NWF(SH:600975)2021-08-30 16:00Financial Performance - The company's operating revenue for the first half of 2021 was CNY 968.41 million, an increase of 4.71% compared to CNY 924.83 million in the same period last year[23]. - The net profit attributable to shareholders of the listed company decreased by 50.49% to CNY 73.94 million from CNY 149.35 million year-on-year[23]. - The net cash flow from operating activities was negative at CNY -241.98 million, a significant decline of 444.73% compared to CNY 70.19 million in the previous year[23]. - The total assets increased by 65.27% to CNY 3.68 billion from CNY 2.23 billion at the end of the previous year[23]. - The net assets attributable to shareholders of the listed company rose by 2.06% to CNY 1.46 billion compared to CNY 1.43 billion at the end of the previous year[23]. - Basic earnings per share decreased by 52.17% to CNY 0.11 from CNY 0.23 in the same period last year[23]. - The weighted average return on net assets was 5.06%, down from 12.04% year-on-year, reflecting a decrease of 6.98%[23]. - The company achieved a revenue of 968.41 million yuan and a net profit of 73.94 million yuan during the reporting period[55]. - The company reported a total revenue of 19,204.07 million, with a significant increase of 42.23% compared to the previous period[107]. - The company has set a future outlook with a revenue target of 61,436.24 million, aiming for a 13,896 million increase in the next quarter[107]. Operational Developments - The company operates in the livestock industry, focusing on pig farming, meat sales, and feed processing, establishing a complete industrial chain from feed production to meat processing[29]. - The company has a slaughtering capacity of 700,000 pigs per year and a cold storage capacity of 40,000 tons[32]. - The company plans to establish a new subsidiary for a slaughtering and cold chain distribution project with an annual capacity of 500,000 pigs and a cold storage of 4,000 tons[32]. - The company aims to enhance its "company + appropriate scale small farm" model, optimizing farmer structures and adjusting profit distribution mechanisms[32]. - The company has established a complete pig industry chain, enhancing its risk resistance and regional competitiveness, with a focus on standardized and large-scale breeding practices[40]. - The company has initiated a digital transformation in pig farming through a partnership with Huawei, aiming to reduce production costs and improve breeding quality[45]. - The company has implemented a standardized and intelligent breeding model, significantly upgrading its breeding facilities to enhance industry competitiveness[45]. - The company has established a new subsidiary, Hunan Shunxin Food Co., Ltd., with a registered capital of CNY 100 million to invest in a slaughter and cold chain distribution project[84]. - The company has invested in a new breeding base and feed processing plant for Tibetan pigs, increasing its registered capital to CNY 35.2049 million, with the company holding a 20% stake[62]. Market and Industry Trends - The pig farming industry in China has seen a rise in scale, with the scale farming rate reaching 57.1% in 2020, an increase of 4.1 percentage points from the previous year[36]. - In the first half of 2021, the national pork production increased by 35.9% compared to the same period in 2020, with a total of 2,715 million tons produced[36]. - As of the end of Q2 2023, the national pig inventory reached 43.91 million heads, a year-on-year increase of 29.2%, recovering to 99.4% of the end of 2017 level[37]. - The number of breeding sows stood at 4.564 million heads, up 25.7%, equivalent to 102% of the end of 2017 level[37]. - In the first half of 2023, the national pig slaughter volume was 33.742 million heads, an increase of 34.4% year-on-year, while pork production reached 2.715 million tons, up 35.9%[37]. Risk Management and Compliance - The company has outlined potential risks in the management discussion and analysis section of the report[8]. - The company has established a comprehensive biosecurity management system to prevent African swine fever, including a strict "three zones and two lines" disinfection management system[49]. - The company has implemented a risk-sharing mechanism for African swine fever prevention, enhancing collaboration between management and farms[58]. - The company has focused on digital transformation and capacity expansion despite challenges from COVID-19 and fluctuating feed prices[55]. - The company has established a comprehensive epidemic prevention system to mitigate risks associated with pig diseases, particularly African swine fever[116]. - The company is committed to maintaining a robust epidemic prevention framework, including regular training and monitoring of staff to ensure compliance with biosecurity protocols[116]. Investment and Financing - The company plans to raise up to 1.03 billion yuan through a non-public offering of up to 152,365,383 new shares[50]. - The company completed a non-public offering to raise up to CNY 1.02999 billion to expand pig farming scale and improve market competitiveness[69]. - The company has received credit support from multiple banks to facilitate its funding needs for expansion[123]. - The company is in a rapid growth phase requiring significant funding; it plans to utilize retained earnings and capital market financing to support expansion[123]. Environmental Management - The company has implemented environmental protection measures to comply with national standards, but increasing regulations may lead to higher operational costs[120]. - The company’s wastewater discharge meets national standards, with specific discharge limits for COD, ammonia nitrogen, and BOD[134]. - The company has established a comprehensive wastewater treatment system, ensuring compliance with environmental regulations across its subsidiaries[135]. - The company is actively enhancing its environmental management system and increasing investments in environmental protection facilities[120]. - The company is committed to reducing carbon emissions through low-carbon pig farming practices and the use of automated feeding systems[161]. Social Responsibility and Community Engagement - The company actively engages in rural revitalization efforts to support poverty alleviation initiatives[166]. - The company has implemented a "modular breeding unit" poverty alleviation model in Pingjiang County, achieving approximately CNY 560,000 in income for the village group in 2021[167]. - The company has signed cooperative breeding agreements with impoverished households, resulting in a live pig inventory of 4,800 heads and generating over CNY 900,000 in income for these households[168]. - Guangzhou Zhuangzhuang Technology Development Co., Ltd. has committed CNY 300,000 annually to local public welfare projects to support rural revitalization[168]. Legal and Regulatory Matters - The company has ongoing litigation with a claim amounting to approximately ¥26.07 million, with a second-instance judgment already made[198]. - The arbitration case involving the company has a claim amount of approximately ¥11.02 million, with a decision already rendered[198]. - The company has a long-term commitment to ensure that the conditions for stock option incentives are linked to the execution of compensation measures[187]. - The company will strictly comply with relevant regulations during the issuance process, ensuring no improper benefits are provided to related parties[186].