[年报]新 希 望(000876):2021年年度报告全文（英文版）
原标题:新 希 望:2021年年度报告全文（英文版） 2021 Annual Report 2022-44 April 2022 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 annual 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 annual report is true, accurate and complete. All directors of the company attended the board meeting deliberating this report. The company is required to comply with disclosure requirements for livestock, poultry and aquaculture industries in the “Self-regulatory Guideline No.3 of Shenzhen Stock Exchange for Listed Companies—Industry Information Disclosure”. 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, 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 downstream market demands, and also 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, live livestock and poultry, and the workers returning to work. In addition, the outbreak of infectious epidemic diseases will force most catering enterprises to stop doing business, some agricultural product markets to shut down, and consumers to reduce outdoors activities, resulting in reduced meat consumption. For example, the African Swine Fever (ASF), which has been lasting for years, has characteristics such as long latency and high mortality after onset of the disease. New variants of ASF have been emerged constantly. No effective vaccines have been developed successfully since its outbreak. Thus ASF has been producing persistent, enormous impact on the entire industry in recent years. In late 2021 and early 2022, the attenuated-strain ASF bounced back once again, especially hitting Hebei, Shandong and Henan. The COVID-19 outbreak at the beginning of 2020 also posed daunting challenges to the farming and livestock industries. When sporadic outbreaks of the pandemic occur across the country, the anti-epidemic measures such as lockdown and delay in return to work led to unavailability of feed to farms and livestock farmers, newborn poultry and pigs nowhere to sell, and inability to slaughter livestock and poultry. Lockdown measures in urban areas would also affect demands for meat consumption. 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 rainstorms broke out in many places of central, east and southwest China in summer of 2021, leading to floods and landslides. They adversely affected the planting, breeding, farm produce logistics, project construction and meat prices along the industry chain to varying degrees; in terms of planting, continuous catastrophic floods hitting some areas will result in decreased output of feed ingredients, thus impacting the feed ingredient prices, while at the same time decreasing the quality of ingredients; 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 will result in spread of pathogenic microorganisms and trigger epidemic diseases; floods would also destroy breeding facilities and equipment, and wash away livestock, poultry or aquatic products, causing losses to farming enterprises and farmers and thus affecting feed sales of the company; in terms of logistics, roads are flooded and roadbeds and road surfaces are 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 construction, continuous rainstorms would also cause part of capital investment construction projects of the company to temporary shut down, affecting the construction schedule; in terms of meat prices, flood would also impact the meat supply and contribute to rising prices of pigs, while the gap in meat prices between affected areas and unaffected areas grows, thus leading to increased allocation and transport of live pigs, and resulting in spread of the pandemic to a certain extent. In the winter of 2021, snowstorms or blizzards hit north and northeast China, which, along with catastrophic snowstorms in some areas, posed daunting challenges to farming sheds, transportation, logistics and heat preservation and epidemic prevention for animals. 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 prevent and control the occurrence of epidemic diseases. The company has been guiding technicians to better serve farmers and staffs of self-run farms 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 particular, in view of ASF outbreak, the company formulated all-round and system-wide prevention and control measures, covering existing self-run pig farms, fattening farms in cooperation with farmers, and supporting feed plants and other vunerable segments, with a view to ensuring proper prevention and control at the source of animal nutrition. In response to the COVID-19, the company lost no time to react, formulate and carry out various containment policies and conducted emergency disposition in a coordinated manner. Secondly, the company actively communicated with the government at all levels, coordinated the transportation of goods such as livestock products, and raw and auxiliary materials of feed and products, secured vehicle passes, and implemented the green channel policy enacted by the government at all levels. Thirdly, the company ensured sufficient procurement for feed plants and production supply through region-wide coordination, strengthened cross business units coopeartions and support, arranged its employees to return to work rapidly and orderly, contributed to the adequate supply of daily necessities across the country, and expanded sales through supermarket channel and online channel. Fourthly, in light of its business practices, the company compiled the epidemic containment manual, organized the epidemic prevention arrangements in a targeted manner and strengthened employee safety protection. In response to natural disasters, the company’s extensive business portfolio and