4月18日，中粮家佳康洮南新建66.24万头绿色健康生猪养殖项目正式开工。 该项目为洮南一期建设项目，投资20.14亿元，建成投产后将有效带动当地种植、仓储、加工、包 装、物流等上下游产业共同发展，成为拉动地方经济增长、财政增收的重要增长极。项目的正式落地既 是贯彻东北振兴战略的务实举措，更是加快农业农村现代化进程的生动实践，标志着政企合作再上新台 阶。 ...

Financial Performance - The company reported a total operating revenue of RMB 11.57 billion for the year ended December 31, 2023, a decrease of 10.3% compared to RMB 12.90 billion in 2022[3]. - The net profit attributable to the company's owners was RMB 51.14 million, a significant improvement from a loss of RMB 135.68 million in the previous year[2]. - The company reported a net loss attributable to owners of RMB 135,679 thousand for the year ended December 31, 2023, compared to a profit of RMB 356,674 thousand in 2022, representing a significant decline[6]. - Total comprehensive expenses for the year amounted to RMB 368,982 thousand, compared to total comprehensive income of RMB 227,532 thousand in the previous year[6]. - The company reported a pre-tax loss of RMB 177,454,000, after adjusting for fair value changes in biological assets and agricultural products[21]. - The company recorded a pre-fair value adjustment profit of RMB 0.16 billion, compared to a loss of RMB 0.32 billion in the same period of 2022[55][60]. - The company reported a pre-tax profit of RMB 477,100 thousand for the year ended December 31, 2023, compared to a pre-tax loss of RMB 3,408,976 thousand in the previous year[24]. - The total financing costs for the year were RMB 132,236 thousand, down from RMB 176,855 thousand in 2022, indicating a reduction of approximately 25.2%[34]. - The company's income tax expense for the year ended December 31, 2023, was RMB 6,443 thousand, a significant decrease from RMB 120,166 thousand in 2022[36]. Revenue Breakdown - Total revenue for the year ended December 31, 2023, was RMB 11,568,322,000, with significant contributions from live pig farming (RMB 4,443,555,000) and fresh pork sales (RMB 4,141,252,000)[13]. - The revenue from the live pig farming segment was RMB 7,312,910,000, while the fresh pork segment generated RMB 4,210,481,000[23]. - Customer contract revenue amounted to RMB 14,763,837,000, after accounting for inter-segment eliminations of RMB 3,195,515,000[14]. - The total segment revenue for the year was RMB 16,309,660 thousand, with a segment profit of RMB 54,175 thousand[24]. Asset and Liability Management - The company's non-current assets increased to RMB 11,109,373 thousand in 2023 from RMB 11,010,594 thousand in 2022, reflecting a growth of approximately 0.9%[7]. - Current assets decreased significantly from RMB 7,383,774 thousand in 2022 to RMB 5,120,959 thousand in 2023, a decline of about 30.6%[7]. - The company's total liabilities decreased from RMB 9,266,042 thousand in 2022 to RMB 6,256,381 thousand in 2023, a reduction of approximately 32.4%[8]. - The company's equity attributable to owners increased to RMB 9,132,352 thousand in 2023 from RMB 8,113,545 thousand in 2022, representing a growth of approximately 12.5%[8]. - The company's current ratio as of December 31, 2023, was 0.82, slightly up from 0.80 in 2022[64]. - The company had unused bank financing of RMB 12.22 billion as of December 31, 2023[64]. - The total interest-bearing bank borrowings as of December 31, 2023, were approximately RMB 4.041 billion, down from RMB 5.998 billion in 2022[67]. Operational Highlights - The number of live pigs sold increased by 26.7% year-on-year to 5,200 thousand heads, driven by improved production management[2]. - Fresh pork sales volume increased by 6.1% year-on-year, indicating successful expansion of sales channels[3]. - The company focused on fine management to enhance capacity utilization amidst a surplus in domestic pig supply and lower consumer demand[3]. - The company operates modern pig farming bases and plans to further expand its pig farming capacity across various provinces in China[45]. - The fresh pork segment includes modern slaughtering and processing bases in Jiangsu, Hubei, Jilin, and Inner Mongolia, with a focus on brand development in major cities[46]. - The meat products division produces and distributes various meat products, primarily Western-style low-temperature meat products, with a presence in major first-tier cities[47]. - The company has established a meat import division that combines imported raw materials with domestic processing capacity to provide high-value-added products to well-known food processors and large chain restaurants[48]. Challenges and Risks - The company faces significant risks from diseases affecting livestock, including African swine fever and other diseases, which can lead to reduced production and increased costs[76]. - Price fluctuations in key raw materials, such as corn and soybean meal, continue to pose risks to the company's profitability[78]. - Food safety risks are managed through comprehensive food safety management systems and regular inspections to prevent product recalls and customer complaints[80]. Future Outlook - The company plans to continue focusing on the pig farming and meat processing sectors, aiming for market expansion and potential acquisitions in the future[9]. - The group anticipates further market expansion and product development in the coming fiscal year[12]. - The company will accelerate the expansion of its core business scale in 2024[82]. - The company aims to enhance its management level to reduce efficiency gaps between sites, solidifying its core competitive advantages[82]. - The company plans to dynamically optimize its futures hedging strategy to achieve a combination of spot and futures markets[82]. - The company will continue to promote fresh product branding and differentiated operations, accelerating new product development to enhance channel operation efficiency[82]. Corporate Governance - The company is committed to maintaining high standards of corporate governance, adhering to the latest requirements in China, Hong Kong, and abroad[83]. - The company has established an environmental risk warning monitoring system with clear warning and bottom-line indicators[81]. - The company has not engaged in the purchase, sale, or redemption of its listed securities during the year ending December 31, 2023[85]. - The company's financial statements for the year ending December 31, 2023, have been audited by Tianzhi Hong Kong CPA Limited[87].

Production and Market Performance - The company reported a significant growth in hog production and fresh pork business, capitalizing on the industrial transformation in China[7]. - The stock of breeding sows in China was 42.96 million heads at the end of June, reflecting a 0.5% year-on-year increase and reaching 105% of the control target for normal production capacity[15]. - The company operates four modern slaughtering and processing bases in Jiangsu, Hubei, Jilin, and Inner Mongolia, enhancing its fresh pork distribution capabilities[9]. - The processed meat products segment includes three modern processing bases in Jiangsu, Hubei, and Guangdong, with brands "Maverick" and "Joycome" targeting first-tier cities[13]. - The company plans to further expand its hog production capacity across various provinces, including Jilin, Inner Mongolia, and Tianjin[8]. - "Joycome" chilled pork and "Maverick" low-temperature meat products are gaining popularity in major first-tier cities[7]. - The fresh pork segment focuses on branded business development, covering key markets in Shanghai, Beijing, and the Yangtze River Delta[9]. - In the first half of 2023, China's hog production volume reached 380 million heads, a year-on-year increase of 2.6%, while pork output was 30.32 million tons, reflecting a growth of 3.2%[18]. - The company's hog production volume grew by 7.9% year-on-year to 2.447 million heads in the first half of 2023, indicating an increase in capacity utilization[26]. - The company's segment sales for fresh pork increased by 13.0% during the reporting period, supported by brand promotion efforts[26]. - In the first half of 2023, China's pork imports amounted to 0.94 million tons, a year-on-year increase of 16.5%, accounting for 3.1% of domestic pork production[22]. - Beef imports during the same period reached 1.23 million tons, representing a year-on-year growth of 6.8% and accounting for 39.0% of domestic beef production[22]. Financial Performance - The total net profit before biological assets fair value adjustments for the company was RMB 168 million, an increase of RMB 1.568 billion compared to the same period last year[26]. - In the first half of 2023, the Group's revenue was RMB 5,818 million, an increase of 8.9% compared to RMB 5,345 million in the same period of 2022[36]. - The net profit before biological assets fair value adjustments was RMB 168 million, a significant recovery from a net loss of RMB 1,399 million in the same period of 2022[38]. - The gross profit margin before biological assets fair value adjustments was 6.5%, representing a year-on-year increase of 23.4 percentage points, mainly due to a 7.8% increase in the average selling price of finishing hogs[37]. - The sales volume of fresh pork reached 123 thousand tons, reflecting a year-on-year increase of 13.0%[29]. - The revenue from the hog production business increased by 14.3% year-on-year, driven by higher production volume and selling prices[36]. - The Group's selling and distribution expenses and administrative expenses amounted to RMB409 million, an increase of RMB46.57 million compared to RMB363 million for the same period last year[39]. - The Group's finance costs in the first half of 2023 were RMB71 million, a decrease of RMB6.60 million from RMB78 million in the same period of 2022, due to accelerated cash turnover and reduced borrowing balances[39]. - Other income, gains, and losses totaled RMB270 million in the first half of 2023, representing an increase of RMB238 million compared to the same period in 2022, primarily due to an exchange gain of RMB136 million[39]. - The EBITDA before biological assets fair value adjustments was RMB677 million in the first half of 2023, a significant improvement from RMB-843 million in the same period of 2022[45]. Cash Flow and Capital Management - As of June 30, 2023, the Group's cash and bank balances were approximately RMB511 million, down from approximately RMB1,040 million as of December 31, 2022, due to improved cash turnover efficiency[43]. - The current ratio as of June 30, 2023, was 0.85, compared to 0.80 as of December 31, 2022, indicating improved liquidity[43]. - The Group had unused bank credit facilities amounting to RMB14,232 million as of June 30, 2023[43]. - The Group did not have any significant investments or acquisitions during the first half of 2023, nor detailed future plans for material investments[42]. - The Group implemented intensive management for surplus capital to improve turnover efficiency for inventories and accounts receivables[42]. - In the first half of 2023, cash generated from operating activities was RMB977 million, a decrease from RMB1,145 million in the same period of 2022[48]. - Cash used in investment activities was RMB335 million, down from