Pig Production and Breeding - COFCO Joycome's annual pig production exceeded 1.5 million heads in 2023[12] - The company expanded its self-breeding and fattening farms by 110,400 heads each, adding a total capacity of 110,400 heads[13] - Hog production volume increased by 26.7% YoY to 5,200 thousand heads in 2023[15] - The company's live pig production in 2023 was 5.2 million heads, a year-on-year increase of 26.7%[29] - The company established a complete breeding system with the successful introduction of breeding pigs at its Chifeng facility[11] - The company's genomic breeding platform was officially launched in March 2023, accelerating the optimization of breeding stock performance[30] - The company's gene breeding platform significantly improved the accuracy of breeding values for key traits[5] Brand Exposure and Marketing - COFCO Joycome's brand exposure exceeded 120 million during the 2023 Beijing Marathon sponsorship[9] - The company's marketing campaign for the "Healthy Dumpling Competition" reached over 3.215 million exposures[14] - COFCO Joycome's brand exposure during the 2023 Beijing Half Marathon sponsorship exceeded 40 million, with over 10,000 new self-media followers[6] - The company's short video campaign for the "Food and Health China" program achieved 1.765 million views and 733,000 interactions on Douyin[11] - The company strengthened its brand influence through sports marketing, sponsoring events like the 2023 Beijing Half Marathon and organizing community activities[34] Financial Performance - Revenue decreased by 10.3% YoY to RMB 11.57 billion in 2023[17] - Profit before biological asset fair value adjustment increased by RMB 336 million YoY to RMB 16 million in 2023[17] - The company's attributable profit before biological asset fair value adjustment was RMB 51 million in 2023[17] - Basic earnings per share before biological asset fair value adjustment was RMB 0.0115 in 2023[16] - The company's gross profit margin in 2023 was 4.5%, an increase of 0.8 percentage points year-on-year, primarily due to cost reduction and efficiency improvement, as well as the use of futures and spot combination strategies to hedge against unfavorable market conditions[35] - The company's operating income in 2023 was RMB 11.568 billion, a decrease of 10.3% compared to RMB 12.901 billion in 2022, mainly due to declining domestic prices affecting the pig farming and fresh pork business, as well as reduced import volumes and falling beef prices[35] - The company's net profit in 2023 was RMB 16 million, compared to a net loss of RMB 320 million in 2022[35] - The company's sales and distribution expenses, as well as administrative expenses, totaled RMB 861 million in 2023, an increase of 29.6% compared to RMB 664 million in 2022[35] - The company's financing costs in 2023 were RMB 132 million, a decrease of RMB 45 million compared to RMB 177 million in 2022, mainly due to accelerated cash turnover and reduced loan balances[35] - The company's other income, gains, and losses totaled RMB 476 million in 2023, an increase of RMB 310 million compared to 2022, primarily due to a foreign exchange gain of RMB 130 million[35] - The company's return on equity (ROE) in 2023 was -2.0%, compared to 4.2% in 2022[37] - The company's net debt-to-equity ratio in 2023 was 37.6%, a significant improvement from 73.3% in 2022[37] - The company's EBITDA interest coverage ratio in 2023 was 4.45x, compared to 6.79x in 2022[37] - The company's current ratio in 2023 was 0.82, slightly improved from 0.80 in 2022[37] - The company's cash and bank balances as of December 31, 2023, were approximately RMB 1.169 billion, remaining stable compared to RMB 1.040 billion at the end of 2022[41] - The company's EBITDA (before biological asset fair value adjustment) for 2023 was RMB 1.035 billion, compared to RMB 786 million in 2022[41] - The company's net debt as of December 31, 2023, was RMB 3.477 billion, with a net debt-to-equity ratio of 37.6%, down from 73.3% at the end of 2022[43] - The company's capital expenditures for 2023 were RMB 983 million, primarily used for the construction of pig farms in Inner Mongolia, Jilin, and Henan provinces[46] - The fair value of the company's biological assets as of December 31, 2023, was RMB 2.202 billion, down from RMB 3.063 billion at the end of 2022[48] - The company's operating cash flow for 2023 was RMB 2.025 billion, compared to an outflow of RMB 6.13 million in 2022[41] - The company's investment cash outflow for 2023 was RMB 742 million, including RMB 969 million for property, plant, and equipment[41] - The company's financing