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 ...

2020 年度報告 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 | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-------|-------|-------|-------|-------|---------|-------|-------------------|-------|------------------|-------|-------|------------------|-------| | | | | | | | | | | | | | | | | | | | | | | | ORGANIC | | | | | | | | | | | NVD8 | | ORGANIC | | 圣权有机一 છ | | ORGANIC 圣家有机 | | | ORGANIC 圣牧有机 | | | | | | | | | | | | | | | | | 提供全球最高品質的沙漠有 ...

Financial Performance - For the six months ended June 30, 2020, the company's sales revenue was RMB 1,251.1 million, a decrease of 11.9% compared to RMB 1,420.6 million in the same period of 2019[3] - The gross profit for the same period was RMB 470.8 million, down 9.0% from RMB 517.4 million year-on-year[3] - The profit from continuing operations surged to RMB 165.7 million, a significant increase of 414.2% compared to RMB 32.2 million in the previous year[3] - The company reported a net profit of RMB 165.7 million, compared to a loss of RMB 20.8 million in the same period last year, marking a turnaround of RMB 186.5 million[3] - For the first half of 2020, the company's sales revenue was RMB 1,251.1 million, with a gross margin increase from 36.4% in the first half of 2019 to 37.6% in 2020, an increase of 1.2%[14] - The company achieved a profit of RMB 165.7 million in the first half of 2020, recovering from a loss of RMB 20.8 million in the same period of 2019, with the profit attributable to the parent company increasing from a loss of RMB 73.5 million to a profit of RMB 142.9 million[14] - The external sales of raw milk increased from RMB 1,159.0 million in the first half of 2019 to RMB 1,251.1 million in the first half of 2020, representing a year-on-year increase of 7.9%, with organic raw milk sales rising by 21.4%[16] - The average selling price of organic raw milk was RMB 4,992 per ton in the first half of 2020, compared to RMB 4,687 per ton in the same period of 2019, reflecting a price increase[17] - The total sales volume of raw milk decreased by 5.2% from 313,948 tons in the first half of 2019 to 297,675 tons in the first half of 2020, primarily due to the disposal of inefficient cattle[18] - The group had no income tax expenses in the first half of 2020, while it incurred RMB 0.2 million in income tax expenses in the first half of 2019[28] - For the six months ended June 30, 2020, the profit attributable to the owners of the parent company was RMB 142.9 million, a turnaround from a loss of RMB 73.5 million in the same period of 2019, representing an improvement of RMB 216.4 million[29] Operational Efficiency - The company is focusing on lean operations and precise management to reduce costs and improve efficiency, contributing to healthy business growth[7] - The group’s sales cost decreased from RMB 903.2 million in the first half of 2019 to RMB 780.3 million in the first half of 2020, with a gross margin increase from 36.4% to 37.6%[21] - The average daily fresh milk production is 1,715 tons, with 730 tons coming from organic certified farms, making it the largest organic raw milk base in China[6] - The company is developing a precision breeding management platform to enhance production efficiency and establish a smart dairy farming system[12] - The company is focusing on talent development to ensure a dynamic talent pool for achieving its strategic goals[13] - The company is exploring effective dairy-meat linkage projects to capitalize on market opportunities amid consumption upgrade trends[13] Strategic Plans - The company plans to convert three conventional farms to organic farms to enhance profitability and meet market demand for high-end organic milk[9] - The company plans to convert three