[中报]新 希 望(000876):2023年半年度报告（英文版）
原标题:新 希 望:2023年半年度报告（英文版） Section1ImportantNote,TableofContentsandDefinitions Theboardofdirectors,boardofsupervisors,directors,supervisorsandseniorexecutivesofthecompanywarrantthatthecontentsofthissemiannualreport are true, accurate and complete and free of any false recordings,misleadingstatementsorsignificantomissions,andthattheywillbejointlyandseverallyliableforthelegalconsequences. The company’s board chairman Liu Chang, chief accountant ChenXingyaoandthepersoninchargeofaccountingorganization(accountantincharge)SuXiaodanstatethatthefinancialreportinthissemiannualreportistrue,accurateandcomplete. Alldirectorsofthecompanyattendedtheboardmeetingdeliberatingthissemiannualreport. ThecompanyisrequiredtocomplywithdisclosurerequirementssetforthintheSelf-regulatoryGuidelineNo.3ofShenzhenStockExchangeforListedCompanies-IndustryInformationDisclosurewithrespectto“livestock,poultryandaquaculturerelatedbusinesses”. I.Animaldiseaseandnaturaldisasterrisks Animaldiseaseisthemainriskfacedinthedevelopmentoflivestock industry. There are three kinds of risks arising out of the occurrence ofepidemicdisease.First,theoccurrenceofepidemicdiseaseislikelytoresultindeathoflivestock,directlyresultinginreducedyield,increasedcosts,andlowerprices.Second,theoccurrenceandprevalenceofanimaldiseaseonalargescaleeasilyinfluencetheconsumerpsychology,leadingtoacontractioninmarketdemand,andalsoaffectingthefeedproductionandoperation.Forexample,thefirstoutbreakofAfricanSwineFeverinChinainmiddle2018causedahugeshocktothewholeindustry.Althoughtheindustryinitiallyexploredtheprevention,controlandtreatmentmethodsofcomprehensivebio-safetypreventionandcontrolcombinedwithpreciseeliminationin2019and2020,ASFexperiencedaweakenedmutationattheturnofwinterandspringbetween the end of 2020 and beginning of 2021, making it more spreadchannels,longerincubationtime,andmoredifficulttodetectandeliminate.Inrecentyears,ASFhasgraduallybecomenormal,especiallyinwinterandearlyspringwhenthetemperatureislow,theimpactisparticularlyseriousinthenorth of China. Since 2022, avian influenza outbreaks have continued inEurope,NorthAmericaandSouthAmerica,whichhavehadamajorimpact onpoultryproductionandnaturalbirds.Althoughthecurrentroundofavianinfluenzaepidemichasnotbeenlarge-scaleoutbreakinChina,itstillaffectstheintroductionofgrandparentalbreedingchickensinChina. Intermsofthenaturaldisasterrisk,thefeedandslaughterarecloselyrelatedtoplantingandlivestockbreedingindustry.Thereforethenaturaldisasters,suchastemperatureanomalies,drought,flood,earthquake,hail,andsnowdisasterwilladverselyaffecttheindustryoperationanddevelopment.Naturaldisastersoccurringinandaroundthecompany’sproductionfacilites mayresult in substantial damages to production infrastructure or equipment.Furthermore,naturaldisastersandextremeweathereventscanalsodriveuppricesforcertainfeedingredientsandmeat.Forexample,in2022,severalprovincesincentralandsouthwesternChinaexperiencedprolongedperiodsofhightemperaturesandreducedrainfall,leadingtothecontinuousdevelopmentofdroughtconditionsinsomeregions.This,inturn,triggeredpowershortagesinmultiplesouthernprovinces,affectingvariousaspectsoftheindustrychain,includingcultivationandlivestockfarmingtovaryingdegrees.Intermsofplanting, certain areas affected by drought experienced reduced yields offeedstockcrops,therebyimpactingfeedstockprices,andthequalityoftherawmaterials also declined. In terms of livestock farming, for example,aquaculture faced to oxygen deplention due to high temperature, whichaffected the feeding and growth of fish, shrimps and crabs, and led toproductiondecrease.Additionally,duetothedrought,watershortageandpowerrestriction,theuseofbreedingfacilitiesandequipmentwaslimitedtoacertain extent, causing losses to livestock enterprises and farmers, andaffectingthefeedsalesofthecompany. Riskcountermeasures:inthefaceofanimaldisease,thelivestockfarmsplannedandconstructedbythecompany’sbreedingbasearenormalizedandstandardized farms staffed with professional breeding technologists andequippedwithstrictanti-epidemicmeasurestoeffectivelypreventandcontrolthe occurrence of epidemic diseases. The company has also summarizedexperienceandmeasuresrespondingtomajoranimaldiseasesthroughyearsofexplorationandaccumulation,whichallowthecompanytoeliminatestheimpact of various animal diseases by adjusting the product mix whenappropriate, improving the product quality, conducting deep marketdevelopmentactivelyandreducingthecosts.Since2014,thecompanyhasbeenguidingtechnicianstobetterservefarmersandstaffsofself-runfarmsbyestablishing animal healthcare laboratories in various areas, creating thecloud-basedanimalhealthcaresystem,andconductingthemonitoringandwarningofanimaldiseasesinrealtime.RegardingtheASFoutbreakin2018,thecompanyformulatedcomprehensiveandsystematicsetofpreventionandcontrolmeasures.Thesemeasuresencompassvariousaspects,includingthecompany’s self-owned