[年报]海大集团(002311):2021年年度报告（英文版)
原标题:海大集团:2021年年度报告（英文版) Guangdong Haid Group Co., Limited 2021 Annual Report Stock Code: 002311 Date of Approval for Publication: 10 April 2022 Section I. Important Notes, Table of Contents and Definitions The board of directors (the "Board"), the supervisory committee, the directors, the supervisors and the senior management of Guangdong Haid Group Co., Limited (the "Company") hereby warrant the truthfulness, accuracy and completeness of the information presented in this report, guarantee that there are no misrepresentations, misleading statements or material omissions contained in this annual report, and are individually and collectively responsible for the authenticity, accuracy and completeness of the information contained in this report. Mr. Hua Xue, head of the Company, and Mr. Shaolin Yang, head in charge of accounting work and head of the accounting department (Accounting Officer), declare that they warrant the truthfulness, accuracy and completeness of the financial statements in the annual report. All directors were present in person at the Board meeting to consider and approve this annual report. The Report contains forward-looking statements such as future plans, which do not constitute any specific undertakings by the Group to its investors. Investors are advised to pay attention to investment risks. Risk Warning: 1.Risk of periodical fluctuation of feed industry affected by abnormal weather and animal diseases The feed industry is mainly served for the downstream breeding industry. The abnormal changes of temperature, precipitation and typhoon may lead to the fluctuation of livestock and aquaculture inventory, even the large-scale outbreak of diseases, further impacting the demand for feed and likely causing the risk of periodic and regional fluctuations of feed industry. Animal epidemic diseases may also occur frequently owing to the environmental changes and the expansion of large-scale animal industry. For instance, African swine fever broke out in August 2018 and spread across China, and PRRSV-mediated pig diseases, shrimp-relevant EMS epidemic diseases and poultry-relevant H7N9 diseases occurred recently. The outbreak of animal diseases directly holds up the scale of breeding and reduces the demand for feed in the short term. Major animal epidemic diseases may also reduce the demand of end-consumers, products, resulting in adverse effects on the production and operation of feed enterprises. Risk control methods: (1) The company is currently fully deploying manufacturers and local markets in major areas of Southern China, Central China, Eastern China and Northern China and overseas markets in Southeast Asia, etc. The expansion of regional distribution can effectively decrease the risk of weather anomalies and natural disasters in local areas. (2) The feed products cover pig, chicken, duck, goose, fish, shrimp feeds and other livestock and aquatic feeds. The variety of products and well-balanced structure can effectively mitigate the risk of single species disease with strong comprehensive risk-relieve capability. 2. Risk of the drastic fluctuation of main ingredient materials’ price The feed ingredients consist of staple agricultural products such as corn and soybeans (soybean meal) et al. In recent years, the domestic and international markets of agricultural product have been closely linked. The changes of the planting area size and the harvest amount in these major grain-producing countries, purchasing and storage and subsidy policies, import and export policies, political conflicts between countries, international trade relations, logistics capacity and conditions of shipping and exchange rates result in great fluctuations of agricultural products’ price, bringing certain impact on the cost of feed and animal industry. With the strengthening of the international trade of agricultural products, the factors affecting the prices of agricultural products have become more complicated, and the fluctuation of price therefore increased. Failing to understand the changes of feed raw materials in a timely manner and promptly implement strategic management, the company may face the risk of the rising procurement costs. Risk control methods: (1) The materials were divided into different categories such as centralized purchasing staple category and local procurement of regional varieties category. It not only guarantees the advantages of large-scale raw material procurement, but also makes best use of localization advantages from rapid response in respect of regional procurement. (2) The raw material procurement research system was continuously invested and constructed. The members of team are professional and familiar with raw material information. It can effectively control the procurement risk through real-time tracking, studying and judging the market trend in domestic and foreign bulk raw material, and manage the risk of bulk raw materials through futures hedging, raw materials trade and other tools. (3) The company has strong research and development (R&D) team composed of nearly 2,000 employees with extensive experience in research on animal nutrition and feed formulation technologies. Large amounts of funds are invested on R&D each year, focusing on animal nutrition requirements, feed formulation technology, animal farming and genetic improvement, overall investigation on healthy animal farming strategies, and other research areas. Whenever the material price is fluctuated, the formula can be quickly adjusted to guarantee feed nutrient level and control the cost based on the profound understanding of animal nutritional requirements and the expertise in making best use of raw materials. 