NEW HOPE(SZ:000876)2021-08-30 16:00Animal Health and Biosecurity - The company reported a significant impact from animal epidemics, with the African swine fever causing substantial losses in the past, affecting both large enterprises and small farmers [6]. - The company has established a comprehensive biosecurity system, achieving a control rate of less than 1% for African swine fever outbreaks by the end of the first half of 2021 [10]. - The company is committed to continuous improvement in its biosecurity measures, including the use of advanced technologies for disease monitoring and prevention [10]. - The company has been proactive in adjusting its product structure and improving quality to counteract the effects of epidemics and market fluctuations [9]. - The company has developed a cloud-based animal health monitoring system to enhance disease prevention and control measures, improving overall livestock survival rates [9]. - The company has accumulated experience in disaster response, including the establishment of emergency plans and the stockpiling of flood prevention materials [11]. - In response to animal epidemics, the company has implemented strict biosecurity measures, achieving an industry-leading survival rate for livestock, with less than 1% of farms affected by African swine fever as of mid-2021 [153]. - The company has established a four-tier biosecurity system for pig farms, effectively isolating the African swine fever virus [92]. - The company has developed 65 research outcomes in the field of African swine fever prevention, demonstrating its commitment to biosecurity [91]. Financial Performance - The company's operating revenue for the reporting period reached ¥61.52 billion, an increase of 37.64% compared to ¥44.70 billion in the same period last year [46]. - The net profit attributable to shareholders was a loss of ¥3.42 billion, a decrease of 207.94% from a profit of ¥3.16 billion in the previous year [46]. - The net cash flow from operating activities was a negative ¥4.60 billion, down 797.94% from ¥658.59 million in the same period last year [46]. - Total assets at the end of the reporting period amounted to ¥132.39 billion, reflecting a 20.96% increase from ¥109.44 billion at the end of the previous year [46]. - The company's net assets attributable to shareholders decreased by 6.65% to ¥37.20 billion from ¥39.85 billion at the end of the previous year [46]. - The basic earnings per share were -¥0.79, compared to ¥0.76 in the same period last year, marking a decline of 203.95% [46]. - The diluted earnings per share were -¥0.78, down 204.00% from ¥0.75 in the previous year [46]. - The weighted average return on equity was -9.28%, a decrease of 20.44 percentage points from 11.16% in the previous year [46]. - The company reported non-operating losses totaling ¥1.11 billion for the reporting period [51]. Market and Industry Trends - The company has faced challenges due to natural disasters, but its diversified business layout across regions has mitigated significant impacts on overall operations [11]. - The poultry market faced challenges in H1 2021, with high inventory levels leading to low prices, further exacerbated by reduced consumer demand due to the pandemic [16]. - Environmental regulations have intensified since 2014, leading to the exit of non-compliant producers, which may benefit remaining industry players in terms of profitability [19]. - The domestic feed industry has entered a mature stage, with national feed production growth rates of -3.7% in 2019 and a recovery of 16.4% in 2020, reaching 86% of 2018 levels [56]. - The company maintains the leading position in the domestic feed industry, with poultry feed sales ranked first and pig and aquatic feed in the top three nationally [60]. - The company is actively investing in and acquiring projects related to food processing and agricultural product sales, transitioning from a feed company to a food enterprise [60]. - The company is the largest parent duck seed supplier and the second largest supplier of commodity chicken and duck seeds in China, with a focus on digital management and cost control in breeding [65]. - The company is actively pursuing new retail and emerging business models, collaborating with platforms like Alibaba and JD to innovate and upgrade its product and supply chain [98]. Cost Management and Efficiency - The company has maintained a strong focus on cost reduction and efficiency improvements in response to rising feed raw material prices [12]. - The cost of feed raw materials typically accounts for over 90% of the total feed cost, with rising prices significantly impacting the company's overall performance as livestock and poultry farming becomes a larger revenue contributor [13]. - The company has optimized its raw material procurement system since 2017, establishing strategic partnerships with suppliers to mitigate raw material price fluctuations [14]. - The company aims to enhance its breeding efficiency and maintain lower costs than competitors to sustain profitability during price downturns in the livestock market [18]. - The company has focused on long-term cost reduction strategies as the market share competition phase stabilizes [69]. - The company’s pig farming cost management has been optimized through standardized cost accounting and a detailed weight gain cost model [91]. - The company has implemented a standardized training process for pig farming talent, utilizing internal training programs to enhance efficiency and reduce training time for new employees [29]. Environmental Compliance and Sustainability - The company has implemented a comprehensive food safety management system, achieving certifications such as China-HACCP and BRC, ensuring safety across the supply chain from feed to table [163]. - The company is classified as a key pollutant discharge unit by environmental protection authorities [179]. - The company has established agreements with wastewater treatment plants to manage its discharge effectively [179]. - The company is actively monitoring and managing its environmental impact through compliance with national standards [180]. - The company has implemented measures to ensure that the pH levels of wastewater remain between 6 and 8.5, complying with environmental regulations [184]. - The company is focused on enhancing its wastewater treatment processes to meet stricter environmental standards in the future [184]. - The company is committed to reducing the concentration of pollutants in wastewater, with specific targets for ammonia and total nitrogen levels [185]. - The company has invested in technology to improve waste treatment processes and reduce overall emissions [185]. Talent Management and Development - The company has implemented a talent cultivation and organizational activation strategy, focusing on recruiting not only agricultural professionals but also veterans and individuals from non-agricultural backgrounds [167]. - The company has standardized daily production processes and enhanced training through its internal "Pig University" and "Pig Industry Research Institute," aiming to shorten the training time for new employees [167]. - The company has increased recruitment efforts in strategic new business areas and is actively conducting cross-industry training to enrich the knowledge and skills of existing personnel [168]. - The company has established a competitive selection mechanism to create a meritocratic environment for managerial talent development [168]. Strategic Initiatives and Future Outlook - The company plans to enhance its talent recruitment in strategic new business areas and promote cross-industry training to improve the knowledge and skills of existing employees [30]. - The company aims to achieve higher premium returns in poultry sales by improving standards in breeding and slaughtering processes [64]. - The company is exploring potential acquisitions in the livestock sector to enhance its supply chain and reduce costs [182]. - The company plans to expand its market presence in Southeast Asia, targeting a 25% increase in market share by 2023 [182]. - The company has set a performance guidance for the next quarter, projecting a revenue growth of 10% [182]. - The company aims to achieve a 5% increase in overall operational efficiency through strategic initiatives implemented in 2021 [182].