[年报]禾丰股份(603609):禾丰股份2022年年度报告（英文版)
原标题:禾丰股份:禾丰股份2022年年度报告（英文版) Important Statements I. The Board of Directors, Supervisory Board, Directors, Supervisors and Senior Management of the Company hereby warrant that there are no false representations, misleading statements or material omissions in this annual report, jointly and severally accept full responsibility for the truthfulness, accuracy and completeness of the contents of this report. II. All Directors attended the Board Meeting. III. SuyaJincheng CPA LLP has issued a standard audit report for the Company. IV. The person in charge of the Company, Jin Weidong, the person in charge of accounting work, Chen Yu, and the person in charge of the accounting organization (accounting supervisor), Chen Yu, declare that they guarantee the truthfulness, accuracy and completeness of the financial report in the annual report. V. The proposal of dividend payment for the reporting period approved by the Board of Directors The Company's profit distribution proposal for 2022 is to distribute a cash dividend of RMB1.20 (tax included) for every 10 shares to all shareholders based on the total share capital of the Company registered on the date of registering the implementation of equity distribution (excluding the shares held in the Company's repurchase special account). As of December 31, 2022, the total share capital of the Company recorded 919,430,450 shares, excluding 20,956,579 shares held in the Company's special account of repurchased shares, and the estimated cash dividend of RMB107,816,864.52 (tax included) was calculated on the basis of 898,473,871 shares, accounting for 21% of the net profit attributable to shareholders of the Company in 2022. VI. Risk Statement of Forward-looking Statements The forward-looking descriptions contained in this report such as business plans, development strategies and other information can’t be deemed the Company's commitment to investors. Please beware of the investment risks. VII. There has been no occurrence of the Company's non-business capital being appropriated by the controlling shareholder and his related parties. VIII. There has been no occurrence of the Company violating its decision-making procedure while providing external guarantees. IX. There has been no occurrence that more than half of the Directors can’t guarantee the authenticity, accuracy and completeness of the annual report disclosed by the Company. X. Material Risk Warning The Company has described in detail in this report the relevant risks that may exist, please refer to "Possible Risks" in "Section III Business Operations Analysis". XI. This annual report has been issued in both Chinese and English versions. In case there is any discrepancy or inconsistency between the two versions, the Chinese version shall prevail. The disclosed Chinese version of 2022 Annual Report can be obtained at: www.sse.com.cn. Contents Section I Glossary ............................................................................................................................... 4 Section II Company Profile and Key Financial Information ................................................................. 5 Section III Business Operation Analysis ................................................................................................ 9 Section IV Corporate Governance ...................................................................................................... 51 Section V Environment and Social Responsibility ............................................................................. 63 Section VI Important Disclosures ....................................................................................................... 79 Section VII Changes in Common Shares and Shareholder Information .............................................. 86 Section VIII Preference Share ............................................................................................................... 91 Section IX Corporate Bond ................................................................................................................. 92 Section X Financial Statements ......................................................................................................... 94
I. Glossary
Section II Company Profile and Key Financial Information I. Company Information
II. Contact Person
III. Basic Information of the Company
IV. Place where the Annual Report is Prepared
V. Stock Information
VII. Key Accounting Data and Financial Performance Indicators in the Latest Three Years 1. Key accounting data Unit: yuan Currency: RMB
Unit: yuan Currency: RMB
IX. Extraordinary Items Unit: yuan Currency: RMB
X. Item Measured at Fair Value Unit: yuan Currency: RMB
Section III Business Operation Analysis I. Business Operation Analysis In 2022, China’s animal husbandry industry got out of a tight spot. In the first half of the year, feed raw material prices rose sharply, while animal husbandry industry still depressing. The increasing feed costs ate into the margins of animal raising business, making farmers or farms speed up cutting capacities. In the meantime, feed demands dropped significantly due to farmers or farms being less motivated to feed animals. Coming to the second half year, positive changes have been taken place in macro environment, the sentiment of downstream farming industry rebounded, farmers or farms were encouraged to quicken their restocking, ramping up the initiative of purchasing feed. Thereupon, the margins of feed business, broiler integration and pig farming businesses of the Company increased rapidly. Facing the complex external environment, all the people of Wellhope have been working hard to implement the operation plan formulated at the beginning of the year, pushing forward the transformation and upgrading of the feed business, expanding the cost advantage of the broiler integration business, and striving to consolidate the foundation for the development of the pig farming business, while speeding up the introduction and training of key talents, and continuously optimizing the talent structure, strengthening the interlocking linkage of technology, production and marketing, and digging deeper into the potential of cost reduction and efficiency increase, meanwhile, promoting the process performance management system, and enhancing benchmarking and process management. For the whole year of 2022, the Company achieved an operating revenue of RMB32.812 billion with a year-on-year growth of 11.34%, the net profit attributable to shareholders of the Company recorded RMB514 million, rising 333.25%, and the net profit attributable to shareholders deducting extraordinary items recorded RMB520 million with a year-on-year increase of 285.41%. The weighted average return on net assets was 7.48%, increasing 5.68 percentage points compared with the prior year. At the end of the reporting period, the Company was in good financial condition, with total assets of RMB15.393 billion and net assets attributable to shareholders of the Company of RMB7.237 billion, increasing 18.67% and 11.95% respectively compared with the end of the previous year. Operating revenue curve 2014-2022: 1. Feed business For the year 2022, Wellhope’s holding and associated companies produced nearly 8 million tons of feed, including 3.99 million tons of feed sold to external customers produced by companies within the scope of consolidation.
