Business Operations - The company operates in the production and sale of pork and related meat products in Changde, Hunan Province, China, and has faced significant challenges due to the African swine fever outbreak, which has severely impacted the pork market [6]. - A temporary business model has been adopted, involving the purchase of piglets for fattening until they reach approximately 110 kg for slaughter and sale as pork products [9]. - The company has also leased one of its farms to an independent third party to generate rental income while retaining another farm for business recovery plans [10]. - The company has established contracts with suppliers for piglets to ensure a steady supply for its operations once licenses are obtained [9]. - The company aims to restore pig slaughter operations to the original business model by regaining slaughter licenses and exploring potential acquisitions or collaborations with other slaughterhouses [32]. Financial Performance - The company recorded revenue of approximately RMB 29,700,000 for the year ended December 31, 2020, an increase of about 425% or RMB 24,000,000 compared to the previous year, primarily due to the recovery of the pork business [14]. - Revenue from the pipeline business was approximately RMB 11,500,000, representing an increase of about 102.6% compared to the previous year, indicating successful market entry and sales growth [14]. - The pork business generated revenue of approximately RMB 18,200,000 in Q4 2020, following its restart, with a gross loss of approximately RMB 4,400,000 due to low sales volume and fixed costs [14]. - The total comprehensive loss for the year was RMB 40,750,000, a reduction from RMB 195,842,000 in 2019, indicating an improvement in financial performance [185]. - The basic and diluted loss per share for the year was RMB 4.16, compared to RMB 21.74 in 2019, reflecting a decrease in losses per share [185]. Regulatory Compliance and Approvals - The company has been proactive in applying for operational approvals for its farms and slaughterhouses to ensure compliance with government regulations [9]. - The company has applied for a designated slaughtering license, with expectations to receive approval by the end of 2021, subject to regulatory conditions [10]. - The company is closely monitoring developments regarding African swine fever vaccines and related licensing processes [32]. Cash Flow and Liquidity - As of December 31, 2020, the company maintained cash and bank balances of approximately RMB 14,900,000, up from RMB 3,500,000 in the previous year [18]. - The company’s cash and cash equivalents increased to RMB 14,936 thousand in 2020 from RMB 3,523 thousand in 2019, representing a growth of approximately 323.5% [187]. - Cash generated from operating activities was RMB 1,651 thousand in 2020, a recovery from a cash outflow of RMB 6,374 thousand in 2019 [197]. Corporate Governance - The company has adopted the corporate governance code as per the listing rules and has complied with the code provisions, except for the absence of two independent non-executive directors at the annual general meeting [93][94]. - The board consists of 7 members, including 3 executive directors and 4 independent non-executive directors, meeting the requirement of at least one-third being independent [95]. - The company has maintained a high level of corporate governance standards, continuously reviewing and improving its practices [97]. Risk Management - The Board is responsible for the overall effectiveness of the risk management and internal control systems, which are reviewed annually [136]. - The company has established a risk management manual to clarify the roles of management, the Board, and the Audit Committee in risk management [140]. - The Audit Committee reviewed the effectiveness of the risk management and internal control systems, finding no significant issues [138]. Supplier and Customer Relationships - The largest customer accounted for 30% of total revenue, while the top five customers collectively contributed 67% [62]. - The largest supplier represented 34% of total purchases, with the top five suppliers accounting for 100% of total purchases [62]. - The company has established long-term relationships with suppliers, ensuring compliance with quality and ethical standards [67]. Environmental Sustainability - The company is committed to environmental sustainability, having installed waste treatment facilities at its farms and production bases [64]. Dividend Policy - The company does not plan to declare a final dividend for the year ended December 31, 2020, consistent with the previous year [27]. - The company continues to review its dividend policy without guaranteeing any specific amount for distribution at any given time [157].
惠生国际(01340) - 2021 - 年度财报