Financial Performance - The operating revenue for the year ended December 31, 2024, was RMB 5,834,604, a decrease of 9.1% compared to RMB 6,418,966 in 2023[3] - Gross profit increased by 10.7% to RMB 733,407, with a gross margin of 12.6%, up from 10.3% in the previous year[3] - Profit attributable to shareholders rose by 25.1% to RMB 58,831, compared to RMB 47,024 in 2023[3] - Basic earnings per share increased to RMB 0.058 from RMB 0.046, reflecting improved profitability[5] - The total segment operating income for 2024 is 7,217,226, down from 8,154,471 in 2023, indicating a decrease of about 11.5%[20] - The group reported a net profit of 84,312 for 2024, compared to 75,380 in 2023, indicating an increase of about 11.9%[18] - In 2024, the company's total revenue was RMB 5,834,604 thousand, a decrease of 9.1% year-on-year, while net profit attributable to shareholders increased by 25.1% to RMB 58,831 thousand[47] Assets and Liabilities - Total non-current assets amounted to RMB 2,209,335, an increase from RMB 2,045,539 in 2023[7] - Current assets decreased to RMB 1,670,355 from RMB 1,738,411, with cash and cash equivalents at RMB 469,747[7] - Total liabilities decreased to RMB 1,450,000 from RMB 1,402,937, indicating improved financial stability[8] - The company reported a net asset value of RMB 2,429,691, up from RMB 2,381,013 in the previous year[8] - The total liabilities for the group increased to 1,449,999 in 2024 from 1,402,937 in 2023, representing an increase of approximately 3.4%[20] - The group's total non-current assets in 2024 are reported at 2,042,897, an increase from 1,885,561 in 2023, showing a growth of about 8.3%[23] Revenue Breakdown - Revenue from the mainland China market for 2024 is 5,519,176, down from 6,157,786 in 2023, a decrease of approximately 10.4%[23] - Sales revenue from chain restaurant customers grew rapidly by 43% year-on-year, becoming a significant driver for the growth of processed food business[44] - Processed food business revenue increased by 10.7% year-on-year to RMB 2,571,851 thousand, with gross profit rising by 9.2% to RMB 522,021 thousand[49] - The feed business revenue decreased by 24% year-on-year to RMB 1,720,637 thousand, with gross profit declining by 6.3%[54] - The meat business revenue fell by 15.9% year-on-year to RMB 1,542,116 thousand, but gross profit surged by 116.1% to RMB 67,453 thousand[57] Expenses and Costs - The group's depreciation and amortization expenses for 2024 amounted to 171,696, up from 130,260 in 2023, reflecting an increase of approximately 31.9%[18] - The group's financial expenses for 2024 were reported at 23,168, compared to 17,738 in 2023, indicating an increase of about 30.5%[20] - Distribution costs accounted for 6.11% of total operating income in 2024, up from 5.26% in 2023[61] - Administrative expenses represented 4.86% of total operating income in 2024, compared to 3.88% in 2023[62] Cash Flow and Investments - As of December 31, 2024, the group's cash and bank deposits totaled RMB 469,747 thousand, a decrease of RMB 57,193 thousand from 2023[63] - The group's net cash generated from operating activities in 2024 was RMB 306,153 thousand, down RMB 101,099 thousand from 2023[63] - Capital expenditures in 2024 amounted to RMB 335,465 thousand, primarily funded by internal resources and bank loans[64] Strategic Focus and Future Outlook - The company continues to focus on the production and sale of poultry feed, poultry, and processed meat products, indicating a stable operational strategy[10] - The company plans to enhance food production capacity and develop high-quality, cost-effective products to strengthen market competitiveness[52] - The company aims to optimize supply chain management and improve operational efficiency through digital transformation[46] - The company will continue to focus on processed food as the main growth driver while diversifying its product offerings and market channels[46] - The company anticipates a shift in industry competition from growth to a more intense competition in the existing market due to oversupply and weak demand[43] Governance and Compliance - The audit committee has been established in accordance with the "Listing Rules" and has defined its scope of authority[79] - The audit committee is responsible for evaluating financial statements and providing recommendations on financial reporting, internal controls, and risk management systems[79] - The audit committee consists of independent non-executive directors, ensuring no disagreements with external auditors regarding accounting policies[79] - The executive directors include the chairman, Mr. Wei Junxian, and Mr. Han Jiayin[81] - The board of directors includes several non-executive and independent non-executive directors, ensuring a diverse governance structure[81]

Financial Performance - For the nine months ended September 30, 2024, the company's operating revenue was RMB 4,316,818 thousand, a decrease of 10.7% compared to RMB 4,834,221 thousand in the same period last year[1][2]. - The company's net profit attributable to shareholders was RMB 36,910 thousand, down 44.6% from RMB 66,604 thousand year-on-year[1][2]. - The gross profit increased to RMB 543,513 thousand, representing a growth of 4.4% from RMB 520,850 thousand in the previous year, with a gross margin of 12.6% compared to 10.8% last year[1][2]. Business Segments - Processed food business accounted for 45.2% of total revenue and 71.7% of total gross profit, indicating its position as the largest revenue and profit source for the group[6][7]. - The processed food segment saw revenue and gross profit growth of 11.4% and 10.6% respectively, despite a slow recovery in the domestic catering market[6][7]. - In the first three quarters of 2024, the feed business revenue decreased by 25.5% year-on-year, and gross profit decreased by 2.9%[8]. - The meat business revenue and gross profit decreased by 20.4% and 19.6% year-on-year, respectively, due to limited recovery in domestic market consumption and oversupply in the broiler chicken industry[9]. Strategic Initiatives - The company plans to enhance its food production capacity and develop differentiated high-quality products using advanced production technologies[7]. - The company is focusing on expanding its export markets, particularly in Japan, while also diversifying to reduce risks associated with market concentration[7]. - The company aims to improve supply chain efficiency through digital transformation and increase customer engagement via retail channel promotions[7]. - The company is focusing on product diversification and channel diversification to mitigate market risks and enhance competitiveness[10]. - The company is actively developing new markets and customers beyond pig feed to diversify its product offerings and reduce market risks[8]. - The company is accelerating the transformation of its business model in the meat sector to be more customer demand-driven, enhancing supply chain flexibility[9]. - The company aims to improve cash flow management and increase the value of each chicken through focused customer development[10]. - The company is advancing its digital transformation and optimizing supply chain management to enhance overall industry competitiveness and cyclical resilience[10]. Market Trends - The overall market demand for high-quality processed foods is expected to rise due to increasing consumer awareness of healthy eating and stricter food safety standards[7]. Financial Position - As of September 30, 2024, the company's net assets amounted to RMB 2,414,225 thousand, with cash and cash equivalents accounting for 13.8% of total assets[11]. - The current ratio as of September 30, 2024, was 1.61, slightly up from 1.56 on December 31, 2023[11]. - The ratio of interest-bearing borrowings to equity was 23.6% as of September 30, 2024, compared to 22.3% on December 31, 2023[11].

Business Strategy and Market Position - In the first half of the year, the operating income of the foods segment accounted for 45% of the Group's total operating income and 74% of its gross profit, making it the most important source of profit and growth driver for the company[10][12]. - The company has restructured its business model to focus on downstream food processing, increasing the scale of food processing while downscaling breeding operations[9][10]. - The company aims to develop differentiated and processed products to enhance the value of each chicken and reduce the risk of fluctuation in the white feather broiler market[9][10]. - The strategic adjustment towards food development has been ongoing since 2021, following the sale of its Southeast Asian business to its parent company[10][12]. - The company is benefiting from the core strategy of food processing transformation, which has helped mitigate losses from the depressed domestic meat chicken market[10][12]. - The competitive landscape in the Chinese market is intense, and the company believes that focusing on food processing is essential for long-term survival[11]. - The company has established a solid market foundation in food processing, which is expected to capitalize on changing consumer habits and increasing demand for food safety and convenience[11]. Investment and Expansion - The Company has invested RMB 1 billion in a new one-stop meat and food production line in Bengbu, which commenced operations in Q4 2023, marking a strategic expansion in the Yangtze River Delta region[20]. - The new food workshop in Bengbu, along with a second phase project expected to be commissioned this year, will add an annual production capacity of 46,000 tonnes[20]. - A food processing plant expansion project in Dalian, initiated in Q3 2023, will provide an additional annual production capacity of 9,000 tonnes upon completion this year[20]. - The Company plans to continue expanding food production capacity and increase investments in the food supply chain, research and development, and digital operations[20]. Financial Performance - For the first half of 2024, the operating income of the Company was RMB2,794,444 thousand, a decrease of 11.1% compared to the same period last year[29]. - Profit attributable to shareholders amounted to RMB31,575 thousand, representing a decrease of 22.5% year-on-year[29]. - The domestic processed food business continued to grow, with operating income and gross profit increasing by 11.9% and 21% year-on-year, respectively[31]. - The Company achieved a gross profit margin of 13.0%, up from 10.8% in the previous year[29]. - The net cash inflow from operating activities was RMB124 million, providing financial support for the expansion of food production capacity[31]. - The Company reported a profit for the period of RMB 31,575 thousand for the six months ended June 30, 2024[79]. - Total comprehensive income for the period was RMB 30,197 thousand, reflecting a positive performance[79]. Market Trends and Consumer Behavior - The implementation of new urbanization policies is expected to stimulate catering consumption demand among urban residents, creating more business opportunities for the food industry[16][17]. - The Company recognizes the increasing competition in the food processing industry due to large-scale enterprises investing in downstream food processing to buffer against cyclical fluctuations[16][17]. - The focus on customer demand will guide the restructuring of the broiler breeding and slaughtering supply chain to enhance resilience against market volatility[21][23]. - The domestic food sales team focused on major direct sales customers, enhancing collaboration in product development and supply chain[38]. Corporate Governance and Compliance - The Company has complied with the Corporate Governance Code, except for the combined roles of Chairman and Chief Executive Officer held by Mr. James Chun-Hsien Wei since September 1, 2022[164]. - The Board believes that the dual role of Chairman and CEO does not impair the balance of power and authority within the Company[165]. - The Company Secretary, Ms. Cho Yi Ping, has been in position since August 8, 2016, and meets the qualifications required by the Listing Rules[168]. - All directors confirmed compliance with the standard code of conduct for securities trading during the six months ended June 30, 2024[167]. - The Group is committed to maintaining high standards of corporate governance to enhance shareholder value[163]. Related Party Transactions - The company has related party transactions with its ultimate holding company, Great Wall Enterprise Co., Ltd., and its subsidiaries during the reporting period[139]. - The company has several related party transactions with subsidiaries and associates, including Beijing Universal Chain Food Co., Ltd. and DaChan Liangyou Foods (Tianjin) Co., Ltd.[141][142]. - The report indicates a focus on maintaining strong relationships with related parties while managing financial performance effectively[144].

[Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) This section presents the financial highlights for the six months ended June 30, 2024, detailing key performance indicators [Financial Highlights](index=1&type=section&id=Financial%20Highlights) For the six months ended June 30, 2024, operating revenue and profit attributable to equity holders decreased, while gross profit and gross profit margin improved | Indicator | 2024 (RMB thousands) | 2023 (RMB thousands) | Change % | | :----------------------------- | :------------------- | :------------------- | :--------- | | Operating Revenue | 2,794,444 | 3,142,785 | -11.1 | | Gross Profit | 362,471 | 338,920 | 6.9 | | Gross Profit Margin (%) | 13.0 | 10.8 | | | Profit Attributable to Equity Holders of the Company | 31,575 | 40,757 | -22.5 | | Basic Earnings Per Share (RMB) | 0.031 | 0.040 | | [Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) This section provides the consolidated financial statements, including the statement of profit or loss, comprehensive income, and financial position [Consolidated Statement of Profit or Loss](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2024, the Group reported operating revenue of RMB 2,794,444 thousands and profit attributable to equity holders of RMB 31,575 thousands | Indicator | 2024 (RMB thousands) | 2023 (RMB thousands) | | :----------------------------- | :------------------- | :------------------- | | Operating Revenue | 2,794,444 | 3,142,785 | | Cost of Sales | (2,431,973) | (2,803,865) | | Gross Profit | 362,471 | 338,920 | | Operating Profit | 68,266 | 70,361 | | Profit Before Tax | 56,652 | 63,324 | | Profit for the Period | 48,028 | 56,236 | | Profit Attributable to Equity Holders of the Company | 31,575 | 40,757 | | Basic Earnings Per Share (RMB) | 0.031 | 0.040 | [Consolidated Statement of Comprehensive Income](index=3&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2024, the Group's profit for the period was RMB 48,028 thousands, with total comprehensive income of RMB 46,782 thousands | Indicator | 2024 (RMB thousands) | 2023 (RMB thousands) | | :-------------------------------------------- | :------------------- | :------------------- | | Profit for the Period | 48,028 | 56,236 | | Exchange Differences | (1,246) | (6,035) | | Total Comprehensive Income for the Period | 46,782 | 50,201 | | Total Comprehensive Income Attributable to Equity Holders of the Company | 30,197 | 34,012 | [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, the Group's total assets less current liabilities were RMB 2,727,818 thousands, and net assets were RMB 2,427,795 thousands | Indicator | 2024 June 30 (RMB thousands) | 2023 Dec 31 (RMB thousands) | | :-------------------------------------------- | :--------------------------- | :-------------------------- | | Total Non-current Assets | 2,110,890 | 2,045,539 | | Total Current Assets | 1,626,445 | 1,738,411 | | Total Current Liabilities | 1,009,517 | 1,111,299 | | Net Current Assets | 616,928 | 627,112 | | Total Assets Less Current Liabilities | 2,727,818 | 2,672,651 | | Total Non-current Liabilities | 300,023 | 291,638 | | Net Assets | 2,427,795 | 2,381,013 | | Total Equity Attributable to Equity Holders of the Company | 2,145,511 | 2,115,314 | [Notes to the Financial Statements](index=6&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed notes to the financial statements, covering presentation basis, accounting policy changes, segment reporting, and other financial details [Basis of Presentation](index=6&type=section&id=Basis%20of%20Presentation) This interim financial report is prepared in accordance with HKEX Listing Rules and IAS 34, adopting consistent accounting policies with the prior year, except for noted changes - This interim financial report complies with the HKEX Listing Rules and International Accounting Standard 34[6](index=6&type=chunk) - The report adopts the same accounting policies as the 2023 annual financial statements, except for changes detailed in Note 2[6](index=6&type=chunk) [Changes in Accounting Policies](index=6&type=section&id=Changes%20in%20Accounting%20Policies) Several amendments to International Financial Reporting Standards were applied, none of which had a significant impact on the Group's financial performance or position - The Group has applied several amendments, including those to International Accounting Standard 1 and International Financial Reporting Standard 16[7](index=7&type=chunk) - All changes in accounting policies had no significant impact on the Group's results and financial position[7](index=7&type=chunk) [Operating Revenue and Segment Reporting](index=7&type=section&id=Operating%20Revenue%20and%20Segment%20Reporting) The Group's business is divided into three reportable segments: processed food, livestock feed, and meat products, with their respective operating revenues for the six months ended June 30, 2024 - The Group primarily operates in three business segments: processed food, livestock feed, and meat products[9](index=9&type=chunk) | Segment | 2024 Operating Revenue (RMB thousands) | 2023 Operating Revenue (RMB thousands) | | :--------------- | :----------------------------------- | :----------------------------------- | | Processed Food | 1,249,661 | 1,123,488 | | Livestock Feed | 827,086 | 1,114,113 | | Meat Products | 717,697 | 905,184 | | Total | 2,794,444 | 3,142,785 | [Processed Food Segment](index=7&type=section&id=Processed%20Food%20Segment) The processed food segment primarily engages in the processing, reprocessing, or production and distribution of ready-to-eat meat products, mainly chicken - The processed food segment produces and distributes reprocessed or ready-to-eat chicken products[11](index=11&type=chunk) [Livestock Feed Segment](index=7&type=section&id=Livestock%20Feed%20Segment) The livestock feed segment produces and distributes various feeds for pigs, laying hens, broiler chickens, ducks, and breeding poultry under multiple brands - The livestock feed segment produces various brands of feed for pigs, chickens, ducks, and other animals, including 'Dr. Buck,' 'DaChan,' and 'Green Knight'[11](index=11&type=chunk) [Meat Products Segment](index=7&type=section&id=Meat%20Products%20Segment) The meat products segment covers broiler breeder farming, broiler hatching, contract farming, and the processing and trading of chilled and frozen chicken meat - The meat products segment engages in broiler breeder farming, hatching, contract farming, and the processing and trading of chilled/frozen chicken meat[11](index=11&type=chunk) [Other Operating Income and Other Net Gains](index=8&type=section&id=Other%20Operating%20Income%20and%20Other%20Net%20Gains) In the first half of 2024, other operating income was RMB 10,717 thousands, mainly from interest income, government grants, and rental income, while other net gains were RMB 755 thousands, primarily from net foreign exchange gains | Other Operating Income | 2024 (RMB thousands) | 2023 (RMB thousands) | | :------------------- | :------------------- | :------------------- | | Interest Income | 4,441 | 4,615 | | Government Grants | 2,509 | 3,229 | | Rental Income | 3,767 | 2,891 | | **Total** | **10,717** | **10,735** | | Other Net Gains/(Losses) | 2024 (RMB thousands) | 2023 (RMB thousands) | | :----------------------- | :------------------- | :------------------- | | Foreign Exchange Gains/(Losses) | 1,858 | (261) | | Net Loss on Disposal of Property, Plant and Equipment | (1,738) | (1,383) | | Others | 635 | 1,785 | | **Total** | **755** | **141** | [Profit Before Tax](index=8&type=section&id=Profit%20Before%20Tax) Profit before tax is influenced by factors such as finance costs, depreciation, amortization, impairment of trade receivables, and inventory write-downs, with finance costs significantly increasing and inventory write-downs turning into a reversal in H1 2024 [Finance Costs](index=8&type=section&id=Finance%20Costs) For the six months ended June 30, 2024, interest expense on bank borrowings significantly increased to RMB 13,008 thousands from RMB 7,103 thousands in the prior year | Finance Costs | 2024 (RMB thousands) | 2023 (RMB thousands) | | :---------------------- | :------------------- | :------------------- | | Interest on Bank Borrowings | (13,008) | (7,103) | [Other Items](index=9&type=section&id=Other%20Items) Other items affecting profit before tax include amortization of prepaid lease payments, depreciation of property, plant and equipment, impairment provision for trade receivables, and net reversal of inventory write-downs | Other Items | 2024 (RMB thousands) | 2023 (RMB thousands) | | :---------------------------------------- | :------------------- | :------------------- | | Amortization of Prepaid Lease Payments | (2,163) | (2,160) | | Depreciation of Property, Plant and Equipment | (78,822) | (55,842) | | Impairment (Provision)/Net Reversal of Trade Receivables | (619) | 716 | | Net Reversal/(Recognition) of Inventory Write-downs | 13,111 | (676) | [Income Tax](index=9&type=section&id=Income%20Tax) The