Financial Performance - For the six months ended June 30, 2020, the total revenue of China Modern Dairy reached RMB 2,828 million, representing a year-on-year increase of 10%[8] - Cash EBITDA for the same period recorded RMB 987 million, reflecting a year-on-year increase of 12%[8] - Profit attributable to owners of the company was RMB 220.7 million, a significant increase of 76% year-over-year[9] - Free cash flow surged to RMB 631.8 million, reflecting a year-over-year growth of 79.9%[9] - The Group achieved a profit before tax of approximately RMB226.6 million, representing a growth of 69.2% year-on-year, and a net free cash inflow of RMB631.8 million, up 79.9% year-on-year[28] - The net profit attributable to the owners of the Company for the Reporting Period was RMB220.7 million, representing a year-on-year increase of 76.7% compared to RMB124.9 million in 2019[88] - Total comprehensive income for the period was RMB 230,250, up from RMB 133,812 in 2019, reflecting a significant increase of approximately 72%[199] - Basic earnings per share for the Reporting Period was approximately RMB3.47 cents, compared to RMB2.05 cents in 2019[89] Production and Operations - The company operates 26 dairy farms in China with over 235,000 dairy cows and an annual milk yield of approximately 1.5 million tons[3] - Modern Dairy has implemented a unique production model called "Zero-distance Integration of Forage Grass Planting, Cows Breeding and Milk Processing within Two Hours," which is SGS certified[3] - Total milk production during the reporting period was 750,000 tons, representing a year-over-year growth of 10%[11] - The herd scale increased to 235,877 head of dairy cows, a 4% increase year-over-year[11] - The annualized milk yield per milkable cow reached 11.2 tons, a 5.7% increase from 10.6 tons in 2019[11] - The average milk yield per milkable cow rose to 11.2 tons during the reporting period, representing a growth of 5.7% year-on-year from 10.6 tons in 2019[42] - The company operates 26 dairy farms across seven provinces in China, each with a herd size close to or over 10,000 dairy cows[40] Market Position and Strategy - The company is the largest dairy farming operator and fresh raw milk producer in China based on herd size and milk yield[4] - Future strategies include expanding market presence and enhancing product offerings through new technologies and research[8] - The company aims to maintain its leadership position in the dairy industry by focusing on quality and sustainability in its operations[8] - The company is actively exploring potential mergers and acquisitions to further strengthen its market position and operational capabilities[8] - The company plans to focus on increasing herd size, maintaining a reasonable herd portfolio, and achieving steady growth in output over the next three to five years[138] - The company will strengthen the synergistic integration of upstream and downstream businesses to enhance market competitiveness as a top brand in raw milk production[138] Quality and Sustainability - Modern Dairy's pure milk has won the Gold Prize at Monde Selection for seven consecutive years, indicating strong brand recognition[12] - Quality management of raw milk adheres to high standards, ensuring that all processes from milking to transportation are monitored[45] - The company has implemented various measures to enhance cow comfort, including improved ventilation, feeding frequency, and bedding conditions[37] - The company is committed to social responsibility, promoting sustainable development in the dairy industry, and supporting local economic development[131] - The company has effectively alleviated the pressure of surplus rural labor by providing multiple job opportunities across the country[130] Financial Health and Debt Management - The company's debt-to-asset ratio decreased from nearly 60% at the end of 2018 to 51% as of June 30, 2020[11] - The total equity of the Group as of June 30, 2020, was RMB7,440.0 million, up from RMB7,207.7 million as of December 31, 2019[91] - The net gearing ratio decreased to 66.4% as of June 30, 2020, compared to 77.0% as of December 31, 2019[91] - The total interest-bearing debt as of June 30, 2020, was RMB6,215.0 million[95] - The Group's available and unutilized credit facilities amounted to approximately RMB6,688.2 million as of June 30, 2020, compared to RMB3,753.4 million as of December 31, 2019[92] Shareholder Information - The board of directors has resolved not to declare any interim dividend for the reporting period[141] - As of June 30, 2020, Ms. Gao holds approximately 3.46% of the company's shares through Jinmu Holdings Co Ltd[141] - As of June 30, 2020, China Mengniu Dairy Company Limited holds 58.15% of the issued share capital of the Company[151] - The total number of shares issued by Mengniu as of June 30, 2020, is 3,938,589,900[152] - The substantial shareholder, China Mengniu Dairy Company Limited, has a beneficial interest in 1,317,903,000 shares, accounting for 20.57% of the Company's issued share capital[157] Governance and Compliance - The Company has complied with the Corporate Governance Code throughout the six months ended 30 June 2020, with a noted deviation regarding non-executive Directors' attendance at the annual general meeting[168][169] - The auditor, Deloitte Touche Tohmatsu, reviewed the condensed interim financial statements in accordance with relevant standards[185] - The Audit Committee consists of two independent non-executive directors and one non-executive director, reviewing accounting principles and financial reporting matters[188] Market Trends - The raw milk market is currently in short supply, and this shortage is expected to continue, leading to a steady rise in prices[136] - The dairy industry saw a 7.9% year-on-year increase in raw milk production, with major dairy companies recovering sales to over 90%[22]
现代牧业(01117) - 2020 - 中期财报