Financial Performance - Revenue for the six months ended June 30, 2024, reached RMB 10,094.9 million, a 3.7% increase compared to the same period in 2023[4] - Gross profit increased by 7.8% to RMB 6,852.5 million in the first half of 2024, up from RMB 6,359.3 million in 2023[4] - Net profit attributable to shareholders rose by 18.1% to RMB 1,911.5 million in the first half of 2024, compared to RMB 1,618.7 million in the same period last year[4] - Basic and diluted earnings per share increased by 10.5% to RMB 0.21 in the first half of 2024, up from RMB 0.19 in 2023[4] - Revenue increased by 3.7% to RMB 10,094.9 million in the first half of 2024 compared to RMB 9,735.2 million in the same period of 2023[14] - Gross profit rose by 7.8% to RMB 6,852.5 million, with gross margin improving from 65.3% to 67.9% due to growth in the Starry Flight product series[16] - Net profit attributable to shareholders increased by 18.1% to RMB 1,911.5 million, with a profit margin of 18.9%[13] - Pre-tax profit increased by 24.4% from RMB 2,435.0 million in the first half of 2023 to RMB 3,029.4 million in the first half of 2024[22] - Net profit for the period grew by 18.1% from RMB 1,618.7 million in the first half of 2023 to RMB 1,911.5 million in the first half of 2024[24] - Revenue for the six months ended June 30, 2024, increased to RMB 10,094,947 thousand, up 3.7% from RMB 9,735,225 thousand in the same period last year[88] - Gross profit rose to RMB 6,852,455 thousand, a 7.8% increase compared to RMB 6,359,266 thousand in 2023[88] - Net profit attributable to owners of the parent company reached RMB 1,875,011 thousand, up 10.6% from RMB 1,695,913 thousand in the previous year[88] - Total comprehensive income for the period was RMB 1,886,699 thousand, compared to RMB 1,747,812 thousand in 2023[89] - Earnings per share (basic and diluted) for the period were RMB 0.21, compared to RMB 0.19 in the same period last year[88] - The company's profit before tax for the six months ended June 30, 2024, was RMB 3,029,435,000, an increase from RMB 2,435,048,000 in the same period in 2023[93] - Net cash generated from operating activities for the six months ended June 30, 2024, was RMB 1,567,971,000, up from RMB 1,136,562,000 in the same period in 2023[93] - The company's pre-tax profit for the six months ended June 30, 2024, was RMB 3,242,492 thousand, compared to RMB 3,375,959 thousand in the same period in 2023, reflecting a decrease of 3.9%[108] - The company's profit attributable to ordinary equity holders for the six months ended June 30, 2024, was RMB 1,875,011 thousand, compared to RMB 1,695,913 thousand in the same period in 2023[115] Market and Industry Trends - The number of newborns in China decreased to approximately 9.0 million in 2023, down from 10.94‰ in 2018, with the number of children aged 0-3 dropping to 28.5 million[5] - China's per capita disposable income reached RMB 39,218 in 2023, with a compound annual growth rate of 6.8% from 2018 to 2023, driving demand for premium infant formula products[5] - The Chinese government's supportive policies, such as the "Three-Child Policy" and stricter national safety standards for infant formula, are expected to stabilize the market[6][7] - The premium infant formula segment is expected to grow due to urbanization, rising disposable income, and increased health awareness[5] Operational Highlights - The company's offline sales network generated 76.8% of total dairy product revenue, with over 2,800 distributors covering more than 80,000 retail outlets[9] - The company's production capacity reached over 363,000 tons annually, supported by 11 production facilities, including a newly licensed infant formula facility in Canada[10] - The company acquired over 1,430,000 new customers through approximately 460,000 face-to-face seminars held in the first half of 2024[11] - Nutritional supplement revenue from Vitamin World USA contributed RMB 81.3 million, accounting for 0.8% of total revenue[12] - Sales cost decreased by 4.0% to RMB 3,242.5 million, mainly due to lower raw material prices[15] - Sales and distribution expenses increased by 2.2% to RMB 3,535.4 million, driven by higher online and promotional activity costs[18] - Administrative expenses decreased by 2.5% to RMB 738.7 million, primarily due to reduced R&D costs[19] - The company's inventory decreased by RMB 102,725,000 in the six months ended June 30, 2024, compared to a decrease of RMB 14,134,000 in the same period in 2023[93] - Trade receivables and bills receivable decreased by RMB 123,240,000 in the six months ended June 30, 2024, compared to an increase of RMB 88,937,000 in the same period in 2023[93] - The company's depreciation of property, plant, and equipment increased to RMB 298,677,000 in the six months ended June 30, 2024, from RMB 259,403,000 in the same period in 2023[93] - The company's interest income