Revenue and Profit Performance - Revenue for 2022 reached RMB 18,050.8 million, a 17.6% increase compared to RMB 15,346.2 million in 2021[8] - Raw milk business revenue grew by 13.8% to RMB 10,853.9 million in 2022, up from RMB 9,537.8 million in 2021[8] - Ruminant animal farming system solutions revenue increased by 23.9% to RMB 7,196.8 million in 2022, compared to RMB 5,808.4 million in 2021[8] - Gross profit decreased by 10.0% to RMB 4,223.7 million in 2022 from RMB 4,694.5 million in 2021[8] - Net profit attributable to owners of the company dropped by 73.4% to RMB 414.8 million in 2022 from RMB 1,558.0 million in 2021[8] - Adjusted net profit attributable to owners of the company decreased by 56.4% to RMB 889.3 million in 2022 from RMB 2,040.4 million in 2021[8] - The company's total revenue for 2022 reached RMB 18,051 million, a 17.6% increase compared to 2021[14] - The company's net profit attributable to owners in 2022 was RMB 415 million, a 73.4% decrease compared to 2021[14] - Revenue for the company reached RMB 18,051 million in 2022, a 17.6% increase compared to RMB 15,346 million in 2021[32] - Raw milk business revenue was approximately RMB 10.85 billion, accounting for 60.1% of total revenue, a 13.8% increase from 2021[33] - Feed business revenue reached RMB 6.58 billion, a 23.4% increase compared to 2021[33] - Revenue increased by 17.6% from RMB 15,346 million in 2021 to RMB 18,051 million in 2022[78] - Raw milk business revenue grew by 13.8% from RMB 9,538 million in 2021 to RMB 10,854 million in 2022, driven by a 19.6% increase in raw milk sales volume from 1,947,226 tons to 2,328,512 tons[79] - Ruminant animal farming system solutions business revenue rose by 23.9% from RMB 5,808 million in 2021 to RMB 7,197 million in 2022[79] - Net profit attributable to owners decreased from RMB 1,558 million in 2021 to RMB 414.8 million in the reporting period[96] - Adjusted net profit attributable to owners was RMB 889.3 million in the reporting period, compared to RMB 2,040.4 million in 2021[96] Operational Performance and Production - The company operates 78 farms, 15 feed production bases, 14 forage production bases, and 3 core breeding bases, with nearly 500,000 dairy cows[2] - Raw milk production reached nearly 2.38 million tons in 2022, with concentrated feed sales exceeding 1.09 million tons[2] - The company produced nearly 14,000 high-yield dairy cow sex-controlled embryos, becoming one of the earliest enterprises in China to achieve large-scale production and commercial application[2] - The annualized milk yield per mature cow (excluding Jersey cows) in 2022 was 11.4 tons, a 4.6% increase from 10.9 tons in 2021[16] - The company's refined feed sales exceeded 1.09 million tons, making it the first enterprise in the industry to surpass the 1 million ton mark in external sales of ruminant refined feed[16] - The company's breeding product sales reached 1.23 million doses (pieces), a 25.8% increase compared to 2021[16] - The company produced nearly 14,000 high-yield dairy cow sex-controlled embryos, becoming one of the earliest enterprises in China to achieve large-scale production and commercial application of such embryos[16] - The company operates 78 dairy farms covering 16 provinces and autonomous regions, with a total of 500,000 dairy cows[12] - The company has 15 feed production bases and 4 forage production bases, serving nearly 1.5 million ruminant animals across 25 provinces and autonomous regions[12] - Raw milk production reached nearly 2.38 million tons, with an annualized yield per mature cow (excluding Jersey cows) of 11.4 tons, a 4.6% increase from 2021[33] - Feed production exceeded 1.37 million tons, a 23.6% increase from 2021[33] - The company operates 78 modernized ranches across 16 provinces in China, with a total of nearly 500,000 dairy cows[33] - The company operates 15 feed production bases and 14 forage production bases in China[33] - High-quality alfalfa grass produced by the company reached over 60% of RFV170 and above, with 30% of alfalfa silage protein indicators reaching 22%, comparable to top U.S. alfalfa levels[33] - The number of cows in stock increased by 20.0% from 416,196 in 2021 to 499,451 in 2022[37] - Raw milk production increased to 2,377,156 tons in 2022, up from 1,989,684 tons in 2021[36] - The annualized milk yield per mature cow (excluding Jersey cows) increased to 11.4 tons in 2022 from 10.9 tons in 2021[36] - The company operates 78 modernized ranches across 16 provinces in China as of December 31, 2022[37] - Seven new ranches were put into operation during the reporting period, including one 10,000-head organic milk ranch[38] - Raw milk production increased by 19.5% from 1,989,684 tons in 2021 to 2,377,156 tons in the reporting period[43] - Annualized milk yield per mature cow (excluding Jersey cows) increased by 4.6% from 10.9 tons in 2021 to 11.4 tons in the reporting period[43] - The newly commissioned 7 farms achieved an annualized milk yield of 12.3 tons per mature cow, with one farm exceeding 13 tons[43] - The acquired Saikexing farms achieved an annualized