Financial Performance - The company's revenue for 2022 was HKD 2.162 billion, with a net loss attributable to equity holders of HKD 15 million. The loss from main business operations was HKD 34 million, a significant reduction of 91.8% year-on-year[26] - Revenue for 2022 was HKD 2.162 billion, a significant decrease from HKD 8.440 billion in 2021, primarily due to the exclusion of subsidiaries from consolidation and a one-time gain of HKD 3.491 billion recognized in 2021[61] - Net loss attributable to equity holders in 2022 was HKD 15 million, compared to a net profit of HKD 3.060 billion in 2021, with a core business loss of HKD 34 million[61] - The group's overall gross profit decreased from HKD 398 million in 2021 to HKD 113 million in 2022, but the gross margin improved by 0.5 percentage points to 5.2% due to a focus on higher-margin products[65] - The group's operating profit for 2022 was HKD 18 million, a significant decrease from HKD 3.076 billion in 2021, primarily due to the absence of a one-time gain from the exclusion of subsidiaries from consolidation[94] Debt and Liabilities - The company's outstanding bank loans as of December 31, 2022, were HKD 484 million, a decrease of HKD 60 million compared to HKD 544 million on December 31, 2021. HKD 453 million of the bank loans are due within one year[6] - The company's equity attributable to shareholders was a loss of approximately HKD 543 million as of December 31, 2022, making it unsuitable to calculate the capital-to-debt ratio[19] - The group's total assets decreased by HKD 130 million to HKD 1.177 billion, while total liabilities decreased by HKD 105 million to HKD 1.672 billion as of December 31, 2022[75] - The company's net current liabilities were HKD 1.038 billion as of December 31, 2022, compared to HKD 1.193 billion in the previous year[106] - Current bank borrowings amounted to HKD 453 million as of December 31, 2022, down from HKD 544 million in the previous year[106] - The group is in discussions with banks to resolve litigation related to HKD 443 million in overdue bank loans as of December 31, 2022[80] - Accounts receivable of approximately HKD 12 million were used as collateral for bank loans totaling HKD 41 million as of December 31, 2022[104] Cash Flow and Capital Expenditures - The group's cash and cash equivalents decreased by HKD 47 million to HKD 33 million as of December 31, 2022, with 79% denominated in RMB and 15% in USD[71] - Cash and cash equivalents stood at approximately HKD 33 million as of December 31, 2022, a decrease from HKD 80 million in the previous year[106] - Capital expenditures for 2022 were HKD 5 million, significantly lower than the HKD 148 million spent in 2021[73] - The group plans to allocate approximately RMB 15 million for capital expenditures in 2023, primarily for ongoing construction projects, factory maintenance, and equipment updates[78] - No significant investments or acquisitions of capital assets were made during the year, and no such plans exist as of the reporting date[105] Business Operations and Strategy - The company's restructuring plan was approved at a creditors' meeting on January 28, 2022, and officially entered the implementation phase, focusing on the production and operation of the "Ha Lian" brand products[29] - The company's restructuring plan was approved by creditors and the Nanjing Intermediate People's Court on January 28, 2022, leading to improved operating performance[38] - The company plans to continue implementing its restructuring plan to improve debt structure and enhance profitability, aiming for a new development phase[49] - In 2023, the company plans to expand its product range, including Chinese-style marinated products, European-style sausages, local specialties, and pre-made dishes, while upgrading the operational model of its "Ha Da Zhong" hot marinated fresh smoked new model chain stores[31] - The company plans to implement operational strategies to improve profitability, control costs, and generate sufficient operating cash flow[106] - The Board believes the company has sufficient financial resources to support its operations and meet financial obligations for the next 12 months[106] Product and Market Performance - The average purchase price of live pigs in 2022 decreased by approximately 30.4% compared to 2021, and the slaughter volume decreased to approximately 620,000 heads (2021: 1.64 million heads) due to changes in the scope of consolidation[15] - The gross profit margin for low-temperature meat products increased by 0.4 percentage points to 18.0%, while the gross profit margin for high-temperature meat products decreased by 1.3 percentage points to 18.8%. The overall gross profit margin for downstream products increased slightly by 0.1 percentage points to 18.4%[16] - The upstream business revenue decreased to HKD 1.670 billion in 2022 from HKD 6.810 billion in 2021, with chilled meat accounting for 68% of total revenue and 88% of upstream revenue[62] - Low-temperature meat products generated revenue of HKD 285 million, accounting for 57% of the deep-processed business revenue, while high-temperature meat products contributed HKD 211 million, representing 10% of the group's total revenue and 43% of the deep-processed business revenue[65] - The company's "Ha Rou Lian" brand, established in 1913, focuses on low-temperature meat products, with key products including Harbin red sausage, canned meat, and marinated products[46] - The company's "Ha Rou Lian" brand has received numerous awards and certifications, including ISO9001, ISO14001, OHSAS18001, and ISO22000, reflecting strong market recognition[40] - The company's subsidiary, Harbin Dazhong Rou Lian Food Co., Ltd., was recognized as a "China 3.15 Integrity Enterprise" in 2022, highlighting its commitment to product quality[57] Industry and Economic Context - The national pig inventory at the end of 2022 was 452.56 million heads, a year-on-year increase of 0.7%, while pig slaughter reached 699.95 million heads, up 4.3% year-on-year[45] - China's GDP in 2022 was RMB 121.0207 trillion, a 3.0% increase from the previous year, with the CPI rising by 2.0% and catering revenue declining by 6.3% to RMB 4.3941 trillion[54] - The annual production capacity of the group's upstream slaughtering and downstream deep-processed meat products businesses remained consistent at approximately 3.35 million heads and 56,000 tons, respectively, as of December 31, 2022[64] Cost Management and Efficiency - Operating expenses decreased to HKD 121 million, representing 5.6% of the group's revenue, down from HKD 836 million (9.9% of revenue) in 2021, primarily due to cost control measures and changes in consolidation scope[67] - The company has implemented a management mechanism to negotiate with at least three or more suppliers for the supply of live pigs, raw meat, or other key raw materials, ensuring a reasonable procurement ratio from each supplier[164] - The company has established safety stock for different raw materials based on sales market forecasts to handle emergencies[182] - The company's average procurement price for live pigs in 2022 fluctuated between RMB 11.9 to RMB 26.7 per kilogram[184] - The company has formulated different strategies for upstream and downstream businesses to mitigate cost pressures from raw material price fluctuations[166] Risk Management and Compliance - The company maintains a risk management and internal control system to manage risks and provide reasonable assurance against material misstatements or losses[160] - The company has adopted a cautious strategy for new product development and promotion, involving small-scale trials, medium-scale trials, and production stages[167] - The company has diversified its market penetration across different regions to reduce the impact of economic fluctuations and reliance on specific markets[163] - The company has signed cooperation agreements with suppliers that include clauses ensuring stable supply and quality safety[164] - The company regularly visits supplier production sites to assess the quality and supply capacity of raw materials[166] - The company continuously analyzes product sales and eliminates low-performing products while innovating and improving to maintain product quality[167] - The company's business is susceptible to fluctuations in raw material prices, particularly live pigs and raw meat, which may impact profitability if cost increases cannot be fully passed on to consumers[184] - Strategic