ROYAL GROUP(SZ:002329)2025-08-25 11:20Important Notes, Table of Contents, and Definitions Important Notes The Board of Directors, Supervisory Board, and senior management affirm the report's accuracy and completeness, with no cash dividends or bonus shares planned - Company's Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report, free from false records, misleading statements, or major omissions5 - Company's responsible person Huang Jiadi, chief accountant Lv Dewei, and head of accounting department Zhu Xiqing declare the financial report's truthfulness, accuracy, and completeness5 - The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for this semi-annual period6 Table of Contents This section lists the report's nine main chapters, covering company profile, financial indicators, management discussion, governance, and financial statements - The report comprises nine main chapters, covering company profile, financial indicators, management discussion and analysis, corporate governance, significant matters, share changes, bond information, financial reports, and other submitted data8 List of Reference Documents Reference documents include signed financial statements and original public disclosures, available at the company's Board Secretary Office - Reference documents include signed and sealed financial statements and original publicly disclosed company documents1011 - Reference documents are available at the company's Board Secretary Office12 Definitions This section defines key terms used in the report, including company names and the reporting period, for clear understanding - This section defines key terms used in the report, such as “the Company” and “Huangshi Group” referring to Huangshi Group Co., Ltd., and names of major subsidiaries13 - The reporting period is from January 1, 2025, to June 30, 202513 Company Profile and Key Financial Indicators Company Profile The company, listed on the Shenzhen Stock Exchange with stock code 002329, is named Huangshi Group Co., Ltd., and its legal representative is Huang Jiadi Company Basic Information | Indicator | Content | | :--- | :--- | | Stock Abbreviation | Huangshi Group | | Stock Code | 002329 | | Listed Stock Exchange | Shenzhen Stock Exchange | | Chinese Name | 皇氏集团股份有限公司 | | Legal Representative | Huang Jiadi | Contact Persons and Information The company's Board Secretary is Luo Bo and Securities Affairs Representative is Li Yuming, with disclosed contact details including address, phone, fax, and email Contact Information | Position | Name | Contact Address | Phone | Fax | Email | | :--- | :--- | :--- | :--- | :--- | :--- | | Board Secretary | Luo Bo | No. 65 Fengda Road, High-tech Zone, Nanning City | 0771-3211086 | 0771-3221828 | hsryhhy@126.com | | Securities Affairs Representative | Li Yuming | No. 65 Fengda Road, High-tech Zone, Nanning City | 0771-3211086 | 0771-3221828 | hsryhhy@126.com | Other Information The company's contact information, disclosure details, and reference document locations remained unchanged during the reporting period, consistent with the 2024 annual report - The company's registered address, office address, website, email, and other contact information remained unchanged during the reporting period17 - Information disclosure and reference document locations remained unchanged during the reporting period18 Key Accounting Data and Financial Indicators This period saw a 13.07% revenue decrease, a significant 549.66% net profit decline to a loss, and a 301.38% drop in net operating cash flow, while total assets slightly grew and net assets slightly decreased Key Accounting Data and Financial Indicators (Year-on-Year Change) | Indicator | Current Reporting Period (yuan) | Prior Year Period (yuan) | Change from Prior Year Period | | :--- | :--- | :--- | :--- | | Operating Revenue | 905,168,825.44 | 1,041,219,381.71 | -13.07% | | Net Profit Attributable to Shareholders of Listed Company | -5,767,163.89 | 1,282,554.49 | -549.66% | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Gains and Losses) | -22,555,127.38 | -19,301,893.53 | -16.85% | | Net Cash Flow from Operating Activities | -66,650,750.06 | 33,097,048.66 | -301.38% | | Basic Earnings Per Share (yuan/share) | -0.0069 | 0.0015 | -560.00% | | Diluted Earnings Per Share (yuan/share) | -0.0069 | 0.0015 | -560.00% | | Weighted Average Return on Net Assets | -0.62% | 0.08% | Decreased by 0.70 percentage points | | End of Current Reporting Period | End of Prior Year | Change from End of Prior Year | | Total Assets | 4,731,436,577.69 | 4,584,642,439.60 | 3.20% | | Net Assets Attributable to Shareholders of Listed Company | 928,554,472.37 | 934,520,860.62 | -0.64% | Differences in Accounting Data Under Domestic and Overseas Accounting Standards The company reported no differences in net profit and net assets between international/overseas accounting standards and Chinese accounting standards during the period - The company's financial reports for the reporting period show no differences in net profit and net assets between international accounting standards and Chinese accounting standards21 - The company's financial reports for the reporting period show no differences in net profit and net assets between overseas accounting standards and Chinese accounting standards22 Non-Recurring Gains and Losses and Amounts Non-recurring gains and losses totaled 16.79 million yuan, primarily from government subsidies, non-current asset disposals, and fair value changes of financial assets, including investment income from a subsidiary's equity transfer Non-Recurring Gains and Losses and Amounts | Item | Amount (yuan) | Explanation | | :--- | :--- | :--- | | Gains and losses from disposal of non-current assets | 3,186,783.87 | | | Government subsidies recognized in current profit and loss | 16,591,739.54 | | | Gains and losses from changes in fair value of financial assets and liabilities, and disposal of financial assets and liabilities, excluding effective hedge accounting related to normal business operations | 732,897.34 | | | Reversal of impairment provisions for accounts receivable subject to separate impairment testing | 1,424,315.36 | | | Other non-operating income and expenses apart from the above | -302,023.17 | | | Other