milk yield of 10.9 tons per mature cow, a 3.8% increase from 2021[44] - The acquired Fonterra China farms achieved an annualized milk yield of 11.5 tons per mature cow, an 11.7% increase from 2021[44] - Concentrated feed sales increased by 19.5% from 914,085 tons in 2021 to 1,092,738 tons in the reporting period, making the company the first in the industry to exceed 1 million tons in external sales[49] - Concentrated feed production increased by 23.6% from 1.111 million tons in 2021 to 1.373 million tons in the reporting period[50] - The company commissioned a new feed production base with a design capacity of 400,000 tons and added a cooperative production agreement with a third-party feed producer in Gansu[50] - The company is constructing a new feed production base in Hebei, which will increase total feed production capacity to 1.89 million tons upon completion[50] - The company has developed and upgraded multiple concentrate feed products under eight feed brands, utilizing core technologies such as amino acid balance technology and precision nutrition assessment technology, in collaboration with Dr. Harkins[52] - The company has established 14 grass production bases nationwide, producing high-quality roughage products like alfalfa hay and corn silage, achieving a significant increase in yield from 1.8 tons/mu in 2021 to 3.5 tons/mu in the reporting period, a 94.4% increase[54][55] - The company's self-produced alfalfa grass quality has reached Grade 1 or above, with over 60% of the alfalfa grass achieving RFV170 or higher, and alfalfa silage protein content reaching 22% or above, comparable to top U.S. alfalfa levels[55] - The company operates 28 offline dairy cow supermarkets and an online platform, "Jumucheng Technology," serving approximately 1.5 million dairy cows across 25 provinces, offering over 1,000 types of dairy farming consumables[57] - The company's breeding product sales increased by 25.8% from 977,988 doses in 2021 to 1,230,050 doses in the reporting period, with nearly 14,000 sex-controlled embryos produced, making it one of the earliest companies in China to commercialize high-yield dairy cow sex-controlled embryos[58] - The company operates three breeding bases in Inner Mongolia, China, and Wisconsin, USA, with a designed capacity of 3,500 cows in the Inner Mongolia base, which is expected to produce over 14 tons of high-yield sex-controlled embryos annually, totaling 50,000 embryos, and 2,000 breeding embryos, cultivating 500 breeding cattle[59] - The company has established a high-quality beef cattle core breeding farm in China, completing company registration, project design, license acquisition, and construction bidding during the reporting period[59] - The company has accelerated the production of world-class core breeding farms, increased investment in US joint venture breeding farms, and established strategic breeding partnerships with global leading seed companies[60] - The company has developed a genetic evaluation system for breeding embryos through genome-wide testing, enhancing breeding efficiency and reducing breeding costs[61] - The company has established a prediction model for methane emissions in dairy cows through the analysis of production performance and infrared spectral data[61] - The company has a technical R&D team of over 400 people, with 75 core patented technologies covering various business segments as of December 31, 2022[63] - The company has developed 7 types of specialty fresh milk and a range of precision feed products, including structural calf feed, rumen-protected soybean meal, premix, heat stress feed, and perinatal feed[63] - The company has constructed China's leading ruminant nutrition database and developed advanced genetic improvement and sex control technologies for cattle[63] - The company has undertaken key projects such as "High-end Dairy Cow Genetic Resource Mining and Efficient Breeding Technology Innovation" and "High-quality Alfalfa New Variety Breeding and Industrialization Demonstration"[63] - The company's subsidiary, Saikexing, was selected as a key support unit for the "National Livestock and Poultry Breeding Industry Array Enterprise" and the "Breeding Enterprise Breeding Capacity Evaluation Reward Project" in Inner Mongolia[63] - The company's near-infrared nutrition database exceeded 1 million calibration samples, enhancing precision nutrition and testing efficiency in the livestock industry[64] - The company achieved a 100% pass rate in quality inspections by national regulatory agencies and was awarded the "2022 Excellent Dairy Processing Enterprise" by the China Dairy Association[64] - The company collaborated with 44 strategic suppliers on 96 strategic synergy projects, optimizing procurement costs and reducing risks[66] - The company implemented digital transformation through platforms like "Hui Mu Yun" and "Ju Mu Cheng Tech," leveraging cloud computing, AI, and IoT for data-driven business management[67] - The company launched a carbon neutrality strategy, aiming for carbon peak by 2030 and carbon neutrality by 2050, with detailed