Accounting Errors and Adjustments - The company identified and corrected eight accounting errors from previous years, impacting sales incentive plans, receivables, and inventory provisions[1]. - The adjustments related to error (i) were made in the interim financial statements for the six months ending June 30, 2022, following a detailed review of contract liability calculations[3]. - The audit committee confirmed that the adjustments for error (i) were correctly made and resolved all significant misstatements from prior years[5]. - The company has updated its accounting treatment for sales incentive plans to ensure compliance with relevant accounting standards[4]. - The adjustments made for error (i) reflect complex calculations and parameters that were not easily identifiable by the board[3]. - The company identified several errors in its financial statements, including understatements related to accounts receivable provisions and inventory reserves, which were attributed to credit losses and unsold products[7][8][9]. - The adjustments related to errors (ii) to (viii) were deemed not significant in nature and amount, leading the company to decide against restating prior financial statements[9][10]. - The audit committee confirmed that the adjustments related to errors (ii) to (viii) were correctly made and resolved all significant misstatements in prior financial reports[13]. Revenue and Profit Performance - The company reported a significant decline in revenue and profit performance due to market downturns, which was unexpected by the board[3]. Internal Control and Review - An internal control review has been initiated by the company, with an external consultant engaged to assess and improve the internal control and financial reporting systems, expected to take two to three months[14]. - The company is in the process of reviewing its internal controls[15]. - The company will provide updates regarding the internal control review results at an appropriate time[15]. Customer and Tax Adjustments - The company has reviewed the financial status of its customers and adjusted the expected credit loss amounts accordingly, ensuring no other anomalies were found in prior years' financial statements[11]. - The company has updated its calculations for income tax payable and deferred tax assets based on a review of past tax filings, ensuring compliance with tax regulations[12]. - The company has taken steps to ensure the accuracy of intercompany transaction eliminations, reviewing key assumptions and ensuring completeness[11]. - The company has reassessed long-term sick leave provisions for employees, updating estimates based on internal discussions and reviews[12]. - The company has conducted a thorough review of inventory to identify any significant inventory write-downs necessary due to nearing expiration dates[11]. Corporate Governance and Transparency - The company plans to correct all identified errors in its 2022 annual performance announcement and report, aiming for better corporate governance[10]. - The company is committed to transparency for shareholders and potential investors[15]. - No specific financial performance metrics or forecasts were disclosed in this announcement[15]. - Further details will be communicated to stakeholders in due course[15]. Board of Directors - The board of directors includes three executive directors and three independent non-executive directors[15]. - The chairman and CEO is Mr. Yan Weibin[15]. - The vice chairman is Mr. Sun Donghong[15]. - The board consists of a total of nine members[15]. - The announcement date is July 7, 2023[15].

Financial Performance - In 2022, the revenue from self-owned brand formula milk powder was RMB 2,923.5 million, a decrease of 28.6% compared to RMB 4,095.0 million in 2021[11]. - The revenue from self-owned brand goat milk powder was RMB 133.0 million in 2022, down 24.9% from RMB 177.1 million in 2021[12]. - The revenue from nutritional products increased to RMB 1,148.0 million in 2022, up 23.1% from RMB 933.9 million in 2021[12]. - Revenue decreased by 9.1% year-on-year to RMB 7,795.5 million, with gross profit down 18.3% to RMB 3,392.8 million[23]. - The company's gross profit for 2022 was RMB 3,392.8 million, a decrease of RMB 760.6 million or 18.3% compared to 2021, with a gross margin decline from 48.4% to 43.5%[62]. - The net profit attributable to shareholders dropped to RMB 216.5 million in 2022, down 71.7% from RMB 763.8 million in 2021[14]. - The group reported a net profit for 2022 of RMB 216.5 million, down from RMB 763.8 million in 2021, reflecting challenges in the market[80]. - The company's profit attributable to equity holders for 2022 was RMB 216.5 million, a decrease of RMB 547.3 million or 71.7% from 2021, primarily due to reduced revenue from self-branded formula milk products[75]. Market Challenges - The company faced challenges due to the decline in birth rates and intense competition in the Chinese infant formula market[22]. - In 2022, the overall scale of China's infant formula milk powder industry decreased by a single-digit percentage year-on-year due to a declining birth rate[45]. - The company's self-branded formula milk powder revenue decreased by RMB 1,171.5 million or 28.6%, primarily due to a decline in China's birth rate and intense competition[55]. Strategic Initiatives - Strategic mergers and acquisitions, research upgrades, and new product launches were highlighted as key achievements despite the difficult market conditions[22]. - The company aims to enhance brand building and sustainable development practices moving forward[22]. - The company completed the acquisition of multiple goat milk assets in the Netherlands, adding approximately 45,000 tons of fresh goat milk supply annually[29]. - The company is investing €140 million in a new infant formula base powder facility, expected to be completed this year[29]. - The company has entered a strategic collaboration with Yili Group, focusing on serving the Chinese market and accelerating global development[24]. - The company aims to enhance its global leadership in goat milk products by maintaining a dual-engine strategy focused on brand and channel development[60]. Product Development - New product launches include a range of infant formula products and special medical foods, expanding the product matrix in the special medical food sector[28]. - The company launched several new products, including the first lactose-free medical infant formula "Zhi Shu" and the first HMO mixed formula milk powder "Future Version" to enhance its product portfolio[56]. - The ultra-high-end segment (average price per kilogram exceeding RMB 420) recorded double-digit year-on-year growth, indicating a trend towards premiumization in the market[46]. Operational Efficiency - The sales and distribution expenses accounted for 27.8% of revenue in 2022, slightly down from 28.1% in 2021, indicating stable expense management[64]. - The company's inventory provision decreased by RMB 59.8 million, partially offsetting the decline in gross profit[62]. - The current ratio of current assets to current liabilities improved to 1.49 times as of December 31, 2022, compared to 1.40 times in 2021[81]. - Inventory turnover days decreased to 183 days in 2022 from 189 days in 2021, indicating improved production planning and logistics[82]. 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, ensuring a balanced and independent governance structure[114]. - The company has adopted the corporate governance code as per the listing rules, aiming to enhance shareholder rights and corporate accountability[112]. - The board believes that the new leadership structure, with the chairman also serving as CEO, will enhance strategic decision-making and operational efficiency[112]. - The company has appointed a new CEO, Yan Weibin, to respond to increasing competition in the Chinese infant formula market, effective January 27, 2023[129]. Sustainability and Community Engagement - The company has committed to sustainable development, with its 2021 sustainability report awarded an A rating by MSCI[34]. - The group reported a significant commitment to sustainable development, donating over RMB 27 million in cash or materials to support communities in China[188]. - The company continues to focus on reducing carbon emissions and establishing a sustainable green supply chain in response to global climate change[188]. Financial Management - The company has established a hedging policy to manage foreign exchange risks associated with currency fluctuations, particularly with the Euro and Australian Dollar[98]. - The company has entered into interest rate cap agreements with a notional amount of EUR 150.0 million to mitigate floating interest rate risks[101]. - The company is focused on enhancing cash flow from operations and increasing bank financing to support business development, particularly in expanding its nutritional product segment[96]. Employee and Training Programs - As of December 31, 2022, the total number of full-time employees was 4,290, a decrease from 4,896 in 2021, representing a reduction of approximately 12.4%[107]. - The group has established employee training programs through platforms like "Dairy Academy" and "Ausnutria University" to enhance staff development[188]. - The company has established various retirement benefit plans for employees in different regions, including mandatory provident funds in Hong Kong and defined contribution plans in the Netherlands, Australia, and New Zealand[107].