3. Risk of environmental protection laws and policies on the scale structure and regional adjustment in animal industry In recent years, our government has introduced a series of environmental protection laws and policies such as new Environmental Protection Law, the Regulations on Prevention and Control of Pollution from Large-Scale Livestock and Poultry Industry, the Plan for Prevention and Treatment of Contaminated Water, the Guiding Opinions on Adjusting the Layout of Pig Production in the Southern Water Network Region et al. These anti-pollution regulations stipulate the pollution prevention in animal industry, and especially limit the production scale in the regions of key water sources and its surrounding areas. According to the regulations and policies of the central government, the banned areas and restricted areas have been set up throughout the country, and pig farms in the prohibited areas are gradually relocated in the southern water network areas. The implementation of environmental protection policies not only speeds up the withdrawal of family pig farms with backward production capacity and unqualified environmental protection, but also expands the production capacity of large-scale farms and improves breeding scale structure. In addition, the establishment of banned areas and restricted areas will enforce the adjustments of pig production capacity across the country. The adjustments of the scale composition of pig production and the relocation of pig production areas will certainly have profound impact on the existing capacity layout, market share, pricing power and business model of feed industry. The impact of environmental protection policies on the pig industry and feed industry makes the existing competitive enterprises at risk of reshuffling. Risk control measures: (1) The company continually improves its service capability to farmers. In addition to feed products, the company is also engaged in the industrial fields of animal healthcare products, vaccines and finance, and set up strong connection with large-scale farmers. (2) The feed products of the company cover the field of livestock, poultry, and aquatic animals with abundant product lines. The producing lines for pig feed, chicken feed, duck feed and pelleted fish feed can be shared and switched. The company can rapidly shift the production layout according to the changes in the market through adjusting the production capacity. (3) The company adopts multiple models to speed up the production layout in areas with abundant resources and permitted environment, and to obtain more market share in new animal farming areas. (4) The company continues to increase R&D investment, and the key technologies on microbial fermented feed and antibiotic substitutes have been effectively applied to foster the progress and development of the industry. 4. Risk of Exchange Rate Fluctuations The global procurement of feed raw materials has become the norm. The scale of overseas investment and operations of the company is also rapidly expanded. The scale of cross-border fund settlement and the stock of overseas assets have grown substantially, involved in various currency types of different countries. The currency exchange rate fluctuations are subject to different factors. The exchange rate fluctuations in any currency put certain impact on the settlement cost and asset value of the regions. Risk control methods: (1) the company strictly controls the exchange rate risks, carefully selects settlement currencies to achieve relatively balanced regional fund inflow and outflow through the structural arrangements of financing sources and financing types according to the scale, the operation model, and the settlement characteristics of business in different regions and countries. (2) The expansion of two-way fluctuations in RMB exchange rate has become the new norm. The company increases its awareness of foreign exchange risk and arranges settlement models according to the procurement and sales strategies and the cycle characteristics of import and export operations, and flexibly used financial instruments such as forward foreign exchange settlement and sale, swaps, foreign exchange options and others to lock in exchange rate risks, control procurement and sales costs and the possible risk caused by exchange rate fluctuations. The proposed profit distribution plan of the Company was considered and passed by the Board: on the basis of the total number of shares on the date of record minus the repurchased shares when the plan is implemented in the future, the Company will distribute cash dividend of RMB 1.50 (tax inclusive) and 0 bonus share (tax inclusive) for every 10 existing shares held by all shareholders without capitalization of capital reserve. This report has been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese version shall prevail. The complete published Chinese 2021 Annual Report is availableat the media designated for information disclosure . Table of Contents Section I. Important Notes, Table of Contents and Definitions ....................................................... 1 Section II. Company Profile and Key Financial Indicators .......................................... 8 Section III. Management Discussion and Analysis ..................................................... 14 Section IV. Corporate Governance .............................................................................. 74 Section V. Environmental and Social Responsibility ................................................ 121 Section VI. Material Matters ..................................................................................... 131 Section VII. Share Changes and Shareholder Information ....................................... 155 Section VIII. Preferred Shares ................................................................................... 164 Section IX. Bonds ...................................................................................................... 165 Section X. Financial Statements ................................................................................ 169 Documents Available for Reference 1. The financial statements signed and sealed by the head of the Company, the head in charge of accounting work and the head of the accounting department (Accounting Officer). 2. The original copy of the Independent Auditor’s Report signed and sealed by the CPAs, as well as sealed by the CPA firm. 3. The originals of all the Company’s announcements and documents which were disclosed during the Reporting Period. 4. The annual report disclosed on other securities markets.
