[年报]新 和 成(002001):2022年年度报告（英文版）
原标题:新 和 成:2022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. Hu Baifan, the Company’s legal representative, Shi Guanqun, the officer in charge of accounting, and Zhang Lijin, 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: Based on the 3,073,421,680 shares (total share capital of 3,090,907,356 excluding 17,485,676 repurchased shares[Note]), a cash dividend of 5 yuan (tax included) will be distributed to all shareholders for every 10 shares, and no bonus shares will be distributed, and the capital reserve will not be converted into share capital. Note: 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 ........................................................................ 6 Section III Management Discussion and Analysis ................................................................................... 11 Section IV Corporate Governance ......................................................................................................... 37 Section V Environmental and Social Responsibilities .............................................................................. 53 Section VI Significant Events ................................................................................................................ 59 Section VII Movements in Shares and Conditions of Shareholders .......................................................... 68 Section VIII Preferred Shares ............................................................................................................... 75 Section IX Bonds .................................................................................................................................. 76 Section X Financial Report ................................................................................................................... 77 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 Accounting policy changes and other reasons
shares to 3,090,907,356 shares. The above EPS of the comparative period was recalculated based on the adjusted share capital. [Note2] The company has implemented The Interpretation of Accounting Standards for Business Enterprises No. 15 since January 1, 2022. The interpretation requires that if the company sells the products or by-products produced before the fixed assets reach the expected serviceable state or during the research and development process, the income and cost related to the trial operation sales shall be accounted for separately and included in the current profit and loss, The net amount of the revenue from trial operation sales after offsetting the relevant costs shall not be used to offset the cost of fixed assets or R&D expenses. The company makes retroactive adjustment according to requirements. The company's net profit before and after deducting non-recurring gains and losses in the last three fiscal years, whichever is lower, is negative, and the audit report of the latest year shows that the company's ability of continuing operation is uncertain. □ Yes √ No The lower of the net profit before and after deducting extraordinary gains and losses is a negative value. □ Yes √ No 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 Based on the fine chemical industry, the company takes "Chemical+" and "Bio+" as its core technology platform to produce various functional chemicals around nutrition, flavors and fragrances, new materials and APIs. Nutrition: With the growth of global population and the deepening of population aging, the improvement of people's living standard and health awareness will bring more demand for nutritional health services and products, and the consumption demand for nutritional products in the global market will continue to grow steadily. Nutritional products include human nutritional products and animal nutritional products. Human nutritional products are mainly used in food, beverage and other nutritional health care fields; animal nutritional products are mainly used in poultry, livestock, aquaculture and other breeding fields. Vitamins and methionine are the representatives of the nutritional products market. 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 0.41 million tons of vitamins in 2022, accounting for 83.40% of the global production. The vitamin industry faced various challenges in 2022, such as market demand falling under expectations, complex changes 1 in the industry structure, and rising production costs, etc. The price of vitamin E and other products rose, most product prices fell . Methionine is the only sulfur-containing amino acid among the essential amino acids. It cannot be produced by animal itself and must be obtained from outside. It is widely used in medicine and health products, food and feed. During recent years, the development of China’s methionine industry has accelerated, as a result, the production capacity and supply have tilted to the domestic market. The global increase in methionine mainly comes from China, since some factories in Europe periodically reduced production, affecting by energy and other factors. In 2022, China's methionine output is 443 thousand tons, at a year-on-year increase of 21.4%, accounting for 2 26.7% of global production. Flavor and fragrance: The flavor and fragrance industry is an industry with high technological content, strong matching and high correlation with other industries in the national economy. It includes fragrances (synthetic fragrances, natural fragrances) and essences (daily chemical flavors, food flavors, tobacco flavors, etc.), which are used in various daily life scenarios such as personal care, home care, food, and beverages. The global market size is about 35 billion US dollars, and the industry maintains long-term stable growth. From the perspective of downstream, the global demand and consumption growth of processed food, personal care and cosmetics are the main factors driving market growth. From the perspective of regional markets, emerging markets, especially China, India, Southeast Asia and other regions are the main driving force for the development of the global flavor and fragrance market. The Asia-Pacific region accounted for the 3 largest share of the global flavors and fragrances market in 2022, which exceeds 31.4%. China already becomes one of the most important fragrance suppliers in the world, and an important market with a large proportion of the industry, and one of the important focus areas for global fragrance and flavor research and development, new technologies and new products. China's market accounts for about one-fifth of the global market, which has also injected power and vitality into the development of the industry. Companies 1 The “2022 Vitamin Market Annual Analysis Report” by BOYAR 2 The “2022 Amino Acid Market Annual Analysis Report” by BOYAR should keep up with the development trend of world technology and industry, pay attention to the research and development of green 4 production technology, and continuously strengthen the competitiveness and influence of enterprises. New polymer materials: As a strategic and fundamental industry, new polymer materials has become an important