Financial Performance - Revenue for the year ended December 31, 2022, decreased by RMB 779.7 million or 9.1% to RMB 7,795.5 million compared to RMB 8,575.2 million in 2021[2] - Gross profit decreased by RMB 760.6 million or 18.3%, resulting in a gross margin of 43.5%, down from 48.4%[3] - EBITDA decreased by RMB 673.9 million or 58.2%, from RMB 1,158.4 million in 2021 to RMB 484.5 million in 2022[2] - Profit attributable to equity holders of the company decreased by RMB 547.3 million or 71.7%, from RMB 763.8 million in 2021 to RMB 216.5 million in 2022[3] - The proposed final dividend per share for the year 2022 is HKD 0.06, a decrease of 78.6% from HKD 0.28 in 2021[3] - The company reported a total comprehensive income of RMB 352.8 million for the year 2022, compared to RMB 424.4 million in 2021[6] - The pre-tax profit for the year ended December 31, 2022, was RMB 251,277 thousand, compared to RMB 890,651 thousand in 2021, showing a significant decline of approximately 71.8%[17] - The company's profit attributable to ordinary shareholders for 2022 was RMB 216,526,000, a decrease of 71.6% compared to RMB 763,794,000 in 2021[34] - The basic earnings per share for 2022 was RMB 0.12, down from RMB 0.44 in 2021, reflecting a significant decline in profitability[36] Assets and Liabilities - Total assets as of December 31, 2022, increased to RMB 9,796.1 million from RMB 9,632.5 million in 2021[7] - Non-current assets increased to RMB 4,433.6 million in 2022 from RMB 4,033.5 million in 2021[7] - Total liabilities decreased to RMB 4,231,039 thousand from RMB 4,701,390 thousand, a reduction of approximately 10% year-over-year[8] - Current liabilities totaled RMB 3,600,614 thousand, down from RMB 3,997,140 thousand, representing a decrease of about 10%[8] - Total equity increased to RMB 5,565,056 thousand from RMB 4,931,111 thousand, reflecting an increase of about 13% year-over-year[8] - The company’s total assets amounted to RMB 9,796,095 thousand, up from RMB 9,632,501 thousand, indicating a growth of about 2%[8] - The total liabilities as of December 31, 2022, were RMB 4,231,039 thousand, an increase from RMB 4,701,390 thousand in 2021, reflecting a decrease of approximately 10%[18] Cash Flow and Investments - Net cash flow from operating activities was negative RMB 357,537 thousand, compared to positive RMB 1,071,319 thousand in the previous year[9] - Cash and cash equivalents decreased to RMB 1,861.9 million in 2022 from RMB 2,262.2 million in 2021[7] - The company reported a net cash outflow from investing activities of RMB 723,984 thousand, compared to RMB 606,566 thousand in the previous year[9] - The company issued new shares, generating proceeds of RMB 739,024 thousand during the year[9] - The group reported a net cash outflow from operating activities of RMB 357.5 million in 2022, a significant decrease from a net inflow of RMB 1,071.3 million in 2021[85] - The group’s investment activities resulted in a net cash outflow of RMB 724.0 million in 2022, compared to RMB 606.5 million in 2021, primarily due to property, plant, and equipment purchases totaling RMB 571.5 million[86] Market and Product Performance - Revenue from the Dairy Products and Related Products segment was RMB 7,662,551 thousand, while the Nutrition segment generated RMB 132,961 thousand for the year ended December 31, 2022[17] - Revenue from the Chinese market for dairy products was RMB 6,436,059 thousand, while nutritional products generated RMB 127,497 thousand, leading to a total of RMB 6,563,556 thousand[23] - Revenue from the company's own brand formula milk powder decreased by RMB 1,171.5 million or 28.6%, primarily due to a decline in birth rates in China and intense competition[67] - Sales of the company's own brand goat milk powder increased by 6.6% year-on-year, with growth rates of 5.5% in China and 21.8% in overseas markets[50] - The company completed the acquisition of multiple goat milk assets in the Netherlands, adding approximately 45,000 tons of fresh goat milk supply annually[54] - The company launched several new products, including a range of infant formula and special medical foods, enhancing its product matrix in the special medical food sector[52][53] Challenges and Strategic Initiatives - The company faced challenges in 2022 due to the impact of the Russia-Ukraine conflict and declining birth rates in China[49] - Despite difficulties, the company achieved strategic acquisitions and launched new products during the year[49] - The overall market for infant formula in China has contracted, leading to intensified competition[49] - The company is committed to sustainable development practices and brand building as part of its long-term strategy[49] - The company plans to continue focusing on expanding its product offerings in the Dairy and Nutrition segments to enhance market presence[16] - The company is actively exploring opportunities for mergers and acquisitions to strengthen its market position and diversify its product portfolio[16] Corporate Governance and Compliance - The audit committee has reviewed the audited consolidated financial statements for the fiscal year 2022, including accounting principles and practices adopted by the company[104] - The company has confirmed compliance with the standard code for securities trading by all directors throughout 2022[102] - The board consists of three executive directors, three non-executive directors, and three independent non-executive directors as of the announcement date[110] - The company has established written guidelines for senior management and employees regarding securities trading to ensure compliance with insider information regulations[102] Future Outlook - The company anticipates a gradual recovery in the consumer market in 2023, driven by national pro-birth policies and the end of pandemic restrictions[62] - The new national standards for infant formula are expected to lead to a new round of market consolidation, improving market order and reducing price chaos[62] - The company aims to enhance cash flow from operations and increase bank financing to support business development, particularly in expanding its nutritional product segment and constructing new facilities in the Netherlands[91]

