2024年度经营数据显示，得益于乳牛种群改良及单产提升，在成乳牛存栏数同比下降的背景下，公司原 料奶总产量同比提升1.6%。面对原料奶终端需求持续疲软的市场环境，公司采取灵活经营策略：将增 量产能重点投入犊牛精细化饲喂体系，同时通过加工为全脂奶粉进行价值转化。在此经营策略下，全年 原料奶外销总量为70.0 万吨，较2023年度的71.1万吨同比下降1.6%，整体产销结构保持良性平衡。 因2024年乳制品市场供大于求的状况未能得到有效改善，原奶售价持续走低，影响集团原料奶平均售价 同比下跌6.1个百分点至人民币4,467元╱吨(2023年：人民币4,756元╱吨)，销量与原奶售价的双重不利 因素，给集团销售收入带来明显冲击。 中国圣牧(01432)公布2024年业绩 母公司拥有人应占 亏损6549.5万元 同比盈转亏 智通财经APP讯，中国圣牧(01432)公布2024年业绩，营业收入约33.74亿元，同比减少4.1%;销售收入 31.26亿元，同比减少7.6%;母公司拥有人应占亏损6549.5万元，同比盈转亏;每股亏损0.008元。 年内，面对奶价持续下行趋势，集团通过降本增效措施与优化核心业务，实现公斤奶销 ...

中國聖牧有機奶業有限公司 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，概不就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 SHENGMU ORGANIC MILK LIMITED （於開曼群島註冊成立的有限公司） 提質增效 穩健前行： 年內，面對奶價持續下行趨勢，本集團通過降本增效措施與優化核心業務，實現 公斤奶銷售成本同比下降5.2%，成乳牛單產同比提升5.9%，並歷史性突破12噸 大關。作為全國首家獲得ISO22000食品安全管理體系(FSMS)認證的奶牛養殖企 業，我們將堅持以優質有機食品來守護國民健康作為己任。 （股份代號：1432） 截 至 2024 年 12 月 31 日止年度的 全年業績公告 | （除特別列明外，所有金額以人民幣（「人民幣」）千元列示） | | | | | --- | --- | --- | --- | | | | 截至12月31日止年度 | | | | 2024年 | 2023年 | 變動 | | 經營狀況 | | | | | 營業收入(1) | 3,3 ...

Investment Rating - The report initiates coverage with a "Buy" rating for China Shengmu [8][10]. Core Views - China Shengmu is the largest organic raw milk producer in China, focusing on upstream ranch operations and benefiting from a strong partnership with Mengniu Dairy, which holds a 29.99% stake in the company [3][8]. - The high-end organic milk market is expanding due to consumer upgrades driven by rising income levels and the emergence of a new middle class [5][30]. - The company has a unique geographical advantage in the Ulan Buh Desert, which enhances its product quality and safety, creating a competitive moat [6][65]. - The scale of operations allows the company to effectively manage risks and improve operational efficiency, particularly in the face of fluctuating feed prices [7][52]. Summary by Sections Company Overview - China Shengmu was founded in 2009 and became the first global organic raw milk stock listed in Hong Kong in 2014. The company has shifted its focus to organic raw milk production since 2018, partnering with Mengniu to enhance operational efficiency [18][21]. - The company operates a fully organic supply chain, from pasture planting to milk processing, and has received dual certification for organic standards from China and the EU [18][69]. Market Potential - The report highlights that the average per capita consumption expenditure in China has grown at a compound annual growth rate (CAGR) of 6.96% from 2010 to 2023, indicating a strong foundation for high-end milk consumption [30]. - Organic milk is becoming a popular choice among consumers due to its higher quality standards and health benefits, with the market for organic products in China expected to grow significantly [37][47]. Operational Efficiency - The company has improved its operational efficiency by focusing on large-scale ranching, which reduces the risk of disease and allows for better cost management [7][52]. - The report notes that the proportion of organic raw milk sales has increased from 41.4% in 2019 to 77% in 2023, contributing to improved profitability [25][78]. Financial Forecasts - The projected net profits for 2024 to 2026 are expected to be -80 million, -20 million, and 291 million yuan, respectively, with significant growth anticipated in 2026 [8]. - The report estimates that the price-to-earnings (P/E) ratio for 2026 will be 6 times, reflecting the company's growth potential in the organic milk sector [8].

