Financial Performance - The company's revenue for Q1 2023 was ¥2,233,266,009.68, a decrease of 28.40% compared to ¥3,119,046,203.43 in the same period last year[3] - Net profit attributable to shareholders was ¥182,814,094.72, down 52.83% from ¥387,571,013.34 year-on-year[3] - Basic earnings per share decreased to ¥0.66, a decline of 52.86% from ¥1.40 in the previous year[3] - The net profit for the current period is approximately ¥193.45 million, a decrease of 50.8% compared to ¥392.63 million in the previous period[18] - The total comprehensive income for the current period is approximately ¥162.72 million, down from ¥361.76 million in the previous period, reflecting a decline of 55.0%[18] Cash Flow and Liquidity - The net cash flow from operating activities was -¥438,843,869.41, representing a 95.72% decrease compared to -¥224,220,205.58 in the same period last year[3] - Cash flow from operating activities shows a net outflow of approximately ¥438.84 million, worsening from a net outflow of ¥224.22 million in the previous period[19] - Cash inflow from operating activities totaled approximately ¥3.07 billion, an increase from ¥2.90 billion in the previous period[19] - Cash outflow from operating activities increased to approximately ¥3.51 billion, compared to ¥3.12 billion in the previous period[19] - The ending cash and cash equivalents balance is approximately ¥2.05 billion, compared to ¥1.89 billion in the previous period, indicating an increase[20] - The company reported a foreign exchange loss impacting cash and cash equivalents of approximately ¥11.56 million, compared to a loss of ¥3.15 million in the previous period[20] Assets and Liabilities - Total assets at the end of Q1 2023 were ¥10,819,638,626.46, down 6.72% from ¥11,598,874,181.42 at the end of the previous year[3] - Total liabilities decreased to CNY 4,250,997,347.78 from CNY 5,211,651,173.61, indicating improved debt management[15] - The equity attributable to shareholders increased to CNY 6,362,719,929.70 from CNY 6,184,265,166.56, showing a positive trend in retained earnings[15] Expenses - Sales expenses increased by 61.62% to ¥75,879,447.34, primarily due to higher employee compensation and registration costs[7] - Financial expenses rose by 50.84% to ¥60,017,682.80, mainly due to increased exchange losses from currency fluctuations[7] - The company's net profit margin has been impacted, with a significant increase in sales expenses to CNY 75,879,447.34, up from CNY 46,948,661.90[16] - Research and development expenses decreased to CNY 56,162,380.67 from CNY 89,023,043.97, indicating a strategic shift in R&D focus[16] Investment and Shareholding - The company reported an investment loss of CNY 35,302,194.73, contrasting with a gain of CNY 28,854,869.96 in the previous period[16] - 山东润源投资有限公司持股比例为41.47%，持有股份数量为114,911,237股[9] - KONKIA INC持股比例为22.08%，持有股份数量为61,191,800股[9] - 山东润农投资有限公司持股比例为4.73%，持有股份数量为13,105,690股[9] - 济南信博投资持股比例为2.83%，持有股份数量为7,840,686股[9] - 裴旭波持股比例为2.81%，持有股份数量为7,800,011股[9] - 中国工商银行股份有限公司－交银施罗德趋势优先混合型证券投资基金持股比例为2.74%，持有股份数量为7,587,490股[9] - 香港中央结算有限公司持股比例为2.12%，持有股份数量为5,863,976股[9] - 东方证券股份有限公司－中庚价值先锋股票型证券投资基金持股比例为1.75%，持有股份数量为4,843,468股[9] - 招商银行股份有限公司－交银施罗德启诚混合型证券投资基金持股比例为0.73%，持有股份数量为2,009,964股[9] - 中国建设银行股份有限公司－国泰大健康股票型证券投资基金持股比例为0.57%，持有股份数量为1,577,667股[9] Future Strategy - The company plans to focus on market expansion and new product development as part of its future strategy[16]

Financial Performance - The company achieved a sales revenue of 144.60 million, representing a year-on-year growth of 47.60% and a compound annual growth rate of 25.76%[5]. - The company's operating revenue for 2022 was ¥14,460,175,154.41, representing a 47.60% increase from ¥9,797,107,551.38 in 2021[31]. - The net profit attributable to shareholders for 2022 was ¥1,413,238,278.11, a 76.72% increase compared to ¥799,718,982.72 in 2021[31]. - The net cash flow from operating activities for 2022 was ¥1,370,655,408.25, up 73.27% from ¥791,071,609.73 in 2021[31]. - The total assets at the end of 2022 were ¥11,598,874,181.42, a 12.48% increase from ¥10,311,655,543.89 at the end of 2021[31]. - The net assets attributable to shareholders at the end of 2022 were ¥6,184,265,166.56, reflecting a 25.99% increase from ¥4,908,724,302.71 at the end of 2021[31]. - The company reported a basic earnings per share of ¥5.12 for 2022, which is a 51.03% increase from ¥3.39 in 2021[31]. - Total operating revenue reached ¥14,460,175,154, a 47.60% increase from ¥9,797,107,551.38 in 2021[74]. - The main product, herbicides, generated revenue of ¥12,283,317,574.94, accounting for 84.95% of total revenue, with a year-on-year growth of 53.68%[74]. - International sales contributed ¥14,161,700,842, representing 97.94% of total revenue, with a 49.25% increase compared to the previous year[74][77]. Market Expansion and Strategy - The company expanded its global marketing network, establishing new subsidiaries in multiple countries including Poland, Belarus, and Saudi Arabia, enhancing its operational capabilities[9]. - The company completed the acquisition of Sarabia