Investment Rating - The report assigns a **Buy** rating to Sinofert Holdings (297 HK) with a target price of HKD 1 40, implying a 52% upside from the current price [1][4] Core Views - Sinofert Holdings is positioned as a "national team" in the fertilizer industry, leveraging its strong state-owned enterprise background and integrated R&D, procurement, production, and sales capabilities [1][2] - The company is transitioning to become a leader in bio-fertilizers and soil health, with its bio-fertilizer business accounting for 36% of revenue in 2023 and expected to drive future growth [2][8] - The report forecasts revenue growth of 5% annually from 2024 to 2026, with net profit growth of 34%, 10%, and 10% respectively, driven by the high-margin bio-fertilizer segment [2][32] Business Overview - Sinofert is a leading fertilizer distributor in China with a vast network covering 95% of agricultural land, including 22,000 agricultural counties, 18,000 townships, and over 40,000 township stores [1][8] - The company has over 30 years of experience in international fertilizer trade and is a key player in China's potassium fertilizer reserves, ensuring stable supply and pricing [2][8] - In 2023, the company launched its "Bio+" strategy, focusing on nutrient efficiency, bio-fertilizers, and soil health, supported by a RMB 200 million R&D center [8][15] Financial Performance - Revenue in 2023 was RMB 21 7 billion, down 6% YoY, while net profit dropped 44% to RMB 626 million due to a RMB 520 million impairment loss from a joint venture [18] - Excluding the impairment, adjusted net profit would have been RMB 1 21 billion, up 7 3% YoY [18] - The company's gross margin improved to 10 4% in 2023, driven by a shift towards higher-margin bio-fertilizers and away from low-margin nitrogen fertilizers [18] Industry Outlook - China's fertilizer usage has been declining since 2015, with a focus on reducing overuse and improving efficiency, creating opportunities for high-efficiency and bio-fertilizers [20][21] - The global potassium fertilizer market is expected to grow, with China's demand for potassium chloride projected to increase from 16 53 million tons in 2023 to 18 05 million tons by 2027 [25][26] - The bio-fertilizer industry in China is rapidly expanding, with the market size expected to reach RMB 200 billion by 2030, driven by government policies promoting sustainable agriculture [29][30] Valuation - The report values Sinofert at 10 8x 2024E PE, below the A-share fertilizer industry average of 11 6x, reflecting its unique position in potassium fertilizer imports and growth potential in bio-fertilizers [32][33] - Key comparable companies include Yunnan Yuntianhua (600096 SH) and Qinghai Salt Lake Industry (000792 SZ), which trade at 7 9x and 14 7x 2024E PE respectively [33]

Company Overview - Sinofert Holdings Limited is a leading integrated crop nutrition product company in China, focusing on distribution services and the entire industry chain[5]. - The company has a comprehensive sales service network covering 95% of China's arable land, enhancing its competitive advantage[5]. - In 2023, Sinofert Holdings Limited is recognized as a major supplier of imported crop nutrition products and a key player in the national potassium fertilizer strategic reserve[5]. - The company aims to become a leader in bio-fertilizers and soil health innovation, promoting sustainable development and resource-friendly practices[5]. - Sinofert Holdings Limited has established strategic partnerships with several international suppliers, securing exclusive agency rights for high-quality foreign products[5]. - The company is committed to continuous growth and value creation for shareholders while contributing to agricultural modernization[5]. Financial Performance - In 2023, the company reported revenue of RMB 21.73 billion, a decrease of 5.54% from RMB 23.00 billion in 2022[8]. - Gross profit for 2023 was RMB 2.26 billion, down 12.34% from RMB 2.58 billion in the previous year[8]. - The company's net profit attributable to shareholders was RMB 625.55 million, a decline of 43.96% compared to RMB 1.12 billion in 2022[8]. - The return on equity (ROE) for 2023 was 6.52%, significantly lower than 12.25% in 