Core Insights - The SIAL International Food Exhibition opened in Shanghai, showcasing the potential of the Chinese food market and the desire for continued cooperation with various countries [1][3]. Group 1: Exhibition Overview - The SIAL exhibition features over 5,000 exhibitors from 75 countries and regions, highlighting China's significant role as a major food import market [3][4]. - The event is co-hosted by the French company Comexposium, the China General Chamber of Commerce, and Beijing Aibo SIAL Exhibition Co., Ltd., emphasizing its international and professional nature [4][5]. Group 2: International Perspectives - Brazilian Ambassador to China expressed optimism about the Chinese market, noting that China is a key importer of Brazilian agricultural products and emphasizing the desire to enhance trade relations [3]. - Spanish officials highlighted the increasing exports of Spanish agricultural products to China, indicating a strong growth potential for Spanish food products in the Chinese market [3]. - French representatives mentioned ongoing explorations of institutional cooperation in agriculture and service trade, with a focus on increasing the presence of high-quality French food products in China [3]. Group 3: Economic Context - The President of the China General Chamber of Commerce stated that various regions and departments in China are implementing consumer promotion policies to stimulate consumption, which is expected to lead to stable growth [4]. - The SIAL exhibition serves as a platform for international food and beverage companies to deepen their engagement in the Chinese market and facilitate the integration of the Chinese food industry into the global market [5].

Industry Background - In 2025, the food industry is influenced by various factors including policy, economy, social structure, and technology, showcasing unique development trends and consumption patterns [2][4] - The government prioritizes "boosting consumption" as a key task, aiming to transition the food industry from "recovery growth" to "high-quality development" [2][4] - The GDP growth for 2024 is projected at 5%, but the food industry's added value has been declining for four consecutive years, indicating structural supply-demand issues [2][4] - The aging population is accelerating, with those aged 65 and above accounting for 15.6% of the population, while urbanization has reached 67%, shifting consumer dietary preferences from "sufficient" to "quality" [2][4] Core Consumption Trends - Six core consumption trends are identified as new directions for industry development: 1. **Diverse Channel Innovations**: 84.2% of consumers are purchasing alternative products, with retailers optimizing supply chains to lower prices and enhance value [3] 2. **Precision Nutrition Products**: New products targeting different age groups, including senior nutrition and children's dietary needs, are emerging [3] 3. **Emotional Value Experiences**: Marketing strategies focus on sensory and situational engagement, enhancing consumer emotional experiences [3] 4. **Key Demographic Opportunities**: Brands are targeting family nutrition, with rapid growth in urban markets and services for overseas tourists [3] 5. **Smart Information Experiences**: AI is being integrated into product development and production, enhancing personalized nutrition services [3] 6. **Green Revolution in Food and Beverage**: Transparency in supply chains and innovations in green packaging are gaining traction, with over 70% of consumers concerned about "no additives" [3] Strategic Focus for 2025 - The food industry must focus on channel efficiency, precision nutrition, and emotional value, leveraging AI and green technologies to address the needs of the aging population and urban-rural integration [4][5] - The transition from scale expansion to value creation is essential for building a sustainable development ecosystem [4][5]

