Market Impact and Operations - The outbreak of African swine fever in China has severely impacted the pork market, with approximately 40,000 pigs culled as of late 2018, affecting supply chains and prices[6]. - The company faced quarantine orders leading to a 42-day shutdown of its slaughterhouse in Changde, which significantly disrupted operations[7]. - In Q1 2019, the pig farming industry showed no signs of improvement, with pig prices reaching a 14-month high due to decreased supply from the culling of infected pigs[10]. - The company plans to acquire more quality pigs to maintain stable operations and will enhance testing of externally sourced pigs to ensure product quality[11]. - The company will implement more frequent health monitoring of its own pigs to prevent cross-infection and ensure product safety[11]. - The company expects it will take approximately 9 months to 1 year to fully resume operations affected by the African swine fever outbreak[52]. Financial Performance - The company's revenue for the year ended December 31, 2018, was approximately RMB 382 million, a decrease of about 43.3% compared to the same period in 2017[19]. - The average gross profit margin fell from approximately 4.2% in 2017 to an average gross loss margin of about 1.9% in 2018[33]. - Administrative expenses increased to approximately RMB 59 million in 2018 from about RMB 35 million in 2017, mainly due to costs associated with the African swine fever outbreak[33]. - The company reported a loss attributable to owners of approximately RMB 343 million in 2018, compared to a loss of about RMB 300,000 in 2017[34]. - The group recorded an impairment provision of approximately RMB 208 million for property, plant, and equipment due to the instability caused by the African swine fever outbreak[16]. Funding and Capital Management - In 2018, the company attempted to raise funds by issuing 173,692,000 shares at HKD 0.159 per share to improve its financial situation, but the agreement was ultimately terminated due to market volatility[8]. - The group plans to utilize approximately HKD 87.82 million (about 62.5% of the net proceeds from the rights issue) to repay outstanding loans[30]. - The net proceeds from the rights issue amounted to approximately HKD 140.53 million, with about HKD 52.71 million reserved for general working capital and potential future business opportunities[30]. - The company agreed to issue 289,490,000 rights shares at a subscription price of HKD 0.50 per share to raise approximately HKD 144.75 million[30]. Corporate Governance - The company aims to maintain high corporate governance standards to achieve sustainable long-term development and create value for shareholders[11]. - The company has adopted the corporate governance code as per the listing rules and will continue to review and enhance its governance standards[118]. - The board is responsible for determining overall strategy, monitoring operational and financial performance, and managing risks associated with achieving the group's strategic objectives[123]. - The board currently consists of seven directors, including four executive directors and three independent non-executive directors, meeting the requirement of at least three independent non-executive directors[122]. - The company has established a code of conduct for securities trading by directors, confirming compliance with the standard code as of December 31, 2018[140]. Risk Management - The company has established a risk management framework to identify and assess potential risks[171]. - The board is responsible for the overall effectiveness of the risk management and internal control systems, with annual reviews conducted[159]. - The company confirmed that the risk management and internal control systems are effective and sufficient as of December 31, 2018[161]. - The Audit Committee reviewed the effectiveness of the risk management and internal control systems, finding no significant issues during the review period[161]. Shareholder Relations - The company maintains open communication with shareholders and investors through financial reports and annual general meetings[173]. - Shareholders holding at least 10% of the paid-up capital have the right to request the board to convene a special general meeting[174]. - The board regularly reviews its policies to ensure effective communication with shareholders[175]. Asset Management - As of December 31, 2018, the total receivables amounted to RMB 260,000,000, with an expected credit loss provision of RMB 265,000[191]. - The total value of property, plant, and equipment as of December 31, 2018, was approximately RMB 261,733,000[195]. - The group recognized an impairment loss of approximately RMB 207,640,000 for property, plant, and equipment due to indications of impairment[195]. Dividend Policy - The company will continue to review its dividend policy periodically, with no guarantee of specific dividend amounts in any given period[185]. - The board will consider factors such as the group's profitability and financial condition when deciding on dividend payments[184]. - The company has adopted a dividend policy effective December 31, 2018, which outlines the factors considered for dividend distribution[183].