symbol for measuring the economic and technological strength of a country or region. The “Guidelines under 14th Five-Year Plan and Vision for 2035” pointed out that it is necessary to vigorously develop strategic emerging industries, including new generation information technology, biotechnology, new energy, high-end equipment and other fields. These fields have huge demand for new materials. New polymer materials include general- purpose plastics, engineering plastics and special engineering plastics, and downstream processing forms include modified composite materials, films, fibers, foams, coatings, etc., which are widely used in traditional fields such as automobiles, electronic appliances, as well as new energy, 5G communication, artificial intelligence and other emerging fields. With the upgrading of consumption and the high-quality development of the manufacturing industry, the future market growth space of the polymer material industry is huge. In the new round of scientific and technological revolution and industrial revolution, new material technology continues to innovate and break through, and new materials and new material structures keep emerging. China has broken through key technical problems in some products and enjoys a huge domestic market demand and national policy support. China is in a period of strategic transformation, the strategic demand for new materials has become more prominent, providing a rare historical opportunity for the development of new materials industry. However, there are still problems in the R&D and production of advanced high-end materials, such as weak innovation capability, low degree of synergy between innovation chain and industrial chain, incomplete innovation chain, industrial chain and supply chain system to resist risks, etc., which cannot fully meet the demand of China's economic and social development, 5 and there is still a long way to go to become a strong material country. API industry: API is the pillar industry of domestic pharmaceutical industry and one of the key industries supported by the state. China and India are the main source countries of API production. The advantages of API production are concentrated in emerging countries such as China, which has become a major producer and exporter of bulk APIs, and the production technology process has reached international leading 6 level. 2021, the market size of APIs is USD 177.05 billion, and is expected to grow at a CAGR of about 7.5% in the future. The new crown pandemic has impacted the API market, and market demand is shifting from traditional drugs such as anti-infectives and cardiovascular to more complex APIs for novel formulations and for specific disease areas. Pulmonary, cardiology and oncology remain the main application areas and are expected to continue their high growth trend in the coming years. 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 4 Huajing Intelligence Network "China Flavors and Fragrances Industry Market In-depth Analysis 5 Zhejiang Province, the development of new materials industry "fourteen five" plan 6 Active Pharmaceutical Ingredients (API) Market Analysis - Industry Report - Trends, Size & Share (mordorintelligence.com)， Nutrition: The current products mainly cover vitamins, amino acids and pigments, etc. Specific 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. Flavor and fragrance: At present, our main fragrance 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. From the perspective of competitiveness and market share, NHU becomes an important supplier in the global flavor and fragrance industry. 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. 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. APIs: The main products are concentrated in the series of vitamins and antibiotics. The main products include moxifloxacin hydrochloride, vitamin A, vitamin D3, caronic anhydride, azabicyclic, 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 such as holding customer service months, strengthening customer strategic cooperation, establishing customer evaluation models, and optimizing customer classification management, we will continue to expand market areas, increase new large-scale customers, and enhance brand influence. 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, the company's original products were refined and the construction of new projects, the R&D of new products were carried out in an orderly manner. In the nutrition sector, the Company’s second phase of methionine 250,000 tons/year project, of which 100,000-ton equipment was operating smoothly, with comprehensive competition continuously improved. And of which 150,000-ton equipment was constructed according to schedule and the construction is expected to be completed in June 2023. The company deployed the liquid methionine project, signed the "Shareholder Agreement between China Petroleum & Chemical Corporation and Zhejiang NHU Co., Ltd.", and jointly built a 180,000-ton/year liquid methionine (purified) production plant. 5,000 tons / year vitamin B6 and 3,000 tons / year B12 started production and sales, 30,000 tons/year NH-acid project was constructed under schedule. In the Flavor and fragrance sector, the project with an annual output of 5,000 tons of menthol was constructed according to the schedule, and the project progress was controllable. In the new polymer materials sector, the commissioning of the phase III PPS project with an annual output of 7,000 tons was progressing smoothly; The adiponitrile project was in the pilot test stage, and the project approval process was advancing in an orderly manner. In the API sector, the 500 tons/year azabicyclo project was commissioned and the products was sold. Now the process route has been opened and the process is in the process of continuous improvement. In the future, the API product structure will be adjusted, transformed and upgraded, the specific project is in the process of approval. During the reporting period, with the uncertainty of the macro environment in both domestic and foreign markets, as well as market changes of main vitamin products, We actively takes countermeasures, strives to overcome various unfavorable factors, gives full play to the advantages of sector linkage, and maintains a stable development trend of production and operation. During the reporting period, new projects were gradually put into production, R&D investment and technology upgrades were continuously strengthened, and the global network layout was further improved. Flavors and Fragrances, New Materials, and the methionine business developed steadily throughout the year, both volume and price rose, maintaining a relatively high growth rate and making a greater contribution to the company’s performance. At the same time, affected by the macro market environment, the price of some raw materials rose, leads to an increase in product costs. 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, union”, business philosophy of “create wealth, balanced and sustainable”, and enterprise spirit of “ realism, innovation, high-quality 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 （未完）  |