Revenue and Sales Performance - For the first half of 2024, the company recorded revenue of RMB 3,681.1 million, an increase of RMB 169.2 million or 4.8% compared to RMB 3,511.9 million in the same period of 2023[13]. - The company's core business, self-branded formula goat milk powder, achieved a revenue growth of 15.7% in China during the first half of 2024[13]. - The overseas business of self-branded goat milk powder saw a remarkable growth of 50.7% year-on-year, benefiting from increased market acceptance in the Middle East and successful entry into the U.S. market[13]. - The sales of self-branded goat milk powder reached RMB 1,808.4 million, up RMB 304.2 million or 20.2% year-on-year, accounting for 49.1% of the company's total revenue[14]. - Revenue from the company's own brand formula milk powder for the first half of 2024 was RMB 1,130.1 million, a decrease of RMB 131.5 million or 10.4% year-on-year, accounting for 30.7% of total revenue[20]. - Revenue from the company's own brand goat milk powder reached RMB 1,808.4 million, a year-on-year increase of 20.2%, driven by new product launches and strong growth in overseas markets, particularly in the Middle East and North America[35]. - Revenue from dairy products was RMB 3,535,723 thousand, while revenue from nutritional products was RMB 145,340 thousand for the six months ended June 30, 2024[141]. - Revenue from the Chinese market reached RMB 2,884,209 thousand, accounting for approximately 78.3% of total revenue, compared to RMB 2,808,761 thousand in the same period of 2023[143]. Profitability and Financial Performance - The company reported a profit attributable to equity holders of RMB 145.4 million for the first half of 2024, marking a rebound compared to the second half of 2023[13]. - The company's net profit attributable to equity holders was RMB 145.4 million, a decrease of RMB 39.2 million or 21.2% compared to the same period in 2023, mainly due to declining sales of infant formula cow milk powder[47]. - Gross profit for the first half of 2024 was RMB 1,597.7 million, an increase of RMB 124.3 million or 8.4% compared to the same period in 2023, with gross margin rising from 42.0% to 43.4%[40]. - Operating profit decreased to RMB 206,761 thousand from RMB 241,126 thousand, indicating a decline of 14.19% year-over-year[92]. - Basic and diluted earnings per share for the period were RMB 8.17, compared to RMB 10.25 in the previous year, a decline of 20.39%[92]. - The total expenses for the six months ended June 30, 2024, were RMB 3,495,666 thousand, an increase from RMB 3,333,883 thousand in the same period of 2023, reflecting a growth of approximately 4.9%[144]. Market Expansion and Product Development - The company is focused on sustainable value creation and aims to become the most trusted formula milk and nutrition health enterprise globally[9]. - The company is actively expanding its market presence through precise online marketing strategies and increasing offline sales channel coverage in the U.S. market[13]. - In the Chinese market, the company launched three new goat milk powder products in May 2024, addressing previous formula deficiencies and enhancing product offerings[16]. - The company plans to continue launching two additional new products in the second half of 2024 to further solidify its market position[16]. - The company aims to expand into new markets, including India, to capture a larger share of the global newborn market[17]. - The company launched five new products in the first half of 2024, focusing on various nutritional needs, including high-end organic and A2 protein milk powder[20]. Cost Management and Efficiency - The company implemented multiple cost control measures, enhancing supply chain efficiency and reducing overall inventory to improve product freshness[13]. - The gross margin of the Bioflag Nutrition Corporation Ltd. improved despite revenue pressure, indicating a strategic focus on quality and sustainable development[22]. - The company aims to enhance its market competitiveness through value chain design and cost optimization in its core brand operations[20]. - The company reported a decrease in inventory by RMB 170.3 million, attributed to improvements in global supply chain production planning and logistics[48]. Acquisitions and Strategic Partnerships - The company completed the acquisition of the remaining 50% stake in Amalthea Group B.V., enhancing its control over the goat milk supply chain and expanding its product offerings to include cheese[19]. - The company has committed to acquiring dairy-related assets valued at RMB 169,147,000, compared to RMB 198,789,000 in the previous period, a decrease of 15%[167]. - The company plans to acquire the remaining 50% equity of Amalthea Group for approximately €22,100,000 (equivalent to about RMB 169,147,000), which will be fully consolidated into the company's financial statements upon completion[177]. Financial Position and Assets - Total assets increased to RMB 10,190.6 million as of June 30, 2024, driven by increased receivables from overseas markets[48]. - As of June 30, 2024, total assets amounted to RMB 10,190,649 thousand, with segment assets of RMB 7,928,749 thousand for Dairy Products and RMB 464,826 thousand for Nutrition Products[132]. - The company's total liabilities increased to RMB 4,379,920 thousand from RMB 4,284,562 thousand in the previous period[100]. - The equity attributable to the company's equity holders was RMB 5,740,253 thousand, up from RMB 5,693,468 thousand at the end of 2023[100]. Employee and Management Information - The company has a total of 3,474 full-time employees as of June 30, 2024, down from 3,620 employees as of December 31, 2023, indicating a reduction of 4.0%[66]. - Total compensation paid to key management personnel for the six months ended June 30, 2024, was RMB 7,953,000, a decrease from RMB 18,881,000 in the same period of 2023, representing a decline of approximately 58.8%[176]. - The company has not granted any share options under the new share option plan as of June 30, 2024[76]. Taxation and Financial Risks - The effective tax rate decreased to 12.7% from 23.7% in the previous year, due to several business units turning profitable and utilizing prior year tax losses[45]. - The effective corporate income tax rate in mainland China is 25%, while certain subsidiaries benefit from a reduced rate of 15% as high-tech enterprises until June 30, 2024[149]. - The group faced various financial risks, including market risk, credit risk, and liquidity risk, with no significant changes in risk management policies since the end of the reporting period[117].