A. Both supply and demand facing pressures, forging ahead in adversity Influenced by unanticipated factors, the Company's feed mills located in most of the main production and sales regions (Northeast, Northwest, North China, Shandong Province, etc.) faced great difficulties in the first half of 2022, especially logistics, transportation and offline marketing services were under great pressure. The Company gave full play to its strong system and made every effort to ensure the normal supply of feed to customers. In response to the problems of difficult market promotion and after-sales service, the Company made use of the increasingly perfect online marketing service system to actively promote market development through webcasting, distance learning and online guidance, and at the same time provided customers with efficient and accurate after-sales service, which was highly praised and trusted by customers. In the second half of the year, the external environment became more stable, while the margins of raising animals improving significantly, farmers or farms were motivated to feed their animals. The Company seized such opportunity to take the initiative to quickly fill the market share lost in the first half of the year, feed sales decline gradually narrowed, product mix has been optimized, while the net profit per ton gradually rebounding. B. Raw material price hitting new high, boosting transformation and upgrading to reduce costs while improving efficiency In 2022, the prices of major feed raw materials remained high, with corn and soybean meal prices reaching record highs. The Company made efforts in technology, purchasing, production and marketing, while further promoting the collaboration and connection among these functional systems to reduce costs and improve efficiency. In terms of technology, the Company continued to strengthen the R&D strength of feed formulations, accelerating the transformation towards European-style formulations, and gradually getting rid of the dependence on corn and soybean meal through selecting various raw materials alternatives. In terms of purchasing, the Company constantly improved the organizational structure of purchasing team, and boldly introduced key professionals, which significantly ramped up its capabilities in trend judgment and combined purchasing of spot-futures. In terms of production, the Company has continuously optimized production equipment and processing technology, making the equipment and technology can be highly compatible with diversified formulas. The grinding, mixing, pelleting efficiency of each feed mill have been significantly improved. In terms of market, the Company continued to strengthen its market insights, and enhanced the front-line staff to take stock of after-sale service of feed products to ensure that the functional departments and back office can make precise and effective improvement simultaneously. Through the linkage and interlocking of middle and back-end platforms, the product competitiveness of feed business has been significantly heightened and its core competence has been further enhanced. C. Facing complicated and volatile market, continuing to optimize customer structure In 2022, China's pig production shifted from rapidly cutting overcapacity to moderately increasing capacity. In the process of capacity clearing, large-scale farms were forced to reduce production, and back-yard farms rapidly withdrew from the market. Against such backdrop of drastic market fluctuations, the pattern of pig farming industry gradually changed, the percentage of pig delivered by large-scale farms constantly increased. Based on such changes, the Company this year, kept to strategically transform from the dominance of dealers to equally stress on dealers’ sales and direct sales to large farms, continuously improved the development strategy of large-scale farm customers to increase the proportion of sales volume contributed by large-scale customers. In order to meet the needs of large-scale farm customer development, the Company's business units started to improve organizational structure, build professional teams for developing large farms. Meanwhile, relying on own pig farming business, the Company provided services to large farms from upstream to downstream industries of animal husbandry, fully integrating resources to power the development of large-scale farms, while continuously expanding specialized and customized product lines, feed products and farm services gradually turned to differentiation and customization. In addition, the Company have also continuously optimized and innovated incentive programs for key talents in some business sectors, and proactively reserved younger technical experts to lay a solid foundation for future development. 