raw material reserves to control costs and gain time for price adjustments in the sales market, potentially leading to decreased demand for the company's products[185] - Dependence on understanding and adapting to changing consumer tastes and dietary habits for sustained success in the deep-processed meat products market[185] - Significant costs associated with developing and marketing new products or expanding existing production lines, with no guarantee of market acceptance, sales, or profit[185] - Requirement for multiple licenses and permits to operate, including slaughter permits for fresh and frozen meat production facilities and industrial product production permits for deep-processed meat products facilities[187] - Regular inspections by regulatory authorities to ensure compliance with applicable hygiene and food safety standards, with potential business disruptions if inspections are failed or licenses are not renewed[187] - Impact of financial risks including market, liquidity, and credit risks on the company's financial condition, operating performance, and business[188] - Potential adverse effects on the company's business and revenue due to the impact of COVID-19 on retail markets and the possibility of severe animal diseases such as African swine fever[192] - Enhanced disease monitoring by the company's pig procurement and quality management departments to increase inspection and quarantine in areas with outbreaks and reduce or stop purchases from affected regions[193] - Implementation of a nationwide production base network for local procurement, production, and sales, with temperature-controlled delivery vehicles equipped with GPS and temperature monitoring systems[198] - Internal audit department's role in identifying major risk areas and establishing appropriate monitoring measures and management strategies to reduce overall business and operational risks[199] Corporate Governance and Human Resources - The Board consists of five members, including two executive directors and three independent non-executive directors[116] - The Board of Directors is responsible for approving and overseeing the group's overall strategy, annual budget, and business plans[138] - The company has purchased appropriate insurance for directors and executives to cover liabilities arising from the group's business, with annual reviews of the coverage[145] - The Board of Directors includes five members, with three being independent non-executive directors, ensuring diversity in gender, age, education, and professional experience[158] - The company employed approximately 1,400 employees in mainland China and Hong Kong as of December 31, 2022, compared to 1,500 employees in the previous year[133] - Total employee costs for the year amounted to HKD 106 million, accounting for 4.9% of the group's revenue, consistent with the previous year's percentage[133] - The company provides competitive compensation and benefits, including performance-based bonuses and employee stock option plans[109] - The company is committed to environmental protection and aims to improve measures to reduce waste generation in the future[134]

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的內容概不負責， 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 何部分內容而產生或因依賴該等內容而引致的任何損失承擔任何責任。 CHINA YURUN FOOD GROUP LIMITED * 中 國 雨 潤 食 品 集 團 有 限 公 司 （於百慕達註冊成立之有限公司） （股份代號：1068） 截至二零二二年十二月三十一日止財政年度 全年業績公佈 業績摘要 中國雨潤食品集團有限公司（「雨潤食品」或「本公司」）董事會（「董事會」）公佈本 公司及其附屬公司（統稱「本集團」）截至二零二二年十二月三十一日止年度（「回顧 年度」）之綜合業績，連同二零二一年相對期間之比較數字如下： ...

Revenue Performance - In the first half of 2022, the company's revenue from fresh meat sales was HKD 644 million, a decrease from HKD 5.276 billion in the same period of 2021, accounting for approximately 66% of total revenue before internal sales offset[16]. - The revenue from frozen meat products was HKD 145 million, down from HKD 1.091 billion in the first half of 2021, representing about 15% of total revenue before internal sales offset[16]. - The group's revenue for the first half of 2022 was HKD 979 million, a significant decrease from HKD 7.179 billion in the same period of 2021[20]. - Overall sales revenue from upstream operations decreased to HKD 722 million, down from HKD 5.856 billion in the previous year, with fresh meat accounting for approximately 66% of total revenue[22]. - Sales of deep-processed meat products were HKD 258 million, a decline from HKD 1.441 billion in the first half of 2021, with low-temperature meat products generating HKD 145 million[23]. - The group reported external revenue of HKD 721,459,000 for fresh and frozen meat, a significant decrease from HKD 5,765,205,000 in the previous year, representing a decline of approximately 87.5%[109]. - Processed meat products generated external revenue of HKD 258,007,000, down from HKD 1,413,427,000, indicating a decrease of about 81.8%[109]. - Total reported segment revenue for the group was HKD 979,630,000, compared to HKD 7,297,447,000 in the previous year, reflecting a decline of approximately 86.6%[111]. Financial Performance - The overall gross profit decreased from HKD 387 million in the first half of 2021 to HKD 66 million, while the overall gross margin improved to 6.8% from 5.4% year-on-year[24]. - Operating expenses for the period were HKD 62 million, down from HKD 638 million in the previous year, representing 6.4% of total revenue[29]. - The group's operating profit was approximately HKD 9 million, a significant drop from HKD 3.308 billion in the same period of 2021[30]. - The loss attributable to equity holders was approximately HKD 11 million, compared to a profit of HKD 3.288 billion in the first half of 2021[33]. - The group reported a net loss attributable to equity holders of approximately HKD 540 million as of June 30, 2022[42]. - The group recorded a reported segment loss of HKD 16,391,000, a significant improvement from a loss of HKD 166,725,000 in the previous year[109]. - The net loss attributable to equity holders for the period was HKD 16,135,000, compared to a profit of HKD 3,286,680,000 in the prior year[83]. - Total comprehensive loss for the period was HKD 22,313,000, compared to a comprehensive income of HKD 2,967,742,000 in the same period last year[83]. Operational Challenges - The average price of live pigs in China dropped by approximately 44% in the first half of 2022 due to increased supply, with pig production rising by 8.4% year-on-year to 366 million heads[7]. - The average procurement price of live pigs dropped by approximately 43.6% compared to the first half of 2021, with the slaughter volume decreasing to about 360,000 heads from 1.29 million heads[21]. - The company aims to improve its financial performance and profitability through a series of measures implemented since last year, despite ongoing impacts from African swine fever and COVID-19, resulting in a continuous reduction in losses[58]. - The company anticipates that the expected effects of its measures may be delayed by at least three to six months due to the stringent pandemic control policies affecting production and business activities[58]. - The group has acknowledged significant uncertainties regarding its ability to continue as a going concern if planned measures do not yield expected results[104]. Corporate Governance and Compliance - The company has maintained a high standard of corporate governance, with a board consisting of five directors and various committees overseeing financial and business strategies[74]. - The company has established a risk management and internal control system to safeguard its assets and manage business risks effectively[74]. - The board believes that having the chairman and CEO roles combined enhances business strategy formulation and execution[75]. - The company has confirmed compliance with the standard code of conduct for securities trading by all directors during the review period[77]. Shareholder Information - Major shareholders hold significant stakes, with Willie Holdings Limited and associated individuals collectively owning approximately 25.82% of the issued shares, totaling 470,699,900 shares[65]. - Willie Holdings Limited is primarily owned by Willie Holdings, with 93.41% held by former executive director and chairman Mr. Zhu and 6.59% by his spouse Ms. Wu[66]. - As of June 30, 2022, a total of 16,275,000 share options were granted under the old scheme, with 14,350,000 remaining unexercised[69]. - The new share option scheme was adopted on August 7, 2015, and no