pig farms, cooperative fattening farms, pig feedproduction plants, internal animal healthcare laboratories, with a view toensuringproperpreventionandcontrolatthesourceofanimalnutrition.Meanwhile, company actively participating in industry exchanges andexploring more effective containment methods with peers allowed thecompany’sbio-safetypreventionsystem,pigsurvivalrateandmarketingrateto achieve industry-leading levels. From the late 2020 to early 2021, theoutbreak of a new roundof attenuated ASF inmanynorthern provincesbroughtnewchallengestotheapproachformedintheindustryonthebasisofthepastpreventionandcontrolofASFattheinitialstageoftheoutbreak.However, the company continues to summarize its experience during thepreventionandhazardcontrolprocess,upgradingpreventionandpurificatiobmethods, includingdualantibodyanddualscreeninginthewholegroupserum, application of thermal imaging devices, and safe storage anddisinfectionofmaterials.Additionally,itfollowstheprincipleofaddingbeforesubtractinginthepreventionandcontrolprocrss,avoidingprolongedandoverlycomplexcontrolmeasuresthatmayleadtofatigueandcomplancency.Thisapproactnotonlyhelpswitheffectivepreventationandcontrolbutalsofacilitatesaquickerreturentonormalproduction andreducethecostofbiosafetycontrol.Fortheriskofavianinfluenzaandotherepidemics,thecompanyhasestablishedsystematicpreventionandcontrolmeasures.Thecompany’spoultrybreedingbusinesshasalwaysadheredtostrictbiosafetymeasures and provided cooperative farmers with “water quality testing”,material line washing and other free services, as well as standardizedproductionprocessguidanceinbiosafetypreventionandcontrol,toensurelong-termstableoperationofproductionandoperation. Inresponsetonaturaldisasters,thecompany’sextensivedomesticandinternational business presence ensure that specific regions experiencingnaturaldisastersdo nothaveasignificantimpactontheoveralloperationofthecompany.EspeciallyconcerningthefrequentoccurrenceofrainstormandfloodinginsouthernChinathecompanyhasaccumulatedalargewealthofexperienceinrecnetyears.Ithasestablishedmatureemergrancyresponseplansandmaintainssufficientfloodpreventionsuppliesinstockyear-round,whichallowthecompanytoflexiblyguidefarmersthroughproductionplanadjustmentswhenthefloodseasonbeginsinpreparationfordisasterrelieftogether.Atthesametime,thecompanycanalsotaketheadvantageofitsnationwidepresencetoallocatefunds,rawmaterials,equipment,andstafftimelyandeffectivelytoresumeproductionassoonaspossibleandreducethelossescausedbynaturaldisasters.InresponsetonaturaldisasterssuchasheavyrainsandfloodsoccurredfrequentlyinsouthernChinainrecentyearsandthesuddendroughtinsouthwestChinain2022,thecompanyhasactivelyestablishedemergencyplans,storedsufficientresponsematerialsinadvance,andflexiblyguidedfarmerstoadjusttheirproductionplans,soastoachievedisastermitigationandreliefatthesametime. II.Riskofpricefluctuationsoffeedingredients Thecostofmainfeedingredientsforfeedproductionaccountsformorethan90%oftotalcostoffeedproduction.Inthepast,theproportionoffeedbusinessinthecompany’srevenuewaslarge,butasthefeedindustrygenerallyadopts the cost-plus pricing method, the fluctuations in prices of feedingredientscanbepartlytransmittedtothedownstreambreedingoperations,torelievethepressurefromtherisingpricesoffeedingredients.However,withagrowingpercentageoflivestockbreedingbusinessinthecompany’srevenue,therisingpricesoffeedingredientswillhaveagrowingimpactonthecompany.Since2020,duetovariousfactorssuchasthemacroeconomicsituationathomeandabroad,internationaltraderelations,andcropyieldinmaingrain-producingareasofvariouscountries,thepricesofmainfeedingredientssuch ascornandsoybeanmealcontinuouslyrose.Theoutbreakofinternational geopolitical conflict in early 2022 further pushed up global agriculture commodityprice.Moreover,consideringthebackgroundoflongtimeexistence of ASF in China, the feed enterprises will reduce some high-risk feed ingredientsforthesafetyofanimalnutrition,suchasusageofcorn,pigblood, andpigbonemeal,soastomakethedemandforrawmaterialsconcentrateon othertypesofrawmaterials,whichwillalsoleadtoriseinpricesofsuch alternativerawmaterials.Inthefirsthalfof2023,theglobalpriceofmainfeed raw materials fluctuated continuously in the overall downward trend (as showninthefigurebelow),whichalsoincreasedthedifficultyofprocurement.corn Riskcountermeasures:thecompanyisthelargestfeedenterpriseinChina,withscaleadvantagesandaconsiderablebargainingpowerintherawmaterialprocurement.Since2020,thecompanyappliedhedgingtoolsmoretocontroltheingredientpricefluctuationrisk.In2021,thecompanyfurtherreinforcedcentralizedmanagementofrawmaterialprocurementacrosstheindustryandreducedfeedusecostthroughprocessinginbondedzonesandothermethods.In2022,thecompanyactivelypurchasedimportedlow-priceingredientsandalternativeingredientssuchaswheat,sorghumandbrownricetocontinuallyoptimize ingredient costs. Now, the company has established