[年报]新 和 成(002001):2023年年度报告（英文版）
原标题:新 和 成:2023年年度报告（英文版） April 2023 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 4.50 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. 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 ............................................................................................................ 36 Section V Environmental and Social Responsibilities.................................................................................. 54 Section VI Significant Events .................................................................................................................. 61 Section VII Movements in Shares and Conditions of Shareholders ............................................................... 70 Section VIII Preferred Shares .................................................................................................................. 77 Section IX Bonds ................................................................................................................................... 78 Section X Financial Report...................................................................................................................... 79 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
Section II Company Profile and Key Financial Indicators I. Company profile
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
Finance (MOF) . The "Accounting for deferred income taxes not subject to the initial recognition exemption for assets and liabilities arising from individual transactions" requires that adjustments be made for individual transactions to which the provision applies that occur between the beginning of the earliest period for which the financial statements are presented in the period in which the provision is first implemented and the date of first implementation. If taxable temporary differences and deductible temporary differences arise from lease liabilities and right-of-use assets recognized as a result of a single transaction to which this provision applies at the beginning of the earliest period for which the financial statements are presented for the first time, and if projected liabilities related to abandonment obligations and related assets are recognized, the taxable temporary differences and deductible temporary differences shall be adjusted in accordance with the provisions of this provision and Accounting Standard No. 18 - "Income Taxes". -Income Taxes, the cumulative effect is adjusted to opening retained earnings and other related financial statement items in the earliest period for which the financial statements are presented. 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
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: The overall trend of global population growth remains unchanged, with the degree of aging continuously deepening. As people pursue a healthy life and quality living, the demand for products in the large health sector, such as health supplements, pharmaceuticals, and infant health, will always be maintained and continue to grow. The United Nations, PRB, and others predict that by 2050, the global 1 population will approach 10 billion . 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 0.43 million tons of vitamins in 2022, accounting for 84.40% of the global production. In 2023, the production capacity of the vitamin industry is released by inertia, the oversupply situation is intensified, and 2 the industry competition is fierce . Methionine is the only amino acid containing sulfur among essential amino acids, and is the first limiting amino acid in poultry, high- yield dairy cows and fish. The industrial production of methionine is mainly used as a feed additive, which has two advantages: economy and availability. At present, the main production process of methionine is chemical synthesis, the production process and engineering technology are complex, the safety and environmental protection requirements are high, and there are high capital barriers and technical barriers. The methionine industry has a high concentration of production, with the majority of the capacity focused on 8 major manufacturers: Evonik, Adisseo, NHU, Novus, Sumitomo Chemical, CHINA UNIS CHEMICAL, CJ, and Sichuan Hebang. The global market demand is growing steadily, and the effective supply and demand are relatively balanced in the short term. The global methionine increase in 2023 mainly comes from China, and the methionine production adjustment and supply reduction of most international enterprises in the second half of 2023. It is expected that China's methionine production in 2023 will be 0.58 billion tons, an increase of 31.20% year- 3 on-year, accounting for 34.60% of global production, and an increase of 7.9% compared with 2022 . Flavor and fragrance: Flavor and fragrance industry is a complementary industry of the national economy, and the independent high-level flavor and fragrance industry is crucial to the independent high-level food industry, tobacco industry and daily chemical industry. Fragrances include fragrances (synthetic fragrances, natural fragrances) and fragrances (daily chemical fragrances, food fragrances, tobacco fragrances, etc.), which are used in personal care, home care, food, beverage and other daily life scenarios. In 2022, the global flavor and fragrance 4 market will reach 196.4 billion yuan, and China's market will reach 56 billion yuan, accounting for 28.50% of the world's total . New polymer materials: As a strategic and fundamental industry, new polymer materials has become an important symbol for measuring the economic and 1 https://www.prb.org/articles/highlights-from-the-2023-world-population-data-sheet/ 2 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. Specialty engineering plastics refer to a class of engineering plastics with superior comprehensive performance and a long-term service temperature above 150°C. They combine advantages such as high heat resistance, insulation, corrosion resistance, and high mechanical strength, and are widely used. In the aerospace field, materials like PPS, PEEK, and PEI are partially replacing metals and thermosetting plastics due to their heat resistance, flame retardancy, and processability. In the automotive sector, lightweight and electrification are the main factors driving the growth of demand for specialty engineering plastics. In the electronic and electrical field, the increase in the assembly temperature of electronic components and the increase in the communication transmission frequency are the main factors 5 driving the growth of the demand for special engineering plastics. API industry: API is the pillar industry of the 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, and China has become a large production and export country of bulk API, and the production technology has reached the international leading level. According to the production data of chemical raw materials and chemical preparations collected by the Statistical Information Professional Committee of China Chemical Pharmaceutical Industry Association in 2022, the production of chemical raw materials basically remained stable, and among the major categories, the output of anti-infective drugs in 2022 increased by 3% over the previous year; The output of antipyretic and analgesic drugs will increase by 16.1% in 2022; Vitamin production 6 increased by 10.6% in 2022. 