Summary of Conference Call Company and Industry Overview - The conference call primarily discusses the dairy industry, focusing on the company's operations and financial performance in the context of milk prices, feed costs, and market dynamics [1][2][3][4][5][6][7][8][9][10][11][12][13][14][15][16][17][18][19][20][21][22][23][24][25][26][27][28]. Key Points and Arguments Milk Prices and Profitability - The company anticipates that milk prices will remain low throughout the next year, impacting overall profitability [1][2][16]. - The average milk price is projected to be around 2.4 to 2.5 RMB per kilogram, with some fluctuations observed in the market [13][14]. Feed Costs - Feed costs are expected to decrease by double digits, primarily due to lower commodity prices [2][3]. - The company estimates that feed costs will account for approximately 75% to 80% of total costs, with a projected cost of around 2.5 RMB per kilogram of milk [7][8]. Supply Chain and Inventory Management - The company has increased its inventory collection by 10% to 15% compared to the previous year, despite challenges faced by social farms [4][5]. - Social farms are reportedly operating at about 60% of their previous year's collection capacity due to financial constraints [5][6]. Financial Performance - The company reported a loss of approximately 400 million RMB in the first half of the year, with expectations for a slightly lower loss in the second half [11][12]. - The average valuation of dairy cows is around 21,000 to 30,000 RMB, which is considered low compared to industry standards [12]. Cash Flow and Capital Expenditure - The company expects operating cash flow to be around 1 billion RMB for the year, with capital expenditures projected to be around 700 to 800 million RMB [9][10]. - Future capital expenditures will primarily focus on maintenance rather than expansion, indicating a conservative approach to investment [17]. Debt and Financial Health - The company's debt ratio is approximately 50%, which is lower than the industry average, and it maintains a low financial cost of about 2.5% [14][15]. - The company has around 9 billion RMB in unused credit, indicating a strong liquidity position [15]. Market Dynamics and Future Outlook - The company anticipates a slight increase in sales volume, but overall growth will be modest, likely in the single digits [16]. - The market for specialty and organic milk is growing, with double-digit growth rates observed in these segments [26][27]. Government Support and Policy - Government subsidies for dairy farms have been limited, and while there have been some initiatives to support struggling farms, the effectiveness of these measures is questioned [19][20]. Industry Trends - The industry is experiencing a consolidation trend, with larger farms gaining market share while smaller farms face significant challenges [21][22]. - The company notes that the supply-demand imbalance in certain regions continues to affect market dynamics [22]. Additional Important Information - The company emphasizes the importance of stable sales agreements with major buyers, which helps mitigate risks associated with fluctuating milk prices [27]. - The management team has remained stable since 2019, contributing to improved governance and operational performance [24].

Operations and Production - The company operates 34 farms with a total stock of 148,000 cows, ensuring a secure milk source[3] - The annualized milk yield per milkable cow is 5.77 tonnes, reflecting the efficiency of the breeding practices[11] - Raw milk sales increased from 10.9 million tonnes in H1 2023 to 12.1 million tonnes in H1 2024, representing a growth of 10.3%[11] - The herd structure shows a significant increase in the number of milkable cows, contributing to overall production capacity[10] - The Group operated 34 farms with a total of 148,101 cows in stock as of June 30, 2024, with a 20.7% increase in fattening cows compared to the end of the previous year[24] - The Group imported over 3,600 high-quality young Holstein cows from Australia, enhancing the quality of the milkable cow herd[24] - The average annualized yield of milkable cows reached 12.07 tonnes, a year-on-year increase of 1.13 tonnes, marking a record high for the Group[27] - Raw milk sales in the first half of 2024 amounted to 0.351 million tonnes, representing a year-on-year increase of 3.2%[28] Financial Performance - The Group's raw milk sales revenue for the six months ended June 30, 2024, was RMB1,490.7 million, a decrease of 4.7% year-on-year from RMB1,565.0 million in 2023[39] - The sales volume of raw milk increased by 3.2% year-on-year to 350,848 tonnes, compared