Group 1 - The company H&H International Holdings (01112) announced the full redemption of its outstanding 5.625% senior notes due in 2024 to reduce financing costs and optimize its capital structure [1] - As of the announcement date, the outstanding principal amount of the notes is $53.352 million [1] - The company has notified the relevant note trustee that the principal amount of $53.352 million will be redeemed on March 25, 2024, at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest [1] Group 2 - Following the redemption, all redeemed notes will be canceled [1] - The company will continue to explore opportunities to lower financing costs and optimize its capital structure [1]

交银国际研究 公司更新 消费 收盘价 目标价 潜在涨幅 2024年3月6日 港元11.66 港元10.40 -10.8% 健合国际 (1112 HK) 2023 年净利润和现金余额低于预期  2023 年销售额符合预期，净利润不及预期：健合国际公布了2023年初步 个股评级 业绩，全年销售额同比增长高个位数（符合一致性/交银国际预期的 中性 9%/8%），但调整后净利润同比增长个位数，低于市场/交银国际预期的 24%/19%。公司公布的净利润同比下降个位数，原因为以下一次性因素： 1）仍待新国标批准的进口婴幼儿配方羊奶粉系列约1.78 亿人民币存货撇 1年股价表现 销及拨备；2）过往收购Aurelia及Good Goût导致的1 亿人民币商誉减值； 1112 HK 恒生指数 3）财务成本增加和人民币兑美元贬值带来的外汇损失增加。 5% 0% -5%  现金余额低于预期，可能引起投资者关注：截至 2023 年底，健合国际的 -10% 现金余额从 2023 年 6 月的 21 亿人民币降至 13.7 亿人民币，低于我们预计 -15% -20% 的 21 亿人民币。其中已经包括 1.4 亿美元的债务偿还，与我们 ...

智通财经APP讯，H&H国际控股(01112)公布，于2023年，按呈报及同类比较基准，该集团均实现高单 位数的收入增长。该增长主要受来自其所有三大战略业务支柱(包括成人营养及护理用品、婴幼儿营养 及护理用品以及宠物营养及护理用品)的高利润及快速增长营养补充品收入的双位数增长所带动。 其中，成人营养及护理用品分部实现强劲双位数增长，有关增长受下列因素带动：各地区的消费者在新 冠肺炎后对保健品的殷切需求，以及该集团致力推出创新品类，如SwissePlus+系列及软糖，配合集团 的高端优质、科学验证、令人向往及参与互动(PPAE)模式。值得注意的是，SwissePlus+于2023年在中 国内地成人营养及护理用品的收入总额带来可观的双位数贡献。此外，该集团SwissePlus+中的NAD+系 列在抗衰老品类取得顶尖地位，抢占极高市场份额，而Swisse净肝片则保持其在中国内地高端蓟分部市 场的领先地位。Swisse重夺澳洲整体维生素、草本及矿物补充剂市场的榜首地位，并在复合维生素、口 服美容、消化及肝脏健康以及肌肉健康等主要分类中稳居第一。 婴幼儿营养及护理用品分部收入取得低双位数降幅。尽管市况不利，惟该集团于2 ...

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 6,980.8 million, representing a 17.2% increase from RMB 5,955.4 million in the same period of 2022[8]. - Gross profit for the same period was RMB 4,262.4 million, up 15.5% from RMB 3,691.5 million year-on-year[8]. - Adjusted comparable EBITDA for the six months ended June 30, 2023, was RMB 1,309.5 million, a 24.0% increase from RMB 1,056.1 million in the prior year[8]. - Net profit for the six months ended June 30, 2023, was RMB 608.0 million, reflecting a 28.0% increase compared to RMB 475.1 million in the same period of 2022[8]. - The company reported a significant increase in EBITDA of 29.5% to RMB 1,397.9 million compared to RMB 1,079.4 million in the prior year[8]. - The adjusted comparable net profit margin for the six months ended June 30, 2023, was 7.4%, down from 8.1% in the previous year[8]. Revenue Breakdown - The revenue breakdown by product segment shows nutritional supplements at 60.1%, infant formula at 31.7%, and others at 8.2% for the six months ended June 30, 2023[9]. - The infant nutrition and care segment saw a revenue contribution of 44.6% for the six months ended June 30, 2023[10]. - The revenue from high-margin and fast-growing nutritional supplements accounted for 60.1% of total revenue in the first half of 2023[15]. - The adult nutrition and care products segment generated RMB 2,938.2 million, reflecting a 43.6% increase compared to the previous year[29]. - The infant nutrition and care segment faced challenges, with revenue declining by 10.1% to RMB 2,213.7 million, representing 31.7% of total revenue[29]. - The pet nutrition and care segment grew by 27.8% to RMB 926.7 million, contributing 13.3% to total revenue[29]. Market Presence and Expansion - The company plans to continue expanding its market presence and invest in new product development to drive future growth[6]. - H&H International Holdings achieved a strong financial performance with a double-digit revenue growth across its three strategic business pillars: adult nutrition and care products, infant nutrition and care products, and pet nutrition and care products, contributing to a positive EBITDA margin[15]. - The company is focusing on market expansion in high-profit regions such as Hong Kong and Singapore, with robust double-digit growth contributions from these markets[20]. - The company plans to expand its market share in the cross-border e-commerce sector in mainland China, targeting double-digit growth in the normal trade market[25]. - The company is focusing on expanding its presence in new markets, including mainland China, Canada, the UK, and Singapore for its Zesty Paws brand[25]. Geographical Revenue Distribution - The geographical revenue distribution indicates that mainland China accounted for 72.7%, Australia and New Zealand 11.9%, and North America 10.6% for the same period[11]. - Revenue from mainland China for the six months ended June 30, 2023, was RMB 5,076.1 million, an increase of 15.4% year-on-year, accounting for 72.7% of the group's total revenue[31]. - Revenue from the Australia and New Zealand market increased by 19.4% to AUD 177.4 million, representing 