仙坛股份(002746) - 2016 Q4 - 年度财报

Important Notice, Table of Contents, and Definitions Significant Risk Warnings The company faces major risks including poultry epidemics and natural disasters, product price fluctuations, raw material supply and price volatility, cooperative farming model risks, rising food safety standards, and underperforming fundraising projects, which could significantly impact its operations, cost control, and profitability - Poultry epidemics (e.g., avian influenza) and major natural disasters may lead to chicken deaths, increased production costs, and market demand contraction, adversely affecting company performance[4][5] - The prices of the company's main products (white feather broiler chicken products) are subject to significant fluctuation risks due to market supply and demand, epidemics, and food safety incidents, potentially leading to performance decline or even losses[6] - Feed costs account for approximately 67% of main business costs, with corn and soybean meal together exceeding 40%, making significant fluctuations in these raw material prices directly impact production costs and operating performance[7] - The company's "company + base + farm" cooperative farming model faces risks if cooperative farms lose enthusiasm or engage in non-compliant farming, which would negatively affect production and operations[8][9] - Food safety incidents or stricter national standards may result in product sales damage, brand image impact, and increased operating costs for the company[10] - The non-public offering's fundraising project for processed food faces market expansion risks, potentially leading to actual results differing from expectations[12] Company Profile and Key Financial Indicators Key Accounting Data and Financial Indicators In 2016, the company achieved explosive growth, with operating revenue increasing by 19.32% and net profit attributable to shareholders soaring by 988.41% to CNY 246 million, demonstrating strong profitability and cash generation, while total assets and net assets also significantly grew due to capital raised from a non-public offering 2016 Annual Key Financial Data | Indicator | 2016 | 2015 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue (CNY) | 2,095,018,758.69 | 1,755,788,002.76 | 19.32% | | Net Profit Attributable to Shareholders (CNY) | 245,516,007.12 | 22,557,355.38 | 988.41% | | Net Profit Attributable to Shareholders (Excluding Non-recurring Items) (CNY) | 242,141,219.76 | 6,043,242.98 | 3,906.81% | | Net Cash Flow from Operating Activities (CNY) | 430,115,147.66 | 154,129,710.56 | 179.06% | | Basic Earnings Per Share (CNY/share) | 1.49 | 0.15 | 893.33% | | Weighted Average Return on Net Assets | 18.63% | 2.36% | 16.27% | | Total Assets (CNY) | 2,485,259,525.95 | 1,451,108,965.01 | 71.27% | | Net Assets Attributable to Shareholders (CNY) | 2,053,613,433.85 | 997,544,929.68 | 105.87% | 2016 Quarterly Key Financial Indicators (Unit: CNY) | Indicator | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 435,249,767.17 | 509,773,885.29 | 567,158,426.45 | 582,836,679.78 | | Net Profit Attributable to Shareholders | 20,325,634.23 | 56,056,939.51 | 102,081,188.64 | 67,052,244.74 | - The company's 2016 non-recurring gains and losses totaled CNY 3.3748 million, primarily from government subsidies and investment income[29][31] Company Business Overview Main Business and Operating Model The company's main business is white feather broiler chicken farming and processing, having established a complete industrial chain from parent breeder chicken farming, chick hatching, feed production, commercial broiler farming, to slaughtering and processing, with commercial chicken farming primarily adopting a "company + base + farm" cooperative model under "nine unified" management to ensure product quality and safety - The company's main business covers parent breeder chicken farming, chick hatching, feed production, commercial broiler farming and slaughtering, chicken product processing and sales, with main products being commercial broilers and segmented frozen chicken products[34] - The company adopts an integrated industrial chain model, effectively ensuring supply at each stage, improving efficiency, and monitoring food safety[35] - Commercial chicken farming employs a "company + base + farm" cooperative model with "nine unified" management, where the company provides chicks, feed, medicine, etc., and reclaims mature chickens, paying farming fees to cooperative farms[37] Industry