Financial Performance - Total revenue for 2019 reached RMB 5,514.2 million, an increase of 11.2% compared to RMB 4,956.8 million in 2018[7] - Net profit attributable to owners of the Company was RMB 341.3 million, a significant turnaround from a loss of RMB 496.1 million in the previous year, representing a change of 837.4%[7] - Cash EBITDA for 2019 was RMB 2,045.5 million, reflecting a 33.8% increase from RMB 1,528.4 million in 2018[7] - Free cash flow surged to RMB 1,023.2 million, a remarkable increase of 197.1% from RMB 344.4 million in 2018[7] - The gross profit margin before raw milk fair value adjustment increased by 6.6 percentage points to 38.1% in 2019, compared to 31.5% in 2018[49] - The Group's revenue for 2019 was RMB 5.514 billion, an increase of 11.2% from RMB 4.957 billion in 2018[51] - The gross profit margin (before fair value adjustments) improved by 6.6 percentage points to 38.1% in 2019, compared to 31.5% in 2018[51] - The Group's cash EBITDA for the reporting year was RMB2,045.5 million, a year-on-year increase of 33.8% from RMB1,528.4 million, with a cash EBITDA margin rising to 37.1% from 30.8%[125] - Profit attributable to owners of the Company was RMB341.3 million, compared to a loss of RMB496.1 million in 2018[125] Production and Yield - Annual raw milk yield reached 1.39 million tons, with an annualized milk yield of 10.6 tons per milkable cow, both setting new records[20] - In 2019, the total milk production reached 1.39 million tons, with the average annual yield per dairy cow hitting a record high of 10.6 tons[21] - The annual milk yield (AMY) per milkable cow rose to 10.6 tons in 2019, reflecting a year-on-year growth of 5.0% from 10.1 tons in 2018[49] - Total annual milk production reached 1.39 million tons in 2019, marking an 8.6% increase compared to 1.28 million tons in 2018[49] - The herd size increased to 233,618 heads, up from 231,530 heads in 2018, reflecting a growth of 2,088 heads[7] - The company operates 26 dairy farms with a total of 233,618 dairy cows across seven provinces in China[33] - The company plans to moderately increase herd size and improve raw milk yield to enhance market competitiveness[31] Cost Efficiency and Pricing - The cash cost per kilogram of raw milk fell to a record low of RMB 2.32, demonstrating improved cost efficiency[20] - The external average selling price (ASP) of raw milk increased to RMB4.04/kg in 2019, representing a year-on-year growth of 4.9% from RMB3.85/kg in 2018[49] - The cost of raw milk sold (excluding depreciation) decreased by 5.4% to RMB2,316/ton in 2019, down from RMB2,447/ton in 2018[105] - The unit cost of raw milk (excluding depreciation) was maintained at RMB 2.32/kg, down from RMB 2.45/kg in 2018, with feed costs decreasing by 6.3% to RMB 1.77/kg[52] Strategic Partnerships and Collaborations - The Company formed strategic partnerships with New Hope Dairy Company Limited, enhancing its upstream and downstream collaborations[20] - The introduction of New Hope Dairy as a strategic shareholder aims to strengthen the raw milk business and meet the growing demand in the high-end raw milk market in China[24] - The company established a joint venture with CITIC Environment Investment Group to enhance the management of energy projects and focus on upstream dairy farming[24] - The strategic cooperation with New Hope Dairy is expected to help establish more reliable raw milk customers and improve herd size flexibility[24] Market Trends and Demand - The demand for high-quality raw milk is expected to grow significantly due to consumption upgrades in first-tier cities and growth in lower-tier cities over the next three years[30] - The domestic demand for high-quality raw milk is expected to continue exceeding supply for the next few years[44] - The raw milk market is currently experiencing a shortage, which is expected to continue, with large-scale dairy farms becoming the main suppliers as small and medium-sized farms exit the market[153] Corporate Governance and Management - The Company has adopted the Corporate Governance Code and complied with its provisions throughout the year ended December 31, 2019, except for one non-executive director's absence at the annual general meeting[184] - The Board is collectively responsible for promoting the company's success and managing its affairs in a responsible manner[187] - The Company emphasizes high standards of corporate governance to safeguard shareholder interests[185] - The management team includes professionals with qualifications in finance, accounting, and animal husbandry, enhancing the company's operational capabilities[179][180][181] Social Responsibility and Community Support - The company donated dairy products worth up to RMB 10 million to support anti-pandemic efforts during the COVID-19 outbreak[27] - The Company donated "Modern Dairy" branded dairy products worth a total value of RMB 10 million to support frontline facilities during the COVID-19 pandemic[147] - The Company has implemented rigorous disease prevention and control measures to ensure employee health during the pandemic[147] Research and Development - The company has a strong focus on research and development in dairy nutrition, with Mr. Li holding a patent for a high-energy and high-protein supplementary feed for dairy cows[171] - The company is actively involved in national dairy programs, contributing to the improvement of dairy herd performance in China[171] - The company has established partnerships with international research centers to advance dairy technology and practices[170] Future Outlook - In 2020, the Company will focus on improving unit production, reducing costs, and enhancing operational efficiency to increase market competitiveness[154] - The Company aims to strengthen the coordination and integration of upstream and downstream operations to create a full-chain layout of raw milk production[154] - The Company is committed to creating greater value for shareholders while providing consumers with nutritious raw milk[154]