to 340,086 tonnes in 2023[39] - The average selling price of raw milk decreased by 7.7% year-on-year to RMB4,249 per tonne, down from RMB4,602 per tonne in 2023 due to supply-demand imbalances[39] - The Group's gross profit margin for the first half of 2024 was 26.5%, nearly unchanged from 26.7% in the same period of 2023[31] - The loss from changes in fair value less costs to sell of biological assets increased to RMB 451.0 million, up from RMB 286.1 million in 2023, primarily due to a significant increase in the number of inefficient cows retired and a decline in beef market prices[46] - Other income and gains rose by 89.0% to RMB 49.9 million, compared to RMB 26.4 million in 2023, mainly driven by increased government subsidies[49] - The Group's raw milk sales revenue for the period was RMB 1,490.7 million, a year-on-year decrease of 4.7% compared to RMB 1,565.0 million in 2023, despite a sales volume increase of 3.2% to 351,000 tons[40] - The cost of sales for raw milk decreased by 4.4% to RMB 1,096.2 million, down from RMB 1,146.7 million in 2023, benefiting from improved operational efficiency and reduced feed costs[41] Debt and Financing - The proportion of long-term loans increased to 65.2% in H1 2024, up from 51.4% in 2022, indicating a shift towards more stable financing[14] - Finance costs decreased from 3.65% in 2022 to 2.43% in H1 2024, showing improved cost management[14] - The Group secured China's first naturally beneficial commercial ESG-linked loan amounting to RMB100 million for a term of 2 years at an interest rate of 2.53% per annum, supporting green projects[35] - The proportion of medium- and long-term loans increased to 65.1%, indicating an optimization of the debt structure[53] - The Group maintained a credit facility of RMB10 billion, with available and unutilized credit facilities amounting to approximately RMB9,028.1 million[60] - The Group's interest-bearing bank and other borrowings increased to RMB2,486.6 million as of June 30, 2024, up from RMB2,131.2 million at the end of 2023, representing a growth of 16.7%[60] Market and Economic Context - In the first half of 2024, China's GDP reached RMB 61,683.6 billion, representing a year-on-year growth of 5.0%[18] - The total retail sales of consumer goods in China reached RMB 23,596.9 billion, with a year-on-year growth of 3.7%[18] - National milk production in the first half of 2024 was 18.56 million tonnes, representing a year-on-year increase of 620,000 tonnes or 3.4%[21] - The average price of raw fresh milk in June 2024 was RMB 3.3/kg, a decrease of 13.7% compared to the same period last year[21] - The total amount of dairy products imported into China in the first half of 2024 was 1,308,000 tonnes, representing a year-on-year decrease of 15.6%[19] Sustainability and Corporate Governance - The company's original organic ecological desert management system was recognized by the United Nations as a best practice for sustainable production[3] - Shengmu is the first raw milk brand in Mainland China to obtain dual certifications of organic standards from both domestic and EU authorities[3] - The Group joined the World Business Council for Sustainable Development (WBCSD), marking a significant step in its commitment to global sustainable development[35] - The Group's organic products won the Gold Award at the 17th Asia International Organic Products Expo, highlighting its commitment to quality[31] - The Group is committed to integrating into global competition and contributing to societal development through its operations[15] - The Group's operations complied with all material national and local environmental protection laws in the PRC during the reporting period[76] Human Resources and Management - The Group's employee count decreased to 2,187 as of June 30, 2024, down from 2,701 employees at the end of 2023, while improving efficiency metrics[36] - The Share Award Scheme resulted in the vesting of approximately 108,942,111 award shares, with an additional 99,954,000 shares vesting due to performance targets being met[37] - The Board believes the Company has complied with the Corporate Governance Code during the reporting period[88] - The Board of Directors consists of nine members, including one executive Director and five non-executive Directors[89] - The Remuneration Committee determines policies related to human resources management and reviews the Company's remuneration policies[91] Future Outlook and Strategy - The Group aims to double the sales volume of organic raw milk by 2025 compared to 2020 levels, following national and local policy guidelines[77] - The Group will focus on cost control, efficiency improvement, herd optimization, and digital innovation to enhance operational capabilities in 2024[78] - The Group plans to continue developing a variety of functional raw milk to enrich its product combination and enhance profitability[23] - The newly built smart farm in the Ulan Buh Desert Base has commenced operations, housing approximately 3,800 high-quality young Holstein cows imported from Australia, with the first batch of raw milk expected by the end of this year[33] - The Group will enhance its digital innovation capabilities and build a highly efficient supply chain for sustainable development[78]