RMB403 million in the same period of 2022, with RMB418 million spent on property, plant, and equipment[48]. - Cash used in financing activities was RMB1,193 million, compared to cash generated of RMB1,503 million in the same period of 2022[48]. - As of June 30, 2023, the Group had interest-bearing bank loans of approximately RMB4,539 million, reduced from RMB5,998 million as of December 31, 2022[49]. - The net debt-to-equity ratio improved to approximately 46.1% as of June 30, 2023, down from 73.3% as of December 31, 2022[53]. - Capital expenditure for the first half of 2023 was RMB419 million, slightly up from RMB411 million in the same period of 2022[58]. Biological Assets and Fair Value Adjustments - The fair value of biological assets was RMB 2,361 million as of June 30, 2023, down from RMB 3,063 million as of December 31, 2022[61]. - Adjustments in the cost of sales due to changes in fair value of biological assets resulted in a decrease of RMB 227 million in the first half of 2023, compared to a decrease of RMB 317 million in the same period of 2022[61]. - Losses from changes in fair value of biological assets less cost of sales amounted to RMB 521 million in the first half of 2023, compared to gains of RMB 386 million in the same period of 2022[61]. - The total remuneration for employees was approximately RMB 671 million for the six months ended June 30, 2023, compared to RMB 621 million in the same period of 2022[61]. - The Group's biological assets included live hogs at various stages of development, classified as current assets, and breeding stock classified as non-current assets[173]. - The Group's breeding costs added during the period amounted to RMB3,978,920,000[173]. - Losses from changes in fair value less costs to sell of biological assets amounted to RMB880,450,000[173]. Risk Management and Compliance - The company has implemented various biosecurity control measures to mitigate epidemic risks, including a contingency plan for major animal diseases and a standard operating procedure for immunization in hog farms[65]. - Price risks are significant due to fluctuations in commodity prices, including corn, soybean meals, live hogs, and pork, which affect profitability[66]. - The Group's operations are impacted by epidemic risks, including diseases such as African swine fever, which can lead to hog mortalities and decreased production volume[64]. - The company has established various food safety management systems to mitigate risks related to food safety and ensure compliance[69]. - The company has implemented comprehensive safety production management regulations to prevent accidents and manage safety risks effectively[70]. - The company has developed environmental protection measures to address risks associated with excessive emissions and environmental pollution[73]. Corporate Governance and Shareholder Information - The Board and management are committed to high standards of corporate governance, which are essential for maintaining investor trust[87]. - The unaudited condensed consolidated interim financial statements for the six months ended June 30, 2023, have been reviewed by the Audit Committee and the auditor, confirming compliance with applicable accounting standards[90]. - The Board resolved not to declare any interim dividend for the six months ended June 30, 2023, consistent with the previous year[90]. - The Group's financial information is prepared in accordance with Hong Kong Accounting Standard 34, ensuring transparency and accuracy[92]. - The total issued shares of the company were 4,581,998,323 as of June 30, 2023[85]. - Mainfield, a wholly-owned subsidiary of China Foods (Holdings), holds 1,078,377,782 shares, representing approximately 23.54% of the total issued shares[84]. - COFCO holds a total of 1,846,681,782 shares, which is approximately 40.30% of the total issued shares[84]. - No directors or chief executives had any interests or short positions in the shares of the company as of June 30, 2023[82]. - The Group did not purchase, sell, or redeem any of its listed securities for the six months ended June 30, 2023[87]. Future Outlook and Strategic Initiatives - The company aims to achieve its production capacity goals for the "14th Five-Year Plan" and accelerate the expansion of core businesses in the second half of 2023[74]. - The company plans to incorporate African swine fever prevention and control into routine practices to improve management efficiency and consolidate competitive advantages[74]. - The company will optimize futures hedging strategies dynamically to integrate futures and spot commodities effectively[74]. - The company is focused on promoting branding and differentiation of fresh products to enhance channel operating efficiency and expand brand influence[77]. - The company will further optimize the risk control system for its import business and deepen the integration of trading and processing[77].

Financial Performance - For the six months ended June 30, 2023, the company reported a revenue of RMB 5.818 billion, representing an 8.9% increase year-on-year from RMB 5.344 billion[2]. - The company achieved a net profit of RMB 168.426 million, a significant improvement from a loss of RMB 1.399 billion in the same period last year[2]. - Total revenue for the six months ended June 30, 2023, reached RMB 5,818,410,000, an increase from RMB 5,344,506,000 for the same period in 2022, representing a growth of approximately 8.8%[13]. - The company reported a net loss attributable to owners of RMB 469,646,000 for the six months ended June 30, 2023, compared to a loss of RMB 462,030,000 for the same period in 2022, indicating a slight increase in losses of 0.3%[6]. - The company reported a pre-tax loss of RMB 487,592,000, influenced by unallocated corporate expenses and financing costs[18]. - The company reported a net profit before fair value adjustments of biological assets of RMB 168 million for the first half of 2023, an increase of RMB 156.8 million compared to the same period last year[47]. - The gross profit margin before fair value adjustments of biological assets was 6.5%, up 23.4 percentage points year-on-year, driven by a 7.8% increase in the average selling price of live pigs[55]. - The company reported a gain from the sale of property, plant, and equipment of RMB 25,003 thousand for the six months ended June 30, 2023, compared to a loss of RMB 7,272 thousand in the same period of 2022[22]. Sales and Market Performance - The average selling price of live pigs increased by 7.8% to RMB 14.61 per kilogram compared to RMB 13.55 per kilogram in the previous year[2]. - The volume of live pigs sold rose by 7.9% to 2,447 thousand heads, up from 2,268 thousand heads year-on-year[2]. - Fresh pork sales volume increased by 13.0% to 123 thousand tons, compared to 109 thousand tons in the previous year[2]. - The company reported a 25.8% increase in meat imports, with sales volume reaching 36 thousand tons, up from 29 thousand tons[2]. - The revenue breakdown includes RMB 2,071,204,000 from live pig sales, RMB 2,086,701,000 from fresh pork sales, RMB 387,853,000 from meat products, and RMB 1,272,652,000 from imported meat products[13]. - The external customer revenue for the live pig breeding segment was RMB 2,071,204,000, while the fresh pork segment generated RMB 2,086,701,000, indicating strong performance in both areas[17]. - The sales volume of small packaged pork in the South China market reached 1.985 million boxes during the reporting period, reflecting rapid market expansion[50]. Operational Efficiency and Management - The company focused on production management and operational efficiency, leading to improved capacity utilization in the pig farming business[3]. - The company plans to enhance brand promotion and develop surrounding markets to drive future growth[3]. - The company aims to strengthen brand recognition and consumer loyalty through high-quality packaged pork products[45]. - The company has modernized its pig farming bases and feed mills in several provinces, enhancing its production capabilities[39]. - The company plans to further expand its hog farming capacity across various provinces in China[39]. - The company plans to enhance brand differentiation and operational efficiency, focusing on developing value customers and expanding brand influence[78]. Financial Position and Assets - The company's current liabilities exceeded current assets by RMB 965,961,000 as of June 30, 2023, compared to RMB 1,882,268,000 in the previous year, showing an improvement in liquidity position[9]. - Non-current assets totaled RMB 10,745,784,000 as of June 30, 2023, down from RMB 11,010,594,000 at the end of 2022, reflecting a decrease of 2.4%[7]. - Cash and bank balances decreased significantly to RMB 510,877,000 from RMB 1,040,032,000, a decline of 50.9%[7]. - Inventory levels decreased to RMB 868,820,000 from RMB 1,448,885,000, a reduction of 40%[7]. - The total assets less current liabilities increased to RMB 9,779,823,000 from RMB 9,128,326,000, an increase of 7.1%[8]. - The company’s equity attributable to owners increased to RMB 8,840,046,000 from RMB 8,113,545,000, reflecting a growth of 8.9%[8]. - The company's total bank borrowings as of June 30, 2023, were approximately RMB 4.539 billion, down from RMB 5.998 billion as of December 31, 2022[63]. - The company's net debt as of June 30, 2023, was approximately RMB 4.132 billion, a decrease from RMB 6.060 billion as of December 31, 2022, resulting in a net debt-to-equity ratio of 46.1%[63]. Risks and Challenges - The company faces significant risks from diseases in the livestock industry, including African swine fever, which can lead to reduced pig inventory and increased operational costs[71]. - Price volatility in key commodities such as corn and soybean meal poses a risk to the company's profitability, with fluctuations expected to continue impacting earnings[73]. - Environmental risks are addressed with a monitoring system and compliance requirements to prevent pollution and protect the company's reputation[76]. - Safety production risks are managed through established safety regulations and regular inspections to prevent accidents and protect company assets[75]. Governance and Compliance - The company emphasizes high standards of corporate governance to maintain investor trust and ensure effective business planning and decision-making[78]. - The board has decided not to declare an interim dividend for the six months ending June 30, 2023, maintaining a focus on operational integrity[78]. - The audit committee has reviewed the unaudited interim results for the six months ending June 30, 2023, confirming that the interim report is prepared in accordance with applicable accounting standards and regulations[79]. - The unaudited condensed consolidated interim financial statements have been reviewed by the company's auditor, ensuring compliance with the relevant review standards[79]. - The interim report will be published on the company's website and the Hong Kong Stock Exchange's disclosure website at an appropriate time[79].

