公司研究 | 动态跟踪 中国飞鹤 06186.HK 单品强势+国产替代，看好公司发展稳中向 买入（维持） 好 股价（2024年02月02日） 3.57港元 目标价格 4.90港元 52周最高价/最低价 6.96/3.53港元 总股本/流通H股（万股） 906,725/906,725 H股市值（百万港币） 32,370 核心观点 国家/地区 中国 行业 食品饮料 ⚫ 卓睿增势强劲，预计库存合理。分产品来看，卓睿增长势头强劲；我们预计星飞帆 报告发布日期 2024年02月05日 销量同比延续下滑趋势，主要因公司在数字化过程中主力产品由700g转换为900g 规格包装，渠道仍需时间适应；整体来看，卓睿占比持续提升，符合公司产品规 1周 1月 3月 12月 划。公司严格控制渠道库存，预计当前公司产品整体渠道库存保持在合理水平，有 绝对表现% -5.56 -14.39 -27.59 -48.86 利于24年轻装上阵。此外，公司积极推进客户营销活动，组织面对面研讨会，包括 相对表现% -2.94 -6.91 -17.74 -19.6 妈妈的爱研讨会、嘉年华及路演；截至23年6月末，公司共举办约48万场面对面 恒生指数% ...

交银国际研究 公司更新 消费 收盘价 目标价 潜在涨幅 2024年4月3日 港元3.87 港元3.40 -12.1% 中国飞鹤 (6186 HK) 销售复苏取决于数字化零售和高端产品的成功  2023年净利润同比下降31%，与盈利预警一致：飞鹤2023年销售额同比 个股评级 下降 8.3%至 195 亿元人民币，净利润同比下降 31%至 33.90 亿元人民币 中性 （比交银国际预期高5%），与盈利预警一致。由于1）出生率下降；2） 价格竞争；3）零售网点关闭；4）渠道去库存，销售额从2023年上半年 同比增长 1%放缓至下半年同比下降 16%。下半年的毛利率稳定在 64.3%， 1年股价表现 但由于去杠杆化和 7.5 亿元人民币的生物资产净值损失（原生态牧业）， 经营利润率/净利润率分别下降了 308/420 个基点。 6186 HK 恒生指数 5% 0%  产品：高端化策略以抵消销量下滑：2023 年，超高端/高端/普通婴幼儿配 -5% 方奶粉占销售额的 64%/22%/7%，销售额分别同比下降 1%/24%/32%。旗 -10% -15% 舰产品星飞帆卓睿的收入贡献从 8%上升到 2023 年的 2 ...

Investment Rating - The investment rating for China Feihe (6186.HK) is "Buy" with a target price of 4.9 HKD, indicating a potential upside of 33% from the current price of 3.68 HKD [3][8]. Core Insights - The worst period for the industry is expected to be over, with a projected recovery in birth rates in 2024, which may positively impact the company's performance [1]. - In 2023, the company's revenue was 19.5 billion RMB, a decline of 8.3% year-on-year, primarily due to intensified competition and a decrease in birth rates [1][14]. - The net profit for 2023 was 3.29 billion RMB, down 33% year-on-year, with a net profit margin of 16.8% [1][14]. - The company is focusing on digital sales strategies and inventory management to navigate the challenging market conditions [1]. Financial Performance Summary - Revenue for 2023: 19.5 billion RMB, down 8.3% YoY [1][14]. - Net profit for 2023: 3.29 billion RMB, down 33% YoY [1][14]. - Gross margin for 2023: 64.8%, a decrease of 0.7 percentage points YoY [1][14]. - Sales expense ratio: 34.3%, an increase of 3.6 percentage points YoY [1][14]. - Management expense ratio: 9%, an increase of 1.8 percentage points YoY [1][14]. - Cash and cash equivalents at the end of 2023: 19.6 billion RMB, with a debt ratio of 27% [1][14]. Earnings Forecast - Projected net profit for 2024: 3.55 billion RMB, with an EPS of 0.43 HKD [1][14]. - Projected net profit for 2025: 3.71 billion RMB, with an EPS of 0.45 HKD [1][14]. - Projected net profit for 2026: 3.89 billion RMB, with an EPS of 0.47 HKD [1][14]. Valuation Analysis - The average P/E ratio for comparable companies in the dairy sector is estimated at 10x, leading to a target price of 4.9 HKD based on a combination of comparable company and DCF valuation methods [8][10].