Development and Company Position The company operates in the white feather broiler industry, with a value chain covering everything from breeder chicken farming to chicken product processing and sales, holding a significant position as a vice-chairman unit of the China Animal Agriculture Association and chairman unit of its Poultry Branch, and has received numerous honors such as "National Key Leading Enterprise in Agricultural Industrialization" and "China Well-known Trademark," serving as a premium supplier to renowned enterprises like KFC and McDonald's - The company's business covers the entire industrial chain from parent breeder chicken farming to chicken product processing and sales, enhancing its comprehensive competitiveness in food safety traceability[42] - The company holds multiple important positions in the industry, including vice-chairman unit of the China Animal Agriculture Association and chairman unit of its Poultry Branch, and has been awarded titles such as "National Key Leading Enterprise in Agricultural Industrialization" and "China Well-known Trademark"[46] - The company is a premium supplier to well-known fast-food and food processing enterprises in China, including KFC, McDonald's, Shuanghui, and Jinluo[47] Core Competitiveness Analysis The company's core competitiveness is reflected in six aspects: the integrated industrial chain advantage, the unique "nine unified" cooperative farming model, superior ecological farming location advantage, leading technological advantage, excellent product quality and brand advantage, and stable high-quality customer resources - Integrated Operations: Business covers feed production, farming, slaughtering, and processing, achieving vertical integration of the industrial chain, enhancing market responsiveness and risk resistance[52] - Cooperative Farming Model: Adopts a "company + base + farm" model with "nine unified" management, effectively integrating the company's management advantages with farmers' breeding advantages, enabling rapid scale expansion[53] - Location Advantage: Farming bases are located in the Jiaodong Peninsula's disease-free animal demonstration zone, possessing geographical advantages for ecological farming and closed epidemic prevention[54] - Technological Advantage: Possesses core technologies such as healthy and efficient broiler farming, green nutritional feed formulations, and disease prevention and control, implementing full-process food safety control[55][56] - Brand and Quality: Certified by multiple quality and food safety systems, awarded honors such as "China Well-known Trademark," and products certified as green food and halal food[57] - Customer Advantage: Possesses numerous long-term stable high-quality customer resources due to premium products and stable supply capacity[58] Discussion and Analysis of Operations Overview of Operations In 2016, benefiting from industry capacity reduction and decreased grandparent breeder chicken imports, the white feather broiler market gradually recovered, allowing the company to seize opportunities by increasing capacity, boosting sales, and lowering farming costs, achieving significant performance growth with operating revenue reaching CNY 2.095 billion (up 19.32%) and net profit attributable to shareholders soaring to CNY 246 million (up 988.41%), while also extending its industrial chain through a non-public offering for a processed food project to enhance risk resistance - In 2016, white feather grandparent breeder chicken imports continuously declined for three years, leading to industry capacity reduction and gradual market recovery, creating favorable conditions for large-scale enterprises[61] 2016 Annual Operating Performance Summary | Indicator | Amount (CNY 10,000) | Year-on-Year Growth | | :--- | :--- | :--- | | Operating Revenue | 209,501.88 | 19.32% | | Operating Profit | 24,658.79 | 2,143.44% | | Total Profit | 24,579.66 | 989.85% | | Net Profit Attributable to Shareholders | 24,551.60 | 988.41% | | Basic Earnings Per Share (CNY) | 1.49 | 893.33% | - The significant performance growth was primarily due to increased company capacity, higher sales volume, an overall increase in industry sales prices year-on-year, and reduced farming costs[63] - The company completed a non-public offering, raising funds for a processed food project aimed at extending the industrial chain and developing processed food products closer to end consumers, thereby enhancing profitability and risk resistance[62] Main