Stock Trading Symbol: 603609 Stock Abbreviation (English): WellhopeBond Trading Symbol: 113647 Bond Abbreviation (English): Wellhope bond
Wellhope Foods Co., Ltd.2022 Annual Report
Important StatementsI. The Board of Directors, Supervisory Board, Directors, Supervisors and Senior Management of theCompany hereby warrant that there are no false representations, misleading statements or materialomissions in this annual report, jointly and severally accept full responsibility for the truthfulness,accuracy and completeness of the contents of this report.II. All Directors attended the Board Meeting.III. SuyaJincheng CPA LLP has issued a standard audit report for the Company.IV. The person in charge of the Company, Jin Weidong, the person in charge of accounting work, ChenYu, and the person in charge of the accounting organization (accounting supervisor), Chen Yu, declarethat they guarantee the truthfulness, accuracy and completeness of the financial report in the annualreport.V. The proposal of dividend payment for the reporting period approved by the Board of DirectorsThe Company's profit distribution proposal for 2022 is to distribute a cash dividend of RMB1.20 (taxincluded) for every 10 shares to all shareholders based on the total share capital of the Companyregistered on the date of registering the implementation of equity distribution (excluding the sharesheld in the Company's repurchase special account). As of December 31, 2022, the total share capital ofthe Company recorded 919,430,450 shares, excluding 20,956,579 shares held in the Company's specialaccount of repurchased shares, and the estimated cash dividend of RMB107,816,864.52 (tax included)was calculated on the basis of 898,473,871 shares, accounting for 21% of the net profit attributable toshareholders of the Company in 2022.VI. Risk Statement of Forward-looking StatementsThe forward-looking descriptions contained in this report such as business plans, developmentstrategies and other information can’t be deemed the Company's commitment to investors. Pleasebeware of the investment risks.VII. There has been no occurrence of the Company's non-business capital being appropriated by thecontrolling shareholder and his related parties.VIII. There has been no occurrence of the Company violating its decision-making procedure whileproviding external guarantees.IX. There has been no occurrence that more than half of the Directors can’t guarantee theauthenticity, accuracy and completeness of the annual report disclosed by the Company.X. Material Risk WarningThe Company has described in detail in this report the relevant risks that may exist, please refer to"Possible Risks" in "Section III Business Operations Analysis".XI. This annual report has been issued in both Chinese and English versions. In case there is anydiscrepancy or inconsistency between the two versions, the Chinese version shall prevail. The disclosedChinese version of 2022 Annual Report can be obtained at: www.sse.com.cn.
Contents
Section I Glossary ...... 4
Section II Company Profile and Key Financial Information ...... 5
Section III Business Operation Analysis ...... 9
Section IV Corporate Governance ...... 51
Section V Environment and Social Responsibility ...... 63
Section VI Important Disclosures ...... 79
Section VII Changes in Common Shares and Shareholder Information ...... 86
Section VIII Preference Share ...... 91
Section IX Corporate Bond ...... 92
Section X Financial Statements ...... 94
| Reference file directory | Financial statements with the signature and seal of the legal representative, the person taking charge of accounting and the person taking charge of the accounting department. |
| The original audit report with the seal of the accounting firm and the signature and seal of the CPA. | |
| During the reporting period, all the original documents and original announcements of the Company that have been publicly disclosed on the websites designated by the China Securities Regulatory Commission. |
Section I GlossaryI. Glossary
| CSRC | refers to | China Securities Regulatory Commission |
| SSE | refers to | Shanghai Stock Exchange |
| Wellhope, the Company | refers to | Wellhope Foods Co., Ltd. |
| Reporting Period | refers to | January 1, 2022-December 31, 2022 |
| The end of the reporting period | refers to | December 31, 2022 |
| Royal De Heus | refers to | Koninklijke De Heus B.V., the biggest privately-owned feed company in the Netherlands, is the parent company of De Heus Mauritius Ltd., one of the Company’s shareholders |
| Company Constitution | refers to | The Constitution of Wellhope Foods Co., Ltd. |
| Shareholders' Meeting | refers to | The Shareholders' Meeting of Wellhope Foods Co., Ltd. |
| Board of Directors | refers to | The Board of Directors of Wellhope Foods Co., Ltd. |
| Supervisory Board | refers to | The Supervisory Board of Wellhope Foods Co., Ltd. |
| Corporate Law | refers to | The Corporate Law of the People's Republic of China |
| Securities Law | refers to | The Securities Law of the People's Republic of China |
Section II Company Profile and Key Financial InformationI. Company Information
| Company name (English) | Wellhope Foods Co., Ltd. |
| Abbreviation (English) | Wellhope |
| Company name (Chinese) | 禾丰食品股份有限公司 |
| Abbreviation (Chinese) | 禾丰股份 |
| Legal Representative | Jin Weidong |
II. Contact Person
| Secretary of the Board | Representative of Securities Affairs | |
| Name | Zhao Xin | Zhao Changqing |
| Address | No. 169, Huishan Street, Shenbei New District, Shenyang, Liaoning Province, China | No. 169, Huishan Street, Shenbei New District, Shenyang, Liaoning Province, China |
| Tel | 024-88081409 | 024-88081409 |
| Fax | 024-88082333 | 024-88082333 |
| hfmy@wellhope.co | hfmy@wellhope.co |
III. Basic Information of the Company
| Registered address | No. 169, Huishan Street, Shenbei New District, Shenyang, Liaoning Province, China |
| Change of the Company's registered address | On December 6, 2016, the registered address of the Company was changed from "No. 67, Hunnan Development Zone, Shenyang " to "No. 169, Huishan Street, Shenbei New District, Shenyang, Liaoning Province". Please refer to the announcement No. 2016-045 disclosed by the Company on the website of Shanghai Stock Exchange |
| Office address | No. 169, Huishan Street, Shenbei New District, Shenyang, Liaoning Province, China |
| Postal code | 110164 |
| Company website | www.wellhope-ag.com |
| hfmy@wellhope.co |
IV. Place where the Annual Report is Prepared
| Media designated by the Company for disclosing information | China Securities Journal, Shanghai Securities News, Securities Times |
| Website designated by the CSRC for publishing the annual report | www.sse.com.cn |
| Place where the Company prepares its annual report | Securities Department of the Company |
V. Stock Information
| Stock information | |||
| Stock type | Stock exchange for IPO | Stock abbreviation | Stock trading symbol |
| A share | Shanghai Stock Exchange | Wellhope(禾丰股份) | 603609 |
VI. Other Information
| Accounting firm (local) | Name | Suya Jincheng CPA LLP |
| Office address | 14th-16th F, Central International Plaza, No.159 Taishan Road, Nanjing, Jiangsu Province, China | |
| Name of signatory CPA | Zhou Jiawen, Wang Lei | |
| The sponsor performs the responsibility of continuous supervision during the reporting period | Name | China Galaxy Securities Co., Ltd. |
| Office address | Qinghai Finance Building, No.1 Building, No.8 Xiying Street, Fengtai District, Beijing | |
| Name of signatory representative | Zhang Peng, Qiao Na | |
| Period of conducting continuous supervision | 2022 |
VII. Key Accounting Data and Financial Performance Indicators in the Latest Three Years
1. Key accounting data
Unit: yuan Currency: RMB
| Item | 2022 | 2021 | Year-on-Year change % | 2020 |
| Operating revenue | 32,811,758,209.54 | 29,468,925,899.60 | 11.34 | 23,817,600,766.26 |
| Net profit attributable to the shareholders of the Company | 513,532,382.02 | 118,530,518.15 | 333.25 | 1,235,162,151.48 |
| Net profit attributable to the shareholders of the Company deducting extraordinary items | 519,633,545.80 | 134,826,072.01 | 285.41 | 1,230,677,435.86 |
| Net cash flow from operating activities | 196,266,510.34 | 299,160,222.36 | -34.39 | 765,945,453.03 |
| As at the end of 2022 | As at the end of 2021 | Year-on-Year change % | As at the end of 2020 | |
| Net assets attributable to the shareholders of the Company | 7,236,565,423.28 | 6,464,358,869.77 | 11.95 | 6,752,397,489.35 |
| Total assets | 15,393,315,399.76 | 12,971,506,159.72 | 18.67 | 11,646,508,203.99 |
2. Key financial performance indicators
| Item | 2022 | 2021 | Year-on-Year change % | 2020 |
| Basic earnings per share (yuan per share) | 0.58 | 0.13 | 346.15 | 1.34 |
| Diluted earnings per share (yuan per share) | 0.55 | 0.13 | 323.08 | 1.34 |
| Basic earnings per share deducting extraordinary items (yuan per share) | 0.58 | 0.15 | 286.67 | 1.33 |
| Weighted average return on equity (%) | 7.48 | 1.80 | Increasing 5.68 percentage points | 19.93 |
| Weighted average return on equity deducting extraordinary items (%) | 7.57 | 2.05 | Increasing 5.52 percentage points | 19.86 |
VIII. Key Financial Figures by Quarters in 2022
Unit: yuan Currency: RMB
| Item | Q1 | Q2 | Q3 | Q4 |
| Operating revenue | 6,374,353,021.62 | 7,412,560,316.11 | 9,734,652,677.96 | 9,290,192,193.85 |
| Net profit attributable to the shareholders of the Company | -128,176,181.71 | 174,826,403.60 | 303,041,626.12 | 163,840,534.01 |
| Net profit attributable to the shareholders of the Company deducting extraordinary items | -118,590,450.86 | 167,067,789.68 | 304,668,660.96 | 166,487,546.02 |
| Net cash flow from operating activities | -364,899,379.02 | 129,241,759.98 | 7,711,939.72 | 424,212,189.66 |
IX. Extraordinary Items
Unit: yuan Currency: RMB
| Item | 2022 | 2021 | 2020 |
| Gains or losses on disposal of non-current assets | -4,023,922.69 | -13,978,382.83 | 3,169,342.06 |
| Government grants charged to current gains or losses (excl. the government grants that are closely related to the Company's ordinary course of business and gained constantly at fixed quotas or amounts as per certain standards based on the state polices) | 43,999,785.07 | 40,412,773.97 | 33,102,019.89 |
| Income generated from the investment costs for acquiring subsidiaries, associated companies and joint ventures being lower than the fair value of the investee’s net identifiable assets acquired by the Company | 58.82 | ||
| Gains or losses on fair-value changes in trading financial assets and liabilities, derivative financial assets and liabilities, and the income from disposal of trading financial assets and liabilities, derivative financial assets and liabilities as well as other debt investment (excl. the effective portion of hedges that arise in the Company's ordinary course of business) | -6,371,590.35 | 2,552,441.74 | -148,741.92 |
| Non-operating income and expense other than those described above | -36,876,323.54 | -42,725,463.13 | -24,964,468.42 |
| Other items that meet the definition of deducting extraordinary items | 154,001.44 | 184,353.40 | |
| deduct: Income tax effects | 4,291,726.21 | 2,557,348.61 | 3,223,835.48 |
| Non-controlling interests’ effects(after-tax) | -1,308,553.68 | 183,928.40 | 3,449,600.51 |
| Total | -6,101,163.78 | -16,295,553.86 | 4,484,715.62 |
X. Item Measured at Fair Value
Unit: yuan Currency: RMB
| Item | Opening balance | Closing balance | Change in this year | Effects on current profit |
| Derivative financial assets | 9,667,725.25 | 4,050,071.80 | -5,617,653.45 | -6,371,590.35 |
| Total | 9,667,725.25 | 4,050,071.80 | -5,617,653.45 | -6,371,590.35 |
Section III Business Operation AnalysisI. Business Operation Analysis
In 2022, China’s animal husbandry industry got out of a tight spot. In the first half of the year, feed rawmaterial prices rose sharply, while animal husbandry industry still depressing. The increasing feed costsate into the margins of animal raising business, making farmers or farms speed up cutting capacities. Inthe meantime, feed demands dropped significantly due to farmers or farms being less motivated tofeed animals. Coming to the second half year, positive changes have been taken place in macroenvironment, the sentiment of downstream farming industry rebounded, farmers or farms wereencouraged to quicken their restocking, ramping up the initiative of purchasing feed. Thereupon, themargins of feed business, broiler integration and pig farming businesses of the Company increasedrapidly.Facing the complex external environment, all the people of Wellhope have been working hard toimplement the operation plan formulated at the beginning of the year, pushing forward thetransformation and upgrading of the feed business, expanding the cost advantage of the broilerintegration business, and striving to consolidate the foundation for the development of the pig farmingbusiness, while speeding up the introduction and training of key talents, and continuously optimizingthe talent structure, strengthening the interlocking linkage of technology, production and marketing,and digging deeper into the potential of cost reduction and efficiency increase, meanwhile, promotingthe process performance management system, and enhancing benchmarking and process management.For the whole year of 2022, the Company achieved an operating revenue of RMB32.812 billion with ayear-on-year growth of 11.34%, the net profit attributable to shareholders of the Company recordedRMB514 million, rising 333.25%, and the net profit attributable to shareholders deductingextraordinary items recorded RMB520 million with a year-on-year increase of 285.41%. The weightedaverage return on net assets was 7.48%, increasing 5.68 percentage points compared with the prioryear. At the end of the reporting period, the Company was in good financial condition, with total assetsof RMB15.393 billion and net assets attributable to shareholders of the Company of RMB7.237 billion,increasing 18.67% and 11.95% respectively compared with the end of the previous year.Operating revenue curve 2014-2022:
1. Feed business
For the year 2022, Wellhope’s holding and associated companies produced nearly 8 million tons of feed,including 3.99 million tons of feed sold to external customers produced by companies within the scopeof consolidation.
| Variety | External sales in 2022 (10k tons) | Percentage |
| Pig feed | 155.81 | 39.04% |
| Poultry feed | 150.73 | 37.77% |
| Ruminant feed | 73.57 | 18.43% |
| Other feed | 18.98 | 4.76% |
| Total | 399.09 | 100.00% |
A. Both supply and demand facing pressures, forging ahead in adversityInfluenced by unanticipated factors, the Company's feed mills located in most of the main productionand sales regions (Northeast, Northwest, North China, Shandong Province, etc.) faced great difficultiesin the first half of 2022, especially logistics, transportation and offline marketing services were undergreat pressure. The Company gave full play to its strong system and made every effort to ensure thenormal supply of feed to customers. In response to the problems of difficult market promotion andafter-sales service, the Company made use of the increasingly perfect online marketing service systemto actively promote market development through webcasting, distance learning and online guidance,and at the same time provided customers with efficient and accurate after-sales service, which washighly praised and trusted by customers. In the second half of the year, the external environmentbecame more stable, while the margins of raising animals improving significantly, farmers or farms weremotivated to feed their animals. The Company seized such opportunity to take the initiative to quicklyfill the market share lost in the first half of the year, feed sales decline gradually narrowed, product mixhas been optimized, while the net profit per ton gradually rebounding.B. Raw material price hitting new high, boosting transformation and upgrading to reduce costswhile improving efficiencyIn 2022, the prices of major feed raw materials remained high, with corn and soybean meal pricesreaching record highs. The Company made efforts in technology, purchasing, production and marketing,while further promoting the collaboration and connection among these functional systems to reducecosts and improve efficiency. In terms of technology, the Company continued to strengthen the R&Dstrength of feed formulations, accelerating the transformation towards European-style formulations,and gradually getting rid of the dependence on corn and soybean meal through selecting various rawmaterials alternatives. In terms of purchasing, the Company constantly improved the organizationalstructure of purchasing team, and boldly introduced key professionals, which significantly ramped up itscapabilities in trend judgment and combined purchasing of spot-futures. In terms of production, the
Company has continuously optimized production equipment and processing technology, making theequipment and technology can be highly compatible with diversified formulas. The grinding, mixing,pelleting efficiency of each feed mill have been significantly improved. In terms of market, the Companycontinued to strengthen its market insights, and enhanced the front-line staff to take stock of after-saleservice of feed products to ensure that the functional departments and back office can make preciseand effective improvement simultaneously. Through the linkage and interlocking of middle andback-end platforms, the product competitiveness of feed business has been significantly heightenedand its core competence has been further enhanced.C. Facing complicated and volatile market, continuing to optimize customer structureIn 2022, China's pig production shifted from rapidly cutting overcapacity to moderately increasingcapacity. In the process of capacity clearing, large-scale farms were forced to reduce production, andback-yard farms rapidly withdrew from the market. Against such backdrop of drastic marketfluctuations, the pattern of pig farming industry gradually changed, the percentage of pig delivered bylarge-scale farms constantly increased. Based on such changes, the Company this year, kept tostrategically transform from the dominance of dealers to equally stress on dealers’ sales and directsales to large farms, continuously improved the development strategy of large-scale farm customers toincrease the proportion of sales volume contributed by large-scale customers. In order to meet theneeds of large-scale farm customer development, the Company's business units started to improveorganizational structure, build professional teams for developing large farms. Meanwhile, relying onown pig farming business, the Company provided services to large farms from upstream to downstreamindustries of animal husbandry, fully integrating resources to power the development of large-scalefarms, while continuously expanding specialized and customized product lines, feed products and farmservices gradually turned to differentiation and customization. In addition, the Company have alsocontinuously optimized and innovated incentive programs for key talents in some business sectors, andproactively reserved younger technical experts to lay a solid foundation for future development.
2. Broiler integration business
The adverse impact of the macro environment gradually moderated in the second half of 2022, theinstitutional purchases and out-of-home consumption slowly recovered, coupled with continuedstrength of pig prices, the broiler industry witnessed an important inflection point with the industrialchain turning from losses to profits. Grasping the opportunities in the industry, the Company's broilerintegration business continued to take “ensuring safety, controlling expansion pace, adjusting industrialstructure, promoting business ecosystem, compressing costs, improving efficiency and increasingprofit” as the core guideline , steadily expanded the production scale, continuously heightened theoperation management level, making the core competitiveness of broiler business continue tostrengthen, while highlighting the profitability of broiler raising and slaughtering businesses. During thisyear, Wellhope’s holding and associated companies totally slaughtered 720 million broilers, produced
and sold 1.86 million tons of broiler part products, also sold 27,000 tons of prepared and cooked foods.
Broilers slaughtered by holding and associated companies(100million)
A. Scientifically grasping the pace of development, moderately expanding production scaleIn 2022, the Company decelerated the expansion of broiler integration business compared to previousyears, with a gradual decline in the proportion of new projects, leading a subsequent increase inprofitability. Regarding broiler breeder sector, the Company moderately expanded the scale of parentstock, gradually eliminated old broiler houses, while putting new breeder farms into operation oneafter another. During this period, the Company strove to ensure a smooth transition between old andnew houses, and made new farms produce in a full capacity. Regarding broiler raising, the Companyhave been steadily expanding production capacity of commercial broilers, and actively strengtheningfarm management and building a talent pipeline. In terms of slaughtering, the Company has beenexpanding in small steps based on existing production capacity to continuously increase market shares,while actively exploring high-quality customers, and striving to achieve the highest comprehensivevalue with the best product mix.B. Further promoting lean management, continuously improving cost advantagesIn the first half of 2022, supported by excellent cost control, the Company's broiler business earnedmoney against the trend of most companies in the industry running in the red. In the second half of theyear, the Company further expanded operating results in the process of the market being on theupward trend, margins per broiler far exceeded the average level of this industry. In terms of broilerbreeder sector, the Company further strengthened farm management to comprehensively optimizeproduction performance indexes, focusing on improving the quality of day-old chicks. In terms ofcommercial broiler sector, the Company started from various aspects such as chicks, feed, animalhealth product and equipment to continuously improve the production performance, while dynamicallyadjusting fees paid to the contract farm owners, which significantly reduced the costs of raisingcommercial broiler in the reporting period. In terms of slaughtering, the Company continued to attractgreat importance to production efficiency, reduced operating costs and strengthened qualitymanagement, while rapidly expanding production scale and sales volume to earn money at the fastest
2014 2015 2016 2017 2018 2019 2020 2021 2022CAGR was nearly 22%
speed after the new project being put into operation.C. Leveraging the scale advantage, actively exploring terminal marketIn 2022, the institutional purchase and out-of-home consumption recovered slowly amidst fluctuations.Against the backdrop of weak recovery in consumption, the Company’s commercial broiler farms timelysold live broilers in batches to ensure sufficient and stable supply of chickens to most of thedownstream slaughterhouses. On the basis of balanced production and sales, the Company’sslaughterhouses have maximized capacity utilization and effectively reduced costs by scale effect. Atthe same time, the Company further enhanced the quality of broiler part products, significantlyincreased the percentage of fresh raw meat, and speeded up the expansion of sales channels for broilerparts products through multi-brand strategy, while timely adjusting product mix and optimizingcustomer structure according to customer demand and market fluctuations to maximize thecomprehensive value of chicken products. For prepared and cooked food business, Tai’an project wassuccessfully put into operation this year, which enabled the Company breaking the bottleneck inproduction capacity, the sales volume of prepared food was expected to increase rapidly.