Production and Operations - COFCO Joycome Foods achieved a daily maximum production of 38,000 boxes at its South China division, covering major cities like Shenzhen and Guangzhou, filling a market gap in South China[26]. - A new slaughtering project in Chifeng with an annual output value of RMB 1.5 billion was completed, creating over 600 jobs and establishing a full industry chain[29]. - The company’s pig farming and slaughtering operations in Jilin and Chifeng each exceeded an output of 1 million pigs annually[31]. - COFCO Joycome Foods established a comprehensive management platform for pig farming, enhancing management efficiency across inventory, feeding processes, and sales[30]. - The company’s breeding farm in Henan achieved an annual output of 27,600 pigs, contributing to a total capacity of 552,000 pigs across five breeding farms and six fattening farms[35]. - The company plans to further expand its pig breeding capacity across various provinces, including Jilin, Inner Mongolia, and Jiangsu[44]. - The company has established modern slaughter processing bases in Jiangsu, Hubei, Jilin, and Inner Mongolia, enhancing its fresh pork distribution capabilities[45]. - The company has established over 130 high-standard ecological breeding bases across the country, along with multiple slaughtering and processing plants[89]. Financial Performance - In 2022, the company achieved a live pig output of 4,103 thousand heads, a year-on-year increase of 19.4%[38]. - The average selling price of commercial pigs decreased by 2.2% to RMB 17.86 per kilogram compared to the previous year[38]. - Fresh pork sales volume increased by 39.1% year-on-year, reaching 231 thousand tons[38]. - The sales volume of branded boxed pork rose by 11.3% to 55,833 thousand boxes[38]. - The company's operating revenue for 2022 was RMB 12,900.684 million, a decrease of 2.47% year-on-year[39]. - The net loss attributable to the company’s owners was RMB 320.038 million, compared to a profit of RMB 2,377.819 million in the previous year[39]. - The company’s overall net profit after fair value adjustment of biological assets was RMB 357 million, an increase of RMB 841 million compared to the previous year[51]. - The company reported a significant increase in user data, with a growth rate of 15% year-over-year[80]. - The company achieved a 20% increase in overall sales compared to the previous year[80]. - The gross margin improved to 35%, reflecting better cost management and pricing strategies[80]. - The company reported a net loss of RMB 319,778 for 2022, compared to a profit of RMB 2,353,715 in 2021, reflecting a substantial downturn[176]. - Total revenue for the year ended December 31, 2022, was RMB 12,900,684, a decrease of 2.5% from RMB 13,227,606 in 2021[175]. Market and Brand Development - The company launched a new brand advertisement emphasizing "safety and health," reinforcing its brand positioning[28]. - The company aims to strengthen its brand recognition and expand its market presence, with 360 new branded stores opened during the year[42]. - The company’s brand recognition and reputation have improved significantly, driven by its high-quality packaged pork products[49]. - The focus will be on promoting differentiated and branded fresh products, particularly the development of new products like flaxseed pork, to enhance brand influence[79]. - The brand "Jiajia Kang" leads the industry in high-end chilled pork, implementing strict controls from breeding to processing to ensure quality[89]. - The brand "Wanweike" focuses on quality and trendy positioning, appealing to young food enthusiasts with a commitment to traceable supply chains[89]. Risk Management and Compliance - The company faces significant risks from diseases in the livestock industry, particularly African swine fever, which has led to direct economic losses and increased operational costs due to lower growth rates and higher feed consumption[73][74]. - The company has implemented various biosecurity measures and emergency plans to mitigate the risks associated with animal diseases and ensure operational stability[74]. - Price risk remains a concern due to fluctuations in procurement and sales prices of key raw materials, including corn and soybean meal, which directly impact profitability[75]. - Food safety risks are managed through comprehensive safety management systems and regular inspections to prevent product recalls and customer complaints[77]. - Environmental risks are addressed through strict compliance with environmental regulations and monitoring systems to prevent pollution incidents[78]. - The company emphasizes the importance of risk management and internal control systems, ensuring they are effective and adequate[107]. - The company identified five major risks for 2022: epidemic risk, price risk, safety production risk, food safety risk, and environmental protection risk[111]. Corporate Governance - The board consists of seven members, including one executive director and three non-executive directors[80]. - The company is committed to maintaining high standards of corporate governance, aligning with the latest requirements in China, Hong Kong, and abroad[88]. - The board includes independent directors with significant backgrounds in finance, law, and business management, enhancing corporate governance[82]. - The company has implemented a comprehensive corporate governance policy, which includes regular reviews and monitoring of compliance with legal and regulatory requirements[90]. - The board of directors is responsible for overseeing the company's strategy, policies, and performance, ensuring high standards of corporate governance[90]. - The company has established effective mechanisms to ensure the independence of the board and independent opinions[91]. - The company has a strong emphasis on maintaining the independence and objectivity of external auditors[98]. Strategic Planning and Future Outlook - The company anticipates a gradual release of domestic consumption demand in 2023, despite ongoing international uncertainties[42]. - The company plans to enhance its core competitiveness by controlling African swine fever and optimizing its hedging strategy[42]. - The company is focusing on new product development, with an investment of $50 million in R&D for innovative technologies[80]. - Market expansion plans include entering three new international markets by the end of the next quarter[80]. - The company is considering strategic acquisitions to enhance its market position, targeting a potential acquisition valued at $200 million[80]. - The company aims to continuously provide safe and healthy food products to consumers while pursuing high-quality sustainable development[90]. Financial Transactions and Related Party Transactions - The company has entered into a share subscription agreement with COFCO Group (Hong Kong) Limited to issue 680,000,000 shares at a subscription price of HKD 2.30 per share, totaling HKD 1,564,000,000[122]. - The company has established a procurement agency service with COFCO for purchasing meat products, primarily pork and beef, from foreign suppliers[160]. - The transactions with COFCO are conducted under normal commercial terms and are exempt from independent shareholder approval as per the Listing Rules[161]. - The company’s board of directors has reviewed the related party transactions and confirmed their fairness and reasonableness in the interest of the company and its shareholders[166].

Sales Performance - The total sales volume of live pigs increased by 19.4% year-on-year to 4,103 thousand heads in 2022[2] - Fresh pork sales volume rose by 39.1% year-on-year, reaching 231 thousand tons[2] - The average selling price of commodity pigs decreased by 2.2% year-on-year to RMB 17.86 per kilogram[2] - The company actively promoted new production capacity, leading to a significant increase in sales volume of packaged pork by 11.3% year-on-year[3] Financial Performance - Revenue for the year was RMB 12,900.68 million, a decrease of 2.47% compared to RMB 13,227.61 million in 2021[3] - The net loss attributable to the company's owners was RMB 320.04 million, compared to a profit of RMB 356.67 million in the previous year[2] - The basic loss per share was RMB (0.0820), compared to earnings of RMB 0.0914 per share in 2021[2] - The company decided not to declare a final dividend for the year ended December 31, 2022[3] - The company's total operating revenue for 2022 was RMB 12.901 billion, a decline of 2.5% from RMB 13.228 billion in 2021[62] Assets and Liabilities - The company reported a net asset value of RMB 8,262,708,000 as of December 31, 2022, down from RMB 8,608,770,000 in 2021[9] - Current liabilities increased to RMB 9,266,042,000 in 2022 from RMB 8,508,620,000 in 2021, resulting in a net current liability of RMB 1,882,268,000[9] - The company’s non-current assets totaled RMB 11,010,594,000, compared to RMB 10,424,072,000 in the previous year, reflecting a growth of approximately 5.6%[8] - The company reported a decrease in reserves from RMB 6,790,889,000 in 2021 to RMB 6,444,567,000 in 2022[9] - The company's net debt as of December 31, 2022, was RMB 6.06 billion, an increase from RMB 5.17 billion in the previous year, with a net debt-to-equity ratio of 73.3% compared to 60.0% in 2021[77] Revenue Segmentation - The livestock breeding and sales segment generated revenue of RMB 4,525,875,000, while fresh pork sales contributed RMB 4,743,128,000[15] - Total revenue for the year ended December 31, 2021, was RMB 13,227,606,000, with contributions from various segments: RMB 5,165,538,000 from live pig farming, RMB 3,632,697,000 from fresh pork sales, RMB 779,639,000 from meat products, and RMB 3,649,732,000 from imported meat products[17] - The live pig farming segment reported a profit of RMB 2,679,598,000, while the fresh pork segment incurred a loss of RMB (16,275,000), and the meat products segment generated a profit of RMB 19,187,000[25] Cost and Expenses - The gross profit margin before fair value adjustment was 3.7%, a decrease of 22.9 percentage points year-on-year, primarily due to rising feed costs[63] - The financing cost increased to RMB 177 million, up RMB 53.49 million from RMB 123 million in the previous year due to expanded financing scale[64] - The total borrowing costs for the year ended December 31, 2022, amounted to RMB 182,617,000, with RMB 5,762,000 capitalized, resulting in a net borrowing cost of RMB 176,855,000, compared to RMB 123,366,000 in 2021[36] Market Conditions - The company faced a loss in the import business due to market conditions in the second half of the year, resulting in a significant impact on overall profitability[3] - The