gains and losses meeting the definition of non-recurring gains and losses | 25,706.27 | Subsidiary Huangshi Sunshine (Guangxi) New Energy Co., Ltd. transferred 100% equity of Nantong Genzuo New Energy Co., Ltd., obtaining investment income of 25,706.27 yuan | | Less: Income tax impact | 3,798,673.81 | | | Impact on minority interests (after tax) | 1,072,781.91 | | | Total | 16,787,963.49 | | Management Discussion and Analysis Principal Businesses Engaged by the Company During the Reporting Period The company, a leading water buffalo milk enterprise, focuses on dairy and information businesses, with its core being specialty dairy products across the entire industry chain, maintaining its market leadership - The company is a leading enterprise in the domestic water buffalo milk sector, with principal businesses including dairy and information services, and its core business is specialty dairy products centered on water buffalo milk, fermented milk, and pasteurized fresh milk28 - During the reporting period, the company's principal businesses, main products, and operating models did not undergo significant changes29 - The company focuses on the water buffalo milk industry, deepening its “water buffalo milk germplasm chip strategy” and accelerating projects such as the Huangshi JW Ranch Phase II in Pakistan and the Anhui Fuyang Intelligent Dairy Central Factory35 Overview of Domestic Dairy Industry Development and Market Competition Landscape The domestic dairy industry is undergoing high-quality development, with increasing demand for low-temperature and high-value products, positioning water buffalo milk as a rapidly growing, high-quality, and stable-priced niche product - The domestic dairy industry is entering a period of deep adjustment for high-quality development, with increasing penetration of low-temperature milk and consumer demand shifting from “basic satisfaction” to a dual pursuit of “experience and emotional value”30 - Water buffalo milk prices have remained stable for a long time, and with its rich and sweet taste, smooth and delicate texture, and higher nutritional value, it is rapidly upgrading from a regional niche product to a national high-quality dairy product31 - Dairy buffalo farming is more flexible and relatively cheaper, adapting to the hot and humid climate of the south, and is expected to become an important pillar industry for rural revitalization in the south, giving the company a differentiated competitive advantage34 Company's Dairy Business Development The company is advancing in water buffalo breeding, smart farms, processing, marketing, and R&D, introducing superior Pakistani genetics, building the largest intelligent breeding base, and expanding market reach through digital transformation and internationalization - The company has made breakthrough progress in water buffalo germplasm introduction and industrial upgrading projects, with the first batch of Pakistani Nili-Ravi dairy buffalo embryo transfer calves successfully born in China, overcoming the “bottleneck” of germplasm36 - The first phase of the Shangsi 10,000-head dairy buffalo breeding base has been put into use, making it currently the largest, most intelligent, and most comprehensive water buffalo germplasm breeding base in China39 - The Anhui Fuyang Smart Factory construction is progressing orderly, expected to gradually commence production by the end of August 2025, becoming the largest water buffalo milk production base in East China and supporting the expansion of the East China B2B market40 - The company continues its traditional business digital transformation, developing “Huangshi Fresh Order” milk ordering system and “Huang Xiao Er” self-service milk terminals, and deepening cooperation with leading traffic platforms to enhance brand influence through live e-commerce43 - The company is comprehensively expanding its B2B channels, entering leading supermarkets like Hema Fresh and Metro, expanding instant retail channels like JD.com, and creating “Zai Guili” water buffalo milk tea experience workshops44 - The company, leveraging Pakistani dairy buffalo breeding, has assembled an international team to explore markets in Southeast Asia and countries along the “Belt and Road” initiative, promoting water buffalo milk globally45 - The company holds a leading position in dairy buffalo breeding technology, utilizing whole-genome selection breeding technology to shorten the dairy buffalo breed improvement cycle from 12 years to 3 years, increasing milk yield per head by more than 3 times47 - The company has successfully built a diversified, high-value-added product matrix, including high-end functional dairy product series like “100% Pure Water Buffalo Milk” and “Jersey Water Buffalo Fresh Milk,” as well as scenario-based dairy product series for baking, tea drinks, and catering4849 - The company has made breakthroughs in dairy source functional factor excavation and characteristic probiotic resource development, establishing a globally leading water buffalo milk component database and a Bama Longevity Village probiotic strain bank50 - The company fully integrates automation and artificial intelligence technology to promote intelligent production processes across the entire industry chain, introducing AI dynamic temperature control technology in pasteurization to enhance product quality and shelf life5152 - The company has become the first domestic company to systematically conduct research on water buffalo milk functional factor excavation and industrial application, forming a multi-dimensional innovation support system comprising “1 National-level Dairy Engineering Center + 1 Guangxi Academy of Sciences Joint Probiotic Innovation Center + 2 University-Enterprise Joint Laboratories”53 - The company is one of the earliest enterprises to strategically develop the water buffalo milk industry chain in China, holding the largest market share in the water buffalo milk industry for many years, certified as “Water Buffalo Dairy Products National Sales Champion,” and selected as a member of China Dairy D2054 - The company innovatively launched the new tea beverage brand “Zai Guili,” integrating water buffalo milk into coffee, milk tea, and other products to create a trendy