3. Pig raising business
In 2022, the supply of pig market presented loose-tight-loose circumstances, and pig prices witnesseddeep fall, big rise and big fall. With the increase of feed cost, the competition in pig farming industrybecame fierce, and the fluctuations of pig prices accelerated, the competition in the industry has beenescalated around the main line of reducing cost and improving efficiency. During the year, the Company,following the development strategy of pig raising business revised in the end of 2021, strictly controlledthe production capacity, continuously strengthened farm management, whilst fully promoted theprocess performance management to constantly improve production performance, and strove toreduce cost and expense. In 2022, Wellhope’s holding and associated companies totally sold 0.98million heads of pig, including 0.64 million of finishers, 0.27 million of piglets and 65,000 heads of pigbreeders.A. Strictly controlling production scale, performance of pig breeders continuously being improvedIn 2022, the Company's pig business continued to focus on scale control and quality improvement as itsmain development strategy. During the sharp rise in pig prices, the Company still maintained sufficientstrategic focus, the numbers of pig sold in 2022 did not expand too much compared with 2021.Compared with the production scale, the Company paid more attention to the development quality ofpig business than to the scale of production, and paid particular attention to the quality of pig breeders.In this year, the Company set up a breeding management team to classify batches of pig breedersaccording to breeding index, farrowing, litter size and evenness of estrus, sorted out and establishedcore herds and propagation herds, while improving the boar herd by introducing excellent boars,enhancing the level of performance measurement of breeders to continuously improve the breedingsystem. At the same time, the Company has been promoting the use of breeding software to collect
and analyze data, and make dynamic adjustment according to the demand in the production process.By doing this, the production performance of pig breeders has been improved continuously. At the endof 2022, the total sow stock of the Company's holding and associated companies amounted to 63,000heads, including 45,000 productive sows and 18,000 reserve gilts.B. Concentrating on cost reduction and efficiency, young backbones growing rapidlyIn 2022, the Company’s pig raising business sector continued to promote process performancemanagement system, held monthly operation analysis meetings at the head office, business region andlocal farm levels to quickly identify the key problems of each farm, establish task lists and implementbetterment plans through the benchmarking analysis mode. For the sake of better reducing costs andincreasing efficiency, the Company promoted information system in pig raising sector, which solved fivepain points such as work collaboration, asset security, whole-process control, per capita efficiency andaccurate settlement, effectively upgrading pig farming from experience management to systemmanagement and intelligent management. In addition, while actively organizing personnel training, theCompany continued to introduce young backbones specialized in technology and management, helpyoung farm managers grow up rapidly through track training and providing support. By doing this, thetalents’ team has become stronger. With the continuous improvement of performance of pig breeders,significant promotion of technical merit, increasing optimization of feed nutrition and feeding program,the cost control ability for pig farms has been significantly enhanced.C. Investing in bio-security, boosting related costs decreasing graduallyWith the normalization of African swine fever, bio-security has become an important factor affectingcosts. In 2022, the Company continued to attach great importance to bio-security, further sorting outand improving the guidelines for disease control, optimizing and strengthening the immunizationprograms, medication procedures, decontamination procedures, testing procedures and other relatedoperation processes to ensure that the bio-security work had rules to follow. At the same time, theCompany continuously improved the reward and punishment regulations to ensure that team membersalways maintaining higher sense of responsibilities and vigilance. In addition, the Company furtherstandardized the management regarding pig introduction to avoid pigs coming from complex sources,which greatly reduced the difficulty in disease prevention. At present, the Company has graduallycombined bio-security work with lean management, continuously demonstrated cost efficiency andeffectiveness of bio-security input under the premise of ensuring the safety of pig farms.
4. Progress in other aspects
A. Promoting process performance management, aiming for continuous improvementThe process performance management system was refined and summarized by the Company accordingto the experiences of the mature and effective management model of its broiler integration business in2021. During the reporting period, the Company vigorously promoted and widely applied thismanagement system in feed and pig farming sectors with remarkable results. The Company regularly
organized three-level operation analysis meetings at the group level, region level and local subsidiarylevel, supplemented by management methods such as benchmarking, task lists, project teams andinspections, and established a PDCA cycle and support system based on the continuous improvementof production and operation indicators to implementation of the Company’s strategic objectives andkey tactics, and to track the organizational and individual performance management, so as to achievecost reduction and increase efficiency and enhance system strength.B. Strengthening capital operation to power business developmentIn April 2022, the Company successfully issue RMB1.5 billion of convertible bonds, which gave a shot inthe arm to the healthy and sustainable development of Wellhope, all the raised funds are planned toinvest in primary businesses to further expand the production capacity of feed, pig farming andslaughtering as well as broiler further processing, which could strengthen the synergistic advantages ofthe Company's industrial chain, and enhancing the overall profitability.C. Optimizing organizational structure and enhancing talent recruitmentDuring the reporting period, in order to cope with the more complex market environment, theCompany carried out organizational structure combing and optimization at the head office, businessunit and local subsidiary levels, especially focusing on the construction of purchasing, informationtechnology, large-scale farm development, market research and other departments, while centering oncore business, strengthening the recruitment and training of talents in key positions, improving theincentive mechanism, and at the same time, holding three-level meetings to heighten the synergy andinterlocking among functional departments, which further enhanced team morale and marketcompetition power.
5. Awards and recognitions in 2022
II. Review of the Circumstances of the Industries in which the Company Operates
1. Feed industry
In 2022, the prices of raw materials in China's feed industry rose sharply, while the downstream farmingmarket becoming complex and volatile, the overall profitability of the industry declined significantly,
and competitions became increasingly fierce. These industrial leaders using their advantages intechnology, purchasing, brand, management, capital, logistics and other aspects to continuouslyincrease market shares, small and medium-sized players gradually withdrew from the market in theincreasingly fierce competition, making the elimination of losers within the industry intensify.On the supply side, in 2022, national feed production recorded 302.23 million tons, including 135.98million tons of pig feed, 32.11 million tons of layer feed, 89.25 million tons of broiler feed, 16.17 milliontons of ruminant feed, 25.26 million tons of aquatic feed, 1.24 million tons of pet feed, and other feedproduction of 2.23 million tons. There were 36 large-scale feed enterprises with annual output of morethan 1 million tons, their feed production accounted for 57.5% of the total national production, 6 groupenterprises had an annual output of more than 10 million tons, 13 production plants had an annualoutput of more than 500,000 tons, the largest single plant output was 1.28 million tons. From the salesmethod, the national bulk feed amounted to 107.03 million tons with an increase of 18.5% over theprevious year, accounting for 38.2% of the total output of compound feed, increasing 4.8 percentagepoints.On the demand side, in the first half of 2022, affected by tight cash flow, sharp rise in cost and otherfactors, farmers were out of motivation to restock animals, combined with the impact of factors such aslogistics and transport obstruction, making the inventories of pig and broiler stay at a historical lowlevel, feed demand got into a slump. In the second half of the year, the macro environment continuedto improve, livestock and poultry prices rose rapidly, the profit of animal farming improved significantly,large-scale farms took the lead in the expansion of production, back-yard farms resume work inhesitation, the phenomenon of secondary fattening of pigs and deferring sales gradually increased, theenthusiasm of restocking broilers have been enhanced, the inventories of livestock and poultryrebounded to pull feed demand growth, feed sales gradually recovered. Throughout the year, thedemand side showed the trend of demand declining to rising, while production capacity of thesouthern regions recovered faster than the north.Overall, in 2022, the profit margins of feed industry became significantly narrowed, which weresqueezed by the upstream raw material market and downstream farming market, and the downstreamcustomer structure was changed significantly, the percentage of large-scale farm customers wasincreased, which would further promote the consolidation of the feed industry.
Note: The above data is obtained from the China Feed Industry Association Statistical Report and Boyar IndustryAnalysis Report.
2. Broiler industry
In 2022, the unfavorable impact of the macro environment gradually weakened in the second half ofthe year, the institutional purchase and out-of-home consumption slowly recovered, superimposed onthe continued strength of pig prices, the broiler industry witnessed an important inflection point withthe industrial chain turning from losses to profits.
On the supply side, the domestic stock of in-production grandparent breeders and parent breederswere at a relatively historical high level in 2022, and the annual average price of commercial day-oldchicks was running at a medium to low level. Regarding to commercial broiler raising, in the context ofrapidly rising feed costs and frequent animal diseases, the risk of farming intensified, back-yard farmsgradually withdrew from the market. For the slaughtering sector, the expansion of total industrialcapacity has slowed down significantly, industry profits have recovered, but the trend of selecting thesuperior and eliminating inferior was still obvious. In 2022, the delivery of domestic broilers decreasedby 3.59% year-on-year, the broiler parts product output decreased by 2.81% year-on-year, and theoverall price of broilers was oscillating upward.On the demand side, the overall consumer demand of China's residents has been greatly impacted inthe past three years, broiler products purchased by group meals, outdoor consumption had beendeclining. In the second half of the year, with the improvement of the macro environment, terminalconsumption gradually picked up, group meals, catering, outdoor portable food consumptionsignificantly increased, while pork prices sharply rising, thus the consumption demand for broilerproducts gradually recovered, the selling price of the broiler parts continuously soared, breakingthrough RMB11,000 per ton in July and rising to RMB11,800 per ton at the end of November, withprices hitting a new high since 2020, although the chicken prices fell slightly at the end of the year, butwere still higher than the annual average price.Overall, the broiler industry shifted to upward channel in 2022, but the disparity in operationalcapabilities of the companies within the industry made the profitability level vary greatly, and theelimination of incompetent players led to further clearing of production capacity, the process ofconsolidation continued to move forward.Note: The above data is obtained from Boyar Industry Analysis Report.
3. Pig farming industry
In 2022, with the increase of feed cost, the competition in pig farming industry became fierce, and thefluctuations of pig prices accelerated, the competition in the industry has been escalated around themain line of reducing cost and improving efficiency.On the supply side, in the first half of 2022, China’s pig industry speeded up to cut production capacity.In the first quarter, under the pressure of high cost, pig farming business suffered serious loss. In thesecond quarter, logistics obstruction and other situations interfered with the rhythm of pig delivery,farmers actively or passively delayed the sales of pig, they were irrationally reluctant to sell pig at lowerprice, which led to a tight supply in the market, the number of commercial live pig sold weresignificantly reduced compared with the first quarter. In the third quarter, pig price went upward, thephenomenon of delaying sales and secondary fattening increased, leading to further tight supply of pigunder the disturbance of irrational reluctance of sell pig. At the beginning of the fourth quarter, theaverage price of live pig exceeded RMB28.00 per kg, however, factors such as measures taken to
prevent rapid pork price increases, releasing frozen pork reserves, delaying sales of pig and secondaryfattening pushed pig prices starting to fall back from the high point. Throughout the year, the domesticpig supply presented the trends of loose, tight and loose again, and the pig price showed deep fall, bigrise and big fall.On the demand side, the restaurant consumption was in a slump in the past three years, which greatlyimpacted pork consumption. With the gradual optimization of the policy, market sentiment for arebound in consumption strengthened, but the recovery of residents' consumption ability andconsumption level could not happen overnight, the pork consumption was still under pressure in theshort term, and may gradually improve in the long term. Since the second half of 2022, the profits ofslaughterhouse became poor, the meat/pig ratio had fallen to historically low levels, the slaughterhousestart-up rate continued to remain low, and the overall demand side was running short. From thefeedback of the market, the pork consumption had not returned to the level of three years ago.In general, in the process of current cycle of cutting overcapacity to production recovery, the domesticpig industry has undergone large changes. In terms of geographical distribution, the northern region ofChina cut big production capacity, while farmers (farms) in the southern region becoming relativelymore active in restocking pigs. In terms of production capacity structure, during the period of cuttingovercapacity to production recovery, the group companies and large-scale pig farms were expandingrapidly, and the proportion of back-yard farms was significantly decreasing, part of the back-yard farmschanged from self-breeding to purchase piglets for fattening and secondary fattening, and thesentiment of speculation became stronger. In terms of competition pattern, the market competitionbecame more and more fierce in the process of large fluctuations of pig prices, and back-yard farmersgave full play to their flexibility advantage of timing in and out of market, while groups and large-scalefarms expanded production rapidly, and cost control ability and capital strength became more andmore important.Note: The above data is obtained from Boyar Industry Analysis Report.
III. Circumstance of Primary Businesses in the Reporting PeriodWellhope is one of the renowned large-scale enterprises across domestic agriculture and animalhusbandry industries, primary businesses cover animal feed, feed raw materials trade, broilerintegration and pig farming, it is also involved in veterinary drug, farming equipment manufacturing,pet clinic, etc. In 2018, Wellhope identified food business as its strategic business. Since establishment,Wellhope has always adhered to its corporate mission, i.e., “Through advanced technology, professionalservice, and high-quality products, Wellhope is devoted to the development of China’s animalhusbandry industry, resources conservation, environment protection, as well as food security for thebenefit of people", and all Wellhope people hold together to set sights on becoming the world's leadingenterprise across agriculture, animal husbandry, and food industries.During the reporting period, the primary businesses of the Company have not changed significantly.
| Primary business | Primary products | Operation model | Business distribution |
| Feed | Pig, poultry, ruminant, aquatic feed | Sales model-dealer, direct sales Operation model-R&D, purchasing, production, marketing, service | 29 provincial-level administrative regions |
| Broiler integration | Live broiler, broiler parts products | Industrial chain-covering broiler breeder raising, day old chick hatching, feed processing, commercial broiler rearing, slaughtering and processing, further processing of prepared food and cooked food Raising model of commercial broiler-own farms + large contract farms(outsourcing) | Liaoning, Jilin, Heilongjiang, Henan, Hebei, and Shandong provinces |
| Pig farming | Finisher, piglet, pig breeders | Industrial chain-covering a complete swine breeding system, including great grandparent, grandparent and parent stock, piglet, and commercial swine Raising model of finisher-few own farms + contract farms(outsourcing) | Liaoning, Jilin, Heilongjiang, Anhui, Hebei, and Henan provinces |
1. Animal feed, feed raw materials trade businesses
Wellhope produces and sells animal feed for swine, poultry, ruminant, aquatic and fur-farmed animals,which are marketed in 29 provincial-level administrative regions across China. It has also built feed millsin Nepal, Indonesia and the Philippines, etc. Driven by the concept of “constantly working on newproducts, never following the beaten path”, Wellhope always designs tailored products for animals indifferent phases, and it is committed to offering farmers integrated services such as animal raising,disease prevention and operation management, while helping farmers achieve desirable economicreturns.The subsidiary trade companies mainly trade in feed raw materials such as fish meal, soybean meal andco-products of corn, also engage in feed additives including amino acid, antioxidant, mold inhibitorsand vitamin. In addition, these trade companies are the sales agents of animal health products such asvaccines and veterinary drugs produced by global strategic suppliers. Now the trade business is activein the regions of Northeast, North, East, South, and Southwest regions across China, some productshave been exported to Nepal, Mongolia and other countries.
2. Broiler integration business
The entities of Wellhope’s broiler integration business are mainly located in the provinces of Liaoning,Jilin, Heilongjiang, Hebei, Henan and Shandong, etc., which is divided into three business sectors interms of broiler raising, meat processing and further processing, containing all parts in the industrialchain such as broiler breeders raising, day-old chick hatching, feed production, commercial broilerrearing, slaughtering and processing of raw meat, further processing of prepared and cooked food.
Through standardized management and streamline operation, Wellhope, cooperating with its partners,consolidates the controls of bio-safety, drug residue and in-process hygiene to achieve traceable foodsafety. Wellhope’s broiler business has been developing rapidly in recent years both in productioncapacity and overall scale, now it has become one of the leading enterprises in the domestic broilerindustry.
◆ Broiler raising: This sector covers broiler breeder raising, day-old chick hatching, commercial broilerrearing and feed processing. By formulating scientific and rational feeding programs, light programs andcomprehensive disease prevention systems, Wellhope produces high-quality eggs for its hatching farms.Meanwhile, it has established thorough management systems in the hatching process and purchasedintelligent facilities that are available for hatching in batches, also equipped with high-efficient andenergy-saving hatcher and micro-environment control system for producing healthy day-old chicks.Entering commercial broiler sector, Wellhope mainly raises broiler by self-invested farms and largecontract(out-sourcing) farms under the pattern of standardized management by unifying nine aspects.All these farms apply three-tier cages and automate all the processes from feed intake, water supply,temperature to moisture control, etc. The average weight of Wellhope’s commercial broiler has reached
3.0 kg with the livability of 95%-96%, and the European production index exceeded 390, which hasbeen widely recognized by the cooperative farms.◆Raw meat processing: Wellhope has set up 19 holding and associated slaughtering and processingfactories, which are equipped with domestically state-of-the-art production lines that are available toslaughter 1.1 billion broilers per year. Driven by strict all-in and all-out inspection and quarantine aswell as drug residue detection, every single factory has established a total quality guarantee system andtraceability system to monitor all the processes. Meanwhile, Wellhope constantly strengthensslaughtering and processing techniques by ways of systematic pre-job training and skill promotion
training as well as conducting "6S" management (i.e., Seiri, Seiton, Seiketsu, Shitsuke, Seiso, Safety),making the killing out percentage and per capita slaughtering efficiency stand out among companieswith similar scale. Now Wellhope’s broiler parts products have entered the supply chain of ShinewayGroup, Jinluo Group, Yurun Group, China’s McDonalds and KFC, Yoshinoya, Wallace, Dili Fresh Food,Yonghui Superstores, RT-MART, other large regional food distribution companies, fresh markets andfood processing plants, etc. In the meantime, broiler products have also been sold to the regions ofHong Kong and Macao, and exported to some countries such as Mongolia and Bahrain, etc.◆Further processing: Relying on the advantage of industrial chain integration, Wellhope useshigh-quality chicken supplied by own slaughterhouses as raw materials and installs efficient andenergy-saving equipment to process raw meat into prepared products and cooked food. At present itsupplies over 100 kinds of further-processed chicken products to central kitchens of restaurant chains,corporate and school cafeterias, supermarkets and convenience stores. In addition, due to ever-growingconsumer demand, Wellhope has been vigorously expanding its export business of cooked products,and such products have successfully penetrated the Japanese and Korean markets with good response.
3. Pig farming business
Wellhope started to try its hand at pig farming business in 2016. Through solely-invested, co-investedoperations and leasing, it has built farms in some regions suitable for pig farming, such as Liaoning, Jilin,Heilongjiang, Henan, Hebei, and Anhui provinces. At present, Wellhope's pig farming business mainlyadopts the operation model that composes of pig breeders farming and sales, commercial piglet sellingplus fattening via contract farms and few own farms, as well as slaughtering. Through establishingcomprehensive and strict bio-safety systems, advanced breeding systems and scientific feedingmanagement systems, Wellhope is devoted to crafting an integrated chain that contains breeding,swine raising, slaughtering and processing.
A. Building farms with high standardWellhope insists on constructing farms in compliance with the principle of moderate scale for everysingle farm, while strictly designing bio-safety systems. All newly-built and under-construction projectsadopt advanced production process and farming equipment, while using intelligent feeding system,environmental control equipment, and production management software to improve productivity andcreate a comfortable environment for swine.B. Holistic operationa. In terms of genetic selection and breeding. Wellhope introduces high-quality pig breeders with
French, American and Danish genes to match different business areas to provide parent stock with purepedigree and clear lineage. At the same time, by establishing scientific breeding programs, Wellhopecontinuously optimizes the structures of breeding stock to ensure the source of excellent breeders, soas to enhance its competence in swine raising industry.b. In terms of feeding management. Wellhope has established a dynamic management system forfeeding swine, which covers feed nutrition and raw material database, feed processing and productquality database as well as production performance database, in combination with dynamicformulation technology, large-scale pig farm feeding management technology and bio-safetyprevention technology to provide systematic nutrition solutions for farms. Meanwhile, throughcontinuous data collection and analysis, result tracking, Wellhope is capable to accurately optimizenutrition programs, refine internal management and risk warning to improve feeding performance.c. In terms of bio-safety prevention. Wellhope has constructed the bio-safety management systemcombining small group feeding, four-zone control, three-level disinfection, precise detection andmonitoring with alarm system. For instance, various levels of security systems, such as service centersand disinfection areas have been set up outside the farms. Professional staff disinfect people, vehiclesand materials thoroughly step by step. Regarding inside farms, all these farms have been divided intozones with different safety levels corresponding to quarantine and isolation remedy, with installation ofAI identification and surveillance cameras at key links and spots of bio-safety. The visualizationmanagement helps ensure enforcement of bio-safety measures. Moreover, each business unit has setup laboratories specialized in testing African swine fever, which apply techniques like fluorescencequantitative PCR to achieve precise detection, discovery and elimination to safeguard pig farms.
4. The Company's position in the involved industries
The Company has the honorary titles of National Key Leading Enterprise of Agricultural Integration,State-Recognized Enterprise Technology Center, High-tech Enterprise, etc. Since completing IPO in 2014,the Company has been elected as Top 100 Most Valuable Corporation of Chinese Public Companies forfour times, and ranked on China’s Top 500 Private Enterprise for the sixth time. Meanwhile, theCompany is the industry leader in the Northeast China, while having a high brand influence innorthwest, north and central China. Regarding feed business, Wellhope is the Vice Chairman of ChinaFeed Industry Association, and has been awarded as National Top 10 Leading Feed Enterprise, and thesales volume of commercial feed is among the top nationwide. Regarding broiler business, Wellhope’sbroiler integration business has been developing rapidly in recent years, now it has become a leadingenterprise in the domestic broiler industry.IV. Core Competitiveness Analysis within the Reporting PeriodThe core competitiveness of Wellhope is embodied in the highly educated, loyal and enterprisingmanagement team, the rationally planned business strategy that focuses on stable development, thesophisticated and advantageous industrial layout, the systematic and scientific R&D system driven by
continuous innovation, the constantly enhanced and vertically extended brand influence, coupled withthe highly energized and dynamic corporate culture that powers the development of Wellhope.
