Revenue and Sales Performance - Revenue for the six months ended 30 June 2024 was RMB 6,418.5 million, a decrease of 3.2% compared to RMB 6,633.4 million in the same period in 2023[7] - Raw milk sales revenue reached RMB 5.112 billion, a year-on-year increase of 1.3%[12] - Raw milk sales revenue grew by 1.3% to RMB 5.112 billion, with total raw milk sales volume increasing by 13.4% to 1.4 million tons[14] - Modern Dairy's sales revenue for the first half of 2024 was RMB 6,418.5 million, a year-over-year decrease of 3.2%[53][54] - Raw milk sales revenue increased by 1.3% year-over-year to RMB 5,111.7 million, driven by a 13.4% increase in sales volume to 1,398 thousand tons[53][57] - Revenue for the six months ended 30 June 2024 decreased to RMB 6,418,499 thousand, compared to RMB 6,633,422 thousand in the same period in 2023, representing a decline of 3.2%[191] Profitability and Margins - Cash EBITDA increased by 19.2% to RMB 1,515.0 million, up from RMB 1,271.4 million in the same period in 2023[7] - The Group's raw milk business gross profit margin increased by 2.0 percentage points compared to the same period in 2023[12] - The gross profit margin of raw milk business improved by 2.0 percentage points, with gross profit increasing by RMB 120 million, an 8.4% year-on-year growth[14] - Gross profit for the raw milk business increased by 8.4% year-on-year to RMB1,547.0 million, with gross profit margin rising to 30.3% from 28.3%[70] - Gross profit for integrated dairy farming solutions surged by 38.9% year-on-year to RMB130.8 million, with gross profit margin improving to 10.0% from 5.9%[70] - Gross profit for the six months ended 30 June 2024 increased to RMB 1,677,739 thousand, up 10.3% from RMB 1,520,752 thousand in the same period in 2023[191] Cash Flow and Financial Position - Net cash from operating activities decreased by 81.8% to RMB 397.5 million, down from RMB 2,182.9 million in the same period in 2023[7] - The Group's asset-liability ratio remained stable at 62.7%, with long-term debt accounting for 76.2% of the total debt structure[13] - The Group's financing cost ratio decreased from 3.5% in the same period last year to 3.4% this year[13] - The financing cost rate decreased from 3.5% to 3.4%, and the debt-to-asset ratio remained stable at 62.7%[14] - Net cash inflow from operating activities decreased by RMB1,785.4 million yoy to RMB397.5 million, due to adjustments in working capital management strategy[90] - Net cash inflow from operating activities decreased by RMB1,785.4 million to RMB397.5 million in 2024, compared to RMB2,182.9 million in 2023, due to the expiration of large supply chain finance payments[93] - Net cash outflow from investing activities increased by RMB204.0 million to RMB1,490.2 million in 2024, driven by higher payments for property, plant, and equipment, and increased loans to associates[94] - Net cash inflow from financing activities was RMB2,474.1 million in 2024, a significant turnaround from a net outflow of RMB656.2 million in 2023, primarily due to increased interest-bearing borrowings[95] - Total interest-bearing borrowings increased by 20.3% to RMB13,835.5 million as of 30 June 2024, compared to RMB11,496.7 million as of 31 December 2023[96] - Bank borrowings increased to RMB9,468.4 million as of 30 June 2024, up from RMB7,390.4 million as of 31 December 2023, with interest rates ranging from 1.50% to 4.20%[99] - Other borrowings rose to RMB977.6 million as of 30 June 2024, compared to RMB547.2 million as of 31 December 2023, with interest rates ranging from 3.35% to 6.00%[101] - Long-term bonds decreased slightly to RMB3,389.6 million as of 30 June 2024, down from RMB3,559.0 million as of 31 December 2023[105] - Capital commitments decreased by 67.7% to RMB90.9 million as of 30 June 2024, compared to RMB281.1 million as of 31 December 2023, reflecting cautious investment and strict capital expenditure control[109] - Available and unutilized credit facilities amounted to RMB7,035.8 million as of 30 June 2024, supporting debt repayment and operational needs[89][92] Operational Performance and Efficiency - Herd size increased by 6.3% to 444,859 heads, compared to 418,596 heads in the same period in 2023[7] - Average