Overview - The food pump industry in China is experiencing significant growth due to rising living standards and increasing demand for food pumps, particularly in emerging sectors like plant-based and functional foods. The market size is projected to reach 10.265 billion yuan in 2024, with a year-on-year growth of 8.42%, and centrifugal pumps accounting for over 50% of the market share [1][14]. Industry Background - The food industry has stringent hygiene and safety requirements, prompting the government to implement and refine regulations and standards. This has led to increased investments in product hygiene design, material selection, and production process control, enhancing overall industry quality. Additionally, government support for technological innovation and industry upgrades is fostering a favorable environment for the food pump sector [6]. Industry Chain - The upstream of the food pump industry includes suppliers of stainless steel, engineering plastics, rubber, and components like motors, control systems, bearings, and seals. These materials must possess corrosion resistance and hygiene characteristics to meet the food industry's specific requirements. The midstream involves the research, development, and manufacturing of food pumps, while the downstream consists of demand markets, primarily food and beverage production companies, catering services, and food storage and logistics [9]. Market Demand - The largest demand for food pumps in China comes from food and beverage production companies, including dairy, beverage, alcohol, seasoning, meat processing, and baked goods. These companies utilize food pumps to transport various raw materials, semi-finished products, and finished goods, such as milk, juice, sauces, and chocolate paste, facilitating processes like transfer, mixing, and filling. The food and beverage industry is projected to have 43,000 large-scale enterprises with a revenue of 9,065.25 billion yuan and a total profit of 643.17 billion yuan in 2024, providing substantial growth opportunities for the food pump industry [12]. Competitive Landscape - The food pump industry in China comprises state-owned enterprises, private companies, and foreign enterprises. Notably, private companies, including Tianjin Huaman Pump Industry Group Co., Ltd., Hebei Hengsheng Pump Industry Co., Ltd., and others, account for over 60% of the market, making them the main players. However, the overall brand concentration in the industry remains low, particularly in county-level markets, indicating a fragmented market structure [16]. Development Trends - The future of the food pump industry in China will see increased automation and intelligence, leveraging IoT, big data, and cloud computing technologies. Food pumps will achieve higher precision, performance, and automation control, enabling automatic adjustments based on production needs and facilitating remote monitoring and fault diagnosis. Additionally, there will be a focus on developing low-noise, low-energy, and corrosion-resistant food pumps, aligning with environmental protection and sustainable development goals [23].

Financial Performance - In 2024, China Foods achieved a revenue of approximately RMB 21.492 billion, with total operating profits reaching RMB 1.866 billion, marking a steady business expansion and record-high profits[33]. - The total assets of China Foods increased by 8.5% from 2023 to 2024, amounting to RMB 17,598 million[9]. - The asset-liability ratio improved by 1.8 percentage points from 2023 to 2024, indicating better financial health[9]. - In 2024, China Foods achieved a revenue of approximately RMB 21.492 billion and an operating profit of RMB 1.866 billion, marking a historical high in profitability[36]. - The overall revenue per unit increased by RMB 1.59, and the price per unit of the main packaging rose by RMB 1.27, leading to a gross profit margin increase of 2.6 percentage points[49]. - The gross profit margin improved by 2.6 percentage points year-on-year, driven by a decrease in procurement prices of major raw materials, except for white sugar[76]. - The average product prices increased, leading to overall revenue remaining largely unchanged year-on-year despite a decrease in sales volume in 2024[109]. - Other income, gains, and losses decreased by 51% year-on-year from RMB 328.4 million in 2023 to RMB 161.9 million in 2024, primarily due to a one-off gain recorded in the previous year[111]. - Income tax expense amounted to RMB 444 million, representing a decrease of 3% compared to 2023[118]. - The company expects aluminum costs to rise in 2025 due to reduced raw material supply, prompting a focus on product structure upgrades and business portfolio optimization to improve gross profit margin[108]. Business Operations and Strategy - The company initiated the construction of a new plant in Shaanxi on January 30, 2024, to support its production capacity[12]. - A specialized operation for production and sales in the Beijing-Tianjin-Hebei region commenced on December 25, 2024, aimed at improving efficiency and profitability[26]. - The innovative business of China Foods reached a scale of