Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 430.8 million, a decrease of 14.9% compared to RMB 506.0 million in the same period of 2021[7] - Profit attributable to owners for the same period was RMB 13.5 million, down 77.9% from RMB 61.2 million in 2021[7] - Basic earnings per share for the first half of 2022 were RMB 0.42, a decline of 77.9% from RMB 1.90 in the previous year[7] - Gross profit fell by approximately 42.1% to RMB 81.9 million, with a gross margin decline from 28.0% to 19.0% due to decreased demand and increased transportation and procurement costs[30] - The group’s profit before tax for the six months ended June 30, 2022, was RMB 13,535,000, a decrease of 77.9% compared to RMB 61,240,000 for the same period in 2021[131] - Total comprehensive income for the period was RMB 14,989,000, compared to RMB 55,516,000 in 2021, reflecting a significant decrease[87] Cash Flow and Liquidity - Operating cash flow for the period was RMB (13.7) million, an improvement of 91.2% compared to RMB (155.6) million in the first half of 2021[7] - The net cash flow from operating activities for the six months ended June 30, 2022, was RMB (13,690) thousand, a significant improvement from RMB (155,570) thousand in the same period last year[101] - Cash and cash equivalents decreased to RMB 866,532,000 from RMB 998,897,000, showing a reduction in liquidity[94] - The company’s financing activities generated a net cash inflow of RMB 27,847 thousand for the six months ended June 30, 2022[100] Market and Product Development - The company focused on stabilizing product quality and expanding new products in the collagen casing industry during the reporting period[14] - The company has obtained production licenses for new collagen products, including collagen oat milk, and is preparing for large-scale production[1] - The company is expanding its market presence by establishing partnerships with leading manufacturers in South America, Southeast Asia, and the United States[24] - The company aims to enhance production capacity by improving the production line for high-grade natural casings and increasing the sales proportion of new products[56] - In the collagen food sector, the company will enhance equipment and facilities for mass production of products like collagen oatmeal and rice noodles, while also adjusting marketing strategies[57] Challenges and Economic Environment - The domestic market faced challenges due to ongoing COVID-19 restrictions, impacting demand for collagen casings[13] - Revenue decreased by approximately 14.9% to RMB 430.8 million from RMB 506 million in the previous period, primarily due to the impact of COVID-19 and related government control measures[27] - The overall economic environment in China showed signs of recovery, with GDP growth of 2.5% in the first half of 2022[10] Shareholder and Governance - The company has a stock option plan in place to attract and retain qualified personnel, with a total of 323,048,000 shares available for issuance under the plan, representing 10% of the issued shares[61] - The company is committed to maintaining effective communication with shareholders and ensuring their opinions are conveyed to the board[78] - The chairman and CEO roles are separated to ensure effective governance and oversight of the company's operations[76] Expenses and Liabilities - Sales and distribution expenses decreased by approximately 5.4% to RMB 13.9 million, with the ratio of these expenses to revenue increasing from 2.9% to 3.2%[32] - Administrative expenses decreased by approximately 6.1% to RMB 73.2 million, impacted by foreign exchange losses of approximately RMB 6.6 million due to currency depreciation[33] - Current liabilities increased to RMB 821,198,000 from RMB 618,021,000 in the previous year, indicating a rise in short-term financial obligations[93] Research and Development - The company completed several R&D and technical improvement projects aimed at increasing production capacity without expanding facilities[14] - The company is advancing research on medical collagen products to improve purity, activity, and reduce costs, with clinical trials for collagen bone filling materials expected to progress[57] Employee and Management - The company employed approximately 2,690 contract employees, with total employee compensation and benefits amounting to approximately RMB 93,200,000[53] - The total remuneration for key management personnel was RMB 3,731,000 in the first half of 2022, compared to RMB 3,172,000 in 2021, reflecting an increase of 17.6%[152]

Financial Performance - Revenue for the year ended December 31, 2021, was RMB 1,168.1 million, representing a 21.5% increase from RMB 961.6 million in 2020[11]. - Profit attributable to owners of the company was RMB 122.7 million, up 35.1% from RMB 90.8 million in the previous year[11]. - Basic earnings per share increased to RMB 3.8, a rise of 35.7% compared to RMB 2.8 in 2020[11]. - The company reported a net cash flow from operating activities of RMB 179.7 million, down 59.4% from RMB 443.1 million in the previous year[11]. - Total assets increased by 5.8% to RMB 3,312.1 million from RMB 3,130.2 million in 2020[11]. - Gross profit increased by approximately 29.9% from RMB 239 million to RMB 310.5 million, with gross margin rising from 24.9% to 26.6%[41]. - Other income and gains decreased by approximately 24.2% from about RMB 70,600,000 to about RMB 53,600,000, primarily due to a reduction in government subsidies received[42]. - Selling and distribution expenses increased by approximately 12.0% from about RMB 32,700,000 to about RMB 36,600,000, while the ratio of these expenses to revenue decreased from approximately 