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 聯 合 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 聯 合 公 告全 部 或 任 何 部 份 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。 本 聯 合 公 告僅 供 參 考 ， 並 不 構 成收 購 、 購 買 或 認 購 要約 人 或 本 公 司 證 券 之邀 請 或 要 約 ， 亦 非 在 任 何 司法 管 轄 區 招 攬 任 何 投票 或 批 准 。 本 聯 合 公告 並 非 供 在 、 向 或 從刊 發 、 登 載 或 分 發 全 部 或 部分 內 容 即 構 成 違 反 有關 司 法 權 區 適 用 法 律或 法 規 的 任 何 司 法 權區 刊 發 、 登 載 或 分發。 菁 裕 企 業 發 展（ 山 東 ）有 限 公 司 Jingyu Enterprise Development (Shandong) Co., Ltd. * （ 於中華人民共和國註冊成立之有限公司 ） SHANDONG ...

Group 1 - The stock price of Fengxiang Co., Ltd. (09977.HK) closed at HKD 1.950 on July 7, 2023, marking a 1.56% increase from the previous trading day, with an intraday high of HKD 1.960, reaching a nearly one-year high [1] - On the same day, the net inflow of funds was HKD 24.96 thousand, with no specific data provided for the inflow and outflow amounts [1] Group 2 - Shandong Fengxiang Co., Ltd. primarily produces chicken meat products from white feather broilers and was listed on the Hong Kong Stock Exchange on July 16, 2020, under the stock code 09977.HK [2] - The company has a strong domestic market position in China and a growing export business supplying high-quality chicken products to countries including Japan, the EU, Malaysia, South Korea, Mongolia, and Singapore [2] - Fengxiang's chicken products are certified halal through Islamic slaughtering practices, and the company has established long-term relationships with international food processors, traders, and fast-food chain operators [2] - The company's quality safety supervision system covers six key stages of the production process, ensuring comprehensive control over the supply chain, and it has obtained certifications from BRC, HACCP, and ISO9001 [2] - Fengxiang has developed a remote control real-time data information platform to monitor and maintain optimal temperature and humidity in chicken farms, which includes an alarm system for timely detection of anomalies [2] - The analysis of breeding data from the information platform helps the company continuously improve the breeding environment and performance [2]

Core Insights - The poultry farming industry in Yanggu County, Shandong Province, is undergoing an innovative insurance transformation to address various risks faced by farmers [1][2] - Traditional poultry insurance primarily covers disease-related risks, but there is a growing need for coverage against natural disasters and unexpected incidents [2][3] - A new specialized insurance product has been developed to cover major disaster risks, including power outages, natural disasters, and accidents, effectively filling a market gap [2][5] Industry Challenges - Poultry farmers are particularly concerned about risks such as power outages and natural disasters, which can significantly impact their operations [2][3] - The reliance on modern temperature control facilities makes the industry vulnerable to sudden disruptions, necessitating comprehensive insurance solutions [2] Product Innovation - The new insurance product, set to launch in June 2024, includes coverage for three major risk categories: power outages leading to temperature control failures, natural disasters like storms and floods, and accidents such as fires and explosions [2][5] - This product is designed to meet the specific needs of the poultry farming industry, providing a tailored solution to address critical risks [2] Service Enhancement - The insurance company has introduced a subsidy-based insurance model to lower costs for poultry farmers, combining government subsidies with commercial insurance [5][6] - A collaborative mechanism between the government and the insurance company has been established to ensure effective implementation of the insurance scheme [5][6] Financial Impact - The new insurance initiative has attracted significant social investment, with a reported leverage of 5.3 times the government subsidy [6] - As of April 2025, the insurance has covered over 7 million poultry, providing risk protection exceeding 200 million yuan [6] Commitment to Rural Development - The insurance company aims to enhance service efficiency, promising rapid response times for claims and payments [6] - The company is committed to supporting national agricultural policies and promoting innovative insurance solutions tailored to local agricultural characteristics [6]

