新和成(002001) - 2022 Q2 - 季度财报

Important Notice, Table of Contents and Definitions This section provides important notices, the table of contents, and definitions relevant to the report Company Profile and Key Financial Indicators This section presents an overview of the company and its key financial performance metrics Key Accounting Data and Financial Indicators In the first half of 2022, the company's operating revenue increased by 11.92% year-on-year, while net profit attributable to shareholders decreased by 8.78% year-on-year. Net cash flow from operating activities significantly declined by 45.74% year-on-year, primarily due to increased raw material purchases, with prior period data retrospectively adjusted due to accounting policy changes Key Financial Indicators for H1 2022 | Indicator | Current Period | Prior Period (Adjusted) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue (CNY) | 8,215,039,277.03 | 7,340,124,310.11 | 11.92% | | Net Profit Attributable to Shareholders (CNY) | 2,213,877,419.25 | 2,426,979,148.42 | -8.78% | | Net Cash Flow from Operating Activities (CNY) | 1,242,456,738.20 | 2,289,637,496.69 | -45.74% | | Basic Earnings Per Share (CNY/share) | 0.72 | 0.79 | -8.86% | | Weighted Average Return on Net Assets | 9.55% | 11.87% | Down 2.32 percentage points | | Total Assets (CNY) | 37,815,015,843.65 | 34,724,025,476.79 | 8.90% | | Net Assets Attributable to Shareholders (CNY) | 22,113,966,711.03 | 21,831,838,010.85 | 1.29% | - The company retrospectively adjusted accounting treatment for products or by-products sold externally before fixed assets reached their intended usable state or during R&D, effective January 1, 2022, in accordance with Interpretation No 15 of Accounting Standards for Business Enterprises[14] Non-recurring Gains and Losses Items and Amounts During the reporting period, the company's total non-recurring gains and losses amounted to CNY 119.82 million, primarily from government grants, entrusted investment gains/losses, and non-current asset disposal gains/losses Non-recurring Gains and Losses Items for H1 2022 | Item | Amount (CNY) | | :--- | :--- | | Gains/Losses on Disposal of Non-current Assets | 6,674,850.81 | | Government Grants Recognized in Current Profit/Loss | 85,522,179.54 | | Gains/Losses from Entrusted Investments or Asset Management | 28,841,651.61 | | Other Non-operating Income/Expenses and Fair Value Changes | 9,869,704.16 | | Less: Income Tax Impact | 11,046,849.16 | | Less: Impact on Minority Interests (After Tax) | 40,067.33 | | Total | 119,821,469.63 | Management Discussion and Analysis This section provides management's perspective on the company's operations, financial condition, and future outlook Company's Main Business During the Reporting Period The company is a fine chemical enterprise specializing in the production and sales of nutritional products, flavors and fragrances, high-performance new materials, and APIs. In the first half of 2022, operating revenue reached CNY 8.215 billion, a 11.92% year-on-year increase, while net profit attributable to the parent company was CNY 2.214 billion, a 8.78% year-on-year decrease, with revenue growth driven by flavors and fragrances and new materials, and net profit decline influenced by falling vitamin product prices and rising raw material costs - The company's main business segments include: - Nutritional Products: e.g., Vitamin E, A for feed additives and food fortification - Flavors and Fragrances: e.g., Linalool, Citral series for personal care, cosmetics, and food - High-Performance New Materials: e.g., PPS, PPA for electronics and automotive - APIs: e.g., vitamins, antibiotics series[20] - During the reporting period, the flavors and fragrances and new materials segments achieved stable development with increased methionine sales, but vitamin product prices and sales declined year-on-year, and rising raw material costs led to increased expenses[22] - Several new projects are progressing orderly, including Methionine Phase II (150,000-ton facility expected to be completed by June 2023), Menthol Project, and PPS Phase III Project (trial operation commenced), laying a foundation for future growth[22] Main Business Analysis During the reporting period, the company's main business revenue grew by 11.92%, primarily driven by the flavors and fragrances and new materials segments, which saw revenue increases of 31.17% and 32.06% respectively. Nutritional products revenue slightly increased by 4.81%, but its gross margin decreased by 11.17 percentage points due to rising raw material costs, while overall operating costs rose by 29.36% mainly due to raw material price increases, and financial expenses significantly decreased by 84.62% due to exchange gains from currency fluctuations Year-on-Year Changes in Key Financial Data | Item | Current Period (CNY) | Prior Period (CNY) | YoY