Financial Performance - Revenue decreased by 8.3% year-on-year from RMB 21,310.9 million in 2022 to RMB 19,532.2 million in 2023[8] - Gross profit decreased by 9.2% year-on-year from RMB 13,950.6 million in 2022 to RMB 12,663.4 million in 2023[8] - Net profit decreased by 33.5% year-on-year from RMB 4,948.1 million in 2022 to RMB 3,290.4 million in 2023[8] - Total revenue decreased by 8.3% to RMB 19,532.2 million in 2023 from RMB 21,310.9 million in 2022[33] - Infant formula products revenue declined by 10.3% to RMB 17,876.8 million, accounting for 91.5% of total revenue[33] - Gross profit decreased by 9.2% to RMB 12,663.4 million, with a gross margin of 64.8% in 2023[37] - Net profit attributable to shareholders dropped by 33.5% to RMB 3,290.4 million in 2023[46] - Revenue decreased by 8.3% from RMB 21,310.9 million in 2022 to RMB 19,532.2 million in 2023, primarily due to low birth rates in China and intense industry competition[32] - Gross profit margin decreased from 65.5% in 2022 to 64.8% in 2023, with gross profit declining by 9.2% to RMB 12,663.4 million[30] - Net profit for the year dropped by 33.5% to RMB 3,290.4 million, with a net profit margin of 16.8% in 2023 compared to 23.2% in 2022[30] - Sales and distribution expenses increased by 2.5% to RMB 6,709.1 million, representing 34.3% of total revenue in 2023[30] - Administrative expenses rose by 14.8% to RMB 1,762.0 million, accounting for 9.0% of total revenue in 2023[30] - Other income and gains increased by 21.3% to RMB 1,659.5 million, contributing 8.5% to total revenue in 2023[30] - Sales and distribution expenses increased by 2.5% to RMB 6,709.1 million, mainly due to higher advertising and promotional costs[39] - Administrative expenses rose by 14.8% to RMB 1,762.0 million, driven by increased employee and R&D costs[41] - Net cash generated from operating activities decreased to RMB 4,145.3 million in 2023 from RMB 6,279.1 million in 2022[54] - Capital expenditures amounted to RMB 1,510.1 million, primarily for property, plant, and equipment[56] - The company's asset-liability ratio increased to (0.36) as of December 31, 2023, compared to (0.33) in the previous year[52] - Total asset mortgages decreased by RMB 1,195.2 million to RMB 418.9 million as of December 31, 2023[58] Assets and Equity - Total assets increased to RMB 36,194.7 million in 2023 from RMB 35,515.8 million in 2022[6] - Total equity increased to RMB 26,334.3 million in 2023 from RMB 25,474.9 million in 2022[6] - Cash and cash equivalents stood at RMB 10,440.9 million as of December 31, 2023[49] - The company's distributable reserves as of December 31, 2023, amounted to approximately RMB 11,323.6 million, with RMB 1,220.9 million proposed for the final dividend distribution[108] Research and Development - Launched the "14th Five-Year Plan" national key R&D project, leading the development of China's next-generation infant formula[10] - Established a research platform and foundation with Peking University and Harvard Boston Children's Hospital for brain development strategy[10] - China Feihe plans to focus on the "brain development" strategy and expand its product offerings across life cycle nutrition services[13] - The company will focus on developing next-generation infant formula products tailored to Chinese babies' needs, leveraging advanced "fresh-locking" technology and expanding into four major business areas: pregnant women and infants, children and students, health foods, and nutritional health[63] Awards and Recognition - Won 11 "World Dairy Innovation Awards" at the Global Dairy Congress[10] - China Feihe's three factories were recognized as national-level "Green Factories" in 2023[12] Market and Industry Trends - The number of newborns in China decreased to approximately 9.0 million in 2023, down from 10.94‰ in 2018 to 6.39‰ in 2023[16] - China's per capita disposable income in 2023 was RMB 39,218, with a CAGR of 6.8% from 2018 to 2023[17] - The high-end infant formula market is expected to drive growth in China's infant formula industry due to rising disposable incomes and urbanization[17] - The Chinese government's policies, such as the "Three-Child Policy," aim to slow the decline in birth rates and support the infant formula market[20] Distribution and Production - The company operates through a distribution network of over 2,800 offline customers, covering more than 83,000 retail outlets, contributing to 79.6% of total dairy product revenue[24] - The company's production capacity reached 327,000 tons annually across 11 production facilities as of December 31, 2023[25] - The company acquired 2.8 million new customers in 2023 through approximately 950,000 face-to-face seminars[27] - Revenue from nutritional supplements, primarily through Vitamin World USA, amounted to RMB 231.7 million, accounting for 1.2% of total revenue[28] Sustainability and Social Responsibility - The company is committed to sustainable development and contributing to China's dual carbon goals[14] - The company will continue to innovate green and circular development models, contribute to rural revitalization, and fulfill social responsibilities to achieve higher-quality sustainable development[63] - The group's charitable donations for the year ending December 31, 2023, totaled approximately RMB 27,044,000[108] Corporate Governance and Leadership - Chairman and CEO Leng Youbin, along with three other directors, will retire by rotation at the upcoming annual general meeting but are eligible