annualized milk yield per cow increased by 3.2% to 13.0 tons/head/year, up from 12.6 tons/head/year in the same period in 2023[7] - Total milk production increased by 16.1% to 1.45 million tons, compared to 1.249 million tons in the same period in 2023[7] - The average annual milk yield per cow reached 13 tons, a 3.2% year-on-year increase[14] - The Group's total number of dairy cows increased by 6.3% year-on-year to 444,859 heads as of 30 June 2024, with milkable cows accounting for 50.6% of the total, up 1.8 percentage points from 48.8% in 2023[34] - The company operates 42 dairy farms in China, with a total of 444,859 dairy cows, a 6.3% year-on-year increase, and the proportion of mature cows increased to 50.6%, up 1.8 percentage points[35] - The average annual milk yield per milkable cow reached 13.0 tons, a 3.2% year-on-year increase, and the total milk yield was 1,450 thousand tons, a 16.1% year-on-year increase[36][37] - The company has established four forage grass plantation bases covering 66,000 mu, with an annual output of 30,000 tons of high-quality forage grass, and cooperates with third-party companies to improve 15,000 mu of saline-alkali land[41][42] - The company owns five feed production and processing plants in China and jointly operates three feed production plants with large domestic feed companies, with an annual supply capacity of over 200,000 tons of high-quality forage grass[42] - The Aiyangniu e-commerce platform achieved a transaction amount of RMB 17.4 billion in the first half of 2024, with significant growth in both transaction amount and volume[44][45] - The Yunyangniu intelligent digital system covers 457 farms and 1.57 million cows, focusing on digital farming and improving digital and intelligent breeding capabilities[44][45] - The company sold approximately 360,000 units of high-quality frozen semen in the first half of 2024, promoting genetic improvement in dairy cows[46][47] ESG and Sustainability - Modern Dairy maintained a "BBB" investment-grade credit rating from Standard & Poor's for four consecutive years[15][16] - MSCI upgraded Modern Dairy's ESG rating to BBB, marking a three-level improvement within a year[15][16] - Modern Dairy's MSCI ESG rating was upgraded to "BBB," marking a significant three-level jump within a year, and the company was selected into the S&P Global Sustainability Yearbook (China Edition) 2024[48] - Modern Dairy was awarded the "BBB" investment grade rating by Standard & Poor's with a stable outlook, becoming the first dairy farming company globally to achieve this rating[49][50] - Modern Dairy was selected for the S&P Global Sustainability Yearbook 2024, highlighting its achievements in sustainable development[50][51] - The company won the "2024 Digital Innovation Leadership Award" for its digital transformation in production management and the entire industry chain[50][51] - The Group aims to reduce unit carbon emissions by 7%, 15%, and 20% by the end of 2025, 2030, and 2035, respectively, compared to the 2021 baseline[134] - The Group has built a green recycling industrial chain, including forage grass planting, cow breeding, fertilizer treatment, biogas power generation, and fertilizer back to the field[130] - The Group has launched the Dual-carbon Project, setting a quantitative target for carbon intensity emissions by 2035[133] Cost Management and Efficiency - The average unit cost of raw milk before inter-segment offset decreased to RMB2.58/kg from RMB2.95/kg in 2023, with feed costs dropping to RMB2.02/kg from RMB2.39/kg, a year-on-year decrease of RMB0.37/kg[64][67] - The cost of sales for integrated dairy farming solutions decreased by 21.3% year-on-year to RMB1,176.0 million, driven by a reduction in sales scale[65][68] - Total cost of sales decreased by 7.3% year-over-year to RMB 4,740.8 million, primarily due to reduced sales scale in integrated dairy farming solutions[61][62] - Administrative expenses decreased by 5.3% yoy to RMB359.0 million, reflecting cost reduction and efficiency improvement efforts[83] - Finance costs decreased by RMB16.0 million yoy to RMB244.4 million, with interest-bearing borrowings contributing RMB199.9 million[87] Market and Industry Trends - China's raw milk