Revenue and Business Segments - The Group's revenue is derived from two business segments: upstream products and fermented and downstream products, with production activities conducted in the People's Republic of China (PRC) [8]. - The Group's principal activities include investment holding and the manufacture and sale of cornstarch, lysine, starch-based sweeteners, modified starch, and ancillary corn-based products [7]. - The Group's subsidiaries are primarily engaged in the manufacture and sale of various corn-based products, contributing to its overall revenue [7]. - The Group achieved a turnover of more than RMB 11 billion for the first time in 2021 [46]. - The Group recorded total revenue of approximately RMB11,639,315,000, a significant increase from RMB8,892,261,000 in 2020, representing a growth of 30.9% [56]. - Revenue from upstream products increased by 27.3% to RMB8,576,482,000, with a gross profit margin of 5.8%, down from 6.2% in 2020 [58]. - Revenue from lysine products increased from RMB1,442,844,000 to RMB2,224,230,000, with a sales volume increase of 16.2% to about 320,638 tonnes [61]. - Revenue from fermented and downstream products rose substantially to RMB3,062,833,000, compared to RMB2,153,751,000 in 2020 [60]. - Revenue of starch-based sweetener increased to approximately RMB519,544,000, up from RMB357,781,000 in 2020, with an average selling price of RMB2,650 per tonne and sales volume of 196,049 tonnes [64]. - Revenue of modified starch decreased to RMB267,463,000 from RMB312,025,000, primarily due to reduced production from sewage disposal control [64]. - Revenue of other fermented products rose by 25.5% to approximately RMB51,596,000, compared to RMB41,101,000 in 2020 [64]. Financial Performance - Gross profit increased by 70.1% to approximately RMB952,211,000, up from RMB559,775,000 in 2020 [56]. - Profit after taxation rose significantly to RMB402,830,000, compared to RMB207,039,000 in 2020 [56]. - Basic earnings per share increased to RMB0.0577 based on a weighted average of 5,994,132,000 ordinary shares, up from RMB0.0317 based on 5,995,591,000 shares in 2020 [56]. - Distribution expenses decreased significantly to RMB164,934,000 from RMB184,229,000, due to increased use of bulk cargo delivery [66]. - Administrative expenses rose to RMB192,013,000 from RMB166,018,000, mainly due to higher staff costs and depreciation [68]. - Research expenses surged to RMB199,648,000 from RMB28,899,000, focusing on production technology innovation and corn-derivative products [69]. - Other net income increased to RMB114,923,000 from RMB80,871,000, with significant contributions from government grants and gains on sales of scrap materials [72]. - The Group's current ratio improved to 2.5 in 2021 from 1.9 in 2020, while the quick ratio increased to 1.8 from 1.2 [78]. - The gearing ratio decreased to 2.4% in 2021 from 2.8% in 2020, indicating a reduction in leverage [78]. - Total shareholder return rose significantly to 41.7% in 2021, compared to 13.3% in 2020 [78]. Dividends and Shareholder Information - The proposed final dividend is HK0.69 cents per share for the year ended 31 December 2021, subject to approval at the upcoming annual general meeting [12]. - As of December 31, 2021, Mr. Tian Qixiang holds 3,705,385,194 ordinary shares of the Company, representing 61.81% of the total shareholding [15]. - The total number of shares in issue of the Company as at December 31, 2021, is 5,994,132,043 [25]. - The Company has maintained appropriate directors and officers liability insurance for indemnifying against losses from relevant legal actions [23]. - The indemnity provision for Directors and officers was in force during the year and remains effective as of the date of the annual report [23]. - The interests of Directors are recorded in accordance with the Securities and Futures Ordinance [15]. - The Board intends to maintain a balance between dividend distribution and adequate cash flow to meet working capital requirements [100]. Corporate Governance and Compliance - The Company has complied with the Corporate Governance Code during the year under review, except for the absence of the chairman at the 2021 AGM due to other business engagements [197]. - The Company has adopted a Securities Dealing Code that applies to all Directors and employees, ensuring compliance throughout the year [199]. - The Board is committed to maintaining high corporate governance standards, which are crucial for future success [195]. - The effectiveness of the Group's internal control and risk management systems has been evaluated by the Board [189]. - The Company has ensured compliance with legal and regulatory requirements throughout the year [189]. Environmental and Sustainability Practices - The Group is committed to complying with all environmental policies and relevant laws, and has an internal laboratory to ensure product quality meets national standards, including food safety standards [10]. - The company recognizes its corporate social responsibility and aims to create value for stakeholders beyond monetary terms, incorporating ESG principles into business operations [108]. - The company is focused on enhancing its research and development capabilities to support sustainable growth [110]. - The company is committed to using water responsibly and has its own reclaimed water treatment facilities to minimize environmental impact [148]. - The Group has implemented a perpetual monitoring system for sewage disposal, reported to local environmental protection bureau [146]. - The Group did not produce any hazardous waste in its production plants during the year [147]. - The Group is committed to using water responsibly and has its own reclaimed water treatment facilities to minimize environmental impact [148]. - The company encourages the use of reusable packaging materials to align with sustainability practices [152]. - The company has not set any specific targets for reducing emissions or waste, primarily due to the variability in product mix and production methods [150]. Employee and Stakeholder Relations - The Group maintains key relationships with major stakeholders, including employees, customers, and suppliers, as outlined in the Environmental and Sustainability Report [9]. - As of December 31, 2021, the Group had approximately 2,326 full-time staff, with total staff costs of approximately RMB229,470,000, an increase from RMB190,457,000 in 2020 [74]. - The male to female employee ratio is 1,932 males to 391 females, indicating a gender distribution of approximately 83% male and 17% female [126]. - The employee turnover rate for males was 6.7% in 2021, an increase from 5.2% in 2020 [126]. - The Group's whistleblowing policy provides a secure reporting channel for suspected misconduct, enhancing accountability [124]. - The company has established trust with suppliers, primarily consisting of farmers, cooperatives, agents, and traders in the PRC [133]. Risk Management - The Risk Review Report provides a comprehensive review of principal risks and uncertainties facing the Group [9]. - The management uses a risk scorecard to rank and compare identified risks, presenting them to the Board for annual review [169]. - The executive management team is responsible for managing risks and ensuring appropriate control procedures are in place [170]. - The Group invested in high-efficiency equipment to effectively reduce energy consumption as part of its commitment to carbon footprint neutralization [174]. - The company is monitoring commodity price movements closely due to the volatility in cornstarch and corn kernel prices, which may lead to significant losses if costs cannot be passed to customers [182]. Research and Development - The management team expects to start trial production of lactic acid and polylactic acid in the second and fourth quarters of 2022 respectively [48]. - The company plans to adjust production plans and product mix in response to market conditions to maintain profitability [57]. - The Group invests significantly in research and development for new products and production methods, aiming to improve production efficiency and control costs [157]. - The Group plans to register its research and development results with the National Intellectual Property Administration in China to protect its innovations [157]. - The company is conducting market research and feasibility studies for potential new product projects to promote innovation [182].
中国淀粉(03838) - 2021 - 年度财报