TECON(SZ:002100)2017-08-22 16:00Financial Performance - The company's operating revenue for the first half of 2017 was CNY 2,269,473,254.95, representing a 4.88% increase compared to CNY 2,163,773,417.62 in the same period last year[23]. - The net profit attributable to shareholders of the listed company was CNY 189,752,358.05, a decrease of 1.14% from CNY 191,946,054.83 in the previous year[23]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY 180,883,451.09, down 4.33% from CNY 189,073,522.39 year-on-year[23]. - The net cash flow from operating activities increased by 14.54% to CNY 213,309,644.91, compared to CNY 186,226,708.94 in the same period last year[23]. - Total assets at the end of the reporting period were CNY 4,685,603,190.98, up 4.34% from CNY 4,490,817,872.34 at the end of the previous year[23]. - The net assets attributable to shareholders of the listed company increased by 3.55% to CNY 2,722,409,811.88 from CNY 2,628,995,914.63 at the end of the previous year[23]. - The weighted average return on net assets decreased to 7.01% from 7.90% in the previous year[23]. - The company reported non-recurring gains of CNY 8,868,906.96 during the reporting period[28]. Revenue Breakdown - The sales revenue from the feed business was CNY 110,425.07 million, down 2.23% year-on-year, while the pharmaceutical business saw a revenue increase of 13.22% to CNY 26,597.74 million[37]. - The feed segment generated CNY 1,104,250,679.79 in revenue, accounting for 48.66% of total revenue, with a slight decrease of 2.23% compared to the previous year[47]. - The livestock farming segment saw a significant revenue increase of 57.67%, reaching CNY 102,017,492.66, with a gross margin of 49.94%[48]. - The veterinary medicine segment reported revenue of CNY 265,977,398.59, with a gross margin of 70.80%, reflecting a 13.22% increase in revenue year-on-year[48]. - Revenue from agricultural product processing increased by 30.28% to CNY 529,895,821.35, but the gross margin decreased to 3.95%[48]. - Revenue from the Xinjiang region accounted for 57.94% of total revenue, increasing by 18.87% year-on-year, while revenue from outside Xinjiang decreased by 9.74%[46]. Investment and R&D - The company invested CNY 19,328,131.53 in R&D, a decrease of 9.36% compared to the previous year[43]. - The total investment in the comprehensive feed project in Wujiaqu City reached 23,648.5 million yuan, with a cumulative actual investment of 36,660.3 million yuan, indicating a construction progress of 20.95%[58]. - The total investment in the comprehensive feed project in Yuanyang County was 27,761.4 million yuan, with a cumulative actual investment of 27,761.4 million yuan, reflecting a construction progress of 23.13%[58]. - The total actual investment across both projects amounted to 64,421.7 million yuan, with a planned investment of 51,410.0 million yuan[60]. Risks and Challenges - The company faces risks related to livestock disease outbreaks, raw material price fluctuations, and food safety issues that could impact its performance[6][7][9]. - The decline in the pig farming segment's performance is attributed to a decrease in domestic pig prices since May 2017, alongside a downturn in the plant protein business due to low cottonseed oil prices[73]. - The company faces risks from fluctuations in raw material prices, particularly corn and soybean meal, which could negatively impact feed business performance[75]. - To counteract raw material price volatility, the company has established storage companies in major production areas and is actively seeking new supply channels[75]. - The company has implemented measures to mitigate risks from animal diseases by enhancing disease prevention during pig farming and developing a complementary business model involving vaccines and feed[74]. Shareholder and Dividend Information - The company plans not to distribute cash dividends or issue bonus shares for the reporting period[10]. - The company has committed to distributing at least 10% of its distributable profits in cash annually over the next three years[88]. - The company plans to increase cash dividend ratios or implement stock dividends to enhance shareholder returns if net profits continue to grow steadily over the next three years[88]. - The company did not distribute cash dividends or issue bonus shares for the first half of the year[82]. Subsidiary Performance - The subsidiary Xinjiang Kuitun Tiankang Plant Protein Co., Ltd. reported a net loss of 5,854,127.3 yuan on total revenue of 237,889,016 yuan[71]. - The subsidiary Xinjiang Akesu Tiankang Plant Protein Co., Ltd. reported a net loss of 5,587,310.8 yuan on total revenue of 337,990,035 yuan[71]. - The subsidiary Henan Hongzhan Industry Co., Ltd. reported a net loss of 234,117.38 yuan on total revenue of 343,858,040 yuan[71]. - The subsidiary Shenyang Tiankang Feed Co., Ltd. reported a net loss of 2,156,130.2 yuan on total revenue of 13,716,986.4 yuan[71]. Corporate Governance and Compliance - The company has committed to maintaining transparency and accuracy in the information provided regarding its assets and liabilities[88]. - The company has established a commitment to reduce and regulate related party transactions[85]. - The company has ensured that any related party transactions will follow market principles and legal procedures[85]. - The company has confirmed that all commitments made during the asset restructuring have been fulfilled[84]. - The company has undertaken to avoid any illegal occupation of funds and assets of the company and its subsidiaries[85]. - The company has committed to fulfilling its obligations under relevant laws and regulations to protect the rights of its shareholders[85]. Financial Position and Assets - Cash and cash equivalents at the end of the reporting period were CNY 1,055,301,189.00, representing 22.52% of total assets, an increase from 13.24% at the end of the previous year[50]. - Short-term borrowings increased significantly to CNY 1,064,000,000.00, accounting for 22.71% of total liabilities, due to increased bank loans[51]. - The company reported a decrease in inventory turnover, with inventory valued at CNY 777,753,778.60, representing 16.60% of total assets[50]. - The total amount of guarantees approved during the reporting period was CNY 105 million, with actual guarantees amounting to CNY 79 million[105]. - The total amount of guarantees at the end of the reporting period was CNY 87 million, with actual guarantees amounting to CNY 65.5 million[105]. - The proportion of actual guarantee total to the company's net assets was 24.06%[105]. Market Expansion and Strategy - The company is actively pursuing market expansion and new product development strategies to enhance its competitive position in the industry[56]. - The company plans to gradually expand its "company + farmer" breeding model as its pig farming scale increases[39]. - The company has plans for market expansion and new product development in the feed and veterinary sectors, aiming to enhance its competitive edge[173]. Accounting and Financial Reporting - The company's financial statements are prepared based on actual transactions and events, adhering to accounting standards[175]. - The company adheres to the Accounting Standards for Business Enterprises, ensuring that financial statements accurately reflect its financial position, operating results, and cash flows for the reporting period[181]. - The accounting period for the company runs from January 1 to December 31 each year[178]. - The company uses the Chinese Yuan (RMB) as its functional currency for accounting purposes[180].