Financial Performance - The company recorded revenue of approximately RMB 628,912,000 for the year ended December 31, 2021, a decrease of about 1.2% compared to RMB 636,715,000 in 2020[18]. - The total gross profit for the year was approximately RMB 70,728,000, a decrease of about 31.0% from RMB 102,493,000 in the previous year[18]. - The net loss for the year was RMB 266,458,000, compared to a profit of RMB 7,510,000 in 2020, resulting in a net loss margin of (42.4%) in 2021[11]. - Total revenue decreased by 1.2% from approximately RMB 636,715,000 in 2020 to approximately RMB 628,912,000 in 2021, primarily due to a significant drop in domestic pig prices, despite a 30.7% increase in overall sales volume[31]. - The overall gross profit was approximately RMB 70,728,000, down about 31.0% from RMB 102,493,000 for the previous year[27]. - The group reported a net loss of approximately RMB 266,458,000, compared to a net profit of RMB 7,510,000 for the year ended December 31, 2020[27]. Operational Highlights - The company experienced a 37.5% increase in live pig output and a 30.7% increase in overall sales compared to the previous year[18]. - The number of live pigs sold increased by 37.5% and overall sales volume increased by 30.7% compared to the previous year[27]. - Retail pork revenue increased by approximately 1.4% from about RMB 402,537,000 in 2020 to approximately RMB 408,053,000 in 2021, driven by a 29.6% increase in product sales volume[32]. - Wholesale pork revenue decreased by approximately 5.2% from about RMB 202,316,000 in 2020 to approximately RMB 191,843,000 in 2021, despite a 39.2% increase in sales volume[34]. Cost and Margin Analysis - The average breeding cost in the pork industry reached historical highs due to rising feed prices and increased epidemic prevention costs[17]. - The gross profit margin decreased to 11.2% in 2021 from 16.1% in 2020[11]. - The gross margin for retail pork decreased from approximately 16.8% in 2020 to approximately 14.2% in 2021, while the gross margin for wholesale pork dropped from approximately 13.7% to approximately 4.2%[39][40]. - The gross profit for wholesale commodity pigs decreased by approximately 45.4% from about RMB 5,372,000 in 2020 to approximately RMB 2,931,000 in 2021, with the gross margin increasing from approximately 48.9% to 57.7%[42]. Financial Position - The company's asset-liability ratio increased to 86.1% in 2021 from 55.9% in 2020[11]. - The current ratio decreased to 0.8 in 2021 from 1.1 in 2020, indicating a decline in short-term financial health[11]. - As of December 31, 2021, the total interest-bearing bank loans amounted to approximately RMB 123.22 million, a decrease from RMB 140.04 million as of December 31, 2020[47]. - The group reported a net loss of approximately RMB 266.46 million for the year ended December 31, 2021, with current liabilities exceeding current assets by approximately RMB 81.17 million[58]. Strategic Initiatives - The company plans to focus on improving operational efficiency and exploring new market opportunities in response to the challenging industry conditions[17]. - The group plans to focus on developing black pork products and the Pusweet gourmet series in the future[23]. - The group aims to enhance its image as "China's leading high-end safe pork brand" and continue to promote the healthy development of the pork industry[20]. - The group plans to accelerate the establishment of direct sales stores and franchise stores in Fujian and Beijing in 2022 to expand its retail footprint[54]. - The group is focusing on developing emerging retail channels, including e-commerce and community stores, to adapt to changing consumer behaviors[55]. Governance and Management - The company has a strong focus on agricultural research and development, with key personnel holding advanced degrees and extensive experience in agricultural science[70]. - The company emphasizes internal controls and corporate governance to ensure compliance with statutory regulations[71]. - The board includes independent directors with expertise in animal genetics and agricultural management, contributing to the company's strategic planning[69][66]. - The company has adopted the latest corporate governance code as per the Hong Kong Stock Exchange's listing rules, enhancing transparency and governance standards[74]. - The board consists of eight directors, with a mix of executive, non-executive, and independent non-executive members, ensuring a balanced governance structure[79]. Risk Management and Internal Controls - The audit committee reviewed the effectiveness of the group's risk management and internal control systems, ensuring compliance with statutory and regulatory requirements[132]. - The company has adopted a set of internal control policies and procedures to safeguard its assets and ensure the reliability of financial reporting[139]. - The internal audit department identified risks and reviewed the effectiveness of internal controls and risk management systems, reporting no major internal control issues for the year 2019[140]. - The company has established a framework for determining the remuneration of executive directors and senior management, considering comparable companies and internal equity[128]. Shareholder and Stakeholder Engagement - The company emphasizes high corporate transparency and actively communicates with shareholders and investors regarding its strategies and operations[145]. - The company’s governance report indicates that the board has taken appropriate steps to ensure effective communication with shareholders[151]. - The company has received confirmation from key stakeholders regarding compliance with a non-competition agreement throughout 2021[75]. Employee and Workforce Management - The group had 463 employees as of December 31, 2021, a decrease from 486 employees as of December 31, 2020, with employee costs around RMB 17.12 million[53]. - The company emphasizes the importance of continuous professional development for directors, ensuring they are updated on legal, regulatory, and market changes[100]. Share Capital and Stock Options - As of December 31, 2021, the company had a total of 98,200 thousand shares remaining under the stock option plan that had not been exercised[170]. - The stock option plan allows for a maximum of 10% of the total issued shares to be granted, which equates to 80,000,000 shares at a par value of HKD 0.1 per share[166]. - The exercise price for the stock options is set at HKD 0.595 per share, which is based on the adjusted price following a share split[170].
普甜食品(01699) - 2022 - 年度财报