options have been granted under this scheme since its adoption[67]. Cash Flow and Liquidity - As of June 30, 2022, the group's cash and cash equivalents amounted to HKD 60 million, a decrease of HKD 20 million from HKD 80 million as of December 31, 2021[36]. - The group had outstanding bank borrowings of HKD 509 million as of June 30, 2022, down from HKD 544 million as of December 31, 2021[37]. - The company experienced a cash inflow from operating activities of HKD 11,990,000 for the six months ended June 30, 2022, compared to a cash outflow of HKD 13,006,000 in the same period of 2021[98]. - The company incurred a cash outflow of HKD 5,085,000 from investing activities for the six months ended June 30, 2022, compared to HKD 223,663,000 in the previous year[98]. - The company recorded a cash outflow of HKD 12,034,000 for the repayment of bank loans during the financing activities[98]. Employee and Personnel Information - The group employed approximately 1,100 staff as of June 30, 2022, down from approximately 1,500 staff as of December 31, 2021[49]. - Personnel expenses for the six months ended June 30, 2022, amounted to HKD 54,998,000, a decrease of 84.4% from HKD 352,280,000 in the same period of 2021[120]. - The total remuneration for key management personnel was HKD 1,649,000 for the first half of 2022, up from HKD 1,271,000 in the same period of 2021, representing a growth of 29.7%[157]. Legal and Regulatory Matters - The group is currently involved in litigation with domestic banks in China, seeking immediate repayment of HKD 508,544,000 in bank loans[118]. - The group has not recorded any litigation losses for the current period, contrasting with HKD 3,000,000 in litigation losses recorded in the previous year[114]. - The company has no significant pending litigation or claims that could materially affect its financial position or performance as of June 30, 2022[152]. - The company has not recognized any significant contingent liabilities related to ongoing legal proceedings as of the reporting date[152].

Financial Performance - The company achieved a revenue of HKD 8.44 billion for the year, with a profit attributable to equity holders of HKD 3.06 billion, and a significant reduction in operating loss of approximately 56.6% to HKD 416 million[14]. - The group recorded a revenue of HKD 8.44 billion in 2021, a decrease of 44.5% compared to HKD 15.21 billion in 2020[35]. - Fresh meat sales amounted to HKD 6.11 billion, representing a 47.5% decline from HKD 11.64 billion in the previous year, accounting for approximately 72% of total revenue[33][38]. - The gross profit decreased by 48.5% to HKD 398 million, with a gross margin of 4.7%, down from 5.1% in the previous year[40]. - The group’s loss from core operations was HKD 416 million, a reduction of approximately 56.6% compared to a loss of HKD 957 million in 2020[35]. - Other net income for the year was approximately HKD 23 million, a decrease from HKD 137 million in 2020, primarily due to reduced gains from the sale of non-current assets and increased litigation loss provisions[42]. - The company reported a loss of HKD 416 million for the fiscal year ending December 31, 2021, which is a 56.6% reduction in losses compared to the previous year[163]. - The company has not declared a final dividend for the year[168]. Market and Production Insights - The national pig inventory reached 449 million heads by the end of 2021, representing a year-on-year increase of 10.5%, while the total pig output was 671 million heads, a substantial year-on-year increase of 27.4%[11]. - The average price of pork fell by 30.3% throughout the year due to an oversupply in the market[11]. - In 2021, the national pig slaughter volume reached approximately 265 million heads, a year-on-year increase of 62.9%, marking the highest slaughter volume in five years[26]. - The national pork production in 2021 was approximately 53 million tons, up 28.8% year-on-year, while the average pork price dropped by 30.3%[26]. - The average procurement price of live pigs decreased by approximately 25.7% compared to 2020, leading to a 43.0% drop in slaughter volume to about 1.64 million heads[36]. - The company’s major business remains focused on providing various types of fresh and frozen meat products, with no significant changes reported[167]. Strategic Initiatives and Restructuring - The company plans to focus on deep processing and slaughtering as core business areas, with deep processing expected to be the profit center and slaughtering serving as the cost center[16]. - The restructuring plan was approved and is expected to optimize the overall debt structure and reduce financial costs, enhancing profitability for long-term sustainable returns to shareholders[19]. - The restructuring process involved significant support from various stakeholders, including government and creditors, enabling the company to embark on a new development chapter[24]. - The company is targeting a strategic cooperation model with regional partners and franchisees to expand its market presence in first and second-tier cities in Heilongjiang Province over the next four years[16]. - The company aims to enhance product quality and optimize production to drive sales recovery, alongside developing convenience store channels and strategic partnerships for national market expansion[16]. E-commerce and Sales Channels - E-commerce sales have increased significantly, rising from 3% in 2016 to 20% in 2020, indicating a strong growth in online sales channels[16]. - The company has focused on expanding e-commerce and dining channels to increase sales[154]. - The company aims to implement operational strategies to improve profitability and cash flow, including enhancing product quality and expanding sales channels, particularly in e-commerce and dining sectors[160]. Governance and Management - The company has adhered to the Corporate Governance Code as per the Hong Kong Stock Exchange rules during the review year, with the exception of the separation of roles between the Chairman and CEO[72]. - The board consists of five members, including two executive directors and three independent non-executive directors, ensuring a balance of power[74]. - The independent non-executive directors have confirmed their independence in accordance with the relevant rules, contributing to the strategic development of the group[77]. - The board is responsible for approving and monitoring the overall strategy and policies of the group, as well as evaluating its performance[74]. - The company has established clear terms of reference for the audit, remuneration, and nomination committees in compliance with the Corporate Governance Code[84]. Risk Management and Compliance - The group faces significant financial risks, including market, liquidity, and credit risks, with a net debt status as of December 30, 2021, and potential risks of failing to meet financial obligations[124]. - The group is subject to strict government regulations in the pig slaughtering and processed meat industry, which could impact its business if compliance is not met[125]. - The company has established a comprehensive food safety control system with 21 inspection and quarantine processes to ensure product quality and safety[129]. - The company has implemented a management mechanism to negotiate with at least three suppliers for the supply of key raw materials to ensure stability and quality[117]. Environmental and Social Responsibility - The company is committed to environmental protection and aims to reduce waste generation in its production processes[64]. - The company has established an underground sewage treatment station to reduce odor emissions and improve the surrounding environment[172]. - The company has adopted a clean production audit mechanism and implemented a circular economy approach to minimize environmental impact[172]. - The company has established an employee mutual aid fund to support employees facing difficulties in their lives[174]. Employee and Workforce Management - The total employee cost for the year was HKD 416 million, accounting for 4.9% of revenue, a decrease from HKD 722 million and 4.7% of revenue in the previous year[67]. - The group employed approximately 1,500 staff as of December 31, 2021, down from approximately 10,400 staff in the previous year due to restructuring[67]. - The company actively recruits young employees to develop new products and sales channels targeting modern consumer groups[176].

