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].

Financial Performance - For the six-month period ended June 30, 2023, operating income was RMB 1,643,416 thousand, representing a year-on-year increase of 2.7% compared to RMB 1,600,623 thousand in 2022[8]. - Revenue from sales of raw milk reached RMB 1,565,011 thousand, a 1.1% increase from RMB 1,548,581 thousand in the same period last year[8]. - Gross profit decreased by 18.4% to RMB 418,289 thousand from RMB 512,764 thousand in the previous year[8]. - Profit attributable to owners of the parent was RMB 23,327 thousand, down 89.8% from RMB 228,843 thousand in 2022[8]. - For the first half of 2023, the profit for the period was RMB 21,274,000, a decrease from RMB 243,242,000 in the same period of 2022[78]. - The total comprehensive income for the period was RMB 22,274,000, compared to RMB 221,135,000 in the first half of 2022[78]. - Profit before tax for the first half of 2023 was RMB 21,345, a significant decrease of 91.2% compared to RMB 243,242 in the same period of 2022[105]. - Loss arising from changes in fair value increased to RMB 286,085, up 45.0% from RMB 197,169 in the previous year[105]. Sales and Production - Sales volume increased by 9.2% to 340,086 tonnes compared to 311,565 tonnes in the first half of 2022[8]. - The average annualized milk yield per milkable cow increased by 3.9% to 10.94 tonnes/year from 10.53 tonnes/year in the previous year[8]. - The herd size grew by 2.6% to 139,897 heads from 136,344 heads in the first half of 2022[8]. - The proportion of organic raw milk sold increased by 9.2 percentage points from 71.5% in 2022H1 to 76.8% in 2023H1[55]. - The volume of raw milk sold in 2023H1 was 34,000 tonnes, reflecting a growth rate in cow herd size[55]. Market and Economic Context - In the first half of 2023, China's GDP grew by 5.5% year-on-year, with total retail sales of consumer goods increasing by 8.2%[28]. - The total volume of imported dairy products decreased by 12.9% year-on-year, equivalent to a reduction of 9,580,000 tonnes of fresh raw milk[33]. - The self-sufficiency rate of domestic milk sources accelerated due to rising costs of imported dairy products and the development of high-end domestic dairy products[33]. Assets and Liabilities - Total equity as of June 30, 2023, was RMB 4,180,051,000, down from RMB 4,261,682,000 as of December 31, 2022, indicating a decrease of about 1.9%[101]. - Non-current liabilities increased to RMB 1,122,279,000 as of June 30, 2023, compared to RMB 955,437,000 as of December 31, 2022, representing an increase of approximately 17.5%[101]. - The company's net assets decreased from RMB 4,261,682,000 as of December 31, 2022, to RMB 4,180,051,000 as of June 30, 2023, reflecting a decline of approximately 1.9%[101]. - The reserve accounts in the condensed consolidated statement of financial position totaled RMB 4,016,709,000 as of June 30, 2023, down from RMB 4,081,306,000 as of December 31, 2022[103]. Operational Efficiency and Strategy - The company continues to focus on its core business and aims to enhance operational efficiency amid challenging market conditions[90]. - The company aims to provide the highest quality desert organic milk globally, focusing on sustainable practices[36]. - The Group focuses on the production and sales of desert-based organic milk, aiming to enhance its product mix and profitability through the development of functional raw milk[200]. Shareholder and Capital Information - The share capital remained unchanged at RMB 69,000,000 as of June 30, 2023[101]. - Treasury shares held under the share award scheme increased to RMB (40,804,000) as of June 30, 2023, from RMB (26,188,000) as of December 31, 2022[101]. - The Group's capital commitments for property, plant, and equipment amounted to RMB 86.9 million as of June 30, 2023, significantly up from RMB 5.0 million as of December 31, 2022[121]. - The Group acquired assets at a cost of RMB 98.71 million during the six months ended June 30, 2023, compared to RMB 61.14 million in the same period of 2022[136]. Employee and Management Compensation - Short-term employee benefits for key management personnel amounted to RMB 4,527,000 for the six months ended June 30, 2023, compared to RMB 4,565,000 for the same period in 2022[175]. - The Group recognized a share award expense of RMB 15,046,000 for the six months ended June 30, 2023, compared to RMB 6,562,000 for the same period in 2022, with a total of 53,889,000 shares vested during this period[148]. Environmental and Compliance - The Group's operations were in compliance with applicable national and local environmental protection laws and regulations during the reporting period[183]. - The company's unique organic eco-sand treatment system has been recognized by the United Nations Global Compact as a best practice in sustainable production[38]. Financial Instruments and Risk Management - The carrying amounts of the Group's financial instruments approximate their fair values due to short-term maturities[179]. - The Group's credit risk is managed by trading only with recognized and creditworthy third parties, with no collateral generally required[196].

