[年报]新 和 成(002001):2024年年度报告（英文版）
原标题:新 和 成:2024年年度报告（英文版） April 2024 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. Except for the following Directors, the other Directors were present in person at the meeting of the Board of Directors at which this Annual Report was considered.
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, a cash dividend of 5.00 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. 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 ........................................................................... 43 Section V Environmental and Social Responsibilities ........................................... 61 Section VI Significant Events ................................................................................... 69 Section VII Movements in Shares and Conditions of Shareholders ..................... 79 Section VIII Preferred Shares .................................................................................. 87 Section IX Bonds........................................................................................................ 88 Section X Financial Report ....................................................................................... 89 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 in 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
supervision during the 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
negative, and the audit report of the latest year shows that the company's ability of continuing operation is uncertain. □ Yes √ No The lower of the net profit before and after deducting extraordinary gains and losses is a negative value. □ Yes √ No VII. Differences in accounting data under Chinese accounting standards and overseas accounting standards 1、Difference in net profit and net assets in financial statements disclosed respectively under IFRS Standards and Chinese accounting standards □Applicable √ Not Applicable The Company has no difference in net profit or net assets in financial statements disclosed respectively under IFRS Standards and Chinese accounting standards. 2、Difference in net profit and net assets in financial statements disclosed respectively under overseas accounting standards and Chinese accounting standards □Applicable √ Not Applicable The Company has no difference in net profit or net assets in financial statements disclosed respectively under overseas accounting standards and Chinese accounting standards. VIII. Key financial indicators by quarter Unit: RMB Yuan
disclosed in quarterly or semi-annual reports? □Yes √ No IX. Non-recurring profit or loss √ Applicable □ Not Applicable Unit: RMB Yuan
The Company has no other profit or loss satisfying the definition of non-recurring profit or loss. Remarks on defining non-recurring profit or loss listed in the “Interpretation Pronouncement on Information Disclosure Criteria for Public Companies No. 1 – Non-Recurring Profit or Loss” as recurring profit or loss □ Applicable √ Not Applicable The Company has no situation of defining non-recurring profit or loss listed in the “Interpretation Pronouncement on Information Disclosure Criteria for Public Companies No. 1 – Non-Recurring Profit or Loss” as recurring profit or loss. Section III Management Discussion and Analysis I. The industry in which the Company operates during the reporting period Based on the fine chemical industry, the Company takes “Chemical +” and “Bio +” as its core technology platform to produce various functional chemicals around nutrition, flavor and fragrance, 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. Africa's population has exploded to 60% of the global population, global life expectancy has increased from 72.8 to 77.2 years, and developed regions are facing a deepening of population aging. 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 sectors such as feed, food, medicine and pharmaceuticals. The overall demand grows at a slow but stable rate, while supply remains highly concentrated, and the market price has long-term cyclical fluctuations. As the largest producer of vitamins, China produced about 0.42 million tons of vitamins in 2024, accounting for 85.90% of the global production. Vitamin prices rebounded from the bottom range in 2024 and most products return to profitability. The profitability of vitamin companies has improved significantly, except for a few companies, most companies' profits turned positive and realized year-on-year growth. Overseas enterprises saw reduced output due to capital, raw material supply, strategic adjustments and other factors—most notably, the explosion at BASF’s German plant triggered a chain reaction.. These capacity adjustment further 2 concentrated the supply of vitamins to China, such as vitamin K3, vitamin B6, vitamins A and E and other products. Methionine is the only sulfur-containingl amino acid 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, and its production process and engineering is complex, with high capital and technical barriers. According to the preliminary statistics of Boyar , the global methionine ( (calculated as 99% purity, liquid methionine × 0.8, the same below) capacity in 2024 was estimated at 2,249,000 