presense both at home and abroad help ensure that the company’s business as a whole will not be materially affected when natural disasters occur in particular regions; the company is also able to resume production and reduce losses resulting from natural disasters as soon as possible by utilizing its nationwide presence and through cross-regional allocation of raw materials, equipment and personnel. Especially for the rainstorms and floods in south China, which have occurred frequently in these years, the company has also accumulated a large wealth of experience, established proven contingency plans and maintained 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. II. Risk of feed ingredient price fluctuations The cost of feed ingredients generally accounts for more than 90% of total cost of feed production. In 2021, prices of corn and soybean meal grew more than 20% year-on-year, and the constant China-US trade frictions in recent years have caused great uncertainties to agriculture commodities trade between the two fluctuations will continue to exist for a long time. The Russia-Ukraine war in early 2022 also has been hugely affecting production and supply of many kinds of agriculture commodities worldwide, further driving costs of feed ingredients up. Risk countermeasures: The company is the largest domestic feed enterprise with the scale advantages and a considerable bargaining power in the raw material purchasing. In recent years, the company continued reorganizing and optimizing its raw material procurement system, 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. The company strengthened application of hedging tools to control the raw material price fluctuation risk. In 2021, the company further reinforced centralized management of raw material procurement across the industry and reduced costs of feed use through processing in bonded zones and other methods. III. Risk of price fluctuations of livestock and poultry The prices of live pigs, pork, breeding poultry, non-slaughtered chicken and ducks and poultry meat were low as a whole in 2021, but with slight differences in price trends of pig and poultry. In terms of live pigs, pig prices had been fallying rapidly in early 2021 due to recovering production capacities for nine months, and remained low as a whole thereafter despite bounce-back. In terms of white-feathered poultry, including newly-hatched poultry, non-slaughtered chicken and ducks and poultry meat, their market prices remained low for a long time as a whole due to serious oversupply, coupled with the apparent inhibited consumer demand of major channels such as wholesale markets, schools and business groups due to the impact of COVID-19 and sharp decline of live pig prices that have substitution effect, causing tremendous pressures on all players along the industry chain. Entering 2022, cutting overcapacity of live pigs across the country was slow, and pork demand will not change significantly in short term. With pork price expected to remain low for a long time, the table poultry market will continue to be adjusted due to still severe imbalance between demand and supply. Table poultry price will also continue to sustain great pressure. Risk countermeasures: 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. Although the company’s pig farming cost increased in the past year due to rapidly expanding scale of pig farming and impacts of attenuated ASF outbreaks, the total cost has been reduced gradually as the company entered a phase of robust operations since 2021, which will allow the company to regain competitiveness in the future. On the other hand, unlike most of agricultural and animal husbandry enterprises, the company has feed business upstream of breeding industry and slaughtering and processing businesses downstream of company. 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, while increased breeding volume helps increase feed sales and profits, which can also ease the impact of price fall of livestock and poultry on the company as a whole moderately. IV. Impact of environmental protection policies In recent years, the enactment of a series of policies and regulations such as the “Environmental Protection Law”, “Regulations on Pollution Prevention for Large-scale Breeding of Livestock and Poultry”, and “ ‘13th Five-Year’ Ecology and Environment Protection Program” reflect the commitments and efforts of the government dealing with pollution from farming operations.Local governments enacted new regulations demolishing farms, prohibiting and restricting farming operations in sensitive areas, ordering some farms 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 and exit the market, and lead to reduced breeding quantities, which will produce a certain impact on the growth of feed business of the company and its acquisition of live pigs 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 base due to being located in the banned areas, which will lead to shutdown. In the long run, however, the exit of these outdated capacities for incompliance with environmental standards will allow the best-run producers remaining in the industry to acquire higher profitability, which is still of a positive significance to the entire industry. Risk countermeasures: the company makes every effort to keep its stock under control, utilizes its industrialized supporting and integrated services, and strengthens its cooperation with medium and large-sized farms and farmers that meet environmental standards, regarding ecology, environmental protection, efficiency and safety as primary considerations in farming cooperation, and helping farmers remodel and build sheds and stalls that meet higher environmental standards for increased profitability of breeding business. On the other hand, the company actively grows its inventories by cultivating new livestock and poultry farming bases in areas with appropriate environmental condition through construction, acquisition, joint venture and cooperation 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, litigation or related penalties in a way that even affects their brands and reputations, thereby adversely affecting their business operations. The implementation of the revised “Food Safety Law” in of 2015 also means China has brought its focus on food safety to an unprecedented level. 