increased to RMB 180,525,000 in the six months ended June 30, 2024, from RMB 151,047,000 in the same period in 2023[93] - The company's income tax paid increased to RMB 1,555,491,000 in the six months ended June 30, 2024, from RMB 1,317,360,000 in the same period in 2023[93] - Investment activities resulted in a net cash outflow of RMB 363.866 million in the first half of 2024, compared to a net cash inflow of RMB 2.311 billion in the same period of 2023[94] - The company purchased structural deposits worth RMB 4.645 billion in the first half of 2024, a significant increase from RMB 2.42 billion in the same period of 2023[94] - Redemption of structural deposits generated RMB 4.05 billion in cash inflow in the first half of 2024, down from RMB 5.263 billion in the same period of 2023[94] - The company's cash and cash equivalents decreased by RMB 203.744 million in the first half of 2024, compared to an increase of RMB 2.014 billion in the same period of 2023[94] - The company's cash and cash equivalents balance stood at RMB 7.21 billion as of June 30, 2024, down from RMB 7.581 billion as of June 30, 2023[94] - The company operates in two reportable segments: raw milk production and sales, and dairy products and nutritional supplements production and sales[98] - Total revenue for the six months ended June 30, 2024, reached RMB 10,094,947 thousand, compared to RMB 9,735,225 thousand in the same period in 2023, representing a 3.7% increase[99][104] - Revenue from external customers in Mainland China increased to RMB 9,987,364 thousand in 2024 from RMB 9,629,346 thousand in 2023, a 3.7% growth[102][105] - Revenue from the United States decreased to RMB 81,305 thousand in 2024 from RMB 105,879 thousand in 2023, a 23.2% decline[102][105] - Revenue from Canada was RMB 26,278 thousand in 2024, compared to no revenue reported in 2023[102][105] - Segment profit for the dairy products and nutritional supplements segment increased to RMB 2,894,421 thousand in 2024 from RMB 2,561,633 thousand in 2023, a 13% growth[99][101] - Total assets as of June 30, 2024, were RMB 35,609,185 thousand, slightly lower than RMB 36,194,678 thousand as of December 31, 2023[99][101] - Total liabilities as of June 30, 2024, decreased to RMB 8,565,478 thousand from RMB 9,860,332 thousand as of December 31, 2023, a 13.1% reduction[99][101] - Bank interest income increased to RMB 138,364 thousand in 2024 from RMB 112,069 thousand in 2023, a 23.5% increase[99][106] - Government grants related to income decreased to RMB 401,255 thousand in 2024 from RMB 517,622 thousand in 2023, a 22.5% decline[106] - The company recognized an impairment loss of RMB 85,925 thousand on property, plant, and equipment, and right-of-use assets due to losses incurred by a subsidiary[109] - Financial costs for the six months ended June 30, 2024, amounted to RMB 26,236 thousand, a slight decrease from RMB 27,347 thousand in the same period in 2023[110] - The company's tax expense for the six months ended June 30, 2024, was RMB 1,117,984 thousand, up from RMB 816,366 thousand in the same period in 2023[112] - The company acquired property, plant, and equipment worth RMB 332,733 thousand during the six months ended June 30, 2024, slightly lower than RMB 342,296 thousand in the same period in 2023[117] - The total number of dairy cows owned by the company as of June 30, 2024, was 109,696, an increase from 102,497 as of December 31, 2023[119] - The total value of dairy cows as of June 30, 2024, was RMB 2,304,520 thousand, compared to RMB 2,235,220 thousand as of December 31, 2023, showing an increase of RMB 69,300 thousand[123][124] - The value of lactating cows increased to RMB 1,230,810 thousand as of June 30, 2024, from RMB 969,000 thousand as of December 31, 2023, reflecting a growth of RMB 261,810 thousand[124] - The total inventory as of June 30, 2024, was RMB 2,139,247 thousand, a decrease from RMB 2,258,059 thousand as of December 31, 2023, primarily due to a reduction in feed and raw materials[128] - Trade receivables and bills receivable decreased to RMB 308,472 thousand as of June 30, 2024, from RMB 431,184 thousand as of December 31, 2023, indicating improved collection efficiency[129] - The fair value of biological assets classified as Level 3 was RMB 2,304,520 thousand as of June 30, 2024, compared to RMB 2,252,706 thousand as of December 31, 2023[127] - The company no longer held any dairy goats as of June 30, 2024, following the sale of a subsidiary, compared to a total of 4,752 dairy goats as of December 31, 2023[121][122] - The value of work-in-progress inventory increased significantly to RMB 1,054,892 thousand as of June 30, 2024, from RMB 676,838 thousand as of December 31, 2023, reflecting higher production activity[128] - The fair value change minus sales costs resulted in a loss of RMB 331,732 thousand for dairy cows in the first half of 2024, compared