Financial Performance - For the first half of 2022, the company reported revenue of RMB 3,630.2 million, a decrease of RMB 645.8 million or 15.1% compared to RMB 4,276.0 million in the same period of 2021[15]. - Gross profit for the first half of 2022 was RMB 1,709.0 million, down RMB 432.9 million or 20.2% from RMB 2,141.9 million in the first half of 2021[15]. - Profit attributable to equity holders was RMB 222.0 million, a decline of RMB 376.9 million or 62.9% from RMB 598.9 million in the same period of 2021[15]. - The revenue decline was primarily due to strategic adjustments in the sales of its own brand milk powder and increased support to distributors during challenging market conditions[38]. - The gross margin decreased from 50.1% in 2021 to 47.1% in 2022, attributed to increased discounts offered to distributors amid intense market competition[39]. - The profit attributable to equity holders for the first half of 2022 was RMB 222.0 million, a decrease of RMB 376.9 million or 62.9% compared to the same period in 2021[49]. - The company reported a total comprehensive income of RMB 221,988,000 for the six months ended June 30, 2022, compared to RMB 203,188,000 for the same period in 2021, showing an increase of 9.0%[106]. Sales and Market Trends - The core business of the company's own brand formula milk powder generated sales of RMB 2,951.2 million, a decrease of RMB 795.3 million or 21.2% year-on-year[16]. - Sales of the company's own milk powder decreased by RMB 770.7 million or 37.6% to RMB 1,279.3 million compared to RMB 2,050.0 million in the first half of 2021[17]. - The overall market demand for infant formula milk powder in China declined by 4.0% year-on-year in the first half of 2022, according to AC Nielsen data[15]. - The company's own brand formula milk powder accounted for 81.3% of total revenue, down from 87.6% in the same period of 2021[16]. - Revenue from the Chinese market was RMB 3,063,014 thousand, down 19% from RMB 3,775,940 thousand in the previous year[140]. Product Development and Innovation - 海普诺凯1897推出首款母乳低聚糖奶粉，标志着产品结构的重大升级[23]. - 佳贝艾特推出多款新产品，包括儿童成长营养配方羊奶粉，进一步拓展市场[23]. - The company has submitted a patent for goat milk protein peptides with DPP-V inhibition function, which won the "China Patent Award Excellent Award" and supports the development of diverse goat milk powder products[26]. - The company holds over 70 domestic and 50 international projects, with goat milk powder-related patents accounting for 50% of China's goat milk powder patents[26]. Strategic Initiatives - The company is actively adjusting sales strategies for its core brand, Haipinokai 1897, to provide fresher and higher-quality products while reducing inventory pressure on distributors[17]. - The company aims to strengthen its global supply chain and enhance brand competitiveness despite the challenges faced in the market[15]. - The company believes that the adjustments made to the distribution strategy will yield long-term benefits for its business[17]. - The company aims to reduce carbon emissions and establish a sustainable green supply chain as part of its commitment to corporate social responsibility[31]. - The company will continue to adhere to its core strategy of "Golden Decade" to drive growth and innovation in the market[34]. Financial Position and Assets - Total assets as of June 30, 2022, were RMB 9,377.4 million, a decrease of RMB 147.8 million from RMB 9,525.2 million at the end of 2021[50]. - The net asset value increased by RMB 504.2 million to RMB 5,963.5 million as of June 30, 2022, compared to RMB 5,459.3 million at the end of 2021[50]. - The current ratio improved to 2.03 times as of June 30, 2022, compared to 1.68 times at the end of 2021, mainly due to new shares issued[52]. - Cash and cash equivalents decreased to RMB 1,764.3 million from RMB 2,262.2 million at the end of 2021[56]. - The group had outstanding borrowings of RMB 1,271.9 million as of June 30, 2022, down from RMB 1,303.0 million as of December 31, 2021, with 47.7% of the borrowings due within one year[59]. Corporate Governance and Compliance - The company has adopted the corporate governance code as per the listing rules to enhance shareholder value and accountability[72]. - The audit committee has reviewed the interim report and the unaudited financial statements for the period[74]. - The company has established written guidelines for securities trading by senior management and employees to ensure compliance with regulations[73]. - The new share option plan was conditionally approved on May 26, 2022, allowing the board to grant options to selected participants, including employees and directors, for a total of up to 10% of the issued shares as of the approval date, equating to 180,854,584 shares[81]. Community Engagement and Social Responsibility - The company donated RMB 17.6 million worth of materials to support local communities and was awarded the "2021 Corporate Social Responsibility Industry Model Award" for the fourth consecutive year[31]. - The company remains cautiously optimistic about the industry outlook despite challenges, focusing on strengthening core business and brand, and enhancing global supply chain efficiency[32].