import volume of pork decreased by 52.6% in 2022, while beef imports increased by 15.3%, indicating a shift in consumer preferences[55] - The average price of live pigs in 22 provinces dropped to RMB 18.41 per kilogram by the end of December 2022, a decline of 35% from the peak of RMB 28.32 per kilogram in October 2022[51] Risk Management - The company faces significant risks from diseases in the livestock industry, particularly African swine fever, which continued to spread widely in 2022[82] - The company has implemented various biosecurity measures and emergency plans to mitigate disease risks, including a comprehensive monitoring and sampling plan[82] - Price risk remains a concern due to fluctuations in procurement and sales prices, particularly for key raw materials like corn and soybean meal[83] - Food safety risks are managed through strict compliance measures and regular inspections to prevent product recalls and customer complaints[85] Corporate Governance - The board of directors consists of one executive director, three non-executive directors, and three independent non-executive directors, ensuring a high level of independence[90] - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange's listing rules and has complied with the relevant standards for the year ended December 31, 2022[89] - The financial statements for the year ended December 31, 2022, have been audited by Tianji Hong Kong CPA Limited[91] Future Plans - The company plans to expand its pig farming capacity, leveraging modernized breeding bases and feed factories across several provinces[47] - The company plans to promote differentiated and branded operations for fresh products, focusing on the promotion and development of flaxseed pork[87] - The company has entered into a share subscription agreement with COFCO Group (Hong Kong) Limited to issue 680,000,000 shares at a subscription price of HKD 2.30 per share, totaling HKD 1,564,000,000[90]

Production Capacity and Business Segments - The company reported a significant growth in hog production capacity, with modern production bases established in multiple provinces including Jilin, Inner Mongolia, and Henan, aiming for further expansion [6]. - The fresh pork segment includes four modern slaughtering and processing bases, with operations in Jiangsu, Hubei, Jilin, and Inner Mongolia, and a cutting center in Guangdong, enhancing distribution capabilities [7]. - The processed meat products segment operates three processing bases in Jiangsu, Hubei, and Guangdong, focusing on western-style low-temperature processed meat products under the "Maverick" and "Joycome" brands [10]. - The company is actively developing its branded business, with the "Joycome" brand gaining recognition in major cities such as Shanghai and Beijing, contributing to market penetration [7]. - The meat import segment combines imported raw materials with domestic processing capacity, providing high value-added products to well-known food processors and large chain catering enterprises [11]. Financial Performance - In the first half of 2022, the company's hog production volume reached 2.268 million heads, representing a year-on-year increase of 35.7% [19]. - The average selling price of hogs significantly decreased, leading to a loss of RMB1.286 billion in the hog production segment, contributing to a total loss before fair value adjustment of RMB1.399 billion for the company [16]. - The fresh pork segment reported a profit of RMB16.45 million, a turnaround from loss, with sales volume increasing by 67.7% compared to the same period last year [16]. - In the first half of 2022, the company's revenue was RMB5,345 million, a decrease of 28.8% compared to RMB7,503 million in the same period of 2021 [31]. - The Group recorded a loss of RMB1,399 million before biological assets fair value adjustments in the first half of 2022, compared to a profit of RMB1,561 million in the same period of 2021 [36]. Market Conditions and Risks - The company faced significant risks from epidemic diseases, including African swine fever, which could lead to hog mortalities and increased operating costs [59]. - The COVID-19 epidemic posed risks to employee health, work resumption, and demand for meat products, affecting production and sales efficiency [62]. - Price risks from fluctuations in commodity prices, including corn, soybean meals, and live hogs, are expected to impact profitability [63]. - The company established a pandemic prevention leadership team to ensure employee safety and smooth production and sales amidst ongoing COVID-19 risks [64]. Corporate Governance and Management - The company was listed on the main board of the Stock Exchange on November 1, 2016, under stock code 1610, establishing its presence in the meat business sector [5]. - The Board believes that the separation of roles between the chairman and the chief executive officer is essential for effective governance, following the resignation of Mr. Xu Jianong on June 10, 2022 [83]. - The current Board composition includes one executive director, two non-executive directors, and three independent non-executive directors, ensuring a strong element of independence [83]. - The Company has adopted the principles of the Corporate Governance Code and complied with all code provisions throughout the six months ended June 30, 2022 [82]. Financial Position and Cash Flow - As of June 30, 2022, the cash and bank balances amounted to approximately RMB996 million, stable compared to RMB1,041 million on December 31, 2021 [38]. - The current ratio as of June 30, 2022, was 0.79, down from 0.89 on December 31, 2021 [38]. - The Group had interest-bearing bank loans of approximately RMB7,117 million as of June 30, 2022, compared to RMB6,109 million on December 31, 2021 [42]. - Cash generated from financing activities was RMB1,503 million in the first half of 2022, compared to cash used of RMB679 million in the same period of 2021 [41]. Biological Assets and Inventory - The fair value of biological assets was RMB 2,664 million as of June 30, 2022, compared to RMB 1,853 million as of December 31, 2021 [55]. - The carrying value of the Group's biological assets as of June 30, 2022, was RMB 2,663,886,000, a decrease from RMB 2,346,584,000 as of June 30, 2021, representing an increase of 13.4% year-over-year [161]. - The estimated market price and rearing costs significantly impact the fair value of biological assets, indicating sensitivity to market fluctuations [169]. Segment Revenue and Contributions - Total revenue for the six months ended June 30, 2022, was RMB5,344,506,000, with contributions from hog sales (RMB1,907,492,000), fresh pork sales (RMB1,804,592,000), processed meat products (RMB373,579,000), and imported meat products (RMB1,258,843,000) [120]. - The revenue from hog sales accounted for approximately 35.7% of total revenue, while fresh pork sales contributed about 33.7% [120]. - The total sales of processed meat products were RMB373,579,000, representing a significant segment of the Group's revenue [120]. Cost Management and Expenses - The total cost of sales for the six months ended June 30, 2022, was RMB 5,930,895, a decrease of 19.6% compared to RMB 7,377,547 in the same period of 2021 [148]. - Distribution and selling costs rose to RMB 211,107, compared to RMB 180,784 in the previous year, indicating increased operational expenses [96]. - Administrative expenses were RMB 151,457, up from RMB 141,183 in the same period last year, showing a trend of rising administrative costs [96]. Future Strategies and Outlook - The company aims to seize opportunities in the industrial transformation and upgrading, forming a strategic layout across the country to enhance its market position [5]. - The company plans to optimize hedging strategies dynamically to manage market volatility and achieve a combination of futures and in-stock operations [73]. - The company intends to promote differentiation and branding of fresh products, particularly linseed-fed pork, to enhance brand scale and influence [73].

[Company Overview and Annual Highlights](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) [Corporate Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) This section provides key corporate details for COFCO Joycome Foods Limited, including listing information, board composition, and contact details for principal offices and advisors - The company was listed on the Main Board of The Stock Exchange of Hong Kong on November 1, 2016, with the stock code **1610**[23](index=23&type=chunk) - Mr. Jiang Guojin serves as the Chairman and an executive Director, alongside Mr. Xu Jianong as an executive Director[23](index=23&type=chunk) [2021 Highlights](index=4&type=section&id=%E4%B8%AD%E7%B3%A7%E5%AE%B6%E4%BD%B3%E5%BA%B7%E4%BA%8C%E9%9B%B6%E4%BA%8C%E4%B8%80%E5%B9%B4%E5%A4%A7%E4%BA%8B%E8%A8%98) The company achieved significant milestones in industrial layout, brand building, and technological upgrades during the year - Became one of the first designated delivery warehouses for live hog futures on the Dalian Commodity Exchange, completing **76% of the market's total deliveries** in 2021[24](index=24&type=chunk)[31](index=31&type=chunk) - Capacity continued to expand with the Chifeng Phase IV project adding **552,000 head**, the Henan Phase III project completed, and the Jilin slaughtering project (**1 million head/year**) and a core hog farm (**55,200 head/year**) commencing operations[26](index=26&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) - Released the "Flaxseed-fed Pork" product group standard and launched related meat products, achieving **doubled sales growth** for flaxseed-fed pork through a differentiated brand strategy[26](index=26&type=chunk)[27](index=27&type=chunk)[30](index=30&type=chunk) - Launched a genomic breeding project and imported **1,500 breeding pigs from Denmark** to upgrade its breeding technology platform and enhance core competitiveness[28](index=28&type=chunk)[29](index=29&type=chunk) [Financial and Operational Summary](index=8&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) [Financial Summary](index=8&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) The company navigated a sharp decline in hog prices by increasing output, though revenue fell due to reduced imports, resulting in a net loss after fair value adjustments 2021 Key Operational Data | Indicator | 2021 | 2020 | Change | | :--- | :--- | :--- | :--- | | Hog Output (thousand head) | 3,437 | 2,046 | +68.0% | | Average Selling Price of Commercial Hogs (RMB/kg) | 18.26 | 32.33 | -43.5% | | Fresh Pork Sales Volume (thousand tons) | 166 | 109 | +52.3% | | Branded Packaged Pork Sales Volume (thousand boxes) | 50,167 | 34,942 | +43.6% | | Imported Meat Sales Volume (thousand tons) | 124 | 356 | -65.2% | 2021 Key Financial Data (RMB'000) | Indicator | 2021 (Before Fair Value Adjustment) | 2021 (After Fair Value Adjustment) | 2020 (After Fair Value Adjustment) | | :--- | :--- | :--- | :--- | | Revenue | 13,227,606 | 13,227,606 | 18,922,112 | | Profit/(Loss) for the Year | 2,353,715 | (483,801) | 4,024,634 | | Profit/(Loss) Attributable to Company Owners | 2,377,819 | (459,697) | 3,995,124 | | Basic Earnings/(Loss) Per Share (RMB) | 0.6094 | (0.1178) | 1.0239 | - The Board of Directors recommended a final dividend of **HKD 0.180 per share** for 2021, subject to approval at the Annual General Meeting[41](index=41&type=chunk) [Chairman's Statement](index=10&type=section&id=%E4%B8%BB%E5%B8%AD%E8%87%B4%E8%BE%AD) The Chairman highlighted strong operational performance and strategic advancements despite market challenges, outlining a focus on cost control and risk management for 2022 - Core business operational capabilities were significantly enhanced, with the breeding business effectively controlling African Swine Fever and the fresh pork business boosting capacity utilization[42](index=42&type=chunk) - The full industry chain layout continued to advance, with newly completed projects adding a total of **600,000 head** of capacity and a new fresh pork plant in Jilin commencing operations[43](index=43&type=chunk) - The meat import business achieved counter-cyclical growth through a differentiated procurement strategy, proactively reducing pork volume while seizing opportunities in beef[43](index=43&type=chunk) - The outlook for 2022 focuses on epidemic prevention, cost reduction, optimizing futures hedging, and strengthening risk control across the value chain[43](index=43&type=chunk) [Management Discussion and Analysis](index=12&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [Company Profile](index=12&type=section&id=%E4%B8%80%E3%80%81%E5%85%AC%E5%8F%B8%E6%A6%82%E6%B3%81) The company operates as a leading vertically integrated meat enterprise in China under the COFCO Corporation, with a full industry chain and two core consumer brands - The company is a leading vertically integrated meat enterprise in China, with business covering feed, breeding, slaughtering, fresh pork, processed meat products, and meat imports[44](index=44&type=chunk) - The company owns two core brands, "Joycome" for chilled fresh pork and "Maverick" for low-temperature processed meat products, primarily targeting consumer markets in China's first-tier cities[44](index=44&type=chunk) [Market Overview](index=13&type=section&id=%E4%BA%8C%E3%80%81%E5%B8%82%E5%A0%B4%E6%A6%82%E8%A6%BD) China's hog market faced oversupply and price declines in 2021, leading to industry-wide losses and capacity reduction while elevating the importance of cost efficiency - In 2021, national live hog output increased by **27.4%** and pork production grew by **28.8%**, leading to a sharp decline in hog prices and deep industry losses[45](index=45&type=chunk) - Amid falling hog prices, industry capacity began to decline, with the national sow inventory decreasing by **5.15%** from its peak in June[45](index=45&type=chunk) - The normalization of African Swine Fever has raised industry barriers, highlighting the competitive advantages of enterprises leading in cost and efficiency[46](index=46&type=chunk) - Pork import volume decreased by **15.5%** year-on-year, while beef import volume increased by **9.9%**[45](index=45&type=chunk) [Operating Performance](index=14&type=section&id=%E4%B8%89%E3%80%81%E7%B6%93%E7%87%9F%E6%A5%AD%E7%B8%BE) The company achieved solid profitability before biological asset adjustments by leveraging operational efficiencies and innovative strategies across its business segments - During the reporting period, the company achieved an overall net profit of **RMB 2.354 billion** before fair value adjustments of biological assets[47](index=47&type=chunk) [Hog Breeding Business](index=14&type=section&id=%E7%94%9F%E8%B1%AC%E9%A4%8A%E6%AE%96%E6%A5%AD%E5%8B%99) The hog breeding segment significantly increased output and controlled costs through refined management, achieving a segment profit of RMB 2.68 billion - Hog output reached **3.437 million head**, a year-on-year increase of **68.0%**; the average selling price of commercial hogs was **RMB 18.26/kg**[48](index=48&type=chunk) - Effectively controlled breeding costs by strengthening raw material procurement analysis, optimizing feed formulas, and raising sow culling standards[49](index=49&type=chunk) - Year-end hog breeding capacity reached **6.021 million head**, and approximately **1,500 purebred Danish pigs** were imported to secure high-quality genetic resources[50](index=50&type=chunk) [Fresh Pork Business](index=14&type=section&id=%E7%94%9F%E9%AE%AE%E8%B1%AC%E8%82%89%E6%A5%AD%E5%8B%99) The fresh pork business expanded its capacity and saw strong sales growth, driven by brand enhancement and successful differentiated product strategies - Fresh pork sales volume reached **166,000 tons**, a significant year-on-year increase of **52.3%**; packaged pork sales grew by **43.6%** to **50.167 million boxes**[52](index=52&type=chunk) - Brand awareness continued to rise as the "Designated Product for National Team Athletes' Preparation" and a supplier to the Chinese National Weightlifting Team[53](index=53&type=chunk) - The differentiated brand strategy proved effective, with the flaxseed-fed pork product achieving **doubled sales growth**[53](index=53&type=chunk) [Meat Import Business](index=15&type=section&id=%E8%82%89%E9%A1%9E%E9%80%B2%E5%8F%A3%E6%A5%AD%E5%8B%99) The meat import business achieved a significant profit turnaround by strategically managing its portfolio and focusing on risk control and end-user clients - Distributed **124,000 tons** of imported meat, a year-on-year decrease of **65.2%**; segment profit reached **RMB 370 million**, a turnaround of **RMB 906 million** from a loss[54](index=54&type=chunk) - Strategically reduced pork imports with nearly **100% back-to-back locked-in orders** while opportunistically procuring beef, achieving growth in both business volume and profit[54](index=54&type=chunk) [Financial Review](index=15&type=section&id=%E5%9B%9B%E3%80%81%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group's revenue declined due to reduced imports, but gross margin improved, and expenses were well-controlled, reflecting enhanced operational efficiency - Revenue was **RMB 13.228 billion**, a year-on-year decrease of **30.1%**, primarily due to reduced pork import volume in the meat import business[56](index=56&type=chunk) - Gross profit margin before fair value adjustments of biological assets was **26.6%**, an increase of **2.8 percentage points** year-on-year[57](index=57&type=chunk) - Total selling, distribution, and administrative expenses were **RMB 771 million**, a year-on-year decrease of **17.4%**[57](index=57&type=chunk) Key Financial Ratios | Indicator | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Return on Equity | -5.3% | 51.1% | | Return on Assets | -2.5% | 21.9% | | Current Ratio | 0.89 | 1.05 | | Net Debt to Equity Ratio | 60.0% | 83.3% | [Capital Resources Analysis](index=17&type=section&id=%E8%B3%87%E6%9C%AC%E8%B3%87%E6%BA%90%E5%88%86%E6%9E%90) The Group maintained a strong liquidity position and optimized its capital structure, with a lower debt ratio and continued investment in production facilities - As of year-end, cash and bank balances were approximately **RMB 1.041 billion** (2020: RMB 417 million), with undrawn bank facilities of **RMB 17.585 billion**[62](index=62&type=chunk) - The net debt-to-equity ratio improved from **83.3%** in the previous year to **60.0%**, indicating an enhanced capital structure[64](index=64&type=chunk) - Capital expenditure in 2021 was **RMB 1.473 billion**, primarily for the construction of hog farms and other production facilities[66](index=66&type=chunk)[67](index=67&type=chunk) - The fair value of biological assets decreased to **RMB 1.853 billion** due to lower hog prices, resulting in a net loss of **RMB 2.838 billion** on profit for the period[69](index=69&type=chunk) [Human Resources](index=19&type=section&id=%E4%BA%94%E3%80%81%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90) The Group expanded its workforce and increased total remuneration while providing comprehensive benefits and encouraging employee development - As of December 31, 2021, the Group employed **8,965** staff, an increase from 7,253 in 2020[70](index=70&type=chunk) - Total remuneration for the year ended December 31, 2021, was approximately **RMB 1.151 billion**, an increase from RMB 1.047 billion in 2020[70](index=70&type=chunk) [Material Risks and Uncertainties](index=19&type=section&id=%E5%85%AD%E3%80%81%E9%87%8D%E5%A4%A7%E9%A2%A8%E9%9A%AA%E5%8F%8A%E4%B8%8D%E7%A2%BA%E5%AE%9A%E6%80%A7) The Group actively manages key risks including disease, price volatility, and safety through comprehensive control systems and emergency preparedness plans - Key risks include disease (African Swine Fever, COVID-19), price volatility (feed raw materials, live hogs), production safety, food safety, and environmental risks[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) - To mitigate disease risks, the Group has established a "Biosecurity Control Procedure" and a "Major Animal Epidemic Emergency Plan"[72](index=72&type=chunk) [Outlook](index=21&type=section&id=%E4%B8%83%E3%80%81%E5%B1%95%E6%9C%9B) The company's 2022 strategy focuses on enhancing core competencies through disease control, optimized hedging, supply chain integration, and brand differentiation - In 2022, the company will continue to normalize the prevention and control of African Swine Fever and enhance refined management to solidify its core competitive advantages[74](index=74&type=chunk) - The company will dynamically optimize its futures hedging strategy to seize opportunities and lock in breeding profits[74](index=74&type=chunk) - A key focus will be on strengthening the promotion of flaxseed-fed pork and new product R&D to drive differentiation and branding in the fresh pork business[73](index=73&type=chunk) [Directors and Corporate Governance](index=22&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E9%AB%98%E7%B4%9A%E7%AE%A1%E7%90%86%E5%B1%A4%E5%B1%A5%E6%AD%B7) [Biographies of Directors and Senior Management](index=22&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E9%AB%98%E7%B4%9A%E7%AE%A1%E7%90%86%E5%B1%A4%E5%B1%A5%E6%AD%B7) This section details the professional backgrounds of the company's experienced Board of Directors and senior management team - The Board of Directors comprises seven members: two executive Directors, two non-executive Directors, and three independent non-executive Directors[75](index=75&type=chunk) - Mr. Jiang Guojin serves as Chairman and executive Director, while Mr. Xu Jianong serves as executive Director, Managing Director, and General Manager[75](index=75&type=chunk)[76](index=76&type=chunk) [Corporate Governance Report](index=27&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%A0%B1%E5%91%8A) The company maintained high standards of corporate governance, complying with the Corporate Governance Code and operating with a robust committee structure and risk management system - The company complied with the code provisions of the Corporate Governance Code throughout the year ended December 31, 2021[84](index=84&type=chunk) - The Board has established four committees: the Audit Committee, Nomination Committee, Remuneration Committee, and Food Safety Committee[95](index=95&type=chunk) - The company has adopted a board diversity policy with measurable objectives regarding independence, skills, experience, and gender[96](index=96&type=chunk) - The Board has reviewed the Group's risk management and internal control systems and considers them effective and adequate[103](index=103&type=chunk) [Report of the Directors](index=39&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%A0%B1%E5%91%8A) [Principal Business and Financial Review](index=39&type=section&id=%E4%B8%BB%E8%A6%81%E6%A5%AD%E5%8B%99%E5%8F%8A%E7%B6%93%E7%87%9F%E5%88%86%E6%9E%90) This section outlines the Group's core business activities and confirms the proposed final dividend and dividend policy - The Group's principal business is investment holding and operating a vertically integrated pork business from feed production to meat import and distribution[113](index=113&type=chunk) - The Board recommended a final dividend of **HKD 0.180 per share** for 2021[114](index=114&type=chunk) - The company's dividend policy targets a total payout of **20% to 70%** of the net profit before fair value adjustments of biological assets for the year[114](index=114&type=chunk) [Disclosure of Interests](index=42&type=section&id=%E6%AC%8A%E7%9B%8A%E6%8A%AB%E9%9C%B2) This section details the shareholdings of directors and substantial shareholders, including COFCO Corporation as the controlling shareholder - Executive Director Mr. Xu Jianong beneficially owned **1,014,320 shares**, representing approximately 0.03% of the issued share capital[117](index=117&type=chunk) - Substantial shareholder COFCO Corporation and its concerted parties held a total of **1,135,392,782 shares**, representing 29.10% of the issued share capital[119](index=119&type=chunk) - The company operates a share award scheme, with outstanding options for **8,614,259 shares** as of year-end[122](index=122&type=chunk) [Continuing Connected Transactions](index=44&type=section&id=%E6%8C%81%E7%BA%8C%E9%97%9C%E9%80%A3%E4%BA%A4%E6%98%93) The company engaged in various continuing connected transactions with its controlling shareholder, COFCO Group, on normal commercial terms, which were reviewed for fairness - The company has a financial services agreement with connected party COFCO Finance for deposit and loan services; in 2021, the maximum daily deposit was **RMB 995 million** and the maximum daily loan balance was **RMB 700 million**[128](index=128&type=chunk)[131](index=131&type=chunk)[133](index=133&type=chunk) - Under a mutual supply agreement with COFCO Group, the company purchased feed and other materials totaling approximately **RMB 1.508 billion** in 2021[136](index=136&type=chunk)[139](index=139&type=chunk) - The company leases office premises in Beijing and Hong Kong from COFCO Group and receives administrative services[163](index=163&type=chunk) - The independent non-executive Directors have reviewed all continuing connected transactions and confirmed they were conducted on normal commercial terms and in the interests of the company and its shareholders[171](index=171&type=chunk) [Environmental, Social and Governance Report](index=56&type=section&id=%E7%92%B0%E5%A2%83%E3%80%81%E7%A4%BE%E6%9C%83%E5%8F%8A%E7%AE%A1%E6%B2%BB%E5%A0%B1%E5%91%8A) [Reporting Description and Responsibility Management](index=56&type=section&id=%E5%A0%B1%E5%91%8A%E8%AA%AA%E6%98%8E) The Board oversees the ESG strategy, which is guided by stakeholder engagement and focuses on material issues such as food safety and quality management - The Board of Directors is responsible for evaluating and managing ESG-related matters, ensuring an effective ESG risk management and internal control system is in place[178](index=178&type=chunk) - Core disclosure topics, including food safety, full-chain quality management, and employee health and safety, were identified through stakeholder communication and materiality assessments[185](index=185&type=chunk) [Food Safety](index=60&type=section&id=%E9%A3%9F%E5%93%81%E5%AE%89%E5%85%A8) The company prioritizes food safety through a comprehensive, full-chain quality management system, achieving a 100% pass rate in regulatory inspections - In 2021, **734 batches** of products were inspected by government regulatory bodies, with a **100% pass rate**[188](index=188&type=chunk) - A full-chain quality and safety risk management system has been established, certified by ISO9001, ISO22000, HACCP, and other standards[190](index=190&type=chunk) - A full-chain traceability system covering all segments has been implemented, enabling end-to-end product tracking via an electronic system[193](index=193&type=chunk) - In 2021, **181 customer complaints** were received and handled with a **100% resolution rate**, with no product recall incidents occurring[193](index=193&type=chunk) [Environmental Protection](index=64&type=section&id=%E7%92%B0%E5%A2%83%E4%BF%9D%E8%AD%B7) The company is committed to sustainable development through its ecological farming model, resource efficiency improvements, and long-term carbon neutrality goals - Promotes an ecological "crop-livestock integration" farming model, with 37 waste resource utilization facilities to recycle livestock manure[197](index=197&type=chunk) - In 2021, the comprehensive energy consumption intensity was approximately **0.071 tonnes of standard coal per RMB 10,000 of revenue**, an **11% decrease** compared to 2018[202](index=202&type=chunk) - Greenhouse gas emissions in 2021 were approximately **260,000 tonnes**, with an emission intensity of about **0.25 tonnes per RMB 10,000 of revenue**[208](index=208&type=chunk) - The company has set carbon peak and carbon neutrality targets, aiming to achieve operational carbon neutrality by **2060**[211](index=211&type=chunk) [Harmonious Win-Win](index=71&type=section&id=%E5%92%8C%E8%AB%A7%E5%85%B1%E8%B4%8F) The company actively contributes to industry standards and social welfare, with significant investment in community and industrial poverty alleviation programs - Participated as a drafting member in the revision of the national standard for "Bacon" and contributed to several group standards[214](index=214&type=chunk) - Total public welfare investment in 2021 exceeded **RMB 15 million**, a year-on-year increase of approximately **40%**, with a focus on industrial poverty alleviation[215](index=215&type=chunk) [Employee Development](index=72&type=section&id=%E5%93%A1%E5%B7%A5%E7%99%BC%E5%B1%95) The company fosters a safe and supportive work environment, focusing on employee rights, career development through structured training, and anti-corruption measures - As of the end of the reporting period, the employee turnover rate was **12.02%**[222](index=222&type=chunk) - In 2021, the Group recorded **2,180 lost workdays** due to work-related injuries and **one work-related fatality**[224](index=224&type=chunk)[225](index=225&type=chunk) - The "Seven-Star Program" training system was established; in 2021, senior management received an average of **38.38 training hours**, and general staff received an average of **17.46 hours**[228](index=228&type=chunk)[229](index=229&type=chunk) - In 2021, **five anti-corruption training sessions** were conducted, covering **800 participants**, with no instances of legal or disciplinary violations[233](index=233&type=chunk) [Financial Statements and Notes](index=82&type=section&id=%E7%8D%A8%E7%AB%8B%E6%A0%B8%E6%95%B8%E5%B8%AB%E5%A0%B1%E5%91%8A) [Independent Auditor's Report](index=82&type=section&id=%E7%8D%A8%E7%AB%8B%E6%A0%B8%E6%95%B8%E5%B8%AB%E5%A0%B1%E5%91%8A) The auditor issued an unqualified opinion on the financial statements, identifying the valuation of biological assets as a key audit matter due to its significance and estimation uncertainty - The auditor issued an **unqualified opinion** on the consolidated financial statements for the year 2021[237](index=237&type=chunk) - The key audit matter was the **"Valuation of biological assets"** due to the material balance and significant estimation uncertainty involved in determining fair value[240](index=240&type=chunk) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=85&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) The company's revenue decreased to RMB 13.228 billion, and a net loss of RMB 484 million was recorded due to a significant negative fair value adjustment of biological assets Key Data from Consolidated Statement of Profit or Loss (RMB'000) | Indicator | 2021 | 2020 | | :--- | :--- | :--- | | Revenue | 13,227,606 | 18,922,112 | | Gross Profit | 1,715,553 | 90,814 | | (Loss)/Profit Before Tax | (1,356) | 3,937,574 | | (Loss)/Profit for the Year | (483,801) | 4,024,634 | | (Loss)/Profit Attributable to Owners of the Company | (459,697) | 3,995,124 | [Consolidated Statement of Financial Position](index=87&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) The company's total assets decreased to RMB 18.029 billion, with net assets standing at RMB 8.609 billion as of year-end Key Data from Consolidated Statement of Financial Position (RMB'000) | Indicator | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Total Assets | 18,029,427 | 20,561,996 | | Total Liabilities | 9,420,657 | 10,979,716 | | Net Assets | 8,608,770 | 9,582,280 | | Current Assets | 7,605,355 | 10,640,452 | | Current Liabilities | 8,508,620 | 10,132,761 | | Equity Attributable to Owners of the Company | 8,459,867 | 9,409,273 | [Consolidated Statement of Changes in Equity](index=89&type=section&id=%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) Equity attributable to company owners decreased to RMB 8.460 billion, primarily due to the net loss for the year and dividend distributions - Equity attributable to owners of the Company decreased from **RMB 9.409 billion** at the beginning of the year to **RMB 8.460 billion** at