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 everything it does. So far, the company has created a food safety control chain from feed, livestock and poultry breeding all the way to dining table. In 2016, the company passed the food technical standard certification issued 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. At present, all food enterprises of the company have passed China-HACCP certification, and more than 60 food enterprises are finishing the BRC and Global-GAP certifications in succession. VI. Risk of exchange rate fluctuations Currently, the globalization of raw material procurement for feed production is improved sharply, and the feed enterprises have been increasingly affected by the exchange rate in terms of feed ingredient 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. In the past years, due to serious impacts of COVID-19 and political turmoils, currencies of many overseas countries where the company operates experienced extraordinary fluctuations, exhibiting trends of continuing depreciation when coupled with the expected US interest rate rise, thus posing daunting challenges to foreign exchange management and operational difficulties of the company. Risk countermeasures: In response to the growing needs for overseas raw material purchasing and investment and operation, the company has been building its Singaporean branch into an overseas commercial and trading center and investment and financing center, actively conducted international centralized purchasing of raw materials, foreign direct financing, supply chain finance, foreign exchange risk management and raw materials purchasing risk 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 mainly involves the following four aspects. First, the pig farming scale of the company is at a phase of leapfrog development in recent years. By the end of 2021, the company’s pig farming team has exceeded 32,000 persons, expanded the management radius of the company, therefore, inadequate hiring, training and retention of personnel will pose potential risks to the subsequent pig farm management and operations; 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 labor 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 trained a large number of outstanding employees in many years, but the competition for human resources has been intensifying due to the increasing competition in the industry and entry of new players from different backgrounds in recent years. The company will suffer from losing of talents. isk countermeasures: the company treats employee training and employee motivation as a long-term strategic task. In terms of recruiting talented pig farmers, the company expanded its recruitment targets beyond college graduates majored in agriculture and animal husbandry. The company started torecruit non-specialized college graduates and ex-soliders. Forpig farmer training, the company not only standardized and digitalized its daily production processes,, but alsooffers specialized courses of different levels for general manager, farm managers all the way down to the newly recruited frontline workers. The courses in conjunction with modern mentorship system inside pig farms and one-to-one mentoring by experienced employees, the training time for new employees. The company further optimized its pig business talent motivation systemEmployee at all levels in pig business will receive competitive compensation based on their performance and output. The company also became more aggressive in acquiring talents for new strategic businesses, and actively conducted cross-industry training and learning activities to ehance employees’ knowledge and improve their scapabilities. In order to reduce the pressure on human cost, the company realized a continuous increase in per capita efficiency by position optimization, , making management leaner, optimization of industry chain design and organization flattening as well as intensified use of automated equipment and IT equipment. The company created the professional manager promotion system with survival of the fittest by constructing the competition, selection and elimination mechanisms; The company also united the growth of the company and of employees by constructing fair evaluation mechanisms, incentive mechanisms and value sharing mechanisms, including its restricted stock and stock option incentive plan implemented in 2019 to motivate senior executives and some of key emloyees. The company plans not to distribute cash dividends or allot bonus shares or transfer its provident fund to share capital. Table of Contents Section 1 Important note, table of contents and definitions .................................... 2 Section 2 Company Profile and Key Financial Indicators .................................... 13 Section 3 Management Discussion and Analysis .................................................... 