RMB 2.5 billion, with smart retail machines generating monthly revenue exceeding RMB 100 million for four consecutive months[54]. - The scale of COFCO Yuexiang Club's omni-channel marketing business exceeded RMB 1 billion, with DTC channel revenue increasing by 88%[54]. - The company plans to deepen the Dingsheng Programme with Coca-Cola to optimize product mix and pricing strategies, aiming for simultaneous growth in scale and profitability[60]. - The company aims to improve customer experience and operational efficiency through restructuring efforts in 2024, focusing on brand, marketing, and supply chain[69]. - The company is committed to achieving sustainable high-quality development and creating long-term value for shareholders through its dual-track strategy of "reshaping + innovation"[62]. - The company is focused on enhancing its market position through strategic appointments and leveraging the extensive experience of its directors[159]. Market and Consumer Trends - The contribution of consumption expenditure to economic growth in 2024 was 44.5%, indicating a strong recovery in consumer confidence and household income[43]. - The Chinese government's focus on boosting domestic consumption is expected to benefit China Foods in 2025, with an emphasis on service and quality consumption[35]. - The Chinese government's policies in 2025 aim to stimulate domestic consumption, which is expected to further boost economic growth and domestic demand[55]. - The sparkling drinks category maintained the highest market share, with new packaging introduced, including a 248 ml pocket bottle[78]. - The "Coca-Cola Creations" platform launched a limited-edition sparkling beverage in collaboration with Oreo, appealing to Generation Z consumers[79]. - The juice category saw improvements in average price, gross profit margin, and profit margin, with a refreshed brand strategy for "Minute Maid"[82]. Corporate Governance and Leadership - The company is committed to high standards of corporate governance to safeguard the interests of shareholders, investors, customers, and staff[186]. - The company complied with all applicable Code Provisions of the Corporate Governance Code throughout the year ended December 31, 2024, except for Code Provision C.2.1 regarding the separation of the roles of chairman and chief executive[188]. - The company promotes a corporate culture focused on consumer-centric values, innovation, and sustainable development[193]. - The board is responsible for formulating overall strategies and policies, reviewing financial performance, and supervising management's performance[198]. - The company has adopted a code for securities transactions by relevant employees, ensuring compliance with the Model Code throughout the year[195]. - The company has a diverse leadership team with expertise in various fields, including finance, quality management, and operational strategy, which supports its growth objectives[161]. Employee and Operational Metrics - The Group employed 17,533 staff as of December 31, 2024, down from 18,889 in 2023[134]. - The Group has established comprehensive policies for employee recruitment, remuneration, and training to ensure sustainable development[136]. - The proportion of controllable business revenue remains at approximately 90% of the overall business, with significant growth in the number of direct service clients[96]. - The company has approximately 10,000 salespersons, with nearly 90% of business coming from controllable customer orders[66]. Environmental and Social Responsibility - In 2024, China Foods activated the "Clean Drinking Water in 24 Hours" emergency mechanism 30 times, delivering 924,496 bottles of drinking water to disaster-stricken areas[22]. - The company received 63 national and provincial-level honorary awards in 2024, with all plants recognized for their water and energy-saving efforts[29]. - The company emphasizes quality improvement, efficiency enhancement, and green operations as part of its business philosophy[193].

中国食品 2024 年业绩小范围交流 20250408 摘要 Q&A 请介绍一下中国食品 2024 年的业绩情况及其主要原因。 中国食品 2024 年全年收入基本持平，略有不到 1%的增长。上半年收入同比下 降接近 10%，但下半年出现显著反弹，实现三位数增长。主要原因包括：第一， 上半年汽水品类需求较弱，导致整体汽水收入下降；第二，去年 PET500 包装的 零售价从 3 元提高到 3.5 元，上半年消费者需要时间接受这一价格调整，但下 半年销量恢复良好。此外，全年毛利率从 35%提升至接近 38%，主要得益于原材 • 中国食品 2024 年汽水品类增长约 2.5%，果汁和水品类有所下降，水品类 下降接近 30%，因可口可乐战略调整，侧重盈利较高的汽水产品，但水产 品对公司仍重要，计划 2025 年保持稳定。 • 预计 2025 年全年整体收入将实现中单位数增长，汽水品类占比超 70%，增 速与整体相近；果汁预计低单位数增长；水平类预计保持稳定；功能饮料 增速可能达三位数，但规模较小影响有限。 • 公司通过改线提升效率，从最初的 10%提高到目前接近 13%，目标是达到 15%。将继续通过提升销售效率、产品 ...