Group's income tax expense, totaling RMB 8,624 thousands in H1 2024, comprises current and deferred tax, with varying rates applied across different regions and entities | Income Tax Items | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--------------- | :------------------- | :------------------- | | Current Tax | (6,404) | (6,294) | | Deferred Tax | (2,220) | (794) | | **Total** | **(8,624)** | **(7,088)** | - Hong Kong profits tax rate is **16.5%**, with certain eligible subsidiaries taxed at **8.25%** for the first HKD 2 million[16](index=16&type=chunk) - Mainland China corporate income tax rate is **25%**, with Northeast Agriculture and Animal Husbandry (Changchun) Co., Ltd. enjoying a preferential rate of **15%** as a high-tech enterprise[16](index=16&type=chunk) [Earnings Per Share](index=10&type=section&id=Earnings%20Per%20Share) As of June 30, 2024, the Company's basic earnings per share was RMB 0.031, calculated based on profit attributable to ordinary equity holders and weighted average shares outstanding, with no difference between basic and diluted earnings - Basic earnings per share for the first half of 2024 was **RMB 0.031**, a decrease from **RMB 0.040** in the same period last year[18](index=18&type=chunk) - The weighted average number of ordinary shares outstanding was **1,016,189,000** shares, consistent with the prior year[18](index=18&type=chunk) - There were no potential dilutive ordinary shares during the period, thus diluted earnings per share is the same as basic earnings per share[18](index=18&type=chunk) [Property, Plant and Equipment](index=10&type=section&id=Property%2C%20Plant%20and%20Equipment) In the first half of 2024, the Group's capital expenditure for property, plant and equipment significantly decreased to RMB 98,284 thousands, and disposal of assets resulted in a net loss of RMB 1,738 thousands | Indicator | 2024 (RMB thousands) | 2023 (RMB thousands) | | :-------------------------------------- | :------------------- | :------------------- | | Cost of Purchases of Property, Plant and Equipment | 98,284 | 263,525 | | Net Book Value of Property, Plant and Equipment Disposed | 1,145 | 2,258 | | Loss on Disposal | 1,738 | 1,383 | [Trade Receivables](index=10&type=section&id=Trade%20Receivables) As of June 30, 2024, total trade receivables were RMB 258,695 thousands, a decrease from 2023 year-end, with the Group generally granting 30-60 day credit terms and a small proportion of overdue accounts - The Group generally grants customers credit terms of **30-60 days**[17](index=17&type=chunk) | Aging | 2024 June 30 (RMB thousands) | 2023 Dec 31 (RMB thousands) | | :-------------------- | :--------------------------- | :-------------------------- | | Current | 245,050 | 263,074 | | Overdue 1 to 180 days | 13,727 | 14,598 | | Overdue 181 to 365 days | 3,108 | 306 | | Overdue over 365 days | 4,454 | 4,838 | | Provision for Doubtful Debts | (7,644) | (7,247) | | **Total** | **258,695** | **275,569** | [Other Receivables and Prepayments](index=11&type=section&id=Other%20Receivables%20and%20Prepayments) As of June 30, 2024, total other receivables and prepayments amounted to RMB 269,653 thousands, primarily consisting of recoverable value-added tax, deposits, and prepayments | Item | 2024 June 30 (RMB thousands) | 2023 Dec 31 (RMB thousands) | | :---------------------------------- | :--------------------------- | :-------------------------- | | Recoverable Value-Added Tax | 247,426 | 259,039 | | Deposits and Prepayments | 92,422 | 94,318 | | Advances to Employees | 4,470 | 4,174 | | Others | 13,484 | 7,265 | | Less: Non-current Recoverable Value-Added Tax | 88,149 | 88,149 | | **Total** | **269,653** | **276,647** | [Trade Payables](index=11&type=section&id=Trade%20Payables) As of June 30, 2024, total trade payables significantly decreased to RMB 340,923 thousands from RMB 506,995 thousands at the end of 2023 | Aging | 2024 June 30 (RMB thousands) | 2023 Dec 31 (RMB thousands) | | :-------------------- | :--------------------------- | :-------------------------- | | Current | 168,617 | 221,009 | | Overdue less than 30 days | 136,254 | 169,074 | | Overdue 31 to 60 days | 23,398 | 46,042 | | Overdue 61 to 90 days | 5,671 | 34,738 | | Overdue over 90 days | 6,983 | 36,132 | | **Total** | **340,923** | **506,995** | [Other Payables](index=12&type=section&id=Other%20Payables) As of June 30, 2024, total other payables were RMB 298,065 thousands, primarily comprising salaries, wages, bonuses, other accrued benefits, accrued expenses, and performance deposits | Item | 2024 June 30 (RMB thousands) | 2023 Dec 31 (RMB thousands) | | :---------------------------------- | :--------------------------- | :-------------------------- | | Sales Rebates | 15,383 | 22,554 | | Salaries, Wages, Bonuses and Other Accrued Benefits | 51,016 | 102,689 | | Accrued Expenses | 104,092 | 60,810 | | Performance Deposits | 59,998 | 57,450 | | Payables for Purchase of Property, Plant and Equipment | 21,678 | 5,276 | | Amounts Due to Related Parties | 42,600 | 42,600 | | Others | 3,298 | 17,365 | | **Total** | **298,065** | **308,744** | [Dividends](index=12&type=section&id=Dividends) The Company did not declare an interim dividend for the six months ended June 30, 2024, consistent with the prior year - No interim dividend was declared for the first half of 2024[24](index=24&type=chunk) [Management Discussion and Analysis](index=13&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's perspective on the Group's overall performance, segment-specific results, financial position, and human resources [Overall Performance Overview and Outlook](index=13&type=section&id=Overall%20Performance%20Overview%20and%20Outlook) In H1 2024, operating revenue and profit attributable to equity holders decreased due to falling chicken prices, but domestic processed food performed well, with the Company optimizing its business model to focus on processed food and reduce inputs in other areas | Indicator | 2024 (RMB thousands) | 2023 (RMB thousands) | Change % | | :----------------------------- | :------------------- | :------------------- | :--------- | | Operating Revenue | 2,794,444 | 3,142,785 | -11.1 | | Gross Profit | 362,471 | 338,920 | 6.9 | | Gross Profit Margin (%) | 13.0 | 10.8 | | | Profit Attributable to Equity Holders of the Company | 31,575 | 40,757 | -22.5 | - Performance decline primarily attributed to falling chicken prices due to supply-demand imbalance in the broiler industry[25](index=25&type=chunk) - Domestic processed food business revenue and gross profit increased by **11.9%** and **21%** year-on-year, respectively[25](index=25&type=chunk) - The Company will focus investments on processed food capacity, R&D, supply chain, and marketing, while reducing resources in broiler farming, slaughtering, and feed processing[26](index=26&type=chunk) - Looking ahead to the second half, the Company will promote scaled food production, diversified feed products, and value-added meat products, while steadily advancing digital transformation[27](index=27&type=chunk) [Segment Performance Review](index=14&type=section&id=Segment%20Performance%20Review) In H1 2024, the processed food business grew in revenue and gross profit, becoming the main profit driver, while livestock feed revenue declined but gross profit slightly increased, and meat products faced significant declines - Processed food, livestock feed, and meat products segments accounted for **44.7%**, **29.6%**, and **25.7%** of total operating revenue, respectively[28](index=28&type=chunk) - The processed food segment was the Company's largest profit source, contributing **74.1%** of total gross profit[28](index=28&type=chunk) [Processed Food](index=15&type=section&id=Processed%20Food) The processed food business saw an 11.2% year-on-year increase in operating revenue and a 19.5% rise in gross profit in H1, driven by domestic sales growth and direct customer focus, with export business also expanding | Indicator | 2024 (RMB thousands) | 2023 (RMB thousands) | Change % | | :------------------------ | :------------------- | :------------------- | :--------- | | Total Operating Revenue | 1,249,661 | 1,123,488 | 11.2 | | Total Gross Profit | 268,719 | 224,891 | 19.5 | | Total Gross Profit Margin (%) | 21.5 | 20.0 | | - Domestic food sales continued to grow, with domestic revenue increasing by **11.9%** and gross profit by **21.0%** year-on-year[29](index=29&type=chunk) - Export business revenue and gross profit increased by **6.3%** and **7.2%** respectively, with continued expansion into new categories, channels, and customers[29](index=29&type=chunk) [Livestock Feed](index=16&type=section&id=Livestock%20Feed) The livestock feed business's operating revenue decreased by 25.8% year-on-year in H1 due to declining pig feed sales, but gross profit still grew by 2.4%, with the Company diversifying products and controlling costs | Indicator | 2024 (RMB thousands) | 2023 (RMB thousands) | Change % | | :-------------------- | :------------------- | :------------------- | :--------- | | Operating