1. The highly educated, loyal and enterprising management team
Talented people are the primary resources and the most important core competence of Wellhope. Themanagement team, with multi-level shareholders as the core, all have high education and seniorprofessional backgrounds, abundant experiences and practices in management and animal husbandryindustries, and they are highly capable of accurately grasping the operating environment, scientificallyformulating corporate development strategies, and have deep insights and high recognitions ofWellhope’s core values and business philosophy. Almost all the middle and senior managers areinternally selected and cultivated by Wellhope, these core members have been rewarded with variousincentives, and they have a strong sense of ownership. Over the past 28 years, the middle and seniormanagement team has been highly stable, and the directors and general managers have rarely left theCompany on their own initiative, except for those who were reassigned to other positions due tosubstandard performance. Meanwhile, newly promoted members of the management team born in the1980s and 1990s are selected from key talents’ cultivation programs, such as “Seedling Plan” and“Sunflower Program”. They love the Company, they are aggressive to forge ahead, having become thebackbone force of the management team. Wellhope also attaches great importance to the continuouslearning and ability improvement of these managers by setting up various senior training programssuch as the EDP (Executive Development Program), leadership training camp, etc. At the same time, italso organizes managers to study in domestic and overseas outstanding enterprises to expand theirhorizons and reflect on improvement. The main cause of failure of some domestic companies is due tounstable and disunited management team. In contrast, the highly educated, loyal and enterprisingmanagement team is one of Wellhope’s core competitiveness at present and in the future, and it is alsothe main reason why the Company is so confident about the future.
2. Rationally planned business strategy that focuses on stable developmentWith full insight into domestic and international political, economic and industry dynamics, Wellhopehas always attached great importance to sustainable development and risk control, focused on theoperational quality and profitable investment return of the enterprise and new projects. Driven by theinvestment concepts of steady growth, healthy and sustainable development, Wellhope, rationalizes itsbusiness layout step by step, instead of pushing through rash and impulsive investment, to maintain therationality and safety of its industrial chain and to mitigate all calculated risks faced by enterpriseoperations, taking the “Built to Last” philosophy as a significant objective.Rationally planned strategy focusing on stable development reflects in the following aspects.A. Prudent expansion of business areas: Starting off with the premix business, Wellhope has beendedicated to expanding feed business over the years, at present it has become one of the top 10commercial feed producers nationwide. In 2008, Wellhope entered broiler integration business after
careful thinking. After 15 years of efforts, the number of broilers processed by Wellhope’s holding andassociated entities have been standing at the forefront of the broiler industry, with its management andkey technical indicators ranking top position both at home and abroad. In 2018, in order to seize marketopportunities and control operating risks, Wellhope decided to formally launch pig farming businessthrough cooperation and sole proprietorship. Since then, it has been mastering the core competitiveadvantage of this business through talents cultivation, practice accumulation, etc. Meanwhile, in theyear 2018, Wellhope further recognized its development strategy in the next ten years, i.e., whileunceasingly expanding feed business, Wellhope would vigorously boost broiler integration and pigfarming businesses, explore food business, to ultimately become a leading enterprise with leading-edgefinancial security, product quality, operation cost and efficiency across agriculture, animal husbandryand food industries.B. Business model confirming to the future trends: Wellhope has gradually formed a value chain withhigh competitiveness and capability of withstanding risk in the fields of animal feed, farming,slaughtering and further processing, which enables all business divisions to closely connect and supporteach other, reduce the cost of intermediate processes, lower trading risks, improve profit margin, andensure food safety. Such set up has become a future direction for agricultural companies under anincreasingly complex and changing economic and industrial environment.C. Steady market expansion: Instead of expanding rapidly in the nationwide markets supported bythe success of feed business in northeast regions and broiler integration business, Wellhope, with richexperiences in market expansion, insists on exploring new markets based on overall analysis andinvestigations, carefully penetrating the markets step by step in the Northeast, Northwest, NorthernChina, Henan, Shandong provinces and other areas, while continuing to pursue asset-light operation,taking into account operational efficiency and returns on investment.D. Strict control of financial risks: Wellhope always attaches great importance to financial risk control.Since going public, it has gradually improved internal control system, regulated corporate governancestructure and enhanced the awareness on risk control. The Company's finance is managed vertically,with centralized financing and credit management, centralized fund management and centralizedguarantee decision management. By taking into account the economic environment, industrydevelopment and operating conditions, the Company has effectively controlled the scale ofindebtedness and financial costs, with a gearing ratio of 45.71% at the end of the reporting period.
3. The sophisticated and advantageous industrial layout
The advantages of Wellhope’s industrial layout are mainly reflected in geographical locations andbusiness portfolios.A. Preferable geographical location: Wellhope is headquartered in Shenyang City, Liaoning Province,with its primary business layout in the North, especially in the Northeast regions. The Northeast is apotential growth area for livestock farming, with high quality raw materials, suitable climate, low
farming density and relatively low labor cost, where is ideal for the development of agricultural andanimal husbandry enterprises. The Northeast is located in the largest grain-producing area in China,especially producing corn and rice characterized by high quality and large output. Relying onwell-developed further processing industry, Northeast has abundant grain and its by-products that canbe used as feed raw materials, which have the advantages of high-performance cost ratio andconvenient logistics. After implementing the national policy of pre-assigned rice auction, the Northeastcan enjoy a unique advantage supported by large rice supply and comprehensive costs, and theapplication of brown rice in formula has been maximumly dampened the pressure of the high cornprice in feed costs. Meanwhile, broiler production mainly centralizes in Liaoning, Jilin, Henan, Hebei andShandong provinces, where Wellhope’s broiler integration businesses are mainly located in, account forover 75% of national production, and these areas are the most important regions for developing whitefeather broiler industry in China, with a strong foundation for broiler raising and more maturemarketing system. The Company's livestock integration business implements a regional, cluster-typeindustrial chain layout, matching regional core industrial resources and forming industrial scaleadvantages in local areas in order to improve operational efficiency and reduce logistics costs.Moreover, Wellhope is actively exploring overseas markets by building feed mills in the Philippines,Indonesia and Nepal, where animal husbandry is developing well with high potential.B. Constantly optimized product portfolio: Based on agriculture and animal husbandry industries,Wellhope adopts the layout strategy of horizontal diversification and vertical integration to constantlyoptimize the industrial structure, which has increasingly heightened its capacity on risk resistance andsustained profitability. In terms of horizontal layout, while strengthening and expanding feed business,Wellhope has been vigorously promoting broiler integration and pig farming businesses to strive toachieve the goal of being the domestic and world’s leader in broiler integration business and theregional leader in pig farming business. In terms of vertical integration, the integrated business model isthe inevitable trend for domestic companies that are active in agriculture and animal husbandryindustries. After years of developing in the fields of raw materials trading, feed production, animalraising, slaughtering and further processing businesses, Wellhope has formed a competitive andrisk-proof industrial chain, and it is well on its way of gradually perfecting the support structure to eachbusiness sector in the chain, constantly exploring further processing of food to accelerate theconstruction of a complete industrial chain, while constantly standardizing and optimizing the divisionand collaboration system to further enhance the synergy effect among all business sectors.
4. The systematic and scientific R&D system driven by continuous innovationBy holding fast to the corporate mission, i.e. “Through advanced technology, professional services, andhigh-quality products, Wellhope is devoted to the development of China’s animal husbandry industry,resources conservation, environmental protection, as well as food security for the benefit of thepeople”, Wellhope’s R&D system always adheres to market-oriented and customer-oriented principles
as well as upholding the objective of producing “safe products, with stable quality, tailored nutritionand being customer-centric”, constantly exploring innovative technology and working on new products.The Company has set up a unique and competitive R&D cooperation model, an excellent and leadingR&D team, and has formed a three-level R&D system and high-efficient achievement transformationsystem supported by the large platform of Wellhope Research Institute. Meanwhile, the Company alsohas first-class testing capability nationwide and established an efficient and accurate dynamic rawmaterial database, a distinct product portfolio and a constantly optimized service capability.A. Excellent R&D team: Relying on a relatively complete industrial chain, Wellhope has built a R&Dteam specializing in animal raising, product formulation, manufacturing and related technologies tofocus on feed, broiler integration, pig farming, biological feed additives, etc. Wellhope’s R&D team iscomposed of hundreds of masters and doctorate degree holders, professors and senior experts. Theseexperts, with profound knowledge, have transformed many cutting-edge technologies into actualapplications. In the meantime, those experienced technicians focus on conducting trials anddemonstrations projects to validate, choose and apply the most suitable technologies. Relying ontechnical strengths, Wellhope has received many national and local-level accreditations and honors,including the Nationally-recognized Enterprise Technology Center, National and Local Joint EngineeringResearch Center for the Development and Application of New Biological Feed, National R&D BranchCenter of Feed Processing, Comprehensive Trial Farm for National Pig Farming Industry TechnologySystem, R&D Center of Agricultural Products Further Processing and Bio-pharmaceutical IndustryCluster of Liaoning Province, Innovation Team for Feed Technology and Safety of Liaoning Province.B. Competitive R&D cooperation: In 2006, Wellhope partnered with Royal De Heus, a century-oldcompany from the Netherlands. By drawing on its globally advanced technical resources, leadingknow-how and a century of excellent management practices, Wellhope has made successfulbreakthroughs and progresses in producing safe and high-quality feed, with precise and efficientnutritional contents, and most importantly using antibiotic-free technologies. Meanwhile, the R&Dteams from both sides have maintained frequent exchanges, which enable Wellhope to keep abreastwith the world's latest technologies in R&D achievements. By combining own 28-year’s technologiesand experiences, Wellhope is committed to providing customers with high quality products andtechnical service. Adding to these, the Company cooperates deeply with research institutes anduniversities, such as China Agricultural University, Nanjing Agricultural University, Shenyang AgriculturalUniversity, Northeast Agricultural University, Hefei University of Technology, Anhui AgriculturalUniversity, to develop new technologies for feed products and meat products and joint training ofprofessional talents.C. Top-class testing ability and database: The Company's central laboratory is one of the fewlaboratories in domestic feed enterprises that have passed CNAS certification, and the test results canbe recognized by 60 countries/regions worldwide. The lab has been equipped with advanced testing
equipment and divided into three functional rooms to cater for physics and chemistry testing,microbiology testing and precision instruments testing. From micro to macro levels, the centrallaboratory is able to maintain consistency in quality and plays a vital role in implementing the conceptof safety first in every step of the production processes. Meanwhile, the Company has also establisheda dynamic database of raw materials that is constantly updated, and shares the data resources of itsDutch partners. With precise net energy database for sow, commercial pig, breeding cow andcommercial cow, amino acid database, crude fiber database, fatty acid database, etc., animal rationscan be precisely formulated according to production performance and feed intake to obtain the lowestcost formula and achieve the best cost performance ratio.D. Fruitful research and development results: Research and development power the sustainabledevelopment of an enterprise. Wellhope has made many fruitful achievements on the road of researchand development. By the end of the reporting period, Wellhope has received 228 authorized patents,including 66 invention patents, and won 2 National Science and Technology Progress Awards, 1National Technology Invention Award and nearly 20 provincial and ministerial-level sci-tech awards.Since its establishment, the Company has always focused on product development and technologyupgrading. During the reporting period, the Company has quickly responded to market changes,upgraded a new generation of creep feed, launched the economic feed for middle and large--weightpig, dairy supplementary feed, beef cattle feed and new type of broiler feed. In response to rawmaterial price fluctuations, the Company has focused on building a diversified formula system, andconducted a lot of research and development as well as promotion and application work on corn,soybean meal and other raw material substitution. For large-scale farms, the Company furtherupgraded and validated the existing sow feed products, and providing customized products and servicesolutions, pushing the competitiveness of sow feed being steadily improved. At the same time, theCompany has carried out research and development in the pig farming business sector, such as sownutrition system with different feeding programs, balanced amino acid diet with low protein and lowsoybean meal, fishmeal free high amino acid diet, diet for medium and large-weight pig with diversifiedgrain, liquid fermented feed, etc., to further improve the product cost performance and enhanceproduct competitiveness.
5. Constantly enhanced and vertically extended brand influence
Wellhope has successfully established its product and corporate brand in domestic agriculture andanimal husbandry industries for the past 28 years. With the constant transformation and upgrading ofthe animal husbandry industry, its branding will be further strengthened.A. Product brand: Relying on leading-edge technology, high quality products and continuousimprovement in customer service over the years, Wellhope’s brands have been widely accepted andtrusted by customers in the market, especially in the Northern regions of China. The brand “Wellhope”has been recognized and honored as Liaoning Province Famous-brand Product, Liaoning Province
Famous Trademark, China Famous Brand, China’s Top 500 Most Valuable Brands, Most Influential Brandin National Animal Husbandry Industry, Trustworthy Product in China's Feed Industry, Governor'sQuality Award of Liaoning Province.B. Corporate brand: Driven by the core values of "Integrity, Responsibility, Double-Win", some ofWellhope’s businesses are joint ventures with partners, it has been working closely together with manypartners for more than 10 or even 20 years, including a 17-year’s good relationship with Royal De Heus.These successful ventures have proven that “Wellhope”, as a corporate brand, has been well recognizedand trusted by its partners. Meanwhile, the strength of Wellhope's brand has also been proved bylong-term strategic partnerships with various multinational and domestic suppliers, and all loansprovided by financial institutions over the years have been credit loans due to the good reputation ofWellhope. As a strong employer brand, “Wellhope” has been recognized and favored by employees,and potential job seekers. Wellhope has twice won the "Best Employer" based on rating by a third partyZhaopin.com, and in the first half of 2022, the Company was honored with the annual Top 10 BestEmployer Brands Award in China's animal husbandry and feed industry.C. Brand extension: Along with the rapid development of the Company's broiler integration and pigfarming businesses, and supported by the business layout strategy of horizontal diversification andvertical integration, the market shares of Wellhope in the fields of raw material trading, animal healthproducts, livestock and poultry breeding and farming, livestock and poultry fresh products, preparedand cooked food have been gradually increasing, and the market reputation and goodwill have beenheightened also. In order to regulate the use of the brand Wellhope and protect the core value of thisbrand, Wellhope has not rashly used the main brand in the above business areas. The Company will,depending on the business development in each area, increase the vertical brand building efforts inmature business areas to further enhance the industry influence and business added value of Wellhopebrand.
6. The highly energized and dynamic corporate culture that powers the development of WellhopeAfter 28 years of development, Wellhope has established energized and dynamic corporate culture thathas been acknowledged by all staff and powers its development. The core value of "Integrity,Responsibility, Double-Win" and the management philosophy of "Innovation, Efficiency, Self-Discipline",have been deeply entrenched in the thinking and behaviors of employees, and has been appliedwithout fail in day-to-day management, strategic planning and business decision. Common values play acrucial role in improving organization efficiency, enhancing organizational cohesion and organizationalempowerment. A good corporate culture is the fundamental principle for corporate operation, whichpowers the long-term development of Wellhope.In 2022, the Company reviewed and upgraded the corporate culture management system, clarified theresponsible persons and responsibilities of culture work at each level, which laid a good foundation forthe continuous enrichment, development and implementation of Wellhope culture. The Company
further improved the self-media matrix, and divided the work of corporate culture at three levels of"head office + region (segment) + branch (sub) companies" to publicize and implement the culture ofWellhope, so that the culture can further penetrate into the hearts of employees. In order to furtherpublicize cost reduction and cost consciousness, and let more employees participate in the group'sactivities, the head office organized an innovation and efficiency competition with the theme of costreduction and efficiency increasing, in which every employee could think about innovative ways tocreate efficiency from their own work. In addition, the promotion and implementation of "processperformance" culture and "benchmarking" culture have also become one of the ways to follow andexecute the overall strategy of the Company. On the Wellhope Day 2022, The Chairman, President andother senior executives jointly preached the entrepreneurial history and culture of Wellhope, rekindledthe passion of the second venture, and deepened the understanding of new and old employees on thebackground and content of Wellhope culture. The subsidiaries also held different kinds of staff activitiesto celebrate "Wellhope Day", which enriched the cultural life of staff and further promoted thecompany culture.It has been proved that corporate culture is the moat of Wellhope’s development, and constantlystrengthening culture construction shall be a lasting and significant work for Wellhope.V. Operations during the reporting periodIn 2022, the Company realized the operating revenue of RMB32.812 billion with a year-on-year growthof 11.34%, the net profit attributable to the shareholders recorded RMB514 million, and the net profitattributable to the shareholders deducting extraordinary items recorded RMB520 million, respectivelyrising 333.25% and 285.41% compared a year earlier. The weighted average return on equity was 7.48%,increasing 5.68 percentage points compared to the prior year.