Investment Rating - The report upgrades the investment rating to "Buy" with a target price of HKD 2.7, indicating a potential upside of 44% from the current stock price of HKD 1.87 [4][10]. Core Insights - The company has shown a recovery in its goat milk powder segment, with revenue reaching HKD 1.81 billion in the first half of 2024, representing a year-on-year growth of 20.2% [2][10]. - The overall revenue for the first half of 2024 was HKD 3.68 billion, a 4.8% increase, while net profit decreased by 15.3% to HKD 150 million [1][2]. - The company expects net profits for 2024, 2025, and 2026 to be HKD 270 million, HKD 310 million, and HKD 320 million respectively, with corresponding EPS of HKD 0.16, HKD 0.19, and HKD 0.19 [1][2]. Revenue Breakdown - Goat milk powder revenue in the domestic market was HKD 1.51 billion, up 15.7% year-on-year, while overseas revenue reached HKD 290 million, a significant increase of 50% [2][10]. - Cow milk powder revenue faced challenges, declining by 10.4% to HKD 1.13 billion due to intensified competition and regulatory changes [2][10]. Margin Analysis - The gross margin for the first half of 2024 improved to 43.4%, up 1.4 percentage points year-on-year, driven by reduced discounts and a higher proportion of high-margin products [2][10]. - Goat milk powder's gross margin increased by 4 percentage points to 54.8%, while cow milk powder's gross margin slightly decreased to 53.1% [2][10]. Strategic Developments - The company completed the acquisition of the remaining 50% stake in the Dutch goat cheese company Amalthea for EUR 18.4 million, enhancing its supply chain for core goat milk powder products [2][10]. - The nutrition products segment reported a slight decline in revenue to HKD 145 million, but the newly restructured division showed strong growth [2][10]. Financial Projections - The report forecasts a recovery in net profit growth rates, projecting a 61.5% increase in 2024 and a 15% increase in 2025 [17]. - The company’s financial metrics indicate a projected PE ratio of 11.4 for 2024, decreasing to 9.9 by 2025 [3][17].

Financial Performance - Revenue for the six months ended June 30, 2024, increased by RMB 169.2 million or 4.8% to RMB 3,681.1 million compared to RMB 3,511.9 million in the same period of 2023[2] - Gross profit rose by RMB 124.3 million or 8.4%, resulting in a gross margin of 43.4%, up from 42.0% in the previous year[3] - EBITDA decreased by RMB 57.3 million or 15.8%, from RMB 363.7 million to RMB 306.4 million[2] - Profit attributable to equity holders of the company fell by RMB 39.2 million or 21.2%, from RMB 184.6 million to RMB 145.4 million[3] - The company reported a net profit for the period of RMB 149.3 million, down from RMB 176.1 million in the previous year[6] - Basic and diluted earnings per share decreased to RMB 8.17 from RMB 10.25[5] - Other comprehensive loss for the period was RMB 20.3 million, compared to a gain of RMB 170.2 million in the same period last year[6] - Total revenue for the six months ended June 30, 2024, reached RMB 3,681,063 thousand, an increase from RMB 3,511,917 thousand in the same period of 2023, representing a growth of approximately 4.8%[20] - The company reported a pre-tax profit of RMB 230,934 thousand for the six months ended June 30, 2024[22] - The company recorded impairment losses of RMB 19,364 thousand during the reporting period[22] Assets and Liabilities - Total assets as of June 30, 2024, amounted to RMB 10,190.6 million, an increase from RMB 10,033.8 million at the end of December 2023[7] - Current assets increased to RMB 5,344.6 million from RMB 5,080.9 million, driven by higher cash and cash equivalents[7] - Total liabilities as of June 30, 2024, were RMB 4,379.9 million, compared to RMB 4,284.6 million at the end of December 2023[8] - Non-current assets as of June 30, 2024, were valued at RMB 4,477,594 thousand, slightly down from RMB 4,586,775 thousand as of December 31, 2023[18] - Total assets increased to RMB 10,190.6 million, with accounts receivable rising by RMB 305.9 million due to increased overseas market revenue[62] - The total equity increased to RMB 5,740.3 million from RMB 5,693.5 million, representing a growth of 0.82%[67] - The debt-to-asset ratio was reported at 2.2% as of June 30, 2024, a decrease from 3.3% as of December 31, 2023, indicating improved debt management[67] Revenue Segmentation - Total revenue for the six months ended June 30, 2024, was RMB 3,681,063 thousand, with RMB 3,535,723 thousand from dairy products and RMB 145,340 thousand from nutritional products[16] - The revenue from the dairy products segment was RMB 3,532,835 thousand, while the nutrition segment contributed