and willing to stand for re-election[67] - Liu Hua, aged 51, serves as the Executive Director, Vice Chairman, Chairman of the Environmental, Social and Governance Committee, member of the Remuneration Committee, authorized representative under the Listing Rules, and Chief Financial Officer of the company[72] - Cai Fangliang, aged 55, serves as the Executive Director and President of the company, focusing on the group's marketing management and overall business development[73] - Tu Fang'er, aged 48, serves as the Executive Director, member of the Environmental, Social and Governance Committee, Vice President, Company Secretary, and authorized representative under the Listing Rules, extensively involved in the group's international business development and capital market matters[74] - Gao Yu, aged 50, serves as a Non-Executive Director and has extensive experience in investment banking and private equity, previously holding senior positions at Morgan Stanley[76] - Chen Guojin, aged 47, serves as a Non-Executive Director and is the co-founder and Managing Director of Guan Yan Asset Management (Hong Kong) Limited, with a background in investment banking and private equity[77] - Zhang Guohua, aged 59, serves as a Non-Executive Director and has a rich background in the nutrition and beverage industry, previously holding senior positions at Nestlé and Wyeth Nutrition[79] - Jacques Maurice LAFORGE, aged 68, was appointed as an independent non-executive director in June 2019, effective from October 2019, bringing extensive experience in the Canadian dairy industry[86] - Leng Youbin, aged 55, serves as the executive director, chairman, and CEO, responsible for the overall development strategy and business planning of the company since August 21, 1996[88] - Liu Hua, aged 51, serves as the executive director, vice chairman, and CFO, responsible for the company's audit, accounting, and financial management since November 6, 2000[88] - Cai Fangliang, aged 55, serves as the executive director and president, responsible for the overall management and business development of the company since November 22, 2010[88] - Tu Fang'er, aged 48, serves as the executive director, vice president, and company secretary, responsible for the company's international business development, capital market matters, and legal affairs since October 1, 2006[88] - Fan Yonghong, aged 56, was appointed as an independent non-executive director in June 2019, effective from October 2019, with extensive experience in financial management and served as the chairman of the audit committee[84] - Liu Jinping, aged 52, was appointed as an independent non-executive director in June 2019, effective from October 2019, and currently serves as the chairman of the remuneration committee and a member of the nomination and ESG committees[81] - Song Jianwu, aged 60, was appointed as an independent non-executive director in June 2019, effective from October 2019, and currently serves as a member of the nomination committee[82] - The board of directors is pleased to present the annual report and the audited financial statements for the year ended December 31, 2023[90] - Laforge Environmental Inc. and Laforge Holsteins Ltd., companies operated by Jacques Maurice LAFORGE, are involved in waste-to-energy facilities and mixed farming in Canada[86] Dividends and Shareholder Returns - The company plans to distribute no less than 30% of its net profit as dividends to shareholders each fiscal year, subject to future investment plans[96][100] - The proposed final dividend for the year ended December 31, 2023, is HK1,345,580,000 (equivalent to approximately RMB 1,220,923,000)[99] - The company paid an interim dividend of HK1,223,021,000 (equivalent to approximately RMB 1,136,522,000)[99] - The final dividend for 2023 represents 70% of the profit for the six months ended December 31, 2023, based on the company's dividend policy[99] Share Capital and Share Options - The company's authorized share capital as of December 31, 2023, is 0.000000025 per share[104] - The Pre-IPO Share Option Plan allows for the issuance of up to 190,190,704 shares, representing approximately 2.10% of the company's total issued shares as of the report date[149] - All Pre-IPO share options granted to Dasheng Limited (totaling 190,190,704 shares) were exercised on September 29, 2022[155] - The 2020 Share Option Plan allows for the issuance of up to 134,000,100 shares, representing approximately 1.48% of the company's total issued shares as of the report date[159] - The maximum number of shares that can be issued under the 2020 Share Option Plan is limited to 1% of the total issued share capital[160] - The 2020 Share Option Plan allows the Board to grant share options to selected participants within a 10-year period starting from June 22, 2020[161] - Participants must pay HKD 1.00 as consideration for the grant of 2020 share options, and the payment is non-refundable[162] - The exercise price of the 2020 share options cannot be lower than the highest of: (a) the closing price on the grant date, (b) the average closing price over the 5 trading days before the grant date, or (c) the nominal value of the shares[165][166] - As of December 31, 2023, 28,044,000 share options granted in February 2021 remained unexercised, with an exercise price of HKD 23.80[168] - As of December 31, 2023, 7,712,900 share options granted in July 2021 remained unexercised, with an exercise price of HKD 16.84[168] - As of December 31, 2023, 