lifestyle55 - The company primarily adopts a sales model combining direct sales, distribution, and e-commerce, establishing a market network system across the country56 Distribution Model Sales Performance (Jan-Jun 2025 vs Jan-Jun 2024) | Indicator | Jan-Jun 2025 | Jan-Jun 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue (yuan) | 655,785,558.22 | 670,163,662.35 | -2.15% | | Operating Cost (yuan) | 477,685,997.74 | 477,379,773.50 | 0.06% | | Gross Margin | 27.16% | 28.77% | Decreased by 1.61 percentage points | Direct Sales Model Sales Performance (Jan-Jun 2025 vs Jan-Jun 2024) | Indicator | Jan-Jun 2025 | Jan-Jun 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue (yuan) | 118,586,390.97 | 141,264,343.66 | -16.05% | | Operating Cost (yuan) | 78,867,478.46 | 99,020,834.77 | -20.35% | | Gross Margin | 33.49% | 29.90% | Increased by 3.59 percentage points | Product Category Sales Performance Under Distribution Model (Jan-Jun 2025 vs Jan-Jun 2024) | Category | Indicator | Jan-Jun 2025 | Jan-Jun 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | | Low-temperature Milk | Operating Revenue (yuan) | 301,632,634.17 | 286,488,309.38 | 5.29% | | | Operating Cost (yuan) | 195,286,387.54 | 179,363,395.24 | 8.88% | | | Gross Margin | 35.26% | 37.39% | Decreased by 2.13 percentage points | | Room-temperature Milk | Operating Revenue (yuan) | 349,066,792.15 | 377,597,670.73 | -7.56% | | | Operating Cost (yuan) | 277,635,980.25 | 292,451,471.64 | -5.07% | | | Gross Margin | 20.46% | 22.55% | Decreased by 2.09 percentage points | | Other Beverages and Food | Operating Revenue (yuan) | 5,086,131.90 | 6,077,682.24 | -16.31% | | | Operating Cost (yuan) | 4,763,629.95 | 5,564,906.62 | -14.40% | | | Gross Margin | 6.34% | 8.44% | Decreased by 2.10 percentage points | Number of Distributors Under Distribution Model | Region | Number of Distributors at Beginning of Period (units) | Number of New Distributors During Period (units) | Number of Decreased Distributors During Period (units) | Number of Distributors at End of Period (units) | | :--- | :--- | :--- | :--- | :--- | | Southwest Region | 2,210 | 226 | 208 | 2,228 | | Other Regions | 526 | 298 | 233 | 591 | - The distribution model primarily uses a prepayment settlement method (cash before delivery)65 Top Five Distributors | Indicator | Amount (yuan) | | :--- | :--- | | Total sales revenue from top five distributors | 101,889,312.91 | | Percentage of total semi-annual sales | 11.26% | | Total accounts receivable from top five distributors at end of reporting period | 11,758,473.10 | E-commerce Sales Performance (Jan-Jun 2025 vs Jan-Jun 2024) | Indicator | Jan-Jun 2025 | Jan-Jun 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue (yuan) | 52,885,845.36 | 52,647,996.07 | 0.45% | | Operating Cost (yuan) | 39,602,663.39 | 39,925,746.72 | -0.81% | | Gross Margin | 25.12% | 24.16% | Increased by 0.96 percentage points | Product Category Sales Performance Under E-commerce Model (Jan-Jun 2025 vs Jan-Jun 2024) | Category | Indicator | Jan-Jun 2025 | Jan-Jun 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | | Low-temperature Milk | Operating Revenue (yuan) | 21,664,772.31 | 19,202,959.26 | 12.82% | | | Operating Cost (yuan) | 12,488,823.86 | 10,250,388.89 | 21.84% | | | Gross Margin | 42.35% | 46.62% | Decreased by 4.27 percentage points | | Room-temperature Milk | Operating Revenue (yuan) | 31,185,771.82 | 33,435,755.27 | -6.73% | | | Operating Cost (yuan) | 27,096,610.36 | 29,672,324.95 | -8.68% | | | Gross Margin | 13.11% | 11.26% | Increased by 1.85 percentage points | | Other Beverages and Food | Operating Revenue (yuan) | 35,301.23 | 9,281.54 | 280.34% | | | Operating Cost (yuan) | 17,229.17 | 3,032.88 | 468.08% | | | Gross Margin | 51.19% | 67.32% | Decreased by 16.13 percentage points | Procurement Model and Content (Jan-Jun 2025) | Procurement Model | Procurement Content | Amount of Main Procurement Content (yuan) | | :--- | :--- | :--- | | External Procurement | Raw Materials | 285,309,144.91 | | | Packaging Materials | 118,338,314.37 | | | Fuel and Power | 23,816,478.82 | | | Transportation Costs | 29,802,071.78 | | | Other | 67,219,461.15 | | Total | | 524,485,471.03 | - The company primarily adopts a production-to-order model, with low-temperature milk produced strictly according to sales orders, while room-temperature milk production is adjusted flexibly based on seasonal sales demand in addition to sales orders73 Main Components of Operating Cost (Jan-Jun 2025 vs Jan-Jun 2024) | Product Category | Item | Amount Jan-Jun 2025 (yuan) | Proportion of Operating Cost | Amount Jan-Jun 2024 (yuan) | Proportion of Operating Cost | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Dairy Products, Food | Direct Materials | 429,517,983.76 | 77.17% | 453,567,236.64 | 78.69% | -5.30% | | | Direct Labor | 24,308,714.71 | 4.37% | 23,786,424.52 | 4.13% | 2.20% | | | Manufacturing Overhead | 72,924,705.95 | 13.10% | 61,721,696.61 | 10.71% | 18.15% | | | Transportation Costs | 29,802,071.78 | 5.36% | 37,325,250.50 | 6.47% | -20.16% | Year-on-Year Changes in Production and Inventory (Jan-Jun 2025 vs Jan-Jun 2024) | Product Category | Item | Unit | Jan-Jun 2025 | Jan-Jun 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Low-temperature Milk | Production Volume | tons | 35,783.26 | 32,531.49 | 10.00% | | | Sales Volume | tons | 35,982.30 | 32,614.55 | 10.33% | | | Inventory Volume | tons | 409.05 | 394.69 | 3.64% | | Room-temperature Milk | Production Volume | tons | 51,294.41 | 57,231.15 | -10.37% | | | Sales Volume | tons | 53,969.92 | 58,189.92 | -7.25% | | | Inventory Volume | tons | 2,701.60 | 3,444.61 | -21.57% | Design Capacity, Actual Capacity, and Under-Construction Capacity of Main Products (ten thousand tons/year) | Production Entity | Design Capacity | Actual Capacity | Under-Construction Capacity | | :--- | :--- | :--- | :--- | | Guangxi Huangshi Dairy Co., Ltd. | 20.00 | 19.77 | | | Huangshi Group Hunan Youshi Dairy Co., Ltd. | 15.74 | 8.24 | 7.50 | | Huangshi Group Zunyi Dairy Co., Ltd. | 15.00 | 15.00 | | | Huangshi Laibin Dairy Co., Ltd. | 5.00 | 3.90 | 1.10 | | Bama Probiotic Technology Co., Ltd. | 3.00 | 3.00 | | | Huangshi (Anhui) Dairy Co., Ltd. | 25.00 | | 16.00 | | Sichuan Huangshi Yangsen Dairy