strategicpartnershipswithmanydomesticandoverseasbest-runrawmaterialsuppliers,whileactivelyexploringdomesticandforeignhigh-qualityandsafelocalrawmaterials and opening up the raw material supply network at home andabroad,conductedthesupplychainfinancingofvariousformsactively,andoptimizeditspurchasingcostandrelatedfinancialexpenses. III.Riskofpricefluctuationsoflivestockandpoultry Thefinishedproductsoflivestockandpoultrybreedingbusinessofthecompanymainlyincludebreedingpig,piglet,hog,babychick,babyduck,whitefeatherbroilerandwhitefeatherduck.Inrecentyears,thepigfarmingbusinessofthecompanyhasbeengrowingrapidly,with14.61millionhogssoldandmorethan390millionself-raisedandoutsourcedcommercialchickenandducksin2022,whichallowedthelivestockandpoultrybreedingtocontributegreatertotheentirerevenueandprofitsofthecompany.Alongwiththefurthergrowthofbreedingvolumeofthecompanyinthefuture,thepricesoflivestock and poultry will affect the levels of revenue and profits of the companyevenmoreremarkably. Inthefirsthalfof2023,thedomesticlivestockandpoultrymarketwas hoveringatthebottom.Intermsofpigbusiness,domesticpigpriceshave continuedtofallsincethebeginningoftheyearandwerebelow15yuan/kg formostofthefirsthalfoftheyear(asshowninthefigurebelow).Intermsofpoultrybusiness,inthefirstquarterof2023,duetothe mismatchbetweensupplyanddemandcausedbymacro-policyadjustment,itexperiencedashort-termpricerebound.Thepriceofrawwhitefeatherbroilerandrawwhitefeatherduckrecoveredquicklyfromthetroughtoabout11yuan/kgatthehighest.Inthesecondquarter,theindustryoutputgraduallyrecovered,andaffectedbyexternalmacrofactors,thepriceofchickenand duckbegantofalltoabout8.6yuan/kgatthelowest.(Asshowninthefigure below)Riskcountermeasures:theprocessoflivestockandpoultrypricesgoingdownitselfisaprocessofthesurvivalofthefittestintheindustry.Whensomeparticipantswithdraw,thetotalsupplydeclinesandthepricesriseagain,survivedbusinessesarelikelytogainagreatermarketshareandahigherreturnoninvestmentthanbefore.Inrecentyears,thecompanyhasfullyentered the stage of robust operation in pig business, and is graduallyimproving its business operation efficiency, reducing farming costs andrestoringitsoriginalcompetitivenessbyenhancingitsinternalmanagementcapabilitiesinmanyways.Ontheotherhand,unlikemostofagriculturalandlivestock companies, the company has slaughtering and food processingbusinessatthedownstreampartoffarmingandfeedbusinessattheupstreampartoffarming,whichhappenstohedgeagainstthefarmingprocess.Thepricedeclineoflivestockandpoultrymeansthatthecostofrawmeatintheslaughteringandprocessingbusinessesfallstooanditsprofitmarginwillbeincreased;thedecliningpricesoflivestockandpoultryalsomeanthefarmingvolumeoflivestockandpoultryisathighlevels,whichalsohelpsincreasetheprofitabilityoffeedbusiness.Suchanindustrychainpresencecanmoderatelymitigatetheeffectsofdecliningpricesoflivestockandpoultryonthecompany.IV.Impactofenvironmentalprotectionpolicies Inrecentyears,thegovernmentandsocietyhaveincreasinglyattachedimportancetoenvironmentalprotection,andrelevantlawsandregulationshave been continuously introduced. Since 2014, China has adopted theRegulationsonPollutionPreventionandControlofLarge-scaleLivestockandPoultryFarming;in2015,thenewEnvironmentalProtectionLawcameintoeffect;in2016,theStateCouncilissuedthe13thFive-YearPlanforEcologicaland Environmental Protection. Since 2018, the central environmentalprotectioninspectorshaveconductedseveral“follow-upreexaminations”,astheeffortstoinvestigatepollutioncausedbylivestockfarmswerestrengthenedacross the country, ordering some breeding households to shut down forenvironmentalremediationorcloseonceforallduetotheirlivestockfarmingfacilities failing to meet the environmental standards or dischargingwastewaterbeyondthesetstandards.In2020,inthecontextofthesharpshortage of domestic hog supply caused by ASF, local governments havegradually relaxed the environmental protection requirements for farmconstructiontopromotetheresumptionofhogproductiontoensuresupply.However,after2021,asthehogproductioncapacitygraduallyrecoveredtothenormal range, the environmental protection policies related to breedingreturned to a more stringent situation. These pressures from theenvironmentalprotectionpolicieswillforcesomelivestockandpoultryfarmsfailingtomeettheenvironmentalstandardsoutofthemarket,andleadtoreduced breeding quantities, which will have a certain impact on thecompany’sfeedbusinessgrowthanditsacquisitionofhogsandpoultryforslaughteringbusinessandwillincreasethecostofthecompany’sinvestmentinthe construction of breeding capacity. In the long run, however, thewithdrawal of backward production capacity that does not meet theenvironmentalstandardswillallowthequalifiedproducersthatremainintheindustrytoacquirehigherprofitability,whichisstillofapositivesignificancetotheentireindustry. Risk countermeasures: in light of the changes in livestock breedingmarket, on the one hand, the company