2. Broiler integration business The adverse impact of the macro environment gradually moderated in the second half of 2022, the institutional purchases and out-of-home consumption slowly recovered, coupled with continued strength of pig prices, the broiler industry witnessed an important inflection point with the industrial chain turning from losses to profits. Grasping the opportunities in the industry, the Company's broiler integration business continued to take “ensuring safety, controlling expansion pace, adjusting industrial structure, promoting business ecosystem, compressing costs, improving efficiency and increasing profit” as the core guideline , steadily expanded the production scale, continuously heightened the operation management level, making the core competitiveness of broiler business continue to strengthen, while highlighting the profitability of broiler raising and slaughtering businesses. During this year, Wellhope’s holding and associated companies totally slaughtered 720 million broilers, produced and sold 1.86 million tons of broiler part products, also sold 27,000 tons of prepared and cooked foods. Broilers slaughtered by holding and associated companies(100million) 2014 2015 2016 2017 2018 2019 2020 2021 2022 A. Scientifically grasping the pace of development, moderately expanding production scale In 2022, the Company decelerated the expansion of broiler integration business compared to previous years, with a gradual decline in the proportion of new projects, leading a subsequent increase in profitability. Regarding broiler breeder sector, the Company moderately expanded the scale of parent stock, gradually eliminated old broiler houses, while putting new breeder farms into operation one after another. During this period, the Company strove to ensure a smooth transition between old and new houses, and made new farms produce in a full capacity. Regarding broiler raising, the Company have been steadily expanding production capacity of commercial broilers, and actively strengthening farm management and building a talent pipeline. In terms of slaughtering, the Company has been expanding in small steps based on existing production capacity to continuously increase market shares, while actively exploring high-quality customers, and striving to achieve the highest comprehensive value with the best product mix. B. Further promoting lean management, continuously improving cost advantages In the first half of 2022, supported by excellent cost control, the Company's broiler business earned money against the trend of most companies in the industry running in the red. In the second half of the year, the Company further expanded operating results in the process of the market being on the upward trend, margins per broiler far exceeded the average level of this industry. In terms of broiler breeder sector, the Company further strengthened farm management to comprehensively optimize production performance indexes, focusing on improving the quality of day-old chicks. In terms of commercial broiler sector, the Company started from various aspects such as chicks, feed, animal health product and equipment to continuously improve the production performance, while dynamically adjusting fees paid to the contract farm owners, which significantly reduced the costs of raising commercial broiler in the reporting period. In terms of slaughtering, the Company continued to attract great importance to production efficiency, reduced operating costs and strengthened quality management, while rapidly expanding production scale and sales volume to earn money at the fastest speed after the new project being put into operation. C. Leveraging the scale advantage, actively exploring terminal market In 2022, the institutional purchase and out-of-home consumption recovered slowly amidst fluctuations. Against the backdrop of weak recovery in consumption, the Company’s commercial broiler farms timely sold live broilers in batches to ensure sufficient and stable supply of chickens to most of the downstream slaughterhouses. On the basis of balanced production and sales, the Company’s slaughterhouses have maximized capacity utilization and effectively reduced costs by scale effect. At the same time, the Company further enhanced the quality of broiler part products, significantly increased the percentage of fresh raw meat, and speeded up the expansion of sales channels for broiler parts products through multi-brand strategy, while timely adjusting product mix and optimizing customer structure according to customer demand and market fluctuations to maximize the comprehensive value of chicken products. For prepared and cooked food business, Tai’an project was successfully put into operation this year, which enabled the Company breaking the bottleneck in production capacity, the sales volume of prepared food was expected to increase rapidly. 3. Pig raising business In 2022, the supply of pig market presented loose-tight-loose circumstances, and pig prices witnessed deep fall, big rise and big fall. With the increase of feed cost, the competition in pig farming industry became fierce, and the fluctuations of pig prices accelerated, the competition in the industry has been escalated around the main line of reducing cost and improving efficiency. During the year, the Company, following the development strategy of pig raising business revised in the end of 2021, strictly controlled the production capacity, continuously strengthened farm management, whilst fully promoted the process performance management to constantly improve production performance, and strove to reduce cost and expense. In 2022, Wellhope’s holding and associated companies totally sold 0.98 million heads of pig, including 0.64 million of finishers, 0.27 million of piglets and 65,000 heads of pig breeders. A. Strictly controlling production scale, performance of pig breeders continuously being improved In 2022, the Company's pig business continued to focus on scale control and quality improvement as its main development strategy. During the sharp rise in pig prices, the Company still maintained sufficient strategic focus, the numbers of pig sold in 2022 did not expand too much compared with 2021. Compared with the production scale, the Company paid