Change | Main Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 8,215,039,277.03 | 7,340,124,310.11 | 11.92% | Growth in flavors and fragrances, new materials segments | | Operating Cost | 4,945,122,803.39 | 3,822,747,702.20 | 29.36% | Increase in main raw material prices | | Financial Expenses | 22,231,053.96 | 144,530,139.09 | -84.62% | Exchange gains from currency fluctuations | | R&D Expenses | 440,357,252.64 | 351,532,764.55 | 25.27% | Increased R&D material and personnel costs | | Net Cash Flow from Operating Activities | 1,242,456,738.20 | 2,289,637,496.69 | -45.74% | Increased raw material purchases | Operating Revenue and Gross Margin by Product Category | Product Category | Operating Revenue (CNY) | Revenue YoY Change | Operating Cost (CNY) | Cost YoY Change | Gross Margin | Gross Margin YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Nutritional Products | 5,768,862,111.12 | 4.81% | 3,430,472,272.00 | 29.06% | 40.53% | Decreased 11.17 percentage points | | Flavors and Fragrances | 1,522,994,415.83 | 31.17% | 764,130,371.15 | 17.91% | 49.83% | Increased 5.65 percentage points | | New Materials | 552,514,423.91 | 32.06% | - | - | - | - | Analysis of Assets and Liabilities As of the end of the reporting period, the company's total assets were CNY 37.815 billion, an 8.90% increase from the end of the previous year. Within the asset structure, inventory and construction in progress increased their proportions by 2.86 and 1.60 percentage points respectively, while short-term borrowings as a percentage of total assets rose from 4.04% to 6.97%, an increase of 2.93 percentage points - At the end of the reporting period, the company's total restricted assets amounted to approximately CNY 564 million, primarily comprising restricted monetary funds, notes receivable, accounts receivable financing, fixed assets, and intangible assets due to pledges or mortgages[33] Analysis of Investment Status During the reporting period, the company's investment amounted to CNY 1.832 billion, a 63.83% year-on-year increase, with no significant equity or non-equity investments made. Financial asset investments primarily included bank wealth management products and derivatives, mainly forward contracts and structured forward contracts aimed at hedging exchange rate risks, while raised funds were primarily allocated to the 250,000-ton Methionine Project, which has accumulated investments of CNY 2.78 billion and is 57.12% complete - The company engaged in foreign exchange derivative investments to hedge exchange rate risks, primarily through forward contracts and structured forward contracts, with an investment amount of CNY 1.519 billion at period-end, representing 6.87% of the company's net assets, and realized actual gains of CNY 9.07 million during the reporting period[40] - Funds raised from the 2017 non-public offering were primarily invested in the '250,000-ton Methionine Project', which has accumulated investments of CNY 2.78 billion as of the end of the reporting period, with an investment progress of 57.12%, generating CNY 352 million in benefits during the period, and its expected completion date has been adjusted from December 2021 to June 2023[42][43] Analysis of Major Holding and Participating Companies During the reporting period, several of the company's subsidiaries significantly contributed to net profit, including Shandong NHU Pharmaceutical Co Ltd (flavors) with CNY 579 million, Shandong NHU Amino Acid Co Ltd (methionine) with CNY 529 million, and Shandong NHU Vitamin Co Ltd (feed additives) with CNY 474 million, while the acquisition of NHU/CHR.OLESEN LATIN AMERICA A/S had no significant impact on overall operating performance initially Operating Performance of Major Subsidiaries in H1 2022 (Unit: CNY million) | Company Name | Main Business | Operating Revenue | Net Profit | | :--- | :--- | :--- | :--- | | Shandong NHU Pharmaceutical Co Ltd | Flavor production and sales | 1,795 | 579 | | Shandong NHU Amino Acid Co Ltd | Methionine production and sales | 1,820 | 529 | | Shandong NHU Vitamin Co Ltd | Feed additive production and sales | 1,195 | 474 | | Shangyu NHU Biochemical Co Ltd | Feed additive production and sales | 771 | 263 | - During the reporting period, the company acquired NHU/CHR.OLESEN LATIN AMERICA A/S and its two subsidiaries, which had no significant initial impact on overall production, operations, or performance[47] Corporate Governance This section details the company's corporate governance structure and practices Implementation of Company's Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures During the reporting period, the company did not implement new equity incentive plans. The lock-up period for the third employee stock ownership plan expired on February 26, 2022, with 681 participants holding 12,157,826 shares, representing 0.39% of the total