Co., Ltd. | 6.60 | 6.60 | | | Total | 90.34 | 56.51 | 24.60 | Analysis of Core Competencies The company maintains its core competitiveness through a complete dairy industry chain, leading water buffalo breeding and commercialization, differentiated products, and digital and photovoltaic technology integration - During the reporting period, the company's core competitiveness did not undergo significant changes79 - The company's dairy business segment has built a complete industry chain, primarily in the Southwest region, covering pasture planting, dairy cattle farming, specialty dairy product R&D, production, and sales, with a marketing network extending from cities to rural markets80 - The company is the first in China to breed and commercialize water buffalo, introducing superior Pakistani Nili-Ravi dairy buffalo germplasm, increasing milk yield per head by more than 3 times81 - The company owns the only water buffalo germplasm resource production site recognized by both China and Pakistan, and has established a water buffalo embryo research and production center in Pakistan82 - The company focuses on developing core products with differentiated competitive advantages, such as water buffalo milk, yogurt, and probiotic solid beverages, holding multiple invention patents, with its water buffalo milk R&D technology ranking among the top domestic peers83 - The company, in collaboration with Sichuan Anaerobic Biotechnology Co., Ltd., has established a Bama Longevity Village probiotic strain bank, and co-built an AKK strain bank with Guangxi Academy of Sciences Institute of Health, providing “bio-chips” for functional dairy product development84 - Through its subsidiary Perfect Online, the company provides electronic billing systems, SMS services, and call center system solutions, promoting resource integration and business synergy between the dairy and information industries to achieve digital marketing85 - The company constructs photovoltaic power stations on its ranches and dairy processing plants, reducing electricity costs and carbon emissions through agro-photovoltaic and pastoral-photovoltaic complementary models, achieving sustainable development86 Analysis of Principal Business Operating revenue decreased by 13.07% due to declines in dairy, information services, and other main businesses, while income tax and financing cash flow significantly increased, and operating cash flow sharply decreased. Dairy and food remain the primary revenue sources, with the Southwest region contributing most Year-on-Year Changes in Key Financial Data | Indicator | Current Reporting Period (yuan) | Prior Year Period (yuan) | Year-on-Year Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 905,168,825.44 | 1,041,219,381.71 | -13.07% | | | Operating Cost | 665,960,456.05 | 778,816,085.35 | -14.49% | | | Selling Expenses | 107,560,058.42 | 113,649,150.47 | -5.36% | | | Administrative Expenses | 68,955,026.30 | 75,511,143.90 | -8.68% | | | Financial Expenses | 50,596,877.06 | 54,248,489.78 | -6.73% | | | Income Tax Expense | 7,241,710.69 | 3,256,506.97 | 122.38% | Primarily due to increased current income tax expense accrued by the company during the reporting period | | R&D Investment | 29,108,674.40 | 34,472,308.85 | -15.56% | | | Net Cash Flow from Operating Activities | -66,650,750.06 | 33,097,048.66 | -301.38% | Primarily due to a year-on-year decrease in cash received from sales of goods and provision of services during the reporting period | | Net Cash Flow from Investing Activities | -133,328,729.42 | -125,422,405.47 | -6.30% | | | Net Cash Flow from Financing Activities | 244,564,177.25 | 86,447,110.87 | 182.91% | Primarily due to a decrease in cash paid for debt repayment during the reporting period | | Net Increase in Cash and Cash Equivalents | 43,859,978.36 | -5,810,153.21 | 854.89% | Primarily due to a decrease in cash paid for debt repayment during the reporting period | Composition of Operating Revenue (by Industry, Product, Region) | Category | Item | Current Reporting Period Amount (yuan) | Proportion of Operating Revenue | Prior Year Period Amount (yuan) | Proportion of Operating Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | By Industry | | | | | | | | | Dairy Products, Food | 774,371,949.19 | 85.55% | 811,428,006.01 | 77.93% | -4.57% | | | Information Services, Information Engineering | 66,258,737.44 | 7.32% | 92,690,577.51 | 8.90% | -28.52% | | | Other Principal Businesses | 44,917,668.59 | 4.96% | 61,122,094.49 | 5.87% | -26.51% | | | Other | 19,620,470.22 | 2.17% | 75,978,703.70 | 7.30% | -74.18% | | By Product | | | | | | | | | Low-temperature Milk | 358,144,062.25 | 39.57% | 346,063,784.68 | 33.24% | 3.49% | | | Room-temperature Milk | 409,245,211.29 | 45.21% | 456,294,415.97 | 43.82% | -10.31% | | | Other Beverages and Food | 6,982,675.65 | 0.77% | 9,069,805.36 | 0.87% | -23.01% | | | Cloud Communication | 44,137,392.28 | 4.88% | 62,193,935.07 | 5.97% | -29.03% | | | Information Engineering | - | 0.00% | 10,245,283.05 | 0.98% | -100.00% | | | Call Center Service Outsourcing | 22,121,345.16 | 2.44% | 20,251,359.39 | 1.95% | 9.23% | | | Other Principal Business Products | 44,917,668.59 | 4.96% | 61,122,094.49 | 5.87% | -26.51% | | | Other | 19,620,470.22 | 2.17% | 75,978,703.70 | 7.30% | -74.18% | | By Region | | | | | | | | | Southwest Region | 613,503,006.93 | 67.78% | 705,194,182.93 | 67.73% | -13.00% | | | Other Regions | 291,665,818.51 | 32.22% | 336,025,198.78 | 32.27% | -13.20% | | Total | | 905,168,825.44 | 100.00% | 1,041,219,381.71 | 100.00% | -13.07% | Industries, Products, or Regions Accounting for More Than 10% of Company's Operating Revenue or Operating Profit | Category | Operating Revenue (yuan) | Operating Cost (yuan) | Gross Margin | Year-on-Year Change in Operating Revenue | Year-on-Year Change in Operating Cost | Year-on-Year Change in Gross Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | By Industry | | | | | | | | Dairy Products, Food | 774,371,949.19 | 556,553,476.20 | 28.13% | -4.57% | -3.44% | Decreased by 0.83 percentage points | | By Product | | | | | | | | Low-temperature Milk | 358,144,062.25 | 229,007,677.08 | 36.06% | 3.49% | 6.35% | Decreased by 1.71 percentage points | | Room-temperature Milk | 409,245,211.29 | 321,030,333.53 | 21.56% | -10.31% | -8.87% | Decreased by 1.24 percentage points | | By Region | | | | | | | | Southwest Region | 613,503,006.93 | 440,357,456.65 | 28.22% | -13.00% | -12.61% | Decreased by 0.33 percentage points | | Other Regions | 291,665,818.51 | 225,602,999.40 | 22.65% | -13.20% | -17.94% | Increased by 4.47 percentage points | Selling Expenses Composition (Jan-Jun 2025 vs Jan-Jun 2024) | Item | Jan-Jun 2025 (yuan) | Expense Proportion | Jan-Jun 2024 (yuan) | Expense Proportion | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Payroll Expenses | 47,551,789.66 | 44.21% | 52,896,391.37 | 46.54% | -10.10% | | Advertising and Promotion Expenses | 18,682,009.80 | 17.37% | 21,306,517.65 | 18.75% | -12.32% | | Depreciation Expense | 4,480,886.40 | 4.17% | 4,010,149.42 | 3.53% | 11.74% | | Service Fees | 11,035,578.12 | 10.26% | 9,655,343.98 | 8.50% | 14.30% | | Travel Expenses | 4,174,397.01 | 3.88% | 5,244,904.12 | 4.61% | -20.41% | | Other Expenses Subtotal | 21,635,397.43 | 20.11% | 20,535,843.93 | 18.07% | 5.35% | | Total | 107,560,058.42 | 100.00% | 113,649,150.47 | 100.00% | -5.36% | Main Advertising Methods and Amounts During Reporting Period (Jan-Jun 2025 vs Jan-Jun 2024) | Method | Jan-Jun 2025 (yuan) | Jan-Jun 2024 (yuan) | Year-on-Year Change | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | | Online Advertising | 1,182,512.96 | 595,462.43 | 98.59% | Primarily due to the company adjusting its promotional strategy and increasing online marketing investment during the reporting period | | Offline Advertising | 2,208,727.07 | 2,539,807.50 | -13.04% | | | TV Advertising | 235,849.06 | 950,509.24 | -75.19% | Primarily due to the company adjusting its promotional strategy and reducing TV advertising investment during the reporting period | Analysis of Non-Principal Business Non-principal businesses significantly contributed to total profit, mainly from government subsidies, reversal of impairment provisions for accounts receivable, and non-operating income, but these items are not sustainable Non-Principal Business Items and Amounts | Item | Amount (yuan) | Proportion of Total Profit | Explanation of Formation | Sustainability | | :--- | :--- | :--- | :--- | :--- | | Investment Income | 455,180.71 | 15.92% | Primarily interest income from debt investments held during the reporting period | No | | Gains and Losses from Fair Value Changes | 732,897.34 | 25.64% | Primarily gains and losses from changes in fair value of financial assets held for trading recognized during the reporting period | No | | Asset Impairment | 69,996.09 | 2.45% | Primarily reversal of impairment provisions for contract assets during the reporting period | No | | Non-Operating Income | 1,298,953.50 | 45.44% | Primarily other non-operating income such as unpayable intercompany balances during the reporting period | No | | Non-Operating Expenses | 1,600,976.67 | 56.01% | Primarily other non-operating expenses such as late payment fees paid during the reporting period | No | | Other Income | 15,604,046.29 | 545.89% | Government subsidies and additional input tax deductions during the reporting period | No | | Credit Impairment Losses | 5,161,219.70 | 180.56% | Primarily reversal of bad debt provisions for accounts receivable during the reporting period | No | Analysis of Assets and Liabilities Total assets increased by 3.20%, driven by significant growth in construction in progress and right-of-use assets from new projects and long-term leases. Short-term borrowings and non-current liabilities due within one year also rose, with 632.79 million yuan in restricted assets at period-end Significant Changes in Asset Composition (End of Current Reporting Period vs End of Prior Year) | Item | Amount at End of Current Reporting Period (yuan) | Proportion of Total Assets | Amount at End of Prior Year (yuan) | Proportion of Total Assets | Change in Proportion | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Monetary Funds | 404,262,167.39 | 8.54% | 421,244,664.61 | 9.19% | Decreased by 0.65 percentage points | | | Accounts Receivable | 399,652,587.73 | 8.45% | 484,664,219.22 | 10.57% | Decreased by 2.12 percentage points | | | Inventories | 283,206,693.46 | 5.99% | 303,056,290.46 | 6.61% | Decreased by 0.62 percentage points | | | Fixed Assets | 1,331,449,280.13 | 28.14% | 1,366,189,440.24 | 29.80% | Decreased by 1.66 percentage points | | | Construction in Progress | 194,964,572.09 | 4.12% | 121,755,330.89 | 2.66% | Increased by 1.46 percentage points | Primarily due to increased civil engineering and equipment for projects such as Guizhou Dairy Buffalo Modern Smart Ranch and Youshi High-Quality Dairy Production Base during the reporting period | | Right-of-Use Assets | 48,990,071.14 | 1.04% | 118,681.16 | 0.0026% | Increased by 1.04 percentage points | Primarily due to increased recognition of right-of-use assets for long-term leased buildings and land during the reporting period | | Short-term Borrowings | 956,396,629.50 | 20.21% | 858,908,905.51 | 18.73% | Increased by 1.48 percentage points | | | Contract Liabilities | 125,011,407.13 | 2.64% | 110,170,984.52 | 2.40% | Increased by 0.24 percentage points | | | Long-term Borrowings | 942,429,912.50 | 19.92% | 898,134,912.50 | 19.59% | Increased by 0.33 percentage points | | | Lease Liabilities | 51,220,889.93 | 1.08% | | | Increased by 1.08 percentage points | Primarily due to increased recognition of lease liabilities for long-term leased buildings and land during the reporting period | | Non-current Liabilities Due Within One Year | 453,508,125.97 | 9.58% | 337,868,591.53 | 7.37% | Increased by 2.21 percentage points | Primarily due to increased long-term borrowings due within one year at the end of the reporting period | - The company had no major overseas assets during the reporting period103 Assets and Liabilities Measured at Fair Value (Period-End Balance) | Item | Beginning Balance (yuan) | Current Period Fair Value Change Gains/Losses (yuan) | Current Period Purchases (yuan) | Current Period Sales (yuan) | Ending Balance (yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | | Financial Assets | | | | | | | 1. Financial assets held for trading | 26,895,230.93 | 732,897.34 | 60,370,000.00 | 77,200,000.00 | 10,798,128.27 | | 4. Other equity instrument investments | 900,000.00 | | | | 900,000.00 | | Subtotal Financial Assets | 27,795,230.93 | 732,897.34 | 60,370,000.00 | 77,200,000.00 | 11,698,128.27 | | Total Above | 27,795,230.93 | 732,897.34 | 60,370,000.00 | 77,200,000.00 | 11,698,128.27 | Restricted Asset Status as of End of Reporting Period | Item | Carrying Amount at Period-End (yuan) | Reason for Restriction | | :--- | :--- | :--- | | Monetary Funds | 88,547,319.75 | Bank acceptance bill and letter of credit margin, pledged loan time deposits, etc. | | Fixed Assets | 414,255,174.32 | Mortgaged loans, finance lease (sale and leaseback) collateral, freezing | | Intangible Assets | 75,956,545.88 | Mortgaged loans | | Construction in Progress | 49,030,257.77 | Mortgaged loans | | Other Receivables | 5,000,000.00 | Pledged loans | | Total | 632,789,297.72 | | Analysis of Investment Status Total investments for the period were 86.37 million yuan, a 22.62% decrease year-on-year. Securities investments, primarily in Bubugao stock, generated 0.7329 million yuan in fair value change gains. The company had no derivative investments or use of raised funds Overall Investment Amount During Reporting Period | Investment Amount During Reporting Period (yuan) | Investment Amount in Prior Year Period (yuan) | Change Rate | | :--- | :--- | :--- | | 86,370,000.00 | 111,625,000.00 | -22.62% | - The company had no significant equity investments acquired during the reporting period108 - The company had no significant non-equity investments in progress during the reporting period108 Securities Investment Status | Security Code | Security Abbreviation | Initial Investment Cost (yuan) | Carrying Amount at Beginning of Period (yuan) | Current Period Fair Value Change Gains/Losses (yuan) | Current Period Gains/Losses (yuan) | Carrying Amount at End of Period (yuan) | Accounting Subject | Source of Funds | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 002251 | Bubugao | 2,473,011.18 | 3,124,481.60 | 732,897.34 | 732,897.34 | 3,857,378.94 | Financial assets held for trading | Debt-to-equity swap | - The company had no derivative investments during the reporting period110 - The company had no use of raised funds during the reporting period111 Significant Asset and Equity Sales The company did not sell any significant assets or equity during the reporting period - The company did not sell any significant assets during the reporting period113 - The company did not sell any significant equity during the reporting period114 Analysis of Major Holding and Participating Companies Major subsidiaries, Huangshi Dairy Group and Zhejiang Perfect Online, significantly impacted net profit. New subsidiaries were established, and one was sold, with minor overall impact on operations and performance Major Subsidiaries and Participating Companies with Over 10% Impact on Company's Net Profit | Company Name | Company Type | Principal Business | Registered Capital (yuan) | Total Assets (yuan) | Net Assets (yuan) | Operating Revenue (yuan) | Operating Profit (yuan) | Net Profit (yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Huangshi Dairy Group Co., Ltd. | Subsidiary | Dairy product production, processing, sales, etc. | 200,000,000.00 | 2,973,806,995.79 | 981,246,026.51 | 732,448,284.61 | 49,231,640.70 | 47,476,368.68 | | Zhejiang Perfect Online Network Technology Co., Ltd. | Subsidiary | Call center services and information services in value-added telecommunications business (Category II) | 10,000,000.00 | 352,020,020.32 | 124,824,984.91 | 70,238,993.83 | 2,595,175.26 | 1,779,328.67 | Acquisition and Disposal of Subsidiaries During Reporting Period | Company Name | Method of Acquisition and Disposal of Subsidiaries During Reporting Period | Impact on Overall Production, Operations, and Performance | | :--- | :--- | :--- | | Guangxi Zaiguili Catering Management Co., Ltd. | Establishment | Minor | | Mr. Water Buffalo (Zhejiang) Ecological Technology Co., Ltd. | Establishment | Minor | | Guizhou Hongyuan Smart Dairy Buffalo Ranch Co., Ltd. | Establishment | Minor | | Nantong Genzuo New Energy Co., Ltd. | Sale | Minor | Status of Structured Entities Controlled by the Company The company did not control any structured entities during the reporting period - The company had no structured entities under its control during the reporting period117 Risks Faced by the Company and Countermeasures The company faces risks from insufficient water buffalo milk supply, cost fluctuations, and intense market competition, addressed by enhancing milk source, optimizing supply chain, and strengthening differentiated marketing - Risk: Water buffalo milk supply is insufficient, and as its popularity increases and B2B demand grows, it may face supply shortages117 - Countermeasures: Vigorously promote the introduction and proliferation of high-yield Pakistani dairy buffalo embryos, accelerate the construction of dairy buffalo breeding ranches, and encourage local governments, cooperatives, and farmers to participate in proliferation117 - Risk: Rising and fluctuating costs in farming, raw materials, packaging, production, and labor may cause fluctuations in the company's profitability118 - Countermeasures: Strengthen production and supply chain management, deepen collaboration with upstream and downstream customers, seek the most cost-effective material procurement, and smooth cost impacts through product structure optimization, improved production management efficiency, and energy saving118 - Risk: Intense competition in the domestic dairy product market, severe product homogenization, high consumer demand for health and quality, and potential negative impacts on revenue and profit from erroneous decisions or insufficient product strength119 - Countermeasures: Seize opportunities in consumption structure upgrading, leverage water buffalo milk as a differentiated selling point, strengthen the development of high-quality and high-value-added products, enhance channel construction and market promotion, improve market competitiveness, and consolidate its leading position in the water buffalo milk industry119 Formulation and Implementation of Market Value Management System and Valuation Enhancement Plan The company