tons, a year-on- year decrease of 4.6%, and China's methionine capacity is 736,000 tons, a year-on-year decrease of 5.2%. Global methionine production in 2024 increased year-on-year, with domestic supply in China reaching 471,000 tonss.In 2024, China exported 380,000 tons, a year- on-year increase of 25.8%, and imported 156,000 tons, a year-on-year decrease of 8.8%. In 2024, domestic production increased significantly, while imports decreased, driven by the significant growth in exports, the annual solid methionine prices are high and then run in a narrow range of adjustment. Global demand for methionine in 2024 is about 1.7 million tons, an increase of 6.3% year-on- year. Domestic poultry farming maintain profitability overall, leading to a slight increase in methionine demand for feed, the domestic 3 demand reached about 450,000 tons, an increase of 4.7% year-on-year. Flavor and fragrance: The 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, tobacco and daily chemical industries. The sector encompasses 1 https://www.prb.org/articles/highlights-from-the-2023-world-population-data-sheet/ 2 Boyar & Company Annual Analysis of Vitamins Market Report 2024 fragrances (synthetic and natura) and flavors (daily chemical fragrances, food fragrances, tobacco fragrances, etc.), which are used in personal care, household products, food, beverage and other daily life scenarios. According to the “14th Five-Year Plan for the development of the flavor and fragrance industry” published by the China Flavor and Fragrance and Cosmetic Industry Association, it is expected that by 2025, the main business income of China's flavor and fragrance industry will reach RMB 50 billion. At present, China's flavor and fragrance has become an important bridge to carry out cultural exchanges, trade and economic cooperation with countries along the “Belt and Road” and a major export earning industry. In 2023, about one-third of China's flavors and fragrances products were exported, with approximately two-thirds of fragrance products shipped overseas, key products such as 4 vanillin, linalool, maltol accounted for about 50% of the global supply. New polymer materials: As a strategic and fundamental industry, new polymer materials has become an important symbol for measuring the economic and technological strength of a country or region. The “Guidelines under 14th Five-Year Plan and Vision for 2035” pointed out that it is necessary to vigorously develop strategic emerging industries, including new generation information technology, biotechnology, new energy, high-end equipment-all of which have substantial 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- 5 quality development of the manufacturing industry, the polymer materials industry holds immense growth potential. Specialty engineering plastics primarily include four high-demand categories: high-performance polyamide, polyphenylene sulfide, polyimide and polysulfone. At present, more than ten kinds of PPA, PPS, PSU and other varieties with application value and industrialization have been developed, which are widely used in electronics, automotive, aerospace, precision instruments and other high-tech industries. Due to the higher price, specialty engineering plastics accounted for about 1.8% of the plastics market by value.In 2022, the global market demand for these materials reached about 550,000 tons, with the market size of 8.5 billion U.S. dollars. Geographically, the consumption is mainly concentrated in China, Europe, the United States and Japan. In 2023, China's total consumption of six major specialty engineering plastics--PPS, PSF, PEEK, LCP, PPA and PI amounted to approximately 174,000 tons. China Chemical Information Centre predicts that in the future China's market demand for special engineering plastics will remain high growth, with a compound annual growth rate of about 7.2%, from 2023 to 2028. and onsumption will reach 246,000 tons by 2028. This growth will be primarily driven by booming sectors such as new energy vehicles, electronic 6 appliances and medical equipment.. 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 global leader in both production volume and export capacity while achieving internationally advanced production technologies.. China's chemical API industry has experienced a long period of rapid development stage, the scale of production once exceeding 3.5 million tons. However, since 2018, production volumes of traditional bulk APIs began to decline, and the total output of APIs of the domestic regulated enterprises fell to 2.3037 million tons in 2018. Between 2019-2023, China's API 4 Xinhua reported December 2023 “Aroma industry floats all over the world http://www.news.cn/fashion/20231215/b4fbb01c61c549cb9fdaf10c9fb21754/c.html 5 Development of new materials industry in Zhejiang Province “14th Five-Year Plan” 6 https://mp.weixin.qq.com/s?__biz=MjM5NDgxMTI0NA==&mid=2651074843&idx=1&sn=ef7960e3284552ed62dcd70454b5691d &chksm=bca1356a8e993c40242f8e9bcbba3346e3b336c43069d3ad93eb6a6e76beb2b63e917c368ede#rd Status and Trends of supply production has gradually recovered and rebounded to 3.949 million tons in 2023. 