2022[8]. - The debt-to-equity ratio was reported at 18.45%, slightly down from 18.69% in the previous year[8]. - The company maintained a strong cash flow and a solid asset-liability structure, enhancing its risk management capabilities[12]. Research and Development - Sinofert Holdings Limited has a robust research and development platform for bio-agents and soil health products, positioning itself as a leader in agricultural technology[5]. - Research and development efforts led to a 16.6% increase in the conversion of R&D results, totaling 1.08 million tons in 2023[13]. - The company has established a team of chief scientists to strengthen its R&D capabilities in key technologies and core competencies[22]. - The company launched a new patent for the production of multi-element polyphosphate and fluorosilicic acid from wet-process phosphogypsum, indicating advancements in technology and product offerings[21]. Strategic Initiatives - The company implemented a "Biological +" strategy to drive future growth and enhance resilience against market fluctuations[12]. - The company plans to focus on the "Biological +" strategy, aiming to improve fertilizer nutrient utilization rates and promote soil health through technological innovation[15]. - The company aims to enhance its market share and channel coverage in the agricultural market by leveraging internal and external synergies in its seed and plant protection business[15]. - The company is committed to ensuring food security and stabilizing fertilizer prices in alignment with national policies, emphasizing its role as a central enterprise[15]. Corporate Governance - The board of directors includes experienced professionals, ensuring strong corporate governance and strategic oversight[6]. - The company emphasizes adherence to best corporate governance practices and compliance with relevant stock exchange regulations[99]. - The company has established committees for remuneration, audit, and nomination to ensure effective oversight and governance[96]. - The board consists of six members as of December 31, 2023, including two executive directors and three independent non-executive directors[103]. Environmental and Social Responsibility - The company is committed to sustainable development and has implemented measures to reduce environmental impact, including the introduction of CO2 liquefaction and low-temperature heat recovery systems[157]. - The group invested RMB 44.43 million in health, safety, and environmental (HSE) initiatives in 2023[156]. - The company conducted over 10 on-site inspections of subsidiaries in 2023 to assess risk management conditions and ensure effective internal supervision[153]. Market Position and Sales - The company achieved a cumulative sales volume of over 500,000 tons of microbial fertilizers in 2022, demonstrating significant yield increases and improved soil biodiversity[17]. - The sales volume of differentiated compound fertilizers reached 1.34 million tons, representing a year-on-year growth of 11.05%[36]. - The group achieved a sales volume of 7.24 million tons for the year ended December 31, 2023, an increase of 4.86% compared to the previous year[47]. Risk Management - The management has implemented measures to manage liquidity risk, including strict cash position management and maintaining sufficient cash and cash equivalents[88]. - The company is facing operational risks including geopolitical tensions and economic slowdowns, which may impact performance[82]. - The internal control system evaluation in 2023 indicated a robust internal control environment, with systematic identification and response to risks[152]. Shareholder Engagement - The company is committed to maintaining effective communication with shareholders and investors, facilitating timely access to comprehensive information[137]. - The company held its annual general meeting on June 19, 2023, with a high attendance rate among directors, including 100% attendance from executive directors[140]. - The company’s dividend policy states that dividends will be distributed in the range of 15%-30% of the profit attributable to shareholders for the fiscal year, considering financial performance and future financing needs[138].