Financial Performance - The group recorded revenue of HKD 7.179 billion, a decrease of 4.7% compared to HKD 7.536 billion in the same period last year[20]. - The profit attributable to equity holders was HKD 3.288 billion, a significant improvement from a loss of HKD 408 million in the same period last year[20]. - Fresh meat sales amounted to HKD 5.276 billion, down 6.5% from HKD 5.642 billion in the previous year, accounting for approximately 72% of total revenue[17][22]. - The sales of processed meat products increased by 25.1% to HKD 1.441 billion, with low-temperature meat products contributing HKD 1.091 billion, a 15.7% increase year-on-year[23]. - The overall gross profit decreased by 12.8% to HKD 387 million, with a gross margin of 5.4%, down 0.5 percentage points from the previous year[24]. - The group’s overall sales revenue from upstream operations decreased by 8.9% to HKD 5.856 billion, influenced by changes in the consolidation scope[22]. - The group recorded a cash outflow from operating activities of HKD 13 million, compared to a cash inflow of HKD 163 million in the same period last year[40]. - Revenue for the six months ended June 30, 2021, was HKD 7,178,632, a decrease of 4.76% from HKD 7,536,316 in 2020[71]. - Gross profit for the same period was HKD 387,091, down 12.87% from HKD 444,155 in 2020[71]. - Operating profit for the business was HKD 3,308,154, a significant recovery from a loss of HKD 139,411 in the previous year[71]. - Net profit for the period was HKD 3,286,680, compared to a loss of HKD 404,735 in 2020[74]. - Basic and diluted earnings per share for the period were HKD 1.804, recovering from a loss of HKD 0.224 in the previous year[71]. - Total comprehensive income for the period was HKD 2,967,742, compared to a loss of HKD 544,390 in 2020[74]. Operational Challenges - The company has initiated the restructuring process for 44 subsidiaries under court supervision, with the first creditors' meeting held on June 23, 2021[12]. - The group has 44 subsidiaries with overdue bank loans totaling RMB 4.581 billion, which ceased accruing interest as of November 16, 2020[14]. - The group confirmed a one-time non-cash gain of approximately HKD 3.491 billion due to the exclusion of certain subsidiaries from the consolidation scope[15]. - The group faced litigation from banks for repayment of approximately HKD 441 million in bank loans[45]. - The group has not met certain bank loan covenants totaling HKD 535,032,000, which raises substantial doubt about its ability to continue as a going concern[103]. - The group recorded a provision for litigation losses of HKD 3,000,000 for the six months ended June 30, 2021, compared to HKD 34,914,000 in the same period of 2020[112]. Market and Industry Trends - In the first half of 2021, the company's average procurement price for live pigs decreased by approximately 27.3% compared to the same period last year[7]. - The national pork production increased by 35.9% year-on-year, with a total output of 2.715 million tons in the first half of 2021[5]. - The total national catering revenue reached RMB 2,171.2 billion, representing a year-on-year growth of 48.6%[5]. - The management is focused on stabilizing pork supply and prices through government policies aimed at balancing production and sales[6]. Financial Position - As of June 30, 2021, the group's cash and bank deposits totaled HKD 95 million, down from HKD 308 million as of December 31, 2020[34]. - The total assets of the group as of June 30, 2021, were HKD 1.342 billion, a decrease from HKD 9.156 billion as of December 31, 2020[37]. - The total liabilities of the group as of June 30, 2021, were HKD 1.581 billion, down from HKD 12.401 billion as of December 31, 2020[37]. - The total debt to total capital ratio as of June 30, 2021, was 261.8%, an increase from 189.4% as of December 31, 2020[41]. - The company reported a net asset value of HKD (238,129) compared to HKD (3,244,557) in the previous year[83]. - The company’s total liabilities increased significantly, with cumulative losses reaching HKD (10,450,233,000) as of June 30, 2021[97]. Governance and Compliance - The company has established a risk management and internal control system to safeguard its assets and ensure proper management of business risks[64]. - The board of directors consists of five members, with various committees established to oversee governance, financial strategies, and management performance[64]. - The company has complied with all applicable code provisions of the Corporate Governance Code, except for the separation of the roles of Chairman and CEO, which are held by the same individual[65]. - The audit committee reviewed the group's accounting standards and practices, as well as internal controls and financial reporting matters during the review period[69]. - The company maintains high transparency in governance by timely releasing information to shareholders and investors through multiple communication channels[64]. Employee and Operational Costs - The total employee cost for the review period was HKD 352 million, accounting for 4.9% of revenue, compared to HKD 305 million and 4.0% in the same period of 2020[48]. - The group employed approximately 1,400 staff as of June 30, 2021, a decrease from approximately 10,400 staff as of December 31, 2020, due to the exclusion of a restructured company from consolidation[48]. - Personnel expenses increased to HKD 352,280,000 in the first half of 2021, up from HKD 305,112,000 in the same period of 2020, representing a growth of approximately 15.4%[118]. Cash Flow and Investments - The company incurred a net cash outflow of HKD 146,720,000 from subsidiaries no longer included in the consolidation scope[141]. - The company’s investment activities resulted in a net cash outflow of HKD (223,663,000) for the six months ended June 30, 2021, compared to HKD (118,569,000) in the prior year[97]. - The company’s cash flow from financing activities generated HKD 12,944,000 in the first half of 2021, down from HKD 99,176,000 in the same period of 2020[97]. Environmental and Social Responsibility - The group aims to improve waste reduction measures and participate in environmental protection initiatives as part of its long-term environmental policy[49].