Sales Performance - In the first half of 2023, the company's raw milk sales volume reached 340,086 tons, representing a year-on-year growth of 9.2%[18] - Organic raw milk sales volume was 261,217 tons, reflecting a year-on-year growth of 17.3%, accounting for 76.8% of total raw milk sales[18] - The total sales volume increased to 340,086 tons, up 9.2% from 311,565 tons in 2022[25] - Revenue for the six months ended June 30, 2023, was RMB 1,643,416,000, representing a 2.7% increase from RMB 1,600,623,000 in the same period last year[65] - The group's raw milk sales revenue for the six months ended June 30, 2023, was RMB 1,565.0 million, a 1.1% increase from RMB 1,548.6 million in 2022[153] Financial Performance - The sales revenue for the reporting period was RMB 1,565.0 million, an increase of RMB 16.4 million year-on-year[18] - Sales revenue for 2023 reached RMB 1,565,011,000, a slight increase from RMB 1,548,581,000 in 2022, representing a growth of 1.1%[24] - The net profit attributable to the parent company was RMB 23.3 million, a significant decrease of 89.8% compared to RMB 228.8 million in 2022[32] - Cash EBITDA for the period was RMB 368.6 million, down 20.9% from RMB 466.1 million in 2022[32] - The gross profit decreased by 18.4% to RMB 418,289,000 from RMB 512,764,000 year-on-year[65] - The net profit attributable to shareholders dropped by 89.8% to RMB 23,327,000 compared to RMB 228,843,000 in the previous year[65] - The average selling price per ton decreased to RMB 4,602 from RMB 4,970, reflecting a decline of approximately 7.4%[24] Operational Efficiency - The average annual milk yield per dairy cow increased to 10.94 tons, up approximately 0.41 tons year-on-year, marking the highest level since the company's establishment[18] - The annualized milk yield per mature cow increased by about 0.41 tons, reaching 10.94 tons, with daily milk production surpassing 2,000 tons for the first time[25] - The herd size grew by 2.6% compared to the end of last year, with raw milk sales volume recorded at 340,000 tons, of which organic raw milk sales reached 261,000 tons, a year-on-year increase of 17.3%, accounting for 76.8% of total raw milk sales[63] - The number of lactating cows as of June 30, 2023, was 63,158, down from 64,355 as of December 31, 2022[146] - The group strategically eliminated inefficient cows to optimize herd quality[149] Cost Management - Administrative expenses rose to RMB 72.7 million, a 9.2% increase from RMB 66.6 million in 2022, accounting for 4.6% of sales revenue[50] - The total employee cost for the reporting period was RMB 175.5 million, compared to RMB 162.4 million in 2022[152] - The cost of goods sold for the six months ended June 30, 2023, was RMB 1,146,722, an increase of 10.7% compared to RMB 1,035,817 for the same period in 2022[103] Investments and Assets - As of June 30, 2023, the total non-current assets amounted to RMB 5,494,910,000, slightly increasing from RMB 5,412,707,000 as of December 31, 2022[95] - The total current assets as of June 30, 2023, were RMB 2,276,252,000, compared to RMB 2,474,925,000 as of December 31, 2022, reflecting a decrease of approximately 8.0%[95] - The company’s investment in associates as of June 30, 2023, was RMB 22,797,000, down from RMB 34,352,000 as of December 31, 2022, representing a decrease of approximately 33.8%[95] - The group has initiated the construction of a smart farm, leading to an increase in capital commitments to RMB 86.9 million[38] Recognition and Awards - The company was recognized as a national key leading enterprise in agriculture, reflecting its commitment to modernizing agriculture and improving product quality[21] - The company received the "2022 China Enterprise Financial Shared Construction Excellence Achievement Award" at the 17th China CFO Summit Forum for its financial shared service project[63] - The company was recognized as a national key leading enterprise by the Ministry of Agriculture and Rural Affairs of China for its significant achievements in promoting agricultural modernization and improving product quality and safety standards[63] Future Plans - The group aims to double the sales volume of organic raw milk by 2025 compared to 2020 levels, leveraging unique resources in the Ulan Buh Desert[173] - The group plans to enhance internal management capabilities through cost control, herd optimization, and digital transformation initiatives[174]