more attention to the development quality of pig business than to the scale of production, and paid particular attention to the quality of pig breeders. In this year, the Company set up a breeding management team to classify batches of pig breeders according to breeding index, farrowing, litter size and evenness of estrus, sorted out and established core herds and propagation herds, while improving the boar herd by introducing excellent boars, enhancing the level of performance measurement of breeders to continuously improve the breeding system. At the same time, the Company has been promoting the use of breeding software to collect and analyze data, and make dynamic adjustment according to the demand in the production process. By doing this, the production performance of pig breeders has been improved continuously. At the end of 2022, the total sow stock of the Company's holding and associated companies amounted to 63,000 heads, including 45,000 productive sows and 18,000 reserve gilts. B. Concentrating on cost reduction and efficiency, young backbones growing rapidly In 2022, the Company’s pig raising business sector continued to promote process performance management system, held monthly operation analysis meetings at the head office, business region and local farm levels to quickly identify the key problems of each farm, establish task lists and implement betterment plans through the benchmarking analysis mode. For the sake of better reducing costs and increasing efficiency, the Company promoted information system in pig raising sector, which solved five pain points such as work collaboration, asset security, whole-process control, per capita efficiency and accurate settlement, effectively upgrading pig farming from experience management to system management and intelligent management. In addition, while actively organizing personnel training, the Company continued to introduce young backbones specialized in technology and management, help young farm managers grow up rapidly through track training and providing support. By doing this, the talents’ team has become stronger. With the continuous improvement of performance of pig breeders, significant promotion of technical merit, increasing optimization of feed nutrition and feeding program, the cost control ability for pig farms has been significantly enhanced. C. Investing in bio-security, boosting related costs decreasing gradually With the normalization of African swine fever, bio-security has become an important factor affecting costs. In 2022, the Company continued to attach great importance to bio-security, further sorting out and improving the guidelines for disease control, optimizing and strengthening the immunization programs, medication procedures, decontamination procedures, testing procedures and other related operation processes to ensure that the bio-security work had rules to follow. At the same time, the Company continuously improved the reward and punishment regulations to ensure that team members always maintaining higher sense of responsibilities and vigilance. In addition, the Company further standardized the management regarding pig introduction to avoid pigs coming from complex sources, which greatly reduced the difficulty in disease prevention. At present, the Company has gradually combined bio-security work with lean management, continuously demonstrated cost efficiency and effectiveness of bio-security input under the premise of ensuring the safety of pig farms. 4. Progress in other aspects A. Promoting process performance management, aiming for continuous improvement The process performance management system was refined and summarized by the Company according to the experiences of the mature and effective management model of its broiler integration business in 2021. During the reporting period, the Company vigorously promoted and widely applied this management system in feed and pig farming sectors with remarkable results. The Company regularly organized three-level operation analysis meetings at the group level, region level and local subsidiary level, supplemented by management methods such as benchmarking, task lists, project teams and inspections, and established a PDCA cycle and support system based on the continuous improvement of production and operation indicators to implementation of the Company’s strategic objectives and key tactics, and to track the organizational and individual performance management, so as to achieve cost reduction and increase efficiency and enhance system strength. B. Strengthening capital operation to power business development In April 2022, the Company successfully issue RMB1.5 billion of convertible bonds, which gave a shot in the arm to the healthy and sustainable development of Wellhope, all the raised funds are planned to invest in primary businesses to further expand the production capacity of feed, pig farming and slaughtering as well as broiler further processing, which could strengthen the synergistic advantages of the Company's industrial chain, and enhancing the overall profitability. C. Optimizing organizational structure and enhancing talent recruitment During the reporting period, in order to cope with the more complex market environment, the Company carried out organizational structure combing and optimization at the head office, business unit and local subsidiary levels, especially focusing on the construction of purchasing, information technology, large-scale farm development, market research and other departments, while centering on core business, strengthening the recruitment and training of talents in key positions, improving the incentive mechanism, and at the same time, holding three-level meetings to heighten the synergy and interlocking among functional departments, which further enhanced team morale and market competition power. 