Financial Performance - In 2020, China Yurun Food Group achieved a revenue of HKD 15.213 billion, with a significant reduction in loss to HKD 2.019 billion, down HKD 1.921 billion or 48.8% compared to HKD 3.940 billion in 2019[12]. - The group recorded a net loss attributable to equity holders of HKD 2.019 billion, a 48.8% reduction from the previous year's loss of HKD 3.940 billion[32]. - The net loss for the year 2020 was HKD 2.012 billion, a reduction of 48.9% compared to 2019[76]. - The net cash inflow from operating activities increased significantly to approximately HKD 189 million in 2020, up from HKD 82 million in 2019[77]. - The overall gross profit decreased by 31.3% to HKD 0.773 billion, with a gross margin decline of 2.3 percentage points to 5.1%[40]. - Operating expenses decreased by 42.8% to HKD 2.531 billion, with impairment losses included, while expenses excluding impairment increased by 6.1% to HKD 1.352 billion[42]. - The company reported an operating loss of HKD 1.621 billion, a significant reduction of 52.0% compared to the previous year[43]. - Financial expenses decreased by 33.4% to HKD 0.367 billion, mainly due to prior year defaults and currency gains from RMB appreciation[44]. Market and Industry Conditions - By the end of 2020, the national pig inventory reached 406.5 million heads, an increase of 31.0% year-on-year, while the national pig output was 527 million heads, a decrease of 3.2%[10]. - The average pork price increased by 49.7% year-on-year in 2020 due to high market prices amid the challenges posed by the COVID-19 pandemic and African swine fever[10]. - The average procurement price of live pigs increased by approximately 70.1% compared to 2019, leading to a 53.9% decrease in slaughter volume to about 2.87 million heads[35]. - The group’s slaughtering industry operating rate reached a historical low in 2020, impacting sales volume and gross profit[23]. - The company is exposed to significant risks from raw material price fluctuations, particularly for live pigs and meat, which may adversely affect profit margins if costs cannot be fully passed on to consumers[143]. Strategic Initiatives - The company plans to enhance its distribution network across the country, actively expand traditional channels, and develop emerging channels to adapt to market changes[15]. - The company aims to integrate the upstream and downstream industry chain to explore new profit growth points while controlling capital expenditure and operating costs[15]. - The company is committed to enhancing its profitability and fulfilling its mission to return value to shareholders and society[15]. - The company aims to enhance profitability and cash flow by exploring new sales channels, particularly in e-commerce and high-margin custom products, with a goal to improve cash flow to healthy levels within three to five years[72]. - The company has implemented global price comparison procurement to reduce costs and increase operating cash flow, aiming for healthier cash flow levels within three to five years[193]. Corporate Governance - The board of directors is committed to maintaining strict corporate governance and has adhered to the applicable code provisions throughout the review period[83]. - The audit committee, remuneration committee, and nomination committee have been established to ensure compliance with corporate governance codes[99]. - The board consists of five members, including experienced independent non-executive directors, ensuring a balance of power[85]. - The company has adopted a board diversity policy to ensure a range of perspectives, considering factors such as gender, age, and professional experience[133]. - The company conducts annual reviews of its governance practices and compliance with corporate governance codes[124]. Risk Management - The company has established a risk management and internal control system that has been confirmed to be effective during the review year[137]. - The board is responsible for maintaining an effective risk management system aimed at safeguarding shareholder interests and managing business risks[138]. - The company faces risks related to regulatory compliance, requiring multiple licenses and permits to operate, which if not renewed, could significantly impact operations[149]. - The company is currently in a net debt position as of December 31, 2020, with risks associated with fulfilling financial obligations[152]. Product Development and Quality Control - The group developed nearly 300 new products in various categories, including low-temperature meat products and leisure foods, since 2019[29]. - The company has implemented a comprehensive 21-step inspection and quarantine control system to ensure food safety, with 100% of products passing quality checks before leaving the factory[159]. - The company has strengthened disease monitoring and will increase inspections in areas affected by outbreaks to minimize the impact of animal diseases on operations[158]. - The company has introduced advanced meat processing equipment from Europe to enhance hygiene and reduce contamination risks during production[160]. Financial Position and Debt Management - As of December 31, 2020, the total assets of the group were HKD 91.56 billion, a decrease of HKD 5.25 billion from HKD 96.81 billion on December 31, 2019[50]. - The total liabilities increased to HKD 124.01 billion as of December 31, 2020, up approximately HKD 14.03 billion from HKD 109.98 billion on December 31, 2019[50]. - The total debt to total equity ratio was 189.4% as of December 31, 2020, up from 126.3% in 2019[55]. - The group is actively communicating with banks regarding the renewal of bank loans and believes that immediate repayment is unlikely to occur[49]. - The group is undergoing restructuring processes for its subsidiaries, which have been accepted by the court, indicating ongoing financial challenges[59]. Shareholder Communication - The company aims to provide high levels of information disclosure and financial transparency to shareholders and potential investors[173]. - The company utilizes multiple communication channels to keep shareholders updated on business developments[176]. - The company has established a process for shareholders to submit proposals for consideration at general meetings[179]. - The company emphasizes that dividends may not be declared in cases of insufficient profits or during periods of significant capital allocation[188].