3.4% to about 3.1%[43]. - Administrative expenses decreased by approximately 3.7% from about RMB 163,700,000 to about RMB 157,700,000, with related losses from the elimination of inefficient production equipment recorded[44]. - Financing costs increased by approximately 114.0% from about RMB 2,500,000 to about RMB 5,300,000, mainly due to increased bank borrowings[45]. Operational Efficiency - Inventory turnover days for raw materials decreased slightly to 37.4 days from 38.0 days[11]. - Finished goods and work-in-progress inventory turnover days improved significantly to 159.6 days, down 37.7 days from 197.3 days[11]. - Accounts receivable turnover days decreased to 56.0 days, down 28.2 days from 84.2 days in the previous year[11]. - Accounts payable turnover days improved to 87.1 days, a reduction of 31.4 days from 118.5 days[11]. - The company has accelerated the automation of its machinery to improve production efficiency and has implemented strict quality control measures to ensure product stability[23]. Product Development and Market Position - In 2021, the company achieved significant progress in new product development, including collagen casings with diameters ranging from 10mm to 50mm, leading to a substantial increase in sales volume and revenue, reaching a five-year high[25]. - The company's main product, collagen casings, maintained its leading position in the domestic market despite challenges from the global pandemic and rising raw material prices, contributing to a recovery in economic benefits[16]. - The production and sales of new products, including high-end natural casing alternatives, have been well received by customers, further expanding the market presence[25]. - The company is actively developing new collagen products, including collagen rice noodles and collagen drinks, which have received positive consumer feedback[27]. - The company has established a strong customer network, providing high-quality collagen products to various well-known food suppliers in China and expanding into international markets[35]. Strategic Initiatives - The company established the Guangxi Shen Guan Collagen Protein Technology Research Institute and a joint R&D center with Huazhong University of Science and Technology to enhance innovation and support future product development[19]. - The company plans to focus on enhancing production capacity and promoting high-quality development across its three major industries in 2022, despite ongoing challenges from the pandemic and rising costs[20]. - The group aims to enhance production capacity and product quality in the collagen sausage casing industry, focusing on stabilizing product quality and addressing bottlenecks in production lines[65]. - The group plans to increase the sales proportion of new products, including high-end natural casing alternatives, to meet the changing demands of the meat sausage industry[65]. - The group is committed to advancing the development of the "Luxeena" product line in the collagen skincare sector, with plans to launch multiple new product series[66]. Economic Environment - The overall GDP of China reached RMB 114.4 trillion in 2021, growing by 8.1% year-on-year, which reflects a stable economic environment beneficial for the company's growth[22]. - The total retail sales of consumer goods in China reached RMB 44.1 trillion in 2021, growing by 12.5% compared to the previous year, which positively impacted the demand for collagen casings[22]. - The group anticipates continued economic growth in China, supported by stable macroeconomic policies and a focus on expanding domestic demand[62]. - The company recognizes the challenges posed by the ongoing COVID-19 pandemic and aims to navigate the complexities of the external environment while seizing market opportunities[62]. Governance and Management - The company has maintained a high level of board independence, with over one-third of board members being independent non-executive directors[74]. - The board has authorized senior management to oversee the group's management and administrative responsibilities, with significant transactions requiring board approval[74]. - The company has adopted a board diversity policy, with eight board members, including one female member[81]. - The company has established a risk management framework that includes a board, an audit committee, and a risk management team to oversee risk management and internal control systems[121]. - The company emphasizes continuous professional development for all directors, ensuring they are updated on regulatory changes and the company's strategic developments[91]. Shareholder Relations and Dividends - The company has adopted a dividend policy that allows for annual dividends to be paid to shareholders, subject to board approval and legal regulations, based on the group's profitability and operational stability[84]. - The company reported a proposed final dividend of HKD 0.02 per ordinary share and a special final dividend of HKD 0.04 per ordinary share, subject to shareholder approval[170]. - The board may also declare special dividends in addition to the annual dividends, considering factors such as actual and expected financial performance, retained earnings, and debt-to-equity ratio[84]. Ownership Structure - The board of directors includes key executives such as the chairperson and president, Ms. Zhou Yaxian, who holds a controlling interest of 69.89% in the company[193]. - The company has a complex ownership structure with multiple layers of control among its major shareholders[200]. - The total shares held by major shareholders indicate a strong concentration of ownership within a few entities[197].