Investment Rating - The report maintains a "Buy" rating for China Feihe (6186.HK) [4] Core Views - The company experienced a revenue decline of 8.3% year-on-year in 2023, with total revenue reaching 19.53 billion yuan and a net profit of 3.39 billion yuan, down 31.4% year-on-year [2][3] - The decline in revenue is attributed to a continuous drop in birth rates, intensified industry price competition, and the closure of some retail stores [2] - Despite the challenges, China Feihe remains the leading player in the Chinese infant formula market, holding market shares of 20.2% in all channels, 22.8% offline, and 14.4% online as of January 2024 [2] - The company plans to upgrade its channel digitalization to enhance control over retail terminals and stabilize pricing [2] Financial Performance Summary - In 2023, the company's revenue from infant formula was 17.88 billion yuan, down 10.3% year-on-year, with the ordinary product segment experiencing the most significant decline [2] - Other dairy products saw a revenue increase of 23.4% to 1.42 billion yuan, while health products generated 232 million yuan, up 2.8% [2] - The gross margin for the company was 64.8%, a decrease of 0.6 percentage points, primarily due to a shift in product mix towards lower-margin adult milk powder [3] - The net profit margin fell to 17.4%, down 5.8 percentage points year-on-year, influenced by increased sales and management expenses [3] Earnings Forecast and Valuation - The net profit forecasts for 2024 and 2025 have been revised down to 3.545 billion yuan and 3.739 billion yuan, respectively, reflecting a 1.9% and 4.4% decrease from previous estimates [3] - The report introduces a 2026 net profit forecast of 3.864 billion yuan, with expected EPS of 0.39, 0.41, and 0.43 yuan for 2024, 2025, and 2026, respectively [3] - The current stock price corresponds to a PE ratio of 9x for 2024, 8x for 2025, and 8x for 2026 [3]

Financial Performance - The group's revenue for the year ended December 31, 2023, was RMB 19,532.2 million, a decrease of 8.3% compared to the previous year[2]. - The group's gross profit for the same period was RMB 12,663.4 million, down 9.2% year-on-year[2]. - The net profit for the year was RMB 3,290.4 million, representing a decline of 33.5% compared to the previous year[2]. - Basic and diluted earnings per share were both RMB 0.37, down from RMB 0.55 in 2022[2]. - The group reported a total comprehensive income of RMB 3,444.0 million for the year, down from RMB 5,110.0 million in 2022[5]. - Revenue from customer contracts for 2023 was RMB 19,532,203 thousand, a decrease of 8.4% from RMB 21,310,933 thousand in 2022[35]. - Revenue from dairy products was RMB 19,298,143 thousand, while revenue from raw milk was RMB 234,060 thousand for 2023[36]. - The group reported a pre-tax profit of RMB 6,868,850 thousand for 2023, down from RMB 7,360,333 thousand in 2022[40]. - Profit before tax decreased by 27.2% from RMB 6,663.1 million in 2022 to RMB 4,850.3 million in 2023[76]. - Net profit fell by 33.5% to RMB 3,290.4 million, down from RMB 4,948.1 million in 2022[78]. Dividends - The board proposed a final dividend of HKD 0.1484 per share, compared to HKD 0.1721 per share in 2022[2]. - The interim dividend declared was HKD 0.1349 per share, amounting to approximately RMB 1.14 billion, compared to RMB 0.1131 per share and RMB 0.9 billion in 2022[45]. - The proposed final dividend for 2023 is HKD 0.1484 per share, totaling approximately RMB 1.22 billion, down from RMB 1.37 billion in 2022[45]. - The company plans to maintain a dividend policy of distributing no less than 30% of net profit for each financial year, depending on future investment plans[110]. Assets and Liabilities - Total assets as of December 31, 2023, amounted to RMB 41,446.7 million, compared to RMB 40,315.8 million in 2022[7]. - The company's total equity increased to RMB 26,334.3 million from RMB 25,474.9 million in the previous year[8]. - The company reported a total liability of RMB 9,860,332 thousand for the year ended December 31, 2023, which is a slight decrease from RMB 10,040,830 thousand in 2022[26][28]. - Non-current liabilities totaled RMB 2,478.1 million, a slight decrease from RMB 2,581.1 million in 2022[8]. - The asset-liability ratio increased from 0.33 in 2022 to 0.36 in 2023[85]. Cash Flow - The company's cash and cash equivalents increased to RMB 10,440.9 million from RMB 9,335.9 million in the previous year[7]. - The net cash flow from operating activities for 2023 was RMB 4,145.3 million, a decrease from RMB 6,279.1 million in 2022[86]. - The group generated a net cash flow from investing activities of RMB 386.7 million in 2023, down from RMB 4,803.7 million in 