Revenue | 827,086 | 1,114,113 | -25.8 | | Gross Profit | 69,205 | 67,595 | 2.4 | | Gross Profit Margin (%) | 8.4 | 6.1 | | - Pig feed sales declined due to hog industry capacity reduction, prompting the Company to increase R&D and channel development for ruminant and niche feed products[30](index=30&type=chunk) - Strengthening cooperation with medium to large-scale farms and reducing feed costs through platform integration to enhance competitiveness[30](index=30&type=chunk) [Meat Products](index=17&type=section&id=Meat%20Products) The meat products business experienced a 20.7% year-on-year decrease in operating revenue and a 47.1% drop in gross profit in H1, primarily due to oversupply in the white feather broiler industry and limited consumer demand recovery | Indicator | 2024 (RMB thousands) | 2023 (RMB thousands) | Change % | | :-------------------- | :------------------- | :------------------- | :--------- | | Operating Revenue | 717,697 | 905,184 | -20.7 | | Gross Profit | 24,547 | 46,434 | -47.1 | | Gross Profit Margin (%) | 3.4 | 5.1 | | - Oversupply in the white feather broiler industry led to falling prices for chicks, live broilers, and chicken meat, resulting in losses for broiler farming and slaughtering operations[31](index=31&type=chunk) - The meat products team is transforming to a customer-demand-driven model, focusing on refined processing and differentiated products, and collaborating with the processed food business to develop high-quality customers[31](index=31&type=chunk) [Financial Review](index=18&type=section&id=Financial%20Review) This section reviews the Group's key financial status for the first half of 2024, including other operating income, liquidity, capital expenditure, exchange rate impact, interest expenses, pledge of assets, and capital commitments [Other Operating Income and Other Net Gains](index=18&type=section&id=Other%20Operating%20Income%20and%20Other%20Net%20Gains) In the first half of 2024, other operating income was RMB 10,717 thousands, primarily from interest income and government grants, while other net gains were RMB 755 thousands, mainly comprising net foreign exchange gains - Other operating income primarily consisted of interest income and government grants, remaining stable year-on-year[32](index=32&type=chunk) - Other net gains primarily included net foreign exchange gains and net loss on disposal of property, plant and equipment[32](index=32&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=18&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) As of June 30, 2024, cash and bank balances were RMB 504,106 thousands, interest-bearing borrowings increased to RMB 609,503 thousands, and the interest-bearing borrowings to equity ratio rose to 25.1%, while the current ratio remained robust at 1.61 times | Indicator | 2024 June 30 (RMB thousands) | 2023 Dec 31 (RMB thousands) | | :-------------------------------------- | :--------------------------- | :-------------------------- | | Cash and Bank Balances | 504,106 | 526,940 | | Interest-bearing Borrowings | 609,503 | 530,079 | | Interest-bearing Borrowings to Equity Ratio | 25.1% | 22.3% | | Current Ratio | 1.61 times | 1.56 times | [Capital Expenditure](index=18&type=section&id=Capital%20Expenditure) In the first half of 2024, the Group's capital expenditure for the purchase of property, plant and equipment was RMB 98,284 thousands, primarily funded by long-term bank loans - Capital expenditure for the first half of 2024 was **RMB 98,284 thousands**[34](index=34&type=chunk) - Capital expenditure was primarily funded by long-term bank loans[34](index=34&type=chunk) [Exchange Rates](index=18&type=section&id=Exchange%20Rates) During the review period, the RMB depreciated by 0.62% against the US dollar, which had no significant impact on the Group's operations - The RMB depreciated by **0.62%** against the US dollar, with no significant impact on operations[35](index=35&type=chunk) [Interest](index=18&type=section&id=Interest) In the first half of 2024, interest expense significantly increased by 83.1% to RMB 13,008 thousands, mainly due to interest on borrowings for the new Bengbu plant being expensed after it commenced production - Interest expense increased by **83.1%** year-on-year to **RMB 13,008 thousands**[36](index=36&type=chunk) - The increase in interest expense was mainly due to interest on borrowings related to the Bengbu new plant being expensed rather than capitalized[36](index=36&type=chunk) [Pledge of Assets](index=19&type=section&id=Pledge%20of%20Assets) As of June 30, 2024, the Group had no assets pledged as security for bank credit facilities - The Group has no assets pledged[37](index=37&type=chunk) [Capital Commitments](index=19&type=section&id=Capital%20Commitments) As of June 30, 2024, the Group's contracted but unprovided capital expenditure was RMB 265,068 thousands, and authorized but uncontracted capital expenditure was RMB 113,246 thousands | Capital Commitment Items | Amount (RMB thousands) | | :----------------------- | :--------------------- | | Contracted but not provided for | 265,068 | | Authorized but not contracted for | 113,246 | [Employee Remuneration and Training](index=19&type=section&id=Employee%20Remuneration%20and%20Training) As of June 30, 2024, the Group had 8,229 employees, offering competitive remuneration and emphasizing training and development to enhance skills and industry knowledge - As of June 30, 2024, the Group's total number of employees was **8,229**, an increase from **7,972** at the end of 2023[39](index=39&type=chunk) - The Company provides competitive remuneration and benefits, with policies regularly reviewed[39](index=39&type=chunk) - Emphasis is placed on employee training and development, offering various programs to enhance work skills and industry knowledge[39](index=39&type=chunk) [Other Information](index=20&type=section&id=Other%20Information) This section covers corporate governance practices, directors' securities transactions, share dealings, audit committee functions, and board composition [Corporate Governance Code](index=20&type=section&id=Corporate%20Governance%20Code) In H1 2024, the Company complied with the Corporate Governance Code, except for the combined roles of Chairman and CEO, which the Board believes enhances business strategy execution and operational efficiency - The Company complied with the Corporate Governance Code, except for the combined roles of Chairman and Chief Executive Officer held by Mr. Wei Chun Hsien, deviating from code provision C.2.1[40](index=40&type=chunk) - The Board believes this combined structure facilitates the execution of the Group's business strategies and enhances operational efficiency, with a highly independent Board providing sufficient checks and balances[40](index=40&type=chunk) [Model Code for Securities Transactions by Directors](index=21&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted a model code for directors' securities transactions, and all directors confirmed their compliance throughout the review period - The Company has adopted the Model Code for Securities Transactions by Directors, and all Directors confirmed compliance[41](index=41&type=chunk) [Purchase, Redemption or Sale of Listed Securities of the Company](index=21&type=section&id=Purchase%2C%20Redemption%20or%20Sale%20of%20Listed%20Securities%20of%20the%20Company) For the six months ended June 30, 2024, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities - Neither the Company nor its subsidiaries engaged in any purchase, redemption, or sale of listed securities during the reporting period[42](index=42&type=chunk) [Audit Committee](index=21&type=section&id=Audit%20Committee) The Audit Committee, comprising independent non-executive directors, reviewed the interim results and found no disagreement with the accounting treatments adopted - The Audit Committee has reviewed the Company's interim results and has no disagreement with the accounting treatments adopted[43](index=43&type=chunk) - The Audit Committee members include Mr. Ting Yu Shan (Chairman), Mr. Hsia Li Yen, Ms. Tsai Yu Ling, and Mr. Kao Kung Lien, all of whom are independent non-executive directors[43](index=43&type=chunk) [Board of Directors](index=21&type=section&id=Board%20of%20Directors) As of the announcement date, the Board of Directors comprises two executive directors, five non-executive directors, and four independent non-executive directors - Executive Directors: Mr. Wei Chun Hsien (Chairman), Mr. Han Chia Yin[44](index=44&type=chunk) - Non-executive Directors: Mr. Han Chia Yu, Mr. Han Chia Chen, Mr. Han Chia Huan, Mr. Chao Tien Hsing, Mr. Wei An Ning[44](index=44&type=chunk) - Independent Non-executive Directors: Mr. Ting Yu Shan, Mr. Hsia Li Yen, Ms. Tsai Yu Ling, Mr. Kao Kung Lien[44](index=44&type=chunk)

