators I. Company Information Stock abbreviation New Hope Stock code 000876 Stock exchange on which stock is listed Shenzhen Stock Exchange Chinese name of the company 新希望六和股份有限公司 Chinese abbreviation of the company（if any） 新希望 English name of the company (if any) NEW HOPE LIUHE CO., LTD. English abbreviation of the company (if any) NEW HOPE Legal representative of the company Liu Chang II. Contact persons and contact details Board secretary Securities affairs representative Name Lan Jia Bai Xubo Contact address 11F, Block T3A, Wangjing SOHO Center, No. 10, Wangjing Street, Chaoyang District, Beijing 11F, Block T3A, Wangjing SOHO Center, No. 10, Wangjing Street, Chaoyang District, Beijing Tel （010）53299899-7666 （010）53299899-7666 （028）85950011 Fax （010）53299898 （010）53299898 [email protected] [email protected] III. Other details 1. Company’s contact details Whether the company’s registered address, office address, post codes, company website and email address have changed during the reporting period □ applicable √ not applicable There is no change to the company’s registered address, office address, post codes, company website or email address during the reporting period, as detailed in the 2020 annual report. 2. Information disclosure and filing place Whether the information disclosure and filing place have been changed during the reporting period □ applicable √ not applicable There was no change to the name of information disclosure newspaper selected by the company, the website address of the website designated by CSRC for publication of semiannual reports or the filing place of the company’s semiannual reports during the reporting period, as detailed in the 2020 annual report. IV. Key accounting data and financial indicators Whether the company needs to retroactively adjust or restate the accounting data of previous years □ yes √ no This reporting period The same period of the previous year Increase or decrease in this reporting period from the same period of the previous year Business revenue (Yuan) 61,518,574,560.67 44,696,040,364.08 37.64% Net profits attributable to shareholders of the listed company (Yuan) -3,415,066,136.23 3,163,865,460.00 -207.94% Net profits attributable to shareholders of the listed company after deduction of non-recurring profit and loss (Yuan) -2,304,738,918.62 3,283,676,864.54 -170.19% Net cash flows from operating activities (Yuan) -4,596,606,685.74 658,593,331.58 -797.94% Basic earnings per share (Yuan/share） -0.79 0.76 -203.95% Diluted earnings per share (Yuan/share) -0.78 0.75 -204.00% Weighted average ROE -9.28% 11.16% 20.44% down End of this reporting period End of the previous year Increase or decrease at the end of this reporting period from the end of the previous year Total assets (Yuan) 132,387,884,782.28 109,443,465,562.15 20.96% Net assets attributable to shareholders of the listed company (Yuan) 37,195,108,119.35 39,846,334,135.68 -6.65% V. Differences in accounting data under domestic and overseas accounting standards 1. Differences between the net profit and net assets disclosed in accordance with international accounting standards and Chinese accounting standards in the financial report □ applicable √ not applicable The company had no difference in net profits and net assets in financial reports disclosed under both international accounting standards and Chinese accounting standards during the reporting period. 2. Differences between the net profit and net assets disclosed in accordance with overseas accounting standards and Chinese accounting standards in the financial report □ applicable √ not applicable The company had no difference in net profits and net assets in financial reports disclosed under both overseas accounting standards and Chinese accounting standards during the reporting period. VI. Items and amounts of non-recurring profit and loss √ applicable □ not applicable Unit: Yuan Item Amount Profit and loss from disposal of noncurrent assets (including the charged-off portion of the accrued provision for asset impairment) -845,492,806.46 Government grants charged to current profit and loss ((excluding government grants given in the Company’s ordinary course of business at fixed quotas or amounts as per government’s uniform standards) 109,067,178.52 Investment costs for acquisition of subsidiaries, associates and joint venture less than gains from the fair value of identifiable net assets of the investees 320,326.09 Except for the effective hedging activities related to the Company's ordinary activities, profit or loss arising from changes in fair value of financial assets held for trading, derivative financial assets, financial liabilities held for trading, and derivative financial liabilities, and investment income from disposal of financial assets held for trading, derivative financial assets, financial liabilities held for trading, derivative financial liabilities, and other debt investments -17,631,335.35 Reversal of impairment provision for receivables and contract assets subjected to separate impairment test 12,461,280.08 Other non-operating incomes and expenses other than the aforesaid items -402,425,817.82 Other items of profit and loss that conform to the definition of non-recurring profit and loss. 0.00 Minus: effect of income tax 3,990,494.71 effect of minority interests (after tax) -37,364,452.04 Total -1,110,327,217.61 For non-recurring profit and loss items defined by the company according to the “Explanatory Announcement No. 1 on Information Disclosure for Companies Offering their Securities to the Public– Non-recurring Profit and Loss”, and for defining the non-recurring （未完）  |