Financial Performance - The company achieved a revenue of HKD 8.44 billion for the year, with a profit attributable to equity holders of HKD 3.06 billion, and a significant reduction in operating loss of approximately 56.6% to HKD 416 million[14]. - The group recorded a revenue of HKD 8.44 billion in 2021, a decrease of 44.5% compared to HKD 15.21 billion in 2020[35]. - Fresh meat sales amounted to HKD 6.11 billion, representing a 47.5% decline from HKD 11.64 billion in the previous year, accounting for approximately 72% of total revenue[33][38]. - The gross profit decreased by 48.5% to HKD 398 million, with a gross margin of 4.7%, down from 5.1% in the previous year[40]. - The group’s loss from core operations was HKD 416 million, a reduction of approximately 56.6% compared to a loss of HKD 957 million in 2020[35]. - Other net income for the year was approximately HKD 23 million, a decrease from HKD 137 million in 2020, primarily due to reduced gains from the sale of non-current assets and increased litigation loss provisions[42]. - The company reported a loss of HKD 416 million for the fiscal year ending December 31, 2021, which is a 56.6% reduction in losses compared to the previous year[163]. - The company has not declared a final dividend for the year[168]. Market and Production Insights - The national pig inventory reached 449 million heads by the end of 2021, representing a year-on-year increase of 10.5%, while the total pig output was 671 million heads, a substantial year-on-year increase of 27.4%[11]. - The average price of pork fell by 30.3% throughout the year due to an oversupply in the market[11]. - In 2021, the national pig slaughter volume reached approximately 265 million heads, a year-on-year increase of 62.9%, marking the highest slaughter volume in five years[26]. - The national pork production in 2021 was approximately 53 million tons, up 28.8% year-on-year, while the average pork price dropped by 30.3%[26]. - The average procurement price of live pigs decreased by approximately 25.7% compared to 2020, leading to a 43.0% drop in slaughter volume to about 1.64 million heads[36]. - The company’s major business remains focused on providing various types of fresh and frozen meat products, with no significant changes reported[167]. Strategic Initiatives and Restructuring - The company plans to focus on deep processing and slaughtering as core business areas, with deep processing expected to be the profit center and slaughtering serving as the cost center[16]. - The restructuring plan was approved and is expected to optimize the overall debt structure and reduce financial costs, enhancing profitability for long-term sustainable returns to shareholders[19]. - The restructuring process involved significant support from various stakeholders, including government and creditors, enabling the company to embark on a new development chapter[24]. - The company is targeting a strategic cooperation model with regional partners and franchisees to expand its market presence in first and second-tier cities in Heilongjiang Province over the next four years[16]. - The company aims to enhance product quality and optimize production to drive sales recovery, alongside developing convenience store channels and strategic partnerships for national market expansion[16]. E-commerce and Sales Channels - E-commerce sales have increased significantly, rising from 3% in 2016 to 20% in 2020, indicating a strong growth in online sales channels[16]. - The company has focused on expanding e-commerce and dining channels to increase sales[154]. - The company aims to implement operational strategies to improve profitability and cash flow, including enhancing product quality and expanding sales channels, particularly in e-commerce and dining sectors[160]. Governance and Management - The company has adhered to the Corporate Governance Code as per the Hong Kong Stock Exchange rules during the review year, with the exception of the separation of roles between the Chairman and CEO[72]. - The board consists of five members, including two executive directors and three independent non-executive directors, ensuring a balance of power[74]. - The independent non-executive directors have confirmed their independence in accordance with the relevant rules, contributing to the strategic development of the group[77]. - The board is responsible for approving and monitoring the overall strategy and policies of the group, as well as evaluating its performance[74]. - The company has established clear terms of reference for the audit, remuneration, and nomination committees in compliance with the Corporate Governance Code[84]. Risk Management and Compliance - The group faces significant financial risks, including market, liquidity, and credit risks, with a net debt status as of December 30, 2021, and potential risks of failing to meet financial obligations[124]. - The group is subject to strict government regulations in the pig slaughtering and processed meat industry, which could impact its business if compliance is not met[125]. - The company has established a comprehensive food safety control system with 21 inspection and quarantine processes to ensure product quality and safety[129]. - The company has implemented a management mechanism to negotiate with at least three suppliers for the supply of key raw materials to ensure stability and quality[117]. Environmental and Social Responsibility - The company is committed to environmental protection and aims to reduce waste generation in its production processes[64]. - The company has established an underground sewage treatment station to reduce odor emissions and improve the surrounding environment[172]. - The company has adopted a clean production audit mechanism and implemented a circular economy approach to minimize environmental impact[172]. - The company has established an employee mutual aid fund to support employees facing difficulties in their lives[174]. Employee and Workforce Management - The total employee cost for the year was HKD 416 million, accounting for 4.9% of revenue, a decrease from HKD 722 million and 4.7% of revenue in the previous year[67]. - The group employed approximately 1,500 staff as of December 31, 2021, down from approximately 10,400 staff in the previous year due to restructuring[67]. - The company actively recruits young employees to develop new products and sales channels targeting modern consumer groups[176].
雨润食品(01068) - 2021 - 年度财报