carbon reduction plans and third-party audits[68] - The company integrated sustainable development into its operations, with over 2.5 million acres of land for combined planting and breeding, promoting green practices[68] - The company achieved breakthroughs in cow cloning embryo production efficiency and recipient pregnancy rate[70] - The company aims to double its income and strengthen profitability through technological empowerment and innovation[71] - The company plans to accelerate the development of high-tech and high-value-added business platforms[73] - The company will optimize its digital strategy blueprint and initiate a comprehensive digital transformation[75] - The company will implement a green and sustainable development strategy, reducing fossil energy usage and enhancing resource recycling[77] - The company will focus on talent development, aiming to upgrade from quantity to quality in its workforce[76] - The company will deepen lean management practices to improve efficiency and value realization[74] Costs and Expenses - Sales cost increased by 18.3% from RMB 14,333 million in 2021 to RMB 16,959 million in 2022, driven by growth in raw milk and ruminant farming system solutions businesses[80] - Raw milk sales cost before fair value adjustment rose by 33.2% from RMB 5,585 million in 2021 to RMB 7,442 million in 2022, due to new farms, increased cow numbers, and rising raw material prices[81] - Average feed cost for high-quality and specialty fresh milk increased by 14.3% to RMB 2.48/kg in 2022, driven by higher feed and forage costs[82] - Ruminant farming system solutions sales cost before fair value adjustment increased by 26.0% from RMB 5,066 million in 2021 to RMB 6,385 million in 2022, mainly due to growth in feed and cow supermarket consumables[83] - Gross profit decreased from RMB 4,694 million in 2021 to RMB 4,224 million in 2022, with gross margin dropping from 30.6% to 23.4% due to rising raw material prices and lower raw milk sales prices[85] - Raw milk business gross profit decreased from RMB 3,953 million in 2021 to RMB 3,412 million in 2022, with gross margin falling from 41.4% to 31.4%[87] - Ruminant farming system solutions gross profit increased from RMB 742 million in 2021 to RMB 812 million in 2022, but gross margin declined from 12.8% to 11.3% due to rising raw material costs[87] - Fair value loss on biological assets increased from RMB 407 million in 2021 to RMB 1,617 million in 2022, driven by lower cow valuations and higher feeding costs[88] - Other income increased by 138.8% from RMB 152 million in 2021 to RMB 363 million in 2022, mainly due to higher government subsidies and reward subsidies[89] - Expected credit loss impairment increased by 163.2% from RMB 12 million in 2021 to RMB 33 million in 2022, due to recoverability issues with certain receivables[90] - Sales and distribution expenses increased by 6.0% from RMB 557 million in 2021 to RMB 590 million in the reporting period, mainly due to increased loading and transportation fees and employee salaries[92] - Administrative expenses decreased by 13.6% from RMB 835 million in 2021 to RMB 722 million in the reporting period, reflecting efficient operational management and cost control[92] - Other expenses increased significantly from RMB 3 million in 2021 to RMB 65 million in the reporting period, primarily due to increased R&D investment[92] - Financing costs surged by 49.8% from RMB 732 million in 2021 to RMB 1,097 million in the reporting period, driven by increased interest on convertible notes and bank loans[92] - Pre-tax profit dropped sharply from RMB 2,095 million in 2021 to RMB 475 million in the reporting period, impacted by rising raw material costs and declining milk prices[92][94] Cash Flow and Financial Position - Net cash generated from operating activities increased from RMB 2,266 million in 2021 to RMB 2,547.8 million in the reporting period[98][99] - Net cash used in investing activities rose from RMB 8,697 million in 2021 to RMB 10,783.8 million in the reporting period, mainly due to payments for biological assets and property, plant, and equipment[99] - Net cash generated from financing activities increased from RMB 5,424.3 million in 2021 to RMB 8,051.8 million in the reporting period, driven by new bank borrowings and early redemption of convertible notes[100] - Bank loans increased to RMB 20,559,056 thousand in 2022, up from RMB 9,456,114 thousand in 2021, with unsecured loans rising to RMB 18,838,786 thousand[101] - Net leverage ratio increased to 135.0% in 2022 from 68.6% in 2021, primarily due to increased bank and other borrowings for dairy farm expansions[102] - Capital commitments for property, plant, and equipment, and biological assets rose to RMB 2,998 million in 2022, a 19.6% increase from RMB 2,506 million in 2021[103] - The company's assets, including shares in subsidiaries and restricted bank deposits, were used as collateral for bank and other borrowings, totaling RMB 8 million[104] - The company has no foreign exchange hedging policy but monitors foreign exchange risks and considers hedging