Financial Performance - For the three months ended March 31, 2024, the operating revenue was RMB 1,406,070 thousand, a decrease of 8.1% compared to RMB 1,529,353 thousand in the same period of 2023[1] - Gross profit increased by 21.7% to RMB 190,370 thousand, with a gross margin of 13.5%, up from 10.2% in the previous year[1] - Profit attributable to shareholders was RMB 26,850 thousand, representing a significant increase of 162.1% from RMB 10,244 thousand year-on-year[1] - Basic earnings per share increased to RMB 0.026 from RMB 0.010 in the previous year, reflecting improved profitability[28] - In Q1 2024, the company's operating revenue was RMB 1,406,070 thousand, a decrease of 8.1% year-on-year; however, net profit attributable to shareholders increased by 162.1% to RMB 26,850 thousand, primarily due to robust growth in processed food sales[40] Business Segments - The processed food business accounted for 44.7% of total revenue and 73.8% of total gross profit, highlighting its role as the main revenue and profit driver for the group[18] - Export revenue for processed foods remained stable year-on-year, but gross profit increased by 30.1% due to continuous R&D innovation and production efficiency improvements[19] - The meat business saw a revenue decline of 21.4% and a gross profit decline of 40.4%, attributed to limited recovery in domestic market consumption and oversupply in the market[21] - The food segment's revenue and gross profit grew by 20% and 31.9% year-on-year, respectively, with domestic food sales increasing by 22.8% and gross profit by 32%[40] - The feed segment experienced a revenue decline of 23.7% year-on-year, while gross profit increased by 26%, attributed to a surplus in the pig farming market leading to lower sales volumes[42] Strategic Plans - The company plans to expand food production capacity and accelerate the scaling process to stabilize profits and mitigate risks associated with meat market fluctuations[20] - For 2024, the company aims to enhance operational efficiency and strengthen cash flow management while focusing on food scaling, feed diversification, and meat value enhancement[22] - The company will continue to seek new growth sources and optimize its operational model in response to increasing competition in the agricultural and livestock food industry[22] - The company is diversifying its product offerings in the feed segment to mitigate market risks and strengthen partnerships with medium to large-scale farms[42] - The company is focusing on digital transformation to improve supply chain efficiency and better meet customer demands[40] Financial Position - As of March 31, 2024, the company's net assets stood at RMB 2,415,960 thousand, with cash and cash equivalents accounting for 13.9% of total assets[44] - The current ratio improved to 1.67 as of March 31, 2024, compared to 1.56 on December 31, 2023[44] - The ratio of interest-bearing borrowings to equity increased to 24.4% from 22.3% as of December 31, 2023[44] Customer and Market Engagement - The company continues to invest in product development and supply chain collaboration with strategic customers to enhance customer loyalty and market presence[40] - The company is a subsidiary of Great Wall Enterprises Co., Ltd., which holds approximately 57.19% of its issued shares, impacting its financial reporting[44]

謝謝股東的支持 Hong Kong March 2024 2024年國際政治經濟環境與國內經濟形 勢或將存在更多不確定性。面對不利的 外部環境，公司經營策略的重點依然是 穩中求進，持續構建長期相對競爭力： 集中資源發展食品，加快食品增長步 伐，以食品帶動一條龍的整體發展；繼 續推動飼料產品多元化，以對抗豬週期 的風險；繼續調整肉品商業模式，聚焦 差異化產品與產值提升，以降低行情波 動對業績的影響。 管理層討論與分析 Management Discussion and Analysis 二零二三年，國內餐飲收入同比增長20.4%， 其中有二零二二年第四季度新冠疫情管控期間 基數較低的影響。與新冠疫情出現前的二零 一九年相比，國內餐飲收入增長了13.2%，顯 現出在整體需求不足的市場環境中餐飲業逐步 呈現復甦勢頭。本集團深耕餐飲渠道多年，面 對複雜多變的外部環境與供過於求的產業格 局，堅持以加工食品為龍頭帶動一條龍的整體 發展。受益於這一核心戰略，在第四季度國內 肉雞市場行情急轉直下之時，本集團憑借加工 食品業務與肉品業務之間的風險對沖從而避免 了更大損失。 本集團在安徽省蚌埠市新建的食品廠、電宰廠 和飼料廠已在 ...

Financial Performance - Operating revenue for 2023 was RMB 6,418,966 thousand, an increase of 3.6% compared to RMB 6,195,175 thousand in 2022[2] - Gross profit for 2023 decreased to RMB 662,690 thousand, down 2.5% from RMB 680,906 thousand in 2022[2] - Net profit for the year was RMB 75,380 thousand, a decline of 38.5% from RMB 122,480 thousand in the previous year[2] - Basic and diluted earnings per share for 2023 were RMB 0.046, compared to RMB 0.090 in 2022, reflecting a decrease of 48.9%[2] - The operating profit for the year was 101,668, down from 149,560 in 2022, indicating a decline of about 32%[38] - The company reported a net profit of 75,380 for 2023, compared to 122,480 in 2022, reflecting a decrease of approximately 38.4%[38] - The pre-tax profit for 2023 was RMB 86,050 thousand, a decrease of 37.3% compared to RMB 137,272 thousand in 2022[61] - Basic earnings per share for 2023 were RMB 47,024 thousand, a decline of 48.8% from RMB 91,852 thousand in 2022[87] Assets and Liabilities - Total assets less current liabilities increased to RMB 2,672,651 thousand in 2023 from RMB 2,630,551 thousand in 2022[5] - Non-current assets, including property, plant, and equipment, rose to RMB 1,636,588 thousand, up from RMB 1,240,947 thousand in 2022, indicating a significant investment in infrastructure[6] - Total assets reported for 2023 were 3,053,954, an increase from 2,784,151 in 2022, showing a growth of about 9.7%[38] - The total liabilities reported for 2023 were 960,262, an increase from 873,847 in 2022, indicating a growth of about 9.9%[38] - Total liabilities rose to RMB 1,402,937 thousand in 2023, up 12.4% from RMB 1,248,170 thousand in 2022[61] - Interest-bearing borrowings increased by RMB 152,839 thousand to RMB 530,079 thousand in 2023, with a debt-to-equity ratio of 22.3%[129] Revenue Sources - The company’s external customer operating revenue for processed food was 2,322,970 in 2023, up from 2,151,768 in 2022, representing an increase of approximately 7.9%[38] - Revenue from external customers in mainland China was RMB 6,157,786 thousand, up 4.7% from RMB 5,883,960 thousand in 2022[65] - The company's revenue from processed food, feed, and meat businesses accounted for 36.2%, 35.3%, and 28.5% of total revenue, respectively, with processed food being the largest source of revenue and profit[98] - The company's operating income from the domestic market increased by 10.8% to RMB 2,063,168 thousand, while export income decreased by 10.4% to RMB 259,802 thousand[100] Cost Management - The company reported a decrease in administrative expenses to RMB 248,739 thousand from RMB 264,290 thousand, reflecting cost control measures[2] - The company incurred financial expenses of 17,738 in 2023, up from 11,278 in 2022, marking an increase of approximately 57.5%[40] - The distribution cost as a percentage of total operating revenue was 5.26% in 2023, compared to 4.97% in 2022[107] - The company's administrative expenses accounted for 3.88% of operating revenue in 2023, down from 4.27% in 2022[129] Investment and Capital Expenditures - The company has committed but unprovided capital expenditures of RMB 70,827 thousand as of December 31, 2023, down from RMB 531,809 thousand in 2022[114] - Capital expenditures for 2023 amounted to RMB 529,018 thousand, primarily funded by internal resources and bank borrowings[130] Market Challenges and Strategies - The company continues to face challenges such as insufficient effective demand and overcapacity in certain industries amid global economic uncertainties[79] - The company plans to continue expanding food production capacity and optimizing its product portfolio to mitigate risks associated with market fluctuations[97] - The company aims to enhance customer engagement through increased investment in direct sales channels and digital transformation initiatives[100] - The company will focus on diversifying its export markets to reduce risks associated with over-concentration in specific regions[101] Dividends - The company did not declare any dividends for the year, maintaining a focus on reinvestment[2] - The company did not declare any final dividends for the years ended 2023 and 2022[48] - The company decided not to distribute dividends for the 2023 fiscal year, consistent with the previous year[112] Operational Highlights - The domestic food business maintained steady growth, with revenue and gross profit increasing by 10.8% and 14.1% year-on-year, respectively[98] - The processed food segment saw an 8.0% increase in operating revenue and a 13.3% increase in gross profit year-on-year for 2023, driven by robust growth in domestic food sales[121] - The meat business experienced a 7.6% increase in operating revenue in 2023, but gross profit decreased by 72.0% due to oversupply in the broiler market[126]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或 完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或因倚賴該等 內容而引致的任何損失承擔任何責任。 （於開曼群島註冊成立的有限責任公司） （股份代號：3999） 截至二零二三年九月三十日止九個月業績公佈 大成食品（亞洲）有限公司（「本公司」）董事會（「董事會」）謹此公佈本公司及其附屬公司（以下合稱「本集 團」）截至二零二三年九月三十日止九個月的未經會計師審核綜合業績： 財務摘要 | --- | --- | --- | |------------|------------------------|------------| | | 截至九月三十日止九個月 | | | 二零二三年 | 二零二二年 | 增減百分比 | （未經審核） （未經審核） | --- | --- | --- | --- | |----------------------------------|-----------|-----------|-------| | 經營收入（人民幣千元） | 4,834,221 | 4,512,433 ...