Financial Performance - Revenue for the year ended December 31, 2024, increased to RMB 5,504,651, representing a growth of 7.2% compared to RMB 5,134,413 in 2023[12] - Gross profit rose to RMB 660,099, up from RMB 591,464, indicating a gross margin improvement[12] - Net profit attributable to shareholders increased significantly to RMB 280,867, compared to RMB 160,319 in the previous year, marking a growth of 75.2%[12] - Adjusted net profit for 2024 was RMB 198,048, reflecting a substantial increase from RMB 160,319 in 2023[12] - Basic earnings per share improved to 17.9 RMB cents, up from 10.8 RMB cents, indicating enhanced profitability per share[12] - For the year ended December 31, 2024, the Group recorded a net profit of RMB 280.9 million, a 75.2% increase from RMB 160.3 million in 2023[148] - Adjusted net profit increased by 23.5% year-on-year, reaching RMB 198.0 million[151] - Total operating revenue for 2024 was RMB 5,504.7 million, reflecting a 7.2% increase compared to RMB 5,134.4 million in 2023[151] Sales and Production Volumes - The rearing volume of white-feathered broilers increased to 179.0 million birds, representing a growth of 3.8% compared to the previous year[17] - Sales volume of raw chicken meat products rose to 279.3 million kg, showing a significant increase from 241.3 million kg[17] - Processed volume of white-feathered broilers reached 430.0 million kg, marking a growth of 16.2% from 370.1 million kg[17] - The sales volume of processed chicken meat products increased to 152.9 million kg, which is an 18.4% rise from the previous year[17] - For the year ended December 31, 2024, the sales volume of processed chicken meat products increased by 18.4% to 152.9 million kg, with revenue growing by 13.1% to RMB2,955.4 million, representing 53.7% of the Group's total revenue[87] - The sales volume of raw chicken meat products increased by 15.8% to 279.3 million kg, with revenue from external sales rising by 2.6% to RMB2,343.4 million, accounting for 42.6% of the Group's total revenue[88] Market and Strategic Initiatives - The company plans to continue expanding its market presence and enhancing product offerings in the upcoming fiscal year[10] - Future strategies may include further investments in new technologies and potential acquisitions to drive growth[10] - The management remains optimistic about achieving sustained growth and profitability in the coming years[10] - The company launched the "iShape" chicken breast brand, which won the 2023 Excellent New Consumer Brand award[20] - The company aims to achieve sustainable, steady, and balanced quality growth in chicken meat products, enhancing customer loyalty and market share[126][131] - The company plans to improve breeding quality and processing capacity while enhancing supply chain management capabilities[128][132] R&D and Innovation - In April, the company initiated a postdoctoral research project focused on drug resistance mechanisms in poultry, enhancing its R&D capabilities[31] - The Group focused on R&D investment and optimized resource allocation, leading to rapid growth in new product sales[106] - The company will leverage digitalization and artificial intelligence to enhance production efficiency and optimize management processes[138] Risk Management - The group faces price risk due to fluctuations in the prices of key raw materials such as corn and soybean meal, which are expected to continue impacting profitability[192] - Health risks from outbreaks of diseases like avian influenza could significantly affect public perception and product safety, prompting the group to implement comprehensive disease prevention measures[193] - The group has established a food safety control system and obtained certifications including ISO22000, ISO9001, and HACCP to mitigate food safety risks[196] - Safety production risks are managed through adherence to the Food Safety Law of the PRC and relevant industry standards, ensuring compliance with national standards for poultry products[197] - Epidemic risks, including COVID-19, pose significant threats to business operations, with the group actively monitoring and implementing hygiene measures[200] Corporate Social Responsibility - The company awarded the "Fengxiang Scholarship" to 50 outstanding university students, reinforcing its commitment to social responsibility[57] - The company received two honors from the Bureau of Training of the General Administration of Sport of China for its support of national athletes[49] Financial Structure and Borrowings - Total borrowings decreased by 15.0% to RMB 999.1 million, reflecting improved profitability and repayment of long-term borrowings[182][186] - The gearing ratio improved to 30.2% from 38.7% in 2023, indicating a stronger capital structure[183] - As of December 31, 2024, the group's bank borrowings are secured by assets with a total net value of RMB 1,508.1 million, an increase from RMB 886.1 million as of December 31, 2023[190]