Financial Performance - For the six months ended June 30, 2024, the company's revenue was RMB 1,567,692 thousand, a decrease of 4.6% compared to RMB 1,643,416 thousand in the same period of 2023[1] - Sales revenue for the same period was RMB 1,490,702 thousand, down 4.7% from RMB 1,565,011 thousand year-on-year[1] - The company reported a gross profit of RMB 394,509 thousand, reflecting a decline of 5.7% from RMB 418,289 thousand in the previous year[1] - The EBITDA profit increased by 9.8% to RMB 404,740 thousand, compared to RMB 368,563 thousand in the prior year[1] - The company reported a net loss of RMB 145,510,000 for the six months ended June 30, 2024, compared to a profit of RMB 21,274,000 for the same period in 2023, representing a significant decline in performance[7] - Total comprehensive loss for the period amounted to RMB 149,510,000, a stark contrast to the comprehensive income of RMB 22,274,000 in the previous year[7] - The group reported a loss attributable to equity holders of the parent company of RMB (143,681) thousand for the six months ended June 30, 2024, compared to a profit of RMB 23,327 thousand for the same period in 2023[24] Assets and Liabilities - Non-current assets totaled RMB 6,407,815,000 as of June 30, 2024, showing an increase from RMB 6,361,869,000 at the end of 2023[8] - Current assets decreased to RMB 1,649,276,000 from RMB 2,155,042,000, indicating a reduction in liquidity[8] - The company's cash and bank balances increased to RMB 626,622,000 from RMB 552,429,000, reflecting improved cash management[8] - The net current liabilities improved to RMB 660,223,000 from RMB 867,205,000, suggesting better short-term financial health[13] - Total liabilities decreased from RMB 4,236,255,000 at the end of 2023 to RMB 4,082,483,000 as of June 30, 2024, indicating a reduction in overall debt[10] - The company's equity attributable to shareholders decreased from RMB 4,023,068,000 to RMB 3,872,507,000, reflecting a decline in shareholder value[11] Operational Highlights - The sales volume for the period was 350,848 tons, representing a growth of 3.2% from 340,086 tons in the same period last year[1] - The average annual milk yield per cow reached 12.07 tons, an increase of 10.3% from 10.94 tons year-on-year[1] - The company has completed the construction of an intelligent farm in Ulanqab and Desert Base, which is now operational with approximately 3,800 dairy cows[2] - The company imported about 4,600 high-quality young Holstein cows during the period, enhancing the quality of its herd[2] - The company operated 34 farms as of June 30, 2024, with a total herd size of 148,101, showing a slight increase from 148,029 at the end of 2023[33] - The average selling price of raw milk for the group was RMB 4.25 per kilogram, a year-on-year decrease of 7.7%[35] Cost and Efficiency - The cost of goods sold for the six months ended June 30, 2024, was RMB 1,096,193 thousand, down from RMB 1,146,722 thousand in the same period of 2023[20] - The cost of milk sales per kilogram decreased by RMB 0.25 to RMB 3.12 per kilogram, with feed costs at RMB 2.51 per kilogram, down RMB 0.24 year-on-year[35] - The gross profit margin for the first half of the year was 26.5%, nearly unchanged from 26.7% in the same period of 2023[35] - The group increased the culling rate of low-efficiency cows, resulting in a 4.1% decrease in the self-breeding expansion rate[36] - The cost of sales for raw milk was RMB 1,096.2 million, down 4.4% from RMB 1,146.7 million in 2023, benefiting from improved operational efficiency and lower feed costs[40] Sustainability and ESG Initiatives - The company has joined the World Business Council for Sustainable Development (WBCSD), marking a significant step in its commitment to sustainability[3] - The group received the "ESG Disclosure Contribution Pioneer Award" for its outstanding performance in ESG and sustainability efforts[38] - The group successfully issued a green loan of RMB 100 million, marking a significant step in ESG financing in Inner Mongolia[38] Management and Governance - The company has implemented a long-term share incentive plan with a total allocation of RMB 105,000,000 over three years, with the third batch of RMB 35,000,000 granted to 62 selected participants in April 2024[28] - The audit committee consists of two independent non-executive directors and one non-executive director, with Mr. Wang Liyan as the chairman[67] - Ernst & Young has agreed to the financial data presented for the six months ending June 30, 2024, but does not provide any guarantees regarding the performance announcement[68] Market Context - In the first half of 2024, China's GDP reached RMB 61,683.6 billion, growing by 5.0% year-on-year, while retail sales of consumer goods increased by 3.7% to RMB 23,596.9 billion[29] - The dairy industry faced challenges with a 3.0% year-on-year decline in production from large-scale dairy manufacturers, totaling 14.33 million tons in the first half of 2024[29] - The average price of raw milk in major producing provinces was RMB 3.3 per kg in June 2024, down 13.7% year-on-year, marking the longest continuous decline in 28 months[30]

Summary of the Conference Call Industry Involved - The discussion focuses on the dairy industry, specifically the upstream (farms) and downstream (dairy enterprises) sectors of dairy products [1]. Core Points and Arguments - The team has been researching the dairy sector for a considerable time, indicating a long-term interest and expertise in this area [1]. - There is a noted correlation between the profitability cycles of dairy farms and dairy companies with the price cycles of dairy products [1]. - In the second quarter, there has been a year-on-year decline in dairy product production, suggesting potential challenges in the industry [1]. Other Important but Possibly Overlooked Content - The mention of the profitability cycle and price cycle correlation implies that market conditions may significantly impact future earnings for companies in the dairy sector [1].

Summary of Conference Call Company/Industry Involved - The conference call pertains to the Washington Securities and the Chinese Saint Mother Gold Mine industry Core Points and Arguments - The meeting is exclusively for professional investment institutions or invited clients of Washington Securities, indicating a focus on institutional investors [1] - All participants are currently muted, suggesting a controlled environment for information dissemination [1] - A disclaimer is read at the beginning, emphasizing that the opinions expressed are personal and do not constitute investment advice [1] - The meeting is regulated to avoid the exchange of sensitive insider information, highlighting compliance with regulatory standards [1] Other Important but Possibly Overlooked Content - The structure of the meeting indicates a formal approach to investor relations, which may reflect the company's commitment to transparency and regulatory adherence [1] - The mention of third-party experts suggests that external insights may be provided, which could add value to the discussion [1]

Financial Performance - In 2023, China Shengmu recorded revenue of RMB3,383.6 million, representing a year-on-year increase of 6.5%[9] - The Group achieved cash EBITDA of RMB991.0 million, with a net profit of RMB94.6 million, maintaining a relatively high net profit margin in the industry[10] - Sales revenue for the year ended December 31, 2023, was RMB3,383.6 million, an increase from RMB3,176.3 million in 2022[74] - For the year ended 31 December 2023, profit attributable to owners of the parent company was RMB 86.1 million, a decrease of RMB 330.4 million compared to RMB 416.5 million in 2022[110][112] - Gross profit for 2023 was RMB1,025.0 million, with a gross profit margin of 30.3%, down from 31.9% in 2022[75] Milk Production and Sales - The total milk yield increased, with 548,000 tonnes of organic raw milk sold during the year[13] - In 2023, the Group's organic raw milk sales volume increased by 19.7%, accounting for 77.0% of total raw milk sales[33] - The sales volume of organic raw milk was 0.548 million tonnes, marking a 19.7% increase from the corresponding period, with organic raw milk sales accounting for 77.0% of total raw milk sales[131] - The milk yield of milkable cows reached 11.38 tonnes, an increase of approximately 0.86 tonnes compared to the previous period, the highest level since the Group's establishment[131] Operational Efficiency and Strategy - The Group's operational efficiency was enhanced through digital transformation and ESG sustainability initiatives, receiving multiple awards for its efforts[14] - The Group continues to prioritize cost control and operational