production increased by 3.4% year-on-year in the first half of 2024, but raw milk prices continued to decline[20][22] - China's dairy product imports decreased by 15.6% in volume and 22.4% in value year-on-year in the first half of 2024[21][22] - The average selling price (ASP) of raw milk decreased by 10.5% year-over-year to RMB 3.66/kg due to downward price trends in the domestic raw milk market[57][58] Strategic Initiatives and Business Development - The Group operates 42 farm companies across 13 provinces and autonomous regions, focusing on improving the feeding environment and health of dairy cows to increase the proportion of the core herd[34] - The Group actively eliminated low-yielding and inefficient cows to optimize herd structure and increase dairy cow yield, resulting in significant improvements in key operational indicators[28] - The Group has strengthened quality farm management, focusing on increasing the ratio of core dairy cows and overall health levels, leading to solid development in the raw milk business[28] - The Group continues to explore emerging technologies such as collars, pedometers, and image recognition to improve breeding, health standards, and safety management in farm production[32] - The Group has renovated cowshed equipment, improved ventilation, adjusted feed formulas, and increased feeding frequency to enhance cow comfort and milk production[31] - The Group leverages the "integration of forage grass planting, cow breeding, and milk processing" model, ensuring high nutritional value and freshness of raw milk[30] - The Group has expanded into feeds, forage grass, intelligent digital platforms, and breeding, forming two major business segments: raw milk and integrated dairy farming solutions[26] - The Group is committed to deploying forces throughout the entire dairy value chain, innovating with digital intelligence, and aiming to become a global dairy farming leader[25] - The Group has established long-term strategic cooperation with large dairy manufacturing enterprises to jointly promote the development of the dairy industry[25] - The Group will focus on cost reduction and efficiency enhancement, shifting from "volume-driven profitability" to "value-driven profitability" to achieve sustainable profit growth[138] - The Group aims to lead the dairy industry towards digital innovation and a sustainable development model emphasizing low-carbon and environmentally friendly practices[139] Corporate Governance and Shareholding - Modern Farming Wuhe's total registered capital increased to approximately RMB529 million after the capital injection, with Modern Farming owning 66.1%, China Agricultural owning 25.4%, and Anhui Suida owning 8.5% respectively[116] - The capital injection of RMB600 million by China Agricultural into Modern Farming Wuhe constitutes a deemed disposal of 25.4% equity interest in the subsidiary[110][113] - The Group's capital commitments for property, plant, and equipment decreased by RMB190.2 million (67.7%) to RMB90.9 million as of June 30, 2024, compared to RMB281.1 million as of December 31, 2023[112] - The Group's biological assets were valued at RMB861.7 million, accounts receivable at RMB23.7 million, and real estate at RMB23.6 million as of June 30, 2024, all pledged as security for the Group's borrowings[111] - The Company granted China Agricultural an option to subscribe for shares at an exercise price of HK0.67 per share, determined based on the market price of the Company's shares at the grant date[160] - The trustee of the share award scheme purchased 36,914,000 ordinary shares from the open market at a consideration of HK$27,769,000 (RMB25,281,000) as restricted shares for the scheme[170] - The Company's Board comprised nine Directors as of the interim report date, including two executive Directors, four non-executive Directors, and three independent non-executive Directors[168] - The Company confirmed compliance with the Model Code for securities transactions by Directors, with all Directors adhering to the required standards throughout the period[169] - Mr. Zhang Ping resigned as an executive director and member of the Sustainability Committee of China Mengniu on 26 March
现代牧业(01117) - 2024 - 中期财报