11.9% of the group's total revenue[33]. - North America revenue grew by 20.9%, accounting for 10.6% of total revenue, with Zesty Paws achieving a 30.1% increase in revenue[34]. Cost and Expenses - Sales and distribution costs, excluding depreciation and amortization, increased by 8.8% to RMB 2,538.7 million for the six months ended June 30, 2023, with the percentage of these costs to total revenue decreasing from 39.2% to 36.4%[37]. - Administrative expenses rose by 31.0% to RMB 412.4 million for the six months ended June 30, 2023, with the percentage of these expenses to total revenue slightly increasing from 5.3% to 5.9%[40]. - Research and development expenses increased by 23.9% to RMB 84.9 million, maintaining a stable percentage of 1.2% of total revenue[40]. - Financing costs increased by 41.9% to RMB 358.0 million for the six months ended June 30, 2023, primarily due to a 65.7% rise in interest on bank loans and preferred notes compared to the previous year[45]. Shareholder and Governance - The company has complied with all corporate governance codes as per the Hong Kong Stock Exchange regulations during the six months ending June 30, 2023[50]. - The Audit Committee, consisting of three non-executive directors, is responsible for overseeing the external auditor's appointment and reviewing the group's financial reporting[52]. - The Remuneration Committee is tasked with recommending remuneration policies for all directors and senior management, ensuring transparency and alignment with company performance[54]. - The Nomination Committee evaluates the board's composition and recommends candidates for directorship, considering diversity and qualifications[55]. - The company established an Environmental, Social, and Governance (ESG) Committee to enhance the management of sustainability issues and improve disclosure quality[56]. Cash Flow and Liquidity - Cash generated from operating activities was RMB 22.1 million for the six months ended June 30, 2023, after tax payments of RMB 337.6 million[47]. - Cash and cash equivalents amounted to RMB 2,137.7 million as of June 30, 2023, providing a strong liquidity position[47]. - The company's net leverage ratio decreased from 3.58 times at the end of 2022 to 3.40 times as of June 30, 2023, reflecting effective management of balance sheet risks[17]. - The company has established several liquidity measures to further manage debt costs following the hedging agreements signed in July 2023[45]. Environmental Initiatives - The company has initiated a greenhouse gas reduction plan and launched a recycling program for Swisse plastic bottles in China[26]. Financial Instruments and Hedging - The company’s hedging strategy has been assessed as highly effective, aligning with expected interest and principal payments[157]. - The fair value of cross-currency swaps is reported at RMB 50,487,000, highlighting the company's exposure to currency risk[196]. - The company’s financial instruments are subject to market fluctuations, with the fair value of derivatives being sensitive to changes in discount rates[194]. Employee Compensation and Share Options - The total remuneration paid to key management personnel for the six months ended June 30, 2023, was RMB 66,306,000, significantly higher than RMB 31,935,000 for the same period in 2022[187]. - The company has adopted three stock option plans, with two currently active as of June 30, 2023[64]. - The company aims to retain and motivate employees through the share award plan, contributing to its ongoing operations and development[76].

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 6,980.8 million, representing a 17.2% increase from RMB 5,955.4 million in the same period of 2022[2]. - Gross profit for the same period was RMB 4,262.4 million, up 15.5% from RMB 3,691.5 million year-on-year[2]. - EBITDA increased by 29.5% to RMB 1,397.9 million compared to RMB 1,079.4 million in the previous year[2]. - Adjusted comparable EBITDA was RMB 1,309.5 million, a 24.0% increase from RMB 1,056.1 million in 2022[2]. - Net profit for the period was RMB 608.0 million, reflecting a 28.0% growth from RMB 475.1 million in the prior year[2]. - Adjusted comparable net profit was RMB 513.4 million, a 6.3% increase from RMB 482.9 million in the same period last year[2]. - The adjusted comparable net profit margin decreased to 7.4% from 8.1% year-on-year, a decline of 0.7 percentage points[2]. Assets and Liabilities - Non-current assets totaled RMB 15,219.1 million as of June 30, 2023, compared to RMB 15,103.6 million at the end of 2022[8]. - Current assets increased to RMB 6,155.6 million from RMB 5,859.4 million at the end of 2022[8]. - Current liabilities decreased slightly to RMB 5,102.7 million from RMB 5,134.9 million at the end of 2022[8]. - As of June 30, 2023, total assets minus current liabilities amounted to RMB 16,272,006 thousand, an