2022[86]. Segment Performance - The segment performance for the raw milk division reported a loss of RMB 325,738 thousand, while the dairy products and nutritional supplements segment achieved a profit of RMB 4,756,742 thousand, leading to a total adjusted profit before tax of RMB 4,850,292 thousand[26]. - Revenue from infant formula products was RMB 17,876.8 million, accounting for 91.5% of total revenue, down 10.3% from RMB 19,932.3 million in 2022[66]. - Revenue from the nutritional supplement segment, operated through Vitamin World USA, amounted to RMB 231.7 million, representing 1.2% of the company's total revenue for the year ending December 31, 2023[60]. Market and Industry Trends - The average disposable income in China reached RMB 39,218 in 2023, with a compound annual growth rate of 6.8% from 2018 to 2023[53]. - The number of newborns in China decreased to approximately 9 million in 2023, down from 10.94‰ birth rate in 2018 to 6.39‰ in 2023[52]. - The market for high-end infant formula is expected to grow due to increased disposable income and health awareness among consumers[53]. - The retail sales value of the infant formula market in China is expected to remain stable despite the declining birth rate[52]. Compliance and Governance - The financial statements are prepared in accordance with International Financial Reporting Standards and presented in Renminbi (RMB), with amounts rounded to the nearest thousand (RMB thousand)[13][14]. - The group’s financial reporting is subject to the disclosure requirements of the Hong Kong Companies Ordinance[13]. - The company confirmed compliance with the corporate governance code throughout the reporting period[99]. - The company has established a strong internal control system to ensure compliance with applicable laws and regulations[100]. Strategic Focus - The company plans to focus on developing a new generation of infant formula that emphasizes active nutrition, targeting the early life stage of 1,000 days[96]. - The company aims to expand into four major business areas: maternal and infant, children, health food, and nutrition health[96]. - The company has a designed annual production capacity of approximately 327,000 tons across 11 production facilities as of December 31, 2023[58]. - The company offers a diversified product portfolio to meet a wide range of customer needs, including ultra-high-end and high-end categories[56]. Shareholder Actions - The company repurchased a total of 1,000,000 shares at a total cost of approximately HKD 4.7 million during the reporting period[102]. - The total number of issued shares is 9,067,251,704 after the cancellation of repurchased shares[102]. - The company believes that the share repurchase reflects confidence in its current and long-term business prospects[102].

Investment Rating - The report maintains a "Buy" rating for China Feihe (6186.HK) [4] Core Views - The company is expected to face significant pressure in 2023, with projected revenue of 19.66-19.89 billion yuan, a decrease of 6.7%-9.5% year-on-year, and a net profit of 3.13-3.43 billion yuan, down 30.6%-36.7% year-on-year [2][3] - The decline in birth rates and intensified industry competition are major factors contributing to the revenue drop [2] - Despite the challenges, China Feihe remains the market leader in the infant formula sector, holding the top position in China for five consecutive years and globally for three years [2] Summary by Sections Revenue and Profit Forecast - For 2023, the company anticipates revenue of 19.66-19.89 billion yuan, with a net profit of 3.13-3.43 billion yuan, reflecting a significant decline compared to previous years [2][3] - The expected net profit margin for 2023 is projected to be 16.2%-17.3%, a decrease of 6.0-7.0 percentage points year-on-year [2] Market Conditions - The infant formula industry is under pressure due to a declining birth rate, with 2023 birth numbers reported at 9.02 million, a further drop from 2022 [2] - The company is expected to see a revenue decline in the second half of 2023, with estimates of 9.56-10.14 billion yuan, down 12.8%-17.8% year-on-year [2] Competitive Position - China Feihe continues to lead the infant formula market in China, with a strong brand presence and market share despite the overall industry contraction [2] - The report suggests that as competitors exit the market, the industry concentration may improve, potentially benefiting the company in 2024 [3] Earnings Estimates - The net profit estimates for 2023-2025 have been revised downwards to 3.29 billion, 3.61 billion, and 3.91 billion yuan respectively, reflecting a reduction of 25.7%-27.8% from previous forecasts [3] - The expected earnings per share (EPS) for 2023-2025 are projected at 0.36, 0.40, and 0.43 yuan [3]