Financial Performance - Revenue for the six months ended June 30, 2019, was RMB 2,570.1 million, representing a 4.1% increase from RMB 2,468.3 million in 2018[17]. - Profit attributable to owners of the Company was RMB 124.9 million, a significant turnaround from a loss of RMB 140.3 million in the previous year, marking a 265.2% change[17]. - Net operating cash inflow rose by 20.6% to RMB 855.6 million compared to RMB 709.5 million in 2018[17]. - Free cash flow surged by 151.3% to RMB 351.1 million from RMB 139.7 million in the prior year[17]. - Basic profit per share improved to RMB 2.05 from a loss of RMB 2.30, reflecting a change of 4.35[17]. - The Group achieved earnings of approximately RMB133.7 million and net free cash inflow of RMB351.1 million during the Reporting Period, marking a successful turnaround from losses to profits[37]. - The Group recorded total revenue of RMB2,570 million for the Reporting Period, representing an increase of 4.13% year-on-year compared to RMB2,468 million in 2018[90]. - Revenue from the dairy farming business increased by 9.64% year-on-year, with raw milk sales volume rising by 7.09% to 667.7 thousand tons[91]. Production and Yield - Gross profit before raw milk fair value adjustments increased by 22.1% to RMB 898.1 million from RMB 735.4 million[17]. - The annualized milk yield per milkable cow increased by 2.9% to 10.6 tons per head from 10.3 tons[17]. - Total milk yield for the period was 68.2 thousand tons, up 7.2% from 63.6 thousand tons in 2018[17]. - The herd scale increased slightly to 226,861 heads from 225,782 heads, a growth of 0.5%[17]. - Total milk production during the Reporting Period reached 682,000 tons, reflecting a year-on-year growth of 7.23%[39]. - The average milk yield per milkable cow increased to 10.6 tons in 2019, up by 2.91% year-on-year, while total milk yield grew by 7.23% to 682,000 tons compared to 636,000 tons in 2018[55][56]. - The Group operates 26 dairy farms with a total of 226,861 dairy cows across seven provinces in mainland China[28]. Cost Management - The Group successfully reduced the unit cost of raw milk (excluding depreciation) to RMB 2.31/kg, a decrease of 4.55% from RMB 2.42/kg in 2018, despite rising feed prices due to the Sino-US trade war[44]. - Direct feed costs decreased to RMB 1.78/kg from RMB 1.89/kg, representing a year-on-year decrease of 5.82%[44]. - Total feed cost for the reporting period was RMB1,225 million, approximately the same as RMB1,221 million in 2018, indicating effective cost control[99]. - The cash cost of raw milk sold (excluding depreciation) decreased by 4.58% year-on-year to RMB2,311/ton in 2019, down from RMB2,422/ton in 2018[100]. Quality and Recognition - Modern Dairy's pure milk was awarded the Gold Prize of Monde Selection for the sixth consecutive year[17]. - The Group's brand, Modern Dairy, has been recognized as a "Strategic Partner of China's Aerospace Industry," highlighting its premium quality[18]. - The Group's raw milk quality is among the top rankings globally, comparable to imported milk products in key indicators[81]. - Four products from the Group were awarded the Gold Prize at Monde Selection 2019, with pure milk winning the Gold Prize for the sixth consecutive time[81]. Strategic Initiatives - The introduction of walnut milk in July 2019 marks the Group's expansion into new product offerings[31]. - The Company launched new high-calcium pure milk and walnut milk products in early 2019 and July 2019, respectively, enhancing its product portfolio[48]. - The Group's unique integration model of forage planting, cow breeding, and milk processing positions it as the largest producer of raw fresh milk in mainland China[51]. - The Group focuses on high-standard environmental protection policies and rigorous epidemic prevention measures to ensure sustainable development[73]. - The Group aims to maintain its leading position in the dairy industry by adhering to food safety, environmental protection, and epidemic prevention[171]. Shareholder and Financial Structure - The Company entered into a subscription agreement with New Hope Dairy Co., Ltd, agreeing to issue 276,228,409 subscription shares at HK$1.3535 per share, raising approximately RMB709 million[82][85]. - Following the completion of the subscription, New Hope will hold 9.28% equity interests in the Company, becoming the second largest strategic shareholder[85]. - As of June 30, 2019, the total interest-bearing debt was RMB6,919.5 million[129]. - The Group's net gearing ratio was 96.4% as of June 30, 2019, compared to 95.0% a year earlier[128]. - The Group had a capital commitment of RMB29.1 million related to the acquisition of property, plant, and equipment as of June 30, 2019, an increase from RMB7.8 million as of December 31, 2018[158]. Employee and Social Responsibility - The Group's farms provide multiple job opportunities nationwide, effectively alleviating rural surplus labor pressure and increasing local farmers' income[170]. - The Group's social responsibility initiatives include direct donations and support for local economic development[170]. - As of June 30, 2019, the Group had 4,959 employees, an increase from 4,735 employees as of December 31, 2018[164].

