NWF(SH:600975)2020-08-28 16:00Financial Performance - The company's operating revenue for the first half of 2020 was RMB 924,833,716, representing a 12.43% increase compared to RMB 822,600,491.20 in the same period last year[24]. - The net profit attributable to shareholders of the listed company reached RMB 149,346,057.19, a significant increase of 2,384.61% from RMB 6,010,842.09 in the previous year[24]. - The net cash flow from operating activities was RMB 70,194,137.46, a recovery from a negative cash flow of RMB -222,596,110.07 in the same period last year[24]. - The total assets at the end of the reporting period amounted to RMB 1,976,422,632.50, reflecting a 21.04% increase from RMB 1,632,840,846.63 at the end of the previous year[24]. - The net assets attributable to shareholders of the listed company increased to RMB 1,295,365,032.32, up 11.13% from RMB 1,165,599,242.65 at the end of the previous year[24]. - Basic earnings per share for the reporting period were RMB 0.23, a substantial increase of 2,200.00% compared to RMB 0.01 in the same period last year[24]. - The weighted average return on net assets rose to 12.04%, an increase of 11.50 percentage points from 0.54% in the previous year[24]. - The company reported a 78.87% increase in domestic sales revenue, totaling CNY 573.71 million, due to high pig prices in the first half of 2020[64]. - The company experienced a 63.00% decrease in slaughter and cold storage revenue, amounting to CNY 145.97 million, primarily due to a decline in slaughter volume[64]. - The company’s export sales revenue decreased by 2.83% to CNY 28.14 million, with a total export of 5400 pigs, a 60.87% decline year-on-year[63]. Industry Context - The company operates in the livestock industry, focusing on pig farming, meat sales, and feed processing, with a comprehensive supply chain from feed production to meat processing and cold chain logistics[31]. - In the first half of 2020, the national pig production was 1,998 million tons, accounting for 57.27% of total meat production, indicating strong demand for pork[38]. - The company reported a 19.9% year-on-year decrease in pig output, with 25,103 million pigs slaughtered in the first half of 2020, reflecting the impact of African swine fever[41]. - The average pig price in the first quarter of 2020 remained above 35 RMB per kilogram, significantly higher than previous cycles, with a June price of 31.2 RMB per kilogram in Hunan Province[41]. - The industry is expected to see a rise in scale farming, with projections indicating that by 2022, the scale farming rate will reach approximately 58%[38]. Operational Developments - The company has established 13 self-owned and 24 leased pig farming bases, utilizing both self-raising and contracted farming models to optimize production efficiency[32]. - The slaughtering capacity of the company's subsidiary, Guanglian, is 700,000 pigs per year, with a cold storage capacity of 40,000 tons[33]. - The company aims to enhance its production capacity and market share through strategic investments in food processing and logistics[31]. - The company has initiated technical upgrades for its pig farms in Huizhou and Hunan Shaoshan, enhancing its breeding facilities and competitiveness in the industry[47]. - The company has established a complete industrial chain through the Guanglian project, significantly enhancing its ability to withstand market risks associated with fluctuating pig prices[43]. Financial Strategy and Investments - The company has received credit support from multiple banks, allowing it to utilize both direct and indirect financing methods to meet its development funding needs[47]. - The company has acquired 90% of Guangzhou Zhuangzhuang Technology Development Co., Ltd. for RMB 14.97 million, aiming to expand its pig farming scale in the Guangdong market[57]. - The company plans to invest RMB 16.40 million in the construction of the Aotou pig farm project in Guangzhou after the acquisition and capital increase[57]. - The company invested CNY 34.42 million to upgrade its Huizhou subsidiary to achieve an annual output of 72,000 market pigs[58]. - Research and development expenses rose by 246.40% to CNY 3.54 million, reflecting increased investment in R&D[72]. Risk Management - The company faces a risk of pig diseases, with an estimated mortality rate of around 10%, leading to a survival rate of approximately 90%[97]. - The company has implemented a comprehensive disease prevention system and will enhance monitoring efforts to mitigate risks associated with pig diseases[99]. - The company is exposed to risks from fluctuations in pig prices, which could significantly impact its operations[101]. - The company plans to adopt a dual market strategy, focusing on both domestic and international sales to mitigate the impact of price volatility[101]. - The cost of feed, primarily corn and soybean meal, constitutes the largest portion of the company's breeding costs, making it vulnerable to raw material price fluctuations[101]. Environmental and Social Responsibility - The company is committed to environmental protection and will increase investments in environmental facilities to comply with stricter regulations[104]. - The company has invested 12 million yuan in a comprehensive waste management project at its Yong'an subsidiary, which includes anaerobic biogas production and organic fertilizer production[147]. - The Yong'an subsidiary has a wastewater discharge capacity of approximately 100 tons per day, adhering to national discharge standards with COD at 50 mg/L and ammonia nitrogen at 8 mg/L[144]. - The company actively participates in poverty alleviation efforts, implementing targeted measures to assist impoverished households in various villages[131]. - The company has implemented a "company + farmer" model to enhance income stability for impoverished households through standardized management and support[135]. Governance and Shareholder Structure - The company appointed new executives, including He Jun as the chairman of the fifth board of directors, indicating a leadership change[182]. - The company has established various specialized committees under the board, including the Strategy Committee and the Audit Committee, to enhance governance and oversight[186]. - The company has not experienced any changes in its controlling shareholder or actual controller, maintaining stability in ownership[176]. - The company has a total of 28,677,100 shares held by Shaanxi International Trust Co., Ltd., reflecting its investment interest[174]. - The company reported a total of 202,018,546 shares held by Hunan Grain and Oil Food Import and Export Group Co., Ltd., representing a significant shareholder[174].