increase from RMB 15,828,142 thousand as of December 31, 2022, representing a growth of approximately 2.8%[9]. - Non-current liabilities, including preferred notes, totaled RMB 2,001,509 thousand, up from RMB 1,886,148 thousand, indicating an increase of about 6.1% year-over-year[9]. - The company's net asset value reached RMB 6,662,462 thousand, compared to RMB 6,141,853 thousand in the previous year, reflecting a growth of approximately 8.5%[9]. - The total equity increased to RMB 6,662,462 thousand from RMB 6,141,853 thousand, marking an increase of around 8.5%[9]. - The issued share capital remained stable at RMB 5,519 thousand, with no changes reported[9]. Revenue Segmentation - The group reported total revenue of RMB 6,980,848 thousand for the six months ended June 30, 2023, with significant contributions from the infant formula segment and probiotics and nutritional supplements[18]. - The probiotics and nutritional supplements segment generated revenue of RMB 2,213,750 thousand, while the infant formula segment contributed RMB 2,938,215 thousand[18]. - Revenue from mainland China was RMB 5,076,109 thousand, representing a significant portion of total revenue[22]. - Sales from infant formula amounted to RMB 2,462,057 thousand, while probiotics and nutritional supplements generated RMB 499,132 thousand[21]. - Revenue from the infant nutrition and care products segment decreased by 2.1% year-on-year, partially offsetting growth in other segments[59]. - Revenue from infant formula milk powder in mainland China decreased by 10.2% year-on-year to RMB 2,138.8 million, primarily due to systemic challenges in the industry and a decline in overall sales[62]. - Revenue from infant probiotics and nutritional supplements in mainland China increased by 48.7% to RMB 735.7 million, driven by higher consumer demand and the introduction of new innovative products[62]. Expenses and Costs - The cost of goods sold for the six months ended June 30, 2023, was RMB 2,560,132 thousand, an increase of 20.2% compared to RMB 2,128,935 thousand for the same period in 2022[28]. - Employee benefits expenses increased to RMB 724,390 thousand, reflecting a rise of 18.4% from RMB 611,930 thousand in the prior year[28]. - Total tax expenses for the period amounted to RMB 295,138 thousand, a significant increase of 43.1% from RMB 206,291 thousand in the same period last year[29]. - Financing costs increased by 41.9% to RMB 358.0 million, primarily due to a 65.7% rise in interest on bank loans and preferred notes[79]. - Administrative expenses increased by 31.0% to RMB 412.4 million for the six months ended June 30, 2023, compared to RMB 314.9 million for the same period in 2022, representing 5.9% of total revenue[74]. Market and Strategic Initiatives - The company continues to engage in the production and sale of high-end children's nutrition products and adult nutrition products, indicating a focus on market expansion in these segments[10]. - The company plans to continue expanding its market presence and investing in new product development to drive future growth[21]. - The company is focused on continuous profitability growth through strategic investments in core growth areas, globalization, and diversification[43]. - The company aims to leverage its leading position in the adult nutrition and care products segment to drive growth, particularly in core markets like mainland China and Australia[54]. - The company is in the process of reapplying for high-tech enterprise status for its subsidiary, which is expected to significantly reduce its tax rate[30]. Cash Flow and Financing - Net cash generated from operating activities was RMB 22.1 million, after accounting for income tax payments of RMB 337.6 million[82]. - Cash flow used in investing activities was RMB 19.3 million, primarily due to purchases of property, plant, and equipment totaling RMB 47.2 million[83]. - Cash flow used in financing activities amounted to RMB 205.7 million, mainly related to the repayment of bank loans and interest payments totaling RMB 406.6 million[84]. - As of June 30, 2023, the company's cash and cash equivalents amounted to RMB 2,137.7 million[85]. - The outstanding interest-bearing bank loans totaled RMB 8,070.6 million, with a net leverage ratio decreasing from 3.93 to 3.57 compared to June 30, 2022[86][87]. Corporate Governance - The company continues to comply with corporate governance codes and will review its practices to ensure adherence to the latest developments[92]. - The Audit Committee is responsible for recommending the appointment, reappointment, and removal of external auditors to the Board, as well as approving their remuneration and terms of engagement[95]. - The interim financial statements for the six months ended June 30, 2023, have been reviewed by the independent auditor Ernst & Young according to the relevant standards[96].