Financial Performance - In the fiscal year 2021, the company's revenue increased from RMB 7,985.8 million to RMB 8,873.3 million, representing a year-on-year growth of 11.1%[23] - Gross profit rose from RMB 3,982.0 million to RMB 4,470.7 million, reflecting a year-on-year increase of 12.3%[23] - Net profit attributable to the parent company increased from RMB 1,004.1 million to RMB 1,040.3 million, showing a year-on-year growth of 3.6%[23] - The company's revenue for the year 2021 was RMB 8,873.3 million, an increase of 11.1% compared to 2020, driven by effective marketing strategies and the trend towards product premiumization in mainland China[54] - The revenue from the company's self-branded formula milk products in China increased by 12.1% to RMB 7,762.3 million, contributing 85.0% to the total revenue[54] - The revenue from the self-branded formula milk products was RMB 4,414.1 million, a year-on-year increase of 15.5%[55] - The Haipinokai 1897 business unit, focusing on the ultra-premium market, recorded revenue of RMB 3,181.5 million, a year-on-year increase of 17.9%[55] - The Nengliduo business unit achieved revenue of RMB 1,019.3 million, a year-on-year increase of 23.3%[55] - The revenue from the nutrition products segment was RMB 177.1 million in 2021, a year-on-year increase of 24.5%, driven by sales of gastrointestinal health products and probiotics[59] - The company's private label and other businesses generated revenue of RMB 211.6 million and RMB 722.3 million respectively, contributing 10.5% to total revenue[57] Market Position - The company's market share in the offline sales of infant formula in mainland China increased to approximately 6.9%, ranking 5th in the industry[23] - The core self-owned brands of infant formula, including Jia Bei Ai Te, Hai Pu Nuo Kai, and Neng Li Duo, achieved double-digit growth, outperforming the overall industry performance[23] - The company maintained its leading position in the goat milk powder segment, with Jia Bei Ai Te holding over 60% market share in imported infant goat milk powder since 2018[23] - The infant formula industry in China is expected to see increased market concentration, with the top three and top ten brands holding market shares of 43.7% and 82.1%, respectively[49] Investments and Expansion - The company received approval for two green factories in the Netherlands and two in Australia, enhancing its global supply chain and product quality[24] - In 2021, the company invested in a new research center in Changsha, China, leading to 45 patent applications and 30 published academic papers, including 7 in SCI journals[25] - The company plans to complete the second formula registration work in 2022, ensuring 100% compliance for core products[37] - The company aims to expand its global layout for probiotics and enhance its product offerings in nutritional and special medical use products[37] - The company intends to invest in enhancing processing and logistics capabilities in China, as well as brand-building activities[44] - The company plans to expand its operations by constructing a new milk powder facility in the Netherlands, supported by increased financing[90] Shareholder and Governance - The company welcomed Inner Mongolia Yili Industrial Group as its largest shareholder, marking a significant merger in the Chinese dairy industry aimed at strategic collaboration[32] - The total consideration for the share purchase agreement with Yili Group was HKD 5,340,097,116, equating to HKD 10.06 per share[44] - The board of directors consists of nine members, including three executive directors, three non-executive directors, and three independent non-executive directors, ensuring a balanced and independent governance structure[109] - The company has established a nomination committee to review board composition and oversee the nomination and appointment processes[118] - The board has adopted a diversity policy, recognizing the benefits of a diverse and inclusive board, and aims to enhance diversity across various dimensions such as gender, age, and professional skills[136] Sustainability and Corporate Responsibility - The company is committed to sustainable development and has established a green supply chain to contribute to environmental protection[35] - The company has identified 8 out of 17 United Nations Sustainable Development Goals relevant to its operations[172] - The company is actively reducing reliance on natural gas and transitioning to electric heating to achieve zero nitrogen emissions[172] - The company established a Sustainability Committee in 2018 to support the board in implementing sustainability strategies across subsidiaries[172] - The company made charitable donations totaling RMB 22,283,000 in 2021, a decrease from RMB 35,016,000 in 2020[181] Financial Position and Cash Flow - The company's operating cash inflow for the year was RMB 1,071.3 million[17] - The company's total assets increased to RMB 9,514.2 million, while net assets reached RMB 5,493.6 million[17] - The net cash balance as of December 31, 2021, was RMB 1,214.4 million, maintaining a strong liquidity level[37] - The net cash flow from operating activities for the year 2021 was RMB 1,071.3 million, a decrease of 5.2% from RMB 1,130.2 million in 2020, primarily driven by a pre-tax profit of RMB 1,233.7 million[82] - The net cash flow used in investing activities increased to RMB 606.5 million in 2021 from RMB 402.5 million in 2020, mainly due to the acquisition of property, plant, and equipment amounting to RMB 442.3 million[83] Risk Management and Compliance - The company has established a risk management and internal control framework based on COSO ERM and ISO 31000, adopting a "three lines of defense" model to manage risks effectively[152] - The board conducted an annual review of the effectiveness of the risk management and internal control systems, finding them to be effective and sufficient without any significant deficiencies identified[159] - The company emphasizes the importance of compliance with regulatory requirements and has provided guidelines to employees regarding legal compliance[171] - The company has implemented policies to mitigate risks, including anti-fraud measures and reporting procedures, to ensure compliance and proper conduct[154] Employee and Director Information - The total employee cost for the year 2021 was RMB 1,485.5 million, up from RMB 1,380.7 million in 2020, reflecting adjustments based on individual performance and current market salary levels[98] - The company employed a total of 4,896 full-time employees as of December 31, 2021, down from 5,202 in 2020, mainly due to restructuring in the formula milk powder business unit[98] - The company has established various retirement benefit plans for its employees in different regions, including mandatory provident funds in Hong Kong and defined contribution plans in the Netherlands, Australia, and New Zealand[98] - The company has adopted a share option scheme as a reward for directors and employees, with specific details outlined in the board report[191] Audit and Financial Reporting - The company has engaged Ernst & Young as the independent auditor for the consolidated financial statements, ensuring compliance and accuracy in reporting[115] - The total remuneration paid to external auditor Ernst & Young amounted to RMB 11,757,000, which includes RMB 6,640,000 for annual audit services and RMB 3,757,000 for non-audit services[151] - The internal audit department reports directly to the audit committee and conducts audits at least twice a year to enhance oversight and management functions[157]

