Production and Operations - COFCO Joycome Foods achieved a daily maximum production of 38,000 boxes at its South China division, covering major cities like Shenzhen and Guangzhou, filling a market gap in South China[26]. - A new slaughtering project in Chifeng with an annual output value of RMB 1.5 billion was completed, creating over 600 jobs and establishing a full industry chain[29]. - The company’s pig farming and slaughtering operations in Jilin and Chifeng each exceeded an output of 1 million pigs annually[31]. - COFCO Joycome Foods established a comprehensive management platform for pig farming, enhancing management efficiency across inventory, feeding processes, and sales[30]. - The company’s breeding farm in Henan achieved an annual output of 27,600 pigs, contributing to a total capacity of 552,000 pigs across five breeding farms and six fattening farms[35]. - The company plans to further expand its pig breeding capacity across various provinces, including Jilin, Inner Mongolia, and Jiangsu[44]. - The company has established modern slaughter processing bases in Jiangsu, Hubei, Jilin, and Inner Mongolia, enhancing its fresh pork distribution capabilities[45]. - The company has established over 130 high-standard ecological breeding bases across the country, along with multiple slaughtering and processing plants[89]. Financial Performance - In 2022, the company achieved a live pig output of 4,103 thousand heads, a year-on-year increase of 19.4%[38]. - The average selling price of commercial pigs decreased by 2.2% to RMB 17.86 per kilogram compared to the previous year[38]. - Fresh pork sales volume increased by 39.1% year-on-year, reaching 231 thousand tons[38]. - The sales volume of branded boxed pork rose by 11.3% to 55,833 thousand boxes[38]. - The company's operating revenue for 2022 was RMB 12,900.684 million, a decrease of 2.47% year-on-year[39]. - The net loss attributable to the company’s owners was RMB 320.038 million, compared to a profit of RMB 2,377.819 million in the previous year[39]. - The company’s overall net profit after fair value adjustment of biological assets was RMB 357 million, an increase of RMB 841 million compared to the previous year[51]. - The company reported a significant increase in user data, with a growth rate of 15% year-over-year[80]. - The company achieved a 20% increase in overall sales compared to the previous year[80]. - The gross margin improved to 35%, reflecting better cost management and pricing strategies[80]. - The company reported a net loss of RMB 319,778 for 2022, compared to a profit of RMB 2,353,715 in 2021, reflecting a substantial downturn[176]. - Total revenue for the year ended December 31, 2022, was RMB 12,900,684, a decrease of 2.5% from RMB 13,227,606 in 2021[175]. Market and Brand Development - The company launched a new brand advertisement emphasizing "safety and health," reinforcing its brand positioning[28]. - The company aims to strengthen its brand recognition and expand its market presence, with 360 new branded stores opened during the year[42]. - The company’s brand recognition and reputation have improved significantly, driven by its high-quality packaged pork products[49]. - The focus will be on promoting differentiated and branded fresh products, particularly the development of new products like flaxseed pork, to enhance brand influence[79]. - The brand "Jiajia Kang" leads the industry in high-end chilled pork, implementing strict controls from breeding to processing to ensure quality[89]. - The brand "Wanweike" focuses on quality and trendy positioning, appealing to young food enthusiasts with a commitment to traceable supply chains[89]. Risk Management and Compliance - The company faces significant risks from diseases in the livestock industry, particularly African swine fever, which has led to direct economic losses and increased operational costs due to lower growth rates and higher feed consumption[73][74]. - The company has implemented various biosecurity measures and emergency plans to mitigate the risks associated with animal diseases and ensure operational stability[74]. - Price risk remains a concern due to fluctuations in procurement and sales prices of key raw materials, including corn and soybean meal, which directly impact profitability[75]. - Food safety risks are managed through comprehensive safety management systems and regular inspections to prevent product recalls and customer complaints[77]. - Environmental risks are addressed through strict compliance with environmental regulations and monitoring systems to prevent pollution incidents[78]. - The company emphasizes the importance of risk management and internal control systems, ensuring they are effective and adequate[107]. - The company identified five major risks for 2022: epidemic risk, price risk, safety production risk, food safety risk, and environmental protection risk[111]. Corporate Governance - The board consists of seven members, including one executive director and three non-executive directors[80]. - The company is committed to maintaining high standards of corporate governance, aligning with the latest requirements in China, Hong Kong, and abroad[88]. - The board includes independent directors with significant backgrounds in finance, law, and business management, enhancing corporate governance[82]. - The company has implemented a comprehensive corporate governance policy, which includes regular reviews and monitoring of compliance with legal and regulatory requirements[90]. - The board of directors is responsible for overseeing the company's strategy, policies, and performance, ensuring high standards of corporate governance[90]. - The company has established effective mechanisms to ensure the independence of the board and independent opinions[91]. - The company has a strong emphasis on maintaining the independence and objectivity of external auditors[98]. Strategic Planning and Future Outlook - The company anticipates a gradual release of domestic consumption demand in 2023, despite ongoing international uncertainties[42]. - The company plans to enhance its core competitiveness by controlling African swine fever and optimizing its hedging strategy[42]. - The company is focusing on new product development, with an investment of $50 million in R&D for innovative technologies[80]. - Market expansion plans include entering three new international markets by the end of the next quarter[80]. - The company is considering strategic acquisitions to enhance its market position, targeting a potential acquisition valued at $200 million[80]. - The company aims to continuously provide safe and healthy food products to consumers while pursuing high-quality sustainable development[90]. Financial Transactions and Related Party Transactions - The company has entered into a share subscription agreement with COFCO Group (Hong Kong) Limited to issue 680,000,000 shares at a subscription price of HKD 2.30 per share, totaling HKD 1,564,000,000[122]. - The company has established a procurement agency service with COFCO for purchasing meat products, primarily pork and beef, from foreign suppliers[160]. - The transactions with COFCO are conducted under normal commercial terms and are exempt from independent shareholder approval as per the Listing Rules[161]. - The company’s board of directors has reviewed the related party transactions and confirmed their fairness and reasonableness in the interest of the company and its shareholders[166].
中粮家佳康(01610) - 2022 - 年度财报