Financial Performance - The group's revenue for the year was RMB 21.728 billion, a decrease of 5.54% compared to RMB 23.003 billion in 2022[2]. - The profit attributable to shareholders for the year was RMB 626 million, down 43.96% from RMB 1.117 billion in 2022[2]. - The basic earnings per share for the year were RMB 0.0891, a decrease of 43.96% from RMB 0.1590 in 2022[2]. - The net profit for the group was RMB 684 million, a decrease of 39% year-on-year, primarily due to impairment losses totaling RMB 523 million from an associate company[3]. - Gross profit for the fiscal year was RMB 2.260 billion, down 12.3% year-over-year[20]. - The net profit margin for the year ended December 31, 2023, was 2.88%, a decrease of 1.98 percentage points compared to the previous year[29]. - The company's profit before tax for 2023 was RMB 846,235,000, a decrease of 28.7% from RMB 1,186,723,000 in 2022[90]. - The income tax expense for 2023 was RMB 162,119,000, significantly higher than RMB 61,777,000 in 2022[90]. Business Segments - The growth business achieved revenue of RMB 7.845 billion and a pre-tax profit of RMB 239 million[3]. - The basic business generated revenue of RMB 11.334 billion and a pre-tax profit of RMB 678 million[4]. - The revenue breakdown for 2023 shows that compound fertilizers accounted for 30% of total revenue, while potassium fertilizers contributed 24%[23]. - The company reported external sales of RMB 11,333,844 in the basic business segment, down from RMB 12,994,444 in 2022[76]. - The growth business segment generated revenue of RMB 7,845,131, compared to RMB 7,441,296 in 2022, reflecting a growth of 5.4%[76]. Research and Development - R&D output reached 1.079 million tons, an increase of 16.6% year-on-year, with over 250,000 tons from key new products[4]. - The company aims to strengthen its R&D capabilities in key areas such as biotechnology and soil health, with a focus on high-level talent acquisition and training[8]. - The company established a joint laboratory and appointed a Chief Scientist to enhance R&D capabilities in biological fertilizers and soil health, winning two technology advancement awards and three patent awards in 2023[21]. - The group is enhancing its "Biological+" R&D capabilities to accelerate the development and promotion of key products[54]. Strategic Initiatives - The company is advancing its "Bio+" strategy, focusing on technological innovation and high-quality growth in its business segments[3]. - The company plans to enhance its "Bio+" strategy, focusing on improving fertilizer nutrient utilization, carbon reduction, and promoting soil health development[5]. - The company is committed to maintaining stable fertilizer supply and pricing while enhancing collaboration with suppliers and customers to boost sales and brand premium[5]. - The company is focusing on the rapid development of biological fertilizers, with an emphasis on high-efficiency nutrients and soil health products[5]. - The company launched a series of new biological fertilizers and soil health products, resulting in a 12.84% increase in sales of differentiated products, totaling 1.66 million tons[21]. Operational Efficiency - The company maintained a strong cash flow and a solid asset-liability structure, enhancing its risk response capabilities[3]. - The company achieved a total cost reduction of RMB 146 million, with a completion rate of 159%[9]. - The company saved RMB 3 million annually in operating costs through strategic cooperation in green electricity and carbon reduction initiatives[9]. - The company conducted over 60,000 comprehensive technical service activities, reaching more than 300,000 farmers and over 10 million people through new media[15]. Corporate Governance - The audit committee consists of three members, including the chairman Mr. Xie Xiaoyan, and independent non-executive directors Mr. Gao Mingdong and Mr. Lu Xin[101]. - The group's auditor, KPMG, confirmed that the financial data disclosed in the annual performance announcement aligns with the consolidated financial statements for the year ending December 31, 2023[102]. - The company has adopted the corporate governance code and has complied with the relevant provisions, except for deviations regarding significant conflicts of interest handled by written resolutions instead of board meetings[104]. - Further details on corporate governance practices will be available in the upcoming annual report[105]. Environmental and Social Responsibility - The group has not experienced any major environmental pollution incidents in 2023, adhering to strict environmental regulations[55]. - Zhonghua Yunlong's green factory project won the Bloomberg ESG Leading Enterprises Award for Leading Environmental Projects in 2023[9]. - The company launched the "Thick Soil Health+" service platform, establishing nearly 100 service centers across 17 provinces, enhancing arable land by over 20,000 acres[18]. Financial Position - Total assets as of December 31, 2023, amounted to RMB 14,128,340, an increase from RMB 12,731,812 in 2022[70]. - The company's net assets stood at RMB 9,918,784, up from RMB 9,731,646 in the previous year[70]. - The total interest-bearing debt as of December 31, 2023, was RMB 1.829 billion, an increase of RMB 11 million or 0.61% from RMB 1.818 billion in the previous year, mainly due to new bank financing[43]. - The company's equity in joint ventures and associates totaled RMB 1.109 billion, down RMB 285 million or 20.44% from RMB 1.394 billion, primarily due to impairment losses[41].