organic farms in the second half of 2020, having completed the conversion of two farms by July 2020, aiming to strengthen its leading position in the organic sector[11] - The company aims to expand overseas organic feed cooperation and certification business to enhance its organic control capabilities and product image[11] - The company intends to spend about RMB 94.6 million to acquire 5,000 to 6,000 dairy cows domestically and overseas by the end of 2021[49] Financial Position - As of June 30, 2020, total current assets amounted to RMB 1,724.4 million, slightly down from RMB 1,783.3 million as of December 31, 2019, with inventory decreasing by RMB 245.0 million[30] - Total current liabilities decreased to RMB 3,601.5 million as of June 30, 2020, from RMB 4,121.0 million as of December 31, 2019, primarily due to repayment of borrowings and issuance of shares for the acquisition of minority interests[31] - The group had cash and bank balances of RMB 559.8 million as of June 30, 2020, an increase of RMB 249.6 million compared to RMB 310.2 million at the end of 2019, benefiting from improved operational performance[30] - The group had a total of 2,591 employees as of June 30, 2020, down from 2,749 employees a year earlier[39] - The group’s capital commitments increased to RMB 94.1 million as of June 30, 2020, compared to RMB 81.1 million at the end of 2019, primarily due to fixed asset investments by subsidiaries[38] - The company has available undrawn bank credit facilities of RMB 1,895,644,000, which supports its liquidity position going forward[89] Shareholder Information - The company completed the sale of a 49% stake in its associate company Shengmu Dairy to Inner Mongolia Mengniu for a total consideration of HKD 0.33 per share, resulting in a total of 688,705,234 shares issued[42] - Following the share issuance, the total number of shares increased to 8,381,295,229, with China Mengniu becoming the largest shareholder, holding 17.51% of the issued shares[43] - The company has adopted a share option scheme that allows for the issuance of up to 10% of the total issued shares as of the listing date, equating to 635,440,000 shares[71] - The company has disclosed that there are no other interests or short positions held by directors or senior management as of June 30, 2020[67] Governance and Compliance - The audit committee has been established in accordance with listing rules, consisting of Mr. Wang Liyan, Mr. Fu Wenge, and Mr. Li Xuan, with Mr. Wang serving as the chairman[55] - The remuneration committee includes Mr. Li Xuan, Mr. Sun Qian, and Mr. Fu Wenge, chaired by Mr. Li, focusing on human resource management policies and executive compensation[56] - The nomination committee, chaired by Mr. Fu Wenge, is responsible for recommending candidates to fill board vacancies[57] - Non-executive directors have confirmed no direct or indirect competition with the company's business as of June 30, 2020[59] - Continuous related party transactions during the interim period include agreements with Shengmu Pangu and Da Bei Nong Group for the supply of milk and feed[60][61] Market Outlook - The Chinese Dairy Industry Association reported a dairy merchant index of 62.7 in 2020, up from 60.7 in 2019, indicating a positive outlook for the dairy industry[5]

GANIC MILI 2019年度報告 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 0 -24 1 er and the province of the station of the station of the station of the see and 新闻 ORGANIC MILK 自動機+吸 ORGANIC MILA -- ORGANIC 6 - 2 g #83888888 Ething #1 nd 目錄 公司資料 2 有機產業基地位置圖 4 董事長致辭 5 管理層討論及分析 7 董事會報告 19 董事及高級管理層 35 企業管治常規報告 39 環境、社會及管治報告 48 獨立核數師報告 80 綜合損益表 84 綜合全面收益表 85 綜合財務狀況表 86 綜合權益變動表 88 綜合現金流量表 89 財務報表附註 91 財務概要 176 公司資料 | --- | --- | |-----------------------------------------|-------- ...

