TIANSHAN BIO(SZ:300313)2025-04-28 16:20Financial Performance - The company reported a significant decline in live cattle market prices, leading to increased losses in its livestock business[3]. - The sales volume of the high-margin frozen semen business decreased, resulting in reduced profitability[3]. - The newly launched meat slaughtering and processing business has not yet achieved profitability as it is still in its initial phase[3]. - The company has recognized asset impairment provisions for inventories, fixed assets, and investment properties due to estimated recoverable amounts being lower than their book values[3]. - The company plans not to distribute cash dividends, issue bonus shares, or increase capital from reserves[4]. - The audit report issued by Zhongxing Caiguanghua Certified Public Accountants includes a section on significant uncertainties related to going concern[3]. - The company’s operating revenue for 2024 was ¥137,601,816.77, a slight increase of 0.07% compared to ¥137,499,875.86 in 2023[20]. - The net profit attributable to shareholders for 2024 was negative at -¥65,947,904.35, representing a significant decline of 199.74% from -¥22,001,636.31 in 2023[20]. - The net cash flow from operating activities for 2024 was ¥14,357,578.16, a substantial improvement of 204.44% compared to -¥13,747,711.18 in 2023[20]. - The company's total assets at the end of 2024 were ¥248,197,118.59, a decrease of 21.26% from ¥315,229,860.70 at the end of 2023[20]. - The company reported a net profit attributable to shareholders after deducting non-recurring gains and losses of -¥67,545,934.55 for 2024, down 172.25% from -¥24,810,107.89 in 2023[20]. - The company experienced a negative net profit for the last three accounting years, indicating ongoing uncertainty regarding its ability to continue as a going concern[20]. - The company reported a total of ¥1,598,030.20 in non-recurring gains for 2024, compared to ¥2,808,471.58 in 2023[26]. - The company reported an operating loss of 61.34 million yuan, a year-on-year increase in loss of 228.69%[66]. - The total assets of the company decreased by 21.26% compared to the beginning of the year, amounting to 248.20 million yuan[66]. - The company’s equity attributable to shareholders decreased by 106.08%, amounting to -3.78 million yuan[66]. Market Conditions - The average monthly price of beef (boneless) and live cattle was 69.83 CNY/kg and 27.76 CNY/kg respectively, representing a decline of 15% and 20% year-on-year, marking the lowest prices in five and ten years respectively[38]. - The beef cattle industry in China has seen a stable growth in production capacity, with the total cattle inventory reaching 100.47 million heads in 2024, an increase of approximately 11.81% compared to 2013[37]. - The beef cattle industry is experiencing cyclical fluctuations, with many large-scale farming enterprises facing significant losses due to declining market prices[39]. - The entire beef cattle industry chain is facing losses at the farming level, while downstream sectors such as live cattle circulation and beef sales remain relatively stable in profitability[40]. - The average price of fattened cattle in China dropped from 35.1 RMB/kg in 2022 to 30.02 RMB/kg in 2023, with a further decline to approximately 25.39 RMB/kg in June 2023, marking the lowest price since November 2017[114]. - The beef cattle market is expected to continue its downward trend, with prices in mid-April 2024 dropping to levels not seen since 2012, affecting the company's farming operations[115]. Business Strategy and Operations - The company operates primarily in the livestock industry, with approximately 80% of its business focused on cattle breeding and beef cattle farming[28]. - The company is positioned in a growing industry with significant market potential, particularly in the beef cattle sector, which is still in its early stages of development in China[28]. - The company is expanding its business model to include downstream slaughter processing and meat sales in Guangdong, aiming for a full industry chain layout from breeding to table[43]. - The company has established a modern breeding system integrating breeding, nutrition, and disease prevention, providing comprehensive services to cattle farmers[42]. - The company is actively involved in the establishment of the "Beef Simmental Breeding Alliance" to enhance innovation capabilities in the beef industry[42]. - The company aims to focus on the Chinese beef cattle industry, implementing a "big beef cattle strategy" to drive breeding and beef cattle farming[105]. - The company plans to expand its downstream operations in live cattle circulation, slaughter processing, and meat sales[105]. - The company will continue to develop its breeding and beef cattle farming businesses while expanding into live cattle circulation, slaughter processing, and meat sales to enhance the entire industry chain[110]. Legal and Compliance Issues - The company is currently facing litigation risks due to investor claims related to the restructuring of the Elephant Advertising incident, with ongoing legal efforts to minimize losses[118]. - The company has been involved in contract fraud cases, with final judgments affecting agreements made in September 2017, and is actively pursuing the recovery of related shares[119]. - The company is involved in ongoing litigation regarding advertising rights but has not incurred any losses as of the date of the commitment[176]. - The company has committed to bear all economic compensation responsibilities related to the legal case if the transaction is approved and results in a final judgment against it[178]. - The audit report for the 2023 fiscal year from Zhongxing Cai Guanghua CPA included a section on significant uncertainties related to going concern, but the board respects the audit opinion and aims to address the highlighted issues[188]. Governance and Management - The company held two shareholder meetings during the reporting period, adhering to all relevant regulations and ensuring equal treatment of all shareholders[126]. - The board of directors consists of nine members, with independent directors making up at least one-third of the board, ensuring compliance with governance standards[128]. - The supervisory board is composed of three members, including a representative from employees, fulfilling legal requirements for oversight[129]. - The company maintains strict compliance with information disclosure regulations, ensuring timely and accurate communication with investors[131]. - The company's governance practices align with regulatory requirements, with no significant discrepancies noted[131]. - The company has established a remuneration and assessment committee to determine the remuneration plans for directors and senior management[144]. - The company has a total of 10 board members, including independent directors and supervisors[143]. - The company has a complete production, sales, and R&D system, enabling independent market operations[132]. Employee and Training Initiatives - The total number of employees at the end of the reporting period is 124, with 19 in the parent company and 105 in major subsidiaries[153]. - Employee training programs are implemented, combining internal and external training to enhance skills and management capabilities[155]. - The professional composition includes 42 production personnel, 15 sales personnel, 16 technical personnel, 16 financial personnel, 18 administrative personnel, 11 management personnel, and 6 logistics personnel[153]. Risk Management - The company is facing significant risks, including potential delisting due to negative net profits for three consecutive years and a negative net asset value as of the end of 2024[113]. - The company faces significant risks from animal diseases, which can severely impact production and reproduction capabilities, potentially leading to substantial losses[117]. - The company has implemented various disease prevention measures, including isolation, disinfection, and vaccination, to mitigate the risk of outbreaks[117]. - The company acknowledges the impact of the audit report indicating significant uncertainties regarding its going concern and is committed to taking effective measures to mitigate these issues[194]. Investment and Financial Management - The company plans to optimize its asset structure by disposing of long-term idle assets to reduce financial burdens and enhance its competitive edge[112]. - The company aims to strengthen its financial management to gradually improve its asset-liability structure and enhance its risk resistance capabilities[190]. - The company intends to build a professional team by attracting experienced industry talent and establishing a scientific incentive mechanism to boost team motivation[191]. - The company will explore capital operations to improve its capital structure and support long-term development[192].