Financial Performance - Revenue for the year ended December 31, 2022, was RMB 12,775,914 thousand, representing a 10.6% increase from RMB 11,547,825 thousand in 2021[6] - Gross profit for 2022 was RMB 7,703,488 thousand, up from RMB 7,247,982 thousand in 2021, reflecting a growth of 6.3%[6] - Adjusted comparable EBITDA for 2022 was RMB 1,971,876 thousand, compared to RMB 1,851,915 thousand in 2021, marking a 6.5% increase[6] - Net profit for 2022 was RMB 611,783 thousand, a 20.3% increase from RMB 508,484 thousand in 2021[6] - The company achieved an adjusted comparable net profit of RMB 731,172 thousand, down 23.3% from RMB 952,854 thousand in the previous year[6] - The adjusted comparable EBITDA margin decreased to 15.4% in 2022 from 16.0% in 2021, a decline of 0.6 percentage points[6] Strategic Focus - The company focused on three strategic pillars: core growth areas, globalization and diversification, and future strategic investments[10] - The company continues to attract new consumers in key markets through consumer-oriented innovations and aims to become a leader in global family nutrition and health[10] - The company continues to focus on consumer-driven innovation as a key strategy for growth in both adult and infant nutrition segments[16] Market Performance - The infant nutrition and care segment in mainland China has stabilized, with a positive growth trajectory in 2022, attributed to enhanced brand awareness and effective consumer education initiatives[11] - The ultra-premium infant formula series recorded positive retail sales growth, achieving a market share of 12.1%, compared to a market decline of 2.1%[11] - The probiotics business in mainland China has successfully returned to growth, maintaining a strong market share and becoming a key player in the children's probiotics market in Hong Kong[13] - In France, the company holds the number one position in the organic infant formula category with a market share of 41.7% and in the goat milk category with a market share of 41.5%[14] - The adult nutrition and care segment achieved a remarkable growth of 12.5% in 2022, with Swisse ranking first in the online vitamin, herbal, and mineral supplement market in mainland China[15] - Swisse's retail sales in the local market recorded a growth of 12.9%, surpassing the industry average growth of 7.4%[15] - The company is expanding its presence in new Asian markets, driven by online and offline channel distribution, with significant growth momentum expected[16] Product Development - The company plans to expand its product offerings in the infant formula segment, having submitted applications for eight series of infant formula products in mainland China[18] - The launch of the new Swisse Plus+ series and Swisse Me functional food series has been well-received, promoting health and wellness among consumers[16] - The company continues to focus on high-end pet food categories and innovative product development to capitalize on market trends in both China and North America[17] Financial Management - Over 98.5% of the adjusted comparable EBITDA for 2022 was converted into operating cash flow, enhancing the company's ability to manage its capital structure[10] - The company successfully refinanced all existing loan facilities, improving its capital structure and liquidity to better withstand currency fluctuations and higher interest rates[10] - The company has secured a $1.125 billion three-year term loan for refinancing existing loans, linked to sustainability targets[20] - The company maintains a stable dividend payout ratio of 50% of adjusted comparable net profit, ensuring returns to shareholders[20] Sustainability Initiatives - The company reduced water intensity in its production facilities by 18.9% compared to 2021, reflecting its commitment to sustainability[21] - 98% of the company's packaging materials are recyclable, biodegradable, or compostable, demonstrating a strong focus on circular economy initiatives[21] - The company is committed to resource conservation and waste management, participating in carbon offset programs in Australia to enhance its environmental initiatives[46] - The company received an "A" rating from MSCI for environmental, social, and governance performance, reflecting its commitment to responsible business practices[20] Governance and Management - The management team includes experienced professionals with over 20 years in their respective fields, enhancing the company's strategic direction and risk management[47][48] - The company emphasizes employee development through clear career planning and regular training programs[46] - The company has a strong commitment to corporate governance and risk management, led by its experienced board of directors[47] - The board consists of eight members, including two executive directors, three non-executive directors, and three independent non-executive directors[62] Risk Management - The company has established a robust risk management system, which is essential for corporate governance and commitment to environmental, social, and governance practices[90] - The company conducts annual risk assessments and holds risk workshops for middle and senior management to gather insights on risks, which are then presented to senior management and the audit committee for strategic decision-making[95] - The audit committee reviews risk and control management effectiveness every six months, ensuring the adequacy of resources for internal audit and risk management functions[101] Shareholder Communication - The company emphasizes effective communication with shareholders, holding dialogues through annual general meetings and other gatherings to enhance understanding of business performance and strategies[103] - The company has a shareholder communication policy to promote effective interaction with shareholders and encourage them to exercise their rights[110] - The company is committed to maintaining transparency and timely disclosure of information to facilitate informed investment decisions by shareholders[103] Corporate Social Responsibility - The company made charitable donations of RMB 4.2 million for the year ended December 31, 2022, consistent with the previous two years[118] - The company has established a charitable foundation in collaboration with the Red Cross, demonstrating its commitment to social responsibility[118] Audit and Compliance - The independent auditor, Ernst & Young, has issued an unqualified opinion on the consolidated financial statements for the year ended December 31, 2022[192] - The audit committee reviewed the interim and annual results for the periods ended June 30, 2022, and December 31, 2022, respectively[185] - The company has adopted its own code of conduct regarding securities trading by directors, which meets or exceeds the standards set out in the listing rules[186]

