Namchow Food(SH:605339)2023-03-13 16:00Financial Performance - The company achieved a consolidated net profit attributable to the parent company of ¥160,575,547.42 in 2022, with a base of ¥109,144,637.57 for the parent company's net profit[6]. - The total distributable profit for the parent company after accounting for statutory surplus reserves and previous undistributed profits is ¥507,252,413.47[6]. - A cash dividend of ¥3 per 10 shares (including tax) is proposed, amounting to a total of ¥128,392,984.80 based on the total share capital of 427,976,616 shares as of March 13, 2023[6]. - The company does not plan to increase capital reserves or issue bonus shares for the year 2022[6]. - In 2022, the company's operating revenue was CNY 2,861,395,176.17, a decrease of 0.40% compared to 2021[26]. - The net profit attributable to shareholders decreased by 56.41% to CNY 160,575,547.42 in 2022[26]. - The basic earnings per share dropped by 58.70% to CNY 0.38, reflecting the decline in net profit[27]. - The weighted average return on equity fell to 4.98%, down 8.82 percentage points from the previous year[27]. - The net cash flow from operating activities was CNY 200,566,776.40, a decrease of 5.80% compared to 2021[26]. - The company's total assets at the end of 2022 were CNY 4,161,437,459.39, an increase of 0.99% from the previous year[26]. - The net assets attributable to shareholders increased by 1.61% to CNY 3,250,009,036.45 at the end of 2022[26]. - The net profit after deducting non-recurring gains and losses decreased by 58.20% to CNY 147,831,746.98[28]. Risk Management - The report includes a risk statement indicating that forward-looking statements do not constitute a commitment to investors, highlighting the importance of considering investment risks[7]. - The report details potential risks that the company may face, which are elaborated in the management discussion and analysis section[8]. - The company faced challenges in offline consumption and rising raw material costs, impacting profit margins[26]. - The company has not violated decision-making procedures for external guarantees[8]. - There were no non-operating fund occupations by controlling shareholders or related parties reported[8]. Audit and Compliance - The audit report issued by KPMG was a standard unqualified opinion, ensuring the accuracy and completeness of the financial report[5]. - The company’s financial report is signed and sealed by responsible personnel, ensuring its authenticity and reliability[5]. - The company has maintained effective internal controls over financial and non-financial reporting, as confirmed by an independent audit from KPMG, which issued a standard unqualified opinion[157]. - The company has not faced any penalties from securities regulatory authorities in the past three years[129]. Product Development and Market Strategy - The company expanded its frozen dough production capacity, increasing it by 200% at the Shanghai facility, which became the second production base after Tianjin[37]. - A new fully-owned subsidiary was established in Chongqing with an investment of approximately 480 million RMB to build a production base for cream and frozen dough, expected to be operational by Q2 2025[37]. - The company launched new products including Australian-style cream baking oil and customized products for large clients, responding to market trends[38]. - The introduction of pre-baked products received positive feedback, indicating strong market potential for future expansion[38]. - The company developed a new cream product specifically for cakes, which has been well-received and is expected to increase market share in the cake segment[39]. - The company introduced plant-based products such as pistachio oat milk, targeting the growing health-conscious consumer segment[39]. - A dedicated sales team for supermarkets was established to explore market potential in regional supermarkets and convenience stores[40]. - The company plans to continue developing high-end dairy products to meet the diverse upgrading demands of the domestic baking industry[40]. - The company accelerated the refinement of its sales network in first- and second-tier cities, aiming to expand market share and meet diverse customer needs[41]. - The company is actively enhancing its brand through new media channels, increasing consumer interaction and brand awareness[41]. Industry Insights - In 2022, the Chinese baking industry market size reached CNY 285.3 billion, with expectations to grow to CNY 351.8 billion by 2025, indicating significant growth potential[44]. - The penetration rate of frozen dough in China is only about 10%, indicating substantial growth opportunities compared to 40% in Europe and 70% in the U.S.