cash outflow for 2023 was RMB 1.184 billion, compared to an inflow of RMB 944 million in 2022[41] - The company's interest-bearing bank borrowings as of December 31, 2023, were RMB 4.041 billion, down from RMB 5.998 billion at the end of 2022[42] - The company's capital commitments as of December 31, 2023, were RMB 346 million, down from RMB 525 million at the end of 2022[47] - Total number of employees decreased to 9,707 in 2023 from 9,980 in 2022[49] - Total employee compensation increased to RMB 1.423 billion in 2023 from RMB 1.079 billion in 2022[49] Industry and Market Trends - National live pig production in 2023 reached 727 million heads, a year-on-year increase of 3.8%, with pork production at 57.94 million tons, up 4.6% year-on-year[25] - The average live pig price in 2023 was RMB 15.24/kg, a year-on-year decrease of 19.4%, leading to significant industry losses[25] - China's pork imports (excluding by-products) in 2023 decreased by 11.7% year-on-year to 1.55 million tons, while beef imports increased by 1.8% to 2.74 million tons[27] Product Development and Sales - Fresh pork sales volume grew by 6.1% YoY to 245 thousand tons in 2023[15] - Fresh pork sales volume in 2023 increased by 6.1% year-on-year to 245,000 tons, with flaxseed pork sales surging 47.0%[28] - The company expanded its product categories, launching ready-to-cook items like handmade sausages, dumplings, and meatballs, enhancing product convenience[32] - The company's northern and southern markets saw improved supply chain efficiency, with small-packaged product sales growing rapidly in the southern region[33] Risk Management and Internal Controls - The company faces significant risks from diseases such as African swine fever, which can lead to reduced pig production and increased operational costs[50] - The company has implemented various disease prevention and control measures, including the establishment of an African swine fever prevention team[51] - The company is exposed to price volatility risks in key commodities such as corn, soybean meal, and pork, which can impact profitability[51] - The company has established comprehensive food safety management systems to mitigate risks related to food safety[52] - The company has developed safety production management systems to prevent accidents and ensure operational continuity[53] - The company has implemented environmental protection measures to prevent pollution and ensure compliance with environmental regulations[54] - The company's risk management and internal control system was reviewed by the Board and deemed effective and sufficient[78] - The Board ensures the maintenance of a suitable and effective risk management and internal control system, and sets the level of risk the company is willing to take to achieve strategic goals[79] - The Audit Committee is responsible for reviewing the company's risk management and internal control systems, ensuring coordination between internal and external auditors, and monitoring the effectiveness of the internal audit function[80] - The company conducted a comprehensive risk assessment covering all business and functional departments, identifying the top five major risks for 2023: disease risk, price risk, food safety risk, production safety risk, and environmental risk[83] - The company implemented 22 internal audit projects in 2023, covering all major aspects of its operations and management, with no significant omissions[83] - The company's internal control and risk management systems were reviewed twice annually by the board, with the latest review confirming their effectiveness and adequacy as of December 31, 2023[83] - The company adopted a whistleblowing policy to encourage confidential reporting of any suspected violations or misconduct, with regular reviews of the policy[84] Corporate Governance and Board Structure - The company's board consists of seven directors, including two executive directors, two non-executive directors, and three independent non-executive directors[56] - Gao Xiang, aged 52, was appointed as an executive director and chairman of the board on March 7, 2024, with over 30 years of experience at COFCO Group[56] - Zhang Nan, aged 43, was appointed as an executive director and general manager on April 15, 2024, with extensive experience in strategic investment, technological innovation, and fresh pork business[56] - Shi Bo, aged 57, was appointed as a non-executive director on March 28, 2023, with a background in finance and accounting, holding a master's degree in economics and an EMBA[57] - Fu Tingmei, aged 57, was appointed as an independent