[年报]新 和 成(002001):2021年年度报告（英文版）
原标题:新 和 成:2021年年度报告（英文版） Section I Important Notes, Contents, and Definitions The Board of Directors and its members, Board of Supervisors and its members, and senior executives of the Company hereby guarantee that the information presented in this annual report is authentic, accurate, complete and free of false records, misleading statements or material omissions, and they will bear individual and joint liabilities for such information. 胡柏藩 (Hu Baifan), the Company’s legal representative, 石观群 (Shi Guanqun), the officer in charge of accounting, and 王晓碧 (Wang Xiaobi), the head of accounting department hereby declare that they guarantee the financial statements in this annual report are authentic, accurate and complete. All members of the Board of Directors have attended the meeting of the Board of Directors for deliberation of this annual report. The future plan and other forward-looking information disclosed in this annual report shall not be regarded as a commitment to investors. We kindly remind investors of all possible risks in investments. We draw your attention to item “XI. Outlook for the future development of the Company” under “Section III Management Discussion and Analysis”, which explicitly states the possible risks in business operation and countermeasures thereon. Profit distribution proposal deliberated and approved by the meeting of the Board of Directors is as follows: Temporarily based on total shares of 2,563,842,524 shares [Note] as of March 31, 2022, the Company intends to distribute cash dividend of 7 yuan (tax included) and no bonus shares per 10 shares to all shareholders, and to distribute 2 shares per 10 shares by converting capital reserve to all shareholders. Note: As of March 31, 2022, the Company’s share capital totaled 2,578,394,760 shares, including repurchased share of 14,552,236 shares. According to the “Rules on Share Repurchase of Listed Companies”, shares in the special account for repurchase of listed companies carry no right of profit distribution and conversion of capital reserve into share capital. If the Company’s total share capital changes due to the conversion of convertible bonds, share repurchase, exercise of equity incentives, refinancing and listing of new shares, etc. before the implementation of the profit distribution proposal, the total distribution will be adjusted accordingly based on the same distribution ratio. This Annual Report is an English translation of the Chinese Annual Report. In case the English version does not conform to the Chinese version, the Chinese version prevails. Contents Section I Important Notes, Contents, and Definitions...........................................................................................1 Section II Company Profile and Key Financial Indicators ................................................................................5 Section III Management Discussion and Analysis ...................................................................................................9 Section IV Corporate Governance .................................................................................................................................. 36 Section V Environmental and Social Responsibilities ......................................................................................... 52 Section VI Significant Events ............................................................................................................................................. 57 Section VII Movements in Shares and Conditions of Shareholders ........................................................... 66 Section VIII Preferred Shares ............................................................................................................................................ 74 Section IX Bonds ........................................................................................................................................................................ 75 Section X Financial Report .................................................................................................................................................. 76 Documents Available for Reference I. Financial statements signed and sealed by the Company’s legal representative, officer in charge of accounting, and head of accounting department; II. The original auditor’s report with the seal of the accounting firm and the signature and seal of the certified public accountants; III. Originals of all the Company’s documents and announcements published on newspapers designated by the China Securities Regulatory Commission during the reporting period; IV. Other documents for reference. Definitions
I. Company profile
II. Contact information
III. Information disclosure and location
IV. Change of registration
V. Other relevant information Accounting firm engaged by the Company
reporting period □ Applicable √ Not Applicable The financial advisor engaged by the Company, who performed the duty of continuous guidance and supervision during the reporting period □ Applicable √ Not Applicable VI. Key accounting data and financial indicators Whether the Company needs to perform retroactive adjustment or restatement on financial data of prior years √ Yes □ No Reason for retroactive adjustment or restatement Other reasons
shares to 2,578,394,760 shares. The above EPS of the comparative period was recalculated based on the adjusted share capital. VII. Differences in accounting data under Chinese accounting standards and overseas accounting standards 1. Difference in net profit and net assets in financial statements disclosed respectively under IFRS Standards and Chinese accounting standards □ Applicable √ Not Applicable The Company has no difference in net profit or net assets in financial statements disclosed respectively under IFRS Standards and Chinese accounting standards. 2. Difference in net profit and net assets in financial statements disclosed respectively under overseas accounting standards and Chinese accounting standards □ Applicable √ Not Applicable The Company has no difference in net profit or net assets in financial statements disclosed respectively under overseas accounting standards and Chinese accounting standards. VIII. Key financial indicators by quarter Unit: RMB Yuan