RMB 145,340 thousand, totaling RMB 3,678,175 thousand from goods and services sold[21] - The revenue from customer contracts for the six months ended June 30, 2024, was RMB 3,681,063 thousand, compared to RMB 3,511,917 thousand for the same period in 2023, indicating a growth of approximately 4.8%[20] - Revenue from the company's own goat milk powder reached RMB 1,808.4 million, a year-on-year increase of 20.2%, driven by reduced discounts in China and strong growth in overseas markets[51] - Revenue from the company's own cow milk powder decreased by 10.4% to RMB 1,130.1 million, attributed to a slowdown in the infant formula industry in mainland China and increased discounts[52] Operational Highlights - The company continues to focus on research and development in dairy and nutritional products, targeting global markets, particularly in China[10] - The company plans to launch two new products in the second half of 2024 to further expand its market position[37] - The company’s self-branded goat milk powder maintained a market share of over 60% in the imported infant goat milk powder market in China for six consecutive years[36] - The company’s supply chain capabilities have been enhanced, improving the production and transportation of new national standard products[37] - The company is enhancing its brand presence through partnerships with major media platforms and strategic alliances with channel partners to improve customer engagement[41] Expenses and Financial Management - Employee benefits expenses totaled RMB 673,779 thousand, a decrease from RMB 714,737 thousand in the previous year[23] - Sales and distribution expenses accounted for 29.9% of revenue in the first half of 2024, up from 27.4% in the same period of 2023, primarily due to increased advertising investments for new national standard products[56] - Administrative expenses decreased due to cost-saving measures implemented by the company[57] - Financial expenses increased to RMB 31.1 million, primarily due to increased bank loans for capital expenditures in the Netherlands[58] - The effective tax rate decreased to 12.7%, down 11.0 percentage points from 23.7% in the previous period[60] Strategic Initiatives - The company completed the acquisition of the remaining 50% stake in Amalthea Group B.V., strengthening its position as the leading global brand in goat milk products and enhancing its supply chain[39] - The company plans to focus on expanding into overseas markets, particularly India, to capture a larger share of the global newborn market[39] - The company is actively developing new customer relationships and enhancing existing customer sales through channel empowerment strategies in its nutrition business[42] - The integration of the brands Aiyisen and NC is expected to enhance operational efficiency and expand customer reach, resulting in a 34.7% year-on-year growth in downstream sales[43] - The company is committed to reducing carbon emissions and establishing a sustainable green supply chain as part of its corporate social responsibility strategy[47] Market Recognition and Awards - The company received the "2024 Baby Innovation Award" for its goat milk infant formula product, recognizing its strong market performance[38] - The launch of the Cabrit brand infant formula in the U.S. market in January 2024 marks a significant milestone, being the first goat milk infant formula to achieve three strict certifications under the Clean Label Project[46] Governance and Compliance - The company is currently seeking suitable candidates to fill the vacancies of independent non-executive directors and members of the audit, remuneration, and nomination committees due to a shortfall in the number of independent non-executive directors[77] - The audit committee is composed entirely of independent non-executive directors and is responsible for independent reviews of the group's financial reporting processes, internal controls, and risk management effectiveness[79] - The mid-term report detailing the company's performance for the mid-2024 period will be sent to shareholders and published on the Hong Kong Stock Exchange and the company's website[80]

研究报告 Research Report [Table_Info] 维持优于大市 Maintain OUTPERFORM 评级 优于大市 OUTPERFORM 现价 HK$1.95 目标价 HK$3.10 HTI ESG 2.7-3.8-3.5 E-S-G: 0-5, (Please refer to the Appendix for ESG comments) 市值 HK$3.47bn / US$0.44bn 日交易额 (3 个月均值) US$0.23mn 发行股票数目 1,780mn 自由流通股 (%) 17% 1 年股价最高最低值 HK$3.66-HK$1.92 注:现价 HK$1.95 为 2024 年 07 月 12 日收盘价 40 60 80 100 120 Price Return MSCI China Jul-23 Nov-23 Mar-24 Volume 资料来源: Factset 1mth 3mth 12mth 绝对值 -14.1% -15.2% -45.0% 绝对值(美元) -14.1% -14.9% -44.8% 相对 MSCI China -15.1% -24.3% -42.6% [ ...