交银国际研究 公司更新 消费 收盘价 目标价 潜在涨幅 2024年3月11日 港元3.76 港元3.40↓ -9.6% 中国飞鹤 (6186 HK) 下半年销售额和利润率下滑，导致 2023 年净利润不及预期  2023年净利润远低于市场一致预期：飞鹤预计净利润为31.3-34.3亿元人民 个股评级 币，同比下降31-37%（低于市场一致预期的-9%），对应2023年下半年净 中性 利润同比下降31-43%（远低于市场一致预期的+12.5%）。2023年收入同比 下降 6.7-9.5%至 193.0-198.8 亿元人民币（低于市场一致预期的同比增长 +2%），对应2023年下半年同比下降13-18%（远低于市场一致预期的同比 1年股价表现 增长+2%），2023年下半年收入低于预期。这意味着2023 年下半年的净利 6186 HK 恒生指数 润率为15-17%，延续了上半年（净利润率为17.4%）的疲软态势，而非市 5% 0% 场预期的恢复至2022年约23-24%的水平。 -5% -10% -15%  国标过渡后竞争比预期激烈：飞鹤将其疲软的业绩归因于“中国出生人口 -20% -25% 下降及行业竞争 ...

Financial Performance - For the six months ended June 30, 2023, the company's revenue was RMB 9,735,225 thousand, a slight increase of 0.6% compared to RMB 9,672,823 thousand in the same period of 2022[7]. - Gross profit for the same period was RMB 6,359,266 thousand, representing a decrease of 2.7% from RMB 6,536,625 thousand year-on-year[7]. - The company's net profit for the period was RMB 1,618,682 thousand, down 28.8% from RMB 2,272,056 thousand in the previous year[7]. - Basic and diluted earnings per share were both RMB 0.19, a decrease of 24% compared to RMB 0.25 in the same period of 2022[7]. - Total comprehensive income for the period was RMB 1,747,812 thousand, compared to RMB 2,343,911 thousand in the prior year, reflecting a decrease of 25.5%[141]. - The group’s profit before tax for the six months ended June 30, 2023, was RMB 1,695,913,000, a decrease of 24.8% compared to RMB 2,255,887,000 for the same period in 2022[184]. - The total tax expense for the period was RMB 816,366,000, down 15.1% from RMB 962,692,000 in the prior year[181]. Market Trends - The Chinese infant formula market is expected to maintain stable retail sales value despite a declining birth rate, with the number of newborns projected to decrease at a slower rate from 2023 to 2027 due to supportive policies[9]. - Increased consumer confidence in the quality of domestic infant formula products is expected to drive production and sales, meeting diverse consumer needs[10]. - The high-end infant formula segment is anticipated to grow, driven by rising disposable income and health awareness, with per capita disposable income reaching RMB 36,883 in 2022[10]. - Urbanization and rising disposable income are expected to enhance purchasing power, allowing consumers in lower-tier cities and rural areas to afford higher-quality infant formula products[10]. Operational Highlights - The company held approximately 480,000 face-to-face seminars, acquiring over 1,120,000 new customers in the six months ended June 30, 2023[19]. - The company operates a distribution network with over 2,800 offline customers covering more than 94,000 retail points, generating 77.8% of total revenue from dairy products[14]. - The company has a designed annual production capacity of approximately 327,000 tons across its eleven production facilities as of June 30, 2023[16]. Expenses and Costs - Selling and distribution expenses rose by 10.1% to RMB 3,459.9 million, accounting for 35.5% of total revenue[21]. - The group's sales cost increased by 7.6% from RMB 3,136.2 million for the six months ended June 30, 2022, to RMB 3,376.0 million for the six months ended June 30, 2023, primarily due to changes in the product mix[24]. - Administrative expenses increased by 15.4% from RMB 656.7 million for the six months ended June 30, 2022, to RMB 757.5 million for the six months ended June 30, 2023, primarily due to higher R&D costs[29]. Cash Flow and Financial Position - As of June 30, 2023, the group had cash and cash equivalents of RMB 11,128.2 million, primarily consisting of cash on hand and bank deposits[38]. - The company reported a net cash inflow from financing activities of RMB (1,434,234) thousand, compared to RMB (90,931) thousand in the previous year, indicating a decline in financing cash flow[151]. - The total cash and bank balances were RMB 11,489,944 thousand, up from RMB 10,754,301 thousand year-over-year, marking an increase of approximately 6.83%[151]. Shareholder Information - As of June 30, 2023, the company has a total of 9,068,251,704 shares issued, with key executives holding significant stakes, including 42.90% by the founder through a family trust[57]. - The founder, Mr. Leng Youbin, holds 587,516,458 shares directly and through controlled entities, representing 6.48% of the total shares[60]. - Harneys Trustees Limited holds 4,461,740,357 shares, representing 49.20% of the company's equity[64]. Governance and Compliance - The board of directors has confirmed compliance with corporate governance codes during the reporting period, ensuring transparency and accountability[52]. - The company is