Financial Performance - In the first half of 2023, the company achieved a net profit of RMB 1.071 billion, representing a year-on-year increase of 6.14%[14]. - The profit attributable to shareholders was RMB 1.004 billion, showing a slight year-on-year growth of 0.6%[14]. - The group achieved a revenue of RMB 13.128 billion for the six months ended June 30, 2023, with a profit attributable to shareholders of RMB 1.004 billion, representing a slight year-on-year increase[31]. - For the six months ended June 30, 2023, the group's sales volume was 3.97 million tons, a decrease of 15.71% compared to the same period in 2022[62]. - Revenue for the same period was RMB 13.128 billion, a decrease of 14.23% from RMB 15.306 billion in the previous year[65]. - Gross profit for the six months ended June 30, 2023, was RMB 1.550 billion, an increase of 3.33% year-on-year[61]. - The company's profit attributable to shareholders for the six months ended June 30, 2023, was RMB 1.004 billion, which is relatively stable compared to RMB 0.998 billion for the same period in 2022, reflecting a slight increase of 0.6%[76]. - The net profit margin for the six months ended June 30, 2023, was 7.65%, an increase of 1.13 percentage points compared to the same period last year[76]. Strategic Initiatives - The company is focusing on the "Bio +" strategic transformation to enhance product differentiation and expand market channels[14]. - The group continues to promote the "Bio+" strategy, focusing on improving fertilizer nutrient utilization, reducing carbon emissions, and promoting soil health development[18]. - The company aims to improve digital product levels and scientific formulations to help farmers reduce production costs and carbon emissions[15]. - The company is enhancing customer loyalty through professional solutions and full-service tracking by leveraging Syngenta Group's internal collaboration advantages[15]. - The company is focusing on developing advanced green low-carbon process technologies, emphasizing the efficient utilization of phosphorus and fluorine resources[35]. - The company is actively promoting modern agricultural technology service platforms to enhance overall agricultural productivity and ensure stable supply and pricing of fertilizer products[30]. Product Development and Sales - The differentiated compound fertilizer and special fertilizer business has achieved rapid growth, focusing on core crops and soil health[15]. - The company's differentiated product sales reached 960,000 tons in compound fertilizer, with a differentiation ratio of 70%[41]. - The sales volume of specialty fertilizers increased by 53% compared to the same period last year, with nitrogen-enhancing biostimulant products growing by 50%[43]. - The company achieved sales revenue of RMB 21 million from customized products developed in collaboration with Syngenta Group, expanding market opportunities[44]. - The company has launched 13,980 retail stores under the "Nong Xiao Hui" brand, achieving an overall coverage rate of over 80% in agricultural counties[45]. Cost Management and Efficiency - The company is implementing cost reduction and efficiency enhancement measures to maintain good profitability despite price declines[16]. - The company has strengthened partnerships with strategic suppliers to maintain low potassium fertilizer prices and reduce costs for farmers[15]. - Sales and distribution costs decreased to RMB 286 million, down 10.06% from RMB 318 million