公司评论 第一上海研究部 research@firstshanghai.com.hk 2024年5月23日 星期四 【公司评论】 澳优（1717,未评级）： 2023年负重前行，长期规划静待改善 黎航荣 Wayne.li@firstshanghai.com.hk 2023FY业绩符合预期 852 2532 1539 公司23FY共计实现收入73.8亿元，同比-5.3%，实现归母净利润1.74亿元，同比 -19.5%，如剔除一次性费用影响后，核心净利润预计为2.55亿元。同期，2023年 行业 乳制品/食品饮料 中国婴幼儿配方奶粉行业受出生率下降+需求疲软等影响，行业规模同比双约双位 股价 2.40元 数下降幅度，逆势环境下公司整体表现优于行业。2023 财年公司拟派末期股息每 股普通股5港仙（总额0.8亿元），派息比率46.2%。 目标价 国内业务短期承压，海外业务强势增长 分产品看，23FY 牛奶粉、羊奶粉、私人品牌及其它、营养品业务分别实现收入 25.6/32.8/12.5/2.9亿元，同比分别-12.4%/-8.6%/+9.1%/113.9%。其中：1）牛奶 市值 42.72亿元 粉业务下滑，主要受行业 ...

Financial Performance - In 2023, the company's revenue was RMB 7,382.0 million, a decrease of RMB 413.5 million or 5.3% year-on-year[21]. - Gross profit for 2023 was RMB 2,852.6 million, down RMB 540.2 million or 15.9% compared to the previous year[21]. - The profit attributable to equity holders was RMB 174.4 million, a decline of RMB 42.1 million or 19.4% year-on-year[21]. - EBITDA for 2023 was RMB 474.5 million, reflecting a significant decline from previous years[15]. - The company's gross profit for 2023 was RMB 2,852.6 million, a decrease of RMB 540.2 million or 15.9% compared to 2022[51]. - The gross margin fell from 43.5% in 2022 to 38.6% in 2023, primarily due to increased discounts and rebates for distributors, high raw milk prices, and currency fluctuations[51]. - The company reported a net loss of RMB 18.9 million from its investment in Farmel Holding B.V. in 2023, compared to a profit of RMB 22.6 million in 2022[59]. - The cash flow from operating activities for 2023 was RMB 224.7 million, a significant improvement from a cash outflow of RMB 357.5 million in 2022[66]. - The net cash used in investing activities for 2023 was RMB 740.9 million, primarily due to the acquisition of property, plant, and equipment amounting to RMB 610.0 million[67]. - The net cash generated from financing activities was RMB 682.4 million in 2023, compared to RMB 664.1 million in 2022, driven by new bank loans and other borrowings totaling RMB 743.9 million[69]. Market Position and Brand Development - The company's self-owned brand formula goat milk powder maintained the number one market share in China, while international sales showed rapid growth[21]. - Brand exposure for the self-owned goat milk powder brand exceeded 15 billion, with brand strength increasing by 20% compared to 2022[23]. - The company achieved FDA approval for "Jia Bei Ai Te Infant Formula," making it the first European-produced infant formula to meet FDA requirements, and established the "Hunan Province Maternal and Infant Food Technology Innovation Center" with government support[25]. - The company maintains a leading position in the goat milk powder market, with over 60% market share in imported infant goat milk powder in China from 2018 to 2022[44]. - The brand's search index remains the highest in the goat milk category across major consumer platforms, indicating strong brand recognition[44]. - The company emphasized brand building through collaborations with media platforms and community engagement initiatives to enhance brand trust and recognition[38]. Product Development and Innovation - The company launched multiple new products, including the popular "Jia Bei Ai Te Yue Hu" goat milk powder and "Hai Pu Nuo Kai Nutrition Planet" cow milk powder, enhancing its product range[24]. - New product launches in 2023 included the Haipinokai 1897 and Nengliduo series, aimed at meeting diverse consumer nutritional needs[40]. - The company launched several new products, including the upgraded Aiyisen probiotic product line and NC's new gastrointestinal health products, enhancing its market presence[48]. - The company received the "2023 Innovative Technology" award for its MP108 strain, which aids in preventing various children's inflammations, showcasing its strong