Financial Performance - Revenue for the six months ended June 30, 2021, was RMB 506.0 million, representing a 39.0% increase compared to RMB 364.1 million in the same period of 2020[8]. - Profit attributable to owners of the company for the same period was RMB 61.2 million, a significant increase of 125.6% from RMB 27.1 million in 2020[8]. - Basic earnings per share for the first half of 2021 was RMB 1.9, up 126.2% from RMB 0.84 in the previous year[8]. - Gross profit rose by approximately 46.9% from RMB 96,300,000 to RMB 141,500,000, with gross margin improving from approximately 26.5% to 28.0%[30]. - Profit before tax increased to RMB 76,370 thousand, a 134% rise compared to RMB 32,506 thousand in the previous year[89]. - Net profit for the period was RMB 60,506 thousand, which is a 165% increase from RMB 22,825 thousand in the prior year[89]. - The total tax expense for the period was RMB 15,864,000, an increase of 64.1% compared to RMB 9,681,000 in the previous year[121]. Assets and Liabilities - The total assets as of June 30, 2021, amounted to RMB 3,216.4 million, compared to RMB 3,130.2 million at the end of 2020[8]. - Total equity as of June 30, 2021, is RMB 2,582,953, a decrease from RMB 2,688,718 as of December 31, 2020, representing a decline of approximately 3.93%[95]. - Current liabilities increased to RMB 596,509 thousand from RMB 403,237 thousand at the end of the previous year[93]. - The company’s total liabilities decreased to RMB 1,193,474 as of June 30, 2021, from RMB 1,215,000 as of December 31, 2020, reflecting a decrease of approximately 1.77%[97]. - The company has maintained its issued share capital at RMB 27,807 as of June 30, 2021, consistent with the previous reporting period[97]. Market and Product Development - The company has focused on product diversification and quality improvement in collagen casings, leading to a significant increase in sales volume compared to the previous year[14]. - The company has actively expanded its market for collagen casings and initiated new product sales, enhancing production efficiency through automation[14]. - The company is committed to developing new products, with positive customer feedback on its newly developed high-grade natural casing products[14]. - The company launched new collagen products, including collagen rice noodles and beverages, which have begun initial market development and promotion[18]. - The group expects to continue expanding its market presence and product offerings in the edible collagen sector[108]. Operational Efficiency - Sales cost increased by approximately 36.1% from RMB 267,800,000 to RMB 364,500,000, with raw material costs rising by approximately 53.1% to RMB 162,700,000[29]. - Sales and distribution expenses increased by approximately 22.1% from RMB 12,100,000 to RMB 14,700,000, while the ratio of these expenses to revenue decreased from approximately 3.3% to 2.9%[34]. - The company has implemented strict management and supervision in food production to ensure product quality and safety during the pandemic[14]. Cash Flow and Financing - The net cash flow from operating activities for the six months ended June 30, 2021, was RMB (155,595), compared to RMB 109,305 for the same period in 2020, indicating a significant decrease in cash flow[99]. - Cash and cash equivalents at the end of June 30, 2021, amounted to RMB 183,792, down from RMB 315,281 at the end of June 30, 2020, reflecting a decrease of approximately 41.8%[101]. - New bank borrowings for the six months ended June 30, 2021, totaled RMB 426,235, an increase from RMB 154,878 in the same period of 2020, indicating a rise in financing activities[99]. - Total bank borrowings increased by approximately RMB 277.7 million to RMB 426.1 million, with a debt-to-equity ratio of 16.6%[44]. Corporate Governance - The company has complied with all corporate governance codes as per the listing rules during the reporting period[78]. - The company is considering the feasibility of appointing a separate CEO to enhance governance structure[78]. - The audit committee reviewed the interim results and confirmed adherence to the relevant accounting standards[82]. Shareholder Information - As of June 30, 2021, the major shareholder, Ms. Zhou, holds 2,257,628,000 shares, representing 69.89% of the issued share capital[69]. - The company’s major shareholder, Fortune Holdings, owns 1,936,434,000 shares, which is 59.94% of the issued share capital[74]. - The company has a total of 3,230,480,000 issued shares, unchanged from the previous year[135].

Financial Performance - Total revenue for the year ended December 31, 2020, was RMB 961.6 million, a decrease of 3.6% compared to RMB 997.5 million in 2019[15] - Profit attributable to owners of the company increased by 20.3% to RMB 90.8 million from RMB 75.4 million in the previous year[15] - Basic earnings per share rose by 21.7% to RMB 2.8 from RMB 2.3 in 2019[15] - Net cash flow from operating activities increased by 39.4% to RMB 447.7 million, up from RMB 321.1 million in 2019[15] - Total assets increased by 1.5% to RMB 3,130.2 million from RMB 3,083.5 million in 2019[15] - Revenue decreased by approximately 3.6% from RMB 997.5 million to RMB 961.6 million due to the impact of COVID-19[49] - Gross profit increased by approximately 3.0% from RMB 232.2 million to RMB 239.0 million, with gross margin rising from 23.3% to 24.9%[51] - Other income and gains rose by approximately 17.7% from RMB 60.0 million to RMB 70.6 million, including government subsidies of RMB 30.6 million[52] - Selling and distribution expenses decreased by about 7.8% from RMB 35.4 million to RMB 32.7 million, representing 3.4% of revenue[53] - Administrative expenses decreased by approximately 2.1% from RMB 167.3 million to RMB 163.7 million, with charitable donations increasing to RMB 8.8 million[56] - Financing costs increased by approximately 48.6% from RMB 1.7 million to RMB 2.5 million due to increased bank borrowings[57] - Income tax expense for the year was approximately RMB 21.7 million, compared to RMB 17.3 million in the previous year[59] Product Development and Market Expansion - The company maintained its leading position in the domestic collagen casing market while expanding into collagen food, skincare products, and medical devices[21] - The company has launched new collagen products, including collagen rice noodles, drinks, and beef collagen ingredients, which have received consumer recognition during initial market development[24] - The company plans to continue diversifying its product offerings in line with national