[46]. - The domestic baking industry has a compound annual growth rate of approximately 7.9% from 2016 to 2021, outpacing the global average[44]. - The baking industry in China has a compound annual growth rate of 7.69% from 2016 to 2021, indicating significant growth potential[90]. Financial Management - The company's operating costs increased by 13.18% to CNY 2,239.56 million from CNY 1,978.79 million[67]. - Research and development expenses decreased by 11.44% to CNY 70.41 million from CNY 79.51 million[67]. - The total costs for the period amounted to CNY 2,237,606,281.65, an increase of 13.21% compared to CNY 1,976,427,105.91 in the same period last year[77]. - Direct materials for baking applications reached CNY 1,041,000,905.86, representing 84.36% of total costs, up from 80.93% last year[77]. - The transportation costs for dairy products increased by 37.46% year-on-year, primarily due to growth in sales volume and changes in customer structure[78]. - The total sales expenses for the period were CNY 216,300,350.45, a 2.36% increase from CNY 211,321,230.96 in the previous period[81]. Corporate Governance - The company has multiple executives holding positions in various affiliated entities, indicating a broad governance structure[124]. - The company’s management structure includes representatives in significant roles across several subsidiaries and associated companies[123]. - The company is actively involved in governance and oversight through its board and supervisory committees[127]. - The company’s financial performance and management practices are subject to review and approval by the shareholders' meeting[127]. Employee Engagement and Welfare - The total number of employees in the parent company is 451, while the total number of employees in major subsidiaries is 1,132, resulting in a combined total of 1,583 employees[142]. - The company has established a comprehensive compensation and benefits system, ensuring that employee salaries are positioned at the market average level, with core employees receiving competitive compensation[144]. - The company is committed to improving employee welfare, including providing paid leave, commercial insurance, and other benefits to enhance employee stability and sense of belonging[144]. - The company has implemented a training system to enhance organizational capabilities and maintain core competitiveness, ensuring 100% completion of training plans[145]. Environmental Responsibility - The company completed a solar power project with an investment of approximately CNY 14 million, which is expected to reduce annual carbon emissions by over 1,500 tons[42]. - The company invested 8.05 million yuan in environmental protection during the reporting period[159]. - The company reduced carbon emissions by 1.174 tons through measures such as installing solar power systems and initiating condensate water recovery projects[160]. - The company has not reported any environmental penalties during the reporting period[160]. Shareholder Relations - The company has a cash dividend policy that mandates a minimum of 10% of the distributable profit to be distributed as cash dividends when conditions are met[147]. - The company declared a cash dividend of CNY 141,125,955.96, which represents 38.31% of the net profit attributable to ordinary shareholders in the consolidated financial statements[150]. - The cash dividend per 10 shares is CNY 3.30, and no stock bonus or stock increase was proposed[150]. - The company has a clear and complete decision-making process regarding its cash dividend policy, ensuring the protection of minority shareholders' rights[148]. Related Party Transactions - The company aims to avoid related party transactions with its controlling shareholder, Nanjiao Foods, and its subsidiaries[168]. - In unavoidable related party transactions, the company will ensure fair pricing based on market principles and independent third-party standards[168]. - The company commits to comply with national laws and regulations regarding related party transactions to protect shareholder interests[168]. - The pricing policy for related party transactions will adhere to principles of fairness, justice, and transparency[168]. Strategic Planning - The company plans to expand its market presence in Southeast Asia, targeting a 30% increase in market share within the next two years[121]. - The company aims to expand its business into the baking, catering, and retail markets as part of its long-term strategic goal[99]. - The company plans to deepen its presence in the baking market by expanding into lower-tier cities, aiming to cultivate grassroots markets with high-value consulting services[100]. - The company will optimize its organizational structure to focus on the frozen dough business, creating a dedicated pre-baked goods division to enhance resource allocation and support[102].