Market Conditions - The export markets in Southeast Asia and Japan continue to be affected by the pandemic, while the Chinese market shows stability and improvement due to effective vaccination efforts[17]. - The price of pigs has reached record lows, impacting chicken meat prices, with a pessimistic outlook for the chicken market in the second half of 2021[18]. - Rising costs of feeds and commodities are expected due to the recovery of the global economy, alongside long-term trends of increasing wages and labor shortages[18]. - Domestic food prices in China fell by 0.2% in the first half of 2021, influenced by a 19.3% average decrease in pork prices over nine consecutive months[41]. Financial Performance - The company's turnover for the first half of 2021 was RMB 5,100,261, representing a year-on-year increase of 20.7% compared to RMB 4,227,285 in 2020[28]. - Gross profit decreased to RMB 446,551, down 5.9% from RMB 474,400 in the previous year, resulting in a gross profit margin of 8.8% compared to 11.2% in 2020[28]. - Profit attributable to shareholders was RMB 71,347, reflecting a decline of 16.2% from RMB 85,144 in the same period last year[28]. - The total operating income for the first six months of 2021 was RMB 3,291,395 thousand, representing a 32.1% increase from RMB 2,491,614 thousand in 2020[58]. - The Group's profit for the period was RMB 94,420 thousand, down approximately 30.1% from RMB 135,059 thousand in the first half of 2020[100]. - The total comprehensive income for the period was RMB 97,935 thousand, a decrease of approximately 26.3% from RMB 132,806 thousand in the same period of 2020[100]. Segment Performance - Domestic sales of the food segment increased by approximately 28% year-on-year, despite export sales declining by approximately 28.2% due to the impact of COVID-19 in Japan[35]. - The overall operating revenue of the food segment grew by approximately 12.7% year-on-year, with gross profit remaining stable compared to the previous year[35]. - The domestic feed segment's overall sales increased by approximately 15% year-on-year, with gross profit rising by approximately 18.1%[36]. - The processed food segment's turnover in Mainland China increased by 30.4% year-on-year to RMB 820,350 thousand, while export turnover decreased by 33.6% to RMB 159,726 thousand[49]. - The gross profit margin for the processed food segment in Mainland China was 20.1%, down from 22.0% in the previous year[49]. - The meat product segment's gross profit decreased slightly by approximately 9% year-on-year despite significant cost increases[41]. Strategic Initiatives - The company plans to accelerate its transformation and upgrade efforts, focusing on consolidating its feed business and developing processed food products[20]. - Emphasis will be placed on research and development to reduce feed costs and launch high-value-added products[20]. - The company aims to enhance breeding efficiency through improved breeding techniques and feed upgrades, while expanding sales channels[20]. - Short-term focus will be on upgrading existing flagship products and long-term focus on developing new products in the processed food sector[20]. - The overall strategy includes leveraging information technology to improve supply chain efficiency[20]. - The company plans to enhance its product offerings by developing new products and upgrading existing ones, particularly in processed foods[22]. Cost Management - The company is actively introducing solutions to help customers control costs in the feed segment, particularly in response to high raw material prices[36]. - The gross profit of Southeast Asia's feeds segment dropped by approximately 27.5% year-on-year due to rising raw material costs, while feed sales increased by approximately 20% year-on-year[39]. Investments and Assets - The Group is progressing with a major investment in a new plant in Bengbu, which is expected to enhance its foodization strategy[45]. - Capital expenditure for the first half of 2021 amounted to approximately RMB 54,566 thousand, primarily funded by long-term bank loans[82]. - The Group acquired fixed assets at a cost of RMB 54,566,000 for the six months ended 30 June 2021, a decrease of 16.5% compared to RMB 65,471,000 for the same period in 2020[186]. Cash Flow and Liquidity - As of June 30, 2021, the cash and bank deposits balance was approximately RMB 678,566 thousand, an increase of RMB 47,196 thousand from December 31, 2020[77]. - The company reported a net cash generated from operating activities of RMB 34,586 thousand for the six months ended June 30, 2021, compared to RMB 97,117 thousand for the same period in 2020, a decrease of 64.3%[117]. - The Group's current ratio was approximately 1.64 times, indicating a healthy liquidity position compared to 1.56 times as of December 31, 2020[81]. Taxation and Compliance - The company continues to benefit from a preferential tax rate of 15% for certain subsidiaries due to their high-tech enterprise status, compared to the standard rate of 25%[164]. - The applicable corporate income tax rate for the company's subsidiary in Malaysia was 24% for the six months ended June 30, 2021, unchanged from the same period in 2020[166]. - The corporate income tax rate for Asia Nutrition Technologies (MV) Co., Ltd. was 20% for the six months ended June 30, 2021, consistent with the previous year[175]. Inventory and Receivables - Trade receivables as of 30 June 2021 amounted to RMB 303,773,000, down from RMB 325,882,000 at the end of 2020, reflecting a decrease of 6.8%[192]. - The allowance for doubtful debts decreased to RMB 17,284,000 from RMB 24,360,000, indicating improved credit quality[192]. - Deposits and prepayments increased significantly to RMB 300,672,000 from RMB 195,596,000, indicating higher advance payments to suppliers[198].
大成食品(03999) - 2021 - 中期财报