Financial Performance - For the fiscal year ending December 31, 2024, the company's revenue was RMB 21,492 million, representing a slight increase of 0.2% compared to RMB 21,446 million in 2023[4] - The gross profit margin improved to 37.8%, up by 2.6 percentage points from 35.2% in the previous year[4] - Adjusted EBIT for the year was RMB 1,865.9 million, reflecting a growth of 6.2% from RMB 1,757.4 million in 2023[4] - Adjusted EBITDA increased by 4.4% to RMB 2,722.4 million, compared to RMB 2,607.1 million in the prior year[4] - The net profit for the year was RMB 1,422.6 million, an increase from RMB 1,385.6 million in 2023[7] - Basic and diluted earnings per share rose to RMB 30.76, compared to RMB 29.76 in the previous year[7] - Total revenue for 2024 reached RMB 21,491,811 thousand, a slight increase from RMB 21,446,436 thousand in 2023, reflecting a growth of approximately 0.21%[24] - The net profit for the year 2024 reached RMB 860,535,000, an increase from RMB 832,577,000 in 2023, representing a growth of approximately 3.1%[33] - The basic earnings per share for 2024 was RMB 30.76, up from RMB 29.76 in 2023, indicating an increase of about 3.4%[33] Dividends and Shareholder Returns - The company proposed a final dividend of RMB 0.153 per share, up from RMB 0.148 per share in 2023[4] - The company proposed a final dividend of RMB 0.153 per ordinary share for the year ending December 31, 2024, compared to RMB 0.133 per share for the previous year, reflecting an increase of approximately 15%[43] - The company is obligated to withhold a 10% corporate income tax when distributing the final dividend to non-resident corporate shareholders[85] Assets and Liabilities - Cash and cash equivalents increased significantly to RMB 4,014.4 million, up from RMB 2,293.0 million in 2023[11] - Total assets less current liabilities amounted to RMB 10,561.4 million, compared to RMB 10,266.0 million in the previous year[12] - The company reported a net asset value of RMB 10,198.2 million, an increase from RMB 9,686.9 million in 2023[12] - Trade receivables decreased to RMB 361,976,000 in 2024 from RMB 404,506,000 in 2023, a reduction of about 10.5%[39] - The company reported a decrease in trade payables to RMB 802,896,000 in 2024 from RMB 751,893,000 in 2023, an increase of approximately 6.8%[42] Revenue Sources and Trends - Revenue from carbonated beverages was RMB 16,372,978 thousand in 2024, up from RMB 15,973,126 thousand in 2023, indicating a growth of about 2.51%[24] - Other income decreased to RMB 185,207 thousand in 2024 from RMB 264,358 thousand in 2023, representing a decline of approximately 30%[29] - The company reported a net loss of RMB 23,292 thousand from other gains and losses in 2024, compared to a gain of RMB 64,056 thousand in 2023[29] - The overall sales volume decreased by 9.7% year-on-year, while the gross profit margin increased by 2.6 percentage points[55] - Revenue for 2024 remained stable year-on-year despite a decline in sales volume, attributed to an increase in average product prices[69] Operational Developments - The company completed a restructuring involving the acquisition of five subsidiaries for a fair value of RMB 554,179,000, which included cash payment of RMB 124,843,000[45] - The revenue contribution from the five acquired subsidiaries for the year is RMB 32,000 million, with a net profit of RMB 15,290 million[49] - The company aims to enhance product quality and profitability through brand restructuring and supply chain optimization, focusing on high-margin products[52] - The juice category has seen improvements in average price, gross margin, and profit margin, with a unified brand strategy for "Mei Zhi Yuan" launched[58] - The new "LIE SHOU" energy drink brand was introduced, and "Mo Zhua" brand achieved its highest revenue and sales since launch, with double-digit growth in key channels[62] - The company plans to expand its high-end water product offerings, focusing on the health advantages of soda water to improve profitability in the water category[60] Market and Economic Environment - The overall economic environment in China shows a GDP growth of 5.0% year-on-year, with stable sales in the non-alcoholic beverage industry[54] - The company anticipates adverse impacts from external environmental changes in 2025, but expects long-term economic stability and growth potential in China[68] Employee and Governance - The company employed 17,533 employees as of December 31, 2024, a decrease from 18,889 employees in the previous year[79] - The company has established a comprehensive set of policies regarding employee rights and development, ensuring non-discrimination and