efficiency amidst a challenging market environment[27] - The Group will focus on cost control, efficiency improvement, herd optimization, and farm digitization to enhance operational capabilities[116] - The Group aims to double the sales volume of organic raw milk by 2025 compared to 2020 levels, leveraging unique resources from the Ulan Buh Desert[116] Herd Management - The number of organic cows in stock reached 96,165, with a strategic import of approximately 3,800 Australian cows to enhance herd quality[13] - The herd size increased to 148,029 heads, up from 136,344 heads in the previous year, with notable growth in fattening cows and calves[24] - The Group strategically retired inefficient cows, resulting in approximately 47.0% of the herd being milkable cows[44] - The overall quality of the herd has significantly improved, with the proportion of lactating cows at approximately 47.0%[152] Financial Position and Borrowings - As of December 31, 2023, the Group's outstanding interest-bearing borrowings amounted to RMB2,131.2 million, up from RMB1,840.2 million in 2022, with net borrowings increasing by 18.2% to RMB1,053.4 million[71] - The Group's total equity as of December 31, 2023, was RMB4,236.3 million, slightly down from RMB4,261.7 million in 2022[71] - The financial gearing ratio was 51.5%, up from 43.5% in 2022[71] Cost and Expenses - The cost of sales for raw milk amounted to RMB 2,358.6 million, representing a 9.0% increase from RMB 2,163.6 million in 2022[57] - The selling and distribution expenses rose to RMB 62.7 million, an increase of 13.7% compared to RMB 55.2 million in 2022[62] - The Group's total employee costs in 2023 amounted to RMB377.4 million, an increase from RMB330.7 million in 2022[32] - Administrative expenses increased by 18.0% to RMB166.3 million, accounting for 4.9% of sales revenue compared to 4.4% in 2022[83] Share and Equity Management - As of December 31, 2023, there were 230,986,988 award shares outstanding under the Share Award Scheme, representing 2.8% of the Company's issued shares[32] - The proposed final dividend for the year ended December 31, 2023, is HKD0.23 per ordinary share, down from HKD1.13 in 2022[119] - The Group's available reserves as of December 31, 2023, amount to RMB3,474.4 million, a decrease from RMB3,569.3 million in 2022[121] Market and Industry Context - The average price of raw milk decreased by 4.9% year-on-year to RMB4,756 per ton in 2023, down from RMB4,998 per ton in 2022[34] - The total volume of imported dairy products into China decreased significantly for two consecutive years, with a 12.0% year-on-year decrease in 2023[41] - The average price of fresh raw milk in primary dairy-producing provinces was RMB3.66/kg in the last week of December 2023, a decrease of 11.2% compared to the previous year[42] Corporate Governance and Compliance - The Group's operations complied with all applicable national and local environmental protection laws and regulations in 2023[93] - The Group is exposed to various business risks, including financial, regulatory, environmental, and natural risks[117] - The Company has adopted a Share Award Scheme effective from April 19, 2022, where shares will be purchased by a professional trustee on the market[199] Future Outlook - The 2024 Policy on Promoting High-Quality Development of the Milk Industry emphasizes stabilizing high-quality milk supply and increasing subsidies for forage storage[116] - The demonstration zone will cooperate with Mengniu Deluxe Milk brand to build the world's first desert oasis farm of Deluxe Milk[154]

Revenue and Profitability - Revenue for the year ended December 31, 2023, was RMB 3,520,212 thousand, representing a 5.5% increase from RMB 3,335,669 thousand in 2022[2]. - Sales revenue increased by 6.5% to RMB 3,383,629 thousand from RMB 3,176,253 thousand in the previous year[2]. - The company's gross profit rose to RMB 1,025,020 thousand, a 1.2% increase compared to RMB 1,012,682 thousand in 2022[2]. - The net profit attributable to equity holders of the parent company significantly decreased by 79.3% to RMB 86,076 thousand from RMB 416,460 thousand in the prior year[2]. - Cash EBITDA increased by 5.8% to RMB 991,013 thousand from RMB 936,875 thousand in 2022[2]. - The total revenue from other income and gains for the year ended December 31, 2023, was RMB 72,319,000, compared to RMB 46,109,000 in 2022, reflecting a growth of 56.8%[30]. - The company's profit attributable to owners of the parent for 2023 was RMB 86.1 million, a decrease of RMB 330.4 million compared to RMB 416.5 million in 2022[62]. - The group reported a loss of RMB 706.3 million from the fair value changes