in Spain, which will accelerate its investment and business growth in the EU market[9]. - The company operates in over 80 countries globally, continuously accelerating the improvement of its global marketing network[14]. - The company aims to become a global leader in crop protection, focusing on expanding its market presence and enhancing product offerings[21]. - The company has established a global marketing network with over 80 subsidiaries in more than 80 countries, aiming to complete the "rapid market entry platform" in all major markets by 2024[64]. - The company plans to establish local teams for its own brand B-C business in at least 25 new target countries by the end of 2024[64]. - The company has made strategic adjustments to its overseas pesticide registration projects, changing the focus from Argentina and Australia to the EU and Ukraine, while adding several other countries for future registration plans[120]. Research and Development - The company has initiated the development of new products, with two active ingredient products expected to complete development in the second half of 2023 and one in 2024[9]. - The company is investing in R&D for differentiated formulations based on market pain points, with a focus on active ingredients that have significant market potential[63]. - The company has a stable core technical team with extensive R&D and production experience, contributing to its competitive edge in the market[51]. - The company added 42 new members to its technical team in 2022, including 5 leading professionals, enhancing overall R&D capabilities[68]. - The company is developing a new clean production process for cyclohexanone herbicides to improve product quality and reduce waste emissions, currently in the R&D design phase[86]. - The company is working on a new preparation process for organic sulfur fungicides to enhance product competitiveness, currently in the R&D design phase[86]. - The company has invested in a pesticide product R&D center to bolster its research capabilities and improve core competitiveness[124]. Environmental Compliance and Sustainability - The company has established a risk-oriented approach to continuously improve and optimize its internal control system[178]. - The company strictly adheres to environmental protection laws and regulations, ensuring compliance with pollution discharge standards[184]. - The company has successfully renewed multiple pollution discharge permits, with validity extending up to 2028[185]. - The company has implemented measures to eliminate outdated production capacity and reduce pollutant emissions[184]. - The company is committed to enhancing its environmental practices and reducing its ecological footprint[184]. - The company has invested approximately 8 million yuan in an RTO waste gas treatment facility at the Weifang East Plant to ensure emissions meet standards[193]. - The company has implemented a comprehensive waste gas treatment strategy, including source reduction, process control, and end-of-pipe treatment methods[192]. Corporate Governance and Management - The company has a dedicated investor relations management team, ensuring effective communication with investors and maintaining transparency[140]. - The board of directors consists of 9 members, including 3 independent directors, complying with legal requirements[138]. - The company has established a complete business chain with independent procurement and sales systems, demonstrating operational independence[141]. - The company has a clear governance structure, with independent directors and a supervisory board in place[146]. - The company has implemented a stock incentive plan, granting 493.19 million restricted shares at a price of RMB 25.06 per share to 153 eligible participants[172]. - The company has a structured salary management system, including monthly and annual salary schemes tailored to different job roles[166][167]. Employee Engagement and Welfare - The company emphasizes employee rights protection and has implemented a comprehensive employee welfare system, including health plans and training programs[199]. - Employee satisfaction surveys indicate high levels of contentment regarding work environment and company culture[199]. - The company has a total of 5 employees with a doctoral degree and 303 with a master's degree, indicating a strong educational background among staff[165]. - The total number of employees at the end of the reporting period was 3,715, with 1,735 in the parent company and 1,980 in major subsidiaries[165]. Risk Management - The company is actively managing safety production risks by improving process automation and enhancing employee safety awareness[133]. - The company has established a management system for foreign exchange derivative transactions, ensuring compliance with internal control processes and legal regulations[106]. - The company is monitoring foreign exchange risks closely, as a significant portion of its revenue is generated from exports priced in USD, and is employing hedging strategies to mitigate these risks[135].