the prohibition of child labor[80] - The company has committed to providing a robust training system to enhance employees' skills and knowledge for mutual growth[80] - The board of directors includes a mix of executive and non-executive members, ensuring diverse governance[96] Compliance and Reporting - The company has adopted the principles of the Corporate Governance Code as per the Hong Kong Stock Exchange, with a recent adjustment to comply with the separation of roles between the chairman and the CEO[90] - The audit committee reviewed the consolidated financial statements for the year ending December 31, 2024, discussing matters related to audit, internal controls, and financial reporting[94] - The company confirmed compliance with the standards set forth in the Listing Rules regarding directors' securities transactions throughout the year[91] - The annual performance announcement will be published on the Hong Kong Stock Exchange and the company's website[96] - The 2024 annual report will be released at an appropriate time on the aforementioned websites and sent to shareholders[96]

20 March 2025 | 4:39AM HKT China Spirits Tracker: China Food & Liquor Trade Fair Part I: Wuliangye focusing on comprehensive reform and development of white space Wuliangye - Navigating the Comprehensive Reform On Mar 19, we attended investor meetings with Wuliangye during China Food & Liquor Trade Fair. Key takeaways include: 1) More clarity on Wuliangye's organizational reform: Wuliangye believes that its latest structural reform is a fundamental shift which focuses on optimizing sales management and chan ...

Business Operations - China Foods holds an exclusive franchise to manufacture and distribute Coca-Cola products across 19 provincial-level regions, covering approximately 50% of mainland China's population[10]. - The company has around 10,000 salespersons serving over 2.5 million customers, with controllable business orders accounting for nearly 90% of overall business[10]. - The smart retail business achieved rapid revenue growth during the interim period, with equipment units ranking among the best in the industry[11]. - COFCO Yuexiang Club saw a year-on-year revenue increase, with gross profit margins improving and its D2C business more than doubling[11]. - The sparkling drinks category maintained a market share of over 50% in operating regions, outperforming major competitors[24]. - The ready-to-drink coffee segment experienced a double-digit year-on-year revenue increase, driven by the introduction of new flavors like Vanilla Cheesecake Latte and Hazelnut White Chocolate Latte[31][32]. - The smart retail business expanded its device count, achieving nationwide coverage across 31 provinces and over 280 cities, with continued rapid year-on-year revenue growth[35][36]. Financial Performance - In the first half of 2024, China Foods reported a revenue of RMB 11,335.1 million, a decline of 9.0% compared to RMB 12,455.9 million in the same period of 2023[21]. - The gross profit margin decreased by 0.9 percentage points year-on-year, reflecting challenges in the sparkling drinks category due to reduced demand[21]. - The overall revenue decreased by 9.0% year-on-year, primarily due to a 15.7% drop in sales volume[38][42]. - Other income, gains, and losses decreased by 41% year-on-year, largely due to a one-off gain from asset disposal recorded in the previous period[40][44]. - The company reported a profit and total comprehensive income of RMB 5,077,951 for the period ended June 30, 2024, up from RMB 4,694,741 for the same period in 2023, reflecting a growth of approximately 8.2%[94]. - The profit before tax for the first half of 2024 was RMB 1,269,297,000, compared to RMB 1,327,611,000 in the first half of 2023, indicating a decrease of about 4.4%[146]. - Profit before tax was RMB 1,269,297, a decrease of 4.4% from RMB 1,327,611 in the prior year[86]. Market Trends - China's GDP reached RMB 61.68 trillion in the first half of 2024, with a year-on-year growth of 5.0%[17]. - Per capita consumption expenditure in China grew by 6.7% year-on-year, supporting overall sales in the non-alcoholic ready-to-drink sector[17]. Product Development - The "Minute Maid" brand launched a new visual identity system to strengthen consumer connections, enhancing brand image and product packaging[26]. - The new "Chun Yue pH9.0+ White Peach Flavoured Soda Water" was introduced, achieving tens of millions in revenue shortly after launch[28]. - The newly launched "Pure Joy pH9.0+ Sparkling Water" and "LOHAS Natural Sparkling Water" have achieved significant sales, with the latter becoming a million-unit seller within months of its