Financial Performance - For the six months ended June 30, 2021, the company recorded revenue of RMB 4,270.5 million, an increase of RMB 411.2 million or 10.7% compared to the same period last year[13]. - Profit attributable to equity holders was RMB 594.0 million, a year-on-year increase of RMB 185.2 million or 45.3%[13]. - Gross profit for the first half of 2021 was RMB 2,136.4 million, up RMB 114.0 million or 5.6% from RMB 2,022.4 million in the same period of 2020[33]. - The gross margin decreased to 50.0% in the first half of 2021 from 52.4% in the same period of 2020, primarily due to increased inventory provisions[33]. - The company's profit before tax was RMB 698,210 thousand, up from RMB 549,462 thousand in the previous year, reflecting a growth of approximately 27.0%[79]. - The net profit attributable to the owners of the parent company was RMB 593,990 thousand, compared to RMB 408,761 thousand in 2020, marking an increase of around 45.3%[79]. - Basic earnings per share for the period were RMB 34.60, up from RMB 25.37 in the same period last year, representing an increase of approximately 36.5%[79]. Revenue Breakdown - The company's proprietary brand formula goat milk powder, "佳貝艾特," generated revenue of RMB 1,688.2 million, reflecting a year-on-year growth of 2.0%[13]. - The sales revenue of the company's own brand formula milk powder reached RMB 2,052.8 million, an increase of RMB 297.5 million or 16.9% year-on-year[21]. - The sales revenue of the company's own brand formula goat milk powder was RMB 1,688.2 million, with a year-on-year increase of RMB 32.6 million or 2.0%[22]. - The private label and other businesses saw sales increase by 20.6% to RMB 461.2 million, accounting for 10.8% of the total revenue[24]. - Revenue from external customers in the dairy products segment was RMB 4,202,258 thousand, while the nutrition segment generated RMB 68,288 thousand[99]. - Revenue from the Chinese market was RMB 3,770,455 thousand for the first half of 2021, an increase from RMB 3,423,756 thousand in the same period of 2020, representing a growth of about 10.1%[100]. Market Position and Strategy - The company's market share in China's infant formula market was 6.3%, ranking fifth in 2020[15]. - The company has actively adjusted its strategies to respond to market changes, contributing to the growth of its proprietary brand formula milk powder business[13]. - The company faced challenges due to declining birth rates and changing consumer shopping patterns, impacting the competitive landscape of the formula milk powder industry[13]. - The company remains committed to a multi-brand strategy, optimizing its product mix to meet the growing demand for high-end products in the market[20]. - The company plans to introduce its products to Southeast Asia by the end of the year, expanding its market presence[23]. Research and Development - The company has been actively expanding its international research and innovation platform, with over 30 and 40 ongoing goat milk-related research projects in China and overseas, respectively[16]. - The company launched its first probiotic product for infants, "Ai Yi Sen 'Little Orange Box'," using the newly approved MP108 Lactobacillus rhamnosus strain, aimed at enhancing immune and gut health[19]. - The company published three core research results in top international academic journals during the first half of 2021, focusing on the differences in digestibility between breast milk, cow, and goat milk[16]. - The company held two online seminars through the Aoyou Nutrition Research Institute, covering newborn nutrition and the prevention of infant allergies[17]. - The company introduced a tailored growth formula milk for children aged 3 to 12, based on ongoing research in child nutrition[18]. - The company has established partnerships with top global universities to enhance research innovation capabilities and apply findings to product development[17]. Operational Challenges - The company confirmed additional inventory provisions of RMB 122.4 million for certain non-core proprietary brand formula milk powder products[13]. - The company faced challenges in the European market due to ongoing COVID-19 impacts, resulting in negative gross margins for certain products[34]. - The company will continue to monitor the impact of the COVID-19 pandemic on operations and consumer behavior, particularly regarding birth rates[28]. Financial Position - Total assets as of June 30, 2021, were RMB 8,960.2 million, a decrease from RMB 9,248.0 million as of December 31, 2020[46]. - The group's current assets to current liabilities ratio was 1.61 times as of June 30, 2021, remaining stable compared to 1.58 times as of December 31, 2020[47]. - Cash and cash equivalents as of June 30, 2021, were RMB 1,428.9 million, down from RMB 1,857.5 million as of December 31, 2020[51]. - The group had outstanding borrowings of RMB 1,151.4 million as of June 30, 2021, an increase of 6.0% from RMB 1,086.3 million as of December 31, 2020[54]. - The group’s total liabilities decreased from RMB 3,392,668,000 to RMB 3,150,391,000, representing a reduction of approximately 7.1%[82]. Corporate Governance - The company has established an audit committee to provide independent opinions on financial reporting procedures, internal controls, and risk management effectiveness[64]. - The company confirmed compliance with the standards set forth in the securities trading code during the interim period of 2021[63]. - The company’s stock option plan aims to reward selected participants for their contributions to the group[66]. Sustainability and Social Responsibility - The company is focused on reducing carbon emissions and establishing a sustainable green supply chain in response to global climate change[27]. - The company received recognition as a "Social Responsibility Listed Company" and "Advanced Private Enterprise in Employment and Social Security" in China[27].

Financial Performance - Total revenue for 2020 reached RMB 7,985.8 million, representing a year-on-year increase of 18.6%[49] - Gross profit for 2020 was RMB 3,982.0 million, with a gross margin of 49.9%[49] - EBITDA for 2020 amounted to RMB 1,463.2 million, reflecting a growth of 13.3% compared to the previous year[49] - Net profit attributable to shareholders was RMB 1,004.1 million, an increase of 14.3% year-on-year[49] - Operating cash flow for 2020 was RMB 1,130.2 million, indicating strong cash generation capabilities[49] - The total assets of the company increased to RMB 9,248.0 million, up from RMB 8,343.2 million in 2019[49] - The company maintained a net cash position of RMB 983.3 million, reflecting a solid financial foundation[49] - The company reported a profit attributable to equity holders of RMB 1,004.1 million for 2020, an increase of RMB 125.7 million or 14.3% compared to 2019[64] - Adjusted profit attributable to equity holders was RMB 1,083.3 million, up RMB 141.3 million or 15.0% year-on-year[64] - The group's financial expenses for the year 2020 were RMB 289 million, a decrease from RMB 333 million in 2019, primarily due to reduced interest on bank loans and other borrowings[100] Business Expansion and Product Development - The company successfully expanded its business into Mexico and South Korea in 2020, enhancing its international presence[53] - New product launches included probiotics, children's milk powder, and adult milk powder, contributing to diversified offerings[53] - The self-owned brand formula milk business generated revenue of RMB 6,926.4 million, up RMB 903.0 million or 15.0% year-on-year, accounting for 86.7% of total revenue[61] - The company launched a gene chip and genetic testing service in November 2020, focusing on personalized nutrition services based on nutritional genomics[54] - The company launched new nutritional products, including immune-boosting milk powder, leveraging its strengths in research and development[72] Strategic Initiatives and Partnerships - The company established strategic partnerships with Jiangnan University and Wageningen University to enhance global breast milk research and development[54] - The company is advancing the construction of a new processing plant in the Netherlands with a capacity of 35,000 tons, which will be highly automated and environmentally compliant[54] - The company achieved recognition as a "National Green Supply Chain Management Demonstration Enterprise" by the Ministry of Industry and Information Technology of China[53] - The company has developed a personalized nutrition service platform based on a million Chinese gene data, currently in trial operation[73] Market Trends and Consumer Insights - In 2020, the overall retail scale of China's infant formula milk powder industry was RMB 176.3 billion, with a year-on-year growth of 4.4%[83] - The market share of domestic brands increased from 32.9% in 2019 to 38.2% in 2020, reflecting a growing consumer trust in local brands[83] - The concentration of the top three infant formula brands in China increased to 37.6% in 2020, up by 2.0 percentage points from 2019[83] - The company anticipates that the market growth rate for its unique sheep milk products will