industrial policies and local development plans[20] - Revenue from new products, including collagen food, skincare products, and medical collagen, showed significant growth compared to last year, indicating successful market development[36] - The company aims to expand its collagen product lines, including medical collagen and skincare products, with plans for new product launches and increased marketing efforts[46] - The company is focusing on developing high-end collagen casings to solidify its leading position in the domestic market and has completed batch production of a new product that serves as a substitute for traditional pig casings[25] - The company is implementing a diversified development strategy, with significant investments in new products and technologies during the 13th Five-Year Plan period, laying a solid foundation for the 14th Five-Year Plan[29] - The company has made substantial progress in new product development, with collagen rice noodles, drinks, and beef collagen ingredients entering the market, and new beef tendon products in trial sales[40] Corporate Governance and Management - The board of directors consists of eight members, including four executive directors, one non-executive director, and three independent non-executive directors[85] - The company recognizes the importance of high corporate governance standards to enhance performance and transparency[83] - The chairman and CEO roles are separated, with the chairman overseeing the overall operations of the group[92] - The company has established a nomination committee to identify and recommend qualified candidates for the board of directors since September 19, 2009[93] - The board diversity policy has been adopted to enhance operational quality by ensuring a balance of skills, experience, and perspectives among board members[98] - The audit committee was established on September 19, 2009, to oversee the appointment and independence of external auditors and review financial reporting integrity[113] - The audit committee consists of three independent non-executive directors, with Mr. Xu Rongguo serving as the chairman, possessing professional accounting qualifications[113] - The company has established a risk management framework involving the board of directors, audit committee, and risk management team to oversee risk management and internal control systems[136] - The company emphasizes maintaining open communication with investors through various channels, including seminars with media, analysts, and fund managers[141] Financial Position and Investments - As of December 31, 2020, cash and cash equivalents, along with pledged deposits and time deposits, amounted to approximately RMB 1,176,900,000, an increase of approximately RMB 262,800,000 from the end of 2019[63] - Total bank borrowings as of December 31, 2020, were approximately RMB 148,400,000, an increase of approximately RMB 58,800,000 from the previous year[63] - Net cash position as of December 31, 2020, was approximately RMB 1,028,500,000, an increase of approximately RMB 204,000,000 from the end of 2019[64] - Capital expenditures for the year were approximately RMB 80,400,000, primarily for the acquisition of properties, plants, and equipment[69] - Estimated capital expenditures for 2021 are approximately RMB 100,000,000, aimed at upgrading production facilities and expanding new business operations[69] Risk Factors and Compliance - The company faces risks related to the stability and sufficiency of raw material supply, which can impact production volume and costs[175] - Domestic demand fluctuations in China could adversely affect the company's performance and profitability, as sales in China account for a significant portion of total revenue[176] - The company is subject to various legal regulations, including the Food Safety Law of the People's Republic of China, which significantly impacts its operations[179] - The company has established internal rules and procedures to ensure compliance with applicable laws and regulations in its operations[179] Social Responsibility and Community Engagement - The company made charitable donations totaling RMB 8,800,000 during the year[187] - The company emphasizes the importance of human resources for long-term business success and development, ensuring employee compensation is market-competitive[180] - The company maintains close relationships with customers and suppliers, actively seeking feedback and suggestions through various channels[180]

Financial Performance - Revenue for the first half of 2020 was RMB 364.1 million, a decrease of 5.9% compared to RMB 386.8 million in the same period of 2019[10]. - Profit attributable to owners of the company was RMB 27.1 million, down 13.5% from RMB 31.4 million year-on-year[10]. - Basic earnings per share decreased to RMB 0.84, a decline of 13.4% from RMB 0.97 in the previous year[10]. - The group's revenue decreased by approximately 5.9% from RMB 386.8 million in the previous period to RMB 364.1 million in the current period, impacted by delays in customer operations due to the COVID-19 pandemic[29]. - Gross profit decreased by approximately 6.0% from RMB 102.5 million in the previous period to RMB 96.3 million in the current period, maintaining a gross margin of 26.5%[31]. - Net profit for the period was RMB 22,825 thousand, a decrease of 15.3% compared to RMB 26,885 thousand in 2019[95]. - Total comprehensive income for the period was RMB 18,322 thousand, down 37.0% from RMB 29,097 thousand in 2019[95]. - Basic and diluted earnings per share were RMB 0.84, compared to RMB 0.97 in the previous year[100]. - The profit attributable to the company's owners decreased by approximately 13.5% from RMB 31,400,000 to RMB 27,100,000[41]. Cash Flow and Liquidity - Operating cash inflow increased by 4.4% to RMB 109.3 million, compared to RMB 104.7 million in the first half of 2019[10]. - Cash flow from operating activities was RMB 98,837,000, a decrease from RMB 109,611,000 in the previous year[114]. - The company reported a net decrease in cash and cash equivalents of RMB 58,346,000, contrasting with an increase of RMB 149,216,000 in the previous year[120]. - Cash and cash equivalents, along with pledged and fixed deposits, totaled approximately RMB 1,003,400,000, decreasing to RMB 897,400,000 after dividend payments[42]. - The company’s cash and bank balances were RMB 240,041,000, compared to RMB 154,358,000 in the previous year, indicating improved liquidity[120]. Expenses and Costs - Sales costs fell by about 5.8% from RMB 284.3 million in the previous period to