Supply Agreements - As of December 31, 2022, the annual cap for the Dabeinong Group materials supply framework agreement is RMB 146.0 million, with an actual transaction amount of RMB 26.9 million[13]. - The duration of the Dabeinong Group materials supply framework agreement is extended to December 31, 2024[8]. - The actual transaction amount for the Yiyingmei Raw Fresh Milk Supply Framework Agreement as of December 31, 2022, is RMB 1.8 million, against a cap of RMB 17.0 million[19]. - The Yiyingmei Raw Fresh Milk Supply Framework Agreement is effective from March 28, 2022, to December 31, 2024[16]. - The company will continue to purchase materials from Dabeinong Group based on written orders, ensuring compliance with market pricing standards[10]. - The company has established a monthly milk supply plan to meet the purchasing standards of Yiyingmei Dairy[16]. - The original framework agreement with Dabeinong Group was terminated and replaced with the new agreement on March 28, 2022[8]. - The company is committed to expanding its supply agreements to enhance operational efficiency and market reach[16]. Financial Performance - The company’s financial statements for the year ended December 31, 2022, were audited by Ernst & Young[29]. - Total staff costs for 2022 amounted to RMB 330.7 million, compared to RMB 272.0 million in 2021, reflecting a year-over-year increase of approximately 21.5%[53]. - The group has made a provision of RMB 357 million for potential losses related to a civil judgment, reflecting a decrease from RMB 492 million in 2021[106]. - The provision for probable losses related to litigation amounted to RMB 35.7 million in 2022, down from RMB 49.2 million in 2021[136]. - The Company has adopted a dividend policy effective from March 28, 2023, which allows the Board to determine the declaration and payment of dividends based on profits, cash flow, and other factors[146]. Corporate Governance - The Company has adopted and complied with the Corporate Governance Code as per the Listing Rules[40]. - The Company has complied with the Corporate Governance Code for the year ended December 31, 2022[65]. - The Board is responsible for formulating overall strategies and policies to ensure the Group achieves its goals swiftly[39]. - The Board comprises nine Directors, including one executive Director and three independent non-executive Directors[68]. - The Company ensures all independent non-executive Directors are independent as per the Listing Rules, with confirmations received from each[70]. - The roles of the Chairman and Chief Executive Officer are separate, performed by different individuals, ensuring clear governance[70]. - The Company has established various committees under the Board to assist in governance and management functions[68]. - The Company has established a mechanism to ensure independent views and input are available to the Board during the year[148]. Risk Management - The Group has established effective internal control systems for risk assessment[39]. - The Group's risk management and internal control systems are designed to provide reasonable assurance against material misstatement or loss[155]. - The Group's internal control management center is responsible for evaluating and optimizing the internal control system across the industrial chain to ensure effective risk management[157]. - The Board conducted a review of the effectiveness of the Group's risk management and internal control systems, including all material controls, in 2022[155]. - The internal audit function reports to the Audit Committee, which in turn reports findings to the Board, ensuring oversight of internal controls[161]. Employee Management - As of December 31, 2022, the Group had a total of 2,845 employees, an increase from 2,682 employees in 2021[53]. - The Group provides on-the-job education and training opportunities to improve employee skills and knowledge[53]. - The Group has adopted a Share Option Scheme aimed at attracting, retaining, and motivating Directors, senior management, and employees[53]. - The Share Award Scheme aims to enhance corporate governance, attract talent, and motivate core employees for sustainable growth[126]. - The Company emphasizes the importance of integrity and law-abiding practices at all levels, with a strong focus on anti-corruption measures[163]. Shareholder Information - As of December 31, 2022, Start Great Holdings Limited and China Mengniu Dairy Company Limited each held a beneficial interest of 2,513,178,555 shares, representing 29.99% of the total shares[64]. - Nong You Co., Ltd. and Beijing Zhi Nong Investment Co., Ltd. each held 1,301,651,000 shares, accounting for 15.53% of the total shares[64]. - The company has a total of 8,381,295,229 shares issued as of December 31, 2022[108]. - The attendance record of directors at general meetings shows full participation, with key meetings held on June 20, 2022, and December 29, 2022[119]. Compliance and Legal Matters - The Company is not aware of any material uncertainties that may affect its ability to continue as a going concern as of December 31, 2022[122]. - The Company has established a whistle-blowing policy to encourage employees to report financial reporting and operational improprieties, ensuring protection against unfair dismissal[163]. - All employees received anti-corruption training during the year, including seminars and online training, to enhance awareness of anti-corruption practices[163]. - The external auditor for the Group is Ernst & Young, with fees for audit and non-audit services paid or payable for the years ending December 31, 2021, and December 31, 2022[167].