of biological assets less selling expenses in 2023, an increase from RMB 291.4 million in 2022, mainly due to the proactive retirement of inefficient cattle and declining market prices[85]. Sales and Production - Total sales volume increased by 12.0% to 711,465 tons from 635,451 tons in the previous year[2]. - The average yield per lactating cow improved by 8.2% to 11.38 tons per year per head from 10.52 tons[2]. - The average selling price of raw milk decreased by 4.9% year-on-year to RMB 4.76 per kg, while the total sales volume of raw milk reached 711,000 tons, representing a 12.0% increase compared to 635,000 tons in 2022[53]. - The company achieved a daily fresh milk production of 2,119 tons in 2023, with 18 organic certified farms producing 1,667 tons, 2 DHA milk farms producing 133 tons, and 1 organic A2 milk farm producing 34 tons[44]. - The sales volume of organic raw milk increased by 19.7% year-on-year, accounting for 77.0% of total raw milk sales[161]. - The company successfully launched "DHA Milk" and "Organic A2 Raw Milk," with sales volumes of 39,355 tons and 1,647 tons respectively in 2023[161]. Assets and Liabilities - The total non-current assets as of December 31, 2023, amounted to RMB 6,361,869,000, an increase of 17.5% from RMB 5,412,707,000 in 2022[23]. - Current assets totaled RMB 2,155,042,000 as of December 31, 2023, down 13.0% from RMB 2,474,925,000 in 2022[23]. - The company's net current liabilities increased to RMB (867,205,000) in 2023 from RMB (195,588,000) in 2022, indicating a significant decline in liquidity[23]. - The total liabilities increased to RMB 4,125,656,000 in 2023 from RMB 3,625,950,000 in 2022, indicating a rise of 13.8%[25]. - The total assets less current liabilities stood at RMB 5,494,664,000 as of December 31, 2023, compared to RMB 5,217,119,000 in 2022, marking a growth of 5.3%[23]. Costs and Expenses - The company's pre-tax profit for the year was impacted by employee benefits expenses totaling RMB 377,381,000, up from RMB 330,701,000 in 2022, representing a 14.1% increase[32]. - The cost of raw milk sales for the company was RMB 2,358.6 million in 2023, an increase of 9.0% from RMB 2,163.6 million in 2022, primarily due to the growth in sales volume[54]. - The average cost of milk sold was RMB 3.32 per kg in 2023, a decrease of RMB 0.08 compared to the previous year[47]. - Administrative expenses rose to RMB 166.3 million, an increase of 18.0% year-on-year, accounting for 4.9% of sales revenue[197]. Dividends and Shareholder Returns - The company proposed a final dividend of HKD 0.23 per share, down from HKD 1.13 per share in 2022[2]. - The company declared a final dividend of RMB 87,184,000 for the year ended December 31, 2023, compared to no dividend in 2022[34]. - The company plans to distribute a final dividend of HKD 0.23 per share, subject to shareholder approval at the 2024 annual general meeting[173]. Financing and Capital Structure - Financing costs decreased by 7.6%, and the proportion of medium to long-term interest-bearing debt increased to 57.3%[7]. - The group maintained a credit facility exceeding RMB 10 billion with a utilization rate below 30%, ensuring stable operations[64]. - The company's total bank borrowings as of December 31, 2023, were RMB 2,131,239,000, up from RMB 1,840,250,000 in 2022[148]. - The group provided guarantees for bank loans amounting to RMB 69.0 million for a subsidiary, a significant decrease from RMB 142.9 million in the previous year, reflecting a reduction of approximately 51.7%[96]. Strategic Initiatives and Future Outlook - The company aims to double the sales volume of organic raw milk by 2025 compared to 2020 levels, aligning with national and local government policies to enhance the dairy industry[100]. - The company is constructing a dairy farming demonstration area in Ulanqab and the desert base to enhance organic milk sales and brand strength[189]. - The company imported over 3,800 high-quality young Holstein cows from Australia to support the demonstration area[189]. - The company has implemented cost control measures effectively, leading to improved operational efficiency despite declining raw milk prices[156]. Corporate Governance and Compliance - The group has maintained a high level of corporate governance, recognizing its importance to the company's value and shareholder benefits[101]. - The group has established a policy to only engage in transactions with recognized and reputable third parties, minimizing credit risk[97]. - The company has applied the revised International Financial Reporting Standards, which are not expected to have a significant impact on its financial statements[135].