RMB 267.8 million in the current period, with inventory provisions and write-offs included[30]. - Administrative expenses increased by approximately 13.6% from RMB 75,500,000 to RMB 85,700,000, with charitable donations of RMB 8,200,000 made during the period[35]. - Financing costs rose by approximately 238.1% from RMB 383,000 to RMB 1,300,000 due to increased bank borrowings[36]. - Sales and distribution expenses decreased by approximately 15.1% from RMB 14.2 million in the previous period to RMB 12.1 million in the current period, with the ratio to revenue declining from about 3.7% to 3.3%[34]. Assets and Liabilities - The total assets amounted to RMB 3,089.2 million, slightly up from RMB 3,083.5 million in the previous year[10]. - Total liabilities increased to RMB 471,532 thousand from RMB 252,779 thousand at the end of 2019[103]. - Total equity decreased to RMB 2,617,665 thousand from RMB 2,776,427 thousand at the end of 2019[107]. - Non-current assets totaled RMB 1,506,050 thousand as of June 30, 2020, down from RMB 1,612,749 thousand at the end of 2019[103]. Product Development and Market Strategy - The company plans to expand into the healthcare sector by accelerating the production of medical supplies and collagen-based products[13]. - New product development includes collagen food and skincare products, aiming to broaden the application of collagen in the health industry[13]. - The group has developed new collagen products, including collagen rice noodles and collagen beverages, which have begun initial market promotion through online platforms[18]. - The company aims to implement a product diversification strategy focusing on collagen-based food, health products, cosmetics, and medical materials, with an emphasis on quality and market stability[56]. - In the food sector, the company plans to expand production capacity for collagen rice noodles, collagen drinks, and bovine collagen ingredients, targeting significant revenue growth through enhanced advertising and sales strategies[58]. Governance and Compliance - The company has complied with all corporate governance codes as per the listing rules during the reporting period[84]. - The audit committee, consisting of three independent non-executive directors, reviewed the interim results and confirmed compliance with applicable accounting standards[88]. - The company is considering the feasibility of appointing a separate CEO to enhance governance structure[84]. - The chairman ensures effective communication with shareholders and oversees the board's operations[86]. Research and Development - The company is focusing on technological development in collagen products to achieve transformation and upgrade in the health industry[16]. - The company is committed to advancing research in medical collagen, aiming to obtain multiple production licenses for medical devices by the end of 2020 and seeking EU certifications for its medical collagen products[59]. Shareholder Information - The company holds a significant ownership structure, with a major shareholder controlling approximately 69.73% of the issued share capital[71]. - Ms. Zhou holds 65.45% equity in Fortune Limited through her complete ownership of Hong Kong Shen Guan Biotechnology Investment Limited and its subsidiary, Crown Sheng Limited[74]. - Datuk Sri Liu holds 20.84% equity in Fortune Limited through Wealthy Safe Management Limited, which owns 78,936,000 shares[74]. Other Income and Gains - Other income and gains increased by approximately 70.5% from RMB 21.9 million in the previous period to RMB 37.4 million in the current period, including government subsidies of RMB 16.3 million[33]. - Bank interest income increased to RMB 15,682 thousand from RMB 12,194 thousand in the previous year, reflecting a growth of 28.5%[136]. - The group generated other income and gains of RMB 16,280 thousand from government grants, significantly up from RMB 2,622 thousand in 2019[136].

Financial Performance - Revenue for the year ended December 31, 2019, was RMB 997.5 million, representing an increase of 11.0% compared to RMB 899.0 million in 2018[10] - Profit attributable to owners of the company was RMB 75.4 million, a decrease of 6.0% from RMB 80.3 million in the previous year[10] - Basic earnings per share decreased by 8.0% to RMB 2.3 from RMB 2.5 in 2018[10] - The net cash flow from operating activities increased by 13.8% to RMB 321.1 million, up from RMB 282.1 million in 2018[10] - Total assets decreased by 1.1% to RMB 3,083.5 million from RMB 3,117.7 million in the previous year[10] - Cash and cash equivalents increased by approximately RMB 194.2 million to RMB 914.1 million as of December 31, 2019[50] - The company’s net cash position increased by approximately RMB 187.3 million to RMB 824.5 million as of December 31, 2019[50] - The income tax expense for the year was approximately RMB 17.3 million, down from RMB 24.9 million last year[48] - The company’s debt-to-equity ratio was 3.2% as of December 31, 2019, compared to 2.9% the previous year[50] - Administrative expenses decreased by approximately 17.4% from RMB 202.6 million to RMB 167.3 million this year[43] - Financing costs fell by about 52.7% from RMB 3.5 million to RMB 1.7 million this year[45] - Sales costs rose by approximately 30.5% from about RMB 586.5 million to approximately RMB 765.3 million, with raw material costs increasing by about 64.7% to approximately RMB 335.3 million[37] - Gross profit decreased by approximately 25.7% from about RMB 312.5 million to approximately RMB 232.2 million, resulting in a gross margin decline from about 34.8% to approximately 23.3%[40] Product Development and Diversification - The company plans to enhance the development of collagen protein products, health supplements, skincare products, and medical supplies to diversify its product offerings[15] - The company has made significant progress in product diversification, including the development of collagen rice noodles, collagen beverages, and bovine collagen ingredients[19] - The company is focusing on the development of collagen skincare products and has increased the variety of these products in response to market trends[19] - The company has completed the application materials for a collagen wound dressing as a Class III medical device, which is pending approval from the National Market Supervision Administration[19] - The company aims to accelerate its product diversification strategy in 2020, focusing on quality and market stability[20] - The company has entered the trial production phase for several new collagen food