NEW HOPE(SZ:000876)2018-08-30 16:00Economic Performance - In the first half of 2018, China's GDP growth rate was 6.8%, continuing a trend of being below 7% for the past three years, indicating a shift to a "new normal" of medium-high growth [5]. - The company's operating revenue for the first half of 2018 was CNY 31,642,779,555.68, representing a 6.22% increase compared to CNY 29,788,493,938.88 in the same period last year [35]. - The net profit attributable to shareholders decreased by 25.20% to CNY 846,044,679.19 from CNY 1,131,121,345.13 year-on-year [35]. - The net cash flow from operating activities increased by 25.58% to CNY 1,239,093,832.81 compared to CNY 986,701,975.86 in the previous year [35]. - The total assets at the end of the reporting period were CNY 46,147,843,699.92, an increase of 8.71% from CNY 42,451,633,023.98 at the end of the previous year [35]. - The company's weighted average return on equity decreased by 1.33 percentage points to 3.97% from 5.30% in the previous year [35]. - The company reported a total revenue of 23,070 million CNY from Changsha Guoxiong Feed, contributing 1,177.52 million CNY to the overall performance [165]. - New Hope Liuhe reported a revenue of 15.2 billion RMB for the first half of 2018, representing a year-on-year increase of 12% [182]. - The company achieved a net profit of 1.2 billion RMB, up 20% compared to the same period last year [184]. Market Challenges - The company faced three main risks: insufficient consumer demand affecting product sales, declining product prices due to weak economic conditions, and increased operational pressures from financing difficulties and rising production costs [6][7]. - In the first half of 2018, pig prices were in a downward trend, reaching near 8-year lows, which could impact the company's profit levels [10]. - The overall economic environment has led to increased production costs and financing difficulties for the company [118]. - The company is facing risks due to slowing domestic economic growth, which may impact product sales and inventory pressure [118]. Innovation and Transformation - The company has been actively innovating and transforming since 2013, focusing on optimizing product structure and increasing the proportion of high-margin feed products [8]. - The company is adapting to market changes by establishing service companies for poultry and pig farming, focusing on eco-friendly and efficient practices [14]. - The company is exploring agricultural internet finance to support farmers and enhance its service offerings [46]. - The company is focusing on upgrading production efficiency through technological innovations, such as bio-environmental feed and improved logistics [44]. - The company is actively pursuing a transformation towards an integrated model of feed production, breeding, and slaughtering, with investments in food and sales-related projects [46]. Environmental Compliance - Environmental regulations have intensified since 2014, leading to stricter controls on livestock farming, which could affect the company's production capacity [12]. - The company is classified as a key pollutant discharge unit by environmental protection authorities [170]. - The total COD discharge was reported at 21.567 tons per annum, with no exceedance of discharge standards [170]. - The company has implemented pollution control measures in compliance with national standards [170]. - The company has received environmental approvals for various projects, including the low-temperature meat processing project in Chengdu, which was approved in 2008 [179]. - The company is focused on maintaining environmental standards across its various facilities, with specific attention to wastewater quality and compliance [188]. Food Safety and Quality - The company has invested CNY 100 million to enhance its food safety management system, establishing a comprehensive safety control chain from feed production to consumer [19]. - The company has been recognized for its food safety efforts, being elected as a vice-chair unit of the GFSI China Council and passing BRC food safety certification [20]. - The company has implemented strict epidemic prevention measures at its standardized breeding farms to control disease outbreaks effectively [126]. - The company has developed a cloud-based animal health monitoring system since 2014 to provide real-time disease monitoring and guidance for farmers [126]. Talent Development - The company plans to focus on talent development and organizational activation as part of its long-term strategic tasks [23]. - The company is enhancing its talent recruitment efforts in new business areas and promoting cross-industry training to improve the knowledge and skills of existing employees [23]. - The company is focusing on talent development and organizational activation as part of its long-term strategy to address human resource risks in the evolving agricultural and food sectors [131]. Investment and Financial Management - The company has established a risk management strategy that includes strict control of futures positions and funding scale for hedging operations [110]. - The company aims to manage raw material procurement price risks through commodity futures hedging operations [110]. - The company has a dedicated futures operation team and monitoring team to ensure compliance with its hedging policies [110]. - The company reported a guarantee amount of 24,900,000 CNY for Sichuan New Hope Liuhe Agricultural Co., Ltd. Chengdu Branch, with an actual guarantee of 1,440,460 CNY on February 7, 2018 [158]. Social Responsibility and Poverty Alleviation - The company helped 1,238 registered poor individuals increase their income in the first half of 2018, with 120 individuals achieving poverty alleviation, totaling 1,796 individuals since 2016 [191]. - A total of 45,910,000 RMB was invested in poverty alleviation projects, with 21 projects initiated in the agricultural and forestry sectors [193]. - The company has established a strategic cooperation with Evergrande Group for a 10-year joint poverty alleviation project, with a total breeding scale of 16,800 pigs across four projects [192]. - The company has conducted vocational skills training for 82 individuals as part of its employment transfer poverty alleviation efforts [193].