when necessary[105] - The company formed a joint venture with Rixin Investment, with a registered capital of RMB 1 billion, to invest in new dairy farms in China[109] - Total employee count was 11,449 as of December 31, 2022, with technical and skilled workers making up 64.1% of the workforce[110] - Total salary expenses (excluding share-based payments and retirement plan contributions) increased by 12.3% to RMB 1,012 million in 2022 from RMB 901 million in 2021[112] - The company's revenue from its top five customers reached RMB 11,544 million, accounting for 64.0% of total revenue, with the largest customer, Yili Group, contributing RMB 10,485 million, representing 96.6% of raw milk revenue[119] - Yili Group, the company's controlling shareholder, remains the largest customer, with revenue from Yili increasing to RMB 10,485 million in 2022 from RMB 8,757 million in 2021[119] - The company's revenue from overlapping parties, who are both customers and suppliers of Yili Group, contributed approximately 1.3% to total revenue during the reporting period[119] - The company's top five suppliers accounted for less than 30% of total procurement during the reporting period[121] - The company maintains a long-term stable cooperative relationship with Yili Group, which is crucial for its success[119] - The company focuses on providing high-quality raw milk and comprehensive ruminant farming solutions to its customers[122] - The company implements strict procurement policies to ensure the quality and reliability of its suppliers[123] - The company has integrated human rights principles into its Supplier Code of Conduct, prohibiting discrimination

Financial Performance - Revenue for the year ended December 31, 2022, was RMB 18,050,761 thousand, representing a 17.6% increase from RMB 15,346,167 thousand in 2021[2] - Adjusted profit attributable to the company's owners decreased by 56.4% to RMB 889,338 thousand from RMB 2,040,400 thousand in 2021[2] - The company reported a net profit of RMB 414,771 thousand for the year, a significant decrease of 73.4% from RMB 1,558,016 thousand in 2021[2] - The group’s pre-tax profit for 2022 was RMB 475,270,000, a significant decrease from RMB 2,095,333,000 in 2021, reflecting a decline of approximately 77.3%[52] - The company's basic and diluted earnings per share for 2022 were RMB 109.00, down from RMB 436.00 in 2021, representing a decline of approximately 75.0%[55] - The company reported a significant increase in cash flow from financing activities, indicating a strong capital raising effort[134] Revenue Breakdown - Raw milk business revenue was RMB 10,853,917 thousand, up 13.8% from RMB 9,537,814 thousand in the previous year[2] - Revenue from feed sales increased to RMB 6,576,398 thousand in 2022, compared to RMB 5,328,139 thousand in 2021, reflecting a growth of 23.4%[29] - The total revenue from customer A reached RMB 10,617,768 thousand in 2022, up from RMB 8,838,777 thousand in 2021, representing a growth of approximately 20%[43] - The total segment revenue for the raw milk business was RMB 10,853,917 thousand in 2022, with external customer revenue contributing significantly[39] - Revenue from the ruminant animal breeding systematic solutions business grew by 23.9% from RMB 5,808 million in 2021 to RMB 7,197 million, supported by technological empowerment and service enhancement[112] Cost and Expenses - The total sales cost increased to RMB 16,958,848 thousand in 2022 from RMB 14,333,273 thousand in 2021, reflecting a rise of about 18%[44] - The sales cost for raw milk increased by 33.2% from RMB 5,585 million in 2021 to RMB 7,442 million, primarily due to new farm operations and rising raw material prices[114] - The total depreciation and amortization expenses for 2022 were RMB 883,576,000, an increase of 25.7% from RMB 702,678,000 in 2021[53] - Financing costs rose to RMB 1,097,485 thousand in 2022 from RMB 732,443 thousand in 2021, an increase of approximately 50%[49] - Administrative expenses decreased by 13.6% to RMB 722 million, with the proportion of administrative expenses to revenue dropping from 5.4% to 4.0%[125] Assets and Liabilities - As of December 31, 2022, total assets amounted to RMB 31,877,107 thousand, an increase from RMB 24,507,476 thousand in 2021, representing a growth of approximately 29.0%[13] - Non-current liabilities increased to RMB 8,798,904 thousand in 2022 from RMB 5,773,742 thousand in 2021, reflecting a rise of about 52.5%[14] - The total liabilities as of December 31, 2022, were RMB 19,896,284 thousand, compared to RMB 11,307,986 thousand in 2021, marking an increase of approximately 76.5%[14] - The net current liabilities as of December 31, 2022, were RMB (8,327,074) thousand, compared to RMB (3,853,823) thousand in 2021, indicating a significant increase in liabilities[14] Dividends and Shareholder Returns - The company proposed a final dividend of RMB 0.022 per share for the year ended December 31, 2022, compared to no dividend in 2021[3] - The company has not paid or proposed any dividends for 2021, indicating a shift in dividend policy for 