Core Viewpoint - The stock price of Fengxiang Co., Ltd. surged by 25% in Hong Kong due to the impact of a privatization plan [1] Company Summary - Fengxiang Co., Ltd. is experiencing a significant increase in its stock price, attributed to a privatization initiative [1]

Core Insights - The company reported a revenue of 5.505 billion yuan for the year ending December 31, 2024, representing a year-on-year increase of 7.21% [1] - Net profit attributable to shareholders reached 281 million yuan, a significant increase of 75.19% year-on-year, with basic earnings per share at 0.179 yuan [1] Group 1: Revenue and Profit Growth - Export sales revenue increased to 1.676 billion yuan in 2024 from 1.396 billion yuan in 2023, marking a year-on-year growth of 20.1% and accounting for 30.5% of total revenue [1] - The collective procurement business achieved sales revenue of 1.351 billion yuan, up from 1.136 billion yuan in 2023, reflecting an 18.9% year-on-year increase and a business share of 24.6% [1] Group 2: Strategic Initiatives and Operational Improvements - The company emphasized integrated value chain business models and multi-channel layout advantages to strengthen its leading position in the export market [1] - Continuous efforts in cost reduction and efficiency enhancement have led to significant improvements in overall operational management [1] - The company has focused on enhancing its research and development investments and optimizing resource allocation, resulting in rapid growth in new product sales [2] Group 3: Product and Market Development - The proportion of revenue from deep-processed products increased to 53.7% of total revenue, indicating a strengthened ability to withstand market fluctuations [2] - The company has implemented a comprehensive cost control system in the food processing segment, improving cost management effectiveness [2]

Financial Performance - Total revenue for the year ended December 31, 2024, was RMB 5,504,651,000, an increase of 7.2% from RMB 5,134,413,000 in 2023[3] - Net profit for the year ended December 31, 2024, reached RMB 280,867,000, up 75.1% compared to RMB 160,319,000 in 2023[3] - Adjusted net profit for the year was RMB 198,048,000, reflecting a significant increase from RMB 160,319,000 in the previous year[3] - Basic earnings per share increased to RMB 17.9 from RMB 10.8, representing a growth of 65.7%[3] - Total revenue for the year ended December 31, 2024, was RMB 5,504,651 thousand, an increase of 7.2% from RMB 5,134,413 thousand in 2023[15] - The company reported a net profit attributable to shareholders of RMB 280,867 thousand for 2024, compared to RMB 160,319 thousand in 2023, representing a growth of 75.2%[27] - For the fiscal year ending December 31, 2024, the company achieved a sales revenue of RMB 5,504.7 million, representing a year-on-year growth of 7.2% compared to RMB 5,134.4 million in 2023[50] - The net profit for the same period was RMB 280.9 million, which is a significant increase of 75.2% from RMB 160.3 million in 2023[50] - Adjusted net profit increased by 23.5% year-over-year, reaching RMB 198.0 million[69] - The gross profit margin improved to 12.0% in 2024, up from 11.5% in 2023, indicating a 4.1% increase[69] Sales and Revenue Breakdown - Sales volume of processed white feather chickens rose by 16.2% to 430 million kg from 370.1 million kg in 2023[2] - The company reported a 15.8% increase in sales volume of fresh chicken products, totaling 279.3 million kg compared to 241.3 million kg in 2023[2] - Sales volume of deep-processed chicken products increased by 18.4% to 152.9 million kg, with revenue rising by 13.1% to RMB 2,955.4 million, accounting for 53.7% of total revenue[45] - Sales volume of fresh chicken products rose by 15.8% to 279.3 million kg, with revenue increasing by 2.6% to RMB 2,343.4 million, representing 42.6% of total revenue[46] - The sales volume of chicks decreased by 68.7% to 10.7 million, with revenue dropping by 55.8% to RMB 27.0 million, contributing only 0.5% to total revenue[47] - Revenue from other products grew by 1.8% to RMB 178.9 million, making up 3.2% of total revenue[49] - Export business sales revenue increased to RMB 1,676.4 million in 2024, a year-on-year growth of 20.1%, accounting for 30.5% of total revenue[52] - Collective procurement business sales revenue reached RMB 1,351.4 million, up 