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Financial Performance - In 2018, the company achieved a sales revenue of RMB 2.89 billion, with a gross profit of RMB 940 million[12]. - In 2018, the company's sales revenue increased by 6.7% to RMB 2,887.2 million from RMB 2,706.8 million in 2017[18]. - The gross profit decreased by 13.2% to RMB 939.6 million in 2018, down from RMB 1,083.0 million in 2017[18]. - The loss attributable to equity holders increased from RMB 1,015.3 million in 2017 to RMB 2,225.2 million in 2018[18]. - The sales revenue of raw milk rose by 60.1% from RMB 1,279.2 million in 2017 to RMB 2,047.7 million in 2018[20]. - The sales revenue from liquid milk decreased by 41.2% from RMB 1,427.7 million in 2017 to RMB 839.4 million in 2018[25]. - The average selling price of organic raw milk dropped by 17.1% from RMB 4,571 per ton in 2017 to RMB 3,789 per ton in 2018[23]. - The total sales volume of raw milk increased by 11.8% from 585,930 tons in 2017 to 655,294 tons in 2018[23]. - The company's liquid milk business accounted for 29.1% of total sales revenue in 2018, down from 52.7% in 2017[25]. - The sales revenue from the dairy farming segment decreased from RMB 2,502.2 million in 2017 to RMB 2,404.1 million in 2018[23]. Strategic Initiatives - The company sold 51% of its downstream liquid milk business to Mengniu Group, while acquiring minority interests in 12 farms located in the core area of its organic industry system[6]. - The strategic shift aims to enhance the company's focus on dairy farming and raw milk business, leveraging its experience and advantages in the organic industry[6]. - The strategic focus on building a safe milk source base is expected to support sustainable long-term development[6]. - The company is committed to enhancing its operational capital needs through strategic partnerships and asset integration[6]. - The company aims to focus on upstream dairy farming to ensure sustainable long-term development in the competitive dairy industry[17]. Market and Industry Trends - The Chinese dairy industry is undergoing revitalization, with a target to achieve a milk production of 45 million tons by 2025, enhancing quality and competitiveness[9]. - The government aims for over 65% of dairy farms to have more than 100 heads of cattle by 2020, with a self-sufficiency rate of 70%[9]. - The overall quality of raw milk in China continues to improve, supported by collaboration among leading dairy enterprises[10]. - The company is positioned to benefit from the growing demand for dairy products as per capita consumption continues to rise[10]. Operational Developments - The company has improved its brand recognition and reputation through innovative sales strategies and upgraded product image[5]. - The company developed 63 new market bases and established 328 new business partners in 2018[13]. - The company shipped a total of 4.822 million units through the Yunji platform in 2018, enhancing brand visibility and consumer acceptance[14]. - The company established an organic feed base covering over 200,000 acres and built a processing plant with an annual capacity of 70,000 tons of organic fertilizer[15]. - The company has established a comprehensive organic feed management system, becoming a demonstration base for large-scale organic farming in China[15]. Financial Position and Liabilities - Total current assets decreased to RMB 2,048.2 million as of December 31, 2018, down from RMB 3,604.3 million in 2017[37]. - Current liabilities increased to RMB 4,573.4 million as of December 31, 2018, from RMB 4,341.6 million in 2017[41]. - The financial leverage ratio was 82.3% as of December 31, 2018, compared to 62.3% in 2017[45]. - The company had cash and bank balances of RMB 77.3 million as of December 31, 2018, down from RMB 582.3 million in 2017[45]. Corporate Governance - The board consists of nine directors, including three executive directors and three independent non-executive directors[130]. - The company has adopted and complied with the Corporate Governance Code as per the Hong Kong Stock Exchange's listing rules[127]. - The company has established effective internal control systems for risk assessment[128]. - The board has delegated certain functions to various committees, including the audit committee and remuneration committee[129]. - The company encourages continuous professional development for all directors, providing training on responsibilities, insider trading regulations, and market misconduct[137]. Environmental and Social Responsibility - China Shengmu's sustainable development efforts have transformed over 200,000 acres of desert into quality grasslands and built 11 reservoirs in the Ulan Buh desert[162]. - The company emphasizes environmental responsibility, creating a green industry chain and adhering to all relevant environmental laws and regulations[190]. - The company has implemented a strict quality management system, ensuring that all products meet organic standards without any preservatives, artificial colors, or flavors[176]. - The company has established a comprehensive product traceability system, recording all agricultural activities and maintaining real-time health records for each cow, ensuring full traceability of feed and milk production[184]. - The company has committed to complying with regulations and contributing to local economic development through job creation and tax contributions[171].