Economic Growth and GDP - China's GDP grew by 5.3% and 4.7% in the first and second quarters of 2024, respectively, with an overall growth of 5.0% for the period[4][5] - The global economy is projected to grow by 3.2% in 2024, with China targeting a GDP growth of around 5%[51] Agricultural Production and Prices - The annual output of corn in China in 2024 is expected to reach approximately 292 million tonnes, an increase of about 1.1% compared to 2023[6] - The price of corn decreased by 9.8% from RMB2,572 per tonne in Q4 2023 to RMB2,321 per tonne in Q1 2024, and further decreased by 15.2% to RMB2,318 per tonne in the first half of 2024[6] - Corn and coal prices are expected to remain at low levels due to the harvest season and market conditions[51] Coal Imports and Prices - Coal imports increased by 12.5% to approximately 250 million tonnes in the period, compared to the corresponding period[6] - Average price of coal, a key energy cost, decreased by 7.6% to approximately RMB389 per tonne[9] Food Additives and MSG - The price of MSG decreased by 15.4% to approximately RMB7,899 per tonne in the period[6] - MSG revenue was stable at approximately RMB5,262.0 million, with a 13.8% decrease in ASP to RMB7,040 per tonne and a 22.2% increase in sales volume to 747,431 tonnes[17] - Annual production capacity for MSG remains unchanged at 1,330,000 tonnes, with no change from 2023[32] - New MSG capacity of 400,000 tonnes is still in trial run and not included in current capacity[33] - ASP of MSG and xanthan gum is expected to move within a narrow range, while threonine and lysine prices may remain stable[51] Xanthan Gum and Threonine/Lysine - The price of xanthan gum dropped to approximately RMB25,000 per tonne in the period[7] - Xanthan gum revenue and gross profit declined significantly due to a drop in ASP, while threonine and lysine saw increased ASP and sales volume[9] - The export volume of threonine and 98% lysine increased by 43% and 24% respectively, reaching 362,000 tonnes and 548,000 tonnes in the period[8] - The prices of threonine and 98% lysine in the period were around or over RMB10,000 per tonne[8] - Threonine revenue increased by 29.9% to RMB1,149.3 million, with ASP up 11.3% to RMB9,373 per tonne and sales volume up 16.8% to 122,615 tonnes[17] - Lysine revenue increased by 13.7% to RMB1,032.2 million, with sales volume up 4.2% to 159,784 tonnes[18] Revenue and Profit Trends - The Group's revenue trend shows an increase from RMB13,368 million in 2023 to RMB28,007 million in 2024[8] - Revenue slightly decreased by 1.6% to approximately RMB13,368.0 million, primarily due to declines in the Colloid and Others segments offsetting growth in other segments[9] - Overall gross profit decreased by 22.3% to approximately RMB2,298.1 million, driven by lower contributions from the colloid and food additives segments[9] - Profit attributable to shareholders decreased by 32.3% to approximately RMB1,041.3 million[9] - Revenue for the first half of 2024 was RMB 13,368 million, a slight decrease from RMB 13,580 million in the same period of 2023[88] - Gross profit for the first half of 2024 was RMB 2,298 million, down from RMB 2,957 million in 2023[88] - Operating profit for the first half of 2024 was RMB 1,111 million, compared to RMB 1,732 million in 2023[88] - Net profit attributable to shareholders for the first half of 2024 was RMB 1,041 million, a decrease from RMB 1,538 million in 2023[88] - Basic earnings per share for the first half of 2024 were RMB 0.4131, down from RMB 0.6070 in 2023[88] - Total comprehensive income attributable to shareholders for the first half of 2024 was RMB 1,040 million, compared to RMB 1,535 million in 2023[93] Segment Performance - Food additives segment revenue increased by 5.5% to approximately RMB6,916.9 million, driven by higher contributions from MSG and starch sweeteners[15] - Gross profit of the food additives segment decreased by 21.9% to approximately RMB759.3 million, with a gross profit margin of 11.0%, down 3.8 percentage points[15] - Animal nutrition segment revenue increased by 2.5% to RMB4,194.5 million, with gross profit up 43.6% to RMB853.6 million and gross margin rising 5.9 percentage points to 20.4%[17] - High-end amino acid segment revenue increased by 30.0% to RMB1,075.3 million, with gross profit up 32.5% to RMB395.9 million and gross margin rising 0.7 percentage points to 36.8%[19] - Colloid segment revenue decreased by 44.9% to RMB898.9 million, with gross profit down 64.7% to RMB352.1 million and gross margin falling 21.9 percentage points to 39.2%[20] - Other products revenue decreased by 40.1% to RMB282.4 million, with a gross loss of RMB62.7 million[23] Production Costs and Raw Materials - Average price of corn kernels, a key raw material, decreased