Financial Performance - Revenue for the first half of 2020 was HKD 479.1 million, a decrease of 82.9% compared to HKD 2,799.4 million in the same period of 2019[5]. - Gross profit for the first half of 2020 was HKD 40.9 million, down 24.0% from HKD 53.8 million in the previous year[5]. - The company reported a pre-tax loss of HKD 902.8 million for the first half of 2020, compared to a loss of HKD 838.2 million in the same period of 2019[5]. - The company’s basic loss per share for the first half of 2020 was HKD (10.5), compared to HKD (12.5) in the same period of 2019[5]. - The group recorded a net loss of approximately HKD 902,800,000, compared to a net loss of HKD 838,200,000 in 2019[34]. - The total comprehensive loss for the period was HKD 857,557 thousand, compared to HKD 809,095 thousand in the previous year, marking an increase of about 6%[108]. - The company reported a loss before tax of HKD 902,843,000 for the six months ended June 30, 2020, compared to a loss of HKD 838,241,000 for the same period in 2019[161]. - The company incurred financial costs of HKD 360,331,000, an increase from HKD 301,160,000 in the previous year[120]. Operational Challenges - The company faced challenges due to the COVID-19 pandemic, which led to production halts and supply chain disruptions, impacting product demand and pricing[12]. - The company maintained a suspension of amino acid production facilities during the review period due to unprofitability caused by rising costs and declining sales prices[13]. - The company has suspended operations in several locations to reduce cash outflow until market conditions improve[22]. - The amino acid production operations have been suspended since August 2019 to minimize cash outflows, influenced by the ongoing African swine fever[90]. - The company has paused amino acid production operations to mitigate financial risks amid unfavorable market conditions[90]. Debt and Financial Restructuring - The company is progressing with a debt restructuring plan, with a significant step taken when a bank transferred outstanding loans of approximately RMB 4 billion to an asset management company[15]. - The company's debt restructuring plan has made encouraging progress with full support from local government[18]. - The group is actively negotiating with banks to secure sufficient bank loans and reduce the debt ratio[129]. - A debt restructuring plan has been recognized and supported by major banks and the Jilin Provincial Government, emphasizing the importance of the group's stable operations[132]. - The group expects to resolve all outstanding payments under the transferred loans and debts owed to major banks by the end of 2020[134]. - The group is exploring similar arrangements for other outstanding debts to improve financial conditions[132]. - The group has received approximately RMB 377 million as a prepayment for land compensation related to property acquisition discussions[135]. Market Conditions and Pricing - Corn prices in China surged to RMB 2,158 per ton by the end of June 2020, influenced by supply shortages and transportation delays due to lockdown measures[22]. - The outbreak of African swine fever in China is expected to reduce pork production to 36 million tons in 2020, a 33% decrease from 2018, significantly impacting lysine demand[24]. - Lysine prices ranged from RMB 6,500 to RMB 7,500 per ton during the period, while rising corn costs pressured profit margins[24]. - The average selling price of corn starch decreased by 3.3% during the period due to reduced downstream market demand[36]. Strategic Initiatives - The company has been focusing on maintaining limited operations to reduce cash outflow while actively pursuing debt restructuring and property acquisition[12]. - The company plans to explore appropriate increases in corn reserves based on financial conditions during the corn harvest period[16]. - The company will continue to develop high-value products through its R&D team to drive business growth[16]. - The group plans to maintain competitiveness through internal R&D, diversify product range, and improve high-value product development capabilities[67]. - The company is committed to ensuring that subsidiaries resume production as soon as feasible, considering the ongoing pandemic situation[90]. Shareholder and Capital Structure - Major shareholders include Huikang with 2,508,407,357 shares (28.16%) and Modern Agriculture with 8,308,269,029 shares (93.27%) as of June 30, 2020[74]. - The group raised approximately HKD 132 million from a subscription agreement for 1,228,607,685 new ordinary shares at a price of HKD 0.1080 per share[105]. - The intended use of the raised funds includes repaying trade and other payables of RMB 56 million and purchasing corn and other operating expenses of RMB 76 million[106]. Employee and Operational Efficiency - The group employed approximately 4,000 full-time employees as of June 30, 2020, down from 4,300 as of December 31, 2019[69]. - The company is focusing on improving operational efficiency and reducing costs through internal resources and collaboration with industry participants[68]. - The group has optimized production and integrated resources into high-efficiency divisions to minimize cash outflows[139].