Financial Performance - For the year 2022, the company achieved a sales revenue of RMB 3,176.3 million, an increase of 6.4% compared to RMB 2,984.6 million in 2021[10] - The net profit attributable to equity holders of the parent company was RMB 416.46 million, a decline of 11.7% from RMB 471.71 million in the previous year[19] - The gross profit margin decreased to 31.9%, down 3.8 percentage points from 35.7% in 2021[19] - Gross profit for the year was RMB 1,012,682, a decrease of 4.9% compared to RMB 1,064,390 in the previous year[22] - The net profit for the year was RMB 450,073, down 11.6% from RMB 509,571 in 2021[32] - Basic earnings per share for the year was RMB 0.0499, compared to RMB 0.0563 in the previous year, reflecting a decrease of 11.4%[22] Sales and Production - The total sales volume of raw milk reached 635,451 tons, representing an increase of 8.7% from 584,787 tons in the previous year[19] - The total production of fresh milk in 2022 reached 3,932,000 tons, an increase of 6.8% from the previous year[74] - The average annual milk yield per lactating cow improved to 10.52 tons, up 2.4% from 10.27 tons in 2021[19] - The company currently operates 33 farms with a total of 136,344 dairy and beef cattle, producing 1,777 tons of fresh milk daily[75] - The total production of organic raw milk reached 468,505 tons in 2022, with one farm converted to organic production to meet growing demand[97] Assets and Liabilities - Total non-current assets as of December 31, 2022, amounted to RMB 5,412,707, an increase from RMB 5,081,779 in 2021[24] - Current assets totaled RMB 2,474,925, up from RMB 2,049,806 in the previous year, indicating a growth of 20.7%[24] - Total liabilities decreased to RMB 2,670,513 from RMB 2,862,761, a reduction of 6.7%[24] - The company's net current liabilities decreased by 75.9% to RMB 195.6 million as of December 31, 2022, compared to RMB 813.0 million in 2021[175] - The group's net debt decreased by 22.3% to RMB 891.1 million as of December 31, 2022, compared to RMB 1,147.3 million as of December 31, 2021[193] Dividends and Shareholder Returns - The company proposed a final dividend of HKD 1.13 per ordinary share, compared to no dividend in the previous year[19] - The proposed final dividend is HKD 0.0113 per share, equivalent to approximately RMB 0.099, subject to shareholder approval[65] - The company plans to pay a final dividend of HKD 0.0113 per share for the year ending December 31, 2022, compared to no dividend in the previous year[120] Operational Developments - The company converted one more farm to organic, increasing the total number of organic farms to 20, with an average daily production of organic fresh milk reaching 1,295 tons[20] - The company launched an organic A2 milk project, conducting strict DNA testing on 20,000 cows, which successfully hit the market by the end of the year, enhancing the product matrix and promoting innovation[134] - The company has developed and successfully launched organic A2 milk by the end of the year[75] Cost and Expenses - The cost of sold inventory increased to RMB 2,163,571 thousand in 2022 from RMB 1,920,226 thousand in 2021, representing a growth of 12.7%[84] - Administrative expenses increased to RMB 141.0 million in 2022, accounting for 4.4% of sales revenue, up from 3.7% in 2021[169] - Financing costs decreased by 19.3% to RMB 57.4 million in 2022, despite a 9.6% increase in interest-bearing liabilities[170] Awards and Recognition - The company received multiple awards for its digital transformation and social responsibility initiatives, including the "Innovation in Climate Action" award from the International Dairy Federation[20] Future Outlook - The company expects to continue meeting its financial obligations in the foreseeable future based on cash flow forecasts[52] - The group aims to establish its first zero-carbon dairy farm and launch zero-carbon raw milk to the market[187]