18.9% year-on-year, with a business share of 24.6%[54] - Key customer business sales revenue grew to RMB 1,026.2 million, representing a 20.9% increase compared to RMB 848.8 million in 2023[55] - Retail business sales revenue decreased to RMB 384.6 million, a decline of 10.2%, with a business share of 7.0%[57] Assets and Liabilities - Current assets increased to RMB 1,730,204,000 from RMB 1,519,578,000, indicating a growth of 13.9%[7] - Total liabilities decreased to RMB 1,928,462,000 from RMB 2,025,170,000, a reduction of 4.8%[8] - Total equity attributable to owners of the parent increased to RMB 3,306,440,000 from RMB 3,031,896,000, reflecting a growth of 9.1%[9] - Accounts receivable increased to RMB 348,691 thousand in 2024 from RMB 284,825 thousand in 2023, representing a growth of 22.4%[29] - The aging analysis of accounts receivable shows that amounts within one month increased to RMB 323,472 thousand in 2024 from RMB 239,508 thousand in 2023, a rise of 35.1%[30] - Total inventory rose to RMB 969,066 thousand in 2024 from RMB 947,344 thousand in 2023, an increase of 2.6%[32] - Total accounts payable increased to RMB 399,453 thousand in 2024 from RMB 380,727 thousand in 2023, an increase of 4.9%[40] - The company’s bank loans with collateral increased to RMB 893,991 thousand in 2024 from RMB 761,033 thousand in 2023, a rise of 17.4%[40] - The company's total borrowings decreased by 15.0% to RMB 999.1 million, attributed to the repayment of maturing long-term loans and improved profitability[83] Operational and Strategic Initiatives - The company has implemented extensive processes to manage operational risks related to climate, disease, and other natural factors affecting biological assets[38] - The company aims to enhance operational efficiency and achieve high-quality growth by focusing on refined management practices across all production stages[65] - The company is committed to talent development to enhance organizational vitality and core capabilities, aiming to foster a culture that embraces challenges[66] - The company has implemented a comprehensive "farm-to-table" model to control quality and costs throughout the poultry lifecycle[43] - The company is focusing on enhancing operational management and cost reduction to improve efficiency amid industry pressures[50] - The company plans to deepen channel engagement and increase customer loyalty by collaborating closely with key clients across various industry lines[93] Challenges and Market Conditions - The company faces challenges such as intensified industry competition and low product prices, but opportunities exist in expanding domestic demand and channel diversification[88] - The company has maintained a leading position in the export market, capitalizing on international supply gaps due to avian influenza[50] - The trend of restaurant chain development is expected to accelerate, providing growth opportunities for quality supply chain companies[61] - The overall industry chain companies are expected to benefit from the shift towards high-quality development in the consumer goods sector[59] Corporate Governance and Compliance - The company has complied with all applicable provisions of the Corporate Governance Code during the reporting period[107] - The audit committee has reviewed the company's accounting principles and policies, as well as the audited financial statements for the year ending December 31, 2024[110] - The preliminary announcement of the group's financial position for the year ending December 31, 2024, has been agreed upon by the auditor and is consistent with the audited financial statements[111] - The company has adopted electronic communication arrangements for company communications, with no printed copies provided[112] Future Plans and Developments - The company has initiated preparations for its initial public offering (IPO) of A-shares as of January 29, 2021, and has appointed Huatai United Securities as the pre-listing advisory institution[92] - The company is revising its articles of association to reflect changes in its business scope and comply with the latest amendments to the Company Law of the People's Republic of China, effective July 1, 2024[98] - A new loan framework agreement with Falcon will provide revolving loan financing with an annual limit of $13,591,000 for the year ending December 31, 2024, and $15,000,000 for the year ending December 31, 2025[100]