Financial Performance - The Group's turnover for the first half of 2023 was RMB 3,142,785 thousand, representing a 12.4% increase from RMB 2,796,884 thousand in the same period of 2022[133]. - Gross profit for the first half of 2023 was RMB 338,920 thousand, up 10.6% from RMB 306,405 thousand in the first half of 2022[133]. - Profit attributable to shareholders for the first half of 2023 was RMB 40,757 thousand, reflecting a 20.6% increase from RMB 33,802 thousand in the same period of 2022[133]. - The gross profit margin for the first half of 2023 was 10.8%, slightly down from 11.0% in the first half of 2022[133]. - For the first half of 2023, the operating income from the food segment exceeded that of the feed segment for the first time, accounting for 35.8% of the Group's total operating income and 66.4% of its gross profit[122][123]. Trade Receivables and Payables - As of June 30, 2023, trade receivables amounted to RMB 277,633 thousand, an increase from RMB 248,502 thousand as of December 31, 2022, representing a growth of approximately 11.7%[30]. - The allowance for doubtful debts decreased to RMB 8,584 thousand from RMB 9,392 thousand, indicating improved credit quality[30]. - The net trade receivables stood at RMB 269,049 thousand, up from RMB 239,110 thousand, reflecting a growth of about 12.5%[30]. - Trade payables as of June 30, 2023, were RMB 4,983,000, a decrease from RMB 9,326,000 at the end of 2022, showing a reduction of 46.6%[52]. Corporate Governance - The company has undergone changes in its board of directors, with several resignations and new appointments effective from June 30, 2023, which may impact governance and strategic direction[15]. - The company is committed to maintaining strong corporate governance practices, as evidenced by the establishment of various committees and their leadership appointments[20]. - The company emphasizes maintaining high levels of corporate governance to enhance shareholder value and ensure compliance with applicable laws and regulations[56]. - The audit committee comprises independent non-executive directors and is responsible for evaluating financial reporting matters, including the interim results for the six months ended June 30, 2023[95]. Market Position and Strategy - The company is focusing on enhancing its market position through potential new product developments and technology advancements, although specific details were not provided in the extracted content[32]. - The management is optimistic about future growth prospects, particularly in expanding market reach and improving operational efficiencies[32]. - The company plans to continue increasing investments in food production capacity, talent, technology, research and development, and supply chain to strengthen its position in the meat food processing market[125][127]. - The Group's strategy focuses on enhancing corporate efficiency and value while providing safe and healthy products, aiming for sustainable development amidst economic uncertainties[144]. Economic Environment - The macroeconomic environment remains challenging, with China's GDP growing by 5.5% year-on-year, but consumer prices only rising by 0.7%[135][136]. - The company aims to maintain sufficient cash flow to navigate economic downturns and enhance its competitive position[126][128]. Segment Performance - The foods segment achieved double-digit growth, with operating income and gross profit increasing by 11.9% and 14.0% respectively in the first half of 2023[155]. - In the second quarter of 2023, the foods segment's operating income and gross profit grew by 14.9% and 13.6% year-on-year, driven by continued growth in domestic food sales[155]. - The operating income of the feeds segment increased by 7.9% to RMB 1,114,113 thousand, while gross profit rose by 3.8% to RMB 67,595 thousand[182]. - The meat segment's operating income increased by 19.1% to RMB 186,000 thousand, while gross profit grew by 5.5%[186]. Related Party Transactions - The Group had significant related party transactions with subsidiaries and associates, including Beijing Universal Chain Food Co., Ltd. and DaChan Showa Foods (Tianjin) Co., Ltd.[71]. - Management services provided to related parties decreased to RMB 62,000 in the first half of 2023 from RMB 99,000 in 2022, a decline of 37.4%[47]. - Rental services provided to related parties were RMB 738,000 for the six months ended June 30, 2023, compared to RMB 795,000 in 2022, a decrease of 7.2%[47]. Cash Flow and Financial Management - The Group's cash flow management has improved, with a stable increase in cash flow and a safe financial leverage ratio[164]. - The company reported a significant increase in cash and cash equivalents, although specific figures were not provided in the extracted content[33]. Future Developments - The one-stop food production facilities in Bengbu are expected to commence operations in the third quarter of 2023, further supporting the company's strategic focus on food processing[122][123]. - The Group's new food plant, electric slaughtering plant, and feeds plant in Bengbu, Anhui Province are expected to commence production in the third quarter, enhancing market position in the Yangtze River Delta region[151].

Financial Highlights [Key Financial Data](index=1&type=section&id=Key%20Financial%20Data) For H1 2023, the Group saw operating revenue rise 12.4% to RMB3.14 billion and profit attributable to equity holders increase 20.6% to RMB40.76 million Key Financial Data | Metric | 2023 (RMB '000) | 2022 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 3,142,785 | 2,796,884 | 12.4 | | Gross Profit | 338,920 | 306,405 | 10.6 | | Gross Profit Margin | 10.8 | 11.0 | - | | Profit Attributable to Equity Holders of the Company | 40,757 | 33,802 | 20.6 | | Basic Earnings Per Share (RMB) | 0.040 | 0.033 | - | Consolidated Financial Statements [Consolidated Statement of Profit or Loss](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) For H1 2023, the Group reported RMB3.14 billion in operating revenue, RMB338.92 million gross profit, and RMB40.76 million profit attributable to equity holders Consolidated Statement of Profit or Loss | Metric | 2023 (RMB '000) | 2022 (RMB '000) | | :--- | :--- | :--- | | Operating Revenue | 3,142,785 | 2,796,884 | | Cost of Sales | (2,803,865) | (2,490,479) | | Gross Profit | 338,920 | 306,405 | | Other Operating Income | 10,735 | 19,192 | | Other Net Gains/(Losses) | 141 | (1,559) | | Distribution Costs | (163,933) | (143,795) | | Administrative Expenses | (115,502) | (118,246) | | Operating Profit | 70,361 | 61,997 | | Finance Costs | (7,103) | (4,300) | | Share of Profits/(Losses) of Associates Accounted for Using the Equity Method | 66 | (1,077) | | Profit Before Tax | 63,324 | 56,620 | | Income Tax Expense | (7,088) | (7,857) | | Profit for the Period | 56,236 | 48,763 | | Profit Attributable to Equity Holders of the Company | 40,757 | 33,802 | | Non-controlling Interests | 15,479 | 14,961 | | Basic and Diluted Earnings Per Share (RMB) | 0.040 | 0.033 | [Consolidated Statement of Comprehensive Income](index=3&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) For H1 2023, the Group's profit for the period was RMB56.24 million, leading to total comprehensive income of RMB50.20 million after exchange differences Consolidated Statement of Comprehensive Income | Metric | 2023 (RMB '000) | 2022 (RMB '000) | | :--- | :--- | :--- | | Profit for the Period | 56,236 | 48,763 | | Exchange Differences on Translation of Financial Statements of Overseas Subsidiaries | (6,035) | (9,726) | | Total Comprehensive Income for the Period | 50,201 | 39,037 | | Attributable to Equity Holders of the Company | 34,012 | 23,370 | | Non-controlling Interests | 16,189 | 15,667 | [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, the Group's total assets less current liabilities were RMB2.74 billion, with total equity at RMB2.37 billion Consolidated Statement of Financial Position | Metric | 2023 June 30 (RMB '000) | 2022 Dec 31 (RMB '000) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 1,445,571 | 1,240,947 | | Land Use Rights | 123,333 | 125,499 | | Investment Properties | 52,585 | 53,889 | | Interests in Associates Accounted for Using the Equity Method | 68,852 | 68,786 | | Other Financial Assets | 1,948 | 1,948 | | Deferred Tax Assets | 5,831 | 6,071 | | Long-term Recoverable Taxes | 112,497 | 112,497 | | Other Non-current Assets | 49,444 | 59,598 | | **Current Assets** | | | | Inventories | 528,779 | 671,019 | | Biological Assets | 150,634 | 149,077 | | Trade Receivables | 269,049 | 239,110 | | Other Receivables and Prepayments | 285,071 | 310,562 | | Cash and Cash Equivalents | 529,677 | 532,274 | | **Current Liabilities** | | | | Trade Payables | 385,264 | 472,025 | | Other Payables | 310,281 | 328,568 | | Contract Liabilities | 24,574 | 20,756 | | Interest-bearing Borrowings | 147,248 | 107,448 | | Lease Liabilities | 2,001 | 2,001 | | Income Tax Payable | 9,449 | 9,928 | | **Non-current Liabilities** | | | | Interest-bearing Borrowings | 341,777 | 269,792 | | Lease Liabilities | 27,765 | 29,716 | | Deferred Tax Liabilities | 8,490 | 7,936 | | **Equity** | | | | Share Capital | 97,920 | 97,920 | | Reserves | 938,677 | 944,706 | | Retained Profits | 1,068,811 | 1,028,770 | | Total Equity Attributable to Equity Holders of the Company | 2,105,408 | 2,071,396 | | Non-controlling Interests | 261,014 | 251,711 | | Total Equity | 2,366,422 | 2,323,107 | Notes to the Financial Statements [Basis of Presentation](index=6&type=section&id=Basis%20of%20Presentation) This interim financial report is prepared under IAS 34, applying consistent accounting policies with the 2022 annual financial statements - This interim financial report is prepared in accordance with IAS 34 and was authorized for issue on August 7, 2023[111](index=111&type=chunk) - The preparation of the interim financial report involves management's judgments, estimates, and assumptions, and actual