1. Analysis of primary business
A. Analysis of changes of income and cash flow
Unit: yuan Currency: RMB
| Item | 2022 | 2021 | Change % |
| Operating revenue | 32,811,758,209.54 | 29,468,925,899.60 | 11.34 |
| Operating costs | 30,839,271,196.05 | 27,900,298,516.35 | 10.53 |
| Sales expenses | 622,444,761.15 | 570,137,322.67 | 9.17 |
| Administrative expenses | 537,063,858.72 | 418,116,582.79 | 28.45 |
| Financial expenses | 160,680,329.03 | 100,665,726.06 | 59.62 |
| R&D expenses | 90,105,075.01 | 97,360,753.44 | -7.45 |
| Net cash flow from operating activities | 196,266,510.34 | 299,160,222.36 | -34.39 |
| Net cash flow from investing activities | -743,139,911.44 | -1,051,027,476.87 | - |
| Net cash flow from financing activities | 995,492,458.01 | 764,760,161.07 | 30.17 |
Explanation of above changes:
Operating revenue- Mainly due to the expansion of the Company's scale, the increase in the number of
management personnel, the increase in the level of compensation and benefits and the increase inoffice expenses.Financial expenses- Mainly due to the increase in interest accrued on bank loans and convertible bondsduring the reporting period.Net cash flow from operating activities- Mainly due to the increase in prepayments and accountsreceivable during the reporting period.Net cash flow from investing activities- Mainly due to the decrease in cash paid for the purchase andconstruction of long-term assets.Net cash flow from financing activities- Mainly due to cash received from the issuance of convertiblebonds during the period.B. Analysis of revenue and costIn 2022, the Company realized the operating revenue of RMB32.812 billion with a year-on-year growthof 11.34%. The operating cost recorded RMB30.839 billion with a growth rate of 10.53%.a. Primary business analyzed by industries, product classification and regions
Unit: yuan Currency: RMB
| Analyzed by Industries | ||||||
| Industry | Operating revenue | Operating cost | Gross profit margin % | YoY change of revenue % | YoY change of cost % | YoY change of gross profit margin % |
| Feed | 15,643,489,370.72 | 14,423,483,922.24 | 7.80 | 1.86 | 3.69 | Decreased 1.62 percentage points |
| Broiler integration | 9,283,987,645.87 | 8,885,897,170.62 | 4.29 | 12.47 | 8.33 | Increased 3.65 percentage points |
| Raw materials trade | 5,179,881,518.45 | 4,994,178,302.78 | 3.59 | 40.89 | 43.00 | Decreased 1.42 percentage points |
| Pig farming | 2,057,708,604.87 | 1,976,858,326.69 | 3.93 | 38.30 | 14.55 | Increased 19.92 percentage points |
| Related businesses | 614,168,104.92 | 514,401,179.42 | 16.24 | -9.18 | -8.35 | Decreased 0.76percentage points |
| Analyzed by Product Categories | ||||||
| Product | Operating revenue | Operating cost | Gross profit margin % | YoY change of revenue % | YoY change of cost % | YoY change of gross profit margin % |
| Feed | 15,643,489,370.72 | 14,423,483,922.24 | 7.80 | 1.86 | 3.69 | Decreased 1.62 percentage points |
| Broiler integration | 9,283,987,645.87 | 8,885,897,170.62 | 4.29 | 12.47 | 8.33 | Increased 3.65 percentage points |
| Raw materials trade | 5,179,881,518.45 | 4,994,178,302.78 | 3.59 | 40.89 | 43.00 | Decreased 1.42 percentage points |
| Pig farming | 2,057,708,604.87 | 1,976,858,326.69 | 3.93 | 38.30 | 14.55 | Increased 19.92 percentage points |
| Related businesses | 614,168,104.92 | 514,401,179.42 | 16.24 | -9.18 | -8.35 | Decreased 0.76percentage points |
| Analyzed by Regions | ||||||
| Region | Operating revenue | Operating cost | Gross profit margin % | YoY change of revenue % | YoY change of cost % | YoY change of gross profit margin % |
| East China | 4,229,181,142.03 | 4,079,912,003.00 | 3.53 | 43.61 | 45.93 | Decreased 1.54 percentage points |
| North China | 4,503,584,179.72 | 4,199,170,649.20 | 6.76 | 22.98 | 19.42 | Increased 2.78 percentage points |
| Northeast China | 15,627,930,766.52 | 14,589,718,629.02 | 6.64 | 4.18 | 4.12 | Increased 0.05 percentage points |
| Central and South China | 5,935,518,414.50 | 5,612,729,113.84 | 5.44 | 17.84 | 12.77 | Increased 4.25 percentage points |
| Southwest China | 831,371,560.04 | 799,549,962.38 | 3.83 | 19.82 | 19.53 | Increased 0.23 points |
| Northwest China | 1,196,837,221.39 | 1,095,464,142.31 | 8.47 | -30.27 | -29.14 | Decreased 1.47 percentage points |
| Overseas market | 454,811,960.63 | 418,274,402.00 | 8.03 | 14.51 | 11.37 | Increased 2.59 percentage points |
| Analyzed by Sales Model | ||||||
| Sales model | Operating revenue | Operating cost | Gross profit margin % | YoY change of revenue % | YoY change of cost % | YoY change of gross profit margin % |
| Direct selling | 22,278,066,731.85 | 20,890,295,199.24 | 6.23 | 6.15 | 5.49 | Increased 0.59 percentage points |
| Selling on commission | 10,501,168,512.98 | 9,904,523,702.51 | 5.68 | 24.05 | 22.44 | Increased 1.24 percentage points |
Explanation:
During the reporting period, the sales volume of the Company's raw material trading business grew,while the prices maintaining a high level, making the operating revenue and operating costs of theCompany's raw material trading business have increased significantly.The Company's operating revenue and operating costs in East China increased significantly, mainly dueto the stable growth of feed, raw material trading and broiler integration businesses in this region in2022. The Company's operating revenue and operating cost in Northwest China decreased significantly,mainly due to the decrease in feed sales in this region in 2022.b. Analysis of sales volume
| Product | Production volume (10k tons) | Sales volume (10k tons) | Inventory (10k tons) | YoY change of production volume % | YoY change of sales volume % | YoY change of inventory % |
| Feed | 498.28 | 399.09 | 7.43 | -3.47 | -7.85 | 2.27 |
c. Analysis of cost
Unit: yuan Currency: RMB
| By Industry | Item | 2022 | % of total costs | 2021 | % of total costs | YoY change % |
| Feed | Raw material | 13,214,824,240.53 | 95.90 | 12,784,888,622.21 | 96.10 | 3.36 |
| Feed | Labor cost | 163,741,476.79 | 1.19 | 150,722,363.44 | 1.13 | 8.64 |
| Feed | Depreciation | 120,087,065.95 | 0.87 | 106,103,495.18 | 0.80 | 13.18 |
| Feed | Energy (electricity, coal, steam) | 166,499,265.08 | 1.21 | 146,590,774.25 | 1.10 | 13.58 |
| Feed | Other manufacturing expenses (energy and depreciation excluded) | 115,070,637.48 | 0.84 | 115,466,115.61 | 0.87 | -0.34 |
| Feed | Total production cost | 13,780,222,685.83 | 100.00 | 13,303,771,370.69 | 100.00 | 3.58 |
| Broiler | Raw material | 7,888,954,785.20 | 84.10 | 7,256,411,038.64 | 83.02 | 8.72 |
| Broiler | Labor cost | 425,649,406.15 | 4.54 | 458,522,106.14 | 5.25 | -7.17 |
| Broiler | Depreciation | 74,320,788.91 | 0.79 | 67,106,803.95 | 0.77 | 10.75 |
| Broiler | Energy (electricity, coal, steam) | 109,827,583.49 | 1.17 | 95,115,811.60 | 1.09 | 15.47 |
| Broiler | Other manufacturing expenses (energy and depreciation excluded) | 882,037,081.47 | 9.40 | 863,170,280.18 | 9.88 | 2.19 |
| Broiler | Total production cost | 9,380,789,645.22 | 100.00 | 8,740,326,040.51 | 100.00 | 7.33 |
| By Product | Item | 2022 | % of total costs | 2021 | % of total costs | YoY change % |
| Feed | Raw material | 13,214,824,240.53 | 95.90 | 12,784,888,622.21 | 96.10 | 3.36 |
| Feed | Labor cost | 163,741,476.79 | 1.19 | 150,722,363.44 | 1.13 | 8.64 |
| Feed | Depreciation | 120,087,065.95 | 0.87 | 106,103,495.18 | 0.80 | 13.18 |
| Feed | Energy (electricity, coal, steam) | 166,499,265.08 | 1.21 | 146,590,774.25 | 1.10 | 13.58 |
| Feed | Other manufacturing expenses (energy and depreciation excluded) | 115,070,637.48 | 0.84 | 115,466,115.61 | 0.87 | -0.34 |
| Feed | Total production cost | 13,780,222,685.83 | 100.00 | 13,303,771,370.69 | 100.00 | 3.58 |
| Broiler | Raw material | 7,888,954,785.20 | 84.10 | 7,256,411,038.64 | 83.02 | 8.72 |
| Broiler | Labor cost | 425,649,406.15 | 4.54 | 458,522,106.14 | 5.25 | -7.17 |
| Broiler | Depreciation | 74,320,788.91 | 0.79 | 67,106,803.95 | 0.77 | 10.75 |
| Broiler | Energy (electricity, coal, steam) | 109,827,583.49 | 1.17 | 95,115,811.60 | 1.09 | 15.47 |
| Broiler | Other manufacturing expenses (energy and depreciation excluded) | 882,037,081.47 | 9.40 | 863,170,280.18 | 9.88 | 2.19 |
| Broiler | Total production cost | 9,380,789,645.22 | 100.00 | 8,740,326,040.51 | 100.00 | 7.33 |
d. Top 5 customers and suppliersSales to the top five customers amounted to RMB1.34 billion, accounting for 4.10% of the total annualsales; among the sales to the top five customers, sales to related parties amounted to RMB621.69
million, accounting for 1.89% of the total annual sales.The purchase orders of top five suppliers amounted to RMB3.19 billion, accounting for 14.96% of thetotal annual purchases; among the top five suppliers, it did not occur the orders of purchasing productsfrom the related parties.C. Expense
Unit: yuan Currency: RMB
| Item | 2022 | 2021 | Change % |
| Sales expense | 622,444,761.15 | 570,137,322.67 | 9.17 |
| Administrative expense | 537,063,858.72 | 418,116,582.79 | 28.45 |
| R&D expense | 90,105,075.01 | 97,360,753.44 | -7.45 |
| Financial expense | 160,680,329.03 | 100,665,726.06 | 59.62 |
D. R&D Inputa. R&D input
Unit: yuan Currency: RMB
| Expensing R&D input | 90,105,075.01 |
| Capitalizing R&D expenditure | 0 |
| Total R&D expenditure | 90,105,075.01 |
| % of total operating revenue | 0.27 |
| Percentage of capitalizing R&D expenditure | 0 |
b. Headcount
| Headcount of R&D | 258 |
| Percentage of total staff % | 3.09 |
| Educational structure | |
| Item | Headcount |
| Doctoral candidate | 20 |
| Masters | 112 |
| Bachelors | 78 |
| Junior college | 43 |
| High school and below | 5 |
| Age structure | |
| Item | Headcount |
| 30 years old (30 excluded) | 94 |
| 30-40 (30 included, 40 excluded) | 115 |
| 40-50 (40 included, 50 excluded) | 32 |
| 50-60 (50 included, 60 excluded) | 17 |
| 60 and above | 0 |
c. Circumstances of R&D--Progress in feed R&DA) Strengthening product upgrades and reserves to continuously improve product competitivenessIn the face of the changing market landscape, the Company relied on its strong product developmentplatform and more than 20 years of technical precipitation, insisted on market demand as the guide,accelerated the development of new products and upgraded of existing products through product life
cycle management to continuously improve the competitiveness of products.In terms of pig feed, the Company continued to optimize the effect of anti-biotic free feed in differentregions, strengthen the immune nutrition program, focus more on piglet intestinal health. The newgeneration of creep feed developed by the Company has been launched in the market, which hasimproved the palatability and anti-diarrhea of piglets. At the same time, the Company launchedeconomic feed for finisher and feed products with large proportion of premix, which received goodmarket feedback. For large-scale farms, the Company further upgraded and verified the existing sowfeed products, supporting farms customized products and 6M service solutions, the competitiveness ofsow feed products has been steadily improved. Meanwhile, the Company carried out researches in theown pig farms, such as nutrition for gilts at different ages and feeding model that controls growth ratewithout restricted feeding, balanced amino acid diet with low protein and low soybean meal, fishmealfree high amino acid diet, diversified grain diet for medium and large-weight pig, liquid fermented feed,etc., aiming to further improve product cost performance.In terms of ruminant feed, the Company has been engaged in ruminant feed business for many years, itupgraded star products with large sales percentage and repositioned some products during thereporting period, digging deeper into customer needs, launching targeted products and feedingsolutions, which closely integrated products, service solutions, farm evaluation and farm operableprocesses. In response to the downturn in the dairy industry, the Company's dairy product linecontinued to develop customized products, and helped customers actively carry out cost reductionprograms to tide over the difficult times together.In terms of broiler feed, this year, the Company's broiler team focused on overcoming formulationmanagement difficulties and farming site problems, and made breakthroughs in the quality control anduse of oil and grease in feed raw materials, and rapidly choose raw materials to alternate corn, soybeanmeal and some other materials with rapidly fluctuating prices, reducing costs while also ensuringbroiler production performance.B) Increasing formula optimization efforts, promoting synergies among technology, purchasing,production and marketing to reduce costsThe international situation and other factors led to high price fluctuations of feed ingredients, whichadversely affected the cost of the Company's feed formulations. Thus, the Company continued toincrease the optimization of its main product formulations this year, and accelerated the transitionfrom American to European-style formulations, such as increasing the use of cost-effective rawmaterials such as brown rice, sunflower meal, corn by-products (DDGS, sprayed corn husk) and oats torealize corn-free formulations in some business region. Meanwhile, the Company continued to improvebalanced amino acid formulations with low protein, evaluated and used miscellaneous meals and localorigin raw materials to realize the technical reserve of diversified soybean meal-free diet for mediumand large-weight pig. In addition, the Company has been making efforts to set up professional R&D
technical teams in various directions, integrate resources, quickly carry out formula comparison andtargeted R&D verification and other work to accelerate the transformation of R&D results.On the other hand, the Company deeply promoted the interlocking linkage of technology, purchasing,marketing and production, interoperated and formed task lists, quickly promoted formula adjustment,production process optimization and other lists to the ground, enhanced the sense of urgency andresponsiveness through the upward and downward transmission of information, and strengthened theawareness of collaborative cost reduction.As an outstanding enterprise representative, the Company participated in the development of twoinfluential group standards (see the table below for the names of the standards). For the Ministry ofAgriculture and Rural Affairs "Grain Saving Action - Technology Leading Soybean Meal Reduction andSubstitution", the Company won honor of advanced typical case of technology demonstration for eightenterprises nationwide by virtue of the technical model of "Feed Precision Formulation and EfficientProcessing Application”.--Progress in research and development of breeding technologyA) Broiler raising technologyThe Company promoted differentiated broiler raising programs based on the situation in differentregions. According to the current situation in Northeast China, the Company implemented "ballast pluspellet" mode with strict feeding restriction, and carried out slow feeding to appropriately extend thefeeding time to ensure the same weight and reduce the feed to meat ratio, improve the livability, andfurther improve the farming efficiency. Outside of Northeast China, the Company has implementedhigh nutrient pellet feed, short day old and low feed to meat ratio, which has achieved satisfactory andstable results. Meanwhile, the R&D team has successfully solved some of the difficulties in broilerfarming, such as low blood sugar and woody breast meat.B) Pig farming technologySows: For many years, the Company's pig farming technology team has been carrying out research andverification based on Danish and French sows, while upgrading and iterating farming technologysolutions by drawing on the advanced experience of partner Royal De Heus. This year, the Companyfocused on accumulating basic performance data of sows at each weight stage, optimizing the feedingprocedures and bio-security program for contract farms, while optimizing the nutrition standard andfeeding program for pig breeders, improving the powdering rate of pellet feed, etc., and establishing afive-phase nutrition system and feeding mode of growth control without restricted feeding for sows.During the reporting period, the Company vigorously promoted the collection of backfat measurementand feeding data of sows at various stages of pregnancy, improved the backfat and feeding model ofFrench sows during pregnancy, which further explored the correlation between sow backfat andproduction performance, and clarified the best backfat of French sows at term to achieve continuousimprovement of production performance and economic efficiency.
Fattening pigs: During the reporting period, the Company utilized a number of technologies such asdiversified formula and control of feeding quantity at each stage, and made efforts to reduce feed costsby strengthening on-site management, changing troughs and other practical technologies, so that thecost of finisher gaining weight could be basically the same as the previous year in 2022 despite thesignificantly increased raw material prices.--Projects undertaken, standards drafting, awards and patents received
| Patents granted in 2022 | ||||||||
| Number of authorized patents in 2022 | 30 | Patents for invention | 6 | Total number of authorized patents | 228 | Patents for invention | 66 | |
| Patents for utility models and designs | 24 | Patents for utility models and designs | 162 | |||||
| Circumstances of Wellhope participating in the formulation of national or group standards and undertaking sci-tech projects in 2022 | ||||||||
| Participating in formulating two community standards | T/CFIAS8001-2022 Technical Specification for the Production of Low-Protein and Low-Soybean Meal Diversified Diets for Hog T/CFIAS8002-2022 Technical Specification for the Production of Low-Protein and Low-Soybean Meal Diversified Diets for Broiler | |||||||
| Participating in the revision of industry regulations | Participating in the revision of Feed Ingredients Catalog led by the Ministry of Agriculture and Rural Development | |||||||
| Participating in the formulation of two local standards | DB21/T3672-2022 Technical Specification for the Production of Antibiotic-Free Pork DB21/T3671-2022 Technical Specification for Identification and Grading Control of Key Risk Sources for Feed Production Quality and Safety | |||||||
| Undertaking and presiding over scientific and technological projects | National Key Research and Development Program "Livestock and Poultry Low-Protein Low-Soybean Meal Diversified Diet Formulation and Food Saving Technology | |||||||
| Shenyang Science and Technology Program “Research on Precision Nutrition and Supporting Feeding Mode for Sow" | ||||||||
| Liaoning Provincial Science and Technology Program “Selection and Breeding of Characteristic and Advantageous Livestock and Poultry Breeds and Key Technology of Whole Industry Chain Production of Liaoning Province" | ||||||||
| Certificates and awards obtained by the Company's technology research and development in 2022 | ||||||||
| Leading or participating in the projects that obtained awards | 2019-2021 First-class prize of National Agriculture, Animal Husbandry and Fishery Harvest Award "Integration and Promotion of Green Manufacturing Technology in the Food Chain of White Feather Broiler" [Leading role] 2019-2021 Third-class prize of National Agriculture, Animal Husbandry and Fishery Harvest Award, "Researching and Promotion of Key Technologies for Integrating Genetic Resource Screening and Breeding of Lean Boars" [Participation] | |||||||
| First-class prize of Beijing Agricultural Technology Promotion Award "Development of functional yeast products and their application and promotion in reducing the use of anti-biotics in livestock and poultry farming " [Participation] | ||||||||
| Second-class prize of Jilin Provincial Science and Technology Progress Award for "Precise Optimization of Feed Nitrogen Source Structure and Creation and Application of Nitrogen Efficient Utilization System" (Changchun Wellhope Company) [Participation] | ||||||||
| Second-class prize of Liaoning Agricultural Science and Technology Contribution Project "Research and Promotion of Comprehensive Supporting Techniques for Efficient Breeding of Large White Sow Breeds" [Participation] | ||||||||
E. Cash flow
Unit: yuan Currency: RMB
| Item | 2022 | 2021 | Change % |
| Net cash flow from operating activities | 196,266,510.34 | 299,160,222.36 | -34.39 |
| Net cash flow from investing activities | -743,139,911.44 | -1,051,027,476.87 | - |
| Net cash flow from financing activities | 995,492,458.01 | 764,760,161.07 | 30.17 |
| Net increase in cash and cash equivalents | 450,706,660.91 | 12,075,918.87 | 3,632.28 |
2. Assets and liabilities
A. Circumstance of assets and liabilities
Unit: yuan Currency: RMB
| Item | Closing balance of 2022 | % of total assets | Closing balance of 2021 | % of total assets | YoY change % | Explanation |
| Monetary capital | 1,688,741,603.60 | 10.97 | 1,233,577,781.76 | 9.51 | 36.90 | Mainly due to the issuance of RMB1.5 billion convertible corporate bonds that increased in funding in the current period |
| Derivative financial assets | 4,050,071.80 | 0.03 | 9,667,725.25 | 0.07 | -58.11 | Decrease in disposal of derivative financial assets during the period |
| Notes receivable | 5,778,682.68 | 0.04 | 11,846,863.22 | 0.09 | -51.22 | Part of notes receivable due for encashment |
| Accounts receivable | 1,035,056,761.74 | 6.72 | 681,517,885.70 | 5.25 | 51.88 | Increase in accounts receivable during the new settlement period |
| Prepayments | 762,467,440.93 | 4.95 | 479,830,550.25 | 3.70 | 58.90 | Increase in prepayment for raw materials during the period |
| Contract assets | 1,186,905.42 | 0.01 | 2,505,447.69 | 0.02 | -52.63 | Decrease in contract warranty during the period |
| Right-of-use assets | 328,428,097.10 | 2.13 | 199,981,121.45 | 1.54 | 64.23 | Increase in corporate leasing business during the period |
| Goodwill | 290,425.67 | 0.00 | 2,135,421.24 | 0.02 | -86.40 | Decrease in impairment of goodwill during the period |
| Short-term borrowing | 933,785,791.96 | 6.07 | 1,546,199,813.26 | 11.92 | -39.61 | Decrease in repayment of short-term loans due during the period |
| Notes payable | 600,000.00 | 0.00 | 3,900,000.00 | 0.03 | -84.62 | Decrease in notes payable due during the period |
| Accounts payable | 1,691,652,639.28 | 10.99 | 1,296,159,112.55 | 9.99 | 30.51 | Increase in purchasing payables due to the growth of production and sales during the period |
| Advance receipt | 17,873,252.23 | 0.12 | 10,500,434.76 | 0.08 | 70.21 | Increase in sales proceeds received in advance during the period |
| Payroll | 182,394,434.59 | 1.18 | 108,059,107.18 | 0.83 | 68.79 | Mainly due to the increase in payroll payable to employees during the period |
| Non-current | 471,328,595.34 | 3.06 | 191,145,065.59 | 1.47 | 146.58 | Mainly due to the increase in long-term |
| liabilities due within one year | loans and lease liabilities due within one year | |||||
| Other current liabilities | 5,334,961.22 | 0.03 | 9,681,957.60 | 0.07 | -44.90 | Decrease in sales tax received in advance for the period |
| Bonds payable | 1,257,828,066.86 | 8.17 | Issuing RMB1.5 billion convertible bonds during the period | |||
| Lease liabilities | 223,002,370.80 | 1.45 | 123,468,375.46 | 0.95 | 80.61 | Increase in leasing business of the Company during the period |
| Long-term payables | 7,685,803.59 | 0.05 | 47,702,610.06 | 0.37 | -83.89 | Decrease in loans payable to finance leasing companies during the period |
B. Overseas assetsOverseas assets recorded RMB8,685,618.82, accounting for 0.06% of the total assets.
3. Restrictions on major assets as of the end of the reporting period
Unit: yuan Currency: RMB
| Item | Carrying value at the end of the period | Reason of restriction |
| Monetary capital | 29,160,615.15 | Futures Margin |
| Monetary capital | 10,480,765.63 | Letter of Credit Margin |
| Monetary capital | 120,000.00 | Bank Acceptance Margin |
| Total | 39,761,380.78 | / |
4. Investment analysis
As at December 31, 2022, the balance of the Company’s long-term equity investments recordedRMB2.49 billion, increased by 6.62% compared with the end of prior year. The investment in otherequity instruments recorded RMB17.33 million, representing a decrease of 13.73% compared with theend of prior year. For details, please refer to notes to the items of Consolidated FinancialStatements--long-term equity investment, Investments in other equity instruments.