launch[30]. - China Foods plans to enhance the profitability of its water segment by promoting mainstream and premium water products[29]. Corporate Governance - The Company complied with the Corporate Governance Code throughout the reporting period, except for specific provisions C.2.1 and F.2.2[66]. - The Chairman and Chief Executive roles are held by the same individual, Mr. Qing Lijun, which is an exception to the governance code[67]. - The new appointments and resolutions reflect the company's ongoing commitment to corporate governance and transparency[75]. Financial Position - As of June 30, 2024, the Group's net assets attributable to owners of the parent were approximately RMB6,167 million, an increase from RMB6,015 million as of December 31, 2023[47]. - The Group's net cash position was approximately RMB3,662 million as of June 30, 2024, up from RMB2,293 million as of December 31, 2023, with a gearing ratio of nil[47]. - Current assets increased to RMB 6,673,432, up from RMB 5,975,180 as of December 31, 2023[88]. - Total equity attributable to owners of the Company rose to RMB 6,166,675, compared to RMB 6,015,432 at the end of 2023[90]. - The total equity as of June 30, 2024, was RMB 10,203,025, compared to RMB 9,405,608 as of June 30, 2023, indicating an increase of about 8.5% year-over-year[94]. Employee and Management - The Group employed 17,821 staff as of June 30, 2024, down from 18,889 as of December 31, 2023[50]. - The Group emphasizes a "contributor-oriented" talent development concept, providing a robust career development platform and comprehensive training[54]. - The total compensation to key management personnel was RMB 8,423,000, a decrease of 8.3% from RMB 9,185,000 in the same period of 2023[157]. Cash Flow and Investments - For the six months ended June 30, 2024, the net cash from operating activities was RMB 1,639,722, an increase from RMB 1,478,089 in the same period of 2023, representing a growth of approximately 10.9%[96]. - The net cash used in investing activities for the six months ended June 30, 2024, was RMB 211,619, slightly higher than RMB 202,245 in the same period of 2023[96]. - Cash and cash equivalents at the end of the period on June 30, 2024, were RMB 3,661,582, compared to RMB 2,276,257 at the end of June 30, 2023, showing a significant increase of approximately 60.8%[98]. Shareholder Information - As of June 30, 2024, China Foods (Holdings) Limited holds 2,072,688,331 shares, representing approximately 74.10% of the issued shares[60]. - The total number of issued shares of the Company as of June 30, 2024, is 2,797,223,396 shares[65]. - The Group's weighted average number of ordinary shares remained constant at 2,797,223,396 for both periods[122][126].

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 11,335.1 million, a decrease of 9.0% compared to RMB 12,455.9 million in the same period of 2023[2] - Gross profit margin decreased to 34.6%, down 0.9 percentage points from 35.5% in the previous year[2] - Adjusted EBIT for the period was RMB 1,271.9 million, an increase of 2.8% from RMB 1,237.7 million in 2023[2] - Adjusted EBITDA rose to RMB 1,682.5 million, reflecting a 1.2% increase from RMB 1,662.8 million in the prior year[2] - The company reported a net profit of RMB 965.5 million for the period, down from RMB 1,016.9 million in the same period last year[6] - Basic and diluted earnings per share decreased to RMB 20.21, compared to RMB 21.47 in the previous year[6] - Total revenue for the six months ended June 30, 2024, was RMB 11,335,111,000, a decrease of 9.0% compared to RMB 12,455,896,000 for the same period in 2023[14] - Revenue from carbonated beverages was RMB 8,577,161,000, down from RMB 9,305,769,000, representing a decline of 7.8%[14] - Juice revenue decreased to RMB 1,661,095,000 from RMB 1,931,396,000, a drop of 13.9%[14] - Other income for the six months ended June 30, 2024, was RMB 134,846,000, an increase of 8.5% from RMB 123,985,000 in the same period of 2023[18] - Basic earnings per share for the period were RMB 565,232,000, compared to RMB 600,610,000 for the same period in 2023, reflecting a decrease of 5.9%[25] - The total cost of goods sold for the six months ended June 30, 2024, was RMB 7,423,252,000, compared to RMB 8,067,854,000 in 2023, indicating a decrease of 8.0%[21] - The gross margin for the first half of 2024 decreased by 0.9 percentage points compared to the previous year[38] - In the first half of 2024, the company's revenue decreased by 9.0% year-on-year, primarily due to a 15.7% drop in sales volume[48] - The gross profit margin declined year-on-year, influenced by a significant increase in procurement prices for aluminum