products, with some already on the market[26] - The company is committed to developing new products, including the "Luxeena" product line and the "Collagen Princess" new product, while accelerating the establishment and production of its Singapore base[66] - The company intends to obtain production permits for Class III collagen wound dressings and clinical trial approvals for high-activity collagen bone repair biomaterials within 2020[66] - The company will expand sales channels for medical collagen raw materials and Class I medical device products to generate economic benefits as soon as possible[66] Market Position and Competition - In 2019, the company maintained its leading position in the collagen casing market in China, despite challenges such as rising raw material prices and increased environmental regulations[22] - The company recognizes the impact of the COVID-19 pandemic on the Chinese economy but sees opportunities in the increasing demand for high-end collagen sausage casings as a substitute for expensive natural casings[62] - The company faces risks related to the stability and sufficiency of raw material supply, which can impact production volume and costs[153] - International competitors may establish production lines in China or reduce prices to penetrate the market, potentially affecting the company's pricing and profit margins[153] - The company has faced competition from substitutes like natural casings, which could adversely affect its business and profitability[153] Research and Development - The company has strengthened its research and development platform, hiring 12 high-level talents, including six PhDs and postdoctoral researchers, to enhance R&D capabilities[25] - The group has made substantial progress in the R&D of new products, with some products currently in trial production[28] - The group has received multiple patent approvals, with 81 patents granted and 16 pending approval from the China National Intellectual Property Administration[30] - The company has invested $5 million in R&D for new technologies aimed at improving production efficiency[140] Corporate Governance and Shareholder Engagement - The company has established a nomination committee to identify and recommend qualified candidates for the board, ensuring diversity in skills, experience, and perspectives[79] - The board structure separates the roles of the chairperson and CEO, with the chairperson overseeing the group's overall operations[78] - Independent non-executive directors have confirmed their independence and have been in their roles for over nine years, ensuring unbiased judgment[19] - The company emphasizes the importance of continuous professional development for all directors[94] - The board believes that its current structure supports effective operations and communication with shareholders[78] - The company has adopted a dividend policy that allows for annual dividends if the group is profitable and the operating environment is stable, with special dividends also possible[85] - The board will consider various factors before recommending any dividends, including the company's actual and expected financial performance, retained earnings, and debt-to-equity ratio[87] - The company has established a clear policy for the appointment and remuneration of external auditors[97] - The audit committee held four meetings during the year, with full attendance from all members[100] - The company emphasizes the importance of maintaining effective communication with investors through various channels, including seminars with media, analysts, and fund managers[124] Social Responsibility and Community Engagement - The company is actively participating in social welfare initiatives, including educational support and poverty alleviation[24] - The group reported a total charitable donation of RMB 2,899,000 during the year[171] Future Outlook and Strategic Plans - The company has outlined potential future business developments in its annual report, indicating a proactive approach to growth[152] - The company plans to expand its market presence in Southeast Asia, targeting a 25% market share by 2025[138] - A strategic acquisition of a local competitor is in progress, which is anticipated to enhance production capacity by 40%[139] Shareholder Information - The company proposed a final dividend of HKD 0.02 per ordinary share and a special final dividend of HKD 0.04 per ordinary share, pending shareholder approval[159] - As of December 31, the company had distributable reserves totaling approximately HKD 210,525,000, with about HKD 193,829,000 recommended for the final dividend[168] - The company purchased 3,018,000 shares and canceled 4,098,000 shares during the year, with a total expenditure of HKD 1,364,840[165]

Financial Performance - Revenue for the six months ended June 30, 2019, was RMB 386.8 million, representing a 2.8% increase compared to RMB 376.2 million in the same period of 2018[14] - Profit attributable to owners of the company for the same period was RMB 31.4 million, a decrease of 15.7% from RMB 37.2 million in 2018[14] - Basic earnings per share for the first half of 2019 was RMB 0.97, down 14.9% from RMB 1.14 in the previous year[14] - Gross profit decreased by approximately 25.7% to about RMB 102,500,000, resulting in a gross margin decline from approximately 36.7% to about 26.5%[37] - Profit before tax decreased to RMB 32.448 million, a decline of 21.8% from RMB 41.522 million in the previous year[106] - Net profit for the period was RMB 26.885 million, representing a decrease of 17.2% compared to RMB 32.722 million in 2018[108] - Total comprehensive income for the period was RMB 29.097 million, down 9.4% from RMB 32.177 million in the same period last year[111] Cash Flow and Assets - Operating cash inflow for the six months was RMB 104.7 million, a decline of 9.2% from RMB 115.2 million in the same period last year[14] - Total assets as of June 30, 2019, amounted to RMB 3,012.3 million, compared to RMB 3,117.7 million at the end of the previous fiscal year[14] - Cash and cash equivalents increased by approximately RMB 5,500,000 to about RMB 725,400,000 as of June 30, 2019[48] - Total bank borrowings increased by approximately RMB 5,300,000 to about RMB 88,000,000, with a debt-to-equity ratio of 3.2%[50] - Current liabilities decreased to RMB 209.705 million from RMB 236.899 million at the end of 2018, indicating improved liquidity[118] - Non-current assets totaled RMB 1.610 billion, down from RMB 1.627 billion at the end of 2018[118] Operational Developments - The company plans to