5. Main holding and associated companies
Unit: RMB 10k
| Company | Primary business | Registered capital | Total assets | Net assets | Net profit | Operating revenue | Operating profit |
| Beijing Sanyuan Wellhope Agri-Tech Company | Feed processing and selling | 1,000.00 | 29,761.68 | 22,713.06 | 2,360.97 | 87,122.90 | 2,627.24 |
| Anshan Jiuguhe Food Company | Broiler slaughtering | 4,320.00 | 94,384.13 | 53,545.24 | 5,629.77 | 187,184.02 | 5,375.95 |
| Huludao Jiuguhe Food Company | Broiler slaughtering | 7,370.00 | 32,026.22 | 19,324.88 | 1,212.01 | 92,947.74 | 1,213.84 |
| Beipiao Hongfa Food Company | Feed processing, broiler breeder raising, broiler raising and slaughtering | 3,000.00 | 253,583.65 | 159,624.05 | 20,264.31 | 340,689.53 | 20,238.03 |
| Dalian Heyuan Agri-Tech Company | Feed processing, broiler breeder raising, broiler raising and slaughtering | 10,000.00 | 168,531.23 | 83,919.86 | 726.01 | 322,979.65 | 1,008.68 |
| Dalian Chengsan Animal Husbandry Company | Feed processing, broiler raising | 1,008.61 | 246,152.31 | 132,078.11 | 15,151.49 | 514,239.11 | 20,940.10 |
| Liaoning Wellhope Agriculture and Animal Husbandry Development | Pig farming | 5,000.00 | 126,155.74 | 19,623.69 | 2,415.17 | 64,245.51 | 2,546.91 |
| Anhui Wellhope Agri-Tech Company | Feed processing, pig farming | 16,000.00 | 77,498.45 | 3,134.16 | -11,115.89 | 80,762.55 | -9,103.52 |
| Tai’an Jiuguhe Agriculture Development Company | Feed processing, broiler raising | 1,060.00 | 76,400.10 | 16,881.76 | 3,221.17 | 251,533.79 | 3,137.31 |
| Huludao Jiuguhe Feed Mill | Feed processing, broiler breeder raising, broiler raising | 1,085.00 | 55,035.33 | 812.37 | 380.54 | 153,450.92 | -2,134.74 |
| Shenyang Wellhope Ruminant Feed Mill | Feed processing and selling | 550.00 | 24,612.47 | 20,349.12 | 3,317.22 | 84,535.94 | 4,066.84 |
| Linghai Jiuguhe Feed Mill | Feed processing, broiler raising | 1,755.00 | 20,042.33 | 13,819.81 | 2,602.82 | 156,569.36 | 2,544.09 |
VI. Outlook on the Company's Future Development
1. Industry outlook
China is a large agricultural producing country with a population of 1.4 billion, and agriculture hasalways been considered a strategic industry in China to provide security and stabilize people'sconfidence, which lays a foundation for national economy. This is not only because agriculture is thesource of food and clothing for people and the basis of survival, but also because it is the cornerstonefor other industries to become independent and to realize development. China has always paid greatattention to the development of agriculture. Along with the latest changes in international trade,resources and environment, technical circumstance, industrial structure, policies and regulations andother factors, the development of agriculture has also ushered in a new stage. The National 14thFive-Year Plan stated in 2021 further proposed to continue to strengthen the leading position ofagriculture, deepen the structural reform of the agricultural supply side, enhance quality-orienteddevelopment, and promote the revitalization of rural industries.A. Speeding up the elimination of backward capacity, feed industry consolidation beingincreasingly heightenedAlong with fierce competitions taking place in the feed industry, extra-large companies are constantlyexpanding their business scale, medium-sized producers are seeking business opportunities, whilst theshares of small producers have been gradually squeezed out. For large companies, they enjoy theirstrengths and advantages in technology, cost, brand, management, capital and logistics to continuouslyimprove their operational efficiency, rapidly expand production scale and seize market shares throughmergers and acquisitions as well as embarking on new projects. Those small and medium-sized feedproducers have been gradually edged out in the increasingly fierce competitions due to their lowertechnical level, higher comprehensive costs, weaker brand reputation, lack of management skills, andcapital pressure. With a series of events such as ban of using antibiotics in feed, African Swine Feverand the increasing prices of raw materials, the entry barriers of feed industry have been raised yetagain, customers have also remarkably increased their requirements on the comprehensive strength offeed suppliers, which has sped up the elimination of backward players.B. Vertical integration of resources and continuous extension of industrial chainAnimal husbandry industry consists of several industries such as feed production, animal healthproduct, livestock and poultry raising, slaughtering and processing, etc., where the upstream activitiesare more related to the plantation industry, and the downstream serves the agri-food processingindustry, and a variety of related industries form an organic whole. With the elimination of productioncapacity within the industry, large-scale companies are continuously expanding their business scale. Forreasons of risk control, profit growth, food safety and other needs, these agricultural giants, apart frommergers and acquisitions, gradually integrate resources to expand their businesses in both upstreamand downstream industries, and they have expanded vertically, striving to penetrate the industrial
chain and establish strong competitive advantages and anti-risk capabilities. Under the developmenttrend of industrial chain integration, the industrial division of labor of large enterprises engaged inagricultural and animal husbandry industries have been gradually weakened, while seizing theresources of the whole industrial chain has become the theme of the development of animalhusbandry industry.C. Constantly strengthened environment protection promoting the concept of green developmentbeing practicedIn recent years, China has introduced a series of environmental protection regulations, such as therevision of the Environmental Protection Law, the Environmental Protection Tax Law, the Regulations onPollution Prevention of Livestock and Poultry Scale Farming, and the Action Plan for PollutionAbatement of Agriculture and Rural Areas, etc. These successive launches of environmental protectionpolicy highlight the determination of the state to increase the environmental protection supervision ofanimal husbandry industry, local governments have also issued certain new regulations related to farmremoval, ban of animal raising and restriction of farms, which will further squeeze out less qualifiedplayers and reframe animal husbandry industry.D. Increasingly stringent supervisions on food safety highlighting the advantages of large-scalecompaniesIn the past several years, the circumstances food safety in China have been improving, but at presentthe circumstances of the small-scale, and fragmented food industry with low entry barriers have notbeen changed much, and the farm-to-table industrial chain is too long and too large with many riskpoints. The new edition on Food Safety Regulation of China released in October 2019 not only providedclear regulatory initiatives to address specific issues, but also strengthened the penalties for violationsof the law through the policy of "implementing penalties to individuals". The Regulation came intoforce from December 1, 2019, the market has since been the most heavily regulated. In the future,more attention will be paid to the normalization of food safety and industrial system. Stringent foodsafety supervision will further squeeze out less qualified players, at the same time highlighting thestrengths and advantages of large integrated companies.E. Pig farming industry ending the era of high profits, the prevention of African swine feverbecoming normalAs the domestic pig production capacity recovered beyond expectation, the pig price fell sharplycontinuously, but the capacity recovery and pork consumption were out-of-step, which resultedhigh-cost pig farming end from high profit to heavy loss, those enterprises who aggressively expandedpig farming suffered huge financial pressure. Thus, pig farming industry took a key turn, ending the eraof high profit, and the main line of this industry has changed from "aggressive and fast expansion" to"cost reduction and efficiency improvement". The opening of the battle of cost means that China's pigfarming industry is moving to a new stage, and the new pattern of supply and demand is being
reshaped in China's pig industry under the transformation and upgrading of high-quality development.In the meantime, the prevention of African swine fever has become normalized, and bio-security is stillthe primary problem that the industry needs to face, which further raises the entry barriers of pigfarming industry, and the economy and effectiveness of investment in epidemic prevention cost hasbecome an important factor affecting the total cost of pig farming.F. The proportion of pork consumption gradually decreasing, which accelerated restructuring ofmeat consumptionAfter the normalization of African swine fever, the average pork prices in China rose significantlycompared to previous cycles, however, the remarkable decline in the consumption capacity of residentsled to a further reduction in pork consumption, pork purchased by group meals also fell significantly,food processing plants were forced to shift raw materials to chicken and vegetarian food, whichaccelerated the adjustment of domestic meat consumption structure, the overall consumption habits ofresidents are gradually changing. Characterized by high protein, low fat and cholesterol levels, chickenhas been increasingly favored by people as a viable alternative to pork. In terms of growth rate, raisingcosts, safety and environmental protection, broiler also has a greater advantage compared to pigs.Seeing the experiences of developed countries, China's per capita chicken consumption still has a largegrowth potential with a vast market space.
2. Development strategy of the Company
Wellhope’s long-term development objective is to become the world's leading enterprise acrossagriculture, animal husbandry and food industries. In the next three years(2023-2025), the Companywill vigorously increase efforts and concentrate resources to strengthen and enlarge feed business,steadily develop broiler integration business, further improve the management of broiler industrialchain, consolidate the foundation of pig farming business, and focus on improving the productionmanagement level, whilst complete the phased layout of the food business and accelerate thedevelopment pace of food business.According to the Company's three-year business plan, and combined with the analysis and judgment ofthe economic and industrial development trend in 2023, the Company has determined the specificbusiness strategy for 2023, i.e., Wellhope will further heighten organization construction and systemoperation capacity, deepen the performance management and improve the synergistic managementmechanism, closely follow the business, improve human capital and improve the incentive mechanism,quickly heighten the operating ability of three supporting platforms and the interlocking of technology,purchasing, information technology, finance, production and operation to achieve more effectivesupport for the operation, making efforts to create competitive and aggressive front platform(includingproduct power, service ability, financial strength, marketing force), cost-efficient middleplatform(including production, purchasing, quality assurance, technology), and energized back-endplatform(including HR, finance, technology, R&D, purchasing, IT, corporate culture), to become a
leading enterprise across agricultural, animal husbandry and food industries with safe financial position,high quality product, low operating cost and efficiency.
3. Business plan for 2023
In 2023, the macroeconomic environment is expected to continue to improve, while domesticconsumption slowly recovering amidst fluctuations. Under such backdrop, Wellhope will grasp industryopportunities to further strengthen its core competitiveness, broaden the moat round businesses,while focusing on building front, middle and back-end platforms, and promoting layout of productioncapacity and reserving talent in a planned and rhythmic manner, to lay a solid foundation for realizingthe Company's long-term plan.A. Feed businessIn 2023, Wellhope will accelerate the transformation and upgrading of feed business. In terms offormula, the Company will continue to transform feed formula to European-style formula, reduceformula cost and heighten cost-performance of products by using various raw materials’ alternativesbased on the collaboration and connection of technology and purchasing teams. In terms of customerstructure, besides leveraging the advantage of dealer’s marketing, the Company will continue tostrengthen technical service capabilities and accelerate cooperation with third-party financialinstitutions to increase the percentage of large-scale customers. In terms of product structure, basedon holding the advantage of concentrate feed, the Company will gradually build up advantage incomplete feed. By constantly optimizing production technology, improving supporting facilities, theCompany will comprehensively enhance the production and supply of complete feed. In terms ofcapacity planning, the Company will keep to sort out the capacity distribution, also expand the capacityof key regions and advantageous varieties for expanding the scale advantage, while boosting theproduction system gradually transforming to automation, bulk and pelleting. In 2023, the Companyplans to achieve more than 15% increase in feed sales volume.B. Broiler integration businessIn 2023, broiler integration business will still be led by the philosophy of ensuring safety, controllingexpansion pace, adjusting industrial structure, promoting business ecosystem, compressing costs,improving efficiency and increasing profit, the Company will expand production scale as planned basedon ensuring the advantage of margins per broiler. Regarding breeder raising, the Company will activelyexpand production to gradually increase market share, while trying to ensure each single farmproducing in a full capacity, also strengthen production management, striving to close the gap ofproduction performance of different breeder farms to continuously improve the quality of self-suppliedchicks. In terms of commercial broiler farming, will steadily expand production according to thecapacity of slaughterhouse to ensure a stable supply of chickens, and at the same time, speed up thetransformation of automation, environmental protection and waste resource utilization. Regardingslaughtering segment, the Company will push forward the construction progress of uncompleted
projects as planned, continuously improve the operational efficiency of the projects that have been putinto operation, rapidly expand the scale of production and sales in the new plants, further reduce costsand increase efficiency in the old plants, and at the same time continue to improve the ratio of freshproducts, and strive to realize the highest comprehensive value with the optimal product mix. In 2023,Wellhope’s holding and associated companies plan to totally slaughter more than 800 million ofbroilers.C. Pig farming businessIn 2023, the Company will uphold a prudent investment philosophy to maintain a safe developmentpace, strictly control production capacity and cautiously expand production scale. Regarding pigbreeder sector, the Company will continue to strengthen breeding management, and gradually build amulti-strain pig breeding system. Regarding finisher sector, the Company will gradually eliminateinefficient solely-invested fattening farms, and moderately expand the production capacity of finishersfattened by contract farms. At the same time, the Company will continue to boost the processperformance management, optimize the talent pool of the core team, also stress on enhancing theoperation capacity of pig farms, such as optimizing feed and nutrition programs, improving productionmanagement, to comprehensively reduce pig raising costs and heighten the core competency of pigbusiness. In addition, the Company will continue to pay close attention to bio-security management,focusing on three major problems such as African swine fever, blue ear and diarrhea, for ensuring safeand stable operation. In 2023, Wellhope’s holding and associated companies plan to achieve theobjective of selling 1.2 million heads of pig to the market.This business plan can’t be deemed as the Company's performance commitment to investors, pleasemaintain sufficient risk awareness.
4. Possible risks
A. Risks of fluctuations in raw material pricesThe majority of the cost of feed business come from raw materials. Changes in the production in themain production areas of raw materials, import policies, storage and grants, exchange rate fluctuations,logistics costs and other factors may cause fluctuations in the market price of raw materials, which inturn affects the cost and gross margin of the Company's feed business. With the deepening ofinternationalization of agricultural trade in recent years, the supply and demand relationship andtrading price of raw materials are affected by domestic and international spot and futures markets inmany dimensions, and the price trend is becoming increasingly complex and volatile, which furtherincreases the difficulty of cost management of the Company. In addition, the complex changes in theSino-US relations, the Russia-Ukraine war and other international political and economic environmenthave also made the purchase of raw materials more variable.Solutionsa. Wellhope has established strategic partnerships with many leading domestic and overseas raw
material suppliers. Meanwhile, it adopts three-level purchasing mode that includes centralizedpurchasing of head office, bidding purchasing of different business regions and local subsidiarypurchasing to clarify the role of purchasing.b. Wellhope combines its raw material trading business with purchasing management, i.e., theprofessional and practical raw materials’ purchasing team conducts targeted forward-lookingresearches and real-time tracking on the market to strategically reduce the purchasing price, such asuniformly managing different variety of raw materials, adopting spot purchasing and futures together.c. The purchasing team works closely with the R&D team to further optimize the purchasing cost byway of re-formulating the feeds, i.e., changing the composition of the feed to use cheaper alternativeraw materials while achieving the same results.d. Wellhope has set up a raw material information sharing channel with Royal De Heus, which enablesthe two sides to exchange information of raw materials and additives. In addition, the two sides havestarted joint purchasing for vitamins, amino acids and other raw materials, and may further expand thescope of joint procurement in the future to further enhance the overall bargaining power.B. Risks of fluctuations in livestock and poultry pricesAnimal husbandry industry is a typical cyclical industry, and the hysteretic adjustment of supply causesthe prices fluctuating periodically. At present, China's animal husbandry industry is still dominated byback yard farms and small-scale farms, these farm owners show the character of non-rationaldecision-making with an obvious “herd effect”, which further aggravates the cyclical fluctuations in themarket price.Solutionsa. Wellhope always keeps high attention of price fluctuations of upstream and downstream products,continues to deepen market research to accurately predict industry trends and adjust businessstrategies. Meanwhile, Wellhope’s three primary businesses share resources and boost productionexpansion as planned to effectively control the risk of price fluctuations.b. Wellhope's broiler integration business has established an industrial chain from broiler breederraising, day old chick hatching, feed production, commercial broiler raising, slaughtering, processing tofurther processing of prepared food and cooked food. In the meantime, Wellhope’s swine raisingbusiness has also been entering downstream industries, such as the smooth development ofslaughtering business. The continuous improvement of the industry chain makes the price fluctuationsof each sector in the chain can be fully hedged, which maximumly mitigate the price fluctuations of thewhole industry chain.c. Wellhope has always been committed to improving the production standard of each sector,constantly innovating the practical operation technology and management mode of various businesses,reducing overall operating costs by optimizing the production indicators and improving per capitaefficiency. Costs advantage can mitigate the negative impacts of downward industry on the Company,
while improving the overall profitability when facing a booming market.C. Risks of serious animal epidemicFeed and animal raising are Wellhope's two core businesses. Epidemic is one of the main risks faced byanimal raising companies. Once an animal epidemic happens, it will certainly cause panic in the market,which will reduce the demands, then lessen the production, the income shrinks and the cost rises. Thefeed industry mainly serves downstream livestock farming industry, thus, the downstream market willdirectly affect the performance of feed business. As an unpredictable emergency, an explosive epidemicwill undoubtedly have a strong impact on the Company's operations.Solutionsa. Wellhope attaches great importance to regional distribution and business structure, which is themost direct way to disperse the risk of animal epidemic.b. Wellhope continues to improve the prevention technology of major epidemics, completes theearly warning system and strives to control epidemics effectively before spreading.c. When the epidemic comes, the speed of response is particularly critical, the faster to response,the less to loss. Wellhope has set an emergency command system for major epidemics to minimizelosses when they occur.d. Wellhope has been continuously conducting post-epidemic analysis and researches. Meanwhile, ithas been constantly strengthening the ability to prevent epidemics from multiple aspects such asanimal nutrition and veterinary services.e. For African Swine Fever, Wellhope has formed a relatively complete prevention system fromproduct researches to farm management. Specific preventive measures have been detailed in Section IIIhereof-Pig farming business.D. Risks of the industrial pattern adjustment caused by environmental protection policiesChina has put forward some environmental protection regulations in recent years, such asEnvironmental Protection Tax Law, etc., which show the government's determination to increasesupervision on environmental protection in animal husbandry industry, whilst the local governmentshave also issued certain new regulations regarding farm demolition, prohibition or restriction of animalraising. It can be seen that the continuously strengthened environmental protection is the trend of theindustry, also an inevitable reality, which will further weed out unqualified players and reframe theindustry.SolutionsDuring the start-up period, Wellhope had input "saving resources, being committed to environmentalprotection" as part of its Mission, all Wellhope people have always considered saving resources andprotecting environment as the most important mission, taking strict compliance with laws andregulations, and implementing environmental protection requirements as key performance appraisalindicators for managers.
a. Animal raising and slaughtering--In the face of increasingly strict environmental protectionrequirements, all Wellhope’s subordinated entities have carried out a comprehensive identification ofenvironmental risk points, and formulated emergency plans for emergent environmental incident basedon actual circumstances and the requirements of local governments at all levels. In view of the keypollutant discharge entity, Wellhope has made a complete self-monitoring program to identifyproblems timely and eliminate hidden dangers, it also constantly increases personnel, capitalinvestment in environmental protection to ensure that the key pollutant discharge entities always meetthe national standards.b. Feed processing-Wellhope has always performed all environmental standards of the state with themost rigorous attitude, established complete control measures for waste gas, noise, wastewater, solidwaste and other pollution generated during the production process. Meanwhile, it uses eco-friendlyraw materials and additives in feed formulas, and continuously develops safe diet to reduce theemissions of heavy metals, nitrogen and phosphorus.E. Risks of exchange-rate fluctuationsWellhope's international business started early and has been developed rapidly, which can be affectedby exchange-rate fluctuations in raw material purchasing, product export, overseas investment,including the following aspects. Firstly, international development has made the global purchasing ofraw materials becoming normally, therefore, the risk of exchange-rate fluctuations is particularly acutefor raw materials that are largely supplied from abroad. Secondly, Wellhope’s export business of broilerparts products are growing rapidly with customers from many countries and regions across the world,and the exchange-rate fluctuations are inevitably caused by the settlements of multiple currencies.Finally, due to the large overseas investment and overseas operations, the cross-border capitaltransactions and settlements will also be affected by exchange-rate fluctuations.Solutionsa. Wellhope closely focuses on the dynamic international foreign exchange market, whilst enhances theawareness of foreign exchange risk, and improves the researching and forecasting capabilities of theforeign exchange market.b. Wellhope continues to improve the bargaining power in foreign trade transaction by enhancing thecompetitiveness of products, while reducing the exchange rate risks by using RMB for settlement,adding insured value clause and the exchange-rate risk allocation clause in the contract.c. By making full use of foreign exchange forwards, swaps and options (portfolios) and otherinstruments to maintain the exchange-rate for foreign exchange exposure.d. According to specific conditions of different countries, based on the principle of "using foreigncurrencies in foreign trade", Wellhope reasonably manages the income and debts to control theexchange-rate risks.
F. Risks of food safetyIn recent years, there have been some food safety incidents in China, which affected consumers'confidence in food safety. China has continuously improved the legislation on food safety and foodsources, conducted forceful measures on handling food violations. Once the food safety incidenthappens, it will directly damage the interests of consumers and cause panic, which may greatly impactthe downstream demands, affect the brand and performance of the enterprises.SolutionsSince its establishment, Wellhope has always attached great importance to the issues of food safetyand quality assurance, adhering to implement the quality policy of "six never" with the most rigorousattitude--Never accept unqualified raw material, Never use abnormal equipment, Never allownonstandard operation, Never produce substandard product, Never ignore unsatisfied customer, Nevertolerate imperfect service. Wellhope’s head office has set up Food and Quality Safety ManagementCommittee, whilst all business sectors and corresponding subsidiaries have established food and qualitysafety management group to ensure that the team always maintains a high sense of responsibility andawareness.a. Feed business- The Company has established a quality management mechanism and testing systemmanaged at the head office, regional and subsidiary levels, adopted international standards such asISO9001, ISO22000 and ISO-IEC17025, and thoroughly implemented a series of quality standards suchas the Feed Quality and Safety Management Code, the Veterinary Drug Production QualityManagement Code and other specifications, the Company has controlled the whole production processand established the traceability system. Meanwhile, it vigorously popularizes near-infrared detectiontechnology, improves detection efficiency to timely share data and quickly realize risk early warning,and focuses on the detection of heavy metals, harmful microorganisms and mycotoxins, providing animportant guarantee for the safety of feed products.b. Animal raising and slaughtering business-In terms of production management, the Company strictlymonitors and checks the drug selection and drug residue control in broiler integration and swine raisingbusinesses. Whilst it constantly strengthens the quality management in slaughtering and processing,earnestly implements the inspection and quarantine as well as drug residue detection. Regardingbusiness model, Wellhope's broiler integration business has formed an industrial chain including broilerbreeder raising, day-old chick hatching, feed production, commercial broiler rearing, slaughtering andprocessing of raw meat, further processing of prepared and cooked food. The integrated operationensures sufficient supply of raw materials in each sector of the chain, and strictly controls the wholeprocess of food and quality safety from the source. Through standardized management and streamlineoperation, Wellhope consolidates the controls of bio-safety, drug residue and in-process hygiene toachieve traceable food safety.