Financial Performance - Operating income for the six-month period ended June 30, 2022, was RMB 1,600,623, representing a 6.7% increase from RMB 1,499,620 in the same period of 2021[11]. - Revenue increased by 7.1% to RMB 1,548,581 compared to RMB 1,446,189 in the previous year[11]. - Gross profit decreased by 6.3% to RMB 512,764 from RMB 547,290 year-on-year[11]. - Profit for the period was RMB 243,242, down 10.4% from RMB 271,471 in the prior year[11]. - Basic earnings per share decreased by 12.9% to RMB 0.027 from RMB 0.031[11]. - The gross profit margin was 33.1%, reflecting a year-on-year decrease of 4.7 percentage points[29]. - Profit before tax was RMB 243,242, down 10.5% from RMB 271,702 in the same period last year[144]. - Profit attributable to owners of the parent for the Reporting Period was RMB 228,843, compared to RMB 259,275 in the prior year, reflecting a decrease of 11.7%[144]. - Total comprehensive income for the period was RMB 221,135, down from RMB 271,499 in the previous year, representing a decline of 18.5%[145]. Sales and Production - Sales volume increased by 8.2% to 311,565 tonnes compared to 287,856 tonnes in the previous year[11]. - The Group sold a total of 311,565 tonnes of raw milk, representing an increase of 8.2% compared to the prior period[29]. - Total quantity of raw milk sold increased from 28.8 million tonnes in 2021H1 to 31.2 million tonnes in 2022H1, marking a significant increase[15]. - The average milk yield per milkable cow improved by 2.3% to 10.53 tonnes/year from 10.29 tonnes/year[11]. - The size of the herd grew by 6.8% to 130,802 head from 122,518 head[11]. - The number of organic farms increased to 20, with an average daily organic fresh milk production of 1,364 tonnes[17]. - The proportion of organic raw milk sales increased to 71.5%, representing a growth of 20.9% compared to the prior period, with total sales of organic raw milk reaching 223,000 tonnes[17]. Cost and Expenses - The full cost of milk production was RMB 3.3/kg, with feed costs accounting for RMB 2.7/kg, representing a 6.6% increase compared to the prior period[32]. - The Group's cost of sales increased by 15.2% to RMB 1,035.8 million, driven by significant increases in bulk feed prices[49]. - Selling and distribution expenses amounted to RMB 23.5 million, a slight decrease from RMB 25.3 million in 2021[54]. - Administrative expenses increased to RMB 66.6 million, up RMB 19.0 million from RMB 47.6 million in 2021, due to enhanced employee incentives and management salaries[55]. Assets and Liabilities - Total current assets as of June 30, 2022, were RMB 1,975.7 million, a decrease from RMB 2,049.8 million at the end of 2021[67]. - Total current liabilities as of June 30, 2022, were RMB 2,694.2 million, down from RMB 2,862.7 million at the end of 2021[67]. - The Group's total equity as of June 30, 2022, was RMB 4,107.9 million, up from RMB 3,889.2 million as of December 31, 2021[70]. - The net gearing ratio decreased to 28.0% as of June 30, 2022, from 29.5% as of December 31, 2021, representing a drop of 1.5 percentage points[70]. - Trade receivables increased by RMB 23.9 million or 9.7% compared to the end of last year[67]. Strategic Initiatives and Recognition - The company’s dual-carbon strategy was recognized by the World Economic Forum as a case study in its "New Nature Economy Report Series" in January 2022[19]. - The unique organic eco-sand treatment system was selected as one of the "Corporate Best Practices for Achieving the Sustainable Development Goals" by the United Nations Global Compact in March 2022[19]. - The Group was awarded the title of "2022 Corporate Social Responsibility - Leading Enterprise" at the 17th China Corporate Social Responsibility Forum in July 2022[19]. - The Group's carbon neutral management and ESG initiatives have been recognized as industry benchmarks, with the CEO being named a "2022 United Nations' SDG Pioneer" in China[41]. Future Outlook - The Group aims to double the sales of organic raw milk by 2025 compared to 2020 levels, leveraging support from major shareholder Mengniu Group[83]. - In the second half of 2022, the Group will