Revenue and Profit Growth - Revenue increased by 47.60% year-on-year, reaching 14.46 billion RMB[4] - Revenue for 2022 reached RMB 10.23 billion, representing a year-over-year growth of 15.6%[19] - Revenue in 2022 reached 14.46 billion yuan, a 47.60% increase compared to 9.80 billion yuan in 2021[25] - Net profit for the year was RMB 1.45 billion, an increase of 12.3% compared to the previous year[19] - Net profit attributable to shareholders in 2022 was 1.41 billion yuan, a 76.72% increase compared to 799.72 million yuan in 2021[25] - Operating cash flow in 2022 was 1.37 billion yuan, a 73.27% increase compared to 791.07 million yuan in 2021[25] - Basic earnings per share in 2022 were 5.12 yuan, a 51.03% increase compared to 3.39 yuan in 2021[25] Global Market Expansion - The company has expanded its global marketing network, establishing subsidiaries or offices in 18 new markets including Russia, Kazakhstan, and Rwanda[6] - The company has a presence in over 80 countries and is accelerating the improvement of its global marketing network[10] - The company expanded its market presence in South America, with sales in the region increasing by 18.5% year-over-year[19] - The company plans to complete the construction of "rapid market entry platforms" in all major global markets except the US, Canada, and Japan by 2024, and in all major global markets by 2025-2029[58] - The company aims to establish its own B-C business teams in at least 25 new target countries by the end of 2024[58] - The company has built a global marketing network with 80 subsidiaries in over 80 countries and is continuously improving its global registration capabilities[58] R&D and Innovation - The company's R&D team added 42 new members, including 5 leading professionals, enhancing overall R&D capabilities[6] - R&D investment in 2022 totaled RMB 320 million, accounting for 3.1% of total revenue[19] - The company's R&D personnel increased by 105.24% from 248 in 2021 to 509 in 2022, with the proportion of R&D personnel rising from 7.74% to 13.70%[84] - R&D investment in 2022 was RMB 335,089,330.53, accounting for 2.32% of operating revenue, compared to 3.19% in 2021[85][86] - The company focuses on R&D and innovation in advanced manufacturing of active ingredients, aiming to achieve global leadership in scale and technology for selected active ingredients[57] - The company has developed a platform technology and R&D team capable of rapidly developing formulations that meet global market and customer needs, characterized by speed, cost-effectiveness, compliance with regulations, and global leadership in the industry[57] Acquisitions and Strategic Investments - The company acquired Spanish company Sarabia, gaining 131 EU registrations[6] - The company completed the acquisition of Spanish company Sarabia and expanded its factory area in Argentina and Ningxia[8] - The company completed the acquisition of a biotech firm, enhancing its capabilities in pesticide formulation[19] - The company completed the acquisition of Exclusive Sara bia, S.A. for 228,444,871.68 yuan, acquiring 100% of its equity[95] - The company invested 98,574,267.32 yuan in the construction of a 1000-ton high-efficiency low-toxicity herbicide project, with a cumulative investment of 331,026,126.10 yuan and a project progress of 95%[96] - The company invested 78,848,427.23 yuan in the 6000-ton/year small-tonnage phenoxycarboxylic acid project, with a project progress of 90%[97] Environmental and Safety Compliance - The company has achieved significant breakthroughs in environmental protection and production efficiency, such as reducing water usage, avoiding toxic byproducts, and improving energy efficiency in herbicide production[45] - The company holds valid environmental permits, safety certifications, and hazardous chemical registrations across all major production facilities[50] - The company strictly complies with environmental protection laws and regulations, including the Environmental Protection Law of the People's Republic of China (2015)[172] - The company's environmental compliance rate across all monitored pollutants and facilities remains at 100%, with no reported instances of exceeding emission limits[174][175][176] - The company invested 12.4296 million yuan in safety production, accounting for 0.16% of its operating revenue[190] - The company has implemented a comprehensive safety management system, including regular safety meetings, inspections, and emergency drills[189] Financial Performance and Investments - Total assets as of December 31, 2022, amounted to RMB 15.67 billion, a 10.8% increase from the previous year[19] - Total assets at the end of 2022 were 11.60 billion yuan, a 12.48% increase compared to 10.31 billion yuan at the end of 2021[25] - The company plans to invest RMB 500 million in new production facilities in 2023[19] - The company's investment amount for the reporting period was 676,911,063.32 yuan, an increase of 23.05% compared to the same period last year[94] - The company raised 1,428,809,300 yuan through its initial public offering in 2021, with 85.82% of the funds