non-executive director on May 23, 2016, with extensive experience in investment, finance, and legal affairs[57] - Li Hengjian, aged 60, was appointed as an independent non-executive director on May 23, 2016, with over 30 years of experience in financial and accounting affairs, fundraising, mergers and acquisitions, and international business development[57] - The company's Board of Directors and management are committed to maintaining high standards of corporate governance, which is crucial for ensuring operational integrity and investor trust[60] - The company has adopted the principles and code provisions of the Corporate Governance Code, with a minor deviation from code provision C.2.1 regarding the separation of Chairman and CEO roles[60] - Jiang Guojin served as both Chairman and General Manager from June 10, 2022, to March 7, 2024, to strengthen leadership and decision-making efficiency[60] - Dr. Gao Xiang succeeded Jiang Guojin as Chairman of the Board starting March 7, 2024[60] - Dr. Zhang Nan was appointed as the company's General Manager effective April 15, 2024[60] - The Board currently consists of two executive directors, two non-executive directors, and three independent non-executive directors, ensuring a balanced structure of power and authority[60] - Li Lei, the company's Chief Financial Officer, has extensive experience in financial management and the food and agriculture industries[59] - Li Fangfang, the company's Deputy General Manager, oversees centralized raw material procurement and futures hedging, with a strong background in management consulting and human resources[59] - Ju Jiandong, an independent non-executive director, brings expertise in international trade, finance, and industrial organization, with a distinguished academic and professional background[58] - Li Zhengfang, the company's Deputy General Manager, manages international meat trade and meat product operations, with extensive experience in meat procurement and trade[58] - The Board of Directors includes three independent non-executive directors, accounting for more than one-third of the board members[63] - Dr. Zhang Nan was appointed as the company's General Manager effective April 15, 2024[63] - Dr. Gao Xiang was appointed as the Chairman of the Board effective March 7, 2024[63] - The company has implemented mechanisms to ensure the independence of the Board and the availability of independent opinions[63] - The company's Board of Directors is responsible for setting strategic goals, annual budgets, and business plans, and overseeing management performance[62] - The company adheres to the "Green Mountains and Clear Waters are Gold and Silver Mountains" philosophy, investing in environmental protection and sustainable development[62] - The company's Board of Directors holds regular meetings at least four times a year, approximately once every quarter[65] - The Audit Committee held 3 meetings in the year ended December 31, 2023, with the participation of executive directors, senior management, and external auditors[71] - The Audit Committee reviewed the Group's financial statements, annual report, and interim results for the year ended December 31, 2022, and the six months ended June 30, 2023[71] - The Audit Committee discussed the scope and results of the external auditors' audit and review work[71] - The Audit Committee reviewed the external auditors' management letter and management's response[71] - The Audit Committee evaluated the independence, objectivity, and effectiveness of the external auditors' audit procedures[71] - The Audit Committee reviewed the company's financial controls, internal controls, and risk management systems[71] - The Audit Committee discussed audit, internal control, risk management, and financial reporting matters before recommending approval to the Board[71] - The Audit Committee reviewed the company's arrangements for confidential reporting of concerns regarding financial reporting, internal controls, or other potential misconduct[71] - The Audit Committee reviewed the remuneration of the external auditors and recommended its approval to the Board[71] - The company's board of directors currently consists of 7 members, with 2 executive directors, 2 non-executive directors, and 3 independent non-executive directors, ensuring a high level of independence[72] - The board has achieved gender equality by appointing a female director in April 2024, meeting the gender diversity target[72] - The gender ratio of employees (including senior management) as of December 31, 2023, was 69% male and 31% female, reflecting a balanced gender