in the previous year, due to cost reduction measures[79]. Research and Development - The group converted a total of 753,900 tons of new research product results in the first half of 2023, enhancing the synergy between research, production, and sales[34]. - The group is enhancing its research and development capabilities by collaborating with experts from institutions such as the Chinese Academy of Agricultural Sciences and China Agricultural University[34]. - The group is focusing on the development of biological fertilizers and soil health, aiming to become a leader in innovation in this field[18]. Risk Management and Compliance - The company has increased its risk awareness and compliance management efforts, embedding these requirements into business processes[50]. - The company is actively addressing operational risks including geopolitical tensions and commodity price fluctuations[111]. - The company has implemented strict environmental protection measures and has not experienced any major environmental pollution incidents in the first half of 2023[113]. Cash Flow and Liquidity - Cash generated from operating activities for the six months ended June 30, 2023, was RMB 1,278,080 thousand, a decrease of 30.9% compared to RMB 1,851,154 thousand in 2022[146]. - Net cash inflow from operating activities was RMB 1,214,638 thousand, down 33.2% from RMB 1,820,605 thousand in the previous year[146]. - The company has unused bank credit facilities amounting to RMB 19.811 billion, including USD 740 million and RMB 14.458 billion[107]. - The current ratio improved to 1.50 in June 2023 from 1.34 in December 2022, indicating enhanced liquidity[101]. Employee and Training Initiatives - The group employed approximately 4,492 full-time employees as of June 30, 2023, and conducted around 5,225 training sessions in the first half of 2023[129]. Future Outlook - The company anticipates a recovery in market demand and production supply in the second half of 2023, despite global economic uncertainties[58].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其準確性或完 整性亦不發表任何聲明，並明確表示概不會就因本公告全部或任何部份內容而產生或因倚賴該等內 容而引致之任何損失承擔任何責任。 SINOFERT HOLDINGS LIMITED 中化化肥控股有限公司 （於百慕達註冊成立之有限公司） （股份代號：297） 中期業績公告 截至二零二三年六月三十日止六個月 | --- | |----------------------------------------------------------------| | | | 財務摘要 | | ‧ 本期本集團營業額人民幣 131.28 億元 | | ‧ 本期本公司股東應佔溢利人民幣 10.04 億元，同比增長 0.6% | | ‧ 本期每股基本盈利人民幣 0.1429 元，同比增長 0.6% | | ‧ 董事會建議不宣派截至二零二三年六月三十日止六個月的中期股息 | 1 主席致辭 尊敬的各位股東： 本人僅代表全體董事向各位股東報告本集團截至二零二三年六月三十日止六個月的中期業績情況。 二零二三年上半年，隨著全球供應鏈緊張情況緩解和化肥產能的逐步 ...

中化化肥控股有限公司 SINOFERT HOLDINGS LIMITED (於E慕達註冊成立有限公司) 腿併號 : 287 年度報告 2022 與中國 現代農業 共同成長 al For e fi 10H r D t Agential PARTY 197 1 1500 15 目 錄 2 釋義 4 公司簡介和企業信息 7 財務摘要 10 主席致辭 12 大事記 18 經營管理回顧與展望 28 管理層討論與分析 42 董事及高管層 47 企業管治報告 76 董事會報告 95 獨立核數師報告 101 綜合損益及其他全面收益表 103 綜合財務狀況表 106 綜合權益變動表 108 綜合現金流量表 111 綜合財務報表附註 204 五年財務概要 釋義 在本年報內，除文義另有所指外，下列詞彙具有下列涵義： | --- | --- | |--------------------|-----------------------------------------------------------------------------------------------------| | 詞彙 | 釋義 | | 「審核委員會」 ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其準確性或完 整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚賴該等內 容而引致之任何損失承擔任何責任。 SINOFERT HOLDINGS LIMITED 中化化肥控股有限公司 （於百慕達註冊成立之有限公司） （股份代號：297） 年度業績公告 截至二零二二年十二月三十一日止年度 | --- | --- | |-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | | | | | 財務摘要 | | ‧ | 本年度本集團營業額為人民幣 230.03 億元（二零二一年：人民幣 226.41 億元），同比增加 1.6% | | ‧ | 本年度本公司股東應佔溢利為人民幣 11.17 億元（二零二一年：人民幣 ...