already allocated or changed in use[102] - The company's total derivative investment at the end of the period was 0 yuan, accounting for 0.00% of the company's net assets[99] Product and Market Performance - Herbicide sales accounted for 84.95% of total revenue, with a year-on-year growth of 53.68%[68] - Overseas revenue accounted for 97.94% of total revenue, with a year-on-year increase of 49.25%[68] - New product launches contributed approximately 12% to total revenue in 2022[19] - Revenue from herbicide products was 12.28 billion yuan, up 53.68% year-on-year, with a gross profit margin of 19.74%[70] - Sales volume in the chemical industry increased by 16.47% year-on-year to 290,021 tons/thousand liters[74] - The global crop protection market experienced strong demand in 2022 due to high prices of major agricultural commodities and good grower profits[40] Corporate Governance and Leadership - The company has a board of 9 directors, including 3 independent directors, ensuring compliance with legal and regulatory requirements[125] - The company implemented its first restricted stock incentive plan during the reporting period to enhance incentives for senior management and core personnel[126] - Total remuneration for directors, supervisors, and senior management in 2022 was RMB 8.236 million[143] - Chairman Wang Wencai received a pre-tax remuneration of RMB 1.9817 million[144] - The company's core team has over 20 years of experience in the crop protection industry, with deep expertise and practical experience in global markets and trends[55] - The company maintains independence in business, personnel, and operations, with a complete business chain and independent procurement and sales systems[128] Employee and Training Initiatives - Employee headcount increased by 8% to 3,500 employees globally[19] - Total number of employees at the end of the reporting period is 3,715, with 1,735 in the parent company and 1,980 in major subsidiaries[153] - The company focuses on employee training, including strategic management, global operations, risk control, and leadership enhancement programs[156] - Training initiatives include technical backbone growth plans, manufacturing training camps, and marketing training camps[156] - New employee training includes onboarding programs, cross-department rotations, and one-on-one mentoring[156] - The company collaborates with consulting firms like Bester, Deloitte, and Korn Ferry for employee development[156] Shareholder and Investor Relations - The company held 7 shareholder meetings during the reporting period, all conducted in compliance with legal requirements[125] - The company disclosed 4 periodic reports and 151 temporary announcements during the reporting period, ensuring timely and accurate information disclosure[127] - The company implemented a cash dividend policy, distributing RMB 8.33 per 10 shares, totaling RMB 230,057,940 for the year 2021[157] - The company proposed a cash dividend of RMB 16.30 per 10 shares for 2022, amounting to RMB 451,698,662.72, representing 100% of the total profit distribution[159] - The company granted 493,190 second-class restricted shares to 153 eligible employees at RMB 25.06 per share on November 3, 2021[160] - The company's major shareholders, including Shandong Runyuan, KONKIA, and Shandong Runnong, have committed to not transferring or entrusting others to manage their shares for 36 months after the company's IPO[197] Risk Management and Compliance - The company faces environmental protection risks due to its chemical manufacturing processes and is increasing investments in green technologies and pollution control[120] - The company is addressing safety risks by improving automation, enhancing employee training, and strengthening safety management systems[120] - The company is exposed to risks from policy changes in major pesticide-importing countries and is actively monitoring and adapting to these changes[121] - The company is managing foreign exchange risk through hedging and other financial instruments to mitigate the impact of currency fluctuations on its international sales[122] - The company's internal control system has been continuously improved and optimized, with no major defects found in financial or non-financial reporting as of the evaluation report date[165][169] - The company's internal control evaluation report and audit report were disclosed on March 25, 2023, with a standard unqualified opinion issued by the auditor[167][170]