CPA firm engaged by the Company
√ Applicable □ Not applicable
□ Applicable √ Not applicable
non-recurring gain or loss was negative for the last three accounting years, and the latest independent auditor’s report indicated that there was uncertainty about the Company’s ability to continue as a going concern □ Yes √ No
the quarterly report or interim report □ Yes √ No
The Company had no other gain or loss that satisfied the definition of non-recurring gain or loss. Notes for the Company’s non-recurring gain or loss items as illustrated in the Explanatory Announcement on Information Disclosure for Companies Offering Their Securities to the Public No.1 - Non-recurring Gain or Loss (公开发行证券的公司信息披露解释性公 告第 1号——非经常性损益) defined as its recurring gain or loss items □ Applicable √ Not applicable No non-recurring gain or loss items as illustrated in the Explanatory Announcement on Information Disclosure for Companies Offering Their Securities to the Public No.1 - Non-recurring Gain or Loss (公开发行证券的公司信息披露解释性公告第 1号—— 非经常性损益) were defined by the Company as its recurring gain or loss items during the reporting period. Section III. Management Discussion and Analysis I. Industry situation during the reporting period 1. Basic situation and development stage of the industry The breeding industry is in the middle of agricultural industry chain, linking the planting industry with the food industry. As the upstream of the breeding industry, the feed industry is the link between the planting industry and the breeding industry. The feed industry possesses the highest degree of industrialization in the agricultural industrial chain. The feed generally accounts for more than 70% of the farming cost and undertakes the important function of guaranteeing the breeding transformation efficiency and reducing the breeding cost. With the promotion of consumption upgrading, food safety and technological innovation, the farming industry has entered the stage of industrialized, large-scale, intensive and intelligent development after the upgrades of environmental protection regulations and the test of pandemics. However, the level of development varies in different species due to the objective factors such as resources, technologies, land et al. Among them, poultry farming is at the highest degree of industrialized, large-scale, centralized and intelligent development, followed by pig and aquaculture farming, and cattle & sheep farming is still in their early development stage. With the intensification, large-scale, centralized and intelligent development of farming industry as well as the improvement of farming techniques, the sectors related to farming industry such as feeds and animal healthcare products are also increasing intensively, and the industry integration is accelerated. The detailed situations of feed, seedling, animal healthcare and poultry, pig and aquaculture farming industry: (1) Feed industry is the important link in the production system of animal breeding. The development of feed industry in China began in the 1980s. After more than 40 years of development, the total amount of feed has continuously ranked the top in the world in recent years. According to the overview of the development of national feed industry in 2021 issued by the Ministry of agriculture and rural areas and the feed industry association, the feed output in 2021 reached a new high with the total output of more than 290 million tons, the increase of 16.1% year-on-year. The output value of feed was 1,223.41 billion yuan, the increase of 29.30% year-on-year. In last 10 years, the feed industry has gradually changed from quantity oriented to high-quality development stage. The feed industrial has entered the stage of industrial integration and upgrading, and the market growth rate has decreased. At the same time, a few advanced enterprises in the industry have gradually emerged, and the industrial concentration has increased rapidly. In 2021, with the accelerated recovery of pig production and the continuous development of aquaculture and ruminant breeding, the output of feed industry increased rapidly, and the total output of domestic industrial feed increased significantly, reaching an all-time high. (2) High- quality seedlings are the key of animal farming, particularly in the aquaculture industry. However, the supply of high-quality seedlings, especially aquatic seedlings, is insufficient. Few new seedlings with independent intellectual property rights and small production capacity are far from reaching the needs of the upgrading and progress of the animal industry. Seedlings will face the pressure on improving production through research and increasing the supply capacity in the long term. (3) The market demand of animal healthcare products has grown rapidly. In particular, the demand for healthy, safe and green farming has significantly increased with the uprising of consumption and the upgrading of farming species. The concept that the disease prevention is more important than treatment is increasingly accepted by most farmers. The benefits of reasonable investment of animal healthcare products for farming is mainly reflected in the direct effects of reducing disease risk, health improvement, safety-added values of end-products, controllable farming costs, and higher farming efficiency, there are also many extra effects such as decreasing labor intensity and the improvement of industrial chain extension capability. In the future, the capacity of the animal healthcare industry will have a large space for sustainable development based on the current situation, and the advantageous enterprises will usher in major market development opportunities. (4) The output value of poultry breeding industry exceeds 1 trillion yuan, which is the industry with the highest degree of large-scale and standardization. The stock of large-scale poultry breeding in China accounts for more than 70%, and the centralized trend is keeping up. With the help of capital, technology, scale and other advantages, the industrial chain integration become an important trend for the development of