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 “Bio +”, 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, health-focused, and environmentally friendly products, and creates sustainable value for stakeholders. With leading technology, scientific management and genuine service, the Company has become one of the major vitamin producers in the world, one of the China’s top 100l fine chemical enterprises, one of the top 10 Flavor and Fragrance Producer in China's light of industry and a well-known special engineering plastics manufacturer. 1. Main products and applications Nutrition: The current products mainly cover vitamins, amino acids and pigments,. ncluding vitamin E, vitamin A, vitamin C, methionine, vitamin D3, biotin, coenzyme Q10, carotenoids, vitamin B5, vitamin B6, vitamin B12, serine, cystine, tryptophan, etc. They are mainly used in feed additives and nutrition supplements of food, beverages and health food,. The Company actively implements the serialized and differentiated development of nutrition, and continuously enhance the competitiveness of its products by optimizing the production process and tackling key issues. expanding new product lines through serialization, scaling, and high- value-added strategies to reinforce its industry leadership. In addition,the company fully integrates internal integration and external cooperation, opens up cooperation, 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, methyl dihydrojasmonate, raspberry ketone, ligustral and menthol, which are widely used in personal care, cosmetic and food fields. From the perspective of competitiveness and market share, NHU is an important supplier in the global flavor and fragrance industry. The Company continuously enriches the varieties of fragrance portfolio and develop bio-based products to meet evolving market demands. Polymer materials: The Company focuses on the development of high-performance polymers and key intermediates, moderate develop downstream applications of materials, main products include polyphenyl sulfide (PPS), high temperature nylon (PPA), HDI, IPDA, mainly serving automotive, electronic, environmental protection, industrial applications and other fields. At present, the Company has built a PPS whole industrial chain from basic raw materials to polymers, to modified processing, to special fibers, and become the only domestic enterprise capable of stable production of fiber-grade, injection molding-grade, extrusion-grade, coating-grade PPS, while progressing approvals for large-scale production of nylon new material industrial chain projects. APIs: The main products are concentrated in the series of vitamins and antibiotics, including 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 stable supply of strategic materials. The company pays attention to source procurement, minimize intermediaries, reduce procurement costs. It implements transparent procurement practices through an information-based system, ensuring an open, standardized, and efficient procurement process. Suppliers with good reputation and quality products are selected, with 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”.Production plans are dynamically adjusted based on market demand to achieve supply-demand balance. By innovating production management, optimizing processes, and enhancing lean operations, the company continuously improves efficiency while reducing energy consumption per unit of output. It promotes safe, green, standardized, and high-efficiency production to strengthen product competitiveness. (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, attract large-scale customers, and enhance brand influence. 3. Key performance drivers The Company has modernized production bases in Zhejiang Xinchang, Zhejiang Shangyu, Shandong Weifang, and Heilongjiang Suihua, adhering to the development strategy of integration, serialization and synergy, and insists on innovation-driven. Relying on the solid foundation of the 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 comprehensive product network to enhances risk resilience and market responsiveness. 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. In nutrition segment, the capacity of methionine project was released, and the 300,000 tons/year project has reached production with enhanced market competitiveness; the construction of 180,000 tons/year Liquid Methionine (Refractory) project, a joint venture between the Company and China Petroleum & Chemical Corporation, was basically completed; 4,000 tons/year Cystine was in stable production and operation, and pilot test of Glufosinate Ammonium Phosphonate project processed smooth. In the flavor and fragrance segment, the series of aldehyde project, SA project, and the first phase of the Fragrance Industrial Park project are progressing steadily. In new materials segment, the development of PPS for new applications went smoothly; Tianjin nylon new materials project continued to promote the approval of large-scale production; HA project products have been produced and sold normally. In the API segment, the integration projects of halothane and phytol are progressing in an orderly manner. In the future, we will upgrade our