Business Analysis In 2016, the company's main business revenue was CNY 2.095 billion, a 19.32% increase year-on-year, with chicken products contributing 94.87% of the revenue; gross profit margins across all business segments significantly improved, with the farming industry's gross margin increasing from 13.3% to 43.93%, driven by rising sales prices and cost control, while physical sales of processed food, as a core business, saw a 10.08% increase in volume Revenue and Cost Analysis In 2016, the company's operating revenue reached CNY 2.095 billion, a 19.32% year-on-year increase, with chicken products being the primary revenue source, accounting for 94.87%; operating costs were CNY 1.768 billion, increasing by 5.80%, a much slower rate than revenue growth, mainly due to effective raw material cost control, leading to significant improvements in gross profit margins for both food processing and farming, which increased by 9.87 and 30.63 percentage points respectively, while sales to the top five customers accounted for 33.01% of total sales, indicating moderate customer concentration Operating Revenue Composition (2016) | Category | Amount (CNY) | Proportion of Operating Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | | By Product | | | | | Chicken Products | 1,987,614,628.17 | 94.87% | 18.96% | | Commercial Broilers and Others | 107,404,130.52 | 5.13% | 26.50% | | By Region | | | | | Domestic Sales | 2,092,163,449.98 | 99.86% | 19.16% | | Overseas Sales | 2,855,308.71 | 0.14% | 100.00% | Major Business Gross Profit Margin Changes | Industry Segment | 2016 Gross Profit Margin | Change from Previous Year | | :--- | :--- | :--- | | Food Processing | 14.34% | 9.87% | | Farming Industry | 43.93% | 30.63% | Operating Cost Composition (2016) | Industry Segment | Item | Amount (CNY) | Proportion of Operating Cost | | :--- | :--- | :--- | :--- | | Broiler Farming and Slaughtering/Processing | Raw Materials | 1,192,846,615.18 | 67.46% | | Broiler Farming and Slaughtering/Processing | Labor Wages | 175,478,369.31 | 9.92% | | Broiler Farming and Slaughtering/Processing | Other | 311,906,839.20 | 17.64% | - Sales to the top five customers accounted for 33.01% of total annual sales, and purchases from the top five suppliers accounted for 31.46% of total annual purchases, indicating no significant reliance on a single customer or supplier[76] Expense Analysis In 2016, the company maintained good control over its three major expenses, with selling and administrative expenses remaining largely consistent with the previous year, while financial expenses significantly decreased by 113.21%, turning from positive to negative, primarily due to reduced interest expenses from lower borrowings Period Expense Changes (Unit: CNY) | Expense Item | 2016 | 2015 | Year-on-Year Change | Significant Change Explanation | | :--- | :--- | :--- | :--- | :--- | | Selling Expenses | 17,424,871.70 | 16,898,138.20 | 3.12% | - | | Administrative Expenses | 53,941,780.00 | 51,910,351.25 | 3.91% | - | | Financial Expenses | -827,754.78 | 6,267,229.85 | -113.21% | Decrease in borrowings, leading to reduced interest expenses | Cash Flow Analysis In 2016, the company's cash flow significantly improved, with net cash flow from operating activities increasing by 179.06% year-on-year, mainly due to increased revenue and profitability; net cash flow from investing activities showed a substantial outflow, primarily for wealth management products and fixed asset investments; net cash flow from financing activities saw a significant inflow, mainly from the proceeds of a non-public share offering Major Cash Flow Statement Item Changes (Unit: CNY) | Item | 2016 | 2015 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 430,115,147.66 | 154,129,710.56 | 179.06% | | Net Cash Flow from Investing Activities | -852,129,611.01 | -125,005,352.05 | -581.67% | | Net Cash Flow from Financing Activities | 730,562,383.16 | -81,190,270.88 | 999.82% | | Net Increase in Cash and Cash Equivalents | 308,556,638.17 | -52,065,755.00 | 692.63% | - The significant increase in net cash flow from operating activities was primarily due to the company's increased revenue and substantial profit growth[79] - The significant decrease in net cash flow from investing activities was mainly due to increased investments in wealth management products and fixed assets during the year[80] - The significant increase in net cash flow from financing activities was primarily due to the proceeds from