Huatong Meat(SZ:002840)2022-08-28 16:00Financial Performance - The company reported a significant risk of a sharp decline in operating profit due to various market pressures[4]. - The company's operating revenue for the reporting period was ¥3,858,021,774.97, a decrease of 16.42% compared to the same period last year[45]. - The net profit attributable to shareholders was -¥59,079,416.50, representing a decline of 154.72% year-on-year[45]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was -¥100,741,855.89, a decrease of 268.66% compared to the previous year[45]. - The net cash flow from operating activities was -¥992,714.43, down 100.71% from the same period last year[45]. - The total assets at the end of the reporting period were ¥7,944,631,461.76, an increase of 11.33% compared to the end of the previous year[45]. - The net assets attributable to shareholders at the end of the reporting period were ¥1,643,183,789.23, up 6.59% from the previous year[45]. - The company reported a significant decrease in income tax expenses, down 85.90% to ¥2.05 million due to reduced profits[85]. - The company’s feed production capacity is increasing as pig farming projects come online, which will help reduce livestock farming costs and enhance biosecurity[68]. Revenue Sources and Business Operations - The main business revenue primarily comes from food products, including fresh pork and poultry, which are critical for the company's operations[10]. - The company continues to focus on the core business of livestock slaughtering, with major products including feed, fresh pork, and fresh poultry[62]. - The revenue from the slaughtering and meat processing industry was approximately ¥3.46 billion, representing 89.68% of total revenue, down 21.04% year-on-year[86]. - The revenue from the livestock farming industry increased by 230.32% to ¥282.38 million, now accounting for 7.32% of total revenue[86]. - The company has constructed 18 pig farms in Zhejiang province, with 17 farms already in operation, resulting in a total of 486,000 pigs (including breeding pigs and piglets) being slaughtered during the reporting period[68]. - The company has established a nationwide pig procurement platform, which helps in selecting the most economical procurement areas based on various factors such as market prices and transportation costs[75]. Market Expansion and Product Development - The company plans to expand its market presence by entering three new provinces by the end of 2022[34]. - New product lines, including organic meat products, are expected to launch in Q3 2022, targeting a 25% increase in sales from these products[34]. - The company has launched new products, including fresh meat sausages, and has entered new retail fresh food platforms to enhance online marketing channels[69]. - Future guidance estimates a revenue growth of 12% for the full year 2022, driven by increased production capacity[34]. - The company plans to deepen its exploration of traditional markets while increasing efforts to develop markets outside of Zhejiang Province[123]. Risk Management and Operational Challenges - The company faces risks related to animal diseases that could impact livestock supply and consumer demand for pork and poultry products[10]. - Fluctuations in raw material prices, particularly for feed ingredients like wheat and corn, are expected to affect the company's operating costs and net profit[14]. - The cyclical nature of pig prices poses a risk to the company's profitability, especially with new pig farming projects coming online[17]. - The company faces significant operational risks, including food safety and animal epidemic risks, which could adversely affect its reputation and financial performance[115]. - The company has implemented strict quality control standards across procurement, production, storage, and sales to mitigate food safety risks[115]. Environmental Compliance and Sustainability - The company reported a total emission of CODcr at 1.8136 tons per annum and ammonia nitrogen at 0.046181 tons per annum, which is significantly lower than the approved emission limits of 97.3 tons for CODcr and 6.811 tons for ammonia nitrogen[140]. - The company adheres to various pollution discharge standards, including GB14554-93 for odor pollutants and GB13271-2014 for boiler atmospheric pollutants[140]. - The company has no instances of exceeding the emission standards during the reporting period[140]. - The company is focused on compliance with environmental regulations and has taken corrective actions to address pollution issues[146]. - The company has implemented measures to regulate on-site operations following the exceedance of discharge limits[146]. Corporate Governance and Shareholder Relations - The company has established a comprehensive corporate governance structure to ensure fair treatment of all shareholders[169]. - The company emphasizes consumer rights protection and maintains long-term relationships with suppliers and customers[170]. - The company has been proactive in investor relations management, providing multiple communication channels for investors[169]. - The company has made commitments to ensure the fulfillment of measures related to the dilution of immediate returns from non-public stock issuance[191]. - The company will publicly disclose any reasons for not fulfilling commitments and apologize to shareholders if necessary[182].