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 2,654,039,000, representing an increase of 8.9% from RMB 2,436,545,000 in the same period of 2023[8] - Gross profit decreased to RMB 237,414,000, down 15.9% from RMB 282,227,000 year-on-year[8] - Net profit for the period was RMB 60,094,000, a decline of 26.8% compared to RMB 82,095,000 in the previous year[8] - Basic earnings per share decreased to RMB 0.04 from RMB 0.06, reflecting a 33.3% drop[8] - The Group achieved total sales revenue of RMB 2,654.0 million for the first half of 2024, an increase of 8.9% compared to RMB 2,436.5 million in the same period of 2023[32] - Net profit for the first half of 2024 was RMB 60.1 million, a decrease of 26.8% from RMB 82.1 million in the first half of 2023[32] - Gross profit decreased by 15.9% to RMB 237.4 million, resulting in a gross profit margin of 8.9%, down from 11.6% in the same period last year[64] - Operating costs rose by 12.2% to RMB 2,416.6 million, primarily due to increased processing and sales volume[65] Sales and Market Performance - The number of white-feathered broilers bred increased by 9.5% to 77.7 million birds compared to 85.1 million birds in the same period of 2023[9] - Processed white-feathered broilers saw a 20.8% increase in volume, reaching 159.0 million kg compared to 192.1 million kg in the previous year[9] - For the six months ended June 30, 2024, the sales volume of processed chicken meat products increased by 20.1% to 73.0 million kg, compared to 60.8 million kg for the same period in 2023[21] - Revenue from the sale of processed chicken meat products grew by 15.2% to RMB1,416.6 million, representing 53.4% of the Group's total revenue[21] - The sales volume of raw chicken meat products increased by 23.6% to 131.5 million kg, up from 106.4 million kg in the previous year[22] - Revenue from external sales of raw chicken meat products increased by 6.3% to RMB1,153.1 million, accounting for 43.4% of the Group's total revenue[22] - The sales volume of chicken breeds decreased by 71.7% to 4.0 million birds, with revenue dropping by 73.9% to RMB 9.7 million, constituting 0.4% of total revenue[25] - Revenue from the sale of other products fell by 11.8% to RMB 74.6 million, representing 2.8% of total revenue[26] Strategic Initiatives and Future Outlook - The company is focusing on expanding its market presence and enhancing product offerings through new technology and product development strategies[7] - Future outlook indicates a commitment to improving operational efficiency and exploring potential mergers and acquisitions to drive growth[7] - The company aims to leverage its existing infrastructure to support market expansion initiatives in the coming quarters[7] - Management emphasizes the importance of adapting to market trends and consumer preferences to sustain competitive advantage[7] - The Group's strategic initiatives included enhancing customer loyalty and exploring new channels and customers to drive growth[28] - The Group aims to enhance operational efficiency and achieve sustainable growth by refining management practices across all processes[50] - The focus will be on improving breeding quality, increasing production capacity, and enhancing supply chain management capabilities[49] Research and Development - The Company held a review meeting for a postdoctoral research project focused on drug resistance mechanisms in poultry, enhancing its R&D capabilities[15] - The Company developed a new black garlic flavored chicken nugget, which has been successfully supplied to customers in bulk[16] - R&D expenses decreased by 6.3% to RMB 12.3 million for the six months ended June 30, 2024, compared to RMB 13.1 million for the same period in 2023[72] Corporate Governance and Shareholder Information - The Company has complied with all applicable code provisions of the Corporate Governance Code during the six months ended June 30, 2024[105] - The Company continues to enhance corporate governance to protect shareholder interests and improve corporate value[103] - Major shareholders include Shan Weijian, holding approximately 95.01% of domestic shares and 25.53% of H shares[92] - Falcon Holding GP Limited holds 992,854,500 Domestic Shares, representing approximately 95.01% of the Domestic Shares class and 62.73% of the total share capital of the Company[93] - The Board of Directors consists of nine members, including two executive directors and three independent non-executive directors[94] Employee and Operational Insights - The Group had 6,075 employees as of June 30, 2024, with the majority employed in the PRC, and offers various employee benefits including social insurance and training programs[85] - The Group adjusted