Section IV Corporate GovernanceI. Overview of Corporate Governance
In accordance with the Corporation Law, the Securities Law, the Guidelines for Governance of ListedCompany and other requirements, the Company has continuously strengthened and improved itscorporate governance, standardized operation and other aspects of work. The Company's threecommittees have a clear division of labor, clear authority and responsibility, and the systems have beendesigned to constrain each other and work together to support each other, gradually establishing a setof scientific and efficient decision-making, implementation and supervision mechanisms. Theindependent directors, the supervisory board and the special committees of the board of directors allplay key functions, perform their duties faithfully and diligently, and express objective and independentopinions on matters under consideration, so as to ensure that the Company operates legally,compliantly, fairly and transparently, improve the corporate governance structure, enhance thetransparency of corporate governance and effectively safeguard the legitimate rights and interests ofthe Company and its shareholders.During the reporting period, the Company revised several internal regulations in accordance withrelevant laws and regulations, such as the Articles of Association, Rules of Procedure of theShareholders’ Meeting, Management Provision for Changes in Shareholdings of Directors, Supervisorsand Senior Managers, Management Provision for Providing External Guarantees, ManagementProvision for Futures, Rules for the Work of Independent Directors, Management Provision forInformation Disclosure, Management Provision for Investor Relations, Management Provision forRelated Party Transactions, Rules for the Work of the Secretary of the Board of Directors, Rules for theWork of Specialized Committees of the Board of Directors, and other internal systems. Work Rules ofSpecialized Committees of the Board of Directors. In 2022, the Company held 2 shareholders' meetings,5 board meetings, 4 supervisory meetings, 3 audit committee meetings, 1 meeting for compensationand appraisal committee and for nomination committee. The convening, holding and voting proceduresof all meetings were standardized, legal and effective. During the reporting period, the Companycontinued to strengthen the management of information disclosure and investor relations tocontinuously enhance the transparency of the Company, ensure the investors' right to information andeffectively safeguard the legitimate interests of the Company and all shareholders. The Company wasawarded the highest level of A grade in the evaluation of information disclosure work of Shanghai StockExchange 2021-2022, and has received A grade evaluation for five consecutive years.
II. Shareholders' Meeting Convened during the Reporting Period
| Meeting | Date | Query URLs of Resolution | Disclosing Date of Resolution |
| 2021 Annual Shareholders' Meeting | May 20, 2022 | www.sse.com.cn | May 21, 2022 |
| 2022 First Extraordinary Shareholders' Meeting | August 31, 2022 | www.sse.com.cn | September 1, 2022 |
III. Information about Directors, Supervisors and Senior Managers
1. Changes in shareholdings and remuneration of incumbent and outgoing directors, supervisors and senior management during the reporting period
| Name | Office title | Gender | Age | Start of tenure | End of tenure | Opening shareholding (shares) | Closing shareholding (shares) | Changes in shareholding (shares) | Reason of changes | Pre-tax remuneration paid by the Company (RMB 10k) | Whether obtain remuneration from related parties of the Company |
| Jin Weidong | Chairman | male | 59 | Feb. 3, 2015 | Feb. 1, 2024 | 149,549,498 | 149,549,498 | 82.00 | No | ||
| Qiu Jiahui | Director, President | male | 51 | Feb. 1, 2021 | Feb. 1, 2024 | 76.00 | No | ||||
| Jacobus Johannes de Heus | Director | male | 54 | Feb. 3, 2015 | Feb. 1, 2024 | No | |||||
| Shao Caimei | Director, Chief Technical Officer | female | 57 | Feb. 3, 2015 | Feb. 1, 2024 | 49,773,878 | 49,773,878 | 71.51 | No | ||
| Zhang Wenliang | Director, Chief Financial Officer | male | 62 | Feb. 3, 2015 | Feb. 1, 2024 | 8,565,100 | 8,565,100 | 31.80 | No | ||
| Zhao Xin | Director, Board Secretary, Chief HR Officer | female | 51 | Feb. 3, 2015 | Feb. 1, 2024 | 4,420,160 | 4,420,160 | 75.00 | No | ||
| ZUO XIAOLEI | Independent Director | female | 69 | Feb. 1, 2021 | Feb. 1, 2024 | 10.14 | No | ||||
| Jiang Yan | Independent Director | female | 49 | Feb. 1, 2021 | Feb. 1, 2024 | 10.14 | No | ||||
| Zhang Shuyi | Independent Director | male | 58 | Feb. 1, 2021 | Feb. 1, 2024 | 10.14 | No | ||||
| Wang Fengjiu | Vice President | male | 54 | Feb. 3, 2015 | Feb. 1, 2024 | 47,964,602 | 47,964,602 | 67.00 | No | ||
| Wang Xueqiang | Vice President | male | 56 | Feb. 1, 2021 | Feb. 1, 2024 | 9,355,000 | 9,355,000 | 75.00 | No |
| Di Guo | Vice President | male | 52 | Feb. 1, 2021 | Feb. 1, 2024 | 4,908,219 | 4,908,219 | 75.00 | No | ||
| Chen Yu | Chief Financial Director | male | 38 | Aug. 12,2022 | Feb. 1, 2024 | 60.90 | No | ||||
| Wang Zhongtao | Chairman of the Supervisory Board | male | 59 | Feb. 3, 2015 | Feb. 1, 2024 | 46,625,229 | 46,625,229 | 50.00 | No | ||
| Marcus Leonardus van der Kwaak | Supervisor | male | 54 | Feb. 3, 2015 | Feb. 1, 2024 | No | |||||
| Li Jun | Supervisor | male | 50 | Apr. 27, 2016 | Feb. 1, 2024 | 68.49 | No | ||||
| Ren Bingxin | Supervisor | male | 59 | Mar. 27,2019 | Feb. 1, 2024 | 5,429,500 | 5,429,500 | 54.80 | No | ||
| Yuan Minger | Supervisor | female | 52 | Feb. 3, 2015 | Feb. 1, 2024 | 30.92 | No | ||||
| Total | / | / | / | / | / | 326,591,186 | 326,591,186 | / | / | 848.84 | / |
| Name | Work experience |
| Jin Weidong | Male, born in 1963, Chinese nationality, bachelor of veterinarian from Shenyang Agricultural University, master of physiology and biochemistry from Jilin University, doctoral advisor of Shenyang Agricultural University, winner of the first batch of National Natural Science Foundation of China, core founder of Wellhope, serving as the Chairman of Wellhope since 1995. After graduation, he worked in the university for two years. In 1991, he joined Continental Grain Company (the US), successively served as the sales manager of China’s Northeast Region, national sales manager and assistant vice president of Asia Region. Currently he holds the posts of Vice President of China Feed Industry Association, Vice President of China Animal Husbandry Industry Association, President of Liaoning Feed Industry Association, also the MBA interviewer of Peking University and Tsinghua University, guest professor of Remin University of China, Ocean University of China and Northeast Agricultural University, etc. He has been awarded the honorary titles of "China's Outstanding Private Science and Technology Entrepreneur", "National Outstanding Builder of the Socialist Cause", "China's Top Ten Economic Figures in the 30 Years of Reform and Opening up of Feed Industry", "May 1st Labor Medal of Shenyang City", "Model Worker of Liaoning Province" and etc. In 2015, he was awarded as One of the Top Ten Models of Entrepreneurship for Agriculture, Rural Areas and Farmers. Meanwhile, he was awarded as Outstanding Entrepreneur of Liaoning Province in 2017, and awarded as Career-creating Talent regarding Science and Technology Innovation by China’s Ministry of Science and Technology in 2018. In 2019, he was selected as the fourth batch of leading talents regarding technology entrepreneurship in the National Ten Thousand Talents Program, and in 2020 awarded as the National Model Worker. |
| Qiu Jiahui | Male, born in 1972, Chinese nationality, bachelor of veterinarian from Shenyang Agricultural University. After graduation from university, he worked in Dalian Broiler Breeder Farm, a state-owned core breeding enterprise, engaged in technical and on-site management. He joined Wellhope in 2000, served successively as General Manager of Haicheng Wellhope Feed Mill, Haicheng Xinzhongxin Feed Mill, Vice President of Former Huakang Feed Group, Marketing Director of Wellhope, President of Broiler Integration Business Division, Vice President of Wellhope. Due to his outstanding performance and diligence, he has been elected as the board director and President of Wellhope on February 1, 2021. |
| Mr. Qiu Jiahui is the pioneer of Wellhope’s broiler integration business. With more than 10 years of leadership, the broiler integration business has achieved rapid development. | |
| Jacobus Johannes de Heus | Male, born in 1969, the Netherlands’ nationality, master's degree, been working in Royal De Heus since 1992, now serves as the CEO of Royal De Heus, board director of Wellhope. |
| Shao Caimei | Female, born in 1966, Chinese nationality, at the age of 25, she received her PhD in animal physiology and biochemistry from Nanjing Agricultural University. She is one of the founders of Wellhope. She used to be a technician in a poultry breeding center of the Ministry of Agriculture and served as the formula manager at CONTINENTAL GRAIN COMPANY(the US). Since founding Wellhope, she has always taken charge of the technology of Wellhope, successively serving as the Technology Director and Vice President. Now she is the Board Director and CTO of Wellhope, also holds the posts of standing director of Animal Nutrition Branch of Chinese Association of Animal Science and Veterinary Medicine, member of Chinese Feed Industrial Standardization Technical Committee, leader of the Comprehensive Trial Farm for National Swine Raising Industry Technology System and etc. Meanwhile, she has been serving as the master supervisor of China Agricultural University and Shenyang Agricultural University. She has won a number of first and second prizes of provincial-level science and technology progress and applied nearly 30 technical invention patents. |
| Zhang Wenliang | Male, born in 1960, Chinese nationality, master of quality cost management from Northeastern University, senior auditor, the first batch of China’s certified public accountant. He used to work for the Shenyang Office of National Audit Office, mainly engaged in auditing of finance, national tax, customs and large enterprises. He joined Wellhope in 1996 and served successively as Financial Manager of Shenyang Wellhope Feed Mill, Auditing Manager of Wellhope, Financial Manager of Beijing Sanyuan Wellhope Feed Mill, and Financial Director of Wellhope. He is currently the Board Director and CFO of Wellhope. Mr. Wenliang Zhang led and participated in some capital operation projects of Wellhope, such as the shareholding system transformation, IPO and non-public offering new shares. |
| Zhao Xin | Female, born in 1972, Chinese nationality, bachelor of economics from Shenyang Agricultural University. She joined Wellhope in 1995 after graduation, successively served as the Secretary to general manager, Director of Marketing Department, Director of HR Department, Human Resources Manager and Chief HR Director, Assistant to Chairman, etc. Now holds the posts of Board Director, Board Secretary and CHO of Wellhope. Ms. Xin Zhao has more than 20 years of experience in human resources and enterprise management, she is one of the managers who established Wellhope's human resources management system. In 2020 and 2021, she was awarded as "Outstanding Board Secretary" in the Selection of China’s Valuable Public Companies. |
| ZUO XIAOLEI | Female, born in 1953, Singapore’s nationality, famous economist, Ph.D. of International Finance and Econometrics from University of Illinois, USA. She used to be a lecturer in the School of Economic Statistics at the National University of Singapore, associate professor at the Asian Institute of Management in the Philippines, chief economist and chief president adviser of Galaxy Securities, independent director of Tongfang Co., Ltd. and Hubei Bank. Now she serves as the researcher at the Financial Center of Counsellors' Office of the State Council of China. Ms. Xiaolei Zuo is one of the most influential economists in China, who has published more than 50 papers in the fields of econometrics, international finance and securities market. She is the author of "Xiaolei's Perspective: My View on China's Economy" and other books. |
| Jiang Yan | Female, born in 1973, Chinese nationality, doctor of management from Institute of Fiscal Science of Ministry of Finance, certified public accountant, certified asset appraiser. She worked in the Stock Issuance Supervision Department at China Securities Regulatory Commission from 2002-2016, now holds the posts of core consultant of several investment banks such as Minsheng Securities Co., Ltd., and the independent director of Weichai Power Co., Ltd. |
| Zhang Shuyi | Male, born in 1964, Chinese nationality, doctor of ecology from Marie Curie University, France, doctoral advisor of Shenyang Agricultural University. Once he held the posts of researcher of the Institute of Zoology of Chinese Academy of Sciences, Dean of Interdisciplinary Institute of Science and Technology of East China Normal University, Dean of the School of Management of Zhejiang Ocean University. He currently takes charge of the subject of animal husbandry of Shenyang Agricultural University, and serves as the independent director of Wellhope. In addition to the scientific field, he used to serve as an independent director of Wellhope, vice president of Tiansanqi Group Co., Ltd. (Beijing), etc. Mr. Shuyi Zhang has made great achievements in the field of science. He has been funded by the National Natural Science Foundation of China for Distinguished Young Scholars, supported by the "Changjiang Rive Scholars" team project of the Ministry of Education, and been selected into the first and second levels of the National Millions of Talents Project, the "Hundred Talents Program" of the Chinese Academy of Sciences, and the Climbing Scholars Program of Universities in Liaoning Province. He has been awarded special government allowance of the State Council, second prize of national science and technology progress, first prize of natural science of Shanghai and other awards, etc. |
| Wang Fengjiu | Male, born in 1969, Chinese nationality, master of animal nutrition and feed science from Chinese Academy of Agricultural Sciences, one of the founders of Wellhope. He once |
| worked in the office of academic affairs of Shenyang Agricultural University and served as the sales manager of China’s Northeast Region at CONTINENTAL GRAIN COMPANY (the Us). After the establishment of Wellhope, he has successively acted as Business Manager, Deputy General Manager, General Manager of some subsidiaries, President of Wellhope. He is now the Vice President of Wellhope, who takes charge of Wellhope’s food business. He is also a standing member of the 15th Shenyang Committee of CPPCC, Vice President of Liaoning Agricultural Integration Association and Shenyang Food Association. | |
| Wang Xueqiang | Male, born in 1967, Chinese nationality, bachelor of animal husbandry from Shenyang Agricultural University. He once worked at Shenyang Institute of Applied Ecology of Chinese Academy of Sciences. He joined Wellhope in 1995 and served successively as Sales Manager and Deputy General Managers, General Managers of some subsidiaries and Vice President of Wellhope. He is now the Vice President of Wellhope. Mr. Xueqiang Wang is one of the important contributors to Wellhope's feed business management system. The Liaoning Region under his leadership is now the benchmark of Wellhope's "quality management", also the base camp of Wellhope's business development and talent growth. |
| Di Guo | Male, born in 1970, Chinese nationality, master of management from Shenyang Agricultural University. Joining Wellhope in 1996, he served successively as Salesman, Sales Manager, Deputy General Manager and General Manager of some subsidiaries, President of Huakang Group, Chief Director of feed business in Jilin and Heilongjiang regions, Secretary of the Board of Directors and Vice President of Wellhope. He is now the Vice President of Wellhope. Mr. Guo Di has rich experiences in marketing and enterprise management, who has been appointed to take on important responsibilities in times of crisis. He is an innovator of business development in Jilin and Heilongjiang regions. |
| Chen Yu | Male, born in 1984, Chinese nationality, master's degree from Shanghai University of Finance and Economics, certified public accountant. From September 2009 to January 2017, he worked at KPMG Huazhen LLP, holding the position of auditor and audit department manager. From January 2017 to May 2019, he worked at New Northeast Electric Group, responsible for financial management. From May 2019 to November 2021, he worked at Anhui Hetian Hospital Management Co., Ltd. as the chief financial officer. He has been appointed as the chief financial director of Wellhope in August 2022. |
| Wang Zhongtao | Male, born in 1964, Chinese nationality, Bachelor of Animal Husbandry in Shenyang Agricultural University, one of the founders of Wellhope. He once worked in Tianjin Huajin Company as a technical director, a large state-owned enterprise, and the sales manager of six provinces in North China at CONTINENTAL GRAIN COMPANY(the US). After founding Wellhope, he served successively as Purchasing Manager, Financial Manager, General Manager, etc, now holds the post of Chairman of the Supervisory Board. Mr. Wang Zhongtao is the most important contributor to the development and growth of Wellhope’s trading business. Over the past 20 years, Wellhope’s trading business has flourished and the business scale is among the top in China. |
| Marcus Leonardus van der Kwaak | Male, born in 1969, the Netherlands’ nationality, master's degree, CFO of Royal De Heus, supervisor of Wellhope. |
| Li Jun | Male, born in 1972, Chinese nationality, master of Business Administration from Northeastern University. He used to be the export salesman of Shenyang Grain, Oil and Food Import and Export Company, and the sales manager of Shenyang Tongfeng Trading Company. He joined Wellhope in 2004 and successively served as General Manager of several trading subsidiaries. Now he is the Director of Wellhope trading business division, General Manager of Liaoning Expert Trading Company, and supervisor of Wellhope. Mr. Li Jun has been engaged in international trade for many years, who has rich experience in trading feed raw materials. He has made important contributions to the development of Wellhope’s trading business. |
| Ren Bingxin | Male, born in 1963, Chinese nationality, PhD in cell engineering from Ocean University of China. He joined Wellhope in 1998 and has served as Production Manager, Technical Manager, ISO System Manager and Deputy General Manager. Now he holds the post of Technical Director of broiler feed line and Supervisor. Mr. Ren Bingxin is the chief expert of Wellhope’s broiler feed products, with rich experience in feed production and technology research and development. He is an important participant and contributor to the rapid development of Wellhope’s broiler integration business, and has obtained 2 authorized invention patents and 3 utility model patents during his tenure. |
| Yuan Minger | Female, born in 1970, Chinese nationality, bachelor's degree, senior auditor, joined Wellhope in 2004, served successively as Deputy Financial Manager of Liaoning Wellhope and Financial Manager of Wellhope Aquatic Feed Company, now holds the posts of Supervisor and Audit Manager of Wellhope. |
2. Post held by ongoing and outgoing Directors, Supervisors and senior managers in other entityPost in other entities
| Name | Other entity | Post | Start of tenure | End of tenure |
| Zhang Shuyi | Shenyang Agricultural University | Taking charge of the subject of animal husbandry | 2016 | |
| Zhang Shuyi | Wuxi Kezhiqian Technology Company | Executive director | 2012 | |
| Zhang Shuyi | Liaoning Petmate Bio-tech Company | Board director | 2016 | |
| Jiang Yan | Weichai Power Co., Ltd. | Independent director | 2020 | |
| Jacobus Johannes de Heus | Royal De Heus | CEO | 2002 | |
| Marcus Leonardus van der Kwaak | Royal De Heus | CFO | 2001 | |
| Jin Weidong | Beijing Huikezhongda Information Consulting Company | Board director | 2020 | |
| Jin Weidong | Changzhou Sangdichuan Agricultural Development Company | Executive director | 2021 | |
| Jin Weidong | Liaoning Guowei Industrial Group Company | Board director | 2021 |
3. Remuneration of Directors, Supervisors and Senior Management
| Decision-making procedure for remuneration | According to the Company's performance appraisal management, related regulations and the stipulations of the Remuneration and Performance Appraisal Committee of the Board of Directors. |
| Basis for determining remuneration | According to the remuneration level in the industry, the Company's business performance, job responsibilities, etc., and in accordance with the work plan made by the Board of Directors at the beginning of the year, in combination with individual’s work performance and other qualitative and quantitative indicators. |
| Actual payment | Paying in accordance with the annual performance of the Company, the work performance of senior managers and management ability, etc. |
| Total remuneration during the reporting period | Totally paid RMB8.49 million to board directors, supervisory board directors and senior managers. |
4. Changes in directors, supervisors and senior management
| Name | Post | Change | Reason |
| Zhang Wenliang | CFO | Outgoing | Retirement |
| Chen Yu | Chief Financial Director | Appointment | Newly Appointed |
IV. Board Meetings Held in the Reporting Period
V. Performance of duties of directors
1. Circumstance of attending board meeting and shareholders’ meeting
| Name | Independent director or not | Attendance of Board Meeting | Shareholders' Meeting | |||||
| Number of board meetings required to attend this year | Physical presence | Via Tele- communi | Via proxy | Number of absences | Whether continually fail to physically attend the meeting two times | Number of shareholders' meeting attended | ||
| Jin Weidong | no | 5 | 5 | 4 | 0 | 0 | no | 2 |
| Qiu Jiahui | no | 5 | 5 | 2 | 0 | 0 | no | 2 |
| Jacobus Johannes de Heus | no | 5 | 5 | 5 | 0 | 0 | no | 0 |
| Shao Caimei | no | 5 | 5 | 4 | 0 | 0 | no | 2 |
| Zhang Wenliang | no | 5 | 5 | 4 | 0 | 0 | no | 2 |
| Zhao Xin | no | 5 | 5 | 2 | 0 | 0 | no | 1 |
| ZUO XIAOLEI | yes | 5 | 5 | 5 | 0 | 0 | no | 2 |
| Jiang Yan | yes | 5 | 5 | 5 | 0 | 0 | no | 2 |
| Zhang Shuyi | yes | 5 | 5 | 3 | 0 | 0 | no | 2 |
| Number of board meetings held in this year | 5 |
| Including on-site meeting | 0 |
| Number of meetings held via telecommunication | 2 |
| Number of meetings held via on-site meeting and telecommunication | 3 |
VI. Circumstance of Special Committee of Board of Directors
1. Member of each committee
| Committee | Member |
| Audit committee | Jiang Yan(head), ZUO XIAOLEI, Zhang Wenliang |
| Nominating committee | ZUO XIAOLEI(head), Zhang Shuyi, Shao Caimei |
| Compensation and appraisal committee | Zhang Shuyi(head), Jiang Yan, Zhao Xin |
| Strategy committee | Jin Weidong(head), Jacobus Johannes de Heus, Qiu Jiahui, Zhang Wenliang, ZUO XIAOLEI |
Meeting
| Meeting | Date | Resolution |
| The tenth meeting of the seventh session of Board of Directors | April 27, 2022 | No. 2022-020 public announcement --meeting resolution |
| The eleventh meeting of the seventh session of Board of Directors | May 24, 2022 | No. 2022-040 public announcement --meeting resolution |
| The twelfth of the seventh session of Board of Directors | August 12, 2022 | No. 2022-054 public announcement --meeting resolution |
| The thirteenth meeting of the seventh session of Board of Directors | October 24, 2022 | No. 2022-070 public announcement --meeting resolution |
| The fourteenth meeting of the seventh session of Board of Directors | December 2, 2022 | No. 2022-079 public announcement |
2. Meetings held by the audit committee
| Date | Agenda | Important comments and suggestions | Other circumstance |
| April 22, 2022 | To deliberate 2021 annual report, renewing contract with accounting firm, 2021 audit committee performance report, 2021 internal control evaluation report, and 2022 First Quarter Report | After full communication and discussion, all the proposals were unanimously approved | Non |
| August 10, 2022 | To deliberate 2022 Interim Report, terminating and accepting the projects invested by funds raised from 2019 privately issuing shares, and permanently replenishing working capital with surplus proceeds, and a special report on the deposit and actual use of raised funds in the second half of 2022 | After full communication and discussion, all the proposals were unanimously approved | Non |
| October 22, 2022 | To deliberate 2022 Third Quarter Report | After full communication and discussion, all the proposals were unanimously approved | Non |
3. Meetings held by the nominating committee
| Date | Agenda | Important comments and suggestions | Other circumstance |
| August 10, 2022 | Deliberating the proposal on the appointment of the Company's chief financial director | After full communication and discussion, all the proposals were unanimously approved | Non |
4. Meetings held by the compensation and appraisal committee
| Date | Agenda | Important comments and suggestions | Other circumstance |
| April 10, 2022 | Deliberating the compensation plan for the board directors and senior executives, failing to achieve the conditions for unlocking restricted shares in the third lock-up period stated in 2018 Restricted Stock Incentive Plan, cancelling and writing off the shares | After full communication and discussion, all the proposals were unanimously approved | Non |
VII. Employees of the Parent Company and Major Subsidiaries
1. Headcount
| Full time employee of parent company | 275 |
| Full time employee of major subsidiaries | 8,088 |
| Total full-time employees | 8,363 |
| The number of retired employees whose expenses are borne by the parent company and major subsidiaries | 8 |
| Functions | |
| Line | Employees |
| Production | 3,283 |
| Sales | 2,618 |
| Technology | 831 |
| Finance | 446 |
| Administration | 1,185 |
| Total | 8,363 |
| Educational backgrounds | |
| Educational background | Employees |
| Master's degree and above | 489 |
| Bachelor's degree | 2,821 |
| Junior college | 2,512 |
| Below junior college | 2,541 |
| Total | 8,363 |
2. Remuneration policy
The Company always follows the human resource policy of providing a fair, just and merit-basedenvironment for rewarding employees, builds a comprehensive compensation and performanceincentive system from salary policy, appointment management, long-term and short-term incentives towelfare protection and other aspects, continuously improves and innovates incentive mechanism,strongly correlates staff salary with performance to stimulate staff's internal drive, promoting staff tocontinuously achieve goals and realizing career development.In 2022, the overall market environment was sluggish, the Company worked hard to operate andprotect employee compensation and benefits. On this basis, the Company further promoted processperformance management and applied process tracking to annual performance management, anddetermined key personnel awards, appointment, annual compensation and other incentive mattersbased on annual performance results. Meanwhile, the Company continuously promoted theimplementation of compensation optimization projects in some business segments and regions tostandardize basic compensation management. At the same time, the Company continued to optimizethe Appointment Management Measures and revise the commendation program to select moreoutstanding managers with a scientific appointment system, to guide and stimulate employees' senseof honor, and to promote their career development and self-realization.The Company provides employees with social insurance in accordance with the law, and on this basisprovides commercial insurance, annual physical examination and other benefits; through the"employee shopping festival", "Wings of Love" charity foundation and other ways to enrich employeebenefits, realize internal resource sharing and improve staff satisfaction.