improve in the future[86] 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, ensuring a balanced and independent governance structure[129] - The company has adopted the corporate governance code as per the Hong Kong Stock Exchange's listing rules, demonstrating its commitment to high governance standards[127] - The board is responsible for preparing the consolidated financial statements, ensuring they reflect the group's financial position and performance accurately[134] - The company has established various retirement benefit plans for employees in different regions, including mandatory provident fund contributions for Hong Kong employees[125] Sustainability and Community Engagement - The company has identified 8 out of 17 United Nations Sustainable Development Goals relevant to its operations[176] - The company has established a Sustainability Committee to oversee the integration of sustainability strategies into long-term business plans[176] - The company has committed over RMB 78 million in cash, medical supplies, and nutritional products to support community efforts against the pandemic[85] - The company made charitable donations totaling RMB 35,016,000 in 2020, compared to RMB 10,994,000 in 2019[184] Acquisitions and Investments - The acquisition of HypnoCare Biotechnology Group was completed for HKD 898.8 million, with 70 million new shares issued at HKD 12.84 per share[76] - The company completed the acquisition of land in Changsha for USD 11.5 million (approximately RMB 80.7 million) to expand production and storage facilities[80] - The Changsha land acquisition is strategically located adjacent to existing production facilities, enhancing operational capabilities[80] Employee and Workforce Development - As of December 31, 2020, the total number of full-time employees was 5,202, an increase from 4,689 in 2019, representing a growth of approximately 10.9%[125] - The total employee cost for the year 2020 was RMB 1,380.7 million, up from RMB 1,294.9 million in 2019, indicating an increase of about 6.6%[125] Financial Position and Assets - The total assets of the group as of December 31, 2020, were RMB 9,248.0 million, up from RMB 8,343.2 million in 2019[104] - Shareholders' equity rose to RMB 5,171.4 million in 2020, compared to RMB 4,015.7 million in 2019, reflecting an increase of about 28.8%[114] - The group's cash and cash equivalents amounted to RMB 1,857.5 million in 2020, up from RMB 1,674.5 million in 2019, indicating a growth of approximately 10.9%[117] Risk Management and Compliance - The company reported a focus on risk management and internal control systems to ensure business objectives are met, with regular assessments of key risks and mitigation plans in place[163] - The board of directors is responsible for reviewing the effectiveness of the risk management and internal control systems, with no significant deficiencies identified during the review period[163] - The company has established anti-fraud and whistleblowing procedures to encourage employees to report any misconduct related to financial reporting or internal controls[163]

Revenue and Profitability - The company recorded revenue of RMB 3,859.3 million for the first half of 2020, an increase of RMB 711.7 million or 22.6% compared to the same period in 2019[25]. - The self-owned brand formula milk business generated revenue of RMB 3,410.9 million, up RMB 681.4 million or 25.0%, accounting for 88.4% of total revenue[25]. - The profit attributable to equity holders increased by 56.9% to RMB 408.8 million, with an adjusted profit of RMB 574.7 million, up RMB 139.8 million or 32.1% compared to the same period in 2019[27]. - Revenue for the six months ended June 30, 2020, was RMB 3,859,336 thousand, representing a 22.6% increase from RMB 3,147,565 thousand in the same period of 2019[139]. - Total comprehensive income for the period was RMB 478,287 thousand, compared to RMB 272,774 thousand in the prior year, indicating a growth of 75.5%[143]. Acquisitions and Investments - The company completed the acquisition of the remaining 15% equity of the Hyproca Group, which primarily markets and distributes the Kabrita brand in China[26]. - The acquisition of the remaining 15.0% stake in Hyproca Biotechnology (Hong Kong) Limited was agreed upon for HKD 896.0 million, to be settled through the issuance of 70,000,000 new shares[50]. - The group completed the acquisition of HypnoCare Group in May 2018, with the consideration dependent on the subsequent performance of HypnoCare[53]. - The group acquired land in Changsha for USD 11.5 million (approximately RMB 79.3 million) to facilitate the expansion of production and storage facilities in Changsha, China[55]. Research and Development - Research and development (R&D) expenses increased by 72.5% during the first half of 2020 compared to the same period in 2019, leading to the successful launch of two new formula milk products[8]. - The company has established a comprehensive strategic cooperation agreement with Jiangnan University to enhance R&D capabilities in various product development areas[8]. - The company has invested continuously in R&D, publishing over 40 articles on international platforms, and established a research center in collaboration with Jiangnan University[63]. Market Position and Strategy - The company aims to become the most trusted formula milk and nutrition health enterprise globally[15]. - The company is formulating a global innovation strategy to be implemented over the next three to five years to strengthen its market position[44]. - The company has registered a total of 15 series and 45 formulas, covering ultra-high-end, high-end, and mid-range markets[35]. - The company is focused on enhancing its R&D capabilities and digitalizing its operational platforms to support long-term growth[59]. Operational Challenges and Responses - The management discussed the challenges faced in the first half of 2020, including the COVID-19 pandemic and ongoing US-China trade tensions[25]. - The company has adopted a conservative approach to adjust delivery volumes to distributors in response to slowing sales in certain brands due to the ongoing impact of the COVID-19 pandemic[33]. - The company has actively adjusted its marketing strategies, including online activities and live streaming, to empower distribution channels during the pandemic[38]. Financial Performance and Expenses - The gross profit for the first half of 2020 was RMB 2,022.4 million, an increase of RMB 383.3 million or 23.4% compared to the same period in 2019[73]. - Selling and distribution expenses accounted for 25.5% of revenue in the first half of 2020, down from 27.4% in the same period of 2019[77]. - Administrative expenses increased to 8.3% of revenue in the first half of 2020, compared to 7.8% in the first half of 2019, primarily due to rising operational scale and R&D costs[77]. - The total employee cost for the mid-2020 period was RMB 669.8 million, an increase from RMB 590.4 million in the mid-2019 period[110]. Cash Flow and Assets - The net cash flow generated from operating activities for the same period was RMB 830,011,000, up 61.5% from RMB 317,388,000 in 2019[156]. - Cash and cash equivalents increased to RMB 1,846.3 million as of June 30, 2020, from RMB 1,674.5 million at the end of 2019[94]. - The group’s total assets reached RMB 8,880.1 million as of June 30, 2020, compared to RMB 8,343.2 million at the end of 2019[94]. - The group’s total liabilities stood at RMB 4,042,542,000, compared to RMB 3,279,286,000 in the previous year, representing an increase of approximately 23.2%[148]. Customer Engagement and Marketing - The company has increased its marketing efforts, achieving significant brand exposure through popular TV dramas and online platforms, enhancing brand recognition among target audiences[42]. - The company has focused on enhancing consumer interaction through online and offline activities, including live streaming and community events, to drive sales and customer engagement[44]. Inventory and Supply Chain Management - The company has increased the procurement of goat milk to ensure stable supply for the production of Jiabei Aite, resulting in increased output of related by-products[71]. - The group has increased its safety stock levels for key materials and finished products to ensure stable supply of formula milk products during the COVID-19 pandemic[89].