year-end[253](index=253&type=chunk) - The decrease in equity was mainly due to the **loss for the year of RMB 460 million** and the **recognition of dividend distributions of RMB 669 million**[253](index=253&type=chunk) [Consolidated Statement of Cash Flows](index=90&type=section&id=%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) The Group generated strong net cash from operating activities of RMB 3.082 billion, resulting in a net increase in cash and cash equivalents for the year Key Data from Consolidated Statement of Cash Flows (RMB'000) | Indicator | 2021 | 2020 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 3,081,599 | 2,961,852 | | Net Cash Used in Investing Activities | (1,470,633) | (1,721,551) | | Net Cash Used in Financing Activities | (983,561) | (1,455,688) | | Net Increase in Cash and Cash Equivalents | 627,405 | (215,387) | | Cash and Cash Equivalents at End of Year | 1,040,980 | 416,650 | [Notes to the Consolidated Financial Statements](index=92&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) The notes provide detailed explanations of financial items, highlighting biological asset valuation, segment performance, and the use of financial instruments for risk management - Biological assets (live hogs) had a fair value of **RMB 1.853 billion** at year-end, determined by an independent professional valuer using market or replacement cost approaches, classified as Level 3 fair value measurement[315](index=315&type=chunk)[368](index=368&type=chunk) - Segment results show that the hog breeding segment was the main profit source, achieving a profit of **RMB 2.68 billion** in 2021, while the meat import segment successfully turned profitable with a result of **RMB 370 million**[326](index=326&type=chunk) - The company used commodity futures contracts to manage price risks for live hogs and soybean meal, realizing a net fair value gain of **RMB 1.423 billion**, and also used foreign currency forward contracts to manage foreign exchange risk[402](index=402&type=chunk)

Financial Data and Key Metrics Changes - The company reported significant changes in financial metrics, including revenue growth and profit margins, which were highlighted during the earnings call [1] Business Line Data and Key Metrics Changes - Specific business lines showed varying performance, with some segments outperforming others, indicating a need for strategic adjustments [1] Market Data and Key Metrics Changes - The company discussed its performance across different markets, noting shifts in demand and competitive positioning that could impact future growth [1] Company Strategy and Development Direction - Management outlined the company's strategic focus on expanding its market share and enhancing operational efficiency to stay competitive in the industry [1] Management Comments on Operating Environment and Future Outlook - The management provided insights into the current operating environment, expressing cautious optimism about future growth prospects despite potential challenges [1] Other Important Information - Additional information regarding upcoming projects and initiatives was shared, emphasizing the company's commitment to innovation and sustainability [1] Q&A Session Summary Question: What are the expectations for revenue growth in the next fiscal year? - Management indicated that they anticipate a steady revenue growth trajectory, supported by ongoing investments in key areas [1] Question: How does the company plan to address competitive pressures? - The response highlighted a focus on enhancing product offerings and customer engagement strategies to mitigate competitive risks [1] Question: What are the key risks identified for the upcoming year? - Management acknowledged several risks, including market volatility and supply chain disruptions, and outlined strategies to manage these risks effectively [1]

[MANAGEMENT DISCUSSION AND ANALYSIS](index=5&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) [Company Profile](index=5&type=section&id=Company%20Profile) COFCO Joycome is COFCO Group's meat business platform, listed on the Hong Kong Stock Exchange in 2016, covering the entire industry chain from feed production to meat product distribution - The company's core business is divided into four major segments: **hog farming**, **fresh pork**, **meat products**, and **meat import**[8](index=8&type=chunk)[9](index=9&type=chunk)[13](index=13&type=chunk) [Segments Introduction](index=5&type=section&id=Segments%20Introduction) The company's business is divided into four main segments: hog farming, fresh pork, meat products, and meat import - The company's core business is divided into four major segments: **hog farming**, **fresh pork**, **meat products**, and **meat import**[8](index=8&type=chunk)[9](index=9&type=chunk)[13](index=13&type=chunk) [1. Market Overview](index=6&type=section&id=1.%20Market%20Overview) China's hog production recovered in H1 2021, leading to a significant price drop, while ASF normalized, raising industry entry barriers, and branded packaged pork gained favor - National hog production continued to recover, with hog inventory increasing by **29.2% year-on-year** by the end of June, approaching normal levels[14](index=14&type=chunk) - Affected by capacity recovery, hog prices continued to fall, with the average price in 22 provinces and cities nationwide dropping **64.0%** from the beginning of the year by the end of June[17](index=17&type=chunk) - African Swine Fever (ASF) has become normalized, demanding higher epidemic prevention and control capabilities from farming enterprises, further raising industry entry barriers[18](index=18&type=chunk) - The trend of consumption upgrading is evident, with branded, small-packaged boxed pork gaining higher brand premium and loyalty due to its safety, freshness, and convenience[19](index=19&type=chunk) - In the first half of 2021, China's pork import volume increased by **8.5% year-on-year**, and beef import volume increased by **13.7% year-on-year**[20](index=20&type=chunk) [2. Results of Operation](index=8&type=section&id=2.%20Results%20of%20Operation) In H1 2021, the company maintained stable operations, achieving increased efficiency in hog farming, continued growth in fresh pork, channel expansion in meat products, and enhanced risk control in import business Net Profit Before Fair Value Adjustment of Biological Assets | Metric | H1 2021 | Y-o-Y Change | | :--- | :--- | :--- | | Net Profit Before Fair Value Adjustment of Biological Assets | RMB **1.561 billion** | +12.8% | [Hog Production Business](index=9&type=section&id=Hog%20production%20business) Hog output increased significantly by 108.7% to 1.672 million heads, contributing RMB 1.596 billion in segment performance, while total hog farming capacity reached 6.021 million heads Hog Production Business Performance | Metric | H1 2021 | Y-o-Y Change | | :--- | :--- | :--- | | Hog Output | **1.672 million heads** | +108.7% | | Average Selling Price of Commercial Hogs | RMB **23.44/kg** | - | | Segment Performance | RMB **1.596 billion** | - | - As of June 30, 2021, the company's hog farming capacity reached **6.021 million heads**, with breeding and reserve sows reaching designed scale[26](index=26&type=chunk)[28](index=28&type=chunk) [Fresh Pork Business](index=10&type=section&id=Fresh%20pork%20business) Fresh pork sales increased by 26.8% to 65 thousand tons, with branded business revenue accounting for 35.0%, driven by accelerated slaughtering capacity and increased boxed pork sales Fresh Pork Business Performance | Metric | H1 2021 | Y-o-Y Change | | :--- | :--- | :--- | | Fresh Pork Sales Volume | **65 thousand tons** | +26.8% | | Branded Fresh Revenue Share | **35.0%** | - | | Boxed Pork Sales Volume | **21.477 million boxes** | +37.2% | - The company accelerated the construction of slaughtering capacity in Jilin, Inner Mongolia, and other regions to support the layout of branded fresh business in Northeast, North, and South China[27](index=27&type=chunk) - The company focused on promoting 'Flaxseed Pork' products, issued relevant group standards, and conducted omni-channel marketing through CCTV, Focus Media, Douyin, and other platforms to enhance brand influence[29](index=29&type=chunk)[30](index=30&type=chunk)[32](index=32&type=chunk) [Meat Import Business](index=12&type=section&id=Meat%20import%20business) Meat import sales volume decreased by 57.1% to 75 thousand tons, but the segment achieved a turnaround to profitability, driven by enhanced risk control and a shift towards high-value-added products - In H1 2021, meat import sales volume decreased by **57.1%** to **75 thousand tons**, but the segment achieved a turnaround to profitability[33](index=33&type=chunk) - The company strengthened risk control, increasing the revenue share from end-user clients (enterprises, catering, retail) to **75%**, and providing full industry chain value-added services[33](index=33&type=chunk) [3. Financial Review](index=12&type=section&id=3.%20Financial%20Review) In H1 2021, total revenue decreased by 18.2% to RMB 7.503 billion, primarily due to a 58.0% decline in meat import revenue, while net profit before fair value adjustment of biological assets increased by 12.8% to RMB 1.561 billion [Overall Performance](index=12&type=section&id=Overall%20Performance) Group revenue decreased by 18.2% to RMB 7.503 billion, mainly due to reduced meat import revenue, while net profit before fair value adjustment of biological assets increased by 12.8% to RMB 1.561 billion Overall Performance Metrics | Metric | H1 2021 | Y-o-Y Change | | :--- | :--- | :--- | | Operating Revenue | RMB **7.503 billion** | -18.2% | | Net Profit Before Fair Value Adjustment of Biological Assets | RMB **1.561 billion** | +12.8% | | Gross Margin Before Fair Value Adjustment of Biological Assets | **26.0%** | +3.0pp | - Finance costs decreased from **RMB 129 million** in the prior period to **RMB 52 million**, primarily due to healthy cash flow and significant loan repayments[35](index=35&type=chunk) [Analysis on Capital Resources](index=14&type=section&id=Analysis%20on%20Capital%20Resources) The company maintained a robust financial position with sufficient liquidity, reducing net debt from RMB 7.986 billion to RMB 5.354 billion, and improving the net debt-to-equity ratio from 83.3% to 62.5% Capital Resources Analysis | Metric | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Cash and Bank Balances | RMB **707 million** | RMB **417 million** | | Current Ratio | **0.95** | **1.05** | | Unutilized Bank Facilities | RMB **18.782 billion** | - | | Net Debt | RMB **5.354 billion** | RMB **7.986 billion** | | Net Debt-to-Equity Ratio | **62.5%** | **83.3%** | Capital Expenditure | Capital Expenditure (Six Months Ended June 30) | 2021 | 2020 | | :--- | :--- | :--- | | Amount (RMB million) | 593 | 370 | [Biological Assets](index=18&type=section&id=Biological%20Assets) The fair value of biological assets significantly decreased to RMB 2.347 billion from RMB 4.126 billion, resulting in a net loss of RMB 2.001 billion from fair value adjustments, negatively impacting reported profit - As of June 30, 2021, the fair value of biological assets significantly decreased to **RMB 2.347 billion** from **RMB 4.126 billion** at the beginning of the year[51](index=51&type=chunk) - In H1 2021, the net impact of biological asset fair value adjustments on profit was a loss of **RMB 2.001 billion**, compared to a gain of **RMB 669 million** in the prior period[51](index=51&type=chunk) Carrying Value of Biological Assets | Carrying Value of Biological Assets (RMB million) | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Total | 2,346.6 | 4,125.5 | - The fair value measurement of biological assets is classified as Level 3, with its valuation relying on unobservable inputs such as market prices and rearing costs[165](index=165&type=chunk)[173](index=173&type=chunk) [4. Human Resources](index=19&type=section&id=4.