makes every effort to maintainproductioncapacity,andstrengthensitscooperationwithmediumandlarge-sizedfarmsandfarmersthatmeettheenvironmentalstandardsbychangingits feed marketing model and utilizing its industrialized supporting andintegratedservices.Intheprocessofexploringanewbreedingmodel,theprimary considerations in project design of the company are ecology,environmentalprotection,efficiency,andsafety.Byhelpingfarmersremodeland build shedsand stalls that meetthe higher environmentalstandards,increasetheprofitabilityofbreedingbusiness,andactivelydrivethedomesticlivestockandpoultryfarmingindustrytogrowhealthily.Ontheotherhand,thecompanyactivelygrowsitsinventoriesbycultivatingnewlivestockandpoultry farming bases in areas with environmental conditions throughconstruction, acquisition, joint venture, and cooperation using its existingbusinessportfolioacrossthecountry,thusensuringthestabilityofitsbreedingresources. V.Riskoffoodsafety Foodsafetyconcernsthepublic’shealthandlifesafetyanditisevenamatter of life and death for food enterprises. The implementation of therevisedFoodSafetyLawin2015alsomeansthatChinahasbroughtitsfocusonfoodsafetytoanunprecedentedlevel.TheoutbreakofASFin2018raisedevenmoredemandingrequirementsforfoodsafetycontrol,andmorecostsneed to be invested in ASF prevention and control in the process of pigrecyclingandslaughter,porktransportationandvendition.In2019,theStateCouncilissuedtheOpinionsonDeepeningReformsandStrengtheningFoodSafetyEfforts,whichclearlyporposedtousestricteststandards,thestrictestsupervision,themostseverepunishment,andthemostseriousaccountabilitytofurtherstrengthenfoodsafetyregulationandensurethe“safetyonthediningtable”ofthepublic. Riskcountermeasures:thecompanyhasalwaysbeenhighlyconcerned aboutfoodsafetybyseriouslyensuringfoodsafetyineverylinkofproductionandoperation.In2015,thecompanyestablishedSafetyandEnvironmentalProtectionDepartmenttoensuresafety,health,andenvironmentalprotection.In 2022, the company further separated the Food Safety and QualityManagement Department from the Safety and Environmental ProtectionDepartmenttofocusmoreonfoodsafety-relatedwork.Thecompanyhas establisheditsfoodsafetymanagementsystemandsafetytraceabilitysystemfortheentireindustrialchainfromfeed,breeding,farmingtofood.Carryoutthewholeprocessofsafetysupervisionfromthefrontendofthesupplychaintotheterminal,,formingthethree-levelsafetyandqualitymanagementsystemandthethree-levelsafetyandqualityauditsystemincludingFoodSafetyandQuality Management Department of the headquarters, Food SafetyManagement Line of BUs and Safety and Quality Department of branchcompaniesandsubsidiaries. The company has improved its level of food safety related work byparticipatingininternationalcooperationandpassingtherelevantindustrystandards certification. In 2016, the company passed the food technicalstandardcertificationissuedbytheBritishRetailCouncil(BRC)andwaselectedtheVicePresidentoftheChinaCounciloftheGlobalFoodSafetyInitiative(GFSI),becomingthefirstChineseprivateenterprisetobeselectedasamemberoftheglobalboardofdirectorsofGFSI.Atpresent,allfoodbusinessesofthecompanyhavepassedChina-HACCPcertification,andmorethan 60 food companies are completing the BRC and Global-GAPcertificationsinsuccession.Inaddition,thecompanysystematicallyexploresthe antibiotic-reducing and antibiotic-free possibilities in cooperation withmultiplepartiesusingtheGFSIplatformresources,andactivelydrivesthepopularizationofantibiotic-reducingandantibiotic-freesuccessfulcases.Inrecentyears,thecompany’sachievementsinthefieldoffoodsafetyandqualitymanagementhavebeenfullyrecognizedbytheindustry.Ithasbeenawardedthetitleof“2021-2022FoodSafetyIntegrityUnit”byChinaFoodSafetyConference,“2022AnnualQualityGoldenShieldCase”byChinaQualityPress,“ModelUnitinChinaMeatFoodSafetyIntegritySystemConstruction”byChinaMeatAssociation,and“2022FoodSafetyScienceandTechnologyInnovationAward”byChinaAnimalHealthandFoodSafetyAlliance. VI.Riskofexchangeratefluctuations Currently, the globalization of raw material procurement for feedproduction is improved sharply, and the feed enterprises have beenincreasingly affected by the exchange rate in terms of feed ingredientspurchasingcenteredonforeignsupplysuchascorn,soybean,wheypowder,fishmealandDDGS.Atthesametime,asthecompanyexpandsitspresenceabroad,intheforeigninvestmentandoverseasoperations,thecross-bordercapitaltransactionandsettlementamountsinvolvedaregrowing,thusmakingthecompanymorevulnerabletoexchangeratefluctuations.Inrecentyears,duetotheimpactoffactorssuchasgeopoliticsandforeignexchangepolicyadjustments, the currencies of some host countries where the companyoperates experienced extraordinary fluctuations, and the exchange rate ofthesecurrenciesagainsttheUSdollarhasdroppedsharply,combinedwiththetrendofUSdollarinterestrateincrease,whichposesagreatchallengetoforeignexchangemanagementandoperationaldifficultiesofthecompany.Riskcountermeasures:inresponsetothegrowingneedsforoverseasrawmaterialprocurementandinvestmentandoperation,thecompanyhasbeenbuildingSingaporeanbranchintoanoverseascommercialandtradingcenterand