its internal management structure to better meet international customer needs amid rising freight costs and tight production capacity[43] - The Group uses futures contracts to hedge against price fluctuations in raw materials such as corn and soybean meal, with insignificant amounts of ineffective hedging recognized during the reporting period[80][83] Financial Management and Costs - Finance costs decreased by 22.3% to RMB 32.4 million for the six months ended June 30, 2024, down from RMB 41.7 million in the same period of 2023, primarily due to improved borrowing structure and lower interest rates[73][76] - Income tax expenses recorded a negative amount of RMB 39.1 million for the six months ended June 30, 2024, compared to RMB 1.6 million for the same period in 2023, mainly due to the recognition of deferred income tax assets[74][77] - Total borrowings amounted to RMB 1,142.0 million as of June 30, 2024, representing a decrease of 2.8% compared to December 31, 2023, attributed to improved profitability[78][81] Share Award Schemes - The 2020 Share Award Scheme (SAS) was approved to recognize contributions from personnel and provide incentives for retention and development[122] - The 2021 Share Award Scheme (SAS) was approved by the Board on December 10, 2021, with amendments made on August 29, 2023, and June 6, 2024[150] - The 2023 Share Award Scheme (SAS) was approved on August 29, 2023, allowing for awarded shares or cash to selected participants[186] - The maximum number of shares that can be awarded to a selected participant under the 2023 SAS is limited to 1% of the issued share capital in any 12-month period[197]

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 2,654,039 thousand, an increase of 8.9% compared to RMB 2,436,545 thousand in 2023[4] - Net profit for the same period was RMB 60,094 thousand, down 26.8% from RMB 82,095 thousand in 2023[4] - Gross profit for the six months was RMB 237,414 thousand, down from RMB 282,227 thousand in 2023[4] - Basic earnings per share decreased to RMB 0.04 from RMB 0.06 in 2023[11] - The company reported a total comprehensive income of RMB 59,735 thousand for the period, down from RMB 81,969 thousand in 2023[11] - The consolidated net profit attributable to the parent company's ordinary shareholders for the six months ended June 30, 2024, was RMB 60,094,000, a decrease of 26.8% compared to RMB 82,095,000 for the same period in 2023[33] - Basic earnings per share for the six months ended June 30, 2024, was RMB 0.04, down from RMB 0.06 in the same period of 2023, reflecting a decline of 33.3%[33] - Gross profit decreased by 15.9% to RMB 237.4 million, with a gross margin of 8.9%, down from 11.6% in 2023[92] - Net profit fell by 26.8% to RMB 60.1 million, resulting in a net margin of 2.3%, down from 3.4% in the previous year[92] Revenue Breakdown - The revenue from processed chicken products was RMB 1,416,599 thousand, up 15.2% from RMB 1,229,476 thousand in 2023[20] - Revenue from external customers in mainland China was RMB 1,888,286 thousand, an increase of 5.0% from RMB 1,798,740 thousand in 2023[21] - Revenue from the sale of fresh chicken products grew by 6.3% to RMB 1,153.1 million, accounting for 43.4% of the total revenue[67] - The collective procurement business generated revenue of RMB 646.3 million, a 26.4% increase year-on-year, accounting for 24.4% of total revenue[75] - Export business revenue rose by 20.1% to RMB 765.8 million, representing 28.9% of total revenue[77] - Retail business revenue decreased by 12.6% to RMB 202.2 million, accounting for 7.6% of total revenue[80] Sales Volume - Sales volume of processed broiler chickens increased by 20.8% to 192.1 million kg from 159.0 million kg in 2023[2] - The sales volume of fresh chicken products rose by 23.6% to 131.5 million kg compared to 106.4 million kg in 2023[2] - The sales volume of chicks decreased significantly by 71.7% to 4.0 million from 14.2 million in 2023[2] - The company reported a 20.1% increase in sales volume of processed chicken products to 73.0 million kg for the six months ended June 30, 2024, compared to 60.8 million kg for the same period in 2023[66] - For the six months ending June 30, 2024, the sales volume of fresh chicken products increased by 23.6% to 131.5 million kg, compared to 106.4 million kg for the same period in 2023[67] - The sales volume of chicks decreased by 71.7% to 4.0 million, with revenue dropping 73.9% to RMB 9.7 million, representing 0.4% of total revenue[69] Assets and Liabilities - Total assets as of June 30, 2024, were RMB 5,077,452 