dedicated to maintaining strong internal controls and effective governance practices to enhance operational integrity[51]. - The independent auditor's report was issued on August 28, 2023[138]. Future Plans and Investments - The company has no specific plans for significant investments or acquisitions of capital assets but will continue to seek new business development opportunities[46]. - The company aims to utilize the remaining net proceeds by December 31, 2025, as outlined in the prospectus[73]. - The company is focusing on developing a new generation of infant formula tailored for Chinese babies, leveraging active nutritional elements from the 47° North latitude milk source[48]. Stock Options and Share Awards - The 2020 stock option plan allows for a maximum of 134,000,100 shares to be granted, representing 1.48% of the total shares issued as of the report date[97]. - The 2023 Share Award Scheme was adopted on May 25, 2023, aimed at recognizing and rewarding contributions to the group's growth and attracting suitable talent[113][114]. - The maximum number of shares that can be awarded under the 2023 Share Award Scheme is capped at 10% of the company's issued share capital as of May 25, 2023, which equates to 906,825,170 shares[119].

Financial Performance - The group's revenue for the six months ended June 30, 2023, was RMB 9,735.2 million, an increase of 0.6% year-on-year[2] - The group's gross profit for the same period was RMB 6,359.3 million, a decrease of 2.7% year-on-year[2] - The group's profit for the period was RMB 1,618.7 million, a decrease of 28.8% year-on-year[2] - Basic earnings per share for the company were RMB 0.19, down from RMB 0.25 in the same period last year[3] - Total comprehensive income for the period was RMB 1,747.8 million, compared to RMB 2,343.9 million in the previous year[5] - The group reported a pre-tax profit of RMB 2,435,048 thousand for the six months ended June 30, 2023, compared to RMB 3,234,748 thousand in the same period of 2022, showing a decrease of about 24.7%[24] - The group's net profit decreased by 28.8% from RMB 2,272.1 million for the six months ended June 30, 2022, to RMB 1,618.7 million for the six months ended June 30, 2023[58] - Income tax expenses decreased by 15.2% from RMB 962.7 million for the six months ended June 30, 2022, to RMB 816.4 million for the six months ended June 30, 2023, due to the reduction in profit before tax[57] Assets and Liabilities - Non-current assets totaled RMB 13,428.8 million as of June 30, 2023, compared to RMB 13,286.1 million at the end of 2022[6] - Current assets amounted to RMB 21,543.8 million, a decrease from RMB 22,229.7 million at the end of 2022[6] - Current liabilities were RMB 6,755.5 million, down from RMB 7,459.7 million at the end of 2022[6] - The company's net asset value was RMB 25,830.8 million as of June 30, 2023, compared to RMB 25,474.9 million at the end of 2022[7] - The total assets of the group as of June 30, 2023, amounted to RMB 34,972,576 thousand, compared to RMB 35,515,773 thousand at the end of 2022, indicating a decrease of about 1.53%[18] - Total liabilities as of June 30, 2023, were RMB 9,141,784 thousand, down from RMB 10,040,830 thousand at the end of 2022, representing a reduction of approximately 8.95%[18] - The group's asset-liability ratio increased from 0.33 as of December 31, 2022, to 0.40 as of June 30, 2023[62] Revenue Breakdown - Revenue from external customers in mainland China was RMB 9,629,346 thousand for the six months ended June 30, 2023, compared to RMB 9,573,781 thousand in 2022, indicating an increase of about 0.58%[21] - For the three months ended June 30, 2023, the company reported revenue of RMB 1,583,551 thousand, compared to RMB 1,728,024 thousand for the same period in 2022, indicating a decrease of approximately 8.4%[35] - The retail sales value of the Chinese infant formula market is expected to remain stable despite the declining birth rate, driven by increased consumer confidence and preferences for quality products[36] Costs and Expenses - The cost of goods sold for the six months ended June 30, 2023, was RMB 3,375,959 thousand, up from RMB 3,136,198 thousand in 2022, reflecting an increase of approximately 7.65%[24] - The cost of sales increased by 7.6% to RMB 3,375.9 million from RMB 3,136.2 million, primarily due to changes in the product mix[49] - Selling and distribution expenses increased by 10.1% to RMB 3,459.9 million, mainly due to higher costs associated with offline activities and promotions[52] - Administrative expenses rose by 15.4% to RMB 757.5 million, primarily due to increased research and development costs[53] - Financial costs surged by 127.4% to RMB 27.3 