Financial Performance - The company achieved a revenue of RMB 6,736.2 million in 2019, representing a 25.0% increase compared to 2018[160] - Net profit for 2019 was RMB 878.4 million, reflecting a growth of 38.3% year-over-year[160] - Return on equity increased from 19.5% in 2018 to 21.9% in 2019[160] - The company maintained a gross profit margin of 52.5% in 2019, up from 49.4% in 2018[130] - Operating cash flow for 2019 was RMB 970.8 million, indicating strong cash generation capabilities[130] - For the fiscal year ended December 31, 2019, the company recorded revenue of RMB 6,736.2 million, an increase of RMB 1,346.6 million or 25.0% compared to the previous year[177] - The core business segment, self-branded formula milk powder, achieved revenue of RMB 6,023.4 million, up RMB 1,622.0 million or 36.9%, accounting for 89.4% of total revenue[177] - The company reported a fair value loss of RMB 63.6 million related to derivative financial instruments, impacting the profit attributable to equity holders, which increased by 38.3% to RMB 878.4 million[178] - The gross profit margin improved by 3.1 percentage points compared to the previous year, attributed to enhanced operational efficiency and supply chain adjustments[180] Product Development and Launches - The company launched the "萃護" series of infant formula, imported 100% from the Netherlands, in the first half of 2019[161] - In November 2019, the company introduced the "佳貝艾特營嘉" adult goat milk powder and "淳璀有機孕產婦" milk powder, expanding its product range[161] - The company launched several new products in 2019, including the "Aoyou Chun Cui" organic maternal milk powder, which received organic certification from Australian Certified Organic (ACO) and Zhonglv Huaxia[184] - The introduction of the "Yingjia" family formula powder received positive market feedback, leveraging the strong brand power of the company[187] Market Position and Share - In 2019, the company achieved a market share of approximately 5% in the Chinese infant formula market, ranking among the top ten in the country[165] - The company's goat milk formula brand, Kabrita, maintained the leading position in the Chinese goat milk infant formula market, accounting for over 60% of the total imported goat milk formula[165] - The company captured a market share of 60.5% in the total imported formula goat milk powder market in 2019, maintaining its position as the market leader[185] Strategic Partnerships and Acquisitions - A strategic partnership was established with JD.com in December 2019 for the global launch of the Puredo international version[161] - The acquisition of the remaining 15% stake in the Hyproca Group is expected to enhance operational performance and cash flow integration[178] - The acquisition of Aunulife Pty Ltd was completed for AUD 0.8 million (approximately RMB 3.9 million), enhancing the company's probiotic health product offerings[194] - The acquisition of the remaining 40% equity in Yunyangbang Hong Kong and Yunyangbang Guangzhou was completed on October 2019, allowing the company to fully control the Yunyangbang Group[196] - The total consideration for the acquisition of Yunyangbang Hong Kong includes an initial payment of RMB 57.3 million (approximately HKD 63.7 million) and a potential subsequent payment capped at RMB 180.0 million (approximately HKD 203.4 million) based on financial performance[198] - The acquisition of Yunyangbang Guangzhou was valued at RMB 6.8 million (approximately HKD 7.7 million), to be paid in cash[198] - The company agreed to acquire all equity of Hunan Kunyuan Plastic Co., Ltd. for USD 11.5 million (approximately RMB 79.3 million), which includes land adjacent to existing production facilities in Changsha, China[199] Social Responsibility and Community Engagement - The company’s commitment to social responsibility was highlighted by its multiple donations exceeding RMB 67.6 million in response to the COVID-19 pandemic[166] - The company partnered with the China National Tennis Team, enhancing brand visibility and aligning with its brand philosophy[164] Research and Development - The company continues to enhance its R&D and quality control capabilities, with the approval of a new factory in New Zealand, increasing the total number of registered factories to six[180] - The company aims to leverage Fenghua Biotechnology's R&D capabilities to develop a new series of probiotic products, strengthening its market position in gastrointestinal nutrition[194] Marketing and Brand Recognition - The company engaged in various marketing activities, including collaborations with high-profile celebrities and sponsorship of events to enhance brand recognition[184] - The company has launched extensive online and offline marketing campaigns, including collaborations with industry experts to enhance brand influence[191] Future Plans and Market Expansion - The company plans to focus on expanding its market presence in the organic and goat milk powder segments, aiming to become a leader in the global nutrition industry[170] - The company aims to implement its "Golden Decade" strategic plan established at the end of 2015, focusing on strategic resource allocation and market expansion[180] - The company recognizes the increasing demand for nutritional products, especially post-COVID-19, and plans to deepen channel cooperation and education initiatives[191] - The company expanded its market presence to 66 countries and regions globally, with plans for further expansion in the future[187] Challenges and Adjustments - The private label business saw a revenue decline of 40.3% to RMB 201.8 million in 2019, accounting for 3.0% of the total revenue, down from 6.3% in 2018[188] - The company terminated its butter business in 2019 to allocate more resources for developing formula goat milk powder products[188] - Nutrition Care's sales for 2019 amounted to RMB 118.7 million, a decrease of RMB 17.4 million or 12.8% compared to 2018, primarily due to a temporary halt in the production of the Suvra product line[190] - Sales from NC Stomach Powder were RMB 72.1 million in 2019, down from RMB 80.8 million in 2018[190] - The company plans to resume production of the Suvra products by Q3 2020 after addressing packaging issues with contractors[190] Operational Enhancements - The company’s new factory in Changsha received production permits for adult milk powder, expected to enhance production capacity and efficiency[162] - The company’s global supply chain was strengthened with the successful registration of its New Zealand factory in China, recognized for quality assurance[162] - The company has established hundreds of sales points across Hong Kong, Australia, and New Zealand, enhancing its distribution network[191]