diversity[73] - The nomination committee held 1 meeting in the year ending December 31, 2023, and recommended the appointment of Mr. Shi Bo as a non-executive director[72] - The company has adopted a board diversity policy and achieved all measurable targets related to independence, skills, and experience by the end of 2023[72] - The nomination committee will annually discuss and agree on measurable targets for board diversity and recommend them to the board for adoption[73] - The company ensures that director recruitment and selection follow a structured process to attract candidates from diverse backgrounds[73] - The nomination committee reviews the board's structure, size, and composition annually and makes recommendations for changes to align with the company's strategy[73] - The company is committed to maintaining gender diversity among employees and will continue to implement measures to enhance it[73] - The nomination committee's procedures for selecting and recommending directors meet or exceed the requirements of the Hong Kong Stock Exchange[74] - The Remuneration Committee consists of three members, including non-executive director Shi Bo and two independent non-executive directors, Li Hengjian and Ju Jiandong, with Li Hengjian serving as the chairman[75] - In 2023, the Remuneration Committee held one meeting and completed tasks such as evaluating the performance of directors and senior management, and reviewing and approving their remuneration[75] - The remuneration for senior management in 2023 ranged from RMB 1,000,001 to 1,500,000 for 3 individuals and RMB 1,500,001 to 2,000,000 for 2 individuals[76] - The Food Safety Committee, chaired by Dr. Gao Xiang, held one meeting in 2023 to review food quality and safety control measures and plan for the next phase[77] Environmental and Sustainability Initiatives - The company's biogas and wastewater treatment technology reduced nitrogen and phosphorus content in biogas slurry, improving land utilization efficiency[31] - The company has established a comprehensive biogas fermentation and harmless treatment system, promoting resource utilization of breeding waste and green agriculture development[62] - The company adheres to the "Green Mountains and Clear Waters are Gold and Silver Mountains" philosophy, investing in environmental protection and sustainable development[62] Shareholder and Investor Relations - The company's total issued shares as of December 31, 2023, were 4,581,998,323 shares, following the issuance of 680,000,000 new shares to COFCO Hong Kong on March 24, 2023[91] - The company did not declare a final dividend for the year ended December 31, 2023, as per the board's resolution[91] - The company's dividend policy stipulates that dividends will be declared and distributed when the total amount is expected to reach 20% to 70% of the net profit before fair value adjustment of biological assets, provided it does not affect normal operations or major investment plans[91] - Audit services fees amounted to RMB 1,420 thousand, while non-audit services fees were RMB 715 thousand for the year[88] - The company maintains high standards of financial statement disclosure and utilizes its website to enhance communication with shareholders and the public[87] - The company has adopted a shareholder communication policy to ensure clear, timely, and effective communication with shareholders and investors[89] - The company's major business activities include investment holding, feed production, pig farming, slaughtering, fresh pork and meat product production, distribution, and sales, as well as meat product import and distribution[91] - The company's financial risk management objectives and policies are detailed in Note 46 of the consolidated financial statements[91] - The company's performance for the year ended December 31, 2023, is detailed in the consolidated income statement and other comprehensive income on pages 56 to 57 of the annual report[91] - The company's articles of association were amended on June 15, 2023, following a special resolution passed at the annual general meeting[90] - The company's distributable reserves as of December 31, 2023, amounted to RMB 1.541 billion[92] - Charitable donations for 2023 totaled RMB 10.25 million[92] - The company issued 680 million ordinary shares at a subscription price of HKD 2.30 per share, raising net proceeds of approximately HKD 1.551 billion (RMB 1.353 billion)[95] - 70% of the net proceeds (RMB 947 million) were used to expand production capacity and strengthen the distribution of fresh pork brands[96] -
中粮家佳康(01610) - 2023 - 年度财报