17 Section 4 Corporate governance .............................................................................. 82 Section 5 Environmental and Social Responsibilities .......................................... 101 Section 7 Share Changes and Shareholders .......................................................... 220 Section 8 Details Related to Preferred Shares ...................................................... 230 Section 9 Details Related to Bonds ......................................................................... 231 Section 10 Financial Report.................................................................................... 238 List of Documents for Reference (1) Financial statements bearing the signatures of chief executive officer, person in charge of accounting and head of accounting organization (chief accountant) of the company as well as stamps (2) Original of the auditor’s report bearing the signature and seal of the accounting firm and signatures and seals of CPAs. (3) Originals of all corporate documents and announcements disclosed by the company publicly on China Securities Journal, Securities Times, Shanghai Securities News, Securities Daily and www.cninfo.com.cn during the reporting period. Definitions
I. Company Information
Accounting firm engaged by the company
√ applicable □ not applicable
□ applicable √ not applicable VI. Key accounting data and financial indicators Whether the company needs to retroactively adjust or restate the accounting data of previous years □ yes √ no
□ yes √ no The lower of net profits of the company before and after deduction of non-recurring profit and loss was negative √ yes □ no
VII. Accounting data difference under Chinese and foreign accounting standards 1. Difference in net profits and net assets in financial reports disclosed under both international accounting standards and Chinese accounting standards □ applicable √ not applicable The company had no difference in net profits and net assets in financial reports disclosed under either international accounting standards and Chinese accounting standards during the reporting period. 2. Difference in net profits and net assets in financial reports disclosed under both overseas accounting standards and Chinese accounting standards □ applicable √ not applicable The company had no difference in net profits and net assets in financial reports disclosed under either overseas accounting standards and Chinese accounting standards during the reporting period. VIII. Quarterly key financial data Unit: yuan
and semiannual reports disclosed by the company □ yes √ no IX. Items of non-recurring profit and loss and their amounts √ applicable □ not applicable
□ applicable √ not applicable The company has no circumstances of other items of profit and loss that conform to the definition of non-recurring profit and loss. For defining the non-recurring profit and loss items enumerated in “Explanatory Announcement No. 1 on Information Disclosure for Companies Offering their Securities to the Public– Non-recurring Profit and Loss” as recurring profit and loss items, the reasons shall be explained. □ applicable √ not applicable During the reporting period, there was no circumstance in which the company defined the non-recurring items of profit and loss as enumerated in the “Explanatory Announcement No. 1 on Information Disclosure for Companies Offering their Securities to the Public– Non-recurring Profit and Loss” as items of recurring profit and loss. Section 3 Management Discussion and Analysis I. Industries in which the company operated during the reporting period The industries in which the company operates include feed, white-feathered poultry, pig farming and food. (I) Feed business Feed can be classified into premix feed, concentrated feed and compound feed (or complete feed) according to the scope of nutritional ingredients contained. Premix feed is the mixture of various nutritional additives such as vitamin, mineral substance and amino acid; the concentrated feed is formed after adding various animal and vegetable proteins into the premix feed; the compound feed is formed after further adding various energy raw materials into the concentrated feed. In terms of the final nutritional needs, the amount of nutritional additives used is small but with high unit value, and the energy raw materials have a low unit value but with large amount used, while the protein raw materials are between both. Among 290 million tons of feeds nationwide in 2021, the premix feed only accounted for about 2.3%, and the concentrated feed about 6%, and the compound feed more than 92.1%. The vast majority of feed produceds is compound feed. Large companies have large demands for premix feed and concentrated feed due to their large outputs of compound feed, so they generally would produce premix feed and concentrated feed themselves. The small and medium- sized enterprises only produce compound feed due to their small scale, and purchase required premix or concentrated feed as needed from the premix unit of large enterprises or other independent premix enterprises. Some farmers of considerable scale would also purchase the premix or concentrated feed directly, before blending the protein and energy ingredients into them for use. Feed can also be categorized into poultry feed, swine feed, aquatic feed, and ruminant feed according to the animals to be fed. Among the feed produced nationwide in 2021, poultry feed, swine feed, aquatic feed and ruminant feed accounted for 41%, 45%, 8% and 5% respectively. The main parts of feed business include technology development, raw material procurement, production and processing, and sales （未完）  |