2022[56] - The board proposed a final cash dividend of RMB 0.022 per share for the year ended December 31, 2022, which is a new dividend compared to no dividend in 2021[153] Operational Highlights - The number of dairy cows increased by 20.0% to 499,451 from 416,196 in the previous year[2] - The group produced nearly 2.38 million tons of raw milk, with an annualized yield per cow (excluding special breeds) reaching 11.4 tons, a growth of 4.6% compared to 2021[71] - The group operated 78 modern farms across 16 provinces in China, with a total dairy cow inventory of 499,451 heads, a 20.0% increase from the previous year[75] - The group established 7 new farms during the reporting period, including a 10,000-head organic dairy farm, enhancing its operational capacity and technological advancement[77] Strategic Initiatives - Future outlook includes plans for market expansion and potential mergers and acquisitions to strengthen competitive positioning in the dairy industry[16] - The company is actively engaged in the research and development of new products and technologies to improve operational efficiency and product offerings[16] - The company aims to lead the Chinese livestock industry and become a world-class livestock technology group, focusing on high-quality sustainable development[104] - The company plans to enhance its upstream dairy industry chain and expand its market presence through strategic initiatives[110] Research and Development - The company is actively researching carbon reduction technologies in dairy farming, collaborating with multiple research institutions[81] - The company has established a leading domestic dairy nutrition system and a research platform focused on cow nutrition and health[80] - The group is involved in the "National Dairy Breeding and Farming Technology Research Center" and has undertaken significant projects in dairy breeding and quality forage selection[96] Corporate Governance - The company is committed to maintaining high corporate governance standards and has adhered to all applicable codes of conduct as per the listing rules[148] - The audit committee has reviewed the audited consolidated financial statements for the reporting period and discussed accounting policies and internal controls with senior management[150] - The company has established a nomination committee and a remuneration committee in addition to the audit committee[151]

Revenue and Profitability - Revenue for the six months ended June 30, 2022, reached RMB 8,706,955 thousand, a 19.4% increase from RMB 7,291,767 thousand in the same period of 2021[9]. - Adjusted profit attributable to the company's owners was RMB 437,123 thousand, a decrease of 61.7% compared to RMB 1,142,013 thousand in the prior year[9]. - EBITDA for the period was RMB 1,837,606 thousand, reflecting a 12.3% increase from RMB 1,636,448 thousand in the previous year[9]. - The company reported a net profit of RMB 200,121 thousand, a significant decrease from RMB 1,187,518 thousand in the previous year, representing an 83.2% decline[110]. - Gross profit decreased from RMB 2,139 million in 2021 to RMB 2,097 million in 2022, with a gross margin decline from 29.3% to 24.1%[57][59]. Business Operations and Growth - Raw milk business revenue was RMB 5,219,010 thousand, up 19.9% from RMB 4,351,943 thousand year-on-year[9]. - The company operates 75 farms covering 16 provinces and regions, with a dairy cow stock of nearly 450,000[11]. - The company achieved double-digit growth in both feed business and dairy farming consumables revenue, with breeding income doubling during the reporting period[12]. - The company is strategically expanding in regions with high population density and economic potential, focusing on building new farms and feed production bases[12]. - The company launched a new organic fresh milk product, enhancing the functional component conversion efficiency and total output of specialty fresh milk[12]. Production and Supply Chain - The company's raw milk production reached 1.15 million tons, and concentrated feed production was 640,000 tons during the reporting period[12]. - The total production of ruminant animal feed reached 7.24 million tons, an increase of 2.8% compared to the mid-2021 period[15]. - The company established 25 demonstration farms nationwide, with annual milk production per cow increasing by 4.8% compared to mid-2021[27]. - The company has established a high-quality forage planting base covering over 210,000 mu of land in Inner Mongolia[11]. - The company launched new feed products, including a specialized camel feed, to fill market gaps and improve the nutrition and health of dairy cows[25]. Financial Management and Investments - Financing costs increased by 72.1% from RMB 298 million in 2021 to RMB 512 million in 2022, attributed to higher interest on convertible bonds and bank loans[66]. - The company reported a net cash inflow from financing activities of RMB 3,736,490 thousand, compared to RMB 4,338,447 thousand in the previous year, reflecting a decrease of 13.9%[45]. - As of June 30, 2022, total bank borrowings