million, attributed to increased interest-bearing loans from the parent company[55] Market and Industry Trends - The number of newborns in China decreased to approximately 9.6 million in 2022, down from 12.95‰ birth rate in 2016, reflecting a significant decline in the target demographic for infant formula[36] - The average annual disposable income in China reached RMB 36,883 in 2022, with a compound annual growth rate of 7.3% from 2017 to 2022, which is expected to drive demand for high-end infant formula products[37] - The Chinese government aims to maintain a self-sufficiency level of 60% for domestically produced infant formula, promoting local production and quality standards[38] - The new national safety standards for infant formula, effective from February 22, 2023, impose stricter regulations on protein, carbohydrates, and micronutrients, benefiting leading companies in the industry[39] - Urbanization and rising disposable income levels are enhancing consumer purchasing power, particularly in lower-tier cities and rural areas, which are increasingly able to afford higher-quality infant formula[37] Corporate Governance and Compliance - The company has adopted the corporate governance code as its own governance standard, ensuring transparency and accountability to shareholders[69] - The company emphasizes the importance of effective internal control measures to ensure compliance with applicable laws and regulations[69] - The audit committee has been established in accordance with listing rules, consisting of three members, including the chairman, Mr. Fan Yonghong[74] - The independent review of the interim financial information for the six months ended June 30, 2023, was conducted by Ernst & Young in accordance with the relevant standards[75] Future Plans and Strategies - The company is focusing on developing a new generation of infant formula that is more suitable for Chinese consumers, leveraging the unique resources from the 47° north latitude[68] - The company aims to expand into four major business areas: maternal and infant, children and adolescents, health food, and nutrition health, creating a comprehensive product family for all life stages[68] - The company has committed to a green and sustainable development model, actively contributing to rural revitalization and fulfilling social responsibilities[68] - The company is committed to enhancing its core capabilities, including unique resource endowments and integrated online and offline supply chain capabilities[68] Dividends - The company declared a final dividend of HKD 0.1721 per share, totaling approximately RMB 1.42 billion for the year ended December 31, 2022[29] - The company declared an interim dividend of HKD 0.1349 per share, totaling approximately HKD 1,223,021,059 (equivalent to about RMB 1,122,598,800) for the six months ended June 30, 2023[73] - The interim dividend represents 60% of the profit for the six months ended June 30, 2023, based on a policy to distribute no less than 30% of net profit for each financial year[73] - The company plans to maintain a dividend policy of distributing at least 30% of net profit for future financial years, depending on future investment plans[74]

Financial Performance - In 2022, China Feihe Limited reported revenue of RMB 21,310.9 million, a decrease of 6.4% from RMB 22,776.3 million in 2021[9]. - Gross profit for 2022 was RMB 13,950.6 million, down 12.9% from RMB 16,007.6 million in the previous year[9]. - Net profit decreased by 28.4% to RMB 4,948.1 million in 2022, compared to RMB 6,914.9 million in 2021[9]. - The company's revenue decreased by 6.4% from RMB 22,776.3 million in 2021 to RMB 21,310.9 million in 2022, primarily due to a decline in birth rates in mainland China and increased competition in the industry[36]. - The gross profit fell by 12.9% from RMB 16,007.6 million in 2021 to RMB 13,950.6 million in 2022, with the gross margin decreasing from 70.3% to 65.5%[41]. - Profit before tax decreased by 31.1% from RMB 9,672.3 million in 2021 to RMB 6,663.1 million in 2022[47]. - Income tax expenses decreased by 37.8% from RMB 2,757.4 million in 2021 to RMB 1,715.0 million in 2022, reflecting the decline in profit before tax[48]. - Other income and net gains decreased by 30.7% from RMB 1,974.0 million in 2021 to RMB 1,368.6 million in 2022, mainly due to reduced government subsidies[42]. - Administrative expenses rose by 27.1% from RMB 1,208.0 million in 2021 to RMB 1,535.0 million in 2022, primarily due to increased employee and R&D costs[44]. Assets and Equity - Total assets increased to RMB 35,515.8 million in 2022 from RMB 31,481.4 million in 2021[6]. - Total equity reached RMB 25,474.9 million in 2022, up from