thousand, slightly up from RMB 5,057,066 thousand at the end of 2023[12] - The company's total liabilities decreased to RMB 1,989,310 thousand as of June 30, 2024, from RMB 2,025,170 thousand at the end of 2023, representing a reduction of 1.8%[20] - The total current liabilities as of June 30, 2024, were RMB 1,455,965 thousand, a slight decrease of 2.4% from RMB 1,492,166 thousand at the end of 2023[20] - The total borrowings as of June 30, 2024, increased to RMB 1,142,039 thousand from RMB 984,045 thousand as of December 31, 2023[57] - The capital debt ratio was 37.0% and the asset-liability ratio was 39.2% as of June 30, 2024, compared to 38.7% and 40.0% respectively as of December 31, 2023[103] Operational Efficiency - The company continues to focus on refined management and efficiency improvements across all segments to enhance operational performance[82] - The company aims to enhance operational efficiency and achieve stable, high-quality growth through refined management practices and market expansion strategies[84] - The focus for the second half of 2024 includes leveraging digital tools for effective tracking and analysis of operational indicators[88] - The company plans to strengthen its channel layout and expand market share by enhancing its comprehensive business capabilities with key customers[88] - Management expenses increased by 17.1% to RMB 62.0 million, attributed to the implementation of incentive mechanisms and rising employee compensation[96] - Sales expenses decreased by 6.8% to RMB 79.0 million, reflecting improved efficiency in new retail business investments[97] - R&D expenses declined by 6.3% to RMB 12.3 million, due to optimization of product development structure and integration of projects[98] Corporate Governance and Compliance - The company has complied with all applicable provisions of the Corporate Governance Code as of June 30, 2024[132] - The audit committee, consisting of independent non-executive directors, reviewed the interim results and confirmed compliance with applicable accounting standards[138] - The company will continue to review and monitor its corporate governance practices to ensure compliance[132] - The company has not entered into any related party transactions requiring disclosure under Chapter 14A of the Listing Rules during the reporting period[131] Future Plans and Developments - The company is in the preparatory stage for its proposed initial public offering of A-shares, having appointed Huatai United Securities as the pre-listing advisory firm[112] - The company aims to ensure compliance with the public float requirements to facilitate the resumption of trading of its H-shares, effective July 31, 2024[120] - The company has taken appropriate measures to restore its public float in a practical manner to expedite the resumption of H-share trading[118] - The company plans to amend its articles of association to reflect changes in its business scope and comply with the latest amendments to the Company Law of the People's Republic of China, effective July 1, 2024[122] - The company proposed amendments to the 2021 and 2023 share incentive plans, including allowing rewards to be granted in new H-shares and/or existing H-shares[125] - A total of 2,955,968 reward shares were newly granted under the 2023 share incentive plan, replacing unvested shares from the 2021 plan, which will partially be satisfied through the issuance of 730,000 new H-shares[127] Market Conditions - The domestic pork price increase trend is expected to create space for a rebound in chicken prices[108]

Financial Performance - Revenue for the year ended December 31, 2023, was RMB 5,134,413,000, representing a slight increase of 0.96% from RMB 5,085,790,000 in 2022[16] - Gross profit for 2023 was RMB 591,464,000, compared to RMB 583,497,000 in 2022, indicating a growth of 1.49%[16] - The net profit attributable to shareholders of the parent company for 2023 was RMB 160,319,000, a significant recovery from a net loss of RMB 768,993,000 in 2022[16] - Adjusted net profit for 2023 was RMB 160,319,000, a substantial increase from RMB 39,242,000 in the previous year[16] - Basic earnings per share improved to 10.8 RMB cents in 2023, compared to a loss of 55.4 RMB cents per share in 2022[16] - The Group achieved a slight increase in total sales revenue to RMB5,134.4 million for the year, compared to RMB5,085.8 million in 2022, and net profit of RMB160.3 million, a significant recovery from a net loss of RMB769.0 million in 2022[85] - The Group recorded a net profit of RMB160.3 million in 