the non-public share offering during the year[80] Analysis of Assets and Liabilities As of the end of 2016, the company's total assets were CNY 2.485 billion, a 71.27% increase year-on-year, with a significant change in asset structure as monetary funds' proportion rose to 16.34% while fixed assets' proportion decreased from 46.40% to 30.83%, and short-term borrowings significantly reduced, indicating eased debt repayment pressure Major Balance Sheet Item Changes (Unit: CNY) | Item | Amount as of Dec 31, 2016 | Proportion of Total Assets | Amount as of Dec 31, 2015 | Proportion of Total Assets | Change in Proportion | | :--- | :--- | :--- | :--- | :--- | :--- | | Monetary Funds | 406,056,413.86 | 16.34% | 96,613,674.69 | 6.66% | 9.68% | | Inventories | 265,861,586.11 | 10.70% | 271,537,864.46 | 18.71% | -8.01% | | Fixed Assets | 766,178,968.21 | 30.83% | 673,353,477.13 | 46.40% | -15.57% | | Short-term Borrowings | 12,000,000.00 | 0.48% | 90,000,000.00 | 6.20% | -5.72% | Analysis of Investment Status In 2016, the company raised a total of CNY 837.76 million through a non-public offering, with net proceeds of CNY 826.4875 million, primarily invested in a processed food project, a commercial chicken three-dimensional farming technology renovation project, and supplementary working capital; as of the end of the reporting period, CNY 290.1643 million had been utilized, with CNY 547.5957 million remaining unused, mainly for purchasing wealth management products - In 2016, the company raised a total of CNY 837.76 million through a non-public offering, with net proceeds of CNY 826.4875 million[89] Use of Committed Raised Funds Projects (Unit: CNY 10,000) | Committed Investment Project | Total Committed Investment of Raised Funds | Amount Invested in Current Period | Cumulative Amount Invested as of Period End | Investment Progress | | :--- | :--- | :--- | :--- | :--- | | Processed Food Project | 23,259 | 3,258.68 | 3,258.68 | 14.01% | | Commercial Chicken Three-dimensional Farming Technology Renovation Project | 52,517 | 17,885 | 17,885 | 34.06% | | Supplementary Working Capital | 8,000 | 7,872.75 | 7,872.75 | 98.41% | | Total | 83,776 | 29,016.43 | 29,016.43 | - | - As of the end of the reporting period, CNY 547.5957 million of raised funds remained unused, primarily for purchasing wealth management products and subsequent project investments[89][92] Outlook for Company's Future Development The company plans to continue leveraging its integrated operational advantages, expand its business scale, and extend downstream into the industrial chain to develop high-value-added products such as processed foods and convenience foods, building a terminal brand, with a goal to achieve over 120 million birds annually within the next 3 years, and 260,000 tons of annual slaughtering and processing within the next 5 years, along with supplying tens of thousands of tons of convenience and processed foods to enhance brand awareness and profitability - The company's strategic goal is to expand its business scale and extend into the end-consumer market, developing processed foods and convenience foods to build a terminal brand enterprise[100][101] - Future 3-year target: Achieve over 120 million birds/year in broiler output, slaughtering and processing, and optimized matching capacity[101] - Future 5-year target: Annual output of 120 million commercial broilers, annual slaughtering and processing of 260,000 tons of frozen segmented chicken, annual supply of 10,000 tons of convenience foods, and 42,000 tons of processed foods[101] - The company will enhance deep processing capabilities through introducing advanced equipment, improving processes, and product R&D, achieving diversified, serialized, and high-value-added products[103] Important Matters Profit Distribution and Capital Reserve to Share Capital Conversion The company's 2016 profit distribution plan proposes a cash dividend of CNY 2.00 (tax inclusive) per 10 shares to all shareholders based on a total share capital of 181,840,201 shares, totaling CNY 36,368,040.20, with no capital reserve to share capital conversion, representing 14.81% of net profit attributable to shareholders for the year 2016 Annual Profit Distribution Plan | Item | Content | | :--- | :--- | | Dividend per 10 shares (CNY) (tax inclusive) | 2.00 | | Bonus shares per 10 shares (shares) | 0 | | Capitalization issue per 10 shares (shares) | 0 | | Share capital base for distribution plan (shares) | 181,840,201 | | Total cash