Financial Performance - The total revenue of China Modern Dairy reached RMB 5.63 billion for the six months ended June 30, 2022, representing a year-on-year increase of 77.1%[6]. - Gross profit for the same period was RMB 1.65 billion, reflecting a year-on-year growth of 40.0%[6]. - Cash EBITDA amounted to RMB 1.44 billion, showing a year-on-year increase of 25.0%[6]. - Net profit recorded was RMB 531 million, with a year-on-year increase of 5.0%[6]. - Adjusted net profit reached RMB 729 million, representing a significant year-on-year increase of 48.9%[6]. - The Group's sales revenue recorded RMB 5,632.1 million, a year-on-year increase of 77.1%, with raw milk sales contributing RMB 4,858.0 million, up 52.8%[53]. - The Group recorded a net loss from other gains and losses of RMB 225.4 million, compared to a net loss of RMB 9.9 million in the previous year, mainly from foreign exchange losses and fair value changes on derivatives[142]. - For the six months ended June 30, 2022, the profit attributable to owners of the Company was RMB 507.7 million, a slight year-over-year increase of 2.2% compared to RMB 496.7 million in 2021[148]. - Basic earnings per share for the period was approximately RMB 6.46 cents, down from RMB 7.13 cents in 2021, while diluted earnings per share was approximately RMB 6.45 cents, down from RMB 7.12 cents[148]. Production and Yield - The herd size increased to 382,693 heads, marking a year-on-year growth of 51.9%[6]. - The total milk yield was 1,152 thousand tons, reflecting a year-on-year increase of 56.9%[10]. - The annualized unit yield per milkable dairy cow grew by 11% year-on-year to 12.3 tons, achieving a record high[10]. - The average annualized milk yield per milkable cow increased to 12.3 tons, compared to 11.1 tons in 2021[52]. - The average milk yield per milkable cow was 12.3 tons, with a total milk yield of 1,152 thousand tons during the reporting period, reflecting a year-on-year increase of 56.9%[69]. - The total sales volume of raw milk increased by 56.7% year-over-year to approximately 1.135 million tons, up from 725 thousand tons in 2021, driven by higher annual milk yield per cow and contributions from newly acquired farms[102]. Quality and Standards - Modern Dairy was assigned a "BBB" investment grade rating by Standard & Poor's, with a stable outlook, affirming its recognition in the industry[10]. - The Group's raw milk quality indicators exceed EU standards, with strict monitoring throughout the production process to ensure compliance with food safety regulations[79]. - Modern Dairy's standard for somatic cell count is less than 150,000 cells per milliliter, which is more stringent than the PRC's standard of 600,000 cells and the EU's standard of 400,000 cells[75]. - The Group's raw milk production quality indicators exceed EU standards, ensuring high-quality raw milk through comprehensive monitoring during production[83]. Innovation and Technology - The company has introduced innovative EHT enzymatic hydrolysis technology for its zero lactose milk, making it suitable for the constitution of Chinese people[29]. - The Dreamcap product line includes a sleep aid milk that supplements GABA, improving sleep quality[27]. - The A2 genotype dairy cows are screened by DNA detection, providing a limited supply of milk that is naturally compatible with the human body[26]. Market and Industry Trends - In the first half of 2022, China's domestic milk production increased by 8.4% year-on-year, with an average market milk price of RMB 4.19/kg[40]. - Mainland China imported 1.7835 million tons of various dairy products in the first half of 2022, a year-on-year decrease of 18%[41]. - The auction price of foreign whole milk powder increased by 9.2% year-on-year due to reduced milk production in New Zealand and the European Union[41]. - By 2025, national milk production in China is projected to reach approximately 41 million tons, with large-scale farms expected to account for 75%[45]. Operational Efficiency - The Group has implemented measures to mitigate the impact of rising feed costs, including optimizing feed formulas and improving cow health[54]. - The Group's farms have sufficient feed inventory, enough to sustain cows for 20-30 days, ensuring operational stability during emergencies[81]. - The Group has established a green recycling industrial chain, including forage planting, cow breeding, fertilizer treatment, biogas power generation, and returning fertilizer to the field[80]. Financial Position and Investments - The Group's total equity as of June 30, 2022, was RMB 11,529.4 million, an increase from RMB 11,114.7 million as of December 31, 2021[152]. - Total interest-bearing borrowings as of June 30, 2022, amounted to RMB 10,496.8 million, a year-over-year increase of 23.6% from RMB 8,494.7 million[162]. - The company issued long-term bonds with a nominal amount of US$500 million at an interest rate of 2.125%, due in 2026, rated "BBB" by Standard & Poor's[177]. - Modern Farming acquired 80% equity interest in Datong Yilei Second Animal Husbandry Co., Ltd. on May 6, 2022, with a provision of RMB 4.57 million recognized for ongoing arbitration[185]. - The acquisition of 75% equity interest in Inner Mongolia Aiyangniu Technology Co., Ltd. was approved on June 8, 2022, aimed at enhancing the Group's profitability through digital technology and supply chain finance[194]. Corporate Culture and Values - The company emphasizes quality, stating that "Quality comes first, never be compromised" as a core value[18]. - The corporate culture emphasizes safety and health as the top priority, alongside a commitment to innovation and talent development[23].
现代牧业(01117) - 2022 - 中期财报