R&D capabilities[146]. - The company has established two major research platforms at its new innovation center in Hunan, China, aimed at developing proprietary strains and promoting domestic production of probiotics[146]. Strategic Initiatives and Future Outlook - The company aims for steady growth in its core goat and cow milk powder business and expects continued rapid growth in international and nutritional product sales in 2024[29]. - The company plans to enhance its core capabilities and management systems, focusing on brand strength, product quality, channel effectiveness, organizational capacity, and digital intelligence[29]. - The company will increase investment in innovation and research and development to capture new consumer segments and improve overall competitiveness[29]. - The company aims to enhance its global development capabilities, as showcased at the China International Import Expo in October 2023[23]. - The company is focusing on reducing carbon emissions and establishing a sustainable green supply chain as part of its commitment to corporate social responsibility[146]. Corporate Governance and Management - The board of directors consists of nine members, including three executive directors, three non-executive directors, and three independent non-executive directors[93]. - The company has adopted the corporate governance code as per the listing rules and is committed to enhancing governance standards[91]. - The company has ensured compliance with the diversity requirements of the listing rules following the appointment of a new non-executive director[91]. - The company has separated the roles of the chairman and the CEO, ensuring compliance with corporate governance standards[91]. - The company is actively reviewing its corporate governance practices to align with the latest developments and best practices[91]. - The company has established formal and transparent procedures for the appointment of directors, including a shareholder nomination process[106]. Financial Position and Shareholder Information - As of December 31, 2023, the total assets and net assets of the group were RMB 10,033.8 million and RMB 5,749.2 million, respectively, representing increases from RMB 9,796.1 million and RMB 5,565.1 million in 2022[62]. - The company's cash and cash equivalents decreased significantly to RMB (331.4) million from RMB 426.7 million in 2022[77]. - The equity attributable to shareholders was RMB 5,693.5 million, slightly up from RMB 5,646.6 million in 2022[77]. - The company reported a proposed final dividend of HKD 0.05 per share for the fiscal year 2023, down from HKD 0.06 in 2022, pending shareholder approval[147]. - The company has established a shareholder communication policy to ensure that shareholder opinions and concerns are properly addressed[133]. Social Responsibility and Community Engagement - The company is committed to fulfilling its social responsibilities and contributing to a harmonious society while pursuing business growth[29]. - The company made charitable donations totaling RMB 6,406,000 in 2023, down from RMB 11,680,000 in 2022[155]. - The company continues to integrate sustainable development into its operations, aligning with the United Nations Sustainable Development Goals[145].

2024年3月29日 公司研究 23 年整体业绩承压，羊奶粉海外业务表现亮眼 ——澳优（1717.HK）2023 年年报点评 要点 增持（维持） 当 前价：2.35港元 事件：2024年3月28日，澳优发布2023年年报。23年实现营业收入73.8亿 元，同比-5.3%；归母净利润1.7亿元，同比-19.5%。其中，23H2实现营业收 入38.7亿元，同比-7.1%；归母净利润-0.1亿元，同比亏损扩大。 作者 分析师：陈彦彤 佳贝艾特海外营收强劲增长，国内仍有承压。受出生率持续走低和需求疲软的影 执业证书编号：S0930518070002 响，2023年中国婴配粉行业规模同比双位数下滑，公司奶粉业务亦受到影响。1） 021-52523689 分产品看，2023年公司牛奶粉/羊奶粉/私人品牌及其他产品/营养品分别实现收 chenyt@ebscn.com 入25.62/32.83/12.52/2.85亿元，分别同比-12.4%/-8.6%/+9.1%/+113.9%。① 分析师：汪航宇 牛奶粉：2023年牛奶粉收入同比下滑主要系市场规模萎缩影响。公司于23Q2 执业证书编号：S0930523070002 进一步 ...