focus on cow expansion rates, milk production, cost control, and innovation in raw milk products[87]. - The Group aims to establish its first zero-carbon farm and introduce zero-carbon raw milk to the market as soon as possible[88]. Governance and Compliance - The Company has established a Strategic and Sustainability Committee to formulate long-term development strategies and address environmental, social, and corporate governance matters[95]. - The Audit Committee has reviewed the unaudited interim results for the Reporting Period, ensuring compliance with accounting standards and internal control systems[93]. - All Directors have confirmed compliance with the Model Code for Securities Transactions during the Reporting Period[96]. Shareholder Information - The Board did not recommend the payment of an interim dividend for the reporting period[91]. - As of June 30, 2022, Start Great Holdings Limited holds 2,513,178,555 shares, representing 29.99% of the company's total shares[117]. - The total number of shares that may be issued under the Share Option Scheme shall not exceed 10% of the total shares in issue on the Listing Date, which is 635,440,000 shares, approximately 7.58% of the issued share capital[122].

Financial Performance - In 2021, China Shengmu Organic Milk recorded revenue of RMB 2,984.6 million, representing a year-on-year growth of 12.2%[6] - The net profit for the same period was RMB 509.6 million, reflecting a year-on-year increase of 10.5%[6] - In 2021, the company achieved a sales revenue of RMB 2,984.6 million, an increase of 12.2% year-on-year, driven by rising fresh milk prices and product structure optimization[13] - The company’s net profit for the year was RMB 509.6 million, a 10.5% increase year-on-year, attributed to revenue growth and effective cost control[13] - The gross profit for the year was RMB 1,064,390 thousand, up from RMB 1,025,118 thousand, reflecting a gross margin improvement[184] - The company reported a total comprehensive income of RMB 520,959 thousand for the year, compared to RMB 462,982 thousand in 2020, reflecting a growth of 12.5%[185] - The company’s total assets increased to RMB 3,679,833,000 as of December 31, 2021, compared to RMB 3,196,732,000 in 2020, reflecting a growth of about 15.0%[190] - The company’s cash and cash equivalents at the end of the year were RMB 531,835,000, up from RMB 327,651,000 in 2020, representing an increase of approximately 62.2%[192] Production and Sales - The average selling price of raw milk was RMB 5,104 per ton, up 13.1% compared to the previous year, with organic raw milk averaging RMB 5,324 per ton, a 4.0% increase[15] - Organic raw milk sales reached 394,730 tons, a 38.5% increase year-on-year, accounting for 67.5% of total raw milk sales, up 19.2%[14] - The company’s total fresh milk production was 1,647 tons per day, with a total of 122,518 dairy cows as of the end of 2021[12] - The company plans to increase milk production by approximately 500,000 tons in 2022 due to new dairy farm projects[11] - The company successfully converted 5 farms to organic in March 2021, increasing daily organic milk production by 234 tons[18] Cost Management and Financial Strategy - The financing environment has significantly improved, leading to a noticeable decrease in capital costs for the company[5] - The average price of fresh milk increased by 13.2% to RMB 4.29 per kilogram, while feed prices also rose significantly, with corn averaging RMB 2.93 per kilogram, up 26.5%[10] - The total sales cost increased by 17.4% to RMB 1,920.2 million in 2021, up from RMB 1,635.7 million in 2020[31] - Financing costs decreased to RMB 71.2 million in 2021 from RMB 116.8 million in 2020, a reduction of RMB 45.6 million attributed to optimized debt structure and lower financing rates[36] Sustainability and Development Initiatives - The company was recognized by the United Nations Global Compact as a best practice in sustainable production and consumption for its unique organic ecological desertification control