results may differ from these estimates[9](index=9&type=chunk) [Changes in Accounting Policies](index=6&type=section&id=Changes%20in%20Accounting%20Policies) The Group adopted revised IAS 8, IFRS 17, and IAS 12 amendments, which had no material impact on financial results - The Group has applied IAS 8 (Revised), Definition of Accounting Estimates, which has no material impact on the Group's current or prior period results and financial position[10](index=10&type=chunk) - The Group has applied IFRS 17 (Insurance Contracts) and IAS 12 (Revised) (Income Taxes: Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction)[112](index=112&type=chunk) - The Group has not applied any new standards or interpretations that are not yet effective for the current accounting period[45](index=45&type=chunk) [Operating Revenue and Segment Reporting](index=7&type=section&id=Operating%20Revenue%20and%20Segment%20Reporting) The Group manages its business across processed food, livestock feed, and meat products segments, reporting total operating revenue of RMB3.14 billion for H1 2023 - The Group manages its business through three reporting segments: processed food, livestock feed, and meat products[46](index=46&type=chunk) Operating Revenue and Segment Gross Profit | Segment | 2023 Operating Revenue (RMB '000) | 2022 Operating Revenue (RMB '000) | 2023 Segment Gross Profit (RMB '000) | 2022 Segment Gross Profit (RMB '000) | | :--- | :--- | :--- | :--- | :--- | | Processed Food | 1,123,488 | 1,003,973 | 224,891 | 197,280 | | Livestock Feed | 1,114,113 | 1,032,902 | 67,595 | 65,124 | | Meat Products | 905,184 | 760,009 | 46,434 | 44,001 | | Total | 3,142,785 | 2,796,884 | 338,920 | 306,405 | [Description of Segment Operations](index=7&type=section&id=Description%20of%20Segment%20Operations) The Group's segments include processed food production, livestock feed manufacturing, and meat product processing and trading - Processed Food Segment: Production and distribution of processed or ready-to-eat (partially cooked/fully cooked) meat products, primarily chicken[25](index=25&type=chunk) - Livestock Feed Segment: Production and distribution of complete feed, base mix feed, and premix feed for pigs, laying hens, broilers, ducks, and breeding poultry under the 'Dr. Buck', 'DaChan', and 'Green Knight' brands[25](index=25&type=chunk) - Meat Products Segment: Engaged in broiler breeding, hatching of broiler eggs, contract farming, and processing and trading of chilled and frozen chicken meat sold under the 'DaChan' and 'Sister's Kitchen' brands[25](index=25&type=chunk) [Other Operating Income and Other Net Gains](index=8&type=section&id=Other%20Operating%20Income%20and%20Other%20Net%20Gains) For H1 2023, the Group recorded RMB10.74 million in other operating income and RMB0.14 million in other net gains Other Operating Income Items | Item | 2023 (RMB '000) | 2022 (RMB '000) | | :--- | :--- | :--- | | Interest Income | 4,615 | 4,890 | | Government Grants | 3,229 | 10,442 | | Rental Income | 2,891 | 3,860 | | Total | 10,735 | 19,192 | Other Net Gains/(Losses) Items | Item | 2023 (RMB '000) | 2022 (RMB '000) | | :--- | :--- | :--- | | Foreign Exchange (Losses)/Gains | (261) | 165 | | Net (Losses)/Gains on Disposal of Property, Plant and Equipment | (1,383) | (476) | | Others | 1,784 | (1,248) | | Total | 141 | (1,559) | [Profit Before Tax](index=8&type=section&id=Profit%20Before%20Tax) Profit before tax is determined after accounting for items like interest on bank borrowings, amortization, and depreciation Profit Before Tax Items | Item | 2023 (RMB '000) | 2022 (RMB '000) | | :--- | :--- | :--- | | Interest on Bank Borrowings Repayable in Full Within Five Years | (7,103) | (4,300) | | Amortization of Prepaid Lease Payments | (2,160) | (2,172) | | Depreciation of Property, Plant and Equipment | (55,842) | (59,258) | | Net Reversal/(Provision) for Impairment of Trade Receivables | 716 | (1,056) | | Net Write-down/(Reversal) of Inventories | (676) | 3,469 | [Income Tax Expense](index=9&type=section&id=Income%20Tax%20Expense) For H1 2023, total income tax expense was RMB(7.09) million, with varying corporate income tax rates for Mainland China entities Income Tax Expense by Type | Tax Type | 2023 (RMB '000) | 2022 (RMB '000) | | :--- | :--- | :--- | | Current Tax | (6,294) | (5,241) | | Deferred Tax | (794) | (2,616) | | Total | (7,088) | (7,857) | - The Group is not subject to any income tax in the Cayman Islands and the British Virgin Islands[52](index=52&type=chunk) - Companies in Mainland China generally pay enterprise income tax at a rate of 25%, with Northeast Agriculture and Animal Husbandry (Changchun) Co Ltd enjoying a preferential rate of 15% due to its high-tech enterprise status. DaChan Agriculture and Animal Husbandry (Heilongjiang) Co Ltd and DaChan Agriculture and Animal Husbandry (Yingkou) Co Ltd reverted to a 25% tax rate as their high-tech enterprise qualifications expired[53](index=53&type=chunk) [Earnings Per Share](index=10&type=section&id=Earnings%20Per%20Share) Basic earnings per share for H1 2023 was RMB0.040, with no dilution effect due to the absence of potential dilutive shares - Basic earnings per share is calculated based on profit attributable to ordinary equity holders of the Company of **RMB40,757 thousand** and the weighted average number of ordinary shares outstanding of **1,016,189,000 shares**[55](index=55&type=chunk) - The Group has no potential dilutive ordinary shares outstanding, thus there is no difference between diluted and basic earnings per share[32](index=32&type=chunk) [Property, Plant and Equipment](index=10&type=section&id=Property%2C%20Plant%20and%20Equipment) In H1 2023, the Group invested RMB263.53 million in property, plant and equipment, incurring a RMB1.38 million loss on disposals Property, Plant and Equipment Transactions | Item | 2023 (RMB '000) | 2022 (RMB '000) | | :--- | :--- | :--- | | Cost of Purchasing Property, Plant and Equipment | 263,525 | 73,466 | | Net Book Value of Property, Plant and Equipment Disposed | 2,258 | 5,643 | | Loss on Disposal | 1,383 | 476 | [Trade Receivables](index=10&type=section&id=Trade%20Receivables) As of June 30, 2023, total trade receivables were RMB269.05 million, with a standard credit period of 30-60 days Trade Receivables Aging Analysis | Aging | 2023 June 30 (RMB '000) | 2022 Dec 31 (RMB '000) | | :--- | :--- | :--- | | Current | 257,423 | 228,312 | | Overdue 1 to 180 Days | 12,443 | 11,767 | | Overdue 181 to 365 Days | 1,304 | 2,841 | | Overdue Over 365 Days | 6,463 | 5,582 | | Total Overdue Amount | 20,210 | 20,190 | | Less: Provision for Doubtful Debts | (8,584) | (9,392) | | Total | 269,049 | 239,110 | - The Group generally allows its customers a credit period of 30-60 days[54](index=54&type=chunk) [Other Receivables and Prepayments](index=11&type=section&id=Other%20Receivables%20and%20Prepayments) As of June 30, 2023, net other receivables and prepayments totaled RMB285.07 million, primarily comprising recoverable VAT and deposits Other Receivables and Prepayments Breakdown | Item | 2023 June 30 (RMB '000) | 2022 Dec 31 (RMB '000) | | :--- | :--- | :--- | | Recoverable VAT | 253,479 | 269,948 | | Deposits and Prepayments | 132,953 | 140,830 | | Advances to Employees | 3,831 | 5,327 | | Others | 7,305 | 6,954 | | Total | 397,568 | 423,059 | | Less: Non-current Recoverable VAT | 112,497 | 112,497 | | Net Amount | 285,071 | 310,562 | [Trade Payables](index=11&type=section&id=Trade%20Payables) As of June 30, 2023, total trade payables were RMB385.26 million, showing a decrease from year-end 2022 Trade Payables Aging Analysis | Aging | 2023 June 30 (RMB '000) | 2022 Dec 31 (RMB '000) | | :--- | :--- | :--- | | Current | 189,924 | 275,325 | | Overdue Less Than 30 Days | 135,449 | 146,867 | | Overdue 31 to 60 Days | 36,187 | 28,525 | | Overdue 61 to 90 Days | 9,643 | 8,700 | | Overdue Over 90 Days | 14,061 | 12,608 | | Total Overdue Amount | 195,340 | 196,700 | | Total | 385,264 | 472,025 | [Other Payables](index=12&type=section&id=Other%20Payables) As of June 30, 2023, total other payables were RMB310.28 million, including sales rebates, employee benefits, and accrued expenses Other Payables Breakdown | Item | 2023 June 30 (RMB '000) | 2022 Dec 31 (RMB '000) | | :--- | :--- | :--- | | Sales Rebates | 53,076 | 23,353 | | Salaries, Wages, Bonuses and Other Welfare Payables | 50,395 | 108,912 | | Accrued Expenses | 70,945 | 61,174 | | Performance Deposits | 78,629 | 53,110 | | Payables for Purchase of Property, Plant and Equipment | 7,536 | 14,535 | | Amounts Due to Related Parties | 43,500 | 43,500 | | Others | 6,200 | 23,984 | | Total | 310,281 | 328,568 | [Dividends](index=12&type=section&id=Dividends) The Company will not pay an interim dividend for the six months ended June 30, 2023, consistent with the prior year - The Company will not pay an interim dividend for the six months ended June 30, 2023 (2022: nil)[36](index=36&type=chunk) Management Discussion and Analysis [Macroeconomic Environment](index=13&type=section&id=Macroeconomic%20Environment) Global economic uncertainties and domestic pressures of weak demand and supply shocks continue to impact the operating environment - Since 2023, global systemic risks have intensified due to the impact of global economic policy uncertainties, energy crises, and inflation[38](index=38&type=chunk) - The Chinese economy continues to face the triple pressures of weak demand, supply shocks, and weakening expectations[38](index=38&type=chunk) - Domestic catering revenue grew by **21.4%** year-on-year in the first half, but the year-on-year growth in June's catering revenue declined from **43.8%** in April to **16.1%**, indicating an unstable foundation for current demand recovery[38](index=38&type=chunk) [Performance Review](index=14&type=section&id=Performance%20Review) In H1 2023, the Group achieved 12.4% revenue growth and 20.6% profit growth, driven by the food business and strategic initiatives - In the