Financial Performance - Revenue for the year ended December 31, 2022, was RMB 12,775.9 million, representing a 10.6% increase from RMB 11,547.8 million in 2021[2] - Gross profit for the same period was RMB 7,703.5 million, up 6.3% from RMB 7,248.0 million in the previous year[2] - Adjusted comparable EBITDA for 2022 was RMB 1,971.9 million, a 6.5% increase from RMB 1,851.9 million in 2021[2] - Net profit for the year was RMB 611.8 million, reflecting a 20.3% increase compared to RMB 508.5 million in 2021[2] - Adjusted comparable net profit decreased by 23.3% to RMB 731.2 million from RMB 952.9 million in the prior year[2] - The EBITDA margin for 2022 was 15.4%, down 0.6 percentage points from 16.0% in 2021[2] - Total revenue for the year ended December 31, 2022, was RMB 12,775,914 thousand, an increase from RMB 11,547,825 thousand in 2021, representing a growth of approximately 10.65%[22] - The pre-tax profit for the year was RMB 1,030,931 thousand, compared to RMB 850,213 thousand in the previous year, indicating a growth of approximately 21.3%[15][17] - The company reported a pre-tax profit of RMB 1,324,163 thousand for 2022, slightly down from RMB 1,326,327 thousand in 2021[30] Assets and Liabilities - Total non-current assets as of December 31, 2022, amounted to RMB 15,103.6 million, an increase from RMB 14,768.3 million in 2021[8] - Current assets totaled RMB 5,859.4 million, compared to RMB 5,513.5 million in the previous year[8] - The company reported a net current asset value of RMB 724.5 million, a significant improvement from a net current liability of RMB 1,308.5 million in 2021[8] - Non-current liabilities totaled RMB 9,686,289 thousand in 2022, up from RMB 7,574,628 thousand in 2021, indicating an increase of about 28%[9] - The company's equity increased to RMB 6,141,853 thousand in 2022 from RMB 5,885,186 thousand in 2021, representing a growth of approximately 4.4%[9] - Total assets minus current liabilities increased to RMB 15,828,142 thousand in 2022 from RMB 13,459,814 thousand in 2021, reflecting a growth of approximately 17.6%[9] Revenue Breakdown - The revenue breakdown by segment includes RMB 5,179,961 thousand from adult nutrition, RMB 4,559,212 thousand from infant formula, and RMB 1,529,530 thousand from pet nutrition, among others[15] - Revenue from mainland China reached RMB 9,565,867 thousand, up from RMB 9,084,641 thousand in 2021, reflecting a growth of about 5.3%[19] - The company reported a significant increase in revenue from North America, which rose to RMB 1,220,807 thousand from RMB 499,348 thousand, marking a growth of approximately 144.4%[19] - Revenue from infant formula in mainland China reached RMB 5,022,877 thousand, while adult nutrition and care products generated RMB 2,937,323 thousand in the same region[24] - Revenue from probiotics supplements in mainland China increased by 12.8% to RMB 1,079.1 million, driven by effective consumer education and channel expansion[62] - Revenue from the Australia and New Zealand market was AUD 297.3 million, reflecting a 10.1% increase and accounting for 10.9% of total group revenue[65] Expenses and Costs - The cost of goods sold for the year was RMB 4,823,197 thousand, compared to RMB 4,165,812 thousand in the previous year, indicating an increase of approximately 15.73%[30] - Selling and distribution costs increased by 4.8% to RMB 5,025.4 million, with the percentage of these costs to total revenue decreasing from 41.5% to 39.3%[70] - Administrative expenses increased by 4.6% to RMB 727.7 million, while the percentage of administrative expenses to total revenue decreased from 6.0% in 2021 to 5.7% in 2022[74] - Research and development expenses rose by 9.9% to RMB 158.2 million, maintaining a stable percentage of 1.2% of total revenue compared to the previous year[75] Dividends and Shareholder Returns - Proposed dividends rose significantly to RMB 220,717 thousand in 2022, compared to RMB 87,805 thousand in 2021, marking an increase of about 151%[9] - The proposed final dividend for the year is HKD 0.38 per share, compared to HKD 0.17 per share in the previous year, totaling HKD 220,717,000 for the proposed final dividend[38] - The company maintains a stable dividend payout ratio of 50% of adjusted comparable net profit, providing returns to shareholders[56] Market and Growth Strategies - The company is primarily engaged in the production and sale of high-end children's nutrition products, infant care products, adult nutrition and care products, and pet nutrition and care products[10] - The company plans to continue expanding its market presence and investing in new product development to drive future growth[27] - The company aims to become a global leader in family nutrition and health through high-quality products and desirable brands, aligning with its long-term profitability growth strategy[45] - The company is focusing on high-end infant formula products to adapt to changing demographics in mainland China, with positive growth in this segment[47] - The company has improved its capital structure and liquidity through refinancing existing loans, enhancing its ability to manage currency fluctuations and higher interest rates[45] Corporate Governance and Compliance - The financial statements were prepared in accordance with International Financial Reporting Standards, ensuring compliance and transparency in financial reporting[11] - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange rules and has complied with all provisions as of December 31, 2022[92] - The audit committee, established on November 25, 2010, consists of three members, all of whom are non-executive directors, ensuring oversight of the audit process and risk management[94] - The independent auditor has reviewed the preliminary performance announcement, which has been agreed upon for inclusion in the consolidated financial statements[95] Sustainability and ESG Initiatives - The company has secured a 3-year term loan of USD 1.125 billion linked to sustainability goals, with interest rate reductions tied to achieving ESG targets[57] - The company reduced its water intensity in production facilities by 18.9% compared to 2021, contributing to its sustainability goals[58] - The company has established an ESG committee to enhance governance and oversee sustainability strategies and reporting[58]