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 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, vitamin B5, vitamin B6, vitamin B12, 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 5 China Huaxin "The demand for special engineering plastics continues to increase, and the application status and future trend 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. The Company continuously enriches the varieties of fragrance products to meet the changing market demands. Polymer materials: The company focuses on the development of high-performance polymers and key intermediates, moderate development of downstream applications of materials, the main products include polyphenyl sulfide (PPS), high temperature nylon (PPA), HDI, IPDA, downstream applications include automotive, electronic appliances, environmental protection, industrial applications and other fields. At present, the company has created a whole industry chain of PPS from basic raw materials to high polymer, then to modified processing, to special fibers, becoming the only domestic enterprise that can stably produce fiber grade, injection grade, extrusion grade, coating grade PPS, and is developing new material projects in the whole industry chain. APIs: The main products are concentrated in the series of vitamins and antibiotics. The main products include moxifloxacin hydrochloride, vitamin A, vitamin D3, 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 adhered to the procurement principle of “fairness, transparency and optimal cost”, adopted the dual strategy of long-term strategic cooperation and open competitive procurement, deepened the market trend and market analysis, and ensured the steady supply of strategic materials. Pay attention to source procurement, reduce intermediate links, reduce procurement costs. Promote sunshine procurement, establish an information system, and make the procurement process transparent, standardized and efficient. Select suppliers with good reputation and quality products, and sign quality assurance agreements to ensure stable and reliable performance of purchased items. We will give priority to environmentally friendly, energy-saving and sustainable products and services, encourage suppliers to achieve green production and operation, and gradually promote carbon emission reduction and carbon neutrality plans. Select suppliers with a good sense of social responsibility, pay attention to their social responsibility performance, establish long- term cooperative relations, and achieve sustainable development of procurement activities. (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 distribution. By doing so, it services customers indirectly based on market and customer features. At the same time, through measures 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 operated in fine detail and the development and construction of new projects and new products were carried out in an orderly manner. Of the 250,000 tons/year methionine phase II project in the nutrition sector, 100,000 tons of equipment ran smoothly, 150,000 tons of equipment with its process route successfully established in one go, continues to enhance its comprehensive competitive advantage.; The 180,000 tons/year liquid methionine (conversion) project of the company and China Petroleum & Chemical Corporation was put into construction; 4,000 tons/year cystine project started construction; 30,000 tons/year taurine project started normal production and sales; 2,500 tons/year vitamin B5 project started normal production and sales. In the Flavor and fragrance sector, 5,000 tons/year menthol project started normal production and sales. In the new polymer materials sector, 7,000 tons/year PPS Phase III project started normal production and sales; The pilot test of the adiponitrile project was successful, and the project approval is progressing in an orderly manner. The HA project has commenced with material input testing, and the project is advancing smoothly. In the API sector, Pharmaceutical-grade Coenzyme Q10 was listed, and the product structure was upgraded according to market demand, and gradually developed into a manufacturer of antipyretic and analgesic drugs, nutritional drugs and characteristic API intermediates. During the reporting period, the price of major vitamin products was under downward pressure, and the company actively took countermeasures, innovative marketing management, gave play to the advantages of sector linkage, and made efforts to overcome various unfavorable factors, and achieved steady growth in product sales year-on-year. During the reporting period, the company promoted the normal sales of newly put into production projects, and achieved steady revenue growth in the flavors and fragrances segment and the new materials segment. At the same time, through innovation to reduce costs, fully tap the potential, strengthen the analysis and prediction of the procurement market, and reasonably reduce operating costs, maintaining the overall steady development of the company. 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, 2. R&D The company adheres to the research and development concept of "demand-oriented, internal and external integration", and has invested more than 5% of its operating income in research and development for many consecutive years. Through the establishment of an innovative organizational structure at three levels of science, technology and application, the company has formed a three-level innovative research and development system of scientific research, technology transformation and technology application, and formed a research and development model with the General research Institute as the core, research branches, four production bases, Xinhecheng-Zhejiang University joint research and development center, and external scientific research cooperation institutions. The company cooperates closely with well-known 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, and CysBio Biotechnology Co., LTD., organizing and utilizing global basic science research resources to jointly carry out prospective and applied research in chemistry. As the core of enterprise technology innovation, the research institute of the company has set up biomedical laboratory, supercritical reaction laboratory, engineering equipment research center and other laboratories, equipped with 600M ultra- low temperature probe nuclear magnetic resonance instrument and other world advanced scientific research equipment, master the supercritical reaction, high vacuum distillation, high pressure hydrogenation continuous, peroxide and continuous crystallization and （未完）  |