7,442,000 share options granted in January 2022 remained unexercised, with an exercise price of HKD 11.769[168] - The company has 80,696,300 share options available under the 2020 Share Option Plan, representing approximately 0.89% of the total issued shares as of the reporting date[169] - The 2023 Share Award Plan has a maximum grant limit of 10% of the company's issued share capital as of May 25, 2023, which is 906,825,170 shares[178] - The 2023 Share Award Plan has a service provider sub-limit of 0.5% of the company's issued share capital as of May 25, 2023, which is 45,341,258 shares[178] - The 2023 Share Award Plan is valid for 10 years from May 25, 2023, and no further share awards can be made after the 10-year period[176] - Any share award to directors, key executives, or major shareholders exceeding 0.1% of the issued shares within a 12-month period requires shareholder approval[179] - The 2023 Share Award Plan aims to reward and retain eligible participants for their contributions to the company's growth and development[172] - Eligible participants for the 2023 Share Award Plan include employees, associated entities, and service providers[173] - The 2023 Share Award Plan is managed by the board or committee in accordance with the plan's terms and the trust deed[177] - The trustee cannot exercise voting rights for any shares held under the 2023 Share Award Plan until the shares are vested[182] - The 2023 Share Award Plan includes provisions for the trustee to purchase shares on the stock exchange or over-the-counter using group funding and other distributions[175] - The company repurchased a total of 1,000,000 shares at a total cost of approximately HKD 4.7 million during the reporting period[187] - As of December 31, 2023, the company had 9,554 full-time employees, an increase from 9,489 in the previous year[191] - The company's total issued shares as of December 31, 2023, were 9,067,251,704 after the repurchased shares were canceled[187] - The company's 2023 Share Award Plan will terminate on the 10th anniversary of its adoption on May 25, 2023, or on an earlier date determined by the Board[185] - The company believes the share repurchase reflects confidence in its market-leading position and long-term business prospects[188] - The company's public shareholding complies with the requirements of Listing Rule 8.08 as of the annual report date[186] - The company provides competitive compensation packages, including bonuses and promotions, to incentivize outstanding employee performance[192] - The company adheres to corporate governance principles, including effective internal controls and high ethical standards[194] - The company's 2023 Share Award Plan has not granted any share awards since its adoption on May 25, 2023[185] - The company's related party transactions disclosed in the financial statements are exempt from shareholder approval and annual review under Listing Rule 14A[189] - The company has adopted a standard code of conduct for directors and employees regarding securities transactions, ensuring compliance with regulatory standards[195] - The consolidated financial statements for the year ended December 31, 2023, were audited by Ernst & Young, and a resolution will be proposed at the upcoming annual general meeting to reappoint Ernst & Young as the company's auditor[196] - The company was not involved in any significant litigation or arbitration during the reporting period, and the directors are not aware of any pending or threatened litigation or claims that are material to the company[197] - The company is not aware of any specific tax relief granted to shareholders due to their interests in the company's securities[198] - The company has allocated sufficient resources to ensure continuous compliance with laws and regulations and maintains good relationships with regulatory authorities through effective communication[200] Shareholder Structure - Cold Youbin holds 587,516,458 shares (6.48%) through Dasheng Limited, which he controls with a two-thirds stake[129][130] - Cold Youbin's family trust holds 3,889,911,881 shares (42.90%) through Harneys Trustees Limited[129][130] - Liu Hua holds 345,681,920 shares (3.81%) through his family trust managed by Harneys Trustees Limited[129][131] - Cai Fangliang holds 101,647,734 shares (1.12%) through Adroit Shipping Limited, which he fully owns[129][131] - Harneys Trustees Limited holds a total of 4,461,740,357 shares (49.21%) across various trusts, including Cold Youbin's and Liu Hua's family trusts[136][137] - Liu Shenghui holds 813,663,014 shares (8.97%) through Dasheng Limited and his family trust[136][138] - Dasheng Limited holds 587,516,458 shares (6.48%), with Cold Youbin and Liu Shenghui owning two-thirds and one-third stakes respectively[136][138] - Tu Fang'er holds 23,717,804 shares (0.26%) through the J.T. Living Trust[129][131] - Gao Yu holds 7,536,151 shares (0.08%) as a result of allocations from Morgan Stanley Private Equity Asia III, LLC and related entities[132] - Chen Guojin holds 3,368,918 shares (0.04%) as a result of allocations from Morgan Stanley Private Equity Asia and related entities[132] Debt and Financial Instruments - The company did not issue any debt securities during the year ended December 31, 2023[140] - No equity-linked agreements were entered into during the year ended December 31, 2023[142] - The company did not provide any financial assistance or guarantees to its affiliates during the
中国飞鹤(06186) - 2023 - 年度财报