Financial Performance - The group recorded revenue of HKD 7.536 billion, an increase of 1.9% compared to HKD 7.392 billion in the same period last year[18]. - The loss attributable to equity holders was HKD 408 million, a reduction of approximately 9.0% from HKD 448 million in the previous year[18]. - Sales of fresh meat amounted to HKD 5.642 billion, a 3.5% increase from HKD 5.450 billion in the same period last year, accounting for about 75% of total revenue[14]. - Sales of frozen meat products were HKD 943 million, a decrease of 2.6% from HKD 968 million in the previous year, representing about 12% of total revenue[14]. - Overall sales revenue from upstream operations slightly decreased by 0.1% to HKD 6.426 billion, with fresh meat accounting for approximately 75% of total revenue[20]. - Sales of deep-processed meat products increased by 5.7% to HKD 1.152 billion compared to HKD 1.089 billion in the same period last year[21]. - The overall gross profit decreased by 14.0% to HKD 444 million, with a gross profit margin of 5.9%, down 1.1 percentage points from the previous year[24]. - The company reported a net loss attributable to equity holders of HKD 408 million for the first half of 2020, a decrease in loss of 9.0% compared to HKD 448 million in the same period of 2019[31]. - The company reported a loss of HKD 404,735,000 for the six months ended June 30, 2020, compared to a loss of HKD 446,245,000 for the same period in 2019, indicating a reduction in losses by approximately 9.3%[68]. - Total comprehensive income for the period was HKD (544,390,000), slightly higher than HKD (531,684,000) in the previous year, reflecting a year-on-year increase of about 2.0%[68]. Cost and Expenses - Operating expenses increased by 1.7% to HKD 595 million, including the impairment loss of HKD 37 million, while adjusted operating expenses decreased by 4.6%[26]. - Distribution expenses increased to HKD 280,100 from HKD 260,854, representing an increase of about 7.4%[66]. - Administrative and other operating expenses decreased slightly to HKD 314,835 from HKD 323,947, a reduction of approximately 2.8%[66]. - The company incurred capital expenditures of HKD 119,651,000 for the acquisition of property, plant, and equipment, compared to HKD 29,985,000 in the previous year, indicating a significant increase in investment[81]. - The total employee cost for the review period was HKD 305 million, accounting for 4.0% of revenue, compared to HKD 308 million and 4.2% in the same period of 2019[42]. Assets and Liabilities - Total assets as of June 30, 2020, were HKD 92.71 billion, a decrease of HKD 4.10 billion from HKD 96.81 billion on December 31, 2019[33]. - Total liabilities increased by approximately HKD 1.34 billion to HKD 111.32 billion as of June 30, 2020, compared to HKD 109.98 billion on December 31, 2019[33]. - The company's debt-to-equity ratio was 141.6% as of June 30, 2020, up from 126.3% on December 31, 2019[35]. - Cash and cash equivalents totaled HKD 392,887,000 as of June 30, 2020, up from HKD 217,403,000 as of December 31, 2019, showing improved liquidity[115]. - The company's equity attributable to shareholders decreased from HKD (1,370,463,000) to HKD (1,916,971,000), indicating a decline of about 39.8%[74]. - The group had bank borrowings totaling HKD 4,996,982,000, which were classified as current liabilities due to covenant breaches[99]. Market and Strategic Position - The group aims to continue developing new products to enhance market competitiveness while ensuring high product quality[13]. - The group is positioned to leverage its strategic resources and brand strength to navigate challenges and seize opportunities in the market[9]. - The group’s core brands include "Yurun," "Wangrun," and "Hameat," with a strong market presence in low-temperature and fresh meat products[12]. - The group has strengthened epidemic prevention measures to ensure product safety during the pandemic[11]. Legal and Compliance Issues - As of June 30, 2020, the group faced litigation from several banks demanding immediate repayment of approximately HKD 2.128 billion, with assets worth about HKD 313 million frozen by Chinese courts[37]. - The group estimated potential liabilities from contractors at approximately HKD 207 million, with a total of HKD 139 million in ongoing litigation as of the report date[38]. - The company reported a provision for litigation losses of HKD 165,306,000, an increase of 24.4% from HKD 132,954,000 in the previous period[116]. Shareholder and Governance - The board decided not to declare an interim dividend for the review period, consistent with the previous year[47]. - Major shareholders, including Willie Holdings Limited, held approximately 25.82% of the company's issued shares, totaling 470,699,900 shares[50]. - The company has maintained a commitment to high standards of corporate governance and transparency throughout the review period[59]. Employee and Compensation - The group employed approximately 10,400 staff as of June 30, 2020, an increase from about 9,400 staff at the end of 2019[42]. - The group has implemented competitive compensation and benefits, including performance-based bonuses and employee stock options[43]. Risk Management - The group is monitoring foreign exchange risks, primarily operating in RMB, and is assessing cash flow needs to manage these risks[41]. - The company is actively communicating with banks to discuss the renewal of expiring loans and believes that the situation will improve, supporting ongoing operations[33]. - The group is actively negotiating with banks to waive repayment terms and to secure additional financing sources[89].

Financial Performance - In 2019, China Yurun Food Group achieved a revenue of HKD 15.225 billion, an increase of 20.3% compared to HKD 12.651 billion in the previous year[15]. - The company's attributable loss to equity holders was HKD 3.940 billion, a significant reduction of approximately 17.2% from HKD 4.759 billion in 2018[15]. - The group reported a loss attributable to equity holders of HKD 598 million in 2019, a reduction of approximately 7.6% from HKD 648 million in 2018[37]. - The company reported a net loss of HKD 3.940 billion attributable to equity holders, a reduction of 17.2% from the previous year[52]. - Overall gross profit increased by 16.5% to HKD 1.125 billion, while the overall gross margin slightly decreased to 7.4%[44]. - Operating expenses decreased by 15.5% to HKD 4.429 billion, with a significant reduction in promotional, transportation, and wage costs[45]. - The company improved its net loss to HKD 598 million in 2019, a reduction of 7.6% compared to 2018[80]. - Operating cash flow significantly increased to approximately HKD 82 million in 2019, up from HKD 7.8 million in 2018, indicating effective management measures[81]. - The company has sufficient financial resources to support operations and meet financial obligations due within the next twelve months[75]. - The company’s auditor's responsibility statement is included in the independent auditor's report within the annual report[175]. Market and Product Strategy - The company plans to focus on high-value products such as chilled and frozen meat, aiming to enhance product quality and service while expanding sales channels[19]. - The group plans to enhance its product structure and invest in R&D to meet market demand, aiming to maintain its leading position in the industry[32]. - The company aims to optimize its product structure and adjust sales channels in response to market changes to enhance profitability[15]. - The company aims to attract younger consumers by developing new packaging and marketing strategies while maintaining high product quality[32]. - The company has adopted a cautious strategy for new product development, gradually introducing products that meet consumer demand through trial phases[151]. - The company is focusing on market penetration in different regions to mitigate the impact of economic fluctuations on its business[142]. Operational Challenges and Responses - The management emphasizes the importance of food safety and operational security, integrating resources to capitalize on industry consolidation opportunities[19]. - The company anticipates ongoing negative impacts from external factors on its business in 2020, including the economic downturn and industry challenges[39]. - The management team is committed to overcoming challenges and ensuring stable business development amidst a complex economic environment[20]. - The company has implemented measures to minimize the impact of animal diseases, including enhanced disease monitoring and the ability to ensure product distribution during outbreaks[160]. - The company has established emergency plans to prevent disruptions in raw material supply based on media reports and supplier information[146]. Governance and Management - The board believes that the combination of the roles of chairman and CEO will enhance the effectiveness of business strategy formulation and execution[88]. - The chairman and CEO, Zhu Yuan, was appointed on March 28, 2019, and has led the group’s overall corporate development and high-level strategic direction[93]. - The board consists of members with diverse backgrounds and expertise, enhancing the group's core capabilities in industry knowledge and management experience[93]. - The company encourages directors to participate in professional development courses to enhance their knowledge and skills[100]. - The audit committee is responsible for overseeing compliance with the Corporate Governance Code and reviewing the company's governance policies[101]. Financial Position and Liabilities - The group's total assets as of December 31, 2019, were HKD 9.681 billion, down HKD 3.995 billion from HKD 13.676 billion on December 31, 2018[57]. - The total liabilities increased to HKD 10.998 billion as of December 31, 2019, from HKD 10.851 billion on December 31, 2018, an increase of HKD 146 million[57]. - The net debt to total capital ratio as of December 31, 2019, was 121.4%, up from 69.1% on December 31, 2018[62]. - The group was unable to meet covenants on certain bank borrowings totaling HKD 4.937 billion as of December 31, 2019[56]. - The group has approximately 9,400 employees as of December 31, 2019, down from about 10,000 in 2018[70]. Risk Management - The company faces financial risks including market, liquidity, and credit risks that could significantly impact its financial condition and operating performance[156]. - The company has a system in place to ensure compliance with national and regional laws and regulations regarding production licenses and permits[155]. - The internal audit department conducts regular reviews of financial, operational, and compliance controls to mitigate overall business risks[168]. - The board of directors has authorized the audit committee to oversee the effectiveness of risk management and internal control systems[166]. Food Safety and Quality Control - The company has established a comprehensive food safety control system with 21 inspection and quarantine processes to ensure product quality from production to distribution[161]. - The company is committed to maintaining high standards for product quality, exceeding industry and national benchmarks[165]. - The company has invested in advanced meat processing equipment from Europe to automate operations and minimize contamination risks[162]. - The company maintains a cold chain transportation system, ensuring that products are transported at a controlled temperature of 0.4 degrees Celsius[165]. Shareholder Communication - The company aims to provide high levels of disclosure and financial transparency to shareholders and potential investors[176]. - The company has established multiple communication channels to keep shareholders and potential investors updated on business developments[178]. - The company regularly reviews and updates its investor relations webpage to cover all important information[178]. - Shareholders holding at least 10% of the paid-up capital have the right to request the board to convene a special general meeting[180].