3. Training plan
Led by strategic goals and human resource strategy, the Company’s trainings focused more on
supporting business development and operation improvement, paid attention to the growth andcultivation of key talents.
1. The Company’s training center closely followed the business needs, explored excellence, and createda training method that combined training and practice. By introducing the 5D training model,implemented more than 20 training programs covering different groups of staff such as front sales,operations and functional backbones, helping each business segments and functional line to enhancejob skills and improve operational performance. More than 10 excellent benchmarking cases wereexplored to extract experiences and replicate in the group, covering more than 15,000 people.
2. Strengthening the construction of talent echelon and enhancing the training and cultivation of keytalents in key positions. Based on the original training system, optimizing the three-in-one newemployee training program to accelerate the integration, adaptation, stability and development ofnewcomers. Enhancing training management in functional lines to further support businessdevelopment. Paying close attention to the management's ability improvement, organized live learningfor the middle and senior management team of over 2,500 people to reach consensus and synergyinterlock. Introduced a course rating system to establish a culture of independent learning, andincreased the per capita learning rate of employees by 8% for the year.VIII. Common Stock Profit Distribution or Capital Reserve Converted into Share Capital
1. Cash dividend
Driven by the goal of realizing long-term and sustainable development, the Company has established asustainable, stable and scientific profit distribution system for investors based on considering its actualoperation, shareholders’ need, social factors such as capital costs, external financing environment,current and future profitability, cash flow, project investment and capital demand, bank credit and debtfinancing environment, etc.The Company held the 2nd meeting of the 7th Session of Board of Directors to formulate anddeliberate the Shareholders’ Dividend Plan for the Next Three Years (2020-2022), which had beenapproved its 2020 Annual Shareholders’ Meeting. At least every three years, the Company re-reviewsits Shareholders’ Dividend Return Plan for the Next Three Years to evaluate on-going profit distributionpolicy and make necessary modifications according to the opinions of shareholders (especiallynon-controlling shareholders), independent directors and supervisors, and determines theShareholders’ Dividend Plan for that period.The Company's profit distribution proposal for 2022 is to distribute a cash dividend of RMB1.20 (taxincluded) for every 10 shares to all shareholders based on the total share capital of the Companyregistered on the date of registration of the implementation of the equity distribution (excluding theshares held in the Company's repurchase special account). As of December 31, 2022, the total sharecapital of the Company was 919,430,450 shares, excluding 20,956,579 shares held in the Company'srepurchase special account, and the estimated cash dividend of RMB107,816,864.52 (tax included) was
calculated on the basis of 898,473,871 shares, representing 21% of the Company's net profitattributable to shareholders of the Company in 2022.
2. Profit distribution and capitalizing of common reserves in the reporting period
Unit: yuan Currency: RMB
| Number of bonus shares per 10 shares (shares) | |
| Number of dividends per 10 shares (RMB) (tax included) | 1.20 |
| Amount of cash dividends (tax included) | 107,816,864.52 |
| Net profit attributable to ordinary shareholders of the Company in the consolidated statements for the year of dividend distribution | 513,532,382.02 |
| Percentage of net profit (%) | 21.00 |
| Total amount of dividends (tax included) | 107,816,864.52 |
| Percentage of net profit (%) | 21.00 |
IX. Employee Equity Incentive Plan, Stock Ownership Plan or Other Incentive Measures and Impacts
| Overview | Query URLs |
| On April 27, 2022, the Company held the tenth meeting of the seventh session of board of directors and the eighth meeting of the seventh session of supervisory board, which approved the Proposal on Failing to Fulfill the Conditions for Unlocking the Restricted Shares of the Third Lock-up Period of 2018 Stock Incentive Plan and the Repurchasing and Cancellation of Part of Restricted Stock. The Company's performance in 2021 did not reach the assessment conditions stated in the 2018 Restricted Stock Incentive Plan (Draft), the Board of Directors agreed to repurchase and cancel the restricted shares granted to 364 incentive targets, which totally repurchased 5.742 million shares, accounting for 0.62% of the total share capital of the Company before this repurchase and cancellation. | Details can be obtained at www.sse.com.cn, announcement disclosed on April 29, 2022, No. 2022-024 |
| On June 20, 2022, the Company disclosed the announcement of the Implementation of Repurchasing and Writing off Part of Restricted Shares. 5.742 million shares held by 364 individuals had been repurchased and written off by the Company. On June 22, 2022, these shares were written off. | Details can be obtained at www.sse.com.cn, announcement disclosed on June 20, 2022, No. 2022-046 |
X. Internal Control System Construction and ImplementationThe Company is going to disclose the evaluation report of internal control when discloses 2022 AnnualReport. Details, please refer to the website of Shanghai Stock Exchange (http://www.sse.com.cn).XI. Management and Control of Subsidiaries during the Reporting PeriodThe Company implemented internal control management on its subsidiaries in strict accordance withrelevant provisions of laws and regulations. By managing subsidiaries’ operation, human resource,finance, internal audit, information disclosure, investment and financing, business assessment andother management measures, the Company controlled the risk of subsidiaries. Each subsidiary
uniformly implemented the standards and regulations issued by the Company, and establishedbusiness plans and risk management procedures according to the Company's overall developmentstrategic planning and annual business plan. Each subsidiary, in accordance with major event reportingregulations and review procedures, timely reported major business and financial events to theresponsible person of the Company, and reported major events to the Company's board of directors orshareholders' meeting. During the reporting period, the subsidiaries operated stably, the Company hasno major defects in the management and control of the subsidiaries, and the internal control of thesubsidiaries have been effectively implemented.XII. Explanation of Audit Report for Internal ControlSuyaJincheng CPA LLP issued the Audit Report, put forward that Wellhope has maintained effectiveinternal control over financial reports in all major aspects on December 31, 2022 in accordance withrelevant regulations. Details, please refer to the website of Shanghai Stock Exchange(http://www.sse.com.cn).XIII. Circumstance of Rectification regarding Self-inspection on Corporate Governance
Non
Section V Environment and Social ResponsibilityI. Environment information
| Whether establishing mechanisms related to environmental protection | Yes |
| Funds invested in environmental protection during the reporting period (unit: RMB 10K) | 2,047.59 |
1. Information of pollutant-discharging subsidiaries disclosed
Puyang Wellhope Food Company (hereinafter referred to as "Puyang Wellhope"), a subsidiary ofWellhope, has been listed as the company with pollution discharging of Puyang City. Dalian ZhongjiaWellhope Food Company (hereinafter referred to as "Zhongjia Food") and Dalian Huakang Xinxin FoodCompany (hereinafter referred to as "Dalian Huakang"), subsidiaries of Wellhope, have been listed asthe company with pollution discharging of Dalian City. Shenyang Huakang Broiler Company (hereinafterreferred to as "Shenyang Huakang"), a subsidiary of Wellhope, has been listed as the company withpollution discharging of Shenyang City. Pingyuan Wellhope Food Processing Company (hereinafterreferred to as "Pingyuan Wellhope"), a subsidiary of Wellhope, has been listed as the company withpollution discharging of Handan City. Changchun Wellhope Food Company (hereinafter referred to as"Changchun Wellhope"), a subsidiary of Wellhope, has been listed as the company with pollutiondischarging of Changchun City. Chifeng Wellhope Fuxinyuan Food Company (hereinafter referred to as"Chifeng Wellhope"), a subsidiary of Wellhope, has been listed as the company with pollutiondischarging of Chifeng City. Shandong Heyuan Food Company (hereinafter referred to as "ShandongHeyuan"), a subsidiary of Wellhope, has been listed as the company with pollution discharging ofWeihai City. Dunhua Fengda Agriculture and Animal Husbandry Development Company (hereinafterreferred to as "Dunhua Fengda"), a subsidiary of Wellhope, has been listed as the company withpollution discharging of Dunhua City. Daqing Wellhope Food Company (hereinafter referred to as"Daqing Wellhope"), a subsidiary of Wellhope, has been listed as the company with pollutiondischarging of Daqing City.Details are presented as follows.
| Company | Primary pollutants | Way of discharge | Number of discharge outlet | Distribution of outlets | Emission concentration | Pollutant discharge standards | Total Emissions | Total approved emissions | Whether discharge excessive pollutants |
| Puyang Wellhope | Waste water (COD, ammonia nitrogen, total phosphorus, PH, suspended solids, biochemical oxygen demand, animal and plant oil, total coliform, total nitrogen). Waste gas (SO2, nitric oxide, particulate matter) | Waste gas—direct discharge after treatment, waste water-- indirect discharge | 1 outlet for waste gas, 1 for waste water | 1 waste water emission outlet located in the southeast corner of the sewage monitoring station, 1 waste gas exhaust outlet distributed in the boiler room in the northeast corner of the factory | COD: 61.665mg/L Ammonia nitrogen：3.576mg/L Total phosphorus：0.433mg/L Total nitrogen：17.832mg/L SO2：0mg/ m? Nitrogen oxide：25mg/ m? Particulate matter：3.5mg/ m? | Discharge Standard of Water Pollutants for Meat Processing Industry (GB 13457-1992). Boiler Air Pollutant Emission Standard (GB 13271-2014) | COD：24.825359t/a Ammonia nitrogen：1.439776t/a | COD：72.48t/a Ammonia nitrogen：5.436t/a | No |
| Zhongjia Food | Waste water (COD, ammonia nitrogen, total phosphorus, PH, suspended solids, biochemical oxygen demand, total nitrogen). Waste gas (SO2, nitric oxide, particulate matter) | Waste gas—direct discharge after treatment, waste water-- access to sewage works | 1 outlet for waste gas, 1 for waste water | Waste water enters the sewage plant through the pump; the exhaust gas outlet is distributed in the boiler house on the north side of the company | COD：41.35mg/L Ammonia nitrogen：1.98mg/L Total nitrogen：21.46mg/L Total phosphorus: 2.64mg/L PH value: 7.27 Particulate matter：22.9mg/m? Sulfur dioxide: 209mg/m? Nitrogen oxides：132mg/m? | Comprehensive Wastewater Discharge Standard of Liaoning Province (GB 21/1627-2008). Boiler Air Pollutant Emission Standard (GB 13271-2014) | Simplify management without emissions | Non | No |
| Dalian Huakang | Waste water (COD, ammonia nitrogen, total phosphorus, PH, suspended solids, total nitrogen). Waste gas (SO2, nitric oxide, particulate matter) | Waste water-- put into the pipe network after treatment, waste gas—direct discharge | 1 outlet for waste gas, 1 for waste water | Wastewater discharge outlet is distributed in the southeast corner of the company's sewage treatment | COD：300mg/L Ammonia nitrogen：30mg/L Total phosphorus：5mg/L Total nitrogen：50mg/L | Comprehensive Wastewater Discharge Standard of Liaoning Province (GB 21/1627-2008). Boiler Air Pollutant Emission Standard (GB 13271-2014) | Wastewater is unified into the pipe network, no emissions; exhaust gas is used in the biomass boiler, no exhaust gas emissions | Non | No |
| workshop; exhaust gas outlet is located on the roof of the company's boiler house | |||||||||
| Shenyang Huakang | Waste water (coliform group, 5 days biochemical oxygen demand, suspended matter, animal and plant oil, ammonia nitrogen, PH, chemical oxygen demand, total phosphorus). Waste gas (particulate matter, sulfur dioxide, nitrogen oxides, smoke blackness, mercury and its compounds) | Waste gas—direct discharge after treatment, waste water-- put into the municipal pipe network after treatment | 1 outlet for waste gas, 1 for waste water | Wastewater discharge outlet is distributed in the southeast corner of the company's sewage monitoring base station. The exhaust gas outlet is located at the boiler house in the northeast corner of the company | COD：22.68mg/ m? Suspended matter：15mg/ m? Ammonia nitrogen：1.331mg/ m? Five-day biochemical oxygen demand: 10.4mg/ m? Total phosphorus: 2.56mg/m? Animal and vegetable oil: 4.47mg/m? Total coliform: 16000/L Particulate matter: 24.2mg/m? Sulfur dioxide: 40mg/m? Nitrogen oxides: 185mg/m? Mercury and its compounds: <0.003ug/m? Ringerman blackness: <1 grade | Discharge Standard of Water Pollutants for Meat Processing Industry (GB 13457-1992). Comprehensive Wastewater Discharge Standard (GB 21/1627-2008). Boiler Air Pollutant Emission Standard (GB 13271-2014) Integrated Emission Standard of Air Pollutants (GB 16297-1996). Emission Standards for Odor Pollutants (GB 14554-92) | COD：7.0846t/a Ammonia nitrogen：0.419t/a Sulfur dioxide：0.60415t/a Nitrogen oxides：1.655t/a | COD：118.27t/a Ammonia nitrogen：32.76t/a Sulfur dioxide: 5.268t/a Nitrogen oxides: 5.506t/a | No |
| Pingyuan Wellhope | Waste water (COD, ammonia nitrogen, total phosphorus, PH, suspended matter, biochemical oxygen demand, animal and plant oil, total coliform group, total nitrogen). Waste gas (SO2, nitric oxide, particulate matter) | Waste gas—direct discharge via natural gas boiler, waste water—indirect discharge | 6 outlets for waste gas, 1 for waste water | Wastewater discharge outlet is distributed in the north of the company sewage monitoring base station house, the exhaust gas outlets are distributed in the boiler house on the east side of | Ammonia nitrogen：20mg/L COD：100mg/L Biochemical oxygen demand：60mg/L PH value：6-9 Suspended matter：200mg/L Animal and vegetable oil：20mg/L SO2：0mg/m? Nitrogen oxide：21mg/m? Particulate matter：2.8mg/m? Oil smoke：2.0mg/m? Stench：2000(dimensionless) Hydrogen sulfide：0.06mg/m? Ammonia：1.5mg/m? | Discharge Standard of Water Pollutants for Meat Processing Industry (GB 13457-1992) and inlet water quality requirements of Linzhang County. Boiler Air Pollutant Emission Standard (GB 13271-2014) | COD：4.574t/a Ammonia nitrogen：0.288t/a SO2：0t/a Nitrogen oxide：0.376t/a | COD：74.488t/a Ammonia nitrogen：9.732t/a SO2: 3.395t/a Nitrogen oxide: 3.789t/a | No |
| the company | |||||||||
| Changchun Wellhope | Waste water (COD, ammonia nitrogen, total phosphorus, PH, suspended matter, biochemical oxygen demand, total nitrogen) | Waste water-- discharge after entering the sewage treatment station | 1 outlet for waste water | Wastewater discharge outlet is distributed in the company's sewage monitoring station | COD：14mg/L Suspended matter：8mg/L Coliform count: not detected PH value: 7.96 Ammonia nitrogen: 0.587mg/L Five-day biochemical oxygen demand: 2.7mg/L Animal and vegetable oil: 0.17mg/L | Level 2 standard of Discharge Standard of Water Pollutants for Meat Processing Industry (GB 13457-1992) | COD：3.487t/a Ammonia nitrogen：0.104t/a | COD：12.619t/a Ammonia nitrogen：2.524t/a | No |
| Chifeng Wellhope | Waste water (COD, ammonia nitrogen, total phosphorus, PH, suspended solids, biochemical oxygen demand, animal and plant oil, total coliform group, total nitrogen) | Waste water-- indirect discharge | 1 outlet for waste water | Wastewater outlet is distributed in the east side of the company's sewage monitoring base station | COD：500mg/L Ammonia nitrogen：65mg/L PH value：6-9 | Discharge Standard of Water Pollutants for Meat Processing Industry (GB 13457-1992). Integrated Emission Standard of Air Pollutants (GB 16297-1996). Emission Standards for Odor Pollutants (GB 14554-93). Boiler Air Pollutant Emission Standard (GB 13271-2014) | COD：0.92t/a Ammonia nitrogen：0.034t/a | COD：40.6t/a Ammonia nitrogen：6.28t/a | No |
| Shandong Heyuan | Waste water (chemical oxygen demand, suspended matter, coliform group, anionic surfactant, ammonia nitrogen, PH, total nitrogen, total phosphorus, PH, 5 days biochemical oxygen demand). Waste gas (particulate matter, sulfur dioxide, nitrogen oxides) | Waste water— discharge after entering the sewage treatment plant | 1 outlet for waste gas, 1 for waste water | Wastewater outlet is distributed in the southeast side of the sewage pool of the company's sewage treatment station, the exhaust gas outlet is distributed in the boiler house on the northwest side of the company | Anionic surfactant: 10mg/L PH value：6.5-9.5 Ammonia nitrogen：35mg/L COD：500mg/L Total nitrogen：45mg/L Animal and vegetable oil：100mg/L Five-day biochemical oxygen demand：200mg/L Suspended matter：400mg/L Total phosphorus：6mg/L Chromaticity：64 Number of coliform bacteria：10000/L | Comprehensive Discharge Standard for Water Pollutants in Peninsula Watershed of Shandong Province (DB37/676-2007). Emission Standard for Air Pollutants from Boilers (DB 37/2374-2018) | COD：192.8t/a Ammonia nitrogen：17.35t/a Total nitrogen：27t/a | COD：1485t/a Ammonia nitrogen：103.95t/a Total nitrogen：133.65t/a | No |
| Dunhua Fengda | Wastewater (COD, ammonia nitrogen, total phosphorus, total nitrogen, PH, suspended | Waste gas—direct discharge after treatment, | 1 outlet for waste gas, 1 for waste water | The waste gas outlet is located at the boiler room on | COD：100mg/L Ammonia nitrogen：20mg/L PH value：6-8.5 | Discharge Standard of Water Pollutants for Meat Processing Industry (GB 13457-1992). Boiler Air Pollutant Emission Standard (GB 13271-2014). | COD：37.8t/a Ammonia nitrogen：7.56t/a | Non | No |
| matter, biochemical oxygen demand, animal and vegetable oils, total coliform bacteria), waste gas (SO2, nitrogen oxide, particulate matter, smoke blackness) | waste water— discharge after entering the sewage treatment plant | the southeast side of the plant. The waste water outlet is located on the north side of the cesspool of the company's wastewater treatment station | Animal and vegetable oil：20mg/L Five-day biochemical oxygen demand：40mg/L Suspended matter：100mg/L Number of coliform bacteria: 10000/L SO2：300mg/m? Nitrogen oxide：300mg/m? Particulate matter：50mg/m? | Emission Standards for Odor Pollutants (GB 14554-93) Integrated Emission Standard of Air Pollutants (GB 16297-1996). | |||||
| Daqing Wellhope | Waste water (COD, ammonia nitrogen, PH, total soluble solids (salt), flow, biochemical oxygen demand for five days, suspended matter, total nitrogen, total phosphorus, animal and plant oil, fecal coliform count, anionic surfactant), waste gas (particles, SO2, NOx, smoke blackness, hydrogen sulfide, ammonia, odor concentration, lampblack, mercury and its compounds) | Waste gas—direct discharge after treatment, waste water— discharge after entering the sewage treatment plant | 1 outlet for waste gas, 1 for waste water | The waste gas outlet and waste water outlet are located on the north side of the plant | COD：80mg/L Five-day biochemical oxygen demand：15mg/L Suspended matter：50mg/L Ammonia nitrogen：12mg/L Animal and vegetable oil：5mg/L PH value: 6-8.5 Total phosphorus: 0.5mg/L Number of coliform bacteria: 10000/L Anionic surfactant: 3mg/L Total nitrogen：16mg/L Particulate matter：50mg/Nm? Nitrogen oxide：300mg/Nm? Sulfur dioxide：300mg/Nm? Mercury and its compounds：0.05/Nm? | Discharge Standard of Water Pollutants for Meat Processing Industry (GB 13457-1992). Boiler Air Pollutant Emission Standard (GB 13271-2014). Emission Standards for Odor Pollutants (GB 14554-93) | Particulate matter：0.51t/a SO2：2.45t/a Nitrogen oxide：3.06t/a COD：56t/a Ammonia nitrogen: 8.4t/a | Non | No |
2. Circumstance of building and operating pollution control facilities
Puyang Wellhopea. Sewage treatment: Puyang Wellhope has a 2,000-tons-per-day sewage treatment station, whichadopts the treatment process of "pretreatment-oil separation-A2O-disinfection" to treat thewastewater. Its environmental protection facilities are running normally, and the pollutant emissionindexes all meet the required standards.b. Waste gas treatment: Gas generated by the waste water pool of the sewage treatment station iscollected and purified by alkali washing tower and activated carbon adsorption and then dischargedthrough the 25-meter-high chimney in accordance with related standard. The waste gas of theslaughtering shed and broiler suspension platform can be collected and treated by alkali washing towerand activated carbon adsorption and purification. After that, the waste gas can be discharged throughthe 15-meter-high chimney. The traditional coal-fired boilers are replaced by gas-fired boilers, and thecompany carried out low nitrogen upgrading, all kinds of pollutants meet the emission standards.Zhongjia Fooda. Sewage treatment: Zhongjia Food has a 1,200-tons-per-day sewage treatment station, which adoptsthe treatment process of "mechanical barrier-oil separator-regulation pool-hydrolysis pool- catalyticoxidation pool-sedimentation pool-sand filter" to treat the wastewater.b. Waste gas treatment: Dedusting smoke and dust by wet method and conducting desulfurization bymagnesium oxide. Discharging gas by a 25-meter-high chimney to effectively met related standards.Shenyang Huakanga. Sewage treatment: Shenyang Huakang has a 2,220-tons-per-day sewage treatment station, whichadopts the treatment process of "pretreatment-oil separation-A2O-secondary sedimentation tank-flocculation dephosphorization sedimentation tank (advanced treatment process)" to treat wastewater.Its environmental protection facilities are running normally, and the pollutant emission indexes havereached all required standards.b. Waste gas treatment: By equipping biomass boiler, the smoke was treated by the bag filter, pollutantemissions were in line with the coal-fired boiler emission concentration requirements, discharging gasby a 35-meter-high chimney to effectively met related standards.Dalian Huakanga. Sewage treatment: Dalian Huakang has a 1,500-tons-per-day sewage treatment station that adoptsthe treatment process of "mechanical barrier-oil separator-regulation pool-air flotation-hydrolysispool-A2O-sedimentation pool-advanced treatment pool-clean water pool", which can achieve requiredstandards.b. Waste gas treatment: Dedusting the smoke and dust by wet method and conducting desulfurizationby magnesium oxide, then discharging gas by a 36-meter-high chimney. Gas emission meet all requiredstandards.
