TIANSHAN BIO(SZ:300313)2022-04-26 16:00Financial Performance - The company reported a total impairment loss of CNY 42.299 million, including an intangible asset impairment of CNY 28.695 million due to a cautious assessment related to land use rights[6]. - The company's operating income decreased, primarily due to a decline in live livestock sales and rental income, resulting in a decrease in overall gross margin[6]. - Non-recurring gains and losses impacted net profit by approximately CNY 35.238 million, with net gains from the disposal of Australian ranch assets amounting to CNY 31.358 million[9]. - The company plans not to distribute cash dividends, issue bonus shares, or increase share capital from reserves[10]. - The company experienced a significant increase in income tax expenses by CNY 8.15 million due to gains from the disposal of Australian ranch land assets[8]. - The company's operating revenue for 2021 was ¥107,976,195.34, a decrease of 33.88% compared to ¥163,309,323.59 in 2020[26]. - The net profit attributable to shareholders was -¥27,302,573.67, representing a decline of 748.22% from a profit of ¥4,211,925.94 in 2020[26]. - The net cash flow from operating activities was -¥35,061,014.17, a decrease of 356.24% compared to ¥13,682,992.18 in 2020[26]. - The total assets at the end of 2021 were ¥842,790,652.79, down 7.08% from ¥907,019,358.37 at the end of 2020[26]. - The net assets attributable to shareholders decreased by 32.81% to ¥104,129,406.24 from ¥154,968,706.03 in 2020[26]. - The company reported a basic earnings per share of -¥0.09, a decline of 1,000.00% from ¥0.01 in 2020[26]. - The weighted average return on equity was -21.08%, down 23.85% from 2.77% in 2020[26]. - The company recorded non-operating income of ¥35,237,610.91 in 2021, compared to ¥23,006,018.65 in 2020[31]. - The company achieved total operating revenue of 107.98 million yuan in 2021, a decrease of 33.88% year-on-year[67]. - The company reported a net profit attributable to shareholders of -27.30 million yuan, reflecting a significant loss[67]. - Total assets as of December 31, 2021, were 842.79 million yuan, a decrease of 7.08% compared to the previous year[67]. - The company’s equity attributable to shareholders decreased by 32.81% to 104.13 million yuan[67]. - The company’s total operating costs were ¥100,322,077.56, resulting in a net loss for the year[74]. Market and Industry Trends - Domestic beef consumption increased from 6.04 million tons in 2011 to 8.61 million tons in 2020, with a compound annual growth rate (CAGR) of 4%[39]. - The domestic beef production rose from 6.11 million tons in 2011 to 6.72 million tons in 2020, with a CAGR of only 1.07%, leading to a significant consumption gap[40]. - The beef consumption gap expanded from 50,500 tons in 2012 to 2.069 million tons in 2020, with a staggering CAGR of 52.25%[40]. - In 2021, the domestic beef consumption gap reached approximately 2.33 million tons, accounting for 25% of the total beef consumption that year[40]. - The government aims to achieve an 85% self-sufficiency rate for beef by 2025, emphasizing the importance of increasing domestic beef production[41]. - The Xinjiang region plans to increase its beef cattle population to 15 million by 2025, with a target of 8 million head for breeding stock and over 50% of production in large-scale operations[42]. Company Strategy and Operations - The company is focusing on enhancing its breeding technology and improving the quality of beef production as part of its strategic initiatives[35]. - The company is recognized as a national-level frozen semen production unit and has a significant presence in the breeding of Simmental cattle, ranking 17th in the top 100 breeding values nationwide[45]. - The company has established a modern breeding system integrating breeding, nutrition, and management, providing comprehensive services to cattle farmers[45]. - The company is actively involved in initiatives to enhance the genetic improvement of beef cattle through collaborations with national breeding centers and the establishment of breeding alliances[45]. - The company aims to develop beef cattle fattening in key regions such as Xinjiang, Inner Mongolia, Gansu, Ningxia, Shandong, and Henan, combining capital, management, and technology to enhance existing ranches[46]. - The introduction of a digital ranch management system is planned to strictly control core production indicators, reduce production costs, and improve breeding efficiency[46]. - The company has established a comprehensive technical service system for breeding, management, and disease prevention, providing high-quality services to farmers[49]. - The company has accumulated valuable experience in beef cattle business development, focusing on the integration of breeding and fattening operations[46]. - The company plans to enhance its breeding capabilities by introducing advanced genetic materials through embryo transfer and purchasing from national core breeding farms[48]. - The company has a strategic layout in major beef cattle breeding areas, including Xinjiang, Inner Mongolia, Shandong, and Ningxia[60]. Research and Development - The company’s research and development expenses increased by 98.26% to ¥1,514,603.44, primarily due to an increase in technical service fees[81]. - R&D investment amounted to ¥1,514,603.44, representing 1.40% of operating revenue, an increase from 0.47% in 2020[84]. - The number of R&D personnel decreased by 5.26% from 19 in 2020 to 18 in 2021, while the proportion of R&D personnel increased from 18.63% to 20.93%[83]. - The company is investing 100 million CNY in research and development for new technologies aimed at enhancing product efficiency[128]. - The company is investing 100 million CNY in R&D for new technologies aimed at improving product efficiency[199]. Governance and Compliance - The company has established a long-term training mechanism and improved internal controls to mitigate management risks associated with business expansion[115]. - The board of directors consists of 9 members, including 3 independent directors, and held 8 meetings during the reporting period, complying with governance regulations[120]. - The company held two shareholder meetings during the reporting period, with participation rates of 33.06% and 33.89% respectively[125]. - The company has implemented measures to ensure the independence of its operations, assets, and finances from its controlling shareholders[124]. - The company is actively cooperating with judicial and regulatory authorities to expedite the resolution of the fraud case and mitigate uncertainties regarding its operations[114]. - The company has engaged professional lawyers to address investor lawsuits and minimize potential losses[116]. - The company emphasizes the importance of maintaining communication with stakeholders to balance interests and promote sustainable development[123]. Legal and Risk Management - The company is currently involved in a criminal case related to contract fraud, with 33 counterparties involved in litigation, creating uncertainty regarding the final judgment[114]. - The annual audit report for 2021 contains a qualified opinion due to the unresolved fraud case, indicating uncertainty about the company's ability to continue as a going concern[114]. - The company faces a risk of investor lawsuits, with claims totaling approximately 1.79 million yuan as of the reporting period, which may increase as the case progresses[115]. - The company is implementing measures to mitigate disease risks in cattle breeding, including vaccination and biosecurity protocols[112]. - The company has committed to ensuring no losses arise from obligations related to advertising rights on four highways, with full responsibility for any liabilities[178]. Future Outlook - The company aims to become a leading player in China's beef industry by implementing a "Big Beef Cattle Strategy" from 2020 to 2025, focusing on breeding and fattening operations[104]. - The first phase of the strategy (2020-2022) targets the establishment of a professional beef cattle fattening management team and the development of standardized fattening practices[104]. - The company plans to expand its beef cattle fattening operations in key regions such as Xinjiang, Inner Mongolia, Gansu, and Ningxia through self-operation, cooperation, and acquisitions[104]. - The company has outlined its strategy to manage potential risks associated with its advertising business and related legal matters[180]. - The company plans to pursue strategic acquisitions to enhance its product offerings and market reach, with a budget of 500 million CNY allocated for this purpose[197].