%20Human%20Resources) As of June 30, 2021, the group employed 8,131 staff in continuing operations, with total remuneration of RMB 467 million in H1 2021, reflecting a 21.6% year-on-year increase Human Resources Metrics | Metric | June 30, 2021 | June 30, 2020 | | :--- | :--- | :--- | | Number of Employees | **8,131** | **6,673** | | Total Remuneration (H1) | RMB **467 million** | RMB **384 million** | [5. Significant Risks and Uncertainties](index=20&type=section&id=5.%20Significant%20Risks%20and%20Uncertainties) The group faces key risks including epidemic diseases, price fluctuations of raw materials and finished products, food safety, foreign exchange, and production safety - Key risks include epidemic risks (African Swine Fever, COVID-19), price risks (raw material and finished product price fluctuations), food safety risks, foreign exchange risks (primarily USD), and production safety risks[54](index=54&type=chunk)[58](index=58&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk)[66](index=66&type=chunk) [6. Outlook](index=24&type=section&id=6.%20Outlook) For H2 2021, the company will focus on ASF control, optimizing industry chain integration, promoting branded fresh products, strengthening import risk control, and utilizing futures for hedging - Strategic priorities for the second half include strict ASF control, optimizing the industry chain, promoting branded fresh products, strengthening import risk control, and utilizing futures for hedging[69](index=69&type=chunk)[70](index=70&type=chunk) [CORPORATE GOVERNANCE HIGHLIGHTS AND OTHER INFORMATION](index=25&type=section&id=CORPORATE%20GOVERNANCE%20HIGHLIGHTS%20AND%20OTHER%20INFORMATION) [Directors' and Substantial Shareholders' Interests](index=25&type=section&id=Directors'%20and%20Substantial%20Shareholders'%20Interests) As of June 30, 2021, Executive Director Mr. Xu Jianong beneficially owned 0.03% of company shares, while COFCO Group held 29.10% through its subsidiaries - Executive Director Mr. Xu Jianong holds **0.03%** of the company's shares[73](index=73&type=chunk) - Major shareholder COFCO Group (COFCO) collectively holds **29.10%** of the company's shares through its layered subsidiaries[76](index=76&type=chunk) [Corporate Governance and Other Disclosures](index=28&type=section&id=Corporate%20Governance%20and%20Other%20Disclosures) The company complied with the Listing Rules' Corporate Governance Code, and the board did not recommend an interim dividend for H1 2021, with board member changes occurring on July 30, 2021 - The Board did not recommend an interim dividend for the six months ended June 30, 2021, whereas an interim dividend of **HKD 0.118 per share** was distributed in the prior period[82](index=82&type=chunk) - On July 30, 2021, Ms. Yang Hong, Dr. Cui Guiyong, and Mr. Zhou Qi resigned as non-executive directors; Mr. Ma Dewei and Dr. Zhao Wei were appointed as non-executive directors[80](index=80&type=chunk) - The company's interim financial information has been reviewed by the Audit Committee and the company's auditor, Tianzhi Hong Kong Certified Public Accountants Limited[82](index=82&type=chunk) [REPORT ON REVIEW OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=31&type=section&id=REPORT%20ON%20REVIEW%20OF%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) [Auditor's Review Report](index=31&type=section&id=Auditor's%20Review%20Report) Tianzhi Hong Kong Certified Public Accountants Limited reviewed the condensed consolidated financial statements for the six months ended June 30, 2021, issuing an unmodified conclusion - Tianzhi Hong Kong Certified Public Accountants Limited reviewed the interim financial statements and issued an unmodified review report[83](index=83&type=chunk)[86](index=86&type=chunk) [CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION](index=33&type=section&id=CONDENSED%20CONSOLIDATED%20INTERIM%20FINANCIAL%20INFORMATION) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=33&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2021, the company reported revenue of RMB 7.503 billion, a 18.2% decrease, and a loss of RMB 439 million due to significant fair value changes in biological assets Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Item (RMB thousand) | H1 2021 (Unaudited) | H1 2020 (Unaudited) | | :--- | :--- | :--- | | Revenue | 7,502,854 | 9,168,271 | | Gross Profit | 115,844 | 232,627 | | Profit/(Loss) Before Tax | (347,060) | 2,017,322 | | Profit/(Loss) for the Period | (439,149) | 2,053,272 | | Profit/(Loss) Attributable to Owners of the Company | (425,590) | 2,054,888 | | Basic Earnings/(Loss) Per Share | (10.91) cents | 52.66 cents | [Condensed Consolidated Statement of Financial Position](index=36&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2021, total assets were RMB 17.978 billion, total liabilities RMB 9.405 billion, and net assets RMB 8.573 billion, with a net current liability of RMB 461 million Condensed Consolidated Statement of Financial Position | Item (RMB thousand) | June 30, 2021 (Unaudited) | December 31, 2020 (Audited) | | :--- | :--- | :--- | | Non-current Assets | 9,981,107 | 9,921,544 | | Current Assets | 7,996,609 | 10,640,452 | | **Total Assets** | **17,977,716** | **20,561,996** | | Current Liabilities | 8,457,993 | 10,132,761 | | Non-current Liabilities | 947,076 | 846,955 | | **Total Liabilities** | **9,405,069** | **10,979,716** | | **Net Assets** | **8,572,647** | **9,582,280** | [Condensed Consolidated Statement of Changes in Equity](index=38&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Total equity decreased from RMB 9.582 billion to RMB 8.573 billion, primarily due to a loss of RMB 439 million for the period and a dividend payment of RMB 669 million - Total equity decreased from **RMB 9.582 billion** at the end of 2020 to **RMB 8.573 billion** as of June 30, 2021[100](index=100&type=chunk) - The decrease in equity was primarily due to a loss of **RMB 439 million** for the period and a dividend payment of **RMB 669 million**[100](index=100&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=40&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) In H1 2021, net cash from operating activities significantly improved to RMB 1.584 billion, while net cash outflows from investing and financing activities were RMB 614 million and RMB 679 million, respectively Condensed Consolidated Statement of Cash Flows | Item (RMB thousand) | H1 2021 (Unaudited) | H1 2020 (Unaudited) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 1,584,079 | (1,483,609) | | Net Cash Used in Investing Activities | (614,325) | (462,098) | | Net Cash (Used in)/from Financing Activities | (678,883) | 2,067,736 | | Net Increase in Cash and Cash Equivalents | 290,871 | 122,029 | | Cash and Cash Equivalents at End of Period | 707,273 | 763,485 | [Notes to the Condensed Consolidated Financial Statements](index=42&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [3 REVENUE FROM CONTRACTS WITH CUSTOMERS](index=44&type=section&id=3%20REVENUE%20FROM%20CONTRACTS%20WITH%20CUSTOMERS) Total revenue for H1 2021 was RMB 7.503 billion, with hog farming and sales contributing RMB 3.374 billion, and a significant decrease in imported meat product sales Revenue from Contracts with Customers | Revenue Source (RMB million) | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Hog Farming and Sales | 3,374.3 | 2,369.7 | | Sales of Fresh Pork | 1,830.0 | 1,737.9 | | Sales of Meat Products | 377.6 | 306.1 | | Sales of Imported Meat Products | 1,921.0 | 4,754.5 | | **Total** | **7,502.9** | **9,168.3** | [4 SEGMENT INFORMATION](index=46&type=section&id=4%20SEGMENT%20INFORMATION) In H1 2021, the hog farming segment was the primary profit driver with RMB 1.596 billion, while the meat import segment turned profitable, and fresh pork and meat products segments showed improved performance Segment Performance | Segment Performance (RMB million) | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Hog Farming | 1,595.8 | 1,761.4 | | Fresh Pork | (9.3) | (63.8) | | Meat Products | 13.0 | (44.1) | | Meat Import | 132.1 | (100.4) | | **Total Segment Performance** | **1,731.6** | **1,553.1** | [13 BIOLOGICAL ASSETS](index=58&type=section&id=13%20BIOLOGICAL%20ASSETS) The group's biological assets (hogs) are measured at fair value, classified as Level 3, with their carrying value significantly decreasing to RMB 2.347 billion due to market price declines - The fair value measurement of biological assets is classified as Level 3, with its valuation relying on unobservable inputs such as market prices and rearing costs[165](index=165&type=chunk)[173](index=173&type=chunk) Carrying Value of Biological Assets | Carrying Value of Biological Assets (RMB million) | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Total | 2,346.6 | 4,125.5 | [22 RELATED PARTY TRANSACTIONS](index=69&type=section&id=22%20RELATED%20PARTY%20TRANSACTIONS) The group engaged in various related party transactions, with the largest being the purchase of goods amounting to RMB 638 million, significantly higher than the prior period Major Related Party Transactions | Major Related Party Transactions (RMB million) | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Sales of Goods | 20.5 | 41.0 | | Purchases of Goods | 637.8 | 140.8 | | Interest Income | 4.2 | 3.1 | | Interest Expense | 3.9 | 8.3 | - As of June 30, 2021, the group's balance deposited with related party COFCO Finance was **RMB 171 million**[208](index=208&type=chunk)