Financial Performance - Revenue for the year ended December 31, 2018, was RMB 4,956.8 million, representing a 3.6% increase from RMB 4,783.8 million in 2017[15] - The company reported a gross profit before raw milk fair value adjustments of RMB 1,546.1 million, an increase of 8.1% from RMB 1,430.8 million in the previous year[15] - Cash EBITDA for 2018 was RMB 1,528.4 million, a significant increase of 41.3% compared to RMB 1,081.8 million in 2017[15] - The loss attributable to owners of the Company decreased by 49.1% to RMB 496.1 million from RMB 975.1 million in 2017[15] - Net operating cash inflow for the year was RMB 1,406.0 million, a substantial increase of 180.7% from RMB 500.9 million in 2017[15] - Total revenue increased by 3.6% to RMB4,956.8 million, with cash EBITDA rising by 41.3% to RMB1,528.4 million and net operating cash inflow escalating by 180.7% to RMB1,406.0 million compared to 2017[58] Production and Yield - Modern Dairy operates 26 dairy farms in China with over 230,000 dairy cows and an annual milk yield exceeding 1.27 million tons[7] - The total annual milk yield per milkable cow increased to 10.1 tons in 2018, up from 9.8 tons in 2017, reflecting a 3.1% growth[15] - The total number of dairy cows decreased slightly to 231,530 in 2018 from 233,058 in 2017, a decline of 1.3%[15] - The annual milk yield (AMY) per head of milkable cow increased by 3.1% to 10.1 tons, contributing to a total annual milk production of 1.28 million tons, an increase of 8.20% year-on-year[64] - The average milk yield per milkable cow increased by 3.06% to 10.1 tons in 2018, compared to 9.8 tons in 2017[76] Market and Industry Trends - In 2018, Modern Dairy achieved stable revenue growth despite soaring feed costs and global economic challenges, with significant increases in operating net cash inflow[35] - The company believes that milk prices have bottomed out and are expected to rise at a moderate pace moving forward[35] - The supply and demand of raw milk in China are reaching equilibrium, with raw milk prices continuing to rise, which is expected to improve the company's profitability[41] - The Chinese government has introduced several policies to support the dairy industry, emphasizing large-scale farming and quality assurance[38] - The introduction of new national standards for raw milk and dairy products in 2018 is expected to boost consumer confidence and increase domestic fresh milk consumption[54] - The dairy industry in China has undergone significant transformation over the past decade, improving both quality and quantity under stringent regulations[55] Quality and Recognition - Modern Dairy's products have been awarded the gold prize of Monde Selection for five consecutive years, highlighting the quality of its offerings[15] - The company has been recognized as a "Strategic Partner of China's Aerospace Industry," indicating broad societal recognition of its premium quality branded milk[16] - Modern Dairy's premium quality milk has received widespread recognition, winning the gold prize at Monde Selection for five consecutive years, along with three other product series[35] - The Group's dairy products ranked among the top in the world for quality, with four products awarded the Gold Prize at Monde Selection 2018[105] Cost Management - The unit cost of raw milk was maintained at RMB2.45/kg, with feed cost remaining at RMB1.89/kg, despite rising feed prices due to the Sino-US trade war[68] - The gross profit margin of the dairy farming business improved by 0.36 percentage points to 31.46% in 2018[64] - The gross profit of the dairy farming business before raw milk fair value adjustments was RMB1,520.6 million in 2018, an increase of 11.14% from RMB1,368.2 million in 2017[122] - The gross profit margin for the liquid milk products business fell to 8.27% in 2018 from 9.02% in 2017, attributed to a change in the pricing model to "cost-plus"[124] Strategic Initiatives - In early 2019, Modern Dairy entered a milk supply cooperation agreement with Yashili, expanding into a new high value-added business line[37] - The Group aims to enhance milk yield and quality through scientific breeding and feeding technologies, focusing on brand competitiveness and resource management[42] - The Group aims to focus on upstream business, consolidate resources, and enhance financial position and liquidity[63] - The Group aims to achieve high standards in herd breeding, focusing on increasing production output and reducing operational costs[90] Management and Leadership - Mr. Han Chunlin has over 20 years of experience in the food and beverage industry in China, previously serving as marketing vice general manager at Nowara Shinnosuke and marketing manager at Inner Mongolia Mengniu[179] - Ms. Gao Lina, aged 62, is a co-founder of the Group and has extensive experience in international trade and resource integration, having led the largest import-export enterprise in Tai'an City[180] - The management team has demonstrated strong strategic business and market planning capabilities, contributing to the success of the Group's operations in China[181] - The leadership team has received multiple awards for their contributions to the industry, including recognition as top business leaders in China[180] Environmental and Social Responsibility - The Group emphasizes environmental protection and epidemic prevention, continuously improving product quality and farm management[92] - The Group actively engages in social responsibility initiatives, including poverty alleviation and local economic development through job creation and direct donations[167] - The Group will release a separate Environmental, Social, and Governance (ESG) report to illustrate its commitment to sustainable development and corporate governance[172]
现代牧业(01117) - 2018 - 年度财报