德康农牧(02419) - 2025 - 中期业绩

Performance Highlights Key Operating Data For the six months ended June 30, 2025, the company's hog sales significantly increased, with commercial hog sales growing by 23.4% year-on-year and average selling prices slightly rising; poultry business saw yellow-feathered broiler sales increase by 7.2% year-on-year, but average selling prices decreased by 19.1% H1 2025 Key Product Sales and Average Selling Prices | Product | H1 2025 | H1 2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Hog Sales | | | | | Commercial Hog Sales (head) | 4,843,040 | 3,925,495 | +23.4% | | Commercial Hog Average Price (CNY/head) | 2,032.7 | 1,964.1 | +3.5% | | Poultry Sales | | | | | Yellow-Feathered Broiler Sales (unit) | 42,703,302 | 39,839,536 | +7.2% | | Yellow-Feathered Broiler Average Price (CNY/unit) | 30.5 | 37.7 | -19.1% | Key Financial Data In H1 2025, the company's total revenue increased by 24.3% to CNY 11.70 billion; despite revenue growth, profit for the period decreased by 24.1% to CNY 1.36 billion due to a significant reduction in fair value gains on biological assets, yet profit before fair value adjustments of biological assets surged by 250.6%, reflecting strong core operational improvement H1 2025 Key Financial Indicators | Indicator | H1 2025 (CNY Thousand) | H1 2024 (CNY Thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 11,695,381 | 9,407,081 | +24.3% | | Profit Before Tax | 1,360,479 | 1,791,714 | -24.1% | | Profit for the Period | 1,360,367 | 1,791,381 | -24.1% | | Profit Attributable to Equity Holders of the Company | 1,292,387 | 1,766,453 | -26.8% | | Earnings Per Share (CNY) | 3.32 | 4.54 | -26.9% | | Profit for the Period Before Fair Value Adjustments of Biological Assets | 1,273,072 | 363,125 | +250.6% | Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income During the reporting period, the company's revenue reached CNY 11.70 billion, a 24.3% year-on-year increase, with gross profit surging by 74.0% to CNY 2.03 billion; however, operating profit and profit for the period declined due to fair value gains on biological assets sharply decreasing from CNY 1.43 billion in the prior period to CNY 0.087 billion this year Consolidated Statement of Profit or Loss Summary | Item | H1 2025 (CNY Thousand) | H1 2024 (CNY Thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 11,695,381 | 9,407,081 | +24.3% | | Cost of Sales | (9,666,196) | (8,241,133) | +17.3% | | Gross Profit | 2,029,185 | 1,165,948 | +74.0% | | Fair Value Change of Biological Assets | 87,295 | 1,428,256 | -93.9% | | Operating Profit | 1,518,391 | 2,015,268 | -24.7% | | Profit for the Period | 1,360,474 | 1,791,381 | -24.1% | Consolidated Statement of Financial Position As of June 30, 2025, the company's total assets were CNY 23.90 billion, a 4.1% increase from end-2024; total liabilities were CNY 14.31 billion, a slight decrease; net assets grew by 11.7% to CNY 9.59 billion due to period profit, indicating an improved financial structure Consolidated Statement of Financial Position Summary | Item | June 30, 2025 (CNY Thousand) | December 31, 2024 (CNY Thousand) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 23,900,612 | 23,056,050 | +3.7% | | Current Assets | 12,221,274 | 11,765,263 | +3.9% | | Non-current Assets | 11,679,338 | 11,290,787 | +3.4% | | Total Liabilities | 14,306,777 | 14,470,709 | -1.1% | | Current Liabilities | 8,878,682 | 9,063,349 | -2.0% | | Non-current Liabilities | 5,428,095 | 5,407,360 | +0.4% | | Net Assets | 9,593,835 | 8,585,341 | +11.7% | Management Discussion and Analysis Company Overview and Market Overview The company is a leading livestock and poultry farming enterprise in China, with core businesses in hog and yellow-feathered broiler breeding and farming, adopting a vertically integrated business model; in H1 2025, the hog industry showed good profitability with macro-control expected to improve future supply-demand, while the poultry industry faced price declines due to weak consumption but anticipates demand improvement in H2 - The company's core business is hog and yellow-feathered broiler farming, utilizing a vertically integrated model covering feed production, breeding, farming, and sales, complemented by a 'family farm' expansion model[29][31][32] - Hog market: Since early 2025, hog prices have been above the cost line, with breeding sow inventory slightly above normal levels, and policy guidance is expected to improve the supply-demand landscape in 2026[34] - Poultry market: Industry concentration has increased, but during the reporting period, poultry meat prices declined due to weak consumer demand influenced by the macro economy, with performance expected to improve in H2 driven by holidays[35] Operating Performance In H1 2025, the company's overall operating performance was strong, with revenue growing by 24.3% year-on-year and profit before fair value adjustments of biological assets surging by 250.6%; the hog segment was the primary growth driver with double-digit increases in both revenue and sales, while the poultry segment's revenue declined due to market price drops, and the ancillary products segment showed steady growth Revenue Performance by Business Segment | Business Segment | H1 2025 Revenue (CNY Million) | Y-o-Y Change | | :--- | :--- | :--- | | Hog Segment | 9,878.8 | +32.6% | | Poultry Segment | 1,335.5 | -13.5% | | Ancillary Products Segment | 481.1 | +16.1% | - Hog segment growth primarily benefited from advanced independent breeding systems, precise nutrition technology, efficient management, and disease prevention, demonstrating significant anti-cyclical capability[37][38][39] - Poultry segment revenue decline was mainly due to a 20.9% year-on-year decrease in average selling price of yellow-feathered