5. Awards and recognitions in 2022 II. Review of the Circumstances of the Industries in which the Company Operates 1. Feed industry In 2022, the prices of raw materials in China's feed industry rose sharply, while the downstream farming market becoming complex and volatile, the overall profitability of the industry declined significantly, and competitions became increasingly fierce. These industrial leaders using their advantages in technology, purchasing, brand, management, capital, logistics and other aspects to continuously increase market shares, small and medium-sized players gradually withdrew from the market in the increasingly fierce competition, making the elimination of losers within the industry intensify. On the supply side, in 2022, national feed production recorded 302.23 million tons, including 135.98 million tons of pig feed, 32.11 million tons of layer feed, 89.25 million tons of broiler feed, 16.17 million tons of ruminant feed, 25.26 million tons of aquatic feed, 1.24 million tons of pet feed, and other feed production of 2.23 million tons. There were 36 large-scale feed enterprises with annual output of more than 1 million tons, their feed production accounted for 57.5% of the total national production, 6 group enterprises had an annual output of more than 10 million tons, 13 production plants had an annual output of more than 500,000 tons, the largest single plant output was 1.28 million tons. From the sales method, the national bulk feed amounted to 107.03 million tons with an increase of 18.5% over the previous year, accounting for 38.2% of the total output of compound feed, increasing 4.8 percentage points. On the demand side, in the first half of 2022, affected by tight cash flow, sharp rise in cost and other factors, farmers were out of motivation to restock animals, combined with the impact of factors such as logistics and transport obstruction, making the inventories of pig and broiler stay at a historical low level, feed demand got into a slump. In the second half of the year, the macro environment continued to improve, livestock and poultry prices rose rapidly, the profit of animal farming improved significantly, large-scale farms took the lead in the expansion of production, back-yard farms resume work in hesitation, the phenomenon of secondary fattening of pigs and deferring sales gradually increased, the enthusiasm of restocking broilers have been enhanced, the inventories of livestock and poultry rebounded to pull feed demand growth, feed sales gradually recovered. Throughout the year, the demand side showed the trend of demand declining to rising, while production capacity of the southern regions recovered faster than the north. Overall, in 2022, the profit margins of feed industry became significantly narrowed, which were squeezed by the upstream raw material market and downstream farming market, and the downstream customer structure was changed significantly, the percentage of large-scale farm customers was increased, which would further promote the consolidation of the feed industry. Note: The above data is obtained from the China Feed Industry Association Statistical Report and Boyar Industry Analysis Report. 2. Broiler industry In 2022, the unfavorable impact of the macro environment gradually weakened in the second half of the year, the institutional purchase and out-of-home consumption slowly recovered, superimposed on the continued strength of pig prices, the broiler industry witnessed an important inflection point with the industrial chain turning from losses to profits. On the supply side, the domestic stock of in-production grandparent breeders and parent breeders were at a relatively historical high level in 2022, and the annual average price of commercial day-old chicks was running at a medium to low level. Regarding to commercial broiler raising, in the context of rapidly rising feed costs and frequent animal diseases, the risk of farming intensified, back-yard farms gradually withdrew from the market. For the slaughtering sector, the expansion of total industrial capacity has slowed down significantly, industry profits have recovered, but the trend of selecting the superior and eliminating inferior was still obvious. In 2022, the delivery of domestic broilers decreased by 3.59% year-on-year, the broiler parts product output decreased by 2.81% year-on-year, and the overall price of broilers was oscillating upward. On the demand side, the overall consumer demand of China's residents has been greatly impacted in the past three years, broiler products purchased by group meals, outdoor consumption had been declining. In the second half of the year, with the improvement of the macro environment, terminal consumption gradually picked up, group meals, catering, outdoor portable food consumption significantly increased, while pork prices sharply rising, thus the consumption demand for broiler products gradually recovered, the selling price of the broiler parts continuously soared, breaking through RMB11,000 per ton in July and rising to RMB11,800 per ton at the end of November, with prices hitting a new high since 2020, although the chicken prices fell slightly at the end of the year, but （未完）  |