first half of 2023, the Group's operating revenue was **RMB3,142,785 thousand**, a **12.4% increase** year-on-year, and profit attributable to equity holders was **RMB40,757 thousand**, a **20.6% increase** year-on-year[62](index=62&type=chunk) - The primary reason for the year-on-year profit growth is the Group's effective strategy of leveraging the food business as a leader to drive overall integrated development, with the food business achieving double-digit growth in both revenue and gross profit[62](index=62&type=chunk) - The Group's newly constructed food, slaughtering, and feed plants in Bengbu, Anhui Province, are progressing smoothly and are expected to commence operations sequentially in the third quarter, which will help consolidate and expand its market position in the Yangtze River Delta region[63](index=63&type=chunk) Proportion of Group's Total Operating Revenue and Gross Profit by Business Segment in H1 2023 | Business Segment | Proportion of Total Operating Revenue (%) | Proportion of Total Gross Profit (%) | | :--- | :--- | :--- | | Food Business | 35.8 | 66.4 | | Feed Business | 35.4 | 19.9 | | Meat Products Business | 28.8 | 13.7 | [Processed Food Segment](index=15&type=section&id=Processed%20Food%20Segment) The processed food business saw revenue and gross profit grow by 11.9% and 14.0% respectively in H1 2023, driven by domestic sales and export optimization Processed Food Segment Performance | Metric | 2023 (RMB '000) | 2022 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue - Mainland China | 985,955 | 873,914 | 12.8 | | Operating Revenue - Export | 137,533 | 130,059 | 5.7 | | Total Operating Revenue | 1,123,488 | 1,003,973 | 11.9 | | Gross Profit - Mainland China | 199,861 | 177,042 | 12.9 | | Gross Profit - Export | 25,030 | 20,238 | 23.7 | | Total Gross Profit | 224,891 | 197,280 | 14.0 | | Gross Profit Margin - Mainland China | 20.3 | 20.3 | - | | Gross Profit Margin - Export | 18.2 | 15.6 | - | | Total Gross Profit Margin | 20.0 | 19.6 | - | - Export business benefited from continuous R&D innovation, product structure optimization, improved production efficiency, and RMB depreciation, with export gross profit increasing by **23.7%** year-on-year[43](index=43&type=chunk) - The domestic food sales team increased resource allocation to direct clients, collaborated closely with strategic customers, and focused resources on promoting family-sized products in C-end retail channels, improving channel establishment and regional layout[66](index=66&type=chunk) [Livestock Feed Segment](index=16&type=section&id=Livestock%20Feed%20Segment) The livestock feed business achieved 7.9% revenue growth and 3.8% gross profit growth in H1 2023, focusing on large-scale farms and product diversification Livestock Feed Segment Performance | Metric | 2023 (RMB '000) | 2022 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,114,113 | 1,032,902 | 7.9 | | Gross Profit | 67,595 | 65,124 | 3.8 | | Gross Profit Margin | 6.1 | 6.3 | - | - In the first half of 2023, domestic hog slaughter increased by **2.6%** year-on-year, with overall market supply exceeding demand, leading to losses for small and medium-sized farms while large-scale farming enterprises expanded against the trend[67](index=67&type=chunk) - The feed business strengthened cooperation with large and medium-sized farms, secured market share through OEM models, and intensified R&D and market development for poultry and ruminant feed to diversify market risks[86](index=86&type=chunk) [Meat Products Segment](index=17&type=section&id=Meat%20Products%20Segment) The meat products business reported 19.1% revenue growth in H1 2023, but gross profit was impacted by chicken prices lagging behind costs Meat Products Segment Performance | Metric | 2023 (RMB '000) | 2022 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 905,184 | 760,009 | 19.1 | | Gross Profit | 46,434 | 44,001 | 5.5 | | Gross Profit Margin | 5.1 | 5.8 | - | - In the first half of 2023, the import of white feather broiler grandparent stock resumed, and prices for chicks, broilers, and chicken meat, after rising at the beginning of the year, entered a downward trend from early April, falling back to year-start levels by the end of June[69](index=69&type=chunk) - The meat products business is accelerating its business model transformation, restructuring its supply chain, improving contract feed performance, reducing farming risks, and focusing on differentiated product development and key account sales to enhance the meat-to-feed price spread[89](index=89&type=chunk) [Financial Review](index=18&type=section&id=Financial%20Review) The Group maintained a stable liquidity position in H1 2023, with increased interest-bearing borrowings and capital expenditure Liquidity and Capital Structure | Metric | 2023 June 30 (RMB '000) | 2022 Dec 31 (RMB '000) | | :--- | :--- | :--- | | Cash and Bank Balances | 529,677 | 532,274 | | Interest-bearing Borrowings | 489,025 | 377,240 | | Interest-bearing Borrowings to Equity Ratio (%) | 20.7 | 16.2 | | Current Ratio (times) | 2.01 | 2.02 | - The Group spent **RMB263,525 thousand** on purchasing property, plant and equipment in the first six months of 2023, primarily funded by long-term bank loans[72](index=72&type=chunk) - Interest expense was **RMB7,103 thousand**, a **65.2% increase** from the same period in 2022, mainly due to rising USD borrowing rates[74](index=74&type=chunk) - The **3.61% depreciation** of RMB against the USD had no significant impact on the Group's operations[73](index=73&type=chunk) [Pledged Assets](index=19&type=section&id=Pledged%20Assets) As of June 30, 2023, the Group had no assets pledged as collateral for bank credit - As of June 30, 2023, the Group had no assets pledged as collateral for bank credit[94](index=94&type=chunk) [Capital Commitments](index=19&type=section&id=Capital%20Commitments) The Group has capital commitments for contracted but unprovided amounts and authorized but uncontracted projects Capital Commitments | Type of Capital Commitment | Amount (RMB '000) | | :--- | :--- | | Contracted but not Provided for in the Financial Statements | 390,799 | | Authorized but not Contracted for | 59,591 | [Employee Remuneration and Training](index=19&type=section&id=Employee%20Remuneration%20and%20Training) The Group employs 7,896 individuals, providing competitive compensation and extensive training programs - As of June 30, 2023, the Group had **7,896 employees** (December 31, 2022: 7,936 employees)[95](index=95&type=chunk) - The Group regularly reviews its remuneration and benefits policies based on industry standards, financial performance, and individual employee performance, providing fair and competitive compensation, along with additional benefits such as insurance, medical benefits, and provident funds[76](index=76&type=chunk) - The Group provides various training programs for management and other employees to continuously enhance their work skills and industry knowledge[95](index=95&type=chunk) Other Information [Corporate Governance Code](index=20&type=section&id=Corporate%20Governance%20Code) The Company complies with the Corporate Governance Code, with the combined Chairman and CEO role deemed beneficial for strategy and efficiency - The Company has complied with the Corporate Governance Code set out in Appendix 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, although the roles of Chairman and Chief Executive Officer are combined in Mr. Wei Junxian[77](index=77&type=chunk)[97](index=97&type=chunk) - The Board believes this structure does not impair the balance of power and authority between the Board and the Company's management, and it facilitates the execution of the Group's business strategies and enhances operational efficiency[97](index=97&type=chunk) [Standard Code for Securities Transactions by Directors](index=21&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted and all directors complied with a code for securities transactions during H1 2023 - The Company has adopted a code no less exacting than the standard set out in Appendix 10 of the Listing Rules to govern directors' securities transactions[99](index=99&type=chunk) - Following specific enquiries by the Company to all Directors, all Directors confirmed their compliance with the Standard Code and the Company's code of conduct regarding directors' securities transactions for the six months ended June 30, 2023[99](index=99&type=chunk) [Purchase, Redemption or Sale of the Company's Listed Securities](index=21&type=section&id=Purchase%2C%20Redemption%20or%20Sale%20of%20the%20Company%27s%20Listed%20Securities) Neither the Company nor its subsidiaries engaged in purchasing, redeeming, or selling listed securities in H1 2023 - During the six months ended June 30, 2023, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities[100](index=100&type=chunk) [Audit Committee](index=21&type=section&id=Audit%20Committee) The Audit Committee, composed of independent non-executive directors, reviewed interim results and found no accounting discrepancies - The Audit Committee members include Mr. Ding Yushan (Chairman), Mr. Hsia Lii-Yan, Ms. Tsai Yu-Ling, and Mr. Kao Kung-Lien, all of whom are independent non-executive directors of the Company[80](index=80&type=chunk) - The Audit Committee has reviewed the Company's interim results and has no disagreement with the accounting treatments adopted by the Company[100](index=100&type=chunk) [Board of Directors](index=21&type=section&id=Board%20of%20Directors) The Board comprises executive, non-executive, and independent non-executive directors, including the Chairman - The Company's executive directors are Mr. Wei Junxian (Chairman) and Mr. Han Jiayin; non-executive directors are Mr. Han Jiayu, Mr. Han Jiachen, Mr. Han Jiahuan, Mr. Zhao Tianxing, and Mr. Yu Anning; independent non-executive directors are Mr. Ding Yushan, Mr. Hsia Lii-Yan, Ms. Tsai Yu-Ling, and Mr. Kao Kung-Lien[81](index=81&type=chunk)