broilers caused by weak consumption in the catering industry, despite a 7.2% increase in sales volume[43] - The company empowers farmers through its innovative 'new-style family farm' model, which saw PSY (pigs weaned per sow per year) increase to 27 heads during the reporting period, demonstrating industry-leading farming efficiency[42] Financial Review The company's financial position significantly improved in H1 2025, with revenue growing by 24.3% and gross profit margin increasing from 12.4% to 17.4%, primarily due to reduced production costs; finance costs decreased by 32.3% due to lower interest rates and reduced borrowings, while liquidity and quick ratios improved, and the net debt-to-equity ratio substantially decreased from 26.2% to 15.1%, indicating enhanced solvency and a more robust financial structure - Overall gross profit margin increased from 12.4% in the prior period to 17.4%, primarily due to reduced production costs (especially feed and raw materials) and improved management efficiency[47] - Finance costs decreased by 32.3% year-on-year, mainly due to lower bank borrowing interest rates and a reduction in total loans[52] Changes in Key Financial Ratios | Financial Ratio | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Current Ratio | 1.4 | 1.0 | | Quick Ratio | 1.3 | 0.9 | | Net Debt-to-Equity Ratio | 15.1% | 91.9% | - Net cash generated from operating activities was CNY 1.74 billion, a 15.0% year-on-year increase, indicating enhanced cash-generating capability from core operations[60] Major Risks and Uncertainties The company faces major risks including epidemic diseases and market price fluctuations; it has implemented strict biosecurity protocols and disease eradication programs to mitigate epidemic risks, and uses enhanced operational capabilities, financial derivatives, and optimized feed cost control technologies to hedge against price volatility - One major risk is epidemic diseases, such as African Swine Fever and avian influenza; the company mitigates this risk through stringent biosecurity measures, immunization, and careful farm site selection[74][75] - Another major risk is the cyclical price fluctuations of hog and poultry products ('hog cycle', 'chicken cycle') and feed raw material price volatility; the company addresses this through operational improvements, financial derivatives, and feed formulation adjustments[76] Outlook In H2 2025, the company will continue to focus on efficiency improvement, cost reduction, and high-quality development; the hog segment will deepen its 'farmer-empowerment' model, the poultry segment anticipates increased market demand and will enhance farming efficiency, and the ancillary products segment will improve slaughtering business operational efficiency and expand markets; additionally, the company plans to utilize hog futures for risk hedging and continue investing in ESG initiatives - Hog Segment: Will continue to deepen the 'leading enterprise driving small and medium-sized farms' family farm model, focusing on the Southwest market to consolidate brand influence[77] - Poultry Segment: Anticipates increased demand in H2, will enhance farming efficiency, reduce costs, and strengthen distribution channels[77] - Ancillary Products Segment: Will enhance the profitability of its slaughtering business, focus on chilled and cured products, and build a high-quality food ecosystem[80] - Risk Management: Plans to effectively utilize hog futures hedging tools to mitigate operational risks[80] Corporate Governance and Other Information Human Resources As of June 30, 2025, the company had 10,904 employees, with a scientific compensation system and full social security and housing provident fund contributions; during the reporting period, the company focused on talent development, adopting an 'internal growth primary, external recruitment supplementary' strategy, and conducted multi-dimensional training sessions totaling over 350,000 attendances to support business growth - As of June 30, 2025, the total number of employees was 10,904, an increase from 9,978 in the prior period[72] - Total remuneration during the reporting period was approximately CNY 0.791 billion, a 17.0% year-on-year increase[18][79] - The company emphasizes talent development, with over 350,000 training attendances during the reporting period, and introduced professional consulting teams to empower 'AI + systematic management transformation'[73] Dividend Policy The Board resolved not to declare any interim dividend for the six months ended June 30, 2025; however, the company paid a final dividend for the previous fiscal year (2024) totaling CNY 0.35 billion during the reporting period - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025[28][82] - During the reporting period, the company approved and paid the final dividend for the previous fiscal year, totaling CNY 0.35 billion[28] Use of Proceeds from Listing The company listed on December 6, 2023, with net proceeds from global offering of approximately HKD 0.953 billion; as of June 30, 2025, approximately HKD 0.727 billion has been utilized, primarily for expanding farming operations, developing food processing businesses, and repaying bank loans, with approximately HKD 0.226 billion remaining for planned use Use of Proceeds from Listing (As of June 30, 2025) | Purpose | Planned Amount (HKD Million) | Amount Utilized (HKD Million) | Amount Unutilized (HKD Million) | | :--- | :--- | :--- | :--- | | Expansion of Farming Business | 476.3 | 381.0 | 95.3 | | Development of Food Processing Business | 142.9 | 142.9 | 0 | | R&D Investment and Information Technology | 95.3 | 92.3 | 3.0 | | Repayment of Bank Loans | 47.6 | 47.6 | 0 | | Others | 190.6 | 63.3 | 127.3 | | Total | 952.5 | 727.1 | 225.6 |