NWF(SH:600975)2018-08-30 16:00Financial Performance - The company's operating revenue for the first half of 2018 was ¥746,671,789.34, a decrease of 13.58% compared to ¥863,974,868.42 in the same period last year[21]. - The net profit attributable to shareholders of the listed company was -¥56,093,708.77, representing a decline of 236.37% from a profit of ¥41,133,212.92 in the previous year[21]. - The net cash flow from operating activities was -¥62,192,190.90, down 141.28% from ¥150,645,369.27 in the same period last year[21]. - The total assets decreased by 10.93% to ¥1,583,412,748.47 from ¥1,777,786,368.97 at the end of the previous year[21]. - The net assets attributable to shareholders decreased by 10.08% to ¥1,082,046,553.20 from ¥1,203,407,820.37 at the end of the previous year[21]. - The basic earnings per share for the first half of 2018 was -¥0.09, a decrease of 250.00% compared to ¥0.06 in the same period last year[22]. - The company reported a 27.45% decrease in export sales revenue to RMB 72.65 million, with a total export of 45,800 pigs, down 11.41% year-on-year[41]. - Domestic sales revenue reached RMB 364.5 million, a decrease of 5.71% compared to the previous year, primarily due to continued low pig prices[42]. - The company’s livestock revenue accounted for 58.57% of total main business income, decreasing by 10.18% year-on-year due to low pig prices[45]. - The company expects a net profit attributable to shareholders to be between -35 million to -52.5 million yuan for the period from January 1, 2018, to September 30, 2018, indicating a significant decline compared to the previous year[59]. Operational Challenges - In the first half of 2018, the company faced significant challenges due to a continuous decline in pig prices, which reached an eight-year low, impacting overall performance[35]. - The primary reason for the expected decline in performance is the drop in pig prices during the first half of 2018, despite a slight recovery in the third quarter[59]. - The company faces a risk of pig diseases, with an average mortality rate of around 10% during large-scale farming, necessitating enhanced monitoring and prevention measures[60]. - Feed costs, primarily from corn and soybean meal, constitute the largest portion of the company's breeding costs, making them vulnerable to price fluctuations[62]. - Environmental policy changes pose a risk, as increased compliance costs may affect the company's operating performance[62]. Strategic Initiatives - The company has been actively promoting key projects in pig slaughtering, cold chain logistics, and pig trading to enhance its market position[24]. - The company signed a framework agreement in March 2018 with the government of Mayang Miao Autonomous County to develop a pig farming project with an annual output of 300,000 pigs, aiming to enhance both corporate and social benefits[35]. - The company aims to expand its breeding scale and improve internal management to mitigate the impact of industry cycles on its operations[35]. - The company is committed to modernizing pig farming in Hunan Province, with plans to enhance standardized large-scale farming practices by 2020[29]. - The company plans to mitigate the impact of fluctuating pig prices by diversifying sales channels and enhancing internal and external trade integration[61]. Product and Market Development - The company operates in the livestock industry, focusing on pig farming, meat sales, and feed processing, with a comprehensive supply chain established for these products[24]. - The company has established a rich product structure including pigs, meat, and feed, optimizing product allocation in both mainland and Hong Kong-Macau markets[24]. - The company operates 13 large-scale breeding bases and collaborates with over 800 small farms under a "company + appropriate scale small farm" model, providing services such as piglets, feed, vaccines, and technical guidance[32]. - The slaughtering capacity of the company's subsidiary, Guanglian, is 700,000 pigs per year, with a cold storage capacity of 40,000 tons, processing pigs into fresh meat, carcasses, or frozen products for sale[27]. - The company has developed a comprehensive quality assurance system, including a traceability system and GAP certification, ensuring the safety and quality of its meat products[33]. Financial Management - The company achieved a cost reduction and efficiency increase of over RMB 17 million in the first half of 2018 through various management measures[38]. - Operating costs decreased by 2.03% to ¥752,485,980.09 from ¥768,100,456.74[47]. - Research and development expenses increased by 17.11% to ¥1,226,777.67 from ¥1,047,581.71[47]. - The company's cash and cash equivalents decreased by 36.14% to ¥348,679,755.32 from ¥545,976,091.97[49]. - The company has a total investment of 5,000.00 million in various projects, indicating a focus on expanding its investment portfolio[57]. Environmental Compliance - The company is committed to balancing production development with environmental protection, enhancing its environmental management systems and increasing investment in environmental facilities[62]. - The wastewater treatment facility at the company's Huizhou branch has a processing capacity of 500 tons per day, ensuring compliance with local environmental standards[84]. - The company has implemented a 24-hour online monitoring system for pollutants including total phosphorus and nitrogen, enhancing its environmental compliance[86]. - The company has obtained pollution discharge permits for its operations, ensuring adherence to environmental regulations[87]. - The company has established emergency response plans for environmental incidents, which have been filed with local environmental protection authorities[88]. Shareholder Information - The total number of ordinary shareholders reached 61,715 by the end of the reporting period[95]. - The largest shareholder, Hunan Grain and Oil Food Import and Export Group Co., Ltd., holds 202,018,546 shares, accounting for 30.95% of total shares[96]. - Hunan High-tech Venture Capital Management Co., Ltd. holds 104,166,666 shares, representing 15.96% of total shares, with all shares subject to judicial freeze[98]. - A total of 183,955,332 shares were under lock-up due to non-public issuance, set to be released on May 7, 2018[94]. - The company did not report any strategic investors or general corporations becoming top ten shareholders due to new share placements[98]. Corporate Governance - The company did not report any changes in the controlling shareholder or actual controller during the period[99]. - There were no stock option grants or changes in the board of directors, supervisors, or senior management during the reporting period[102]. - The company has committed to align voting results with Xinwufeng during the decision-making process at Guanglian Company[68]. - The actual controller and related parties have committed to avoid or reduce related transactions with Xinwufeng and its controlling enterprises[67]. - Modern Agricultural Group has committed to maintain complete separation and independent operation from Xinwufeng in terms of assets, personnel, finance, and business[68].