Financial Performance - For the first half of 2019, China Yurun Food Group recorded revenue of HKD 7.392 billion, an increase of 20.9% compared to HKD 6.115 billion in the same period last year[16]. - The sales revenue from fresh meat was HKD 5.450 billion, a 20.4% increase from HKD 4.526 billion in the first half of 2018, accounting for approximately 72% of total revenue[14]. - The group reported a loss attributable to equity holders of HKD 448 million, a reduction of approximately 17.3% from HKD 542 million in the same period last year[16]. - The group’s loss from core operations, excluding government subsidies and other losses, was HKD 340 million, a decrease of approximately 14.8% from HKD 399 million in the previous year[16]. - The overall gross profit increased by 22.8% to HKD 5.17 billion, with a gross profit margin of 7.0%, up from 6.9% in the same period last year[20]. - The net loss attributable to equity holders was HKD 4.48 billion, a reduction of approximately 17.3% compared to HKD 5.42 billion in the first half of 2018[23]. - The group recorded a net loss of HKD 4.48 billion for the first half of 2019, an improvement from a net loss of HKD 5.42 billion in the same period of 2018[33]. - The group reported a total loss before tax of HKD (111,223,000) for the six months ended June 30, 2019, a significant improvement from a loss of HKD (305,157,000) in the same period of 2018[116]. - The total comprehensive loss for the period was HKD 531,684, slightly improved from HKD 567,581 in the previous year[70]. Operational Metrics - The total number of pigs slaughtered in the first half of 2019 was 313 million, a decrease of 6.2% compared to the previous year, due to supply constraints[8]. - The average procurement price of live pigs increased by 13.4% during the review period, reflecting the impact of the African swine fever on the market[10]. - The average procurement price of live pigs increased by 13.4% compared to the first half of 2018, with a slaughter volume of approximately 3.78 million heads, representing a year-on-year increase of about 16.9%[18]. - The production capacity for upstream slaughtering and downstream processed meat products remained stable at approximately 52.65 million heads and 312,000 tons, respectively[15]. - The overall sales revenue of upstream business (before internal sales offset) increased by 27.2% to HKD 6.432 billion, compared to HKD 5.057 billion in the first half of 2018[18]. - Fresh meat accounted for approximately 72% of total revenue (before internal sales offset) and 85% of upstream total revenue, reaching HKD 5.450 billion, a year-on-year increase of 20.4%[18]. - The sales revenue of deep-processed meat products was HKD 1.089 billion, a decrease of 8.8% compared to HKD 1.194 billion in the first half of 2018[19]. Financial Position - As of June 30, 2019, the total assets of the group were HKD 13.144 billion, a decrease of HKD 0.532 billion (3.9%) compared to December 31, 2018[28]. - The total liabilities of the group as of June 30, 2019, were HKD 10.851 billion, a slight decrease of approximately HKD 2 million compared to December 31, 2018[28]. - The group's current liabilities net amount was HKD 7.366 billion as of June 30, 2019, compared to HKD 7.264 billion on December 31, 2018[33]. - The total debt to total equity ratio increased to 75.8% as of June 30, 2019, up from 72.1% on December 31, 2018, representing an increase of 3.7 percentage points[34]. - The company’s total equity attributable to owners decreased from HKD 2,774,095 thousand in December 2018 to HKD 2,241,146 thousand in June 2019, a decrease of approximately 19.2%[79]. - The company’s net asset value decreased from HKD 2,824,823 thousand in December 2018 to HKD 2,293,139 thousand in June 2019, a decline of around 18.8%[75]. - The group’s total bank and other loans were HKD 6,368,337,000 for current loans and HKD 572,752,000 for non-current loans as of June 30, 2019, showing a slight increase from HKD 6,355,546,000 and HKD 703,678,000 respectively as of December 31, 2018[86]. Cash Flow and Liquidity - The company reported a net cash outflow from operating activities of HKD 5,183 thousand for the six months ended June 30, 2019, compared to an outflow of HKD 76,483 thousand for the same period in 2018[82]. - The group has taken measures to alleviate liquidity pressure, including negotiating with banks for waivers and additional financing, and implementing operational plans to improve profitability and cash flow[88]. - The group’s bank deposits were frozen by Chinese courts amounting to HKD 37,215,000 as of June 30, 2019, compared to HKD 22,043,000 as of December 31, 2018, reflecting a 68.9% increase in frozen assets[86]. - The group failed to meet certain bank loan covenants totaling HKD 5,004,099,000 as of June 30, 2019, which included ongoing litigation amounting to HKD 2,133,475,000[86]. - The board believes that the group has sufficient financial resources to support its operations for the next twelve months based on cash flow forecasts and the effectiveness of the measures taken[88]. Corporate Governance and Compliance - The company has maintained a high standard of corporate governance, ensuring transparency and accountability in its operations[62]. - The group has no significant pending or threatening litigation or claims as of June 30, 2019, and management believes any potential legal liabilities will not have a significant impact on the financial position and performance[148]. - The group has adopted several new and revised International Financial Reporting Standards, which may not have a significant impact on the consolidated financial statements in the foreseeable future[90]. - The group has implemented the cumulative effect method for the adoption of IFRS 16, which significantly changes the accounting treatment for leases, affecting the recognition of right-of-use assets and lease liabilities[91]. Employee and Management Information - The group employed approximately 9,300 employees as of June 30, 2019, down from about 10,000 employees on December 31, 2018[40]. - The total employee costs for the review period were HKD 308 million, accounting for 4.2% of the group's revenue, compared to HKD 322 million (5.3%) in the first half of 2018[40]. - The total remuneration for key management personnel was HKD 1,492,000 for the six months ended June 30, 2019, down from HKD 5,626,000 in the same period of 2018[156]. Related Party Transactions - The group reported significant related party transactions, including sales of raw materials to related companies amounting to HKD 1,379,000 and sales of finished products amounting to HKD 2,772,000 for the six months ended June 30, 2019[150]. - The group purchased raw materials from related companies totaling HKD 34,227,000, an increase from HKD 27,343,000 in the same period of 2018[150]. - Trade receivables from related companies increased to HKD 31,806,000 as of June 30, 2019, compared to HKD 7,859,000 as of December 31, 2018[154]. - Trade payables to related companies rose to HKD 213,265,000 as of June 30, 2019, from HKD 196,047,000 as of December 31, 2018[154].