investment and financing center, actively conducted internationalcentralizedprocurementofrawmaterials,foreigndirectfinancing,supplychainfinance,foreignexchangeriskmanagement,fundsmanagementandrawmaterialspurchasingriskmanagementtoreducetheimpactofexchangeratefluctuationsonitscashflowinoverseasoperations.Inthecontextof theincreasinguncertaintyinthemacroenvironmentandsharpexchangeratefluctuationsinrecentyears,thecompanyhasreinforcedeffortstoimprovetheabilityofexchangerateforecastingandfundmanagement,continuedtopayattentiontothedynamicsoftheFederalReserve’sinterestratehike,andguaranteedthevalueoffundsthroughhedgingandothermeansandtools.Meanwhile, the company further strengthened its close connection andcommunicationwithoverseasfinancialinstitutions,overseasagenciesoftheChinese government and host governments to analyze the trends of localcurrencyexchangeratesinhostcountriesfromtimetotime,makefinancialarrangementsandeasetheadverseimpactofexchangeratefluctuationsbymeansofdirectinvestmentinlocalcurrencyabroad,etc. Thecompanyplansnottodistributecashdividendsorallotbonussharesortransferitsprovidentfundtosharecapital. TableofContents Section1ImportantNote,TableofContentsandDefinitions.......................................................2 Section2CompanyProfileandKeyFinancialIndicators...........................................................22 Section3ManagementDiscussionandAnalysis...........................................................................25 Section4CorporateGovernance....................................................................................................60 Section5EnvironmentalandSocialResponsibilities...................................................................64 Section6ImportantMatters.........................................................................................................171 Section7ChangesinSharesandInformationaboutShareholders..........................................220Section8DetailsRelatedtoPreferredShares.............................................................................227 Section9DetailsRelatedtoBonds...............................................................................................228 Section10FinancialReport..........................................................................................................233 ListofReferenceDocuments (I)FinancialstatementsbearingthesignaturesandsealsoftheCEO,personinchargeofaccountingandthepersoninchargeof accountingorganization(chiefaccountant)ofthecompany. (II)OriginalsofallcorporatedocumentsandmanuscriptsofannouncementspubliclydisclosedonChinaSecuritiesJournal, SecuritiesTimes,ShanghaiSecuritiesNews,SecuritiesDailyandcninfo.comduringthereportingperiod.Definitions
I.CompanyInformation
1.Contactinformationofthecompany Whetherthecompany’sregisteredaddress,officeaddress,postcode,websiteandemailaddresshavebeenchangedduringthe reportingperiod □applicable?notapplicable Thereisnochangeinthecompany’sregisteredaddress,officeaddress,postcode,websiteoremailaddressduringthereporting period,referto2022annualreportfordetails. 2.Informationdisclosureandfilingplace Whethertheinformationdisclosureandfilingplacehavebeenchangedduringthereportingperiod□applicable?notapplicable Thereisnochangeinthenameandwebsiteofthestockexchangeandmediawherethecompany’ssemiannualreportisdisclosed, orthefilingplaceofthecompany’ssemiannualreportduringthereportingperiod,referto2022annualreportfordetails. 3.Otherrelevantinformation Whetherotherrelevantinformationhavebeenchangedduringthereportingperiod□applicable?notapplicable IV.Keyaccountingdataandfinancialindicators Whetherthecompanyneedstoretroactivelyadjustorrestatetheaccountingdataofpreviousyears□yes?no
□applicable?notapplicable Thecompanyhadnodifferenceinnetprofitsandnetassetsinfinancialreportsdisclosedundereitherinternationalaccounting standardsandChineseaccountingstandardsduringthereportingperiod.2.DifferenceinnetprofitsandnetassetsinfinancialreportsdisclosedunderbothoverseasaccountingstandardsandChineseaccountingstandards □applicable?notapplicable Thecompanyhadnodifferenceinnetprofitsandnetassetsinfinancialreportsdisclosedundereitheroverseasaccounting standardsandChineseaccountingstandardsduringthereportingperiod.VI.Itemsandamountsofnon-recurringprofitorloss ?applicable□notapplicable Unit:yuan