disclosed in quarterly or semi-annual reports? □ Yes √ No IX. Non-recurring profit or loss √ Applicable □ Not Applicable Unit: RMB Yuan
The Company has no other profit or loss satisfying the definition of non-recurring profit or loss. Remarks on defining non-recurring profit or loss listed in the “Interpretation Pronouncement on Information Disclosure Criteria for Public Companies No. 1 – Non-Recurring Profit or Loss” as recurring profit or loss □ Applicable √ Not Applicable The Company has no situation of defining non-recurring profit or loss listed in the “Interpretation Pronouncement on Information Disclosure Criteria for Public Companies No. 1 – Non-Recurring Profit or Loss” as recurring profit or loss. Section III Management Discussion and Analysis I. The industry in which the Company operates during the reporting period The Company mainly operates in the fine chemical industry. Relying on the two core platforms of chemical and biology, it produces various functional chemicals, including nutrition, flavor and fragrance, new materials, and APIs. It has broad prospects in the future. Nutrition: With the growth and aging of the global population, the improvement of people’s living standards and their increased awareness of health, the demand for nutrition and health services and products keeps growing. The global nutrition market represented by vitamins and methionine maintains steady growth. Vitamins are trace organic substances essential to humans and animals. The market demand mainly comes from the downstream feed, food, medicine and other fields. The overall demand is growing steadily at a low speed. The supply concentration is high, and the market price has long-term cyclical fluctuations. As the largest producer of vitamins, China produced about 0.40 million tons of vitamins in 2021, a year-on-year increase of 3.70%, 1 accounting for 81.80% of global production. In 2021, the domestic downstream market demand grew steadily, and the vitamin market was relatively prosperous. As the first-limiting amino acid of non-grain protein, methionine has great economical effects on poultry, dairy cows, pigs and aquaculture. In 2021, the global production of feed amino acids (lysine, methionine, threonine and tryptophan) totaled around 5.62 million tons, with a slight increase from the same period last year. The total output of feed methionine in China was around 3.44 million tons, at a year-on-year increase of 9.90%. In 2021, the global DL-methionine 99% production capacity was around 2.03 million tons, with a slight increase over the same period of last year, while the domestic methionine production capacity was around 0.48 million tons, at a year-on-year increase of 13.10%. The global increase in methionine mainly came from China. The global output was around 1.60 million tons, at a year-on-year increase of 3.00%, and the domestic output was around 0.37 million tons, at a year-on-year increase of 22.90%, accounting for 23% of the global output, with an increase of 5 percentage points from last year. The global demand was around 1.50 million tons, with a year-on-year increase of 3.40%, and the domestic demand was around 0.39 million tons, with a year-on-year increase of 11.40%. In the recent five years, the development of China’s methionine industry has accelerated, as a result, the production capacity and supply have tilted to the 2 domestic market . With the continuous recovery of the global economy and the rapid economic development of emerging countries, the demand for meat has grown steadily, which leads to the steady growth of the global feed production. As a result, the demand for methionine is significantly increased. Flavor and fragrance: After centuries of development, the global flavor and fragrance industry has gone through the era of the origin 3 of fragrance, the era of bulk fragrance, the era of high-end fragrance, and the era of oligopoly . The global market size has exceeded 4 USD 30.00 billion and has been growing at a compound growth rate of 4% in recent years. In 2021, the market size of flavor and fragrance was estimated to be around USD 29.00 billion, and is expected to reach USD 37.30 billion in 2026, with a compound 5 growth rate of 5.10% . The growth of the flavor and fragrance market is mainly supported by the growing populations of emerging economies, such as China, India, Indonesia, South Korea, Brazil and South Africa. The industry is expected to continue to grow steadily in the future, and its future development prospects are promising. 1 The “2021 Vitamin Market Annual Analysis Report” by BOYAR 2 The “2021 Amino Acid Market Annual Analysis Report” by BOYAR 3 The “Analysis Report on China's Flavor and Fragrance Industry in 2021 - Industry Status Quo and Future Planning Analysis” by Insight and Info 4 Data from IAL Consulting Agency 5 MARKET and MARKET https://www.marketsandmarkets.com/Market-Reports/flavors-fragrance-market-175163912.html#utm_source=Email&utm_medium= th New polymer materials: The “Guidelines under 14 Five-Year Plan and Vision for 2035” issued by the central government in 2020 pointed out that it is necessary to vigorously develop strategic emerging industries, accelerate the growth of a new generation of information technology, biotechnology, new energy, new materials, high-end equipment, new energy vehicles, green environmental protection, aerospace, marine equipment etc. According to the China Petroleum and Chemical Industry Federation, the value of global output of new chemical materials in 2019 reached USD 370.00 billion, and is expected