expand into collagen food, skincare products, and medical supplies, aiming to enhance its presence in the health and strategic emerging industries[17] - The company is focusing on the development of collagen technology and aims to upgrade the collagen industry while promoting its application in the health sector[20] - The group has developed new collagen products, including collagen rice noodles and solid/liquid collagen beverages, which have entered trial production and some are already on the market[22] - The group is actively developing new medical collagen products, including low endotoxin sterile medical-grade collagen and hydrophilic wound dressings[23] - The group has made significant progress in the development of collagen skincare products, with several new products in trial production[22] Cost Management - Sales cost increased by approximately 19.3% to about RMB 284,300,000, with raw material costs rising by about 34.1% to approximately RMB 109,400,000[36] - The company has been actively negotiating with raw material suppliers to manage rising costs, which have seen some reduction since the second quarter of 2019[19] - Financing costs decreased by approximately 86.3% to about RMB 383,000, following the repayment of most RMB-denominated loans[42] Shareholder Information - As of June 30, 2019, Ms. Zhou holds 2,241,006,000 shares, representing 69.37% of the company's equity[75] - The company has a significant shareholder, Futong, with 1,936,434,000 shares, accounting for 59.94% of the issued share capital[83] - The company has no plans to declare an interim dividend for the period due to anticipated capital expenditures and market expansion needs[68] Corporate Governance - The company has adopted the standard code of conduct for securities trading as per the listing rules[91] - The company has complied with all corporate governance code provisions during the reporting period[86] - The board of directors meets regularly to discuss significant operational matters affecting the group[87] Market Strategy - The group aims to accelerate the implementation of its product diversification strategy, focusing on the development of new products centered around collagen, targeting the health industry, which is projected to exceed RMB 16 trillion by 2030, three times the current market size[62] - The group plans to enhance product quality and market share while seeking overseas cooperation opportunities, with a focus on stabilizing its leading position in the collagen casing market[64] - The group will continue to develop collagen skincare products and improve product variety, ensuring alignment with contemporary societal demands[65] Taxation - The total tax expense for the period was RMB 5,563,000, compared to RMB 8,800,000 in the previous year[187] - The current tax expense in China decreased to RMB 6,836,000 from RMB 13,093,000 year-on-year[190] - The company continues to comply with the preferential corporate income tax rate of 15% for its subsidiary in Guangxi, China[188]

Financial Performance - Revenue for the year ended December 31, 2018, was RMB 899.0 million, a decrease of 10.8% from RMB 1,008.0 million in 2017[10] - Profit attributable to owners of the company increased by 16.7% to RMB 80.3 million, compared to RMB 68.8 million in the previous year[10] - Basic earnings per share rose by 19.0% to RMB 2.5, up from RMB 2.1 in 2017[10] - Net cash flow from operating activities decreased by 33.2% to RMB 282.1 million, down from RMB 422.4 million[10] - Total assets decreased by 5.4% to RMB 3,117.7 million, compared to RMB 3,294.0 million in 2017[10] - Gross profit increased by approximately 29.9% from RMB 240,700,000 to RMB 312,500,000, with gross margin rising from 23.9% to 34.8% due to higher average selling prices and lower sales costs[45] - Other income and gains rose by about 5.4% from RMB 34,900,000 to RMB 36,800,000, with foreign exchange gains of approximately RMB 3,700,000 recorded this year[47] - Selling and distribution expenses decreased by approximately 9.0% from RMB 43,600,000 to RMB 39,700,000, while the ratio of these expenses to revenue increased from 4.3% to 4.4%[48] - Administrative expenses increased by approximately 28.2% from RMB 158,100,000 to RMB 202,600,000, influenced by losses from the sale of aging equipment and amortization of intangible assets from the acquisition of Guangdong Shengchi[49] - Financing costs decreased significantly by approximately 59.4% from RMB 8,700,000 to RMB 3,500,000[54] - The company's attributable profit increased by approximately 16.7% from RMB 68,800,000 to RMB 80,300,000, with total selling and distribution expenses and administrative expenses for new product expansions amounting to RMB 15,700,000 and RMB 35,200,000 respectively[58] - As of December 31, 2018, cash and cash equivalents totaled approximately RMB 719,900,000, an increase of about RMB 48,700,000 from the previous year[59] - The company reported a loss of approximately HKD 5,910,000 for the year[181] - As of December 31, 2018, the company had distributable reserves totaling approximately HKD 334,617,000, with HKD 116,297,000 proposed for the final dividend[181] Market and Product Development - The company focused on expanding collagen technology applications and product diversification in the health industry[16] - The sales revenue of collagen casings decreased compared to the previous year due to slow growth in the domestic meat industry and market competition, as well as the impact of African swine fever[19] - The company has made progress in product diversification, with new collagen products such as collagen rice noodles, beef collagen ingredients, and collagen solid and liquid beverages entering trial production[23] - The company is actively developing 21 new products in the health supplement sector, including new nutrient soft capsules for pregnant women and iron supplements[23] - The average selling price of collagen casings increased despite a decrease in sales volume, due to a shift towards shorter shelf-life products and reduced discount promotions[28] - The company aims to stabilize and enhance product quality while expanding into new markets, focusing on collagen food, skincare, and medical products[25] - The company aims to accelerate product diversification, focusing on developing new products centered around collagen, including food, health products, cosmetics, pharmaceuticals, and medical materials[68] - The company plans to enhance the production and marketing of collagen rice noodles and accelerate the research and development of solid and liquid