Thecompanyhasnootherprofitorlossitemsthatconformtothedefinitionofnon-recurringprofitorloss.Descriptionofnon-recurringprofitorlossitemsenumeratedintheExplanatoryAnnouncementNo.1onInformationDisclosure forCompaniesOfferingtheirSecuritiestothePublic–Non-recurringProfitorLossclassifiedasrecurringprofitorlossitems □applicable?notapplicable Thecompanyhasnonon-recurringprofitorlossitemsenumeratedintheExplanatoryAnnouncementNo.1onInformation DisclosureforCompaniesOfferingtheirSecuritiestothePublic–Non-recurringProfitorLossclassifiedasrecurringprofitor lossitems. Section3ManagementDiscussionandAnalysis III.AnalysisofMainBusinesses Overview Thechallengesfacingthedomesticagricultureandanimalhusbandryindustryin2023arestillhuge.Ontheonehand,after theadjustmentofmacroeconomicpoliciesatthebeginningoftheyear,marketconsumptionbegantorecover,buttheoveralltrend ofthemacroeconomyisstillunderpressure,andtherecoveryofconsumptionfallsshortofexpectationstoacertainextent.On theotherhand,thesupplyascpect,inthesecondhalfoflastyeartheshort-termhigher-than-expectedpigandpoultryprices objectivelyslowedthepaceofcapacityreduction.Meanwhile,thefeedrawmaterialpricesinthefirsthalfoftheyeardeclined,so thatthisyear’sfeedindustryisrelativelypromising,butpigpricesbegantofallfromthebeginningoftheyearandremainedlow inthefirsthalfoftheyear,whichalsoindirectlyledtothepoultryindustrymarketinthefirsthalfofthefirstroseandthenfell.In thefaceofthesechallenges,thecompanystickedtoitsstrategy,steadilypromotedthetransformationofoperationmanagement, consolidatedthemanagementfoundation,continuouslyimprovedefficiencyandcostreduction,andimprovedprofitability;while ensuresproductionandoperation,alsoactivelycarriesoutstrategiccooperation,revitalizesexistingassets,raisesfinancing flexiblythroughmultiplechannels,managesandcontrolledfunds,andcontinuouslyoptimizedtheorganizationalsystem.Withthe jointeffortsofallparties,thescaleofbusinessoperationsinthefirsthalfof2023continuedtogrow,whilealsoachieving significantyear-on-yearlossreduction.Duringthereportingperiod,thecompanyreportedbusinessrevenueof69.453billionyuan, anincreaseof7.123billionyuanor11%year-on-year;andnetprofitattributabletoshareholdersofthelistedcompanyof-2.983 billionyuan,ayear-on-yearlossreductionof1.157billionyuanormarginoflossreductionof27.95%.(I)Feedbusiness Thefeedbusinessisoneofthecorepillarsofthecompany.Inthefirsthalfof2023,pigproductioncapacityslowlydeclined fromahighlevel,butmeatandpoultryproductioncapacityincreasedtoahighlevel,makingtheoverallamountoffeedatahigh level,withfeedconsumptionalsohigherthanthesameperiodlastyear.Atthesametime,therawmaterialmarketwasmainly down,whichhelpedtoimprovetheprofitoffeed.Thecompany’sfeedbusinessalsoachievedincreaseinbothsalesandprofit. 1.Customerserviceandkeycustomerdevelopment:sincethelaunchofthe“breedingsupport”modeforpigfarmerslastyear, thecompanycontinuedtoupgradethemodeiterativelyinthefirsthalfofthisyeartoprovidecomprehensivesolutions.In responsetothemarketbackgroundoflowpigpricesagainduringtheyear,thecompanycarriedoutthepromotionof“extreme meatcost”packagetohelpfarmerscontrolthecostoffatteningpigs;activelylinkedwiththecompany’spigbusiness,andhelped large-scalefarmcustomerstocarryoutbreedingtechnologytraining;andexploredthecombinationwithpiginsuranceschemeto reducetheriskofcustomerlosses.Intermsofkeycustomerdevelopment,thecompanyfurtherimprovedthekeycustomer resourcemap,establishedorupgradedcooperativerelationswithanumberofwell-knownagriculturalandanimalhusbandry enterprises,strengthenedresourcesharing,channelsharingandcooperationintheupstreamanddownstreamindustrychain,and achieveda37%year-on-yearincreaseindomesticfeedkeycustomersales.Intermsofcustomervaluemanagementandfulllife cyclemanagement,thecultivationmapisbuilttoformcross-fieldcollaborationfor“supply,research,production,serviceand marketing”offeedindustrychain. 2.Productresearchanddevelopment:thecompanycontinuedtooptimizetheNHFHongtongfeedformulasystemwithindependentintellectualpropertyrights,whichwasfullylaunchedlastyear,andoptimizedtheformulacostthroughthreeaspects oftechnologyresearchanddevelopment,technicaloperationanddigitalnutrition,optimizingthedomesticfeedformulacostby18 yuan/toninthefirsthalfoftheyear.Inaddition,theproductsystemwassortedoutatthecompanylevel,focusingonthepain pointsofeachkindofproductandcontinuingtopromotebasicresearchprojectsfortheR&Danditerationof20hitproductssuch assucklingpigfeed,high-gradeduckfeed,shrimpandcrabfeed,andcalffeedtoimprovetheterminalperformanceandpromote salesgrowth. 3.Rawmaterialprocurement:thecompanycontinuedtostrengthenthecentralizedprocurementofbulkrawmaterialsthroughthesupplychainsystemandsignedstrategiccooperationagreementswithanumberoflargesuppliers,reportinga sustainedaveragecentralizedprocurementrateoftheheadquartersabove75%inthefirsthalfoftheyear,anincreaseof8percent pointsoverthepreviousyear,whichwasincreasedtomorethan80%inthesecondquarter.However,intermsoflocalraw materials,thecompanyalsofullyencouragesfront-linebusinessunitstocarryoutsurveyonnearbyrawmaterialstoformamap ofvaluerawmaterials,andactivelypurchaseandmakefulluseofnearbyrawmaterials.Inaddition,inthefirsthalfoftheyear, thecompanyalso builtafive-dayposition managementsystematthedistrictlevel,timelysortingoutandanalyzingthe procurement,inventory,in-transitandgooduseofeachdistrict,andmaintainedinternalandexternalbenchmarkinganddistrict ranking,tohelpimprovethebackwardarea.Thecompanyalsosetupaspecialteamtostrengthenthequalitymanagementofraw materialprocurement,assignspecialportpersonneltomonitorimportedrawmaterials,developspecialstorageplans,strengthen supplierinspectionandqualitycommitmentmanagement,aswellasthewithdrawalofunqualifiedsuppliers,toachievethesource controlofqualitymanagementandforwardqualitycontrol. 