share capital - The company's third employee stock ownership plan involved 681 employees, including directors, supervisors, senior management, and core staff, holding shares representing 0.39% of the company's total share capital[52][53] - Due to the implementation of the 2021 annual equity distribution, the number of shares held under the third employee stock ownership plan increased from 10,131,522 shares to 12,157,826 shares, while the shareholding percentage remained unchanged[55] Environmental and Social Responsibility This section outlines the company's commitments and performance regarding environmental protection and social responsibility Significant Environmental Issues The company and its several subsidiaries are designated as key pollutant-discharging entities by environmental protection authorities. The report details the emission methods, concentrations, total amounts, and approved total amounts of major pollutants (e.g., COD, ammonia nitrogen, sulfur dioxide) for each subsidiary, with all emissions remaining within limits. The company has established and operates comprehensive pollution control facilities, obtained environmental impact assessment approvals for relevant construction projects, and developed emergency response plans for environmental incidents, incurring no administrative penalties for environmental issues during the reporting period - The company and several subsidiaries are designated as key pollutant-discharging entities, with all major pollutant emissions during the reporting period complying with standards and no exceedances observed[58][59][60] - The company has established comprehensive facilities for wastewater, exhaust gas, solid waste, and noise pollution control, along with emergency management and self-monitoring systems, ensuring environmental compliance[63][66] - To reduce carbon emissions, the company incorporates carbon emissions per CNY 10,000 of output value as a key evaluation metric in new product R&D, applying green technologies to enhance atomic utilization and reduce emissions at the source[69] Significant Matters This section covers significant events and transactions impacting the company during the reporting period Significant Contracts and Their Performance During the reporting period, the company had no significant entrustment, contracting, or leasing agreements. Regarding significant guarantees, the company primarily provided guarantees for its subsidiaries, with an actual guarantee balance of CNY 5.092 billion for subsidiaries as of the end of the reporting period. The company also engaged in entrusted wealth management of bank financial products totaling CNY 2.75 billion, funded by raised capital Guarantees to Subsidiaries (Unit: CNY million) | Item | Amount | | :--- | :--- | | Total Approved Guarantee Limit for Subsidiaries During Reporting Period | 2,250 | | Total Actual Guarantees Issued to Subsidiaries During Reporting Period | 825.11 | | Total Approved Guarantee Limit for Subsidiaries at Period-End | 6,517.36 | | Total Actual Guarantee Balance for Subsidiaries at Period-End | 5,092.11 | - The company invested raised funds in bank wealth management products, with transactions totaling CNY 2.75 billion during the reporting period, an outstanding balance of CNY 920 million, and no overdue unrecovered amounts[83] Explanation of Other Significant Matters During the reporting period, the company completed its share repurchase plan, with a cumulative repurchase amount of approximately CNY 500 million. The lock-up period for the third employee stock ownership plan has expired. The controlling shareholder, NHU Holding Group Co Ltd, initiated a share increase plan, intending to increase holdings by CNY 300-600 million, and had already increased holdings by 4,195,452 shares as of the end of the reporting period - The company's share repurchase plan has been completed, with a cumulative repurchase of 17,485,676 shares, representing 0.5657% of the total share capital, and a total transaction amount of approximately CNY 500 million[92][93] - Controlling shareholder NHU Holding Group Co Ltd plans to increase its stake in the company by no less than CNY 300 million and no more than CNY 600 million within six months, having cumulatively increased holdings by 4,195,452 shares as of June 30, 2022[87] Share Changes and Shareholder Information This section details changes in share capital and provides an overview of the company's shareholder structure 1. Share Change Information During the reporting period, the company's total share capital changed due to the implementation of the 2021 annual profit distribution plan (2 shares transferred for every 10 shares), increasing from 2.578 billion shares to 3.091 billion shares, with both restricted and unrestricted shares increasing proportionally while the shareholding percentage remained unchanged - The company implemented its 2021 annual profit distribution plan, transferring 2 shares for every 10 shares from capital reserves to all shareholders, totaling 513 million shares transferred, increasing the company's total share capital to 3,090,907,356 shares after the transfer[91] III. Company Shareholder Numbers and Shareholding Information As of the end of the reporting period, the company had a total of 93,348 common shareholders. The controlling shareholder, NHU Holding Group Co Ltd, held 48.74% of shares, making it the largest shareholder. The top ten shareholders also included institutional investors such as Hong Kong Securities Clearing Company Limited, funds under Shanghai Chongyang Strategic Investment Co Ltd, and national social security fund portfolios Top Ten Shareholders' Shareholding Information | Shareholder Name | Shareholder Nature | Shareholding Percentage | Number of Shares Held | | :--- | :--- | :--- | :--- | | NHU Holding Group Co Ltd | Domestic Non-State-Owned Legal Person | 48.74% | 1,506,479,825 | | Hong Kong Securities Clearing Company Limited | Overseas Legal Person | 3.10% | 95,701,262 | | Shanghai Chongyang Strategic Investment Co Ltd - Chongyang Strategic Huizhi Fund | Other | 1.75% | 54,072,200 | | National Social Security Fund Portfolio 503 | Other | 0.91% | 28,000,000 | | Kuwait Investment Authority | Overseas Legal Person | 0.56% | 17,222,802 | | Shanghai Chongyang Strategic Investment Co Ltd - Chongyang Strategic Yingzhi Fund | Other | 0.53% | 16,248,559 | | Hu Baifan | Domestic Natural Person | 0.47% | 14,595,929 | | Beijing Yuanfeng Private Equity Fund Management Partnership... | Other | 0.46% | 14,372,624 | | Chongyang Group Co Ltd | Domestic Non-State-Owned Legal Person | 0.45% | 13,962,191 | | Hu Baipan | Domestic Natural Person | 0.45% | 13,922,998 | Preferred Shares Information This section provides information regarding the company's preferred shares, if any Preferred Shares Information During the reporting period, the company had no preferred shares Bond Information This section details information related to the company's bonds, if any Bond Information During the reporting period, there was no bond-related information for the company Financial Report This section presents the company's comprehensive financial statements and related disclosures II. Financial Statements This chapter includes the company's consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in equity for the first half of 2022. All statements are unaudited VII. Notes to Consolidated Financial Statements This chapter provides detailed notes and explanations for key items in the consolidated financial statements, including the composition and changes of various assets, liabilities, revenues, costs, expenses, and cash flows Top Five Accounts Receivable at Period-End | Entity Name | Period-End Balance (CNY) | Percentage of Total Accounts Receivable | Period-End Balance of Bad Debt Provision (CNY) | | :--- | :--- | :--- | :--- | | Customer One | 370,453,247.11 | 11.49% | 18,522,662.36 | | Customer Two | 289,470,824.68 | 8.98% | 14,473,541.23 | | Customer Three | 233,254,640.83 | 7.23% | 11,662,732.04 | | Customer Four | 112,321,714.00 | 3.48% | 5,616,085.70 | | Customer Five | 73,238,065.34 | 2.27% | 3,661,903.27 | Significant Construction in Progress Projects (Unit: CNY million) | Project Name | Budget Amount | Period-End Balance | Cumulative Investment as Percentage of Budget | Project Progress | | :--- | :--- | :--- | :--- | :--- | | 250,000-ton Methionine Project | 5,369.84 | 583.53 | 48.04% | 55.00% | | Shandong Industrial Park TMB Project | 1,231.61 | 1,187.15 | 100.12% | 100.00% | | 616 Co-production Project | 772.14 | 626.42 | 90.89% | 90.00% | | Shangyu Industrial Park PPS Project | 709.00 | 548.94 | 77.43% | 80.00% | XII. Related Parties and Related Party Transactions The company's ultimate controlling party is Hu Baifan, with NHU Holding Group Co Ltd as the parent company holding 48.74% of shares. During the reporting period, the company engaged in transactions with related parties including goods purchases and sales, provision and acceptance of services, related party leases, and related party guarantees, with the largest purchase of goods from Zhejiang Saiya Chemical Materials Co Ltd amounting to CNY 153 million, and the largest sale of new materials to DSM NHU Engineering Materials (Zhejiang) Co Ltd amounting to CNY 81.29 million - Total purchases of goods/acceptance of services from related parties amounted to CNY 273 million this period, primarily from Zhejiang Saiya Chemical Materials Co Ltd (CNY 153 million) and Zhejiang Chunhui Environmental Energy Co Ltd (CNY 60.25 million)[359] - Total sales of goods to related parties amounted to CNY 82.55 million this period, primarily to DSM NHU Engineering Materials (Zhejiang) Co Ltd, with sales of CNY 81.29 million[360]