Financial Performance - For the six months ended June 30, 2019, the company reported revenue of HKD 7,392,433 thousand, an increase from HKD 6,115,061 thousand in the same period of 2018, representing a growth of approximately 20.9%[5] - The gross profit for the same period was HKD 516,635 thousand, compared to HKD 420,555 thousand in 2018, indicating a gross margin improvement[5] - The net loss for the period was HKD 446,245 thousand, a decrease from a net loss of HKD 541,380 thousand in the previous year, reflecting a reduction in losses by approximately 19.5%[5] - The company reported a total comprehensive loss of HKD 531,684 thousand for the period, compared to HKD 567,581 thousand in 2018, showing an improvement in comprehensive loss[13] - The company reported a comprehensive loss of HKD (446,245,000) for the six months ended June 30, 2019, compared to a loss of HKD (541,380,000) in the same period of 2018, indicating an improvement of 17.5%[58] - The group recorded a net loss of HKD 448 million for the review period, an improvement from a net loss of HKD 542 million in the first half of 2018[107] Cash Flow and Liquidity - The company reported cash generated from operating activities of HKD 6,360 thousand, a significant decrease from HKD 129,422 thousand in 2018[20] - The company's cash and cash equivalents decreased to HKD 201,885 thousand from HKD 147,007 thousand in the previous year, reflecting a net decrease of HKD 14,902 thousand[20] - The group’s cash and cash equivalents amounted to HKD 201,885,000 as of June 30, 2019, down from HKD 218,687,000 as of December 31, 2018[23] - The board has taken measures to alleviate liquidity pressure, including negotiating with banks for waivers and seeking additional financing[24] - The board believes the group has sufficient financial resources to support operations and meet financial obligations due within the next twelve months[26] Assets and Liabilities - The total assets as of June 30, 2019, were HKD 10,327,586 thousand, down from HKD 10,886,706 thousand at the end of 2018[18] - The company’s total liabilities as of June 30, 2019, were HKD 10,182,511 thousand, compared to HKD 10,053,658 thousand at the end of 2018, indicating an increase in liabilities[18] - The company’s net asset value decreased to HKD 2,293,139 thousand from HKD 2,824,823 thousand at the end of 2018, reflecting a decline in equity[18] - The group's total assets decreased to HKD 131.44 billion from HKD 136.76 billion at the end of 2018, a reduction of HKD 5.32 billion[104] - The total debt to total capital ratio increased to 75.8%, up from 72.1% as of December 31, 2018, representing a 3.7 percentage point increase[108] - The group's equity attributable to shareholders decreased to HKD 2.241 billion, down HKD 533 million from HKD 2.774 billion as of December 31, 2018[107] Segment Performance - Total revenue for the six months ended June 30, 2019, was HKD 7,521,608,000, an increase of 20.4% compared to HKD 6,250,632,000 for the same period in 2018[55] - The reported segment loss for the six months ended June 30, 2019, was HKD (111,223,000), a significant improvement from HKD (305,157,000) in the same period of 2018[55] - The sales revenue of fresh meat was HKD 54.50 billion, representing a 20.4% increase from HKD 45.26 billion in the previous year, accounting for approximately 72% of total revenue[85] - The sales of deep-processed meat products amounted to HKD 10.89 billion, a decrease of 8.8% from HKD 11.94 billion in the previous year[91] Expenses and Costs - Depreciation and amortization expenses for the six months ended June 30, 2019, were HKD (157,012,000), down from HKD (217,005,000) in 2018, reflecting a reduction of 27.7%[55] - Operating expenses decreased by 10.7% to HKD 585 million from HKD 655 million in the same period last year, with operating expenses accounting for 7.9% of the group's revenue, down 2.8 percentage points year-on-year[95] - Financial expenses increased to HKD 321 million from HKD 212 million in the same period last year, primarily due to higher bank interest[97] - Employee costs totaled HKD 308 million, accounting for 4.2% of the group's revenue, down from HKD 322 million and 5.3% in the first half of 2018[116] Compliance and Governance - The company has adopted the standards set forth in the Listing Rules Appendix 10 regarding the conduct of securities transactions by directors, confirming compliance during the review period[122] - The audit committee reviewed the accounting standards and practices adopted by the group, including the unaudited interim performance for the review period[124] - There were no significant matters affecting the group from June 30, 2019, to the date of this announcement[125] Market and Economic Context - In the first half of 2019, China's GDP was RMB 45,093.3 billion, growing by 6.3% year-on-year[80] - The average purchasing price of live pigs increased by 13.4% compared to the same period last year, with a total slaughter volume of approximately 3.78 million heads, up by 16.9% year-on-year[89] - The average disposable income per capita in China was RMB 15,294, with a real growth of 6.5%, outpacing GDP growth by 0.2 percentage points[80] - The total retail sales of consumer goods reached RMB 19.5 trillion, growing by 8.4% year-on-year, with final consumption expenditure contributing 60.1% to economic growth[80] Legal and Litigation Matters - The group failed to meet certain bank loan covenants totaling HKD 5,004,099,000 as of June 30, 2019, which included ongoing litigation amounting to HKD 2,133,475,000[23] - As of June 30, 2019, certain properties with a book value of HKD 452,280,000 were frozen by Chinese courts due to litigation related to bank loans[62] - The group has ongoing litigation with local governments claiming approximately HKD 91,488,000 in cash, down from HKD 130,578,000 as of December 31, 2018[77] - The group has recognized a provision for litigation losses of HKD 91,488,000 in the income statement for the six months ended June 30, 2019[77] Strategic Focus - The company is focusing on high-quality product development and has a research team of over 300 professionals to enhance brand value and expand business advantages[84] - The group is committed to environmental protection and aims to reduce waste generation in its production processes[117] - The group has no significant investments or plans for major acquisitions or capital asset purchases during the review period[111]