amounted to RMB 13,613,427,000, an increase of 44.5% from RMB 9,456,114,000 as of December 31, 2021[76]. - The company has begun construction of feed production bases in Heilongjiang and Hebei, aiming for a total production capacity of 2 million tons[30]. - The company has initiated a strategic performance transformation project to enhance organizational activation and employee motivation[85]. Market and Competitive Landscape - The national average price of fresh milk in major producing provinces was RMB 4.20 per kilogram, a decrease of 1.4% compared to the mid-2021 period[14]. - The company reported a 33.4% increase in the import value of frozen bull semen, totaling $51.17 million, reflecting strong domestic demand for high-quality breeding products[15]. - The company is focused on expanding its market presence and enhancing its product offerings in the dairy sector[118]. - Major customer A generated revenue of RMB 5,028,566 thousand from raw milk sales, RMB 51,334 thousand from feed sales, and RMB 7,357 thousand from breeding products for the six months ended June 30, 2022[138]. - The company is integrating supply chain advantages to expand into new businesses such as vaccines and agricultural inputs, enhancing automation in dairy farming[33]. Sustainability and Corporate Governance - The company is committed to sustainable development, integrating ecological strategies into its business operations and establishing a long-term mechanism for sustainability[44]. - The company has established a carbon accounting model for the entire dairy industry chain, achieving leading greenhouse gas emissions levels for raw milk in 2021[45]. - The company is advancing electrification and new energy construction in its farms, with electric loaders expected to reduce greenhouse gas emissions by approximately 72% compared to diesel vehicles[46]. - The company is focused on digital transformation and automation in financial and human resource management to enhance operational efficiency and risk management[43]. - The company is committed to maintaining strict corporate governance and has adopted all applicable code provisions during the reporting period[101]. Employee and Talent Management - Total employee count as of June 30, 2022, was 10,835, with technical staff making up 21.5% and skilled workers 41.6% of the workforce[83]. - The company aims to attract and retain qualified employees through continuous improvement in talent assurance, capability building, and compensation management[84]. - Total salary expenses (excluding share-based payments and retirement plan contributions) amounted to RMB 690 million, an increase from RMB 536 million in the same period of 2021[85]. - The company plans to build a talent development system to accelerate the construction of an efficient and agile workforce for future growth[49]. - The company has not engaged in any significant acquisitions or disposals of subsidiaries or associates during the reporting period[82].

Financial Performance - Total revenue for 2021 reached RMB 15,346,167, an increase of 30.3% compared to RMB 11,781,195 in 2020[6] - Profit before income tax was RMB 2,095,333, reflecting a growth of 31.4% from RMB 1,594,435 in 2020[6] - Net profit for the year was RMB 2,021,216, a 31.2% increase from RMB 1,540,630 in 2020[6] - The adjusted net profit attributable to the company’s owners was RMB 2,040,400, representing a 49.1% increase from RMB 1,368,093 in 2020[7] - The company recorded a revenue of RMB 15,346 million and a profit of RMB 2,021 million for the year, representing growth of 30.3% and 31.2% respectively compared to the previous year[8] Revenue Breakdown - Raw milk business revenue was RMB 9,537,814, up 36.4% from RMB 6,994,592 in the previous year[6] - Revenue from ruminant animal breeding solutions was RMB 5,808,353, up 21.3% from RMB 4,786,603 in the previous year[6] - Feed business revenue rose by 21.2% to RMB 5,328 million, contributing 34.7% to total revenue[24] - Raw milk revenue rose by 36.4% from RMB 6,995 million in 2020 to RMB 9,538 million, driven by stable growth in sales volume and milk prices[44] - The revenue from ruminant animal husbandry solutions grew by 21.3% from RMB 4,787 million in 2020 to RMB 5,808 million, attributed to growth in feed and dairy supermarket businesses[44] Operational Expansion - The number of dairy cows increased to 416,196, a growth of 35.0% from 308,195 in 2020[6] - The company operates 73 farms covering 16 provinces, with a total dairy cow inventory exceeding 410,000[5] - The company expanded its operations by launching 3 new farms, 1 feed production base, and 1 core breeding factory during the reporting period, with a total dairy cow inventory reaching 416,000 heads and raw milk production of 1,990,000 tons[17] - The company launched three new farms during the reporting period, including a 6,000-head Jersey cow farm[25] - The company established a new international standard dairy cattle breeding farm in Inner Mongolia with a designed capacity of 3,500 heads, aimed at becoming the largest quality breeding source output base in