cans, while other major raw material prices remained stable[48] Cash and Assets - Cash and cash equivalents increased significantly to RMB 3,661.6 million from RMB 2,293.0 million at the end of 2023[8] - Total assets as of June 30, 2024, were RMB 10,765.8 million, compared to RMB 10,266.0 million at the end of 2023[8] - The company's trade receivables as of June 30, 2024, were RMB 633,739,000, an increase from RMB 369,973,000 as of December 31, 2023[27] - As of June 30, 2024, accounts payable increased to RMB 974,887,000 from RMB 774,354,000 as of December 31, 2023, representing a growth of 25.9%[28] - As of June 30, 2024, the company's cash and cash equivalents totaled approximately RMB 3.662 billion, up from RMB 2.293 billion at the end of 2023[51] - The company has no interest-bearing bank borrowings, maintaining a zero leverage ratio as of June 30, 2024[52] Dividends and Shareholder Returns - The company did not declare an interim dividend for the period[2] - The company declared a final dividend of RMB 413,989,000 for the year ended December 31, 2023, compared to RMB 337,361,000 for the previous year, an increase of 22.7%[24] - The board did not declare an interim dividend for the period ending June 30, 2024, consistent with the previous year[55] Operational Insights - The distribution and selling expenses ratio improved to 22.5%, down from 24.4% in the previous year[2] - The company operates in 19 provincial-level regions in China, covering approximately 50% of the population, with a sales team of about 10,000 serving over 2.5 million customers[34] - The company aims to enhance operational efficiency and profitability through supply chain optimization and digital transformation initiatives[35][36] - The non-alcoholic beverage industry in China showed stable sales performance, with GDP growth of 5.0% year-on-year in the first half of 2024[37] - The company plans to focus on product quality, efficiency improvements, and innovation to achieve sustainable high-quality development[35][36] - The smart retail business expanded its scale, covering over 280 cities across 31 provinces, with revenue maintaining rapid growth[45] Acquisitions and Subsidiaries - The company acquired five subsidiaries for a total consideration of RMB 554,179,000, with cash and cash equivalents amounting to RMB 51,064,000 included in the acquisition[31] - Revenue from the five acquired subsidiaries for the period from January 1, 2023, to June 30, 2023, was RMB 32,000, with a net profit of RMB 8,996,000[33] - The company received cash payments of RMB 63,000,000 related to the acquisition during the interim period[31] Governance and Compliance - The company has adopted the Corporate Governance Code and has complied with all applicable code provisions, except for C.2.1 and F.2.2[55] - The chairman and CEO roles are held by the same individual, Mr. Qing Lijun, which the board believes benefits the execution of business strategies[56] - The board consists of six experienced members, ensuring a balance of power and authority within the management[56] - The interim financial information for the six months ending June 30, 2024, has been reviewed by the company's auditors[58] - The interim report will be published on the company's website and the Hong Kong Stock Exchange's disclosure platform at an appropriate time[59] Employee Matters - As of June 30, 2024, the group employed 17,821 employees in mainland China and Hong Kong, a decrease from 18,889 employees as of December 31, 2023[54] - The company emphasizes the importance of talent development and has established policies to ensure employee rights and non-discrimination[54] - The company provides various employee benefits, including retirement and medical insurance, in compliance with local laws[54]

Financial Performance - In 2023, China Foods reported a revenue of RMB 21,446 million, representing a 2.3% increase from RMB 20,968 million in 2022[6] - Adjusted EBITDA rose by 13.3% to RMB 2,607 million in 2023, compared to RMB 2,302 million in 2022[6] - Earnings per share increased by 26.2% to RMB 29.76 cents in 2023, up from RMB 23.59 cents in 2022[6] - The revenue growth for the company in 2023 was 2.3% year-on-year, while sales volume growth was only 0.5%[90] - The sales volume increased by 0.5% year-on-year, although the gross profit margin declined by 0.6 percentage points due to rising sugar prices[63] - Other income and gains increased by 136.9% year-on-year, primarily due to one-off gains from investment disposals and government grants[92] - Income tax expense amounted to RMB 460 million, reflecting a 13.5% increase, consistent with profit growth[100] - The net assets