Shennong Group(SH:605296)2022-04-21 16:00Financial Performance - The company's operating revenue for 2021 was approximately CNY 2.78 billion, a 2.02% increase from CNY 2.72 billion in 2020[17]. - The net profit attributable to shareholders for 2021 was CNY 245.29 million, a significant decrease of 78.44% compared to CNY 1.14 billion in 2020[17]. - The net cash flow from operating activities for 2021 was CNY 585.86 million, down 33.86% from CNY 885.83 million in 2020[17]. - The total assets at the end of 2021 were CNY 5.17 billion, representing a 79.79% increase from CNY 2.88 billion at the end of 2020[18]. - The net assets attributable to shareholders increased by 98.99% to CNY 4.50 billion in 2021 from CNY 2.26 billion in 2020[18]. - Basic earnings per share for 2021 were CNY 0.64, a decrease of 79.75% from CNY 3.16 in 2020[19]. - The weighted average return on net assets for 2021 was 6.86%, down 57.89 percentage points from 64.75% in 2020[19]. - The company reported a government subsidy of CNY 22.53 million in 2021, compared to CNY 9.37 million in 2020[22]. Dividend Policy - The company plans to distribute a cash dividend of 2.50 RMB per 10 shares, totaling 100,057,253 RMB (including tax) to all shareholders[3]. - The proposed cash dividend for the 2021 fiscal year is also 2.50 RMB per 10 shares, with a total distribution of 100,057,253.00 RMB, representing 40.79% of the net profit attributable to shareholders[146]. - The company emphasizes a stable and continuous dividend policy, with no adjustments made to the profit distribution policy during the reporting period[145]. - The company has a cash dividend policy that mandates a minimum distribution of 10% of the distributable profits each year, provided certain conditions are met[143]. Risk Management - The company has outlined various risks and countermeasures in its management discussion and analysis section[4]. - Major risks include animal epidemics such as African swine fever, which could lead to increased mortality rates and significant losses in biological assets[101]. - Natural disasters pose a risk to the company's feed and breeding operations, particularly in earthquake-prone areas like Yunnan Province[102]. - Fluctuations in pig and pork prices are cyclical, influenced by supply-demand dynamics, which could adversely affect the company's profitability[104]. - The company faces risks from the volatility of raw material prices, particularly corn and soybean meal, which significantly impact operating costs[104]. - Food safety remains a critical concern, with potential regulatory changes requiring increased investment in quality control and testing[104]. - Environmental protection policies may lead to higher operational costs and potential relocation of breeding facilities if new restrictions are imposed[103]. Operational Strategy - The company plans to continue expanding its market presence and invest in new product development to enhance future growth[17]. - The company is actively expanding its breeding farms and slaughtering capacity, aiming to enhance production scale and reduce breeding costs[26]. - The company is transitioning its marketing strategy from "sales" to "providing specialized pig farming services" to adapt to market changes and enhance feed sales[27]. - The company is focusing on improving its biosecurity management system to mitigate risks associated with African swine fever[28]. - The company aims to increase its market share in the feed business by enhancing product competitiveness and expanding its sales team[27]. - The company is advancing the construction of a 500,000-head annual slaughter project to improve production capacity and ensure food safety[30]. - The company plans to launch deep processing products in 2022, including processed meat products and pre-prepared dishes, to enhance product value and market reach[31]. Corporate Governance - The company has established a transparent information disclosure system, enhancing shareholder rights and preventing insider trading[115]. - The company is committed to improving corporate governance and internal control mechanisms to promote sustainable and stable development[116]. - The company respects the rights of stakeholders, including customers, employees, suppliers, and partners, to enhance both economic and social benefits[115]. - The company has maintained a clear separation in operations, assets, and finances from its controlling shareholder, ensuring independent business capabilities[115]. - The company has established a governance structure that complies with relevant laws and regulations, ensuring the protection of shareholder rights[112]. Research and Development - The research and development center has been recognized as a provincial-level technology center, indicating a strong commitment to innovation[57]. - The company plans to continue optimizing its core technologies for feed production, focusing on high-energy feed formulations for high-yield sows and piglets[59]. - Research and development expenses rose by 66.77% year-on-year to CNY 28.30 million, attributed to an increase in R&D projects[64]. - The company holds a total of 48 authorized patents, including 3 invention patents and 45 utility model and design patents[58]. Environmental Responsibility - The company strictly adhered to environmental regulations, with no exceedance of pollutant discharge limits during the reporting period[153]. - The company implemented various pollution prevention measures, including real-time monitoring of wastewater discharge[156]. - The company committed to reducing carbon emissions through various energy-saving projects, including the installation of solar heating facilities and the replacement of high-energy-consuming processes[159]. - The company is committed to continuous improvement in environmental management and resource utilization to enhance competitiveness[158]. Market Trends - The company is witnessing an increase in industry concentration as smaller slaughterhouses are phased out in favor of larger, more modern facilities[91]. - The company anticipates significant growth potential in the agricultural and livestock industry, with targets set for pork, poultry, and beef production values[90]. - The total output of the national feed industry reached 293.44 million tons, a year-on-year increase of 16.1%, with pig feed accounting for 130.77 million tons, up 46.6%[32]. - The top 20 livestock companies accounted for 20.3% of the national pig output, with a significant increase in industry concentration due to the expansion of breeding capacity[33]. Employee Management - The company has a clear human resource management mechanism that promotes talent development and employee welfare, enhancing overall business capabilities[48]. - The company has established a comprehensive employee training system to enhance the overall quality of its workforce[141]. - The total number of employees in the parent company is 247, while the main subsidiaries employ 1,646, resulting in a total of 1,893 employees[139].