Financial Performance - Revenue for the year ended December 31, 2023, decreased by RMB 413.5 million or 5.3% compared to the previous year[2] - Gross profit fell by RMB 540.2 million or 15.9%, resulting in a gross margin of 38.6%, down from 43.5%[3] - Profit attributable to equity holders decreased by RMB 42.1 million or 19.4%, totaling RMB 174.4 million[3] - EBITDA decreased by RMB 10.0 million or 2.1%, amounting to RMB 474.5 million[2] - The company reported a total comprehensive income of RMB 284.7 million for 2023, down from RMB 352.8 million in 2022[5] - The company reported a pre-tax profit of RMB 201,801 thousand for the year ended December 31, 2023, compared to RMB 251,277 thousand in the previous year, indicating a decline of approximately 19.6%[19] - Basic earnings per share for 2023 was RMB 9.70, down from RMB 12.08 in 2022[33] - The profit attributable to equity holders of the company for 2023 was RMB 174.4 million, a decrease of RMB 42.1 million or 19.4% from 2022, mainly due to intense competition in the Chinese formula milk market[70] Dividends - The proposed final dividend per share for 2023 is HKD 0.05, down from HKD 0.06 in 2022, representing a decrease of 16.7%[3] - The company plans to declare a final dividend of HKD 0.05 per ordinary share, down from HKD 0.06 in the previous year[27] - The board proposed a final dividend of HKD 0.05 per share for the fiscal year 2023, down from HKD 0.06 in 2022, pending shareholder approval[92] Assets and Liabilities - Total assets as of December 31, 2023, increased to RMB 10,033.8 million from RMB 9,796.1 million in 2022[6] - Total liabilities rose slightly to RMB 4,284.6 million in 2023 from RMB 4,231.0 million in 2022[7] - The company’s non-current assets increased to RMB 4,586,775 thousand in 2023 from RMB 3,990,786 thousand in 2022, representing a growth of about 14.9%[20] - Total liabilities as of December 31, 2023, were RMB 4,284,562 thousand, up from RMB 4,231,039 thousand in the previous year, reflecting a rise of about 1.3%[19] - As of December 31, 2023, the total assets amounted to RMB 10,033.8 million, with shareholders' equity at RMB 5,693.5 million, resulting in a debt-to-asset ratio of 3.3%[80] Cash Flow - The net cash flow from operating activities for 2023 was RMB 224.7 million, compared to a cash outflow of RMB 357.5 million in 2022[8] - The net cash flow from investing activities for the year ended December 31, 2023, was RMB (723,984) million[6] - The net cash flow generated from financing activities for the fiscal year 2023 was RMB 682.4 million, an increase from RMB 664.1 million in 2022, driven by net withdrawals of new bank loans totaling RMB 743.9 million[76] - The company’s cash and cash equivalents increased to RMB 2,037.6 million from RMB 1,861.9 million year-over-year[6] - The company’s cash and cash equivalents increased by RMB 166.2 million in 2023, compared to a decrease of RMB 417.4 million in 2022[73] Market and Business Segments - The company operates two reportable segments: Dairy Products and Related Products, and Nutritional Products, focusing on global and China markets respectively[16] - Revenue from external customers in the Chinese market was RMB 5,611,092 thousand, contributing significantly to the overall revenue[22] - The company is focused on expanding its market presence, particularly in China and Australia, through its nutritional products division[16] - The company maintained the number one market share for its own brand formula goat milk powder in China[42] - The international business for the goat milk powder brand achieved rapid growth, maintaining the global leading position[42] Product Development and Innovation - The company launched several new products, including the Kabrita Yuyue and the HiPro Nutritional Star, expanding its product offerings in the milk powder category[45] - The company launched several new products in 2023, including the Haipinokai 1897 and Nengliduo series, aimed at meeting diverse consumer nutritional needs and enriching the product portfolio[55] - The company’s nutrition products segment saw growth due to the merger with Jin Qi Group, which included probiotic business integration[53] - The launch of the new Aiyisen probiotic product line, including upgrades to existing products and the introduction of new ones, aims to meet the nutritional needs of children and adults, enhancing the brand's market presence[61] Awards and Recognition - The company received the "National May Day Labor Medal" and ranked 7th in the "Second New Hunan Contribution Award," highlighting its achievements in the nutrition and health industry[43] - The group received the "2023 Innovative Technology" award for its MP108 Lactobacillus rhamnosus strain, which aids in preventing various children's inflammations, showcasing its strong R&D capabilities[87] - The MSCI ESG rating for the group was upgraded from A to AA, making it the only company in China's food industry to achieve this rating at the time[87] Strategic Initiatives - The company is focusing on brand building through collaborations with major media platforms and community engagement initiatives to enhance brand image and consumer trust[54] - The establishment of the "Leading Sheep Club" has enhanced channel capabilities and market penetration, with a focus on expanding distribution in lower-tier markets[57] - The company aims for steady growth in its core self-owned brand milk powder business and expects continued rapid growth in its international business and nutritional products in 2024[49] Risks and Challenges - The company faces potential foreign exchange risks due to operations in multiple currencies, including RMB, HKD, EUR, USD, AUD, and TWD[82] - Interest rate risk is managed through interest rate cap agreements, with two contracts expiring on December 31, 2023, to mitigate the impact of floating interest rates[83]