Financial Performance - Revenue for the year ended December 31, 2018, was RMB 4,956.8 million, representing a 3.6% increase from RMB 4,783.8 million in 2017[15] - The company reported a gross profit before raw milk fair value adjustments of RMB 1,546.1 million, an increase of 8.1% from RMB 1,430.8 million in the previous year[15] - Cash EBITDA for 2018 was RMB 1,528.4 million, a significant increase of 41.3% compared to RMB 1,081.8 million in 2017[15] - The loss attributable to owners of the Company decreased by 49.1% to RMB 496.1 million from RMB 975.1 million in 2017[15] - Net operating cash inflow for the year was RMB 1,406.0 million, a substantial increase of 180.7% from RMB 500.9 million in 2017[15] - Total revenue increased by 3.6% to RMB4,956.8 million, with cash EBITDA rising by 41.3% to RMB1,528.4 million and net operating cash inflow escalating by 180.7% to RMB1,406.0 million compared to 2017[58] Production and Yield - Modern Dairy operates 26 dairy farms in China with over 230,000 dairy cows and an annual milk yield exceeding 1.27 million tons[7] - The total annual milk yield per milkable cow increased to 10.1 tons in 2018, up from 9.8 tons in 2017, reflecting a 3.1% growth[15] - The total number of dairy cows decreased slightly to 231,530 in 2018 from 233,058 in 2017, a decline of 1.3%[15] - The annual milk yield (AMY) per head of milkable cow increased by 3.1% to 10.1 tons, contributing to a total annual milk production of 1.28 million tons, an increase of 8.20% year-on-year[64] - The average milk yield per milkable cow increased by 3.06% to 10.1 tons in 2018, compared to 9.8 tons in 2017[76] Market and Industry Trends - In 2018, Modern Dairy achieved stable revenue growth despite soaring feed costs and global economic challenges, with significant increases in operating net cash inflow[35] - The company believes that milk prices have bottomed out and are expected to rise at a moderate pace moving forward[35] - The supply and demand of raw milk in China are reaching equilibrium, with raw milk prices continuing to rise, which is expected to improve the company's profitability[41] - The Chinese government has introduced several policies to support the dairy industry, emphasizing large-scale farming and quality assurance[38] - The introduction of new national standards for raw milk and dairy products in 2018 is expected to boost consumer confidence and increase domestic fresh milk consumption[54] - The dairy industry in China has undergone significant transformation over the past decade, improving both quality and quantity under stringent regulations[55] Quality and Recognition - Modern Dairy's products have been awarded the gold prize of Monde Selection for five consecutive years, highlighting the quality of its offerings[15] - The company has been recognized as a "Strategic Partner of China's Aerospace Industry," indicating broad societal recognition of its premium quality branded milk[16] - Modern Dairy's premium quality milk has received widespread recognition, winning the gold prize at Monde Selection for five consecutive years, along with three other product series[35] - The Group's dairy products ranked among the top in the world for quality, with four products awarded the Gold Prize at Monde Selection 2018[105] Cost Management - The unit cost of raw milk was maintained at RMB2.45/kg, with feed cost remaining at RMB1.89/kg, despite rising feed prices due to the Sino-US trade war[68] - The gross profit margin of the dairy farming business improved by 0.36 percentage points to 31.46% in 2018[64] - The gross profit of the dairy farming business before raw milk fair value adjustments was RMB1,520.6 million in 2018, an increase of 11.14% from RMB1,368.2 million in 2017[122] - The gross profit margin for the liquid milk products business fell to 8.27% in 2018 from 9.02% in 2017, attributed to a change in the pricing model to "cost-plus"[124] Strategic Initiatives - In early 2019, Modern Dairy entered a milk supply cooperation agreement with Yashili, expanding into a new high value-added business line[37] - The Group aims to enhance milk yield and quality through scientific breeding and feeding technologies, focusing on brand competitiveness and resource management[42] - The Group aims to focus on upstream business, consolidate resources, and enhance financial position and liquidity[63] - The Group aims to achieve high standards in herd breeding, focusing on increasing production output and reducing operational costs[90] Management and Leadership - Mr. Han Chunlin has over 20 years of experience in the food and beverage industry in China, previously serving as marketing vice general manager at Nowara Shinnosuke and marketing manager at Inner Mongolia Mengniu[179] - Ms. Gao Lina, aged 62, is a co-founder of the Group and has extensive experience in international trade and resource integration, having led the largest import-export enterprise in Tai'an City[180] - The management team has demonstrated strong strategic business and market planning capabilities, contributing to the success of the Group's operations in China[181] - The leadership team has received multiple awards for their contributions to the industry, including recognition as top business leaders in China[180] Environmental and Social Responsibility - The Group emphasizes environmental protection and epidemic prevention, continuously improving product quality and farm management[92] - The Group actively engages in social responsibility initiatives, including poverty alleviation and local economic development through job creation and direct donations[167] - The Group will release a separate Environmental, Social, and Governance (ESG) report to illustrate its commitment to sustainable development and corporate governance[172]