Financial Performance - Total revenue for the year ended December 31, 2021, was RMB 11,547.8 million, representing a 3.2% increase from RMB 11,194.7 million in 2020[7]. - Gross profit for the same period was RMB 7,248.0 million, a slight increase of 0.8% from RMB 7,187.0 million in 2020[7]. - Net profit for 2021 was RMB 508.5 million, a significant decline of 55.3% compared to RMB 1,136.7 million in 2020[7]. - Adjusted comparable EBITDA decreased by 10.3% to RMB 1,851.9 million, with an adjusted EBITDA margin of 16.0%, down from 18.4%[7]. - Revenue from infant nutrition and care products decreased by 10.8% to RMB 6,157.6 million, with infant formula milk powder revenue from mainland China at RMB 4,983.3 million, down 2.7% year-on-year[22]. - The company reported a total comprehensive income of RMB 35,735 thousand for 2021, a significant decrease from RMB 1,404,167 thousand in 2020[195]. - The company’s net asset value decreased to RMB 5,885,186 thousand in 2021 from RMB 6,202,687 thousand in 2020[197]. - The company reported a foreign exchange loss of RMB 91,387,000, highlighting currency fluctuation challenges[198]. Revenue Segmentation - The infant nutrition and care segment accounted for the largest share of total revenue in 2021, despite challenges in the Chinese market due to declining birth rates[10]. - Revenue from the pet nutrition and care segment was 57.3% of total revenue for the year ended December 31, 2021[8]. - Revenue from mainland China accounted for 78.7% of total revenue, down from 82.8% in 2020[9]. - The adult nutrition and care products segment generated revenue of RMB 4,209.2 million, an increase of 8.8% compared to the previous year[20]. - The pet nutrition and care products segment saw a remarkable revenue increase of 2,668.1% to RMB 726.4 million, reflecting strong market demand[20]. Market Position and Growth - The retail sales of the ultra-premium infant formula series grew by 22.5% in 2021, capturing a market share of 11.1%[10]. - The probiotics supplement brand, Biostime, remains a leader in the global children's probiotics market, although it faced challenges due to high base effects in 2020[10]. - The infant nutrition and care segment achieved a market share of 40.3% in the organic infant formula category in France by the end of 2021[11]. - The adult nutrition and care segment in mainland China saw significant growth in both online and offline sales channels, contributing to a stable revenue increase[11]. - The company anticipates continued strong sales momentum in adult nutrition and pet nutrition segments, despite challenges in the infant nutrition segment due to low birth rates and regulatory impacts[13]. Acquisitions and Investments - The acquisition of Zesty Paws completed on October 4, 2021, is expected to enhance the pet nutrition and care segment's revenue[10]. - Zesty Paws generated revenue of RMB 190.1 million from October 4 to December 31, 2021, with annual sales reaching USD 105.0 million, a growth of 43.6%[26]. - The company completed the acquisition of Zesty Paws, LLC for approximately $610 million on October 4, 2021, making it a wholly-owned subsidiary[144]. Cost Management and Profitability - The company's revenue for the year ended December 31, 2021, reached RMB 11,547.8 million, representing a 3.2% increase compared to 2020, driven by growth in adult nutrition and pet nutrition segments, as well as the consolidation of Zesty Paws' revenue post-acquisition[19]. - The total EBITDA for the year was RMB 1,428.9 million, down 33.7% from RMB 2,156.8 million in 2020[33]. - Sales and distribution costs for the year ended December 31, 2021, increased by 7.3% to RMB 4,796.3 million compared to 2020, with the ratio of these costs to total revenue rising from 40.0% in 2020 to 41.5% in 2021[29]. - The company is closely monitoring inflationary pressures on profits and plans to optimize product mix and improve cost efficiency to mitigate impacts[14]. Dividends and Shareholder Returns - The annual dividend payout ratio for 2021 was set at 30% of adjusted net profit, maintaining a consistent dividend policy[12]. - The board proposed a final dividend of HKD 0.17 per share, bringing the total annual dividend to HKD 0.54 per share, which represents approximately 30% of the adjusted net profit[43]. - Proposed dividend for the year is RMB 209,345,000, reflecting a significant allocation of profits[198]. Governance and Management - The company aims to achieve Group-wide B Corporation certification by 2025, with plans to obtain certification in the Australia-New Zealand market in 2023[19]. - The management team includes Mr. Luo, who has held multiple positions within the company since 1999, focusing on sales and business development[51]. - The board consists of eight members, including three executive directors, two non-executive directors, and three independent non-executive directors[62]. - The company emphasizes high standards of corporate governance to enhance transparency and accountability to shareholders[61]. Risk Management and Compliance - The company is committed to maintaining and continuously optimizing a robust risk management system to ensure sustainable business development[85]. - The audit committee reviews the risk and control management framework semi-annually, ensuring adequate resources are allocated for effective risk management and internal auditing[90]. - The company has established arrangements for employees to report any suspected misconduct related to financial reporting and internal controls[80]. Sustainability and Corporate Responsibility - The company emphasizes resource conservation and waste management to enhance environmental protection[46]. - The company plans to establish a Sustainability Committee by the end of 2022 to enhance its environmental, social, and governance performance[62]. - Charitable donations for the years ending December 31 were RMB 3.9 million, RMB 4.1 million, and RMB 4.2 million for 2019, 2020, and 2021 respectively[106].

