Financial Performance - For the six months ended June 30, 2020, the company's sales revenue was RMB 1,251.1 million, a decrease of 11.9% compared to RMB 1,420.6 million in the same period of 2019[3] - The gross profit for the same period was RMB 470.8 million, down 9.0% from RMB 517.4 million year-on-year[3] - The profit from continuing operations surged to RMB 165.7 million, a significant increase of 414.2% compared to RMB 32.2 million in the previous year[3] - The company reported a net profit of RMB 165.7 million, compared to a loss of RMB 20.8 million in the same period last year, marking a turnaround of RMB 186.5 million[3] - For the first half of 2020, the company's sales revenue was RMB 1,251.1 million, with a gross margin increase from 36.4% in the first half of 2019 to 37.6% in 2020, an increase of 1.2%[14] - The company achieved a profit of RMB 165.7 million in the first half of 2020, recovering from a loss of RMB 20.8 million in the same period of 2019, with the profit attributable to the parent company increasing from a loss of RMB 73.5 million to a profit of RMB 142.9 million[14] - The external sales of raw milk increased from RMB 1,159.0 million in the first half of 2019 to RMB 1,251.1 million in the first half of 2020, representing a year-on-year increase of 7.9%, with organic raw milk sales rising by 21.4%[16] - The average selling price of organic raw milk was RMB 4,992 per ton in the first half of 2020, compared to RMB 4,687 per ton in the same period of 2019, reflecting a price increase[17] - The total sales volume of raw milk decreased by 5.2% from 313,948 tons in the first half of 2019 to 297,675 tons in the first half of 2020, primarily due to the disposal of inefficient cattle[18] - The group had no income tax expenses in the first half of 2020, while it incurred RMB 0.2 million in income tax expenses in the first half of 2019[28] - For the six months ended June 30, 2020, the profit attributable to the owners of the parent company was RMB 142.9 million, a turnaround from a loss of RMB 73.5 million in the same period of 2019, representing an improvement of RMB 216.4 million[29] Operational Efficiency - The company is focusing on lean operations and precise management to reduce costs and improve efficiency, contributing to healthy business growth[7] - The group’s sales cost decreased from RMB 903.2 million in the first half of 2019 to RMB 780.3 million in the first half of 2020, with a gross margin increase from 36.4% to 37.6%[21] - The average daily fresh milk production is 1,715 tons, with 730 tons coming from organic certified farms, making it the largest organic raw milk base in China[6] - The company is developing a precision breeding management platform to enhance production efficiency and establish a smart dairy farming system[12] - The company is focusing on talent development to ensure a dynamic talent pool for achieving its strategic goals[13] - The company is exploring effective dairy-meat linkage projects to capitalize on market opportunities amid consumption upgrade trends[13] Strategic Plans - The company plans to convert three conventional farms to organic farms to enhance profitability and meet market demand for high-end organic milk[9] - The company plans to convert three organic farms in the second half of 2020, having completed the conversion of two farms by July 2020, aiming to strengthen its leading position in the organic sector[11] - The company aims to expand overseas organic feed cooperation and certification business to enhance its organic control capabilities and product image[11] - The company intends to spend about RMB 94.6 million to acquire 5,000 to 6,000 dairy cows domestically and overseas by the end of 2021[49] Financial Position - As of June 30, 2020, total current assets amounted to RMB 1,724.4 million, slightly down from RMB 1,783.3 million as of December 31, 2019, with inventory decreasing by RMB 245.0 million[30] - Total current liabilities decreased to RMB 3,601.5 million as of June 30, 2020, from RMB 4,121.0 million as of December 31, 2019, primarily due to repayment of borrowings and issuance of shares for the acquisition of minority interests[31] - The group had cash and bank balances of RMB 559.8 million as of June 30, 2020, an increase of RMB 249.6 million compared to RMB 310.2 million at the end of 2019, benefiting from improved operational performance[30] - The group had a total of 2,591 employees as of June 30, 2020, down from 2,749 employees a year earlier[39] - The group’s capital commitments increased to RMB 94.1 million as of June 30, 2020, compared to RMB 81.1 million at the end of 2019, primarily due to fixed asset investments by subsidiaries[38] - The company has available undrawn bank credit facilities of RMB 1,895,644,000, which supports its liquidity position going forward[89] Shareholder Information - The company completed the sale of a 49% stake in its associate company Shengmu Dairy to Inner Mongolia Mengniu for a total consideration of HKD 0.33 per share, resulting in a total of 688,705,234 shares issued[42] - Following the share issuance, the total number of shares increased to 8,381,295,229, with China Mengniu becoming the largest shareholder, holding 17.51% of the issued shares[43] - The company has adopted a share option scheme that allows for the issuance of up to 10% of the total issued shares as of the listing date, equating to 635,440,000 shares[71] - The company has disclosed that there are no other interests or short positions held by directors or senior management as of June 30, 2020[67] Governance and Compliance - The audit committee has been established in accordance with listing rules, consisting of Mr. Wang Liyan, Mr. Fu Wenge, and Mr. Li Xuan, with Mr. Wang serving as the chairman[55] - The remuneration committee includes Mr. Li Xuan, Mr. Sun Qian, and Mr. Fu Wenge, chaired by Mr. Li, focusing on human resource management policies and executive compensation[56] - The nomination committee, chaired by Mr. Fu Wenge, is responsible for recommending candidates to fill board vacancies[57] - Non-executive directors have confirmed no direct or indirect competition with the company's business as of June 30, 2020[59] - Continuous related party transactions during the interim period include agreements with Shengmu Pangu and Da Bei Nong Group for the supply of milk and feed[60][61] Market Outlook - The Chinese Dairy Industry Association reported a dairy merchant index of 62.7 in 2020, up from 60.7 in 2019, indicating a positive outlook for the dairy industry[5]
中国圣牧(01432) - 2020 - 中期财报