collagen beverages, aiming for new product launches[74] - The company is targeting to obtain clinical trial approval for high-activity collagen-based bone repair biomaterials within 2019 and aims to enhance sales of medical collagen raw materials and semi-finished products[75] - The company is actively developing new collagen-based medical materials, with high-activity collagen bone repair biomaterials entering the product technical index testing phase[33] Operational Efficiency - Inventory turnover days for raw materials increased by 4.3 days to 29.2 days, while finished goods and work-in-progress increased by 37.6 days to 338.4 days[10] - Accounts receivable turnover days increased by 15.5 days to 107.7 days, while accounts payable turnover days decreased by 40.9 days to 112.8 days[10] - The company is focusing on automation and intelligent upgrades of machinery to improve production efficiency and operational quality[31] - The company has successfully reduced raw material procurement prices through bulk purchasing, enhancing future product competitiveness[37] - The company is implementing new operational strategies aimed at improving efficiency, which is expected to reduce costs by D%[157] Governance and Compliance - The board held six meetings and five written resolutions this year, with attendance rates for individual directors ranging from 50% to 100%[85] - The company has adopted a board diversity policy to enhance operational quality, considering factors such as gender, age, and professional experience in board member selection[93] - The company has a dividend policy that allows for annual dividends and special dividends, contingent on profitability and stable operating conditions[95] - Any proposed final dividend must be approved by shareholders at the annual general meeting and cannot exceed the amount recommended by the board[99] - The board will regularly review the dividend policy and submit necessary amendments for approval[100] - Independent non-executive directors have confirmed their independence and are deemed to have integrity and independent judgment[86] - The company has not appointed a CEO, with daily operations managed by executive directors and department heads[89] - The nomination committee is responsible for identifying qualified candidates for the board, focusing on character, qualifications, and experience[90] - The company is considering the feasibility of appointing a CEO in the future[89] - The company adopted the standard code of conduct for securities trading as per the listing rules, ensuring compliance among all directors and senior management[101] - The board has proposed to enhance compliance measures and internal monitoring procedures to prevent future violations, including regular training for directors and management[102] - The audit committee held three meetings this year, with full attendance from its members[113] - The total fees paid to auditors for both audit and non-audit services amounted to RMB 2,723,000, with RMB 2,098,000 for audit services and RMB 625,000 for non-audit services[115] - The nomination committee held one meeting this year, reviewing the board's structure and diversity policies[119] - The company is committed to providing ongoing professional development for all directors to ensure they understand their responsibilities under applicable laws and regulations[106] - The board confirmed the effectiveness and adequacy of the group's risk management and internal control systems during the annual review[130] - The company has established a risk management framework involving the board, audit committee, and risk management team to effectively manage business risks[129] Shareholder Relations - The company emphasizes strong investor relations and communication through various channels, including seminars with media, analysts, and fund managers[133] - The financial director is responsible for preparing financial statements in accordance with Hong Kong accounting principles and ensuring compliance with relevant laws and regulations[126] - The company secretary ensures compliance with legal and regulatory requirements and facilitates communication between the board and shareholders[127] - The company has a clear policy for handling and disclosing inside information in accordance with the Securities and Futures Ordinance and Listing Rules[131] - The 2018 Annual General Meeting was held on May 23, 2018, with a board attendance rate of 6 out of 8 directors present[134] - The company emphasizes the importance of continuous dialogue with shareholders, particularly through annual general meetings[136] - The next annual general meeting is scheduled for May 22, 2019, indicating ongoing commitment to investor communication[137] - The company maintains a policy of timely updates to investors regarding business performance, adhering to regulatory requirements[137] - The company has established procedures for shareholders to submit inquiries and proposals to the board[139] - The company is committed to protecting shareholder interests and ensuring effective communication of relevant information[136] Human Resources - The total employee compensation and benefits expense for the year was approximately RMB 176.3 million, down from RMB 206.5 million in the previous year, with around 2,550 contract employees as of December 31, 2018[71] - The company recognizes the importance of human resources for long-term success and is dedicated to providing competitive compensation and ongoing training for employees[169] - The company will implement competitive compensation packages to attract and retain talent, ensuring smooth business operations amid ongoing expansion[71] - The remuneration of directors is determined based on their responsibilities, performance, and the company's performance[192] Share Repurchase and Dividends - The board proposed a final dividend of HKD 0.02 per ordinary share and a special final dividend of HKD 0.016 per ordinary share, pending shareholder approval[170] - The company repurchased a total of 5,716,000 shares in September 2018 at a price range of HKD 0.3900 to HKD 0.4050, totaling HKD 2,288,130[177] - In October 2018, the company repurchased 8,194,000 shares, with a total expenditure of HKD 3,287,960 at prices ranging from HKD 0.3900 to HKD 0.4100[177] - The company also repurchased 6,544,000 shares in November 2018, spending HKD 2,770,940 at prices between HKD 0.4000 and HKD 0.4400[177] - The company aims to enhance shareholder value by increasing net asset value per share and earnings per share through share repurchases[178]