2023, a year-on-year increase of 308.5%[140] - Total operating revenue for 2023 was RMB5,134.4 million, reflecting a slight increase of 1.0% compared to 2022[143] Sales and Market Performance - The export business generated sales revenue of RMB 1,396.0 million, marking a year-on-year increase of 2.7%[48] - Major customer business sales revenue grew to RMB 848.8 million, representing a year-on-year increase of 24.1%[48] - Processed chicken meat product sales volume rose by 13.2% to 129.1 million kg, with revenue increasing by 10.2% to RMB 2,613.7 million, accounting for 50.9% of total revenue[72] - The sales volume of raw chicken meat products decreased to 241.3 million kg, down from 251.5 million kg in 2022[20] - The sales volume of chicken breeds rose to 34.2 million birds, up from 32.1 million birds in 2022[20] - The retail business saw a decline in sales revenue to RMB 428.3 million, down 31.6% year-on-year, and its share of total business decreased to 8.3%[99] - Revenue from the external sale of other products grew by 9.4% to RMB175.7 million, representing 3.4% of the Group's total revenue[77] Operational Strategies and Future Outlook - The company plans to continue focusing on market expansion and new product development to drive future growth[14] - The management discussion indicates a positive outlook for the upcoming fiscal year, with strategies aimed at enhancing operational efficiency[14] - The company plans to enhance breeding quality and optimize costs while deepening channel penetration and expanding market share in 2024[58] - Strategic initiatives for 2024 include advancing lean production, improving efficiency, and accelerating talent pool development[58] - The company aims to achieve sustainable, steady, and balanced quality growth by upgrading the chicken meat products industry[118] - The company will continue to improve breeding quality and steadily increase breeding capacity to enhance supply chain management capabilities[120] - The company intends to deepen channel penetration and expand market share, particularly in centralized procurement for the catering industry and convenience stores[132] Cost Management and Efficiency - Operating costs rose by 0.9% to RMB4,542.9 million, primarily due to an 11.4% increase in the rearing volume of white-feathered broilers[159] - Selling expenses decreased significantly by 52.5% to RMB156.3 million, attributed to reduced sales and marketing expenses[161] - Management expenses decreased by 7.3% to RMB100.6 million from RMB108.5 million in 2022, reflecting ongoing efforts in refined management[167] - Sales expenses dropped by 52.5% to RMB156.3 million from RMB329.2 million in 2022, primarily due to reduced promotional spending[168] Risk Management and Compliance - The Group has established a quality control system covering all operational stages to mitigate food safety risks, obtaining certifications such as ISO22000 and HACCP[194] - The Group faces price risk due to significant fluctuations in commodity prices, particularly for corn and soybean meal, which are essential feed ingredients[191] - The Group's safety management system is aligned with PRC food safety laws and industry standards to prevent production safety accidents[198] - The Group has implemented comprehensive disease prevention procedures for breeders and broilers, including a monitoring program for disease and mortality rates[192] - Epidemic risks, including COVID-19 and other health crises, could materially affect business operations, prompting the Group to monitor and implement hygiene measures[196] Product Development and Innovation - The company launched new products including Jiaoma Chicken Nuggets and Gānggāng Chicken, enhancing its product portfolio[25][30] - iShape's core single products experienced significant growth, with low-fat chicken breast meatballs doubling in sales and tender MIX chicken breast meat increasing by 161% year-on-year[105] - iShape expanded its product line into non-chicken protein, launching popular new products such as Alaska Crab Meat Sticks and various chicken jerky products[106] Financing and Capital Structure - Fengxiang secured a syndicated loan of RMB 960 million, optimizing its debt structure by replacing all previous borrowings[50] - Total borrowings decreased by 21.1% to RMB1,175.3 million as of December 31, 2023, compared to the previous year, due to repayment of long-term borrowings and improved profitability[179] - The gearing ratio improved to 38.7% from 57.0% in 2022, and the balance sheet ratio improved to 40.0% from 50.0% in 2022[180]