dividend (CNY) (tax inclusive) | 36,368,040.20 | | Proportion of cash dividend to total profit distribution | 100.00% | Cash Dividends for the Past Three Years (Unit: CNY) | Dividend Year | Cash Dividend Amount (tax inclusive) | Ratio of Net Profit Attributable to Ordinary Shareholders | | :--- | :--- | :--- | | 2016 | 36,368,040.20 | 14.81% | | 2015 | 15,935,000.00 | 70.64% | | 2014 | 0.00 | 0.00% | Major Asset Sale On September 30, 2016, the company sold properties, land, and some equipment located in Muping District, Yantai City, to Shandong Ronghua Food Group Co., Ltd. for CNY 72 million, with the proceeds used to increase the company's working capital, positively impacting its cash flow - On September 30, 2016, the company sold some properties, land, and equipment to Shandong Ronghua Food Group Co., Ltd. for CNY 72 million, with the proceeds used to supplement working capital[94] Analysis of Major Holding and Participating Companies Shandong Xiantan Food Co., Ltd., a major subsidiary, performed strongly during the reporting period, achieving nearly CNY 2 billion in operating revenue and CNY 68.3193 million in net profit, making it a significant source of the company's profit Major Subsidiary Financial Situation (Unit: CNY) | Company Name | Main Business | Total Assets | Net Assets | Operating Revenue | Operating Profit | Net Profit | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Shandong Xiantan Food Co., Ltd. | Food Processing | 344,400,425.12 | 274,485,700.68 | 1,999,970,380.66 | 69,253,401.90 | 68,319,311.73 | Changes in Shares and Shareholder Information Changes in Share Capital During the reporting period, the company's total share capital increased by 22,490,201 shares due to a non-public offering, rising from 159,350,000 shares to 181,840,201 shares, while the proportion of unrestricted shares increased from 24.98% to 32.64% due to the lifting of restrictions on some initial public offering shares - On September 22, 2016, 22,490,201 shares from the company's non-public offering were listed, leading to an increase in total share capital[195] - On February 17, 2016, restrictions on 19,500,000 shares of initial public offering shares were lifted[194] Share Structure Changes | Share Class | Quantity Before Change | Quantity After Change | Proportion After Change | | :--- | :--- | :--- | :--- | | Restricted Shares | 119,550,000 | 122,490,201 | 67.36% | | Unrestricted Shares | 39,800,000 | 59,350,000 | 32.64% | | Total Shares | 159,350,000 | 181,840,201 | 100.00% | Shareholder Information As of the end of 2016, the company had 26,531 shareholders, with controlling shareholders and actual controllers Wang Shouchun and Qu Lirong jointly holding 55.09% of shares, and the top ten shareholders, excluding the controlling shareholders, primarily consisting of institutional investors who entered through the non-public offering - The total number of ordinary shareholders at the end of the reporting period was 26,531[200] Top Ten Shareholders' Shareholding | Shareholder Name | Shareholding Percentage | Number of Shares Held at Period End | | :--- | :--- | :--- | | Wang Shouchun | 28.69% | 52,173,800 | | Qu Lirong | 26.40% | 48,000,000 | | First Capital Securities - Guosen Securities - Gongying Dayan Quantitative Private Placement Collective Asset Management Plan | 4.87% | 8,859,060 | | Wang Kegong | 2.47% | 4,500,000 | | He Chuanhu | 2.47% | 4,500,000 | - The company's controlling shareholder and actual controller, Wang Shouchun and Qu Lirong, are a married couple[201] Directors, Supervisors, Senior Management, and Employees D&S&SM Shareholding and Remuneration During the reporting period, only Chairman and President Mr. Wang Shouchun held company shares, with 52,173,800 shares at period-end, having increased his holdings by 123,800 shares during the period, and the total pre-tax remuneration paid to directors, supervisors, and senior management in 2016 was CNY 1.0681 million - Chairman and President Wang Shouchun held 52,050,000 shares at the beginning of the period, increased his holdings by 123,800 shares during the period, and held 52,173,800 shares at the end of the period[209] Remuneration of Selected Directors, Supervisors, and Senior Management (Unit: CNY 10,000) | Name | Position | Total Pre-tax Remuneration from Company | | :--- | :--- | :--- | | Wang Shouchun | Chairman, President | 19.06 | | Xu Shiwei | Director, Vice President, CFO, Board Secretary | 11.26 | | Wang Shouheng | Vice President | 11.26 | | Song Tao | Vice