Revenue and Sales Performance - For the six months ended June 30, 2019, the company recorded revenue of RMB 3,147.6 million, an increase of RMB 565.2 million or 21.9% compared to the same period in 2018[25]. - The company's proprietary brand formula milk business generated revenue of RMB 2,729.5 million, up RMB 653.0 million or 31.4%, accounting for 86.7% of total revenue[25]. - Total revenue for the first half of 2019 reached RMB 3,147.6 million, representing a 21.9% increase compared to RMB 2,582.4 million in the same period of 2018[69]. - Sales of the company's own brand formula milk powder reached RMB 1,410.4 million, a growth of RMB 241.7 million or 20.7% compared to the first half of 2018[30]. - Sales of organic formula milk powder increased by RMB 67.1 million or 52.3%, reaching RMB 195.3 million during the same period[30]. - Sales of the company's own brand formula goat milk powder reached RMB 1,319.1 million in the first half of 2019, an increase of RMB 411.3 million or 45.3% compared to the same period in 2018[35]. - Private label business sales decreased by 38.9% to RMB 117.4 million in the first half of 2019, representing 3.7% of total revenue, down from 7.4% in the same period in 2018[41]. - Nutrition products sales amounted to RMB 52.9 million in the first half of 2019, a growth of RMB 0.4 million or 0.8% compared to the same period in 2018[44]. Profitability and Financial Performance - The company experienced a loss of RMB 174.4 million from changes in the fair value of derivative financial instruments during the reporting period[25]. - The fair value loss related to the contingent consideration from the acquisition of Hypnoke amounted to HKD 202.0 million (approximately RMB 174.4 million), resulting in a 20.4% decrease in profit attributable to equity holders to RMB 260.5 million for the first half of 2019[26]. - Adjusted profit attributable to equity holders, excluding the fair value loss, was RMB 434.9 million, an increase of RMB 169.4 million or 63.8% compared to the first half of 2018[26]. - The profit attributable to equity holders for the first half of 2019 was RMB 260.5 million, a decrease of RMB 66.8 million or 20.4% compared to the same period in 2018[91]. - The net profit for the period was RMB 254,755 thousand, a decrease of 24% compared to RMB 336,770 thousand in the prior year[159]. - Basic earnings per share for the period was RMB 16.38, down from RMB 25.92 in the previous year[158]. Assets and Liabilities - Total assets as of June 30, 2019, were RMB 7,544.7 million, up from RMB 6,829.0 million as of December 31, 2018[93]. - The increase in total assets was primarily due to an inventory increase of RMB 480.0 million and a prepayment of RMB 207.4 million for convertible bonds[93]. - Current liabilities increased to RMB 3,029,182 thousand from RMB 2,653,155 thousand, indicating a rise in short-term obligations[163]. - Non-current liabilities rose to RMB 1,043,157,000, up from RMB 781,303,000, indicating a significant increase of 33.5%[165]. - The net asset value increased to RMB 3,472.3 million from RMB 3,394.5 million as of December 31, 2018[93]. Research and Development - The company continues to enhance its research and development capabilities and has achieved multiple organic certifications from authoritative institutions in the Netherlands and China[32]. - R&D expenses rose from RMB 23.4 million in the first half of 2018 to RMB 41.9 million in the first half of 2019, reflecting the company's ongoing investment in new product development[82]. Market Expansion and Strategy - The company expanded its market presence to 66 countries and regions by the first half of 2019, aiming to become a global leader in infant goat milk nutrition products[40]. - The company plans to expand its market share in China by launching new formula milk products, including adult goat milk powder, organic goat milk powder, and A2 formula milk powder[62]. - The company aims to promote its products outside of China, particularly in Mexico, India, Thailand, and the United States, pending FDA approval[63]. Shareholder and Capital Structure - As of June 30, 2019, the total number of issued shares is 1,607,869,044 shares[144]. - The major shareholders include Citagri Easter Ltd., Chengtong CITIC Agriculture Investment Fund, and others, each holding 23.57% of the shares[148]. - The company has a significant concentration of ownership, with several entities holding over 5% of the shares[147]. Operational Efficiency and Cost Management - The gross profit margin improved by 5.7 percentage points due to ongoing strategic initiatives, while air freight costs decreased by RMB 35.0 million or 55.0%[28]. - Sales and distribution expenses accounted for 27.4% of revenue in the first half of 2019, slightly up from 27.0% in the same period of 2018, primarily due to higher sales and distribution costs associated with self-branded products[81]. - Administrative expenses increased to 7.8% of revenue in the first half of 2019, up from 6.8% in the same period of 2018, driven by higher employee costs and increased R&D expenses[82]. Cash Flow and Financing Activities - The cash flow from operating activities for the first half of 2019 was RMB 317.4 million, compared to RMB 177.7 million in the same period of 2018[93]. - The company’s cash flow from financing activities showed a net outflow of RMB 142,610,000, contrasting with a net inflow of RMB 24,946,000 in the previous year[175]. - The total cash and cash equivalents at the end of the reporting period was RMB 1,374,785,000, an increase from RMB 713,077,000 at the end of the previous year[175]. Compliance and Governance - The company has established an audit committee to provide independent opinions on financial reporting procedures, internal controls, and risk management effectiveness[126]. - The company’s audit committee has reviewed the interim report and the unaudited condensed consolidated financial statements for the six months ended June 30, 2019[126].