Financial Performance - Revenue for the year ended December 31, 2020, was RMB 11,194.7 million, a 2.5% increase from RMB 10,925.2 million in 2019[10] - Net profit increased by 13.1% to RMB 1,136.7 million compared to RMB 1,005.0 million in the previous year[10] - Adjusted comparable net profit was RMB 1,183.1 million, reflecting a 10.1% increase from RMB 1,074.5 million in 2019[10] - The overall EBITDA for the year was RMB 2,156.8 million, a decrease of 2.9% from RMB 2,222.2 million in 2019[10] - The company achieved a stable performance despite significant challenges in sales due to lockdowns and travel restrictions in key markets, particularly Mainland China and Australia/New Zealand[17] - The company’s total revenue for the year ended December 31, 2020, reached RMB 11,194.7 million, representing a 2.5% increase compared to 2019, driven by strong online sales and demand for immune-related products in mainland China[30] - Revenue from mainland China amounted to RMB 9,276.1 million, reflecting a 10.0% growth year-on-year, and accounted for 82.8% of total revenue, up from 77.3% in 2019[31] - The infant nutrition and care products segment generated revenue of RMB 6,905.4 million, a 5.5% increase from the previous year, with the infant formula milk powder contributing RMB 5,123.0 million, growing 2.7%[32] - The adult nutrition and care products segment saw a revenue decline of 3.1% to RMB 3,867.5 million, indicating challenges in this area[31] - Gross profit for the group was RMB 7,187.0 million, a slight decrease of 0.6% from the previous year, with a gross margin of 64.2%[37] - Gross profit margin for infant nutrition and care products decreased by 1.2 percentage points to 65.3%[37] - Revenue from probiotics supplements in mainland China reached RMB 1,389.5 million, a year-on-year increase of 12.7%[34] - Revenue from other infant products in mainland China grew by 21.9% to RMB 392.8 million[34] - Sales of Dodie brand diapers in mainland China increased by 16.9% to RMB 363.9 million[34] - Adult nutrition and care products in mainland China achieved a double-digit growth of 25.4%, accounting for 61.3% of total revenue in this segment[34] Market Segments - The infant nutrition and care products segment accounted for 34.5% of total revenue, while adult nutrition and care products made up 36.5%[12] - The company announced the acquisition of Solid Gold, a comprehensive pet nutrition brand, to establish a new segment in pet nutrition and care products[16] - The mainland China business achieved double-digit revenue growth, significantly improving profitability through core product offerings and expanded distribution networks[16] - The adult nutrition segment saw considerable revenue growth in cross-border e-commerce and online general trade markets[16] - The infant nutrition and care segment saw a recovery in sales in the second half of the year, benefiting from increased penetration in offline channels and strong online sales[20] - The probiotics supplement segment experienced double-digit revenue growth, solidifying Biostime's position as the global leader in the infant probiotics market[22] - In Australia and New Zealand, the company faced challenges due to a decline in purchasing activities, leading to a slight decrease in market share to 12.6% in the vitamin, herbal, and mineral supplement market[22] - Other overseas markets recorded double-digit year-on-year revenue growth, with significant potential for expansion despite challenges posed by the pandemic[24] - The company successfully launched its brand on major e-commerce platforms in India and Malaysia, and expanded the Biostime probiotic series in Singapore, making it the fourth largest market globally[24] - The company’s infant formula products maintained sustainable growth in other markets, with Biostime's organic infant formula ranking first in the pharmacy channel in France[24] Challenges and Strategies - The company faced challenges in the Australia and New Zealand markets due to travel restrictions and logistics issues but aimed to leverage local investments to meet demand[16] - The company plans to expand its distribution network and leverage its diverse product portfolio to increase market share in the competitive infant formula market in China[25] - The company aims to enhance its digital marketing strategies and online promotions to capitalize on the rapid growth of online channels in 2021[25] - The introduction of new "blue cap" products is part of the strategy to capture growth opportunities in the general trade e-commerce channels[25] - The company expects sales in the Australia and New Zealand markets to stabilize in 2021 after a significant decline of 32.5% in 2020[31] Cash Flow and Investments - The net cash generated from operating activities for the year ended December 31, 2020, was RMB 1,532.6 million, down from RMB 2,170.9 million before tax, after deducting income tax paid of RMB 638.3 million[51] - The net cash flow used in investing activities was RMB 1,240.3 million, primarily due to payments related to the acquisition of Solid Gold amounting to RMB 1,079.2 million[51] - The net cash flow used in financing activities was RMB 687.7 million, with cash inflow mainly from the drawdown of existing term loans amounting to RMB 482.6 million (equivalent to USD 75.0 million)[51] - As of December 31, 2020, the net leverage ratio increased from 1.64 to 1.94, with a net leverage ratio of 1.44 excluding the cost of acquiring Solid Gold[51] - The total outstanding term loans as of December 31, 2020, amounted to RMB 4,038.8 million, all due for repayment after one year[51] Corporate Governance and Leadership - The company reported a significant leadership change with Laetitia Garnier appointed as CEO on March 19, 2019, and has been with the group since 2010[59] - The company has a strong focus on strategic planning and business development, with Laetitia Garnier previously serving as the General Manager of Strategy and International Business[59] - The Chief Financial Officer, Wang Yidong, has over 20 years of experience in financial management and previously held senior positions at Henkel AG & Co. KGaA, overseeing financial operations across 14 countries in the Asia-Pacific region[60] - The company emphasizes its commitment to research and development, with Dr. Zhang Wenhui having extensive experience in biotechnology and previously serving as Chief Technology Officer[61] - The company is actively involved in risk management and corporate governance, led by Chairman Luo Fei, who has over 20 years of experience in the biotechnology industry[58] - The company has established three board committees: the Nomination Committee, Audit Committee, and Remuneration Committee[78] - The board is committed to enhancing corporate governance practices in line with business growth and regulatory developments[78] - The company has adopted a code of conduct for securities transactions by directors, ensuring compliance with the listing rules[78] Shareholder