China[30] Product Development - The company introduced new specialty fresh milk products, including organic A2 milk and selenium-enriched milk, enhancing the total production of specialty fresh milk[17] - The company launched new fresh milk and feed products during the reporting period, enhancing its product offerings[21] - New product launches included organic A2 milk and selenium-enriched milk to meet growing consumer demand for specialty fresh milk[32] - The introduction of high-value new products in the feed business included anti-antibiotic upgraded calf feed and specialized nutritional products for farms[32] Strategic Goals and Future Outlook - The company aims to create a new "YouRan MuYe" by 2026, focusing on strengthening its leading position in the industry and continuously creating value for customers, shareholders, and society[9] - The company aims to achieve a strategic goal of raising raw milk cattle stock to 800,000 heads by 2026, doubling the scale of its feed business[40] - The compound annual growth rate for raw milk demand is projected at 8.9% from 2020 to 2025, with a forecasted requirement of 36.4 million tons of raw milk by 2025[40] - The company plans to allocate approximately RMB 2,033 million (75% of net proceeds) for future investment projects, including new farms and feed production bases[149] Corporate Governance and Management - The company emphasizes the importance of strategic management and compliance in its operations and governance[158] - The board consists of two executive directors, four non-executive directors, and three independent non-executive directors[154] - The company is committed to maintaining strict corporate governance to protect and enhance shareholder interests[168] - The company has adopted the standard code of conduct for securities trading as per the listing rules, confirming compliance by all directors from the listing date until December 31, 2021[169] - The company has implemented a comprehensive risk management system, with the audit committee authorized to manage, monitor, and improve this system[199] Environmental and Sustainability Initiatives - Total environmental investment during the reporting period amounted to RMB 91.55 million, focusing on sustainable development strategies[38] - The company has established a carbon emission monitoring and warning platform and is conducting research on low-carbon breeding models[38] - The company is committed to sustainability, targeting a reduction in carbon emissions by 30% over the next five years[162] Financial Position and Cash Flow - The net cash generated from operating activities for the reporting period was RMB 2,266,010,000, up from RMB 1,707,871,000 in the previous year, indicating a growth of approximately 32.6%[70] - The net cash used in investing activities was RMB 8,696,940,000, primarily due to payments for biological assets of RMB 3,773,000,000 and acquisitions of subsidiaries totaling RMB 2,379,000,000[71] - The company completed the acquisition of a 100% stake in Fonterra China Farms for a consideration of RMB 2,530,566,000 on April 1, 2021[76] - The total sales cost increased by 29.7% from RMB 11,049 million in 2020 to RMB 14,333 million in the reporting period[45] Customer and Supplier Relationships - Revenue from the top five customers amounted to RMB 9,563.2 million, accounting for 62.3% of total revenue[92] - Sales to the largest customer, Yili, generated revenue of RMB 8,756.7 million, representing 91.8% of total raw milk revenue during the reporting period[92] - The procurement amount from the largest supplier was RMB 327 million, accounting for about 1.5% of total procurement[92] - The group has entered into a dairy product procurement framework agreement with Yili Group, effective for three years from the listing date, to ensure a stable supply of dairy products[127] Employee and Compensation - Total employee count as of December 31, 2021, is 10,414, with technical staff comprising 22.2% of the workforce[77] - Total compensation expenses for the reporting period amounted to RMB 901 million, an increase of 8% compared to RMB 834 million for the year ended December 31, 2020[79] - The company is committed to employee development through competitive compensation, performance-based bonuses, and various training programs[77] Risk Management - Key risks identified include supply and quality of dairy cows, product and service quality, manufacturing safety, environmental pollution, market supply and demand changes, strategic risks, operational risks, and financial risks[199] - The company has implemented strict procurement policies to ensure high-quality supplies from vendors[95]