President | 11.26 | | Total | -- | 106.81 | Employee Information As of the end of the reporting period, the company had a total of 4,466 employees, with production personnel constituting the largest proportion at 4,056 employees, and the vast majority, 4,202 employees, having a junior college education or below Employee Professional Composition | Professional Category | Number of Employees (people) | | :--- | :--- | | Production Personnel | 4,056 | | Technical Personnel | 228 | | Administrative Personnel | 137 | | Financial Personnel | 25 | | Sales Personnel | 20 | | Total | 4,466 | Corporate Governance Overview of Corporate Governance During the reporting period, the company operated strictly in accordance with laws and regulations such as the "Company Law" and "Securities Law," with no significant discrepancies between its actual corporate governance status and relevant regulations of the China Securities Regulatory Commission; the company maintained independence from its controlling shareholder in terms of business, personnel, assets, organization, and finance, possessing complete independent operating capabilities, and has established a sound corporate governance structure and internal control system to ensure the orderly conduct of all production and operating activities - The actual status of corporate governance has no significant discrepancies with the normative documents issued by the China Securities Regulatory Commission[238] - The company is separate from its controlling shareholder in terms of assets, business, personnel, finance, and organization, possessing independent and complete business operations and the ability to operate independently in the market[239] - The company's Board of Directors has established specialized committees including Audit, Nomination, Remuneration and Appraisal, and Strategy, providing professional opinions for decision-making[234] Financial Report Audit Report Shandong Hexin Certified Public Accountants (Special General Partnership) audited the company's 2016 financial statements and issued a standard unqualified audit opinion, concluding that the financial statements were prepared in all material respects in accordance with enterprise accounting standards, fairly reflecting the company's financial position as of December 31, 2016, and its operating results and cash flows for the year 2016 - The auditing firm was Shandong Hexin Certified Public Accountants (Special General Partnership), which issued a standard unqualified audit opinion[256][265] Main Financial Statements As of the end of 2016, the company's total assets were CNY 2.485 billion, net assets attributable to the parent company were CNY 2.054 billion, and the asset-liability ratio was 17.32%; in 2016, it achieved operating revenue of CNY 2.095 billion and net profit attributable to the parent company of CNY 246 million, with net cash flow from operating activities of CNY 430 million, demonstrating a healthy financial position, excellent profitability, and cash flow performance Consolidated Balance Sheet Major Items (Unit: CNY) | Item | Dec 31, 2016 | Dec 31, 2015 | | :--- | :--- | :--- | | Monetary Funds | 406,056,413.86 | 96,613,674.69 | | Inventories | 265,861,586.11 | 271,537,864.46 | | Fixed Assets | 766,178,968.21 | 673,353,477.13 | | Total Assets | 2,485,259,525.95 | 1,451,108,965.01 | | Short-term Borrowings | 12,000,000.00 | 90,000,000.00 | | Total Liabilities | 430,369,654.83 | 452,768,107.83 | | Net Assets Attributable to Parent Company | 2,053,613,433.85 | 997,544,929.68 | | Total Liabilities and Owners' Equity | 2,485,259,525.95 | 1,451,108,965.01 | Consolidated Income Statement Major Items (Unit: CNY) | Item | 2016 | 2015 | | :--- | :--- | :--- | | Total Operating Revenue | 2,095,018,758.69 | 1,755,788,002.76 | | Total Operating Costs | 1,852,638,061.54 | 1,749,748,832.28 | | Operating Profit | 246,587,922.41 | 10,991,486.70 | | Total Profit | 245,796,621.73 | 22,553,282.88 | | Net Profit | 245,196,516.89 | 22,553,282.88 | | Net Profit Attributable to Parent Company Shareholders | 245,516,007.12 | 22,557,355.38 | Consolidated Cash Flow Statement Major Items (Unit: CNY) | Item | 2016 | 2015 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 430,115,147.66 | 154,129,710.56 | | Net Cash Flow from Investing Activities | -852,129,611.01 | -125,005,352.05 | | Net Cash Flow from Financing Activities | 730,562,383.16 | -81,190,270.88 | | Net Increase in Cash and Cash Equivalents | 308,556,638.17 | -52,065,755.00 |