by 13.3% to approximately RMB2,078 per tonne[9] - Corn kernels accounted for 58.2% of total production costs, with an average price decrease of 13.3% to RMB2,078 per tonne and total cost increase of 5.7%[26] - Coal accounted for 16.6% of total production costs, with an average unit cost decrease of 7.6% to RMB389 per tonne[29] Financial Performance and Ratios - Total gross profit margin for the period was 17.2%, down from 21.8% in the corresponding period[13][14] - Finance income for the first half of 2024 was RMB 219 million, an increase from RMB 135 million in 2023[88] - Selling and marketing expenses for the first half of 2024 were RMB 939 million, up from RMB 885 million in 2023[88] - Administrative expenses for the first half of 2024 were RMB 473 million, down from RMB 556 million in 2023[88] - Other income for the first half of 2024 was RMB 140 million, compared to RMB 107 million in 2023[88] - Total assets increased to RMB 34,901,139,000 as of June 30, 2024, compared to RMB 32,560,887,000 at the end of 2023, reflecting a growth of 7.2%[96][98] - Cash and cash equivalents rose significantly to RMB 9,837,999,000, up from RMB 6,856,177,000 at the end of 2023, marking a 43.5% increase[96] - Total liabilities increased to RMB 17,356,196,000, up from RMB 15,236,673,000 at the end of 2023, a 13.9% rise[96][98] - Retained earnings grew to RMB 15,808,746,000, compared to RMB 15,580,498,000 at the end of 2023, showing a 1.5% increase[98] - Borrowings under current liabilities surged to RMB 10,902,686,000, up from RMB 9,577,500,000 at the end of 2023, a 13.8% increase[98] - Inventories decreased to RMB 4,799,060,000, down from RMB 6,123,216,000 at the end of 2023, a 21.6% reduction[96] - Total equity slightly increased to RMB 17,544,943,000, compared to RMB 17,324,214,000 at the end of 2023, a 1.3% growth[98] - Deferred income tax assets rose significantly to RMB 30,561,000, up from RMB 8,602,000 at the end of 2023, a 255.3% increase[96] - Contract liabilities increased to RMB 791,030,000, up from RMB 537,011,000 at the end of 2023, a 47.3% rise[98] - Other receivables and prepayments grew to RMB 306,765,000, compared to RMB 237,987,000 at the end of 2023, a 28.9% increase[96] Cash Flow and Dividends - Net cash inflow from operating activities was approximately RMB2,964.8 million, compared to RMB1,332.0 million in the corresponding period[42] - Net cash inflow from operating activities was RMB 2,964,812 thousand, driven by cash generated from operations of RMB 3,272,484 thousand[104] - Net cash outflow from investing activities amounted to RMB 650,275 thousand, primarily due to purchases of property, plant, and equipment of RMB 798,736 thousand[104] - Net cash inflow from financing activities was RMB 631,844 thousand, supported by proceeds from bank borrowings of RMB 9,639,686 thousand[106] - Cash and cash equivalents increased by RMB 2,946,381 thousand, reaching RMB 9,837,999 thousand at the end of the half-year[106] - Dividends paid to shareholders totaled RMB 802,778 thousand, reflecting the company's commitment to shareholder returns[102] - The interim dividend for 2024 includes a basic dividend of 16.0 HKD cents per share and a special dividend of 2.0 HKD cents per share[37] Share Repurchases and Treasury Shares - The company repurchased a total of 4,799,000 shares on the Stock Exchange at an aggregate consideration of approximately HKD 20.0 million before expenses during the period[66] - The company repurchased an additional 1,000,000 shares in July 2024 at an aggregate consideration of approximately HKD 4.3 million before expenses[66] - The company repurchased and canceled treasury shares worth RMB 18,252 thousand, reducing share capital[102] Employee and Executive Compensation - The company had approximately 17,000 employees as of 30 June 2024[54] - The annual remuneration of Executive Directors increased by RMB 763,000 for Mr. Li Xuechun, RMB 433,000 for Mr. Li Deheng, and RMB 388,000 for Mr. Li Guangyu, effective from 1 April 2024[57] Share Options and Equity - The number of share options available for grant under the Share Option Scheme as of 1 January 2024 and 30 June 2024 were 250,473,403 Shares and 249,585,403 Shares respectively, representing approximately 9.9% of the issued Shares[76] - The company granted options to subscribe for an aggregate of 2,200,000 Shares, 2,000,000 Shares, and 888,000 Shares on 31 March 2021, 4 July 2022, and 29 April 2024 respectively to eligible employees[76] - The fair values of the options granted on 31 March 2021, 4 July 2022, and 29 April 2024 were RMB1,164,000, RMB2,589,000, and RMB832,000 respectively[79] - The average share prices for the options granted on 31 March 2021, 4 July 2022, and 29 April 2024 were HKD2.80, HKD4.96, and HKD5.52 