Financial Performance - Revenue for the six months ended June 30, 2021, was RMB 7,291,767 thousand, representing a 36.4% increase from RMB 5,344,427 thousand in the same period of 2020[7]. - The profit before tax was RMB 1,216,671 thousand, a significant increase of 57.9% compared to RMB 770,547 thousand in the previous year[7]. - The net profit attributable to the owners of the company was RMB 935,275 thousand, reflecting a 27.9% increase from RMB 731,249 thousand in the same period of 2020[7]. - The company achieved a profit of RMB 1,188 million, a 59.6% increase compared to RMB 744 million for the six months ended June 30, 2020[10]. - The group recorded a gross profit of RMB 1,757 million for the six months ended June 30, 2021, compared to RMB 1,299 million for the same period in 2020, with a gross margin of 40.4% down from 40.7%[29]. - The net profit for the six months ended June 30, 2021, was RMB 1,187,518 thousand, representing a 60% increase compared to RMB 744,059 thousand in the prior year[69]. - The total comprehensive income for the period was RMB 1,229,514 thousand, compared to RMB 752,896 thousand in the same period last year[69]. - The group reported a profit before tax of RMB 1,217 million for the six months ended June 30, 2021, compared to RMB 771 million for the same period in 2020[33]. Revenue Breakdown - Raw milk business revenue reached RMB 4,351,943 thousand, up 36.3% from RMB 3,192,968 thousand year-on-year[7]. - Raw milk production rose by 23.2% from 769,260 tons for the six months ended June 30, 2020, to 947,764 tons during the reporting period[12]. - The feed business revenue grew by 37.2% from RMB 1,977 million to RMB 2,712 million, accounting for 37.2% of the company's total revenue[13]. - Sales of raw milk amounted to RMB 4,351,943 thousand, up from RMB 3,192,968 thousand, representing a 36.2% year-over-year growth[82]. - The sales of feed reached RMB 2,711,981 thousand, a 37.2% increase from RMB 1,977,149 thousand in the prior year[82]. Operational Growth - The number of dairy cows increased to 375,654, a growth of 30.9% from 287,045 in the previous year[7]. - The company operates 73 modern farms across 15 provinces in China, with 48 large-scale farms housing over 5,000 heads of livestock each[14]. - The company integrated acquired businesses, leading to improved operational efficiency and increased scale in its raw milk operations[11]. - The company is expanding its raw milk business by constructing new farms and a feed production base in multiple provinces, including Inner Mongolia and Shandong[23]. - The company completed the acquisition of all equity interests in Fonterra China Farms for a consideration of RMB 2,530 million on April 1, 2021[46]. Market Trends - The Chinese dairy product retail sales volume is projected to grow from 31.1 million tons in 2020 to 33.3 million tons in 2021, with a compound annual growth rate of 5.7% expected until 2025[8]. - The average raw milk price in China's top 10 producing provinces experienced double-digit growth during the reporting period due to increased downstream market demand[8]. - The market for dairy cow frozen semen is on the rise, driven by the need to expand herd sizes effectively, particularly with sexed frozen semen gaining popularity among Chinese farms[8]. Investment and Financing - The net cash used in investing activities for the reporting period was RMB 4,792 million, primarily due to payments for biological assets of RMB 1,759 million and acquisition of subsidiaries for RMB 2,490 million[41]. - The net cash generated from financing activities was RMB 4,338 million, mainly attributed to proceeds from global offerings of RMB 2,855 million and new bank borrowings of RMB 7,503 million[42]. - The company completed the acquisition of 100% equity in Fonterra (Yutian) Farm Co., Ltd. and Fonterra (Yingxian) Farm Co., Ltd. on April 1, 2021, enhancing its market presence[77]. Cash Flow and Liquidity - For the six months ended June 30, 2021, the net cash generated from operating activities was RMB 1,594 million, compared to RMB 1,238 million for the same period in 2020, representing an increase of 28.9%[40]. - The company's cash and cash equivalents increased to RMB 3,776,602 thousand as of June 30, 2021, up from RMB 1,594,505 thousand at the end of the same period in 2020, indicating a significant improvement in liquidity[75]. - Operating cash flow for the six months ended June 30, 2021, was RMB 1,594,270 thousand, compared to RMB 1,237,633 thousand for the same period in 2020, reflecting a growth of approximately 29%[75]. Shareholder Information - As of June 30, 2021, PAG Holdings Limited holds 1,934,013,555 shares, representing 50.96% of the total shares outstanding[56]. - Major shareholders include PAG Dairy GP I Limited with 1,562,429,904 shares (41.17%) and Yili with 1,320,800,000 shares (34.80%) as of June 30, 2021[56][59]. - The total number of issued shares as of June 30, 2021, is 3,795,404,000[58]. Future Outlook - The company has provided a performance guidance for the second half of 2021, expecting a revenue growth of 25% year-over-year[150]. - New product launches are anticipated to contribute an additional RMB 300 million in revenue by the end of 2021[150]. - The company plans to enter into strategic partnerships with local distributors to enhance supply chain efficiency, aiming for a 15% reduction in logistics costs[150]. - The company has set a target to achieve a net profit margin of 12% by the end of 2021, up from 10% in the previous year[150].