has not disclosed any market value management system or valuation enhancement plan - The company has not formulated a market value management system120 - The company has not disclosed a valuation enhancement plan120 Implementation of "Quality and Return Dual Enhancement" Action Plan The company has not disclosed any announcement regarding the "Quality and Return Dual Enhancement" action plan - The company has not disclosed the “Quality and Return Dual Enhancement” action plan announcement120 Corporate Governance, Environment, and Society Changes in Company Directors, Supervisors, and Senior Management Independent directors Meng Lizhen and Liang Gefu retired, replaced by Zhou Bailing and Xu Chunming; Wang Wanfang resigned as Board Secretary, succeeded by Luo Bo Changes in Directors, Supervisors, and Senior Management | Name | Position Held | Type | Date | Reason | | :--- | :--- | :--- | :--- | :--- | | Meng Lizhen | Independent Director | Term Expired | February 24, 2025 | Re-election | | Liang Gefu | Independent Director | Term Expired | February 24, 2025 | Re-election | | Zhou Bailing | Independent Director | Elected | February 24, 2025 | Re-election | | Xu Chunming | Independent Director | Elected | February 24, 2025 | Re-election | - Ms. Wang Wanfang resigned from her position as Board Secretary but continues to serve as a company director and vice president; Mr. Luo Bo was appointed as the new Board Secretary122 Profit Distribution and Capital Reserve Conversion to Share Capital in Current Reporting Period The company plans no cash dividends, bonus shares, or capital reserve conversions to share capital for the semi-annual period - The company plans no cash dividends, bonus shares, or capital reserve conversions to share capital for the semi-annual period123 Implementation of Company Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures The company repurchased and cancelled 15.40458 million restricted shares due to employee departures, unmet performance targets, and changed operating conditions, with no other employee incentive plans in place - The company repurchased and cancelled 15.40458 million restricted shares from the 2022 Restricted Stock Incentive Plan that were not unlocked due to the departure of incentive recipients, failure to meet company-level performance targets, and deviations in performance target settings caused by changes in the operating environment124 - The company has no employee stock ownership plan in place125 - The company has no other employee incentive measures125 Environmental Information Disclosure The company and its key subsidiaries, Huangshi Laibin Dairy and Hunan Youshi Ranch, are listed as legally required environmental information disclosure enterprises and have published their reports - The listed company and its major subsidiaries are included in the list of enterprises required to disclose environmental information by law125 Enterprises Included in the List of Legally Required Environmental Information Disclosure | No. | Enterprise Name | Query Index for Legally Required Environmental Information Disclosure Report | | :--- | :--- | :--- | | 1 | Huangshi Laibin Dairy Co., Ltd. | http://bqfq.sthjt.gxzf.gov.cn/GXHJXXPLQYD/frontal/index.html/home/index | | 2 | Hunan Youshi Ranch Technology Co., Ltd. | http://yfpl.sthjt.hunan.gov.cn:8181/hnyfpl/frontal/index.html/home/index | Social Responsibility The company actively fulfills social responsibilities by protecting stakeholder rights, prioritizing employee well-being, ensuring food safety, engaging in philanthropy, promoting water buffalo breeding technology internationally, implementing environmental protection, and contributing to rural revitalization - The company strictly adheres to laws and regulations, improves governance systems, perfects corporate governance structure, and protects the rights and interests of shareholders and creditors through information disclosure and performance briefings127 - The company adheres to a people-oriented approach, soliciting employee opinions through democratic means, optimizing personnel selection, training, compensation and benefits, and performance appraisal systems, while caring for employee well-being and enriching cultural and entertainment activities128129 - The company insists on digital transformation and upgrading, building comprehensive digital solutions for the entire industry, strictly controlling product quality, focusing on food safety, and is committed to providing high-quality products and services to customers and protecting consumer interests130 - The company actively communicates with government departments and regulatory agencies, operates legally, creates employment, pays taxes according to law, and consistently supports public welfare by donating cash and self-produced products to charitable activities131 - The company actively participates in the “Belt and Road” initiative, investing in the water buffalo industry in Pakistan, conducting breeding and conservation work, and providing free public lectures on water buffalo embryo and dairy product storage and transportation, promoting technology transfer132133 - The company considers environmental protection a crucial part of its sustainable development strategy, accelerating industrial upgrading, investing in smart factories, and exploring agro-photovoltaic and pastoral-photovoltaic complementary methods to reduce carbon emissions, with no environmental accidents during the reporting period135 - As a national key leading enterprise in agricultural industrialization, the company continues to focus on the “three rural issues,” collaborating on rural revitalization through water buffalo industry development, ranch construction, village-enterprise co-farming projects, and providing employment opportunities to help farmers increase income and become prosperous136137138139140 Significant Matters Commitments Fulfilled and Overdue Unfulfilled by Actual Controller, Shareholders, Related Parties, Acquirers, and the Company During and as of the End of the Reporting Period The company completed the repurchase and cancellation of some performance compensation shares from Xu Leilei, but 1.76467 million shares remain uncancelled due to pledges, and 67.5316 million yuan