to reach USD 480.00 billion by 2025, with a compound growth rate of 4.40% from 2019 to 2025. From an international perspective, as a strategic and fundamental industry, the development of the new material industry has become an important symbol for measuring the economic and technological strength of a country or region. Under the background of a new round of scientific and technological revolution and industrial revolution, new technologies and new industries continue to generate huge demand for new materials. Breakthroughs in new material technologies and emergence of new materials and new substance structures continually increasing the supplies. The global new material industry is on the track of rapid growth. From a domestic perspective, China is experiencing a period of strategic transformation, and the strategic demand for new materials is more prominent, providing a rare historical opportunity for the development of the new material industry. However, in the R&D and production of advanced and high-end materials, there are still problems such as lack of innovation lack of coordination between innovation chain and industrial chain, lack of a risk-proof system covering the innovation chain, industrial chain and supply chain, etc., which fails to fully satisfy the needs of China’s economy and social development. China still has a long way to go in the road of new materials6. Benefiting from the huge domestic demand, the rapid development of new technologies and the support of national policies, some products broke through the key technology barriers, which provides us with a broad space for growth. APIs: API is the pillar industry of the domestic pharmaceutical industry and one of the key industries supported by government. At present, China is the world’s largest producer and exporter of APIs. Due to the supply imbalance caused by the pandemic and other factors, some European and American countries are also advocating to engaging in the API manufacturing, but it is foreseeable that in the wave of market globalization, the production advantages of APIs will still be concentrated in emerging countries such as China. China is a major producer and exporter of bulk APIs, and its production technology has reached the international advanced level. Most of the APIs are exported to foreign countries for processing into characteristic APIs and preparations. Due to the uncertainty caused by the global Covid-19 pandemic, the export of major API producing countries such as India and Italy is under pressure. As APIs are rigid demand, Chinese API companies have certain advantages in the global competition. Challenges always come with opportunities. We all know that China announced that it would reach carbon peak by 2030 and be carbon neutral by 2060 (known as double carbon target 3060). To reach the target, China is making solid progress to control the total volume and intensity of carbon emissions. The National Development and Reform Commission issued the Plan for Improving the Dual Control System of Energy Consumption Intensity and Total Volume, proposing to improve the dual control system, with a focus on the control of fossil energy consumption. The Comprehensive Work Plan on Energy Saving and Emission Reduction under the th 14 Five-Year Plan proposes that by 2025, the national energy consumption per unit of GDP shall be reduced by 13.50% compared with 2020. Affected by the “double carbon target and dual control system”, the procurement of basic chemical raw materials faces challenges of rising cost, limited procurement channels, etc. The Company also faces challenges in project approval and power supply. In the future, the Company will ensure the supply of raw materials and inventory reserves by developing more qualified suppliers and choosing more green and sustainable products as raw materials. Besides, the Company insists on technological transformation and equipment innovation, strengthens end-of-line management, to achieve energy conservation and emission reductions. 6 th II. The main business of the Company during the reporting period The Company is a national high-tech company mainly engaged in the production and sales of nutrition, flavor and fragrance, new polymer materials, and APIs. It focuses on fine chemicals, adheres to the concept of innovation-led development and competition-driven growth, and continuously develops various functional chemicals based on the two core platforms of chemical and biology, providing value-added services and solutions to customers in more than 100 countries and regions around the world. It continuously improves the quality of human life with high-quality, healthy and green products, and creates sustainable value for stakeholders. With leading technology, scientific management and sincere service, the Company has become one of the four major world vitamin manufacturers, one of the top 100 national fine chemical companies, one of the top 10 companies in China’s light of industry fragrance and a well-known special engineering plastics manufacturer. 1. Main products and applications Nutrition: The Company’s vitamin products, as the main business, have a substantial market share, with a prominent position in the industry and obvious brand advantages. It is in a leading position in both domestic and overseas markets. Its main products include vitamin E, vitamin A, vitamin C, methionine, vitamin D3, biotin, coenzyme Q10, carotenoids, etc. They are mainly used in feed additives and nutrition supplements of food, beverages, health food, etc. The Company actively implements the serialized and differentiated development of nutrition, and continuously improves the competitiveness of its products by optimizing the processing line and tackling key issues. In addition, through internal integration and external cooperation, it embraces the ideology of open cooperation. It actively deploys cutting-edge biotechnology, and builds the Company’s “Bio+” platform. During the reporting period, for the Company’s second phase of methionine 250,000 tons/year project, 100,000-ton equipment was running steadily, with cost and quality continuously improved, and the 150,000-ton equipment was constructed according to schedule, and the overall process was under control. Flavor and fragrance: At present, the main fragrance products target the global market, in which, the products are competitive, with a high market share and relatively stable market structure. The main products include linalool, citral, and cis-3-hexenol series, and methyl dihydrojasmonate, raspberry ketone and ligustral, which are widely used in personal care, cosmetic and food fields. Relying on the two major technology platforms of chemical synthesis and biological fermentation, the Company continuously enriches the varieties of fragrance products to meet the changing market demands. During the reporting period, the project with an annual output of 5,000 tons of menthol was constructed on schedule, and the project progress was under control. New polymer materials: The Company focuses on the development of high molecular polymers and key intermediates, and appropriately develops downstream applications of materials according to the principles of integration and serialization. The entire industry chain of PPS from raw materials to high molecular polymers, then through modifying processing to special fibers has enabled the Company as the only company in China that can stably produce fiber grade, injection molding grade, extrusion grade and coating grade PPS. The main products include PPS and PPA. They are mainly used in electronic and electrical, automotive, environmental protection, etc. During the reporting period, the third-phase project with an annual output of 7,000 tons of PPS was put into construction. APIs: The main products are concentrated in the series of vitamins and antibiotics. The main products include moxifloxacin hydrochloride, vitamin A, vitamin D3, etc., which are mainly used as active pharmaceutical ingredients for processing and producing pharmaceutical preparations. 2. Main business models (1) Procurement model The Company has always been adhering to the procurement principle of “fairness, transparency and optimal cost”, and adopts a combination of long-term strategic cooperation and open competitive procurement, and makes best use of market trend analysis, to ensure the stable supply of the Company’s strategic materials. The Company pays attention to source procurement, and continuously promotes the removal of intermediate links in the supply chain to reduce procurement costs; the Company implements transparent procurement, and launches information systems such as procurement platform, supplier and bidding management system, etc. to make the procurement process more transparent, standardized and efficient, which promotes the healthy development of the supply chain and reduces costs and increases efficiency for the Company’s operations. (2) Production model The Company has always been adhering to the production strategy based on the principle of “production and sales coordination, efficient operation, excellent quality, and cost leadership”. The Company maintained a balance between production and sales through analysis of changes in market demands, effective response to repeated epidemic waves and dual-control power cuts, and reasonable production plans. In addition, the Company keeps innovating the production model, digging out internal potentials, and optimizing the production process, in order to promote safe, green, standardized and efficient production, and continuously improve the competitiveness of its products. (3) Sales model The Company has always been adhering to the “customer-centric, market-oriented” sales strategy. It divides business lines by product application fields, and establishes a sales model that suits market needs according to market characteristics and industry practices. Most of the Company’s sales are achieved through direct sales. By doing so, it establishes long-term and stable strategic cooperative relationships with end customers to create greater value for them. Meanwhile, it also selects excellent agents or distributors for distribution. By doing so, it services customers indirectly based on market and customer features. 3. Key performance drivers The Company has built four modern industrial bases across the country. It adheres to the development strategy of integration, serialization and synergy, and insists on innovation-driven. Relying on the solid foundation of fine chemical industry, it focuses on “chemical+” and “biology+” to form NHU featured R&D models with industrial clusters, and technology and industry platforms interdependent. Not only can its products connect basic chemical raw materials in the upstream, but also extend to special intermediates, nutrition, flavor and fragrance, new polymer materials, and APIs in the downstream. It has formed a product network structure to resist risks and respond to market emergencies. During the reporting period, in the face of the raging Covid-19 epidemic and the more complex international economic situation, the Company coordinated the epidemic control and business development, actively responded to market changes, adjusted sales strategies, strengthened supply chain scheduling, and reasonably arranged production plans to ensure its product supply, and strive to create value for customers and the society. Moreover, the Company continued to increase investment in R&D and technological upgrading. The development and construction of new projects and new products were carried out in an orderly manner, whereas the refined operation of existing products promoted the sales price and quantity, which promoted the Company’s sales performance. The improvement of the Company’s performance was in line with the development pattern of the industry. During the reporting period, the Company’s main business and its business model remained unchanged. III. Core competitiveness analysis Since its establishment, the Company has focused on fine chemicals, and adhered to innovation-driven development. Through decades of development, it has gradually formed an industrial system with nutrition, flavor and fragrance, new polymer materials and APIs as its main business. The market share of its main products is among the top tier in the world market. The Company’s core competitiveness lies in its cooperate culture, R&D, management, talent and brand. 