respectively[79] - The exercise prices for the options granted on 31 March 2021, 4 July 2022, and 29 April 2024 were HKD2.95, HKD4.96, and HKD5.52 respectively[79] - The expected volatility for the options granted on 31 March 2021, 4 July 2022, and 29 April 2024 were 44.35%, 42.06%, and 40.46% respectively[79] - The expected dividend yields for the options granted on 31 March 2021, 4 July 2022, and 29 April 2024 were 6.93%, 3.76%, and 9.89% respectively[79] - The risk-free rates for the options granted on 31 March 2021, 4 July 2022, and 29 April 2024 were 1.22%, 2.85%, and 4.06% respectively[79] - As of 30 June 2024, Mr. Li Xuechun, an executive Director and the chairman of the company, held 1,000,217,461 Shares, representing 39.69% of the total issued share capital[81] - As of 30 June 2024, Mr. Li Deheng, an executive Director and the chief executive of the company, held 35,320,160 Shares, representing 1.40% of the total issued share capital[81] Tax and Financial Liabilities - Current income tax expense for 2024 was RMB 232,821,000, a decrease from RMB 288,179,000 in 2023[184] - Deferred income tax expense for 2024 was RMB (46,189,000), compared to RMB (68,747,000) in 2023[184] - Withholding tax paid in 2024 was RMB 24,230,000, a significant decrease from RMB 77,750,000 in 2023[184] - U.S. enterprise income tax increased to RMB 12,142,000 in 2024 from RMB 4,738,000 in 2023[184] - The company's subsidiaries in BVI and Cayman Islands are exempted from income tax[185] - Withholding tax rate for dividends from PRC subsidiaries is 10%, but can be reduced to 5% under certain tax treaty arrangements[187] - The company did not provide for withholding tax for the period ended 30 June 2024 as it does not expect PRC subsidiaries to distribute retained earnings[187] - Total financial liabilities due within 1 year are RMB 14,329,086,000, with borrowings accounting for RMB 10,902,686,000[152] - Interest payments on borrowings due within 1 year are RMB 82,212,000[152] - Lease liabilities due within 1 year are RMB 65,000[152] - Total contractual cash flows for financial liabilities are RMB 14,930,220,000[152] Property, Plant, and Equipment - Property, plant and equipment and intangible assets increased to RMB 11,982,098 thousand as of 30 June 2024, up from RMB 9,822,740 thousand as of 30 June 2023[193] - Additions to property, plant and equipment and intangible assets totaled RMB 868,003 thousand for the six months ended 30 June 2024[193] - Depreciation and amortization for property, plant and equipment and intangible assets amounted to RMB 575,683 thousand for the six months ended 30 June 2024[193] - Right-of-use assets increased to RMB 945,283 thousand as of 30 June 2024, compared to RMB 892,752 thousand as of 31 December 2023[197] - Lease liabilities decreased to RMB 117 thousand as of 30 June 2024, down from RMB 565 thousand as of 31 December 2023[197] - Leasehold land-use rights increased to RMB 945,160 thousand as of 30 June 2024, up from RMB 892,235 thousand as of 1 January 2024[199] - Additions to leasehold land-use rights totaled RMB 65,239 thousand for the six months ended 30 June 2024[199] - Depreciation and amortization for leasehold land-use rights amounted to RMB 12,314 thousand for the six months ended 30 June 2024[199] Financial Risk Management - The Group's financial risk management policies remained unchanged since the end of 2023, with exposure to market risk, credit risk, and liquidity risk[122][126] - Credit risk is managed by depositing cash in reputable financial institutions and granting credit to customers with good credit history, typically for no more than 90 days[123][124][128][130] - The Group's trade receivables are subject to the HKFRS 9 simplified approach for measuring expected credit losses, with no significant impairment loss identified[130] - The loss allowance for trade receivables as of 30 June 2024 was RMB 29,672 thousand, with expected loss rates of 1.80% for 3 months, 16.85% for 3-12 months, and 95.43% for over 12 months[135] - The gross carrying amount of trade receivables as of 30 June 2024 was RMB 1,022,458 thousand, with RMB 976,307 thousand within 3 months, RMB 40,632 thousand within 3-12 months, and RMB 5,519 thousand over 12 months[135] - The loss allowance for trade receivables as of 31 December 2023 was RMB 34,538 thousand, with expected loss rates of 2.06% for 3 months, 29.83% for 3-12 months, and 97.63% for over 12 months[135] - The gross carrying amount of trade receivables as of 31 December 2023 was RMB 1,083,530 thousand, with RMB 1,051,258 thousand within 3 months, RMB 27,427 thousand within 3-12 months, and RMB 4,845 thousand over 12 months[135] - The opening loss allowance for trade receivables at 1 January 2023 was RMB 33,297 thousand
阜丰集团(00546) - 2024 - 中期财报