4.Leanmanufacturing:inrecentyears,thecompanyhasgraduallydevelopedandexported12systemsand138standards coveringleanproduction,qualitymanagement,safetyproduction,etc.,inthefieldofleanmanufacturing,andthefocusofwork hasgraduallyshiftedtotheimplementationlink.Inthefirsthalfoftheyear,thecompanyorganizedrelevantdepartmentsinthe middleofficeofthefeedbusinesstogodeepintothefrontline,carriedoutjointinspection,systematicallysortedoutproblems suchasimprovingefficiencyandreducingcosts,stabilizingquality,andreducinglosses,formedimprovementlists,organized monthly“review”meetings,andtimelyreviewedthestandardimplementationandcostimprovementandothersituations.Inthe firsthalfoftheyear,theaverageproductioncostpertoninthedomesticfeedbusinessdecreasedby4%year-on-year. Duringthereportingperiod,thecompanysold14.10milliontonsofvariousfeedproducts,0.67milliontonsmoreor5%up year-on-year;10.28milliontonsoffeedsweresoldexternally,3%upyear-on-year.Amongthem,5.62milliontonsofpigfeed weresold,16%upyear-on-year,andexternalsalesofpigfeedamountedto2.98milliontons,13%upyear-on-year;7.43million tonsofpoultryfeedweresold,2%downyear-on-year,andexternalsalesofpoultryfeedamountedto6.29milliontons,flatyear- on-year;0.72milliontonsofaquaticfeedweresold,3%downyear-on-year;andthecompanyreportedbusinessrevenueof39.152 billionyuan,3.114billionyuanmoreor9%upyear-on-year. (II)Whitefeatherpoultrybusiness Thewhitefeatherpoultrybusinessisanimportantcornerstoneofthecompany’sbusinessgrowthandanimportantpartofthe company’sextensiontowardsthedownstreamfoodbusiness.Inthefirsthalfof2023,duetothemismatchbetweensupplyand demandcausedbymacro-policyadjustment,thedomesticwhitefeatherpoultrymarketpricesfluctuatedwildlyafterrisingand thenfalling.Thecompanycontinuedtoadheretoleanproductioninternally,continuouslyimprovetheproductionefficiencyofall links,andstrengthencostcontrolandcapacityadjustment;externally,relyingonkeycustomerchannelsandadvantageousitems, thecompanyincreasedinvestmentine-commerce,freshsalesandfreshdistributionandotherfields,strengtheningmarket expansion,andachievingaturnaroundinthefirsthalfoftheyear. 1.Breedingefficiency:thecompanycontinuedtostrengthenthemanagementofbreedinglinks,improvethebreedingcapacityandbio-safetylevel.Inthefirsthalfoftheyear,theEuropeanindexofwhitefeatherbroilersself-rearingincreasedby 20%,theaveragecostdecreasedby0.37yuanperchicken,thesurvivalrateincreasedby5percentpoints,andthefeed/meatratio decreasedby0.07;theEuropeanindexofwhitefeatherduckself-rearingincreasedby8%,theaveragecostdecreasedby0.26 yuanperduck,andthefeed/meatratiodecreasedby0.07. 2.Keycustomermaintenance:thecompanyputeffortsinintensivemaintenanceofthekeycustomerbaseformedintheearly stage,ontheonehand,tostrengthenthepromotionofmorediverseproductstothesametypeofcustomers,forinstance,further introductionofduckbloodproductstokeyhotpotcustomersattractedbyduckintestinesproducts;ontheotherhand,todevelop differentiatedproductsforthesalesofthesamecategoryproductstodifferenttypesofcustomers,takeduckintestinescategory productsforinstance,emphasisonsalesofpreparedduckintestinestokeyhotpotcustomers,andmoldedduckintestinestokey marinatedchainretailcustomers. 3.By-productsales:inthefirsthalfof2023,thesalesofduckintestineproductsreached175millionyuan,anincreaseof 13%year-on-year;introductionofduckbloodproductstokeyhotpotcustomersgrewrapidly,withsalesreaching47tonsinthe firsthalfoftheyear,anincreaseofnearly8timescomparedwiththeannualsalesin2022,andexportedtoHongKongandMacao andforeignmarketssuchasJapan,SouthKoreaandMalaysia. Duringthereportingperiod,thecompanysoldatotalof277.76millionbabychickensandbabyducks,0.64millionlessyear- on-year,basicallythesameasthesameperiodofthepreviousyear;180.09millioncommercialchickensandducksweresold, 15.75millionlessor8%downyear-on-year;302.97millionchickensandduckswereslaughtered,19.73millionlessor9%down year-on-year;0.7950milliontonsofchickenandduckmeatsweresold,6,900tonslessor1%downyear-on-year;andthe companyreportedbusinessrevenueof9.654billionyuan,1.364billionyuanmoreor16%upyear-on-year.