Financial Performance - In the first half of 2023, the company recorded revenue of RMB 3,511.9 million, a slight decrease of RMB 133.7 million or 3.7% year-on-year[16] - The core business of self-owned brand formula milk powder recorded sales of RMB 2,765.8 million, a decline of RMB 200.8 million or 6.8% year-on-year[18] - The company's self-branded goat milk powder recorded sales of RMB 1,504.2 million, a decrease of RMB 230.7 million or 13.3% year-on-year, accounting for 42.8% of total revenue[21] - The profit attributable to equity holders decreased by 10.3% to RMB 184.6 million compared to the previous year[17] - Revenue for the six months ended June 30, 2023, was RMB 3,511,917 thousand, a decrease of 3.7% compared to RMB 3,645,604 thousand for the same period in 2022[84] - Gross profit for the same period was RMB 1,473,446 thousand, down from RMB 1,734,071 thousand, reflecting a gross margin decline[84] - Net profit attributable to equity holders was RMB 184,600 thousand, down from RMB 205,709 thousand, representing a decrease of 10.2%[84] Revenue Segmentation - The company's self-owned brand formula milk powder revenue increased by 2.4% year-on-year to RMB 1,261.6 million, contributing 36.0% to total revenue[19] - The nutrition products segment saw a revenue increase of 88.8% year-on-year to RMB 148.8 million, driven by the acquisition of Bioflag Nutrition Corporation Ltd. and a 36.3% increase in probiotic product sales[16] - Revenue from external customers in the dairy products segment was RMB 3,363,098 thousand, while the nutrition segment contributed RMB 148,819 thousand, totaling RMB 3,511,917 thousand[131] Cost and Expenses - The company's gross profit margin was pressured by high Dutch raw milk prices and the need to clear old inventory, but pre-tax profit increased by 3.3% to RMB 230.9 million[17] - Sales and distribution expenses as a percentage of revenue decreased to 27.4% from 31.3% in the same period last year, while administrative expenses fell to 9.5% from 10.5%[17] - The cost of raw materials and consumables used was RMB 1,627,933,000, an increase from RMB 1,405,322,000 in the previous year[135] Market and Product Development - The company aims to become the most trusted formula milk and nutrition health enterprise globally, focusing on sustainable value creation[10] - The company launched new products, including the "Hepinokai 1897" premium formula and the "Jiabai Aite" immune nutrition-focused goat milk powder, targeting post-pandemic health needs[25] - The company aims to focus on goat milk powder and high-end cow milk powder businesses to enhance user experience and achieve sales growth in China and globally[29] Strategic Initiatives - The company plans to increase investment in its probiotic division from 27.5% to approximately 61.1% to support continued growth[24] - The company aims to enhance its competitive edge and resource allocation through strategic adjustments and channel management[20] - The company plans to accelerate the development of the overseas goat milk powder market as part of its strategic initiatives[29] Financial Position - Total assets increased to RMB 10,603.1 million as of June 30, 2023, from RMB 9,796.1 million at the end of 2022, driven by investments in new facilities in the Netherlands[44] - The company's current ratio decreased to 1.28 times as of June 30, 2023, from 1.49 times at the end of 2022, primarily due to refinancing actions[45] - The company's interest-bearing bank loans and other borrowings increased to RMB 2,577.4 million as of June 30, 2023, compared to RMB 1,465.6 million as of December 31, 2022[50] Cash Flow and Financing - The net cash flow used in operating activities for the first half of 2023 was RMB (392,467) thousand, compared to RMB (489,085) thousand in the same period of 2022, indicating a decrease of approximately 19.7%[100] - The net cash flow from financing activities was RMB 924,549 thousand in the first half of 2023, a significant increase from RMB 272,387 thousand in the same period of 2022, reflecting a growth of approximately 239.5%[100] - The company issued new bank loans amounting to RMB 2,181,547 thousand in the first half of 2023, compared to RMB 247,544 thousand in the same period of 2022, indicating a substantial increase of approximately 780.5%[100] Governance and Compliance - The company has adopted corporate governance practices in line with the Hong Kong Stock Exchange's guidelines, ensuring accountability and transparency[68] - The audit committee has reviewed the interim financial statements for the first half of 2023, ensuring compliance with financial reporting standards[70] Employee and Management - The total employee cost for the first half of 2023 was RMB 714.7 million, compared to RMB 729.5 million in the same period of 2022[63] - The total number of full-time employees as of June 30, 2023, was 4,273, a slight increase from 4,290 as of December 31, 2022[63] Risk Management - The group is actively monitoring credit risk and has diversified its customer base to minimize concentration risk[59] - The company has implemented a hedging policy to manage foreign exchange risks associated with non-RMB denominated debts[57]