Group 1: Market Overview - The EU crop protection market is valued at approximately $9 billion, characterized by high profits but complex registration rules and significant investment risks [4] - The market is relatively closed, with most products' Task Forces not open to new entrants, leading to high investment and time requirements for new players [4] - The EU has stringent assessments for different active ingredients, with policies on bans and restrictions ahead of global markets, resulting in rapid growth for biopesticides [4] Group 2: Company Operations in the EU - Since 2016, the company has invested in equivalent recognition of active ingredients in the EU, obtaining about 80 such recognitions and continuously working on more [4] - In 2022, the company's EU business scale was approximately $16 million, still in the early stages [4] - The company has initiated the registration of specific formulations in some EU countries since 2020, which is still ongoing [4] Group 3: Acquisition of Sarabia - The acquisition of Sarabia is part of the company's strategic plan to enhance its global marketing network, with the EU being a key high-value market [5] - Acquiring Sarabia will help the company join more active ingredient Task Forces, reducing investment risks and accelerating product portfolio expansion [5] - Sarabia's existing team and brand presence in Spain will facilitate market expansion and product distribution [5] Group 4: Financial Aspects of the Acquisition - The company re-engaged with Sarabia after a previous agreement with another buyer was terminated due to the Russia-Ukraine conflict [5] - The acquisition price is deemed reasonable based on financial models from Deloitte regarding the EU crop protection market [5] - The price does not account for Sarabia's significant growth potential in surrounding markets and post-acquisition integration growth [5] Group 5: Integration Management Post-Acquisition - Sarabia's small team structure aligns well with the company's culture, facilitating quick integration [6] - The company has prior successful experiences in integrating small teams in Australia and Argentina [6] - Existing partnerships with over 10 local joint ventures abroad provide a solid foundation for effective collaboration and operation [6] Group 6: Industry and Company Performance - In Q4 2021, the industry saw a surge in product prices due to energy control measures, leading to strong sales across crop protection companies [7] - In Q4 2022, the market faced downward pressure due to increased supply from expanded production capacities, currency depreciation, and demand-side inventory reduction [7] - The company has not experienced a downturn in Q4 2022, benefiting from a well-implemented strategic plan and a diverse product portfolio [7] Group 7: Future Growth Strategies - The company exceeded its original performance targets for 2022 due to rising product prices and faster-than-expected market expansion [7] - Key tasks for sustained growth in 2023 include building an excellent market team, expanding TO C companies, and exploring new markets [7] - The company emphasizes a "light structure, fast response" approach to remain competitive in the non-patented crop protection market [7] Group 8: Market Entry Considerations - The Chinese market is highly competitive, with the domestic crop protection market valued at approximately $14.5 billion in 2021, projected to reach $16-21 billion in 2022 [8] - The company plans to expand into the Chinese market through acquisitions rather than direct entry, leveraging local expertise [8] - The company aims to integrate successful domestic TO C methodologies into international markets and promote domestic products globally [8]

Group 1: Company Overview and Strategy - Runfeng Co., Ltd. is a multinational crop protection company from China, actively promoting the globalization of Chinese brands [3] - The mid-term strategic plan (2020-2024) focuses on "doing the right and difficult things, moving towards the high ground of the industrial value chain, and building a complete industrial chain" [3] Group 2: R&D and Manufacturing Innovations - The company has added 41 new technical team members, including 1 PhD and 28 Master's degree holders [3] - A domestic first continuous green process for active ingredient manufacturing is currently in trial operation, with plans for further projects to be implemented by 2022 and 2023 [3][4] Group 3: Global Marketing Network Development - The marketing team has expanded by 20 domestic members and 35 registration team members, including 29 with Master's degrees [4] - New market research has been completed in countries such as Ethiopia, Sudan, and Turkey, with new subsidiaries or offices being established [4] - Global registration expenses increased by approximately 25 million, with 167 new overseas registrations obtained by July 2021 [4] Group 4: Financial Performance - In the first half of 2021, the company achieved sales revenue of 4.014 billion, a year-on-year increase of 12.03%, and a net profit of 275 million, up 1.87% [4] Group 5: Challenges and Responses - The company faces challenges with rising shipping costs, which have extended order delivery times from 45 days to 60 days, impacting profit margins [5] - To mitigate shipping cost increases, the company has adopted various measures, including expanding alternative shipping channels and adjusting pricing terms [5] Group 6: Competitive Advantages - The company's global registration capability is a unique competitive advantage, allowing for efficient decision-making and market control [6] - The combination of traditional export models and overseas self-registration models enhances brand influence and profitability [6][7]