Financial Performance - Fufeng Group reported a turnover of RMB 28,000 million for the first half of 2023, a significant increase compared to RMB 24,000 million in the same period of 2022, representing a growth of approximately 16.67%[4] - The profit attributable to shareholders for the first half of 2023 was RMB 4,000 million, up from RMB 3,500 million in the first half of 2022, indicating a growth of about 14.29%[4] - The Group's revenue increased by 5.0% to approximately RMB13,580.1 million in the Period, driven by higher contributions from food additives, colloid, and high-end amino acid segments[8] - Overall gross profit decreased by 17.4% to approximately RMB2,956.8 million, primarily due to declines in the gross profit of food additives and animal nutrition segments[8] - Profit attributable to shareholders decreased by 24.1% to approximately RMB1,537.9 million in the Period[8] - The company's revenue for the six months ended June 30, 2023, was RMB 13,580,093, an increase from RMB 12,930,797 in the same period of 2022, reflecting a growth of approximately 5.02%[72] - Gross profit for the same period was RMB 2,956,760, down from RMB 3,580,620 in 2022, indicating a decrease of approximately 17.38%[72] - Operating profit decreased to RMB 1,731,961 from RMB 2,721,900 year-on-year, representing a decline of approximately 36.5%[72] - Profit for the half-year decreased to RMB 1,537,904, down 24.1% from RMB 2,026,006 in 2022[74] - Total comprehensive income attributable to shareholders for the half-year was RMB 1,535,044, a decline of 24.2% compared to RMB 2,026,006 in 2022[74] Segment Performance - Revenue from the food additives segment increased by 8.1% to approximately RMB6,558.5 million, mainly due to stable contributions from MSG and increased revenue from starch sweeteners[15] - Gross profit from the food additives segment decreased by 23.5% to approximately RMB971.8 million, with a gross profit margin of 14.8%, down 6.1 percentage points from the Corresponding Period[15] - Revenue from the animal nutrition segment dropped by 14.0% to approximately RMB4,090.7 million, attributed to increased competition and oversupply in the market[18] - Gross profit from the animal nutrition segment decreased by 57.5% to approximately RMB594.5 million, with a gross profit margin of 14.5%, down 14.9 percentage points from the Corresponding Period[19] - Revenue of the high-end amino acid segment increased by 54.7% to approximately RMB827.4 million, driven by increased sales volume[22] - Gross profit of the high-end amino acid segment rose by 40.2% to approximately RMB298.8 million, with a gross profit margin of 36.1%, down 3.8 percentage points[22] - Colloid segment revenue increased by 73.6% to approximately RMB1,632.3 million, primarily due to higher sales volume and ASP of xanthan gum, which was RMB40,864 per tonne, up 44.2%[24] - Gross profit of the colloid segment surged by 109.8% to approximately RMB997.4 million, with a gross profit margin of 61.1%, up 10.5 percentage points[24] Market Conditions - The average selling price (ASP) of MSG in the first quarter of 2023 was approximately RMB 9,435 per tonne, while it dropped to RMB 8,667 per tonne by the end of the second quarter due to increased supply and weak demand[5] - The ASP of threonine and lysine increased in the second quarter of 2023 due to production inspections and maintenance by some suppliers, which limited market supply[6] - China's GDP growth was recorded at 4.5% in Q1 2023 and 6.3% in Q2 2023, averaging 5.5% for the first half of the year, although it was lower than expected[5] - The International Monetary Fund forecasts China's GDP growth at 5.2% for 2023, reflecting ongoing economic recovery challenges[5] - Corn prices fluctuated between RMB 2,636 to RMB 2,816 per tonne during the period, with supply at approximately 188 million tonnes and demand at 116 million tonnes[5] - Coal supply in China increased by 4.4% to approximately 2.3 billion tonnes, while coal imports surged by 93% to around 222 million tonnes during the same period[5] Financial Position and Liquidity - As of June 30, 2023, the Group's total assets amounted to approximately RMB26,888.1 million, an increase from RMB26,388.6 million as of December 31, 2022[38] - The total debts of the Group were approximately RMB5,971.8 million as of June 30, 2023, down from RMB6,026.7 million as of December 31, 2022, resulting in a gearing ratio of approximately 22.2%[38] - The Group had a net cash inflow of approximately RMB1,332.0 million from operating activities during the Period, compared to RMB1,149.7 million in the corresponding period[37] - The Group's net unrestricted cash after short-term bank borrowings was approximately RMB1,934.3 million as of June 30, 2023, up from RMB1,639.5 million as of December 31, 2022[37] - The Group's total cash and bank balances were approximately RMB7,433.2 million as of June 30, 2023, down from RMB7,639.5 million as of December 31, 2022[37] - The Group maintained a healthy liquidity position throughout the Period, supported by cash generated from operations and bank borrowings[37] - The Group's current ratio was 1.79 times, an increase from 1.69 times as of December 31, 2022[37] Investments and Expansion Plans - The Group plans to expand MSG capacity in China by adding 400,000 tonnes at the Hulunbeier Base, expected to launch in Q4 2023[45] - The Group is conducting feasibility studies for establishing production bases in the U.S. and Europe despite delays in the U.S. project[45] - The Group has established three regional marketing centers in the U.S., Netherlands, and Vietnam to serve overseas customers directly[45] Employee and Governance - As of June 30, 2023, the Group employed approximately 16,500 employees[48] - The annual remuneration for Executive Directors was increased effective April 1, 2023, with Mr. Li Xuechun receiving RMB1,428,000[51] - The company has complied with the Corporate Governance Code during the reporting period, with all directors attending the annual general meeting except one[54] Financial Risks and Management - Financial risks faced by the Group include market risk, credit risk, and liquidity risk, with no material changes in risk management policies since the end of 2022[103] - Credit risk is managed on a Group basis, with bank deposits held in reputable financial institutions considered to have low credit risk[105] - The Group's activities expose it to various financial risks, including foreign exchange risk and interest rate risk[107] Trade Receivables and Impairment - The gross carrying amount of trade receivables as of June 30, 2023, was RMB 1,067,800,000, compared to RMB 1,094,634,000 as of December 31, 2022[116] - The provision for impairment loss allowances for trade receivables was RMB 33,637,000 for the six months ended June 30, 2023[119] - The expected loss rates for trade receivables were 4.09% for 3 months, 29.14% for 3 to 12 months, and 99.12% for over 12 months as of June 30, 2023[116] - The opening loss allowance for trade receivables was RMB 50,000,000 as of January 1, 2022, and remained unchanged at RMB 50,000,000 as of December 31, 2022, and June 30, 2023[125] Accounting Policies and Standards - The Group has adopted new accounting standards effective from January 1, 2023, including HKFRS 17 and amendments to HKAS 12, impacting deferred tax recognition[90] - The Group's interim financial statements for the six months ended June 30, 2023, reflect significant accounting policies and amendments adopted, including deferred tax assets and liabilities recognition[94] - The cumulative effect of recognizing adjustments as of December 31, 2022, was not material, with no adjustments made to beginning retained earnings[95]
阜丰集团(00546) - 2023 - 中期财报