Information - The board recommended a final dividend of HKD 0.39 per share, bringing the total dividend for the year to HKD 1.02 per share, representing approximately 50.0% of the profit for the year[54] - The company has adopted a dividend policy to maintain sufficient cash reserves for operational needs and future growth, without a predetermined payout ratio[123] - The company declared an interim dividend of HKD 0.63 per share for the six months ended June 30, 2020, and proposed a final dividend of HKD 0.39 per share for the year ended December 31, 2020, subject to shareholder approval[128] - As of December 31, 2020, the company's distributable reserves amounted to approximately RMB 8,365.0 million, with a proposed final dividend of about RMB 209.3 million[132] Risk Management - The company has established a risk management framework based on the COSO ERM framework (2017 version) and ISO 31000 principles to support its international operations and business development[107] - The company conducts semi-annual risk assessments, discussing risk preferences and ratings with key teams, and reports the results to senior management and the audit committee[109] - The company actively monitors and manages identified specific risks, including the significant impact of COVID-19, ensuring employee safety and stability in logistics and production[110] - The audit committee reviews the risk management framework every six months, including risk assessment results and the progress of risk mitigation plans[114]

Financial Performance - The company's revenue for the first half of 2019 increased by 11.4% to RMB 5,095.3 million compared to RMB 4,573.6 million in the same period last year[20]. - Reported net profit rose by 85.5% to RMB 713.1 million, up from RMB 384.3 million year-on-year[20]. - Adjusted comparable EBITDA slightly decreased by 4.4% to RMB 1,194.5 million, while reported EBITDA increased by 34.5% to RMB 1,298.6 million[20]. - Gross profit for the group was RMB 3,423.3 million, an 11.3% increase year-on-year, with a stable gross margin of 67.2%[47]. - The group's profit before tax reached RMB 713,078,000 for the six months ended June 30, 2019, compared to RMB 384,312,000 for the same period in 2018, representing an increase of 85.6%[180]. - Basic earnings per share increased to RMB 1.11 from RMB 0.60, reflecting strong profitability growth[135]. Revenue Segmentation - The infant nutrition and care products segment accounted for approximately 64.0% of total revenue, while adult nutrition and care products contributed about 36.0%[29]. - The company's infant formula milk powder sales grew by 14.7%, outperforming the market growth rate of 11.6%[29]. - Revenue from the infant formula segment reached RMB 2,401.3 million, reflecting a growth of 14.7% year-on-year despite intense competition in the Chinese market[42]. - The revenue from other infant products surged by 107.4% to RMB 271.3 million, driven by strong performance of the Dodie brand in France and China[45]. - Adult nutrition and care products generated revenue of AUD 383.1 million, reflecting a 4.8% increase year-on-year on a constant currency basis, with active sales in China rising by 21.9%[32]. Market Presence and Brand Strategy - The company expanded its presence in Australia, Hong Kong, and France, launching Biostime organic infant formula products and probiotics in early 2019[30]. - The company appointed Miranda Kerr as the brand ambassador for Biostime, enhancing brand recognition and market penetration[30]. - Swisse maintained a market share of 16.9% in the Australian vitamin, herbal, and mineral supplement market, ranking first[32]. - The company plans to maintain positive revenue growth and robust profits despite macroeconomic volatility and market uncertainties in the second half of the year[36]. - The company aims to enhance brand visibility across different markets through its distribution network and brand assets, following the "Premium, Proven, Aspirational, and Engaging" (PPAE) operational model[36]. Cash Flow and Financial Position - The operating cash flow for the first half of 2019 was RMB 959.9 million, a decrease of 16.5% from RMB 1,149.2 million in the previous year[20]. - Cash generated from operating activities for the six months ended June 30, 2019, was RMB 447.4 million, calculated from pre-tax operating cash flow of RMB 960.0 million less income tax paid of RMB 512.6 million[58]. - Cash flow used in investing activities was RMB 179.3 million, primarily due to purchases of property, plant, and equipment, and investments in bonds issued by a supplier[58]. - Cash and cash equivalents increased to RMB 2,057,721 thousand from RMB 1,912,394 thousand, indicating improved liquidity[136]. - The annualized net leverage ratio slightly increased to 1.65 from 1.62 as of June 30, 2018, while the debt-to-asset ratio decreased from 42.9% to 38.9%[60]. Expenses and Cost Management - Sales and distribution costs increased by 27.5% to RMB 1,971.6 million, representing 38.7% of total revenue, up from 33.8% in the previous year[49]. - Administrative expenses slightly increased by 1.2% to RMB 299.4 million, with the percentage of administrative expenses to total revenue decreasing to 5.9%[51]. - Research and development expenses increased by 22.2% to RMB 74.2 million, reflecting continued investment in new product development[52]. - Financing costs for the six months ended June 30, 2019, were RMB 185.6 million, a decrease of 23.5% compared to the same period in 2018, due to improved capital structure[56]. Share Options and Equity Management - The company has adopted two share option schemes, allowing the grant of options to subscribe for a total of 3,085,008 shares at an exercise price of HKD 49.15 each, with the closing price prior to the grant date being HKD 48.95[79]. - The total number of stock options granted under the stock option plan as of June 30, 2019, was 25,425,066, with 3,085,008 options exercised and 1,473,502 options expired or canceled[80]. - The company aims to retain and motivate key personnel through these share option and award plans, contributing to future growth and expansion[111]. - The company has a strategy to incentivize performance and efficiency among its directors, management, and employees through these equity plans[105]. Strategic Investments and Future Growth - The group has invested 16.75% in Bod Australia Limited to commercialize non-addictive CBD products, expanding its health supplement product range[38]. - The group plans to launch a new line of Swisse MeTM products in the UK in August 2019 to capture the growing consumer segment and shopping trends[38]. - The company plans to continue expanding its market presence and investing in new product development to drive future growth[135]. - The company is engaged in the production and sale of high-end children's nutrition products and adult nutritional supplements, indicating a strategic focus on expanding its product offerings in the health and wellness sector[144].