(III)Pigfarmingbusiness Pigfarmingbusinessisthecorebusinessthathasthegreatestimpacttothecompany.Inthefirsthalfof2023,pigprices continuedtobeunderpressure,pigsupplycontinuedtobehigh,andconsumptionrecoverywaslowerthanexpected,resultingin pigpricesatalevellowerthantheaveragecostlineoftheindustry,sothatthewholeindustrywasundergreaterlosspressure. Despitethecontinueddownturninthemarket,thecompany’spigbusinessreportedeffectiveimprovementinbreedingcost throughcontinuousstrengtheningofinternalmanagementandimprovingofproductionindicators.Inthefirsthalfoftheyear,with significantincreaseinpigoutputs,asubstantialreductioninlosseswasachieved.1.Productionmanagement:inthefirsthalfof2023,alongwiththenormalpreventionandcontrolanddisposalofASF,the companycontinuedtostrengthentheproductionmanagementofeachlink,continuedtooptimizeandimprovetheproductionand operationprocessofeachlink,andstrengthenedthetrainingandenablingoffront-lineunits,andrepeatedlyorganizedthefront- lineunitcomprehensiveinspectionledbycompanyexecutivesandparticipatedinbymultiplemiddleofficedepartmentstofind andsolveproblemsonthespot.Thecompanyfocusesonthemanagementofreservepigsandtheimprovementofthequalityof weanedpigletsinthebreedinglink,focusesontheconstructionofin-housefatteningsystemandthefullloadofin-housefattening farmsinthefatteninglink,andstrengthensthelinkagewiththefeedbusinesstoseizetheopportunityofthedecliningpriceoffeed rawmaterialstooptimizethefeedformulaintime.AlthoughtheASFinthenorthinthefirstquarterbroughtacertaindisturbance totheproductionperformance,afterenteringthesecondquarter,allaspectsoftheproductionindicatorsrushedbacktotheright trackandcontinuedtooptimizeandachievedvaryingdegreesofimprovementorpromotioncomparedwiththefourthquarterof lastyear.Attheendofthefirsthalfoftheyear,thenon-productivedaysofsowsfellto32days,3daysshorterthanthefourth quarteroflastyear;theaverageweanedpigletperlitterincreasedto10.8,anincreaseof0.4fromthefourthquarteroflastyear; morethan23PSY;weaningcostdroppedto370yuan/pig,down30yuan/pigfromthefourthquarteroflastyear;thesurvivalrate offatteningpigswascloseto90%;theratiooffeedtomeatdecreasedto2.74,down0.13fromthefourthquarteroflastyear. 2.Digitalconstruction:thecompanyisfirmlyadvancingontheroadofdigitalandintelligentpigbreeding,takingpilotpig farmsasexperimentalstationsandtestgroundsforkeyequipmentintelligenceandbusinessscenariodata,whilefocusingonthe practicabilityandreproducibilityoftheresultoutput,andrealizingtheiterationofstandardsandtheexplorationofpractical implementation.Inthefirsthalfof2023,thecompanysetup28researchtopicsineightaspects,includingbreedingpigs,biosafety, nutrition,veterinarymedicine,materials,environmentalprotection,plantequipmentmanagement,andpersonnelmanagement,to solvefront-linedrawbackandincreaseeffectiveuse,andpromotedtheminanorderlymanner.Followingthecompletionofthe promotionandcoverageoftheplanningoperationmanagementsystemintheparentalgenerationfarmlinelastyear,thecompany alsograduallypromotedthelaunchofplanningoperationmanagementsystemofthefatteninglinkinthefirsthalfofthisyear;at thesametime,themodulefunctionsofpiglettransfer,fatteningpigweightmanagement,materialtowermanagement,material managementandsalesplanmanagementhavebeennewlydevelopedorupgraded.Inthefieldoffree-rangemanagement,the companytookcontractmanagementandsettlementmanagementasthestartingpointtoupgradethefarmermanagementsystem. In the field of health management, the company’s newly developed immune management system began to be promoted simultaneouslyinbreedingpigsandin-housefatteningsystems.Inthefieldofbreedingmanagement,thecompanycompletedthe developmentofnewvarietybreedingsystemandtheupgradeofbackupintroductionsystem.3.Organizationoptimization:tofurtherstrengthentheoverallmanagementofpigbusiness,streamlinethemanagement processandimproveoperationalefficiency,thecompanyestablishedapigbusinessgroupinthesecondquarteronthebasisofthe originalpigbusinessheadquarters,responsibleforthedailyoperationandmanagementofthecompany’spigbusiness,andmadea seriesofoptimizationandadjustmentstothemanagementsystemofeachverticalteamunderitscontrol.Thecompanyhassetup specialpreventionandcontrolteamsforblueeardiseaseandepidemicdiarrhearespectivelyatthelevelofbusinessgroup headquartersandverticalteams,andinthediseasecontrolveterinaryline,establishedanewriskcontrollinetostrengthenthe systempreventionandsupervisionandinspectionofbusinessprocessrisks,andstrengthenedtheverticalmanagementoflivepig saleslinestorealizetheoptimizationandoverallplanningofnationalsales.Attheverticalteamlevel,thecompanyupgradedthe freerangemanagementlineofeachverticalteamintoafreerangemanagementservicecompanytostrengthentheoverall arrangementofpigletsupplyandfarmers'resourcesattheverticalteamlevel;thecompanyalsoestablishedaseparateplantingand environmentalprotectiondepartmenttoimprovetheself-sufficiencyrateofvegetablesinpigfarmsandreducethefrequencyof vegetablespurchasedandtheassociatedriskofepidemicprevention.Attheoperatingregionlevel,tostrengthenthein-house fatteningcapacitybuilding,thecompanyrequiredthegeneralmanageroftheoperatingregiontobethepersoninchargeofthein- housefatteninglineandallocatedfull-timevetinthein-housefatteningfarm.Inaddition,thecompanyalsoselectedagroupof outstandingcadresfromthecentralsouthverticalteamswithstableandleadingproductionperformanceandgoodteamfoundation（未完）  |