Financial Performance - Revenue for the six months ended June 30, 2023, decreased by RMB 133.7 million or 3.7% compared to the same period in 2022[2] - Gross profit decreased by RMB 260.7 million or 15.0%, resulting in a gross margin of 42.0%, down from 47.6%[3] - EBITDA increased by RMB 19.1 million or 5.5%, reaching RMB 363.7 million[3] - Profit attributable to equity holders of the company decreased by RMB 21.1 million or 10.3%, totaling RMB 184.6 million[3] - Total revenue for the six months ended June 30, 2023, was RMB 3,511,917 thousand, a decrease from RMB 3,645,604 thousand in the same period of 2022, representing a decline of approximately 3.7%[24] - The company reported a pre-tax profit of RMB 223,564 thousand for the period, reflecting operational efficiency despite revenue decline[21] - Profit attributable to equity holders of the company was RMB 184.6 million, a decrease of RMB 21.1 million or 10.3% compared to the first half of 2022, mainly due to a decline in gross margin[70] Assets and Liabilities - Total assets as of June 30, 2023, amounted to RMB 10,603.1 million, an increase from RMB 9,796.1 million as of December 31, 2022[8] - Non-current assets increased to RMB 4,815.8 million from RMB 4,433.6 million[8] - Current assets totaled RMB 5,787.3 million, up from RMB 5,362.5 million[8] - Total liabilities increased to RMB 4,713.8 million from RMB 4,231.0 million[9] - The company's equity attributable to equity holders increased to RMB 5,805.8 million from RMB 5,646.6 million[9] - The group’s total liabilities as of June 30, 2023, were RMB 4,713,849,000, with segment liabilities of RMB 2,071,799,000 in dairy products and RMB 486,332,000 in nutrition[20] - As of June 30, 2023, the group had outstanding borrowings of RMB 2,577.4 million, an increase from RMB 1,465.6 million as of December 31, 2022[78] Revenue Segmentation - For the six months ended June 30, 2023, total revenue reached RMB 3,511,917,000, with sales to external customers amounting to RMB 3,363,098,000 in the dairy products segment and RMB 148,819,000 in the nutrition segment[17] - Revenue from the dairy products segment was RMB 3,363,098 thousand, while the nutrition segment contributed RMB 148,819 thousand, indicating a significant reliance on dairy products for overall revenue[25] - The company's own brand formula milk powder revenue increased by 2.4% year-on-year to RMB 1,261.6 million, showing initial positive results from adjustments made in 2022[46] - The sales revenue of nutritional products grew by 88.8% year-on-year to RMB 148.8 million, driven by the acquisition of Bioflag Nutrition Corporation Ltd. and a 36.3% increase in sales of probiotic products[46] Expenses and Cost Management - Employee benefits expenses totaled RMB 714,737 thousand, slightly down from RMB 729,537 thousand in the previous year, showing cost management efforts[29] - The proportion of sales and distribution expenses to revenue decreased to 27.4% from 31.3% in the same period of 2022 (restated)[47] - The proportion of administrative expenses, including research and development costs, decreased to 9.5% from 10.5% in the same period of 2022 (restated)[47] - The group's net financial expenses increased to RMB 19.4 million in the first half of 2023 from RMB 11.2 million in the same period in 2022, mainly due to increased bank loans for capital expenditures[67] Taxation and Compliance - The company's income tax expense for the six months ended June 30, 2023, was RMB 54,807,000, compared to RMB 32,337,000 for the same period in 2022, representing a significant increase[32] - The effective tax rate rose to 23.7% in the first half of 2023, up from 14.5% in the same period last year, primarily due to the expiration of preferential tax rates for a key subsidiary[69] - The company has a tax rate of 25% for corporate income tax in mainland China, with a reduced rate of 15% for its subsidiary recognized as a high-tech enterprise until December 31, 2025[32] Corporate Governance - The board is committed to enhancing corporate governance standards to protect shareholder interests and improve performance[84] - The company has adopted the corporate governance code as per the listing rules, ensuring effective strategy formulation and implementation[85] - The audit committee, composed of three independent non-executive directors, oversees financial reporting, internal controls, and risk management effectiveness[87] Strategic Initiatives - The company plans to focus on high-end goat and cow milk powder businesses to enhance user experience and drive sales growth in China and globally[58] - The company aims to accelerate the development of its overseas goat milk powder market as part of its strategic initiatives[58] - The company is committed to reducing carbon emissions and establishing a sustainable green supply chain in response to global climate change[57] Market and Product Development - The company received FDA registration for its goat milk infant formula, which will be the first to meet U.S. nutritional and safety requirements, aiding future international expansion[46] - The company received the "2023 Innovative Technology" award for its MP108 strain, enhancing its R&D reputation and future probiotic business prospects[56] - The company implemented stricter inventory control measures for its goat milk powder brand to ensure long-term health and competitiveness[50]