in compensation is still outstanding, with active enforcement efforts underway - The company completed the cancellation of 20,640,630 performance compensation shares held by Xu Leilei on April 3, 2025144 - The remaining 1,764,670 shares held by Xu Leilei, which are subject to pledges, cannot be repurchased and cancelled for now144 - As of the disclosure date, the company has not yet received the performance compensation payment of 67.5316 million yuan from Xu Leilei, and the company is actively pursuing the enforcement of this payment144 Non-Operating Funds Occupied by Controlling Shareholders and Other Related Parties from the Listed Company During the reporting period, there were no instances of non-operating funds being occupied by controlling shareholders or other related parties from the listed company - During the reporting period, the company had no non-operating funds occupied by controlling shareholders or other related parties from the listed company145 Irregular External Guarantees The company had no irregular external guarantees during the reporting period - The company had no irregular external guarantees during the reporting period146 Appointment and Dismissal of Accounting Firms The company's semi-annual financial report was not audited - The company's semi-annual financial report was not audited148 Board of Directors' and Supervisory Board's Explanation on "Non-Standard Audit Report" for the Current Reporting Period The company did not have a non-standard audit report for the current reporting period - The company had no non-standard audit report during the reporting period149 Board of Directors' Explanation on "Non-Standard Audit Report" for the Previous Year The company did not have a non-standard audit report for the previous year - The company had no non-standard audit report during the reporting period149 Bankruptcy and Reorganization Matters The company did not experience any bankruptcy or reorganization matters during the reporting period - The company did not experience any bankruptcy or reorganization matters during the reporting period149 Litigation Matters The company is involved in two major lawsuits: one with Xu Leilei regarding unfulfilled performance commitments, with 1.76467 million shares still pledged and 67.5316 million yuan compensation outstanding; and another with Tai'an Dongyue Wealth, where the company lost on appeal and has accrued 190.7185 million yuan in estimated liabilities, planning to apply for retrial Major Litigation and Arbitration Matters | Basic Information of Litigation (Arbitration) | Amount Involved (ten thousand yuan) | Estimated Liabilities Formed | Litigation (Arbitration) Progress | Litigation (Arbitration) Outcome and Impact | Status of Litigation (Arbitration) Judgment Enforcement | Disclosure Date | Disclosure Index | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Lawsuit against Xu Leilei, former controlling shareholder of Shengshi Jiaoyang, for unfulfilled performance commitments | 6,753.16 | No | On March 11, 2025, Nanning Intermediate People's Court issued a "Ruling on Enforcement," ruling that 20,640,630 shares held by Xu Leilei had been transferred to the company's repurchase special securities account | The repurchase and cancellation of the aforementioned performance compensation shares will not have an adverse impact on the company's current or subsequent period profits; the specific impact amount will be subject to the company's annual audit results | The company completed the cancellation of 20,640,630 performance compensation shares on April 3, 2025. Due to pledges, the remaining 1,764,670 shares held by Xu Leilei cannot be repurchased and cancelled for now. As of the current date, the company has not yet received the performance compensation payment of 67.5316 million yuan from Xu Leilei | March 13, 2025 | Juchao Information Network "Announcement on the Completion of Transfer of Part of Performance Compensation Shares and Progress of Litigation Matters" (Announcement No.: 2025-021); "Announcement on the Completion of Repurchase and Cancellation of Part of Performance Compensation Shares" (Announcement No.: 2025-023) | | Dispute with Tai'an Dongyue Wealth Equity Investment Fund Co., Ltd. | Investment transfer payment of 31,000 ten thousand yuan and related difference compensation, case acceptance fees, etc. | Yes | The company received the "Civil Judgment" (2025) Lu Min Zhong No. 20 from Shandong High People's Court | This judgment is a final judgment and has not yet been enforced. To protect the legitimate rights and interests of the company and its shareholders, the company will apply for retrial through the judicial supervision procedure | Estimated liabilities of 19,071.85 ten thousand yuan have been accrued | June 6, 2025 | Juchao Information Network "Announcement on the Progress of Litigation Matters" (Announcement No.: 2025-045) | Other Litigation Matters | Basic Information of Litigation (Arbitration) | Amount Involved (ten thousand yuan) | Estimated Liabilities Formed | Litigation (Arbitration) Progress | Litigation (Arbitration) Outcome and Impact | Status of Litigation (Arbitration) Judgment Enforcement | Disclosure Date | Disclosure Index | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total amount involved in other litigation not meeting the disclosure standard for major litigation | 1,511.20 | No | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable | Penalties and Rectification The company and key personnel received administrative penalties from the China Securities Regulatory Commission for information disclosure violations, including a 4 million yuan fine for the company. A rectification team has been established to address issues and enhance internal governance Penalties | Name | Type | Reason | Investigation and Penalty Type | Conclusion (if any) | Disclosure Date | Disclosure Index | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Huangshi Group Co., Ltd. | Information Disclosure Violation | Investigated and administratively penalized by China Securities Regulatory Commission | Ordered to rectify, given a warning, and fined 4 million yuan | June 14, 2025 | Juchao Information Network "Announcement on the Company and Relevant Parties Receiving the