to a loss of RMB 731,461 thousand in the same period of 2023[124] - The company's trade receivables aged over three months decreased to RMB 33,058 thousand as of June 30, 2024, from RMB 25,766 thousand as of December 31, 2023, indicating better credit management[130] - Biological assets worth RMB 389,207 thousand were pledged for interest-bearing bank loans as of June 30, 2024, slightly down from RMB 391,283 thousand as of December 31, 2023[127] - Trade payables and bills payable decreased to RMB 1,642,060 thousand as of June 30, 2024, from RMB 1,838,223 thousand as of December 31, 2023[131] - Within trade payables and bills payable, 91.7% (RMB 1,505,086 thousand) were due within three months as of June 30, 2024[132] - Deferred revenue increased to RMB 672,501 thousand as of June 30, 2024, from RMB 632,893 thousand as of December 31, 2023[133] - Contract liabilities decreased to RMB 422,006 thousand as of June 30, 2024, from RMB 683,327 thousand as of December 31, 2023[133] - Capital commitments for construction and purchase of property, plant, and equipment increased to RMB 460,158 thousand as of June 30, 2024, from RMB 294,011 thousand as of December 31, 2023[136] - Sales of raw milk to companies controlled by the controlling shareholder increased to RMB 7,607 thousand in the first half of 2024, compared to RMB 3,183 thousand in the same period of 2023[137] - The total remuneration of key management personnel was RMB 21,913 thousand in the first half of 2024, slightly down from RMB 22,048 thousand in the same period of 2023[139] - Structured deposits increased to RMB 9,405,533 thousand as of June 30, 2024, from RMB 8,670,910 thousand as of December 31, 2023[140] - Interest-bearing bank and other borrowings decreased to RMB 1,267,805 thousand as of June 30, 2024, from RMB 1,377,750 thousand as of December 31, 2023[140] - The fair value of financial assets measured at fair value through other comprehensive income was RMB 1,800 thousand as of June 30, 2024, unchanged from December 31, 2023[143] - The fair value of structured deposits increased to RMB 9,405,533 thousand as of June 30, 2024, up from RMB 8,670,910 thousand as of December 31, 2023[143] - The fair value of interest-bearing bank and other borrowings decreased to RMB 1,260,282 thousand as of June 30, 2024, down from RMB 1,377,054 thousand as of December 31, 2023[145] - A 20% increase or decrease in the price-to-book ratio of comparable companies would result in a corresponding increase or decrease of approximately RMB 360,000 in the fair value of financial assets measured at fair value through other comprehensive income[144] Shareholder and Equity Information - Cold Youbin holds 587,516,458 shares, representing 6.48% of the company's total issued shares, through his controlled company Dasheng Limited[36][37] - Cold Youbin is deemed to have an interest in 3,889,911,881 shares held by Garland Glory Limited through the Cold Family Trust, representing 42.90% of the company's total issued shares[36][37] - Liu Hua holds 345,681,920 shares, representing 3.81% of the company's total issued shares, through the Liu Hua Family Trust[36][37] - Cai Fangliang holds 101,647,734 shares, representing 1.12% of the company's total issued shares, through his controlled company Adroit Shipping Limited[36][37] - Tu Fang'er holds 23,717,804 shares, representing 0.26% of the company's total issued shares, through the J.T. Living Trust[36][38] - Harneys Trustees Limited holds 4,461,740,357 shares, representing 49.21% of the company's total issued shares, as the trustee of the Cold Family Trust and Liu Hua Family Trust[41] - LYB International Holding Limited holds 3,889,911,881 shares, representing 42.90% of the company's total issued shares, through Garland Glory Holdings Limited[41] - Liu Shenghui holds 813,663,014 shares, representing 8.97% of the company's total issued shares, through controlled companies and as the founder of a discretionary trust[41] - Dasheng Limited holds 587,516,458 shares, representing 6.48% of the company's total issued shares, as the beneficial owner[41] - Harneys Trustees Limited holds interests in a total of 4,461,740,357 shares, including 3,889,911,881 shares held by the Leng Family Trust, 345,681,920 shares held by the Liu Hua Family Trust, and 226,146,556 shares held by the Liu Family Trust[42] - The company declared an interim dividend of HKD 0.1632 per share, totaling approximately HKD 1,479,775,478, to be paid by September 30, 2024[48] - The company maintains a dividend policy of distributing no less than 30% of the annual net profit to shareholders, subject to future investment plans[49] - The maximum number of shares that can be issued under the Pre-IPO Share Option Plan is 190,190,704 shares, representing approximately 2.10% of the company's total issued shares as of the date of this interim report
中国飞鹤(06186) - 2024 - 中期财报