Financial Performance - Revenue for 2019 decreased to HKD 4,561 million, down 19.4% from HKD 5,658 million in 2018[5] - Gross profit for 2019 was HKD 204 million, representing a decline of 21.6% compared to HKD 260 million in 2018[5] - The net loss for the year narrowed to HKD 1,116 million from HKD 1,299 million in the previous year[5] - The group’s consolidated revenue decreased by approximately 19.4% to about HKD 4,561,400,000 (2018: HKD 5,657,700,000), primarily due to a decline in sales from the amino acids and sweeteners segment[42] - The group confirmed a one-time compensation of approximately HKD 428,400,000 for the expropriation of related properties, resulting in a net loss of approximately HKD 1,116,300,000 (2018: HKD 1,299,200,000) and an EBITDA of HKD 32,400,000 (2018: LBITDA of HKD 299,100,000)[43] Business Operations - The company suspended amino acid production facilities in August 2019 to reduce cash outflow due to anticipated slow recovery in the domestic farming industry[18] - The corn sweetener business experienced a decline in revenue due to intensified competition and decreased demand, leading to a suspension of production in the third quarter of 2019[18] - The domestic demand for amino acid products decreased significantly due to the ongoing African swine fever epidemic, impacting the company's lysine business[16] - The sweetener business faces challenges in 2020 due to the impact of the COVID-19 pandemic and raw material supply shortages, leading to a temporary halt in production[21] - The group is actively seeking to adjust its product mix to include high-value products in response to changing market demands[28] Debt and Financial Restructuring - The company engaged in debt restructuring discussions with creditors to alleviate financial pressure and improve cash flow[18] - The group aims to resolve all outstanding payments and debts related to the transferred loans by the end of 2020[34] - The group plans to relocate production facilities to improve operational efficiency and release land for sale, while actively negotiating with banks to advance debt restructuring plans[43] - The group has taken measures to improve its financial condition as outlined in the consolidated financial statements, with the board believing there will be sufficient working capital for at least the next 12 months[35] Market Conditions and Economic Outlook - The economic growth rate in China for 2020 is expected to be between 5% and 6%, down from 6.1% in 2019, due to the impact of the COVID-19 pandemic and the African swine fever outbreak[19] - The overall business environment in various industries in China is expected to remain challenging in the new year[19] - The company is monitoring market conditions closely to balance maintaining cash flow and market share amid ongoing economic challenges[25] Corporate Governance - The company has adopted a corporate governance code and confirmed compliance with all provisions of the code during the year[89] - The board of directors held a total of 11 meetings, with attendance rates for executive directors ranging from 73% to 100%[92] - The company emphasizes board diversity, considering factors such as race, gender, age, and professional skills in its diversity policy[104] - The board aims to achieve measurable diversity targets, including a specified percentage of independent non-executive directors and members with professional qualifications[105] - The company has established an audit committee, nomination committee, remuneration committee, and corporate governance committee to ensure compliance with corporate governance codes[132] Risk Management - The company has established a "three lines of defense" risk management framework to manage operational risks effectively[173] - Financial risks include liquidity issues due to urgent cash needs, prompting the company to expedite land sales in the Green Park area for additional funding[177] - Compliance risks are addressed by regularly reviewing and testing the internal control system as per the internal audit department's recommendations[179] - The company is enhancing training for employees in China and Hong Kong to prevent non-compliance behaviors[180] Employee and Operational Efficiency - The group employed approximately 4,300 full-time employees, down from 4,600 in 2018, emphasizing the importance of human resource management[75] - The aging production facilities are impacting productivity, and the company is maintaining production efficiency with minimal investment[181] - The internal audit department plays a key role in monitoring the group's governance and reports directly to the audit committee[167] Shareholder Information - As of December 31, 2019, the total number of shares held by shareholders was 7,678,798,032, with a market value of HKD 1,151.8 million[158] - The public shareholding in Hong Kong accounted for 42.5% of the total shares, totaling 3,263,489,164 shares, valued at HKD 489.5 million[158] - The board of directors aims to distribute dividends amounting to at least 15% of the annual profit attributable to shareholders in the foreseeable future[162]