poultry breeding industry. (5) The output value of pig breeding industry is about 1.5 trillion yuan, which is rapidly moving towards large-scale, intensive and industrialized process. The outbreak of African swine fever in 2018 and COVID-19 in 2020 accelerated the industrial centralization, and the small-scale and free- style farms quickly withdrew from the market. During the epidemic period, large-scale enterprises are expected to rapidly expand their breeding volume relying on their advantages in capital, technology and the construction of the unbroken epidemic prevention system. Large- scale family farms with strong epidemic prevention capacity become the main force besides large-scale enterprises. (6) Aquaculture industry has broad prospects for development, and the output value of aquaculture also exceeds 1 trillion yuan. Aquatic products industry is dominated by aquaculture farming and supplemented by fishing industry. In recent years, the policy of marine summer fishing moratorium has intelligence and automation and the rapid improvement of aquaculture technology, the large-scale aquaculture will accelerate the development of aquaculture business. With the upgrading of consumption, the development of catering industry and the awareness of food safety, it is gradually increasing the demand for stable, safe and high-quality aquatic animal protein. The change of consumption structure will drive the supply of high-end aquatic products. Aquaculture enterprises with high-quality seedlings and strong technical and financial strength will become pioneers in the field of aquaculture and create broader market prospects in promoting technological innovation of aquaculture. 2. The industry situation in 2021 In 2021, COVID-19 continued to spread in the world, along with limited import and export, the rising prices of bulk raw materials, the declining consumer demand of domestic residents, and the depressed prices of poultry and pork, livestock and poultry breeding was squeezed by the declining of meat products’ price and the rising of raw material price, resulting in huge losses and difficulties. The price of aquatic products is relatively better, but the profit is also decreased by the upward prices of raw material. In terms of bulk agricultural products, corn prices will further increase after rising to the high level in 2020. The price of soybean meal rose to the historical high compared with the beginning of the year and remained at the high price throughout the year. According to the statistics of the Ministry of rural agriculture, at the end of 2021, the average price of corn reached 2,930 yuan / ton, an increase of 26.3% over last year's average price with a record high. The average price of soybean meal reached 3,790 yuan / ton, an increase of 14.2% over the average price of last year. The price rise of corn and soybean meal has also driven the rise of other agricultural products’ prices. The prices of wheat, sorghum, rice and cottonseed meal have increased to varying degrees. Driven by the rising prices of raw grain, the domestic feed price has reached a record high, and the breeding cost has further increased. In terms of the breeding industry, (1) the poultry breeding continues its depressed market after 2020. Affected by the continuous weakness of market demand and the continuous decline of pig prices, combined with the sharp rise of feed costs, the income of poultry breeding industry continues to decline, and the industrial capacity is at the stage of rapid clearance. Meat duck farming has suffered losses for 20 consecutive months. In 2021, the operating rate of slaughtering enterprises and the average storage capacity rate of frozen products fell year-on-year, and the production capacity was further cleared. With the continuous release of high production capacity, white feather chicken farming increased significantly from 2020 to 2021. The problem of over-capacity became more and more decline. The consumption of yellow feather chicken farming was greatly impacted by the control management of live poultry market. The output began to decline from 2020. The number of slaughters in 2021 decreased by 8.5% and the output decreased by 4.7% compared with 2020. (2) With the standardized prevention and the control of African swine fever virus and the further recovery of breeding capacity, according to the statistical bulletin of national economic and social development in 2021 issued by National Bureau of statistics, the number of pigs sold in the whole year was 671.28 million and the number of pigs in stock at the end of the year was 449.22 million, with a year-on-year increase of 27.4% and 10.5%, respectively. The output of pork was 52.96 million tons, an increase of 28.8%. The supply of live pigs increased significantly, and the price of live pigs dropped from the highest 36 yuan / kg in the first half of the year to the lowest 10 yuan / kg in the second half of the year. The continuous downward of pig prices led to the loss of farmers from the second quarter. Farms began to eliminate many inefficient breeding and reserve sows, and the pig breeding industry entered the huge loss stage. (3) In the first two years of aquaculture affected by COVID-19 and the comprehensive ban on fishing in the Yangtze River system and the relatively small number of aquatic seedlings, the storage and discharge of aquatic products are generally tight in 2021 resulting in better prices of aquatic products in 2021. The prices of traditional common water fish such as silver carp, spotted silver carp, carp and grass carp continued to rise, reaching a record high from June to July. Among them, the wholesale prices of grass carp, carp and silver carp exceeded 20 yuan / kg. Although the prices fell in the second half of the year, the prices were still generally higher than the average prices in last 10 years. After the downturn of shrimp culture in the past few years, with the further improvement of domestic culture technology, the success rate of shrimp culture has been improved by small shed, greenhouse, high-level pool and industrialized culture mode. During the epidemic period, the consumption demand of shrimp has been stimulated, and the shrimp price has been rising. Due to the high dependence on catering and circulation, the demand of special water fish species is low throughout the year due to the impact of the epidemic. In terms of feed industry, although the farming industry is depressed, due to the significant investment release of livestock and poultry production capacity in last two years, especially the further recovery of pig production capacity, feed demand has increased, and feed output has increased rapidly to a new high. In 2021, the total output of feed exceeded 290 million tons, with the year-on-year increase of 16.1%. Among them, pig feed was 130.765 million tons, the year-on-year increase of 46.6%. 