1. Corporate culture Adhering to the enterprise objective of “creating wealth, employees success, and benefit the society”, core values of “new, harmony, and efficiency”, the Company innovates its operation, and continuously improves management, to ensure the steady development. Under the guidance of the “teacher culture”, the Company pursues high-quality and sustainable development, creates spiritual wealth and material wealth, provides a platform and opportunity for employees to develop and realize life value, and contributes to social innovation development, green development and shared development. During the reporting period, the Company deepened cultural publicity and implementation, organized corporate culture lectures, strengthened the integration of corporate culture and management, carried out reflection activities on execution and talent training, and promoted the improvement of management capabilities. 2. R&D Adhering to the R&D philosophy of “demand-orientated, internal integration and external cooperation”, the Company invested greatly in R&D activities. The R&D investments accounted for more than 5% of the operating revenue for many years in a row. It has built the innovative R&D system spanning from basic research, engineering development, process optimization to product application development. With its focus on the development of common, critical and forward-looking technologies in the chemicals industry, the Company has developed and mastered a number of key technologies that have a strategic impact on economic development and has promoted the transformation and upgrading of the industry. The Company cooperates closely with famous research institutes and universities at home and abroad, such as Zhejiang University, Chinese Academy of Sciences, Jiangnan University, China Agricultural University, Zhejiang University of Technology, CysBio biotechnology company of Denmark, and organizes and utilizes global basic scientific research resources to jointly develop forward-looking studies and application field researches on chemicals. As the core of the Company’s technology innovation, the Company’s research institute has biomedical laboratories, supercritical reaction laboratories, engineering equipment research centers and other laboratories, equipped with 600M NMR with cryoprobes and other world-leading scientific research instruments and equipment. Its achievements of domestic leading technologies such as supercritical reaction, high vacuum distillation, and continuous reaction have made it a nationally recognized enterprise technology center, national post-doctoral scientific research workstation, and national model academician and expert workstation. During the reporting period, the Company’s key R&D projects were steadily implemented as planned, and the innovation achievements were recognized by the society. The project of “Key Innovation and Industrialization Technology for Tailoring Supported Catalysts in the Micro-nano Dimension “ won the first prize of Zhejiang Province Technology Invention Award of 2020. Intellectual property work was continuously progressed forward, and 88 patents were authorized. The full-process patent layout of key products was completed. 3. Production management The Company has always been adhering to the production strategy based on the principle of “production and sales coordination, efficient operation, excellent quality, and cost leadership” and the HSE guideline of “safety first, green development, full participation, and continuous improvement”. The Company takes planning as the goal, cost management as the main line, and maximizing company benefits as the principle for the allocation of resources. Through oriented management and the cyclic operation of planning, organization, implementation and control of the operation process, the Company continuously strengthens the level of cost control. Meanwhile, it also improves the level of digitalization and intelligence. Through process reform, efficient management and intelligent operation, it promotes the continuous improvement of management efficiency. In addition, the Company is committed to the development of green chemicals, vigorously promotes clean production, recyclable economy and 7S on-site management, and adopts an environmental governance model that focuses on source control and final disposal. It is determined to take the road of sustainable development. 4. Process and equipment The Company values highly the effective combination of process and equipment. It has a process and equipment research institute, and cooperates with famous engineering companies and scientific research institutes at home and abroad. Through the introduction, digestion, absorption and re-innovation of advanced technologies, the Company improves the overall level of its process and equipment. The Company is dedicated to the R&D of process and equipment towards larger scale, better airtightness, greater continuity, and higher level of automation, aiming to save energy and reduce emissions, to improve productivity and product quality, to increase the intrinsic safety of production process, to lower production costs, and to improve the level of automation. Currently, the Company has developed various efficient reaction and separation platforms including continuous reaction, high vacuum distillation, （未完）  |