WESTERN ANIMAL(300106)2015-04-08 16:00Financial Performance - The company's operating revenue for 2014 was CNY 771,379,830.66, representing a 70.86% increase compared to CNY 451,460,275.35 in 2013[18]. - The operating profit increased significantly to CNY 10,549,671.19, a rise of 478.85% from CNY 1,822,536.36 in the previous year[18]. - The net profit attributable to shareholders decreased by 17.25% to CNY 22,489,359.83 from CNY 27,176,996.02 in 2013[18]. - The total assets at the end of 2014 were CNY 1,748,810,317.49, marking a 36.61% increase from CNY 1,280,128,573.11 in 2013[18]. - The total liabilities increased by 67.46% to CNY 993,833,911.73 from CNY 593,457,751.23 in the previous year[18]. - The cash flow from operating activities showed a significant negative net amount of CNY -166,624,995.15, worsening from CNY -33,834,476.52 in 2013[18]. - The basic earnings per share decreased to CNY 0.14, down 17.65% from CNY 0.23 in the previous year[18]. - The weighted average return on equity was 3.61%, a decline from 4.53% in 2013[18]. - The company reported a net profit of -8,802,544.46 CNY from non-current asset disposal losses in 2014, compared to -1,569,868.33 CNY in 2013 and -2,935,249.36 CNY in 2012[22]. - The company achieved total operating revenue of 771,379,830.66 CNY in 2014, a year-on-year increase of 70.86%[38]. Assets and Liabilities - The company's total assets reached 1,748,810,300 CNY, up 36.61% from the previous year, while net assets increased by 9.95% to 754,976,400 CNY[31]. - The company's asset-liability ratio rose to 56.83%, up from 46.36% in 2013, indicating increased financial leverage[19]. - Total operating costs rose by 75.83% to CNY 657.41 million, with raw material costs accounting for 33.56% of total costs[41]. - Short-term loans increased by CNY 20.84 million, a growth of 51.71%, primarily due to the expansion of breeding operations[55]. Government Support and Subsidies - Government subsidies recognized in the current period amounted to 27,579,308.83 CNY, a decrease from 29,002,462.31 CNY in 2013 and 5,730,937.36 CNY in 2012[22]. - The company received a total of 11,270,000 CNY in livestock development subsidies, which is part of the government support for the agricultural sector[24]. - The company benefits from government support and subsidies, which are crucial for its operations in the agricultural sector, but future changes in these policies could affect its performance[28]. Risks and Challenges - The company faces risks from fluctuations in fresh milk prices, with a downward trend observed in the second half of 2014 due to international market pressures[25]. - There is a significant risk related to product quality, especially for infant formula, despite the company maintaining high standards and having no major food safety issues reported during the period[26]. - The company is exposed to animal epidemic risks as the scale of its dairy farming operations increases, which could impact fresh milk production and product sales[27]. - The company has faced challenges in achieving expected economic benefits due to the impact of increased imports of milk powder and declining prices in the domestic market[67]. Investments and Acquisitions - The company completed fixed asset investments of 96,066,500 CNY in 2014, establishing 14 large-scale dairy and beef cattle farms[34]. - The company’s strategic acquisition of Huayuan Dairy enhanced its market competitiveness and brand recognition, completing the integration of the entire livestock industry chain[33]. - The company plans to issue 49,140,000 shares to raise funds for a 150,000-ton feed project and to repay bank loans[35][36]. - The company has reported a cumulative investment of 39.05 million yuan in the Shihezi City Zhenxing Animal Husbandry Co., Ltd. project, with a cumulative loss of 21.98%[69]. Subsidiary Performance - The subsidiary Xinjiang Shihezi Garden Dairy Co., Ltd. achieved a revenue of CNY 252.13 million and a net profit of CNY 27.68 million, attributed to increased brand awareness and sales volume[77]. - Xinjiang Xibu Bordo Animal Husbandry Co., Ltd. reported a total revenue of CNY 28.07 million but incurred a net loss of CNY 0.026 million, indicating ongoing challenges during its establishment phase[77]. - The company’s subsidiary, Xinjiang Production and Construction Corps Animal Husbandry Engineering Technology Research Center reported a net loss of CNY 0.34 million, highlighting the need for improved operational efficiency[76]. Shareholder and Dividend Policies - The company has implemented a cash dividend policy that requires at least 10% of the distributable profit to be distributed in cash each year, or a cumulative distribution of at least 30% over three consecutive years[96]. - A cash dividend of CNY 0.20 per 10 shares was declared, totaling CNY 3,276,000.00, which represents 14.57% of the net profit attributable to shareholders[106]. - The total distributable profit at the end of the year was CNY 119,792,977.52, with no capital reserve fund conversion to share capital for 2014[103]. - The company maintained a capital reserve balance of CNY 280,584,749.75 at the end of the reporting period[103]. Management and Governance - The company has a strong management team with extensive experience in various sectors, which is expected to drive future growth[178]. - The board of directors consists of nine members, with a diverse background in management and finance, enhancing the company's governance structure[177]. - The company has established an independent financial department with a complete accounting system and financial management policies[200]. - The governance structure includes independent shareholder meetings, a board of directors, and a supervisory board, all operating under legal regulations[200]. Market Position and Strategy - The company aims to become a nationally recognized leader in livestock industry by 2015, focusing on high-quality dairy and meat production, and establishing a traceable quality control system[89]. - The company is actively pursuing mergers and acquisitions to facilitate low-cost and rapid expansion[47]. - The company is expanding its market presence by entering three new provinces, aiming for a 25% market share in these regions within two years[182]. - The company plans to increase its marketing budget by 20% to enhance brand visibility and customer engagement[182].