Financial Performance - Revenue for the first half of 2019 was HKD 2,799.4 million, a decrease of 4.6% compared to HKD 2,933.9 million in the same period of 2018[6]. - Gross profit dropped significantly to HKD 53.8 million, down 68.0% from HKD 168.1 million year-on-year[6]. - The company recorded a pre-tax loss of HKD 838.2 million, compared to a loss of HKD 767.6 million in the previous year[6]. - The group recorded a net loss of HKD 838,200,000 (2018: HKD 768,400,000) and an LBITDA of HKD 268,100,000 (2018: HKD 196,200,000) during the period[44]. - The company reported a net loss attributable to owners of HKD 4,219,351 for the period ending June 30, 2019, compared to a loss of HKD 3,447,881 for the same period in 2018[126]. - The company recorded a loss of approximately HKD 838.2 million for the six months ended June 30, 2019, compared to a loss of approximately HKD 768.4 million for the same period in 2018[145]. Revenue Breakdown - Revenue from the upstream business increased by 13.6% to approximately HKD 1,441,900,000 (2018: HKD 1,269,400,000) due to increased sales volume[45]. - The amino acid segment recorded revenue of approximately HKD 888,000,000 (2018: HKD 1,092,000,000), accounting for 31.7% of the group's revenue (2018: 37.2%) with a gross loss of HKD 34,700,000 (2018: gross profit of HKD 81,300,000)[47]. - The corn sweetener segment's revenue decreased by 17.1% to approximately HKD 465,600,000 (2018: HKD 561,900,000) with a gross profit decline of 30.7% to approximately HKD 57,900,000 (2018: HKD 83,500,000)[49]. - Revenue from the bio-chemical alcohol segment decreased by 63.2% to approximately HKD 3,900,000 (2018: HKD 10,600,000), while gross profit improved to approximately HKD 1,800,000 with a gross margin of 46.2% (2018: 13.2%)[53]. - Revenue from external customers in the upstream products segment was HKD 1,441,945, while the amino acids segment generated HKD 887,951, and the corn sweeteners segment brought in HKD 465,628[181]. Market Conditions - The average selling price of upstream products and amino acid products decreased significantly due to the African swine fever outbreak, leading to a substantial reduction in overall gross margin[15]. - The demand for corn refining products and lysine is expected to remain weak in the second half of the year due to the ongoing impact of the African swine fever, with lysine prices projected to stay at relatively low levels[20]. - The company anticipates a challenging operating environment in the second half of 2019 due to uncertainties from the US-China trade war affecting corn and soybean supply and prices[28]. - Export sales accounted for 16.6% of total revenue, down from 23.6% in 2018, with total export sales decreasing by 32.8% to approximately HKD 464,900,000 (2018: HKD 691,900,000) due to the outbreak of African swine fever in Asia[55]. Cost Management and Efficiency - The group plans to enhance energy-saving measures and optimize production processes to improve operational efficiency in the second half of the year[20]. - The group is focusing on relocating production facilities to improve operational efficiency and reduce debt levels through negotiations with banks regarding debt-to-equity proposals[44]. - The company is focused on enhancing cost efficiency through ongoing R&D investments and optimizing operational effectiveness to adapt to market changes[28]. - The company plans to focus on new product development and market expansion strategies to enhance future performance[125]. Debt and Financial Restructuring - The management is actively seeking financial restructuring solutions to improve the company's financial situation and has engaged with major lending banks for debt restructuring[19]. - The company is actively negotiating debt restructuring with banks regarding its subsidiaries in Changchun, China[105]. - The company is actively negotiating with banks to secure sufficient loans and finalize a debt-to-equity conversion proposal by the end of 2019[156]. - The company has submitted a revised debt-to-equity proposal to the Bank of China, aiming to convert bank debts into equity to reduce its debt ratio and attract strategic investors[151]. Shareholder and Investment Activities - The company successfully completed a share placement to independent third parties, introducing new strategic investors to enhance capital and support future business development[19]. - The company issued a subscription agreement for 1,279,799,672 new shares at a price of HKD 0.10 per share, representing 20.0% of the issued share capital prior to the subscription[106]. - The company has received a confirmation letter from Jilin Agricultural Investment Group, assuring continued financial support through loans and operational assistance[34]. - The company has secured financial support from its major shareholder, which will continue for the next 24 months to ensure ongoing operations[159]. Operational Changes and Future Plans - The group plans to relocate its production facilities to Xinglongshan, with methanol capacity of 165,000 tons/year expected to be completed by 2020[109]. - The first phase of modified starch production (food grade) at Xinglongshan will have a capacity of 20,000 tons/year, scheduled from June 2019 to May 2020[109]. - The company is exploring strategic options, including debt-to-equity proposals, to reduce its debt ratio and attract strategic investors[32]. - The R&D center is implementing a series of product development projects to introduce new high-value products to enhance the existing product portfolio[77]. Compliance and Governance - The audit committee, consisting of three independent non-executive directors, reviews the financial reporting procedures and risk management systems[94]. - The company has adopted a code of conduct for securities trading by directors, which is not less stringent than the standard code[91]. - The corporate governance committee monitors compliance with governance policies and regulations[98].