product structure according to the market demand, and gradually develop into a producer of antipyretic and analgesic drugs, nutritional drugs, and intermediates of specialty APIs. During the reporting period, the release of new production capacity of methionine and other projects brought profit growth space for the Company, and at the same time, affected by the recovery of the downstreamlivestock industry, supply side of the other manufacturers supply constraints and other factors, the Company's nutrition segment of the main products market price repair. The Company seized market opportunities in time, went all out, production and marketing linkage to expand the market, and took multiple measures to expand market share, achieving year-on-year growth in both sales volume and prices for key nutraceutical products; In addition, the Company through continuous innovation to reduce costs and increase efficiency, optimize the production process, resource allocation, energy consumption and so on, to reasonably reduce the operating costs, so as to achieve business performance improvement. During the reporting period, the Company's main business and operating 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 has a large competitive advantage in culture, R&D, management, talent, brand, etc. 1. Corporate culture The company adheres to the enterprise objective of “Creating wealth, Elevating employees, Benefiting society”, core values of “new, harmony, union”, business philosophy of “create wealth, balanced and sustainable”, the enterprise spirit of “realism, innovation, high- quality and efficiency”, innovative management, and continuous improvement of management, ensure the steady development of the enterprise. The “teacher culture” of “the wise are teachers, the capable are teachers, humbly behave, carefully educate people” is the culture of learning, self-discipline, take-charge culture, and also the culture of carefully educating people. The Company's culture of keeping pace with the times leads the development and penetrates into the hearts of the people, like spring rain nourishing every corner of the enterprise. Led by the "teacher culture", the Company pursues high-quality and sustainable development, creates spiritual and material wealth, provides a platform and opportunities for employees to develop and realize the value of their lives, and contributes to the innovative, green and shared development of society. 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. The Company has set up an innovative R&D system ranging from basic research, engineering development, process optimization to product application development, and focuses on the development of common, key and forward-looking technologies in the chemical industry, to develop and master a number of key technologies with strategic impact on economic development and promote industrial transformation and upgrading. The Company cooperates closely with well-known research institutes and universities at home and abroad, such as Zhejiang University, Chinese Academy of Sciences,Tianjin University, 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 a biomedical laboratory, supercritical reaction laboratory, engineering equipment research center and other laboratories, equipped with a 600M ultra-low temperature probe nuclear magnetic resonance instrument and other world-class advanced scientific research equipment, master the supercritical reaction, high vacuum distillation, high pressure hydrogenation continuous, peroxide and continuous crystallization and other leading technologies at home and abroad. It has been rated as a national enterprise technology center, a national postdoctoral research workstation, and a national model academician expert workstation. During the reporting period, the project of “Development and Industrialization of Key Technology for Fresh Fragrance Series Spice Products” was awarded the First Prize of Technical Invention Award of China Light Industry Federation in 2024, “A Recombinant Microorganism, Its Preparation Method and Its Application in Producing Coenzyme Q10” and “A Preparation Method of Polyphenylene Sulfide Resin, and Polyphenylene Sulfide Resin Obtained by Preparation” were awarded the Excellence Prize of the 25th Chinese Patent Award, and the project of “High-quality D, L-Methionine Green Synthesis Key Technology Development and Industrialization” project was selected as the first prize of Shandong Province Science and Technology Award. 3. Production management The Company aims at world-class manufacturing, and takes the operation of quality assurance, green low-carbon, safety and environmental protection systems as the gripping hand to support and guarantee the sustainable development. The Company has always been adhering to the production strategy based on the principle of “production- sales coordination, efficient operation, excellent quality, and cost leadership” and the HSE guideline of “safety first, green development, full participation, and continuous improvement”. The Company takes planning as the goal, cost management as the main line, and maximizing company benefits as the principle for the （未完）  |