RMB 22,403.4 million in 2021[6]. - China Feihe's non-current assets amounted to RMB 13,286.1 million in 2022, reflecting growth from RMB 11,511.8 million in 2021[6]. - Cash and cash equivalents amounted to RMB 9,335.9 million as of December 31, 2022, primarily consisting of cash on hand and bank deposits[52]. Market Position and Strategy - The company maintained a strong market position, achieving 45 new product registrations for infant formula, leading the industry[10]. - The company aims to continue expanding its market presence and enhancing its brand value through strategic upgrades and innovation[8]. - The company is focused on creating a competitive brand and aims to become a century-old enterprise with international competitiveness[22]. - The company has a distribution network of over 2,700 offline customers covering approximately 94,000 retail points, generating 83.0% of total revenue from dairy products through offline sales[30]. - The company plans to expand its product range to cover four major business areas: maternal and infant nutrition, children's nutrition, adult nutrition, and health foods[21]. - The company aims to leverage the trend of Chinese modernization and expand its product offerings in the infant formula market, focusing on "fresh active nutrition" tailored for Chinese babies[63]. Research and Development - The company published 12 international SCI papers and received over 60 invention patent applications, demonstrating its commitment to R&D[10]. - China Feihe has been recognized for its research capabilities, leading the national "14th Five-Year" key research project on new infant formula technology based on Chinese breast milk[12]. - The company achieved a strategic upgrade to "fresh active nutrition," creating formula that better suits the physical constitution of Chinese babies[12]. - The company aims to innovate with a new generation of infant formula that focuses on the first 1,000 days of life, using active nutritional extracts from the 47° North golden milk source[21]. Corporate Social Responsibility and Sustainability - The company has implemented a green low-carbon development strategy, with three projects producing organic fertilizers that enhance soil quality over tens of thousands of acres[17]. - China Feihe's ESG rating was upgraded from BBB to A in 2022, marking the highest rating achieved by a Chinese food company[18]. - The company has initiated a public welfare campaign in collaboration with the Heilongjiang Provincial Education Department, benefiting 330,000 students[19]. - The company is committed to sustainable development and social responsibility, actively supporting rural revitalization and building a "common prosperity industrial chain" for higher quality growth[63]. Governance and Management - The board of directors includes experienced members such as Mr. Leng Youbin, who has over 30 years in the dairy industry and has been with the company since 2013[67]. - The company has a strong focus on financial management, with Mr. Liu Hua serving as CFO since 2013 and overseeing significant financing activities, including its listing on the NYSE in 2009[70]. - The company is set to re-elect several directors at the upcoming annual general meeting, ensuring continuity in leadership[65]. - The board of directors consists of eleven members, including four executive directors, three non-executive directors, and four independent non-executive directors, ensuring effective governance[192]. - The company has adopted corporate governance codes to promote effective internal controls and enhance transparency and accountability to shareholders[188]. Shareholder Information - Major shareholder Mr. Leng holds 4,477,428,339 shares, representing 49.29% of the company's equity[123]. - Harneys Trustees Limited, as a trustee, holds 4,461,740,357 shares, accounting for 49.12% of the equity[123]. - The percentage of shares held by the top five shareholders accounts for over 70% of the total equity, indicating concentrated ownership[123]. - The company has a diverse shareholder base, with multiple entities holding significant stakes, including Morgan Stanley entities with a combined total of 1,586,000,000 shares[123]. Future Outlook - The company has set a sales target of RMB 35 billion for 2023 and aims for a 15% compound annual growth rate from 2024 to 2028, although it anticipates challenges due to declining birth rates and increasing competition[50]. - The company plans to use HKD 2,621.9 million for offshore debt repayment, with an expected completion date by December 31, 2025[106]. - The company is focused on developing new products and technologies to meet consumer demands in the nutrition sector[72].