121.41 million tons of poultry feed, the year-on-year decrease of 3.1%. 22.93 million tons of aquatic feed, the year-on-year increase of 8.0%. The centralization and large-scale of feed industry have been further improved. There are 39 feed enterprise groups with an annual output of more than the previous year. It is expected that the integration will continue in the later stage, the number of enterprises will be further reduced, and the business centralization will be further enhanced. Dominant enterprises utilize industry integration opportunities and scale advantages to expand production capacity through purchasing and building new construction or extend the industrial chain and develop diversified businesses. Owing to the bottleneck factors of capital, talents, technical pressure and service capacity, small and medium-sized enterprises will gradually be integrated, merged and withdrawn from the market by dominant enterprises. 3. The periodic characteristics of the industry The periodicity of the breeding industry is mainly determined by the supply side (the farming quantity). The periodicity of feed, animal healthcare, seedling and other industries is related to the periodicity of the breeding industry. China is the country with a large population, and the food consumption demand of residents is huge, which remains relatively rigid and stable for a certain period. Therefore, the supply side of the breeding industry determines the price of breeding varieties, thus determining the periodicity of the breeding industry. The periodicity of the feed industry generally lags behind the breeding industry. When the breeding volume is less than the consumption demand, the price of breeding products will rise with considerable profit, resulting in the prosperity of the breeding cycle. The feed demand will be reduced due to the reduction of breeding volume. When the amount of breeding is greater than the consumption demand, the prices of breeding end products will fall, and the breeding cycle will be depressed. The rigid demand for feed is large due to the large amount of breeding. But at the same time, the decline in the prosperity of the breeding industry directly affects the farmers' choice of high-quality or low-quality feed products, the enthusiasm of feeding, the sensitivity of feed product prices and the effective transmission of feed raw material price fluctuations. Therefore, in fact, the periodic factors of the feed industry such as seedlings and animal healthcare will offset each other and have less impact on feed, which is a weak periodic industry. 4. The position of the company in the industry The company belongs to the large comprehensive enterprise. In terms of feed, although the industry centralization is strengthening, it is still relatively scattered. In 2021, the company's feed sales volume was 19.63 million tons, accounting for about 6.69% of the country's total feed output, external sales volume is 18.77 million tons, and the internal farming consumption sales volume is 860,000 tons. The company's aquatic feed technology and scale are leading in the world. Livestock and poultry feed ranks among the top ten in the industry and is in the leading position in technology and industrial scale in the regional market. The company has gradually developed feed, seedling and animal healthcare markets in Southeast Asia, Africa, South America and other countries. The company also ranks among the top ten in the production and marketing scale of global feed enterprises. The company is regarded as the national key leading enterprise in agricultural industrialization, the national enterprise technology center, China top 500 enterprises, China top 500 manufacturing enterprises, China top 500 private enterprises, Fortune China top 500 enterprises in 2021, and China top 500 listed companies in 2021. II. Main businesses of the company during the reporting period The company should comply with the disclosure requirements of livestock and poultry aquaculture industry in the guidelines for self-discipline supervision of listed companies of Shenzhen Stock Exchange No. 3 - industry information disclosure. 1. Main businesses, products and business models of the company during the reporting period The company carries out industrial chain business with the aim of providing overall services to animal farming. It has formed a relatively complete aquatic product industrial chain, and the livestock and poultry industrial chain is also gradually being constructed. The main products include high-quality seedlings, feed, animal healthcare and pig breeding. The business operation has covered all business links such as R&D, designing, producing, sales and services of various products. Specifically, the company's products include feeds of chickens, ducks, geese, pigs, fish, shrimps and crabs, the breeding varieties including pigs, shrimps, fish fry and chickens, as well as biological products, veterinary medicine, vaccines and other products required for producing livestock, poultry and aquaculture. (1) Main business and products The core business of feed is integrated with seedling and animal healthcare products as two wings for breeding industry Feed business is the core foundation of the company. Based on fully understanding the needs of farmers, the （未完）  |