Financial Performance - The company's revenue for 2018 increased by 28.7% to HKD 5,658 million compared to HKD 4,397 million in 2017[6] - Gross profit decreased significantly by 57.4% to HKD 260 million from HKD 609 million in the previous year[6] - The net loss for the year widened to HKD 1,299 million, up from a loss of HKD 890 million in 2017[6] - The loss attributable to shareholders increased to HKD 1,222 million from HKD 837 million in the prior year[6] - The company did not declare any final dividend for the year[6] - The group's consolidated revenue increased by approximately 28.7% to about HKD 5,657,700,000, driven by a 33.5% increase in sales volume due to the resumption of production at the Harbin facility and the relocation of the sweetener production facility[55] - The group experienced a 73.1% decrease in corn procurement subsidies, amounting to approximately HKD 38,300,000, compared to HKD 142,400,000 in 2017[55] - The group's gross profit and gross margin decreased by 57.4% and 9.3 percentage points to approximately HKD 259,700,000 and 4.6%, respectively[56] - The group recorded a net loss of HKD 1,299,200,000, compared to a loss of HKD 890,300,000 in 2017, and an LBITDA of HKD 299,100,000[56] - The average sales cost of upstream products and amino acid products increased by 17.3% and 24.5%, respectively, while their average selling prices only rose by 10.3% and 4.8%[56] Production and Operations - The production capacity utilization increased due to the resumption of operations at the Harbin facility and higher output at the Jinzhou plant[19] - Sales volume of upstream corn refining products exceeded 1 million tons, despite an 18% increase in corn starch prices[19] - The lysine segment did not record any substantial gross profit due to decreased domestic demand and cash flow constraints[19] - The relocation of corn sweetener production facilities to the Xinglongshan plant led to increased sales and revenue in that segment[20] - The group aims to maintain production capacity utilization to enhance operational efficiency and reduce cash outflow[25] - The group will closely monitor market developments to ensure a stable supply of raw materials for production[24] - The group anticipates a cautious optimism for its upstream corn refining business due to expected ample supply in the 2019/20 harvest season[32] - The company is focused on enhancing its operational efficiency and market presence through strategic partnerships and supply agreements[95] - In the short term, the company will relocate production facilities to the Xinglongshan plant, adjusting product mix and capacity to respond to market changes while improving operational efficiency and reducing costs through continuous R&D[102] Debt and Financial Management - The company is actively seeking solutions to address its high debt levels and financial guarantees with creditors[20] - The group proposed a debt-to-equity conversion plan to reduce debt ratios and attract strategic investors, which has received preliminary approval[23] - The company is actively discussing debt restructuring with creditors and exploring methods to alleviate cash flow pressure[25] - The group is actively negotiating with banks regarding debt-to-equity proposals and other alternatives to reduce its debt levels[56] - The company is focused on long-term financial planning and debt restructuring in coordination with major banks and potential strategic investors[115] - The company continues to negotiate with banks for financing to address liquidity risks, ensuring the retention of existing bank loans and improving debt-to-equity proposals[197] Market Conditions - Global corn production is expected to slightly increase to 1,100,000,000 tons in the 2018/19 season, with China's production also projected to rise[24] - Domestic corn prices in China increased by 27.2% year-on-year due to a consumption of approximately 263,000,000 tons against a harvest of about 257,000,000 tons[32] - The lysine market is expected to remain imbalanced in 2019 due to a significant reduction in domestic pig inventory and ongoing impacts from African swine fever[24] - The demand for sweetener products has stabilized despite fluctuations in sugar prices, indicating a reduced substitution effect[38] - The anticipated sugar production shortfall of about 2,000,000 tons in Brazil and the EU for the 2019/20 season may alleviate pressure on sugar imports into China[37] Corporate Governance - The company emphasizes the importance of good corporate governance to enhance confidence among shareholders, investors, employees, business partners, and the community[118] - The board believes that the current composition of independent non-executive directors provides adequate expertise in financial management, accounting, and legal matters[125] - The company has been compliant with all provisions of the corporate governance code during the year ended December 31, 2018[119] - The board of directors recognizes the benefits of diversity and is committed to enhancing diversity at the board level for sustainable development and competitive advantage[127] - The company has established various committees, including the audit committee, remuneration committee, nomination committee, and corporate governance committee, to ensure compliance with corporate governance codes[152] Human Resources - As of December 31, 2018, the company employed approximately 4,600 full-time employees, a decrease from 4,900 in 2017, emphasizing the importance of human resources management as a competitive advantage[104] - The total remuneration for directors in 2018 was HKD 2,296,000, an increase from HKD 1,440,000 in 2017[140] - The total remuneration for executive directors in 2018 amounted to HKD 976,000, with Liu Shuhang receiving HKD 747,000 in director's fees and HKD 229,000 in pension contributions[145] Risk Management - The company is focused on identifying and managing significant risks at various levels to better achieve strategic and business objectives[195] - The company has established a "three lines of defense" framework for enterprise risk management to delineate responsibilities for managing operational risks[194] - The internal audit department reviewed the effectiveness of the company's risk management and internal control systems, identifying weaknesses and proposing improvements to the audit committee[197] Environmental and Social Responsibility - The company emphasizes environmental protection as equally important to corporate development, maintaining a commitment to sustainable development[200] - The company is dedicated to enhancing its social and environmental performance through stakeholder engagement as part of its corporate social responsibility strategy[199]