system[8] - China Shengmu aims to align with the "14th Five-Year Plan" for dairy industry revitalization, focusing on large-scale farming and integrated crop-livestock systems[7] - The company is committed to ecological priority and green development, aiming to contribute to the comprehensive revitalization of China's dairy industry[7] - The company targets a 17% reduction in carbon emission intensity and a 10% absolute reduction in emissions by the end of 2022[60] - The group invested RMB 7.5 billion over the past decade in greening the desert, covering over 200 square kilometers, and established high-quality grasslands of 150 square kilometers[54] Corporate Governance and Management - The board of directors consists of nine members, including one executive director and five non-executive directors, with the chairman being Mr. Lu Minfang[141] - The company has adopted and complied with the Corporate Governance Code as per the Hong Kong Stock Exchange's listing rules[137] - The company has established various committees, including the audit committee and remuneration committee, to assist the board in fulfilling its responsibilities[139] - The company has a board diversity policy that considers factors such as gender, age, cultural background, and professional experience in the selection of board members[143] - The company encourages ongoing professional development for all directors to enhance their knowledge and skills[149] Related Party Transactions - The group engaged in related party transactions, including the purchase and sale of dairy cows with Inner Mongolia Shengmu Pangu Dairy Co., Ltd., totaling RMB 14.2 million and RMB 35.7 million respectively for the year ended December 31, 2021[99] - The group provided financial assistance to Shengmu Pangu with a maximum annual limit of RMB 60.0 million as of December 31, 2021[101] - The group sold fresh milk to China Mengniu Dairy Group with a maximum annual limit of RMB 3,700.0 million as of December 31, 2021, and RMB 4,200.0 million as of December 31, 2022[101] Employee and Workforce Development - The employee count increased to 2,682 by December 31, 2021, reflecting a focus on youth and professional development within the workforce[23] - Total employee costs for the year 2021 amounted to RMB 272.0 million, up from RMB 263.6 million in 2020, indicating a year-over-year increase of about 3.3%[117] - The group has established various fixed contribution retirement plans for eligible employees in compliance with applicable laws and regulations[118] Financial Position and Assets - Current assets totaled RMB 2,049.8 million as of December 31, 2021, down from RMB 2,196.4 million in 2020, with trade receivables increasing by 81.6% to RMB 248.1 million[41] - As of December 31, 2021, the group's net debt was RMB 1,147.3 million, an increase from RMB 1,038.6 million in 2020[43] - The group’s biological assets amounted to RMB 2,764,240,000 as of December 31, 2021, representing approximately 38.76% of the total assets[175] Audit and Compliance - The auditor, Ernst & Young, has audited the annual financial statements for the year ended December 31, 2021[122] - The company maintains an internal audit function, and as of December 31, 2021, no significant internal control deficiencies were identified[165] - The board's governance functions include reviewing compliance with legal and regulatory requirements and monitoring the training and development of directors and senior management[138]

CHINA SHENGMU ORGANIC MILK LIMITED 中國聖牧有機奶業有限公司 (於開曼群島註冊成立的有限公司) 股份代號 : 1432 中 期 報 告 2021 ORGANIC 圣牧有机 ORGANIC Ø ORGANIC 公衣官引 提 供 全 球 最 高 品 質 的 沙 漠 有 機 奶 目錄 | --- | --- | |--------------------------|-------| | | | | 公司資料 | | | 摘要 | | | 管理層討論及分析 | | | 董事會報告 | | | 中期財務報表審閱報告 | | | 中期簡明綜合損益表 | | | 中期簡明綜合全面收益表 | | | 中期簡明綜合財務狀況表 | | | 中期簡明綜合權益變動表 | | | 中期簡明綜合現金流量表 | | | 中期簡明綜合財務資料附註 | | 公司資料 | --- | --- | |---------------------------|----------------------------------------------| | 董事會 | 提名委員會 | | 執行董事 | 盧敏放先生 ...

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