attributable to owners of the company were approximately RMB 6,015 million, an increase from RMB 5,520 million in the previous year[108] - The company has no interest-bearing bank borrowings as of December 31, 2023, maintaining a nil gearing ratio[108] Market and Product Development - The launch of COFCO "Lohas" Changbai Mountain natural mineral water achieved annual sales of RMB 35.8 million in 2023[20] - The D2C business of COFCO Yuexiang Club recorded a remarkable increase of 76%, providing full-scenario services for consumers[39] - The company launched new products, including "Coca-Cola Strawberry Flavor" and "League of Legends," aimed at enhancing customer experience and targeting the young consumer market[65][66] - The company launched new products, including the sugar-free Minute Maid Bergamot Sparkling Drink, contributing to the growth in the juice segment[72] - The overall sales volume for the water category decreased slightly due to product upgrades and price increases, but new product launches are expected to enhance profitability[75] - The juice segment achieved double-digit revenue growth, driven by strong sales of orange juice and new sparkling fruit drinks[71] - The market share of the ready-to-drink coffee brand Costa exceeded 10%, maintaining its position as the second-largest brand in key markets[77] Operational Efficiency and Supply Chain - The integration of the non-sparkling supply platform was successfully completed, enhancing the overall supply chain strength[11] - China Foods focused on optimizing the supply chain and enhancing operational efficiency through regional integration and centralized procurement[30] - The company completed the acquisition of five subsidiaries from Coca-Cola Bottlers Manufacturing Holdings Limited, enhancing supply chain capacity and improving overall profit margins[53] - The Coca-Cola bottling business has aligned with Coca-Cola on mid-to-long-term development goals, focusing on market share and profitability improvements[44] - The company completed the acquisition of Coca-Cola Bottlers Manufacturing Holdings Limited, enhancing supply chain capabilities and reducing production management costs for non-carbonated beverages[55] Sustainability and Corporate Responsibility - Seven plants received National Green Factory Certification, contributing to sustainability efforts[13] - The management is committed to sustainable development, aiming for low-carbon green development while ensuring product quality and community responsibility[58] - The group maintains a strong focus on employee welfare and sustainable development as a foundation for its long-term growth[121] - The company is committed to achieving high standards of corporate governance to safeguard the interests of shareholders, investors, customers, and staff[172] Employee and Management - The workforce as of December 31, 2023, consisted of 18,889 employees, a decrease from 19,243 in the previous year[116] - The group provides various employee benefits including retirement plans, life insurance, and medical insurance, adhering to local laws and market practices[121] - The company emphasizes talent development and has established policies to ensure employee rights and prevent discrimination based on ethnicity, age, or gender[121] - The company has established a network with local and international stakeholders to enhance its operations and governance[172] Governance and Board Composition - The board currently consists of seven directors, including one executive director, two non-executive directors, and three independent non-executive directors, ensuring a balance of skills and experience for independent decision-making[193] - The board has assessed the independence of all independent non-executive directors and confirmed that they meet the independence criteria set out in the listing rules[194] - The Company has established mechanisms to ensure that at least one-third of the Board members are independent non-executive directors, promoting board independence[198] - The Board adopted a diversity policy in August 2013, emphasizing the importance of various factors such as gender, age, and professional experience in achieving board diversity[199] Future Outlook - In 2024, the company aims to reshape its operational efficiency through rebranding and restructuring its marketing network and supply system[44] - The management anticipates that domestic economic challenges and uncertainties will persist in 2024, but aims to maintain stable performance throughout the year[93] - The company plans to focus on upgrading the product mix and optimizing the business portfolio to improve gross profit margins in 2024[89]