Pingyuan Wellhopea. Sewage treatment: Pingyuan Wellhope has a 1,000-tons-per-day sewage treatment station, whichadopts AO treatment process to dispose wastewater. Its environmental protection facilities are runningnormally, and the pollutant emission indexes have reached all required standards.b. Waste gas treatment: Gas generated by the waste water pool of the sewage treatment station iscollected and purified by activated carbon adsorption and then discharged through the 15-meter-highchimney. The traditional coal-fired boilers are replaced by gas-fired boilers with low carbon, all kinds ofpollutants meet the emission standards. Discharging gas by a 12-meter-high chimney.Changchun WellhopeSewage treatment: Changchun Wellhope has a 1,000-tons-per-day sewage treatment station, whichadopts the treatment process of “air flotation-A2O” to dispose wastewater. Its environmentalprotection facilities are running normally, and the pollutant emission indexes have reached all requiredstandards.Chifeng WellhopeWastewater treatment: Chifeng Wellhope has a 2,400-tons-per-day sewage treatment station, whichadopts the treatment process of A?/0. The equipment and facilities are running normally, which canautomatically monitor the COD, ammonia nitrogen, PH and flow of wastewater discharge, and it isnetworked with the Municipal Natural Environmental Protection Bureau. The company has alsoconstructed a biogas project with a daily output of 8,000 m?, which can ferment waste water andmanure, etc., marsh gas can be used for boiler production, biogas residue and slurry used as fertilizer tograin.Shandong Heyuana. Sewage treatment: Shandong Heyuan has a 2,000-tons-per-day sewage treatment station, whichadopts AO treatment process to dispose wastewater. Its environmental protection facilities are runningnormally, and the pollutant emission indexes have reached all required standards.b. Waste gas treatment: Gas generated by the waste water pool of the sewage treatment station iscollected and purified by activated carbon adsorption and then discharged through the 15-meter-highchimney. The traditional coal-fired boilers are replaced by gas-fired boilers, all kinds of pollutants meetthe emission standards, which discharge gas by a 10-meter-high chimney.Dunhua Fengdaa. Sewage treatment: Dunhua Fengda has an 800-tons-per-day sewage treatment station, whichadopts the treatment process of air flotation plus A2O to treat the wastewater produced by thecompany. Its environmental protection facilities are running normally, and the pollutant emissionindexes have reached all required standards.b. Waste gas treatment: The gas produced by the boiler is discharged through a 20-meter-highchimney after dust removal by cloth bags. The traditional coal-fired boilers are replaced by gas-fired
boilers, all kinds of pollutants meet the emission standards, which discharge gas by a 20-meter-highchimney.Daqing Wellhopea. Sewage treatment: Daqing Wellhope has a 500-tons-per-day sewage treatment station, whichadopts the treatment process of A2O to treat the wastewater and discharge to the sewage treatmentplant.b. Waste gas treatment: By equipping a biomass boiler, the waste gas was removed by cloth bag andmulti-tube ceramic dust collector, then discharged by exhaust funnel. All kinds of pollutants meet theemission standards.
3. Environmental impact assessment of construction projects and other administrative permits forenvironmental protectionDuring the reporting period, all the construction projects of the Company met the requirements ofenvironmental impact assessment and other environmental protection administrative licenses. TheCompany has strictly implemented related environmental protection requirements.
4. Emergency plan for environmental incident
According to the requirements of environmental protection authorities and relevant laws andregulations, each factory of the Company has identified the site with potential environmental risk andformulated the emergency plans for environmental incident. Meanwhile, related companies conductedemergency exercises to improve self-rescue ability and continued to identify the hidden danger toensure normal operations.
5. Self-monitoring program for environment
In accordance with requirements of self-monitoring environment and information disclosure, thepollutant discharging entities of the Company have formulated self-monitoring programs to monitorenvironment and disclose information as scheduled.
6. Administrative penalties imposed for environmental issues in the reporting periodNon
7. Description of environmental protection of other subsidiaries
A. Administrative penalties for environmental problemsLinyi Wellhope Animal Husbandry Company received an administrative penalty decision letter from theJu'nan County Branch of Linyi City Ecological Environment Bureau on May 12, 2022 for using non-roadmobile machinery with substandard emissions, imposing a fine of RMB5,000.00 on this company.Huai’an Feed Mill received an administrative penalty decision letter from Huai'an City Industrial ParkEcological Environment Bureau on June 1, 2022 for not running the exhaust gas treatment facilitiesduring the special inspection, imposing a fine of RMB 10,000.00 on this company.The above-mentioned companies started rectification and paid the fine at the first time. In themeantime, comprehensively reviewed and standardized the management related to environmental
protection. The Company will strictly implement environmental protection initiatives in accordancewith relevant national policies to avoid the recurrence of such incidents.B. Information that is conducive to protecting the ecology, preventing pollution, and fulfillingenvironmental responsibilityThe Company strengthened environmental management in its daily operations, built new pollutionprevention projects to effectively fulfill the responsibility of corporate entities to protect theenvironment. The Company and its holding subsidiaries have made efforts to protect the ecology andprevent pollution in the areas of animal raising, slaughtering and food processing. In terms ofpreventing water pollution, the sewage treatment station of the Company’s broiler slaughtering plant'sis designed to meet all the standards, which operated stably throughout the year to meet the dischargestandards and ensure the water environment. In terms of preventing air pollution, the slaughteringplants use biomass boilers and natural gas boilers that produce significantly less carbon oxides andnitrogen oxides than other fuels and do not require desulfurization and denitrification technologies,which can fully guarantee the emission of standards. In terms of preventing the pollution of animalraising waste emission, the Company’s broiler raising subsidiaries built the project of organic fertilizermaking by aerobic fermentation of broiler manure in 2021, which can transform agricultural farmingwaste into efficient organic fertilizer quickly and conveniently through modern biotechnology, so thatagricultural farming waste can be resourcefully utilized to realize the recycling, high efficiency andcomprehensive utilization of farming waste.C. Measures taken to reduce carbon footprint and the result in the reporting period
| Whether taking carbon reduction measures | Yes |
| Types of carbon reduction measures (e.g., using clean energy to generate electricity, using carbon reduction technologies in the production process, developing and producing new products that contribute to carbon reduction, etc.) | Using carbon reduction technologies in the production process |
During the reporting period, the Company focused on the source of carbon emissions and effectivelyreduce carbon footprint through practical measures. The Company and its holding companies usenatural gas boilers, and the carbon generated by the combustion of natural gas are significantly lowerthan those of other fuels. At the same time, it adopts refrigeration heat recovery technology, which canrecover the waste heat from the exhaust of refrigeration compressors and from oil temperature, andheat the water in the workshop and other equipment through heat exchangers, thus saving fuel, whichcan effectively reduce carbon footprint. In terms of equipment, the aeration fan of sewage station hasbeen changed from Roots blower to air suspension to save 30% power and reduce the carbongenerated by power generation. For pig farming, the Company strengthened the energy-saving designfor pig house, pre-heated the air during winter ventilation, reduced the use of heating gas through heatexchange, and adopted environmental controllers to precisely control the start and stop of fans, which
reduced electricity consumption compared to the long running of fans, and reduced the carbonemissions generated by power generation. In the future, the Company will further save energy andreduce carbon emissions, and enhance the awareness of energy saving and consumption reductionamong all employees.II. Social responsibilities
| External donations, public welfare projects | Amount/Content | Explanation |
| Total investment (RMB 10k) | 199.54 | Scholarship, public welfare, poverty alleviation and other donations |
| Of which: funds (RMB 10k) | 181.49 | |
| Converted price of materials (RMB 10k) | 18.05 |
The upstream of agriculture and animal husbandry industries is connected with the planting industry,and the downstream serves the agricultural and food processing industry, which is related to the foodsupply and farmers' income and other national livelihood. As a key leading enterprise of agriculturalintegration, the Company wrote and announced the Declaration and Mission at the beginning of itsestablishment in 1995, indicating and warning all employees of the social responsibility and missionthat the Company should shoulder while progressing and developing itself, and further clarifying theCompany's core values of "integrity, responsibility and win-win" in 2018", once again emphasizing theimportance of responsibility.
1. Practicing corporate mission, undertaking social responsibilities
A. Saving food resources and protecting the ecological environmentThe largest amount of raw materials used in feed is corn and soybean meal, of which soybeans aremainly dependent on imports. In recent years, with the increase in consumption of meat, eggs and milk,the demand for feed grain continues to grow. Since 2018, China has vigorously promoted the reductionof the use of corn and soybean meal in feed to ensure national food security. With the aim of savinggrain resources, the Company has been promoting low protein diets, adopting the net energy - lowprotein diet technology, adding lysine, threonine and other monomeric amino acids to further replacesoybean meal, and actively building a diversified formulation technology system, doing a lot of researchand development and promoting the application of corn substitution in wheat, brown rice corn mixture,sorghum flour and other grains to reduce the dependence of the diet on corn, soybean meal. As thelivestock industry is polluting to the environment, the Company has always been rigorous inimplementing national environmental protection standards, controlling the feed production processthrough technological innovation and equipment investment, while continuing to develop safe andenvironmentally friendly diets to reduce the emission of heavy metals, nitrogen and phosphorus.Regarding the farming and slaughtering projects, the Company's subsidiary enterprises have
comprehensively identified the environmental risks and formulated contingency plans forenvironmental emergencies, and the enterprises with pollution discharges have formulated completeself-monitoring programs to promptly repair and eliminate potential problems, promoting the healthyand sustainable development of the farming industry.B. Keeping corporate responsibility in mind to ensure food safetyIn 2018, the Company positioned its long-term development objective as "being committed tobecoming the world's leading enterprise across agriculture, animal husbandry and food industries",unswervingly pursuing the quality and safety of feed processing and meat processing. For feedproduction, the Company has established a quality management mechanism and testing system withthree-level management at headquarters, business region and subsidiary companies, and strictlyimplemented a series of quality standards such as Feed Quality and Safety Management Code,Veterinary Drug Production Quality Management Code and other internal standards to control rawmaterials and feed products at all levels and established a traceability system. The Company has alwaystaken the responsibility to provide safe and high-quality products, and since 2013, has stockpiled anumber of comprehensive programs to completely replace feed antibiotics. Before the officialpromulgation of the national feed ban, the Company has achieved a variety of feed products withoutantibiotics. In terms of farming and meat processing, the Company implements process management inthe farming process with unified production standards and feeding programs, and constantlystrengthens the quality management during the slaughtering and processing process, and effectivelyimplement all-in and all-out inspection and quarantine as well as drug residue testing to ensure qualityand safety. In terms of business mode, the Company’s broiler integration business has formed anindustrial chain, implemented strict control of the whole process starting from feed, day old chick tothe production and sales process. Through standardized management and streamline operation, theCompany, cooperating with its partners, consolidates the controls of bio-safety, drug residue andin-process hygiene to achieve traceable food safety. In the future, Wellhope is going to pay attention tofood safety and provide safe and high-quality products with a global vision.C. Not forgetting the original intention of entrepreneurship, being enthusiastic about publicwelfareThe corporate culture of Wellhope has always emphasized the mission of serving the society, insistingon doing good to people and giving back to the society. Since its establishment, the Company hasalways supported public welfare and charitable causes to the best of its ability. The Company and itssubsidiaries have made many donations directly or through the Red Cross and other public welfareorganizations to sudden disaster areas, assistance projects for the disabled and related educationalinstitutions. The Company has also actively participated in education and public welfare, donating to 6hope primary and secondary schools, providing education funds, scholarships and grants to nearly 30colleges and universities nationwide, encouraging students of relevant colleges and universities to
conduct scientific research and innovation in their respective fields, and providing opportunities forstudents of colleges and universities to visit the Company and take internships during holidays. In thefuture, the Company will continue to promote the development of China's animal husbandry industry,support education and talent training, consolidate the local poverty alleviation achievements, andpractice the responsibilities of corporate citizenship with down-to-earth actions.D. Continuously attracting talents, promoting social employmentTalented person is the foremost asset and valued resource of Wellhope. According to the developmentneeds, the Company conducts social and campus recruitment every year to create jobs for the societyat the same time of its own development. 2022, the international situation was complicated andchangeable, economic downward pressure and many other unfavorable factors increased pressures onsocial employment, the Company, on the basis of ensuring the employment of its own employees,provided recruitment positions through different channels such as social recruitment and campusrecruitment to protect the employment of job seekers, also gave them systematic training to promotethe career development of talents.
2. Continuously absorbing talents and promoting social employment
-For shareholdersA. Improving corporate governance, comply withing information disclosureIn terms of internal governance, the Company has always adhered to honest management,continuously improved its governance structure, and gradually established a scientific and efficientdecision-making, implementation and supervision mechanism, with a clear division of labor, authorityand responsibility among the Shareholders Meeting, the Board of Directors, the Supervisory Board andthe Management, to achieve standardized, orderly and efficient operation. The independent directors,the Supervisory Board and the special committees of the Board of Directors all play key functional rolesand perform their duties scrupulously, faithfully and diligently, improving the transparency of corporategovernance and effectively safeguarding the legitimate rights and interests of the Company and itsshareholders. Meanwhile, the Company revised a number of internal management provisions duringthe reporting period to ensure compliance with the corporate governance system. In terms ofinformation disclosure, the Company has formulated internal provisions and rules on the basis of theinformation disclosure affairs management system, and strictly fulfilled its information disclosureobligations from top to bottom. In 2022, the Company completed the disclosure of 81 interimannouncements and 4 periodic reports on designated information disclosure media, and made timely,fair and accurate disclosure of information on material events that meet the disclosure requirements,which has protected the legitimate rights and interests of investors. For the fifth consecutive year, theCompany's annual information disclosure work received an A-grade evaluation from the Shanghai StockExchange.
B. Enhancing information sharing and making every effort to reward shareholdersBased on the principle of "sharing results", the Company has been actively enhancing investors' returnsand sharing the results of its operation through cash dividends and share repurchases on the basis ofconscientiously implementing its development strategy and continuously improving management level.Since completing IPO in 2014, the Company has paid cash dividends of RMB 849 million, and all thefunds raised from the initial public offering have been returned to investors in the form of cashdividends. In 2021, the Company repurchased 20.96 million shares, and the RMB 200 million spent onthe implementation of share repurchase was regarded as cash dividends according to relevantregulations, accounting for 168.74% of the Company's net profit attributable to the parent company in2021. At the same time, the Company held 3 performance briefing sessions during the reporting periodto provide investors with a comprehensive introduction of the Company's operation, actively answeredinvestors' questions, and popularized investor protection-related knowledge on the Company's officialwebsite and self-media platforms to increase information sharing with investors and strengtheninvestor protection.-For employeesA. Improving the compensation system, innovating incentive methodsFollowing the human resources policy, the Company has built a comprehensive compensation andincentive system in terms of compensation policy, appointment management, long-term andshort-term incentives, and welfare protection, etc. It also mobilizes employees' enthusiasm and ensuresinternal equity by continuously optimizing the compensation control mode and strengthening thesalary research and result application of benchmark enterprises. At the same time, the Company paysgreat attention to the long-term incentive of high-performing employees, and the Restricted StockIncentive Plan launched in 2018 has been completed, which fully mobilize the enthusiasm and sense ofownership of key talents and boost the Company's sustainable development during the downturn ofthe industry. The Company has also implemented various incentive models in different businesssegments to continuously tap the internal drive of employees and improve employee satisfaction.B. Upgrading training system for career developmentThe Company constantly improves and perfects the training management system that matches overallstrategy and the strategy of each business segment, provides courses and learning resources that aremore up-to-date and better adapted to the practical needs of the positions, and leads the growth andvalue enhancement of employees. The Company has implemented a hierarchical training program ineach business region, including senior management training series, middle management training camp,sales backbone training camp, and new employee seedling program, covering talent growth andlearning development from senior management and general manager to middle and backboneemployees, helping each employee to obtain all-round improvement in job skills, management abilityand professional knowledge. At the same time, the Company has created a "H-type" dual-channel
development plan, in which each employee can choose a management route or a technical routeaccording to his or her professional and future plans, and has the opportunity to switch betweenchannels during the development process, in order to make the best use of his or her talents andpromote the career development of employees.C. Strengthening care and protection, building harmonious families togetherIn accordance with the law, the company provides employees with five insurance and one pension, andon top of that, provides commercial insurance, annual physical examination and other benefits tobenefit employees' families. In 2007, the company established the internal public welfare organization"Wings of Love" Foundation, which is used to provide relief, scholarship and care for employees. 16years, the company insists on rewarding employees' children for entering national colleges anduniversities, encouraging employees to cultivate talents for the country and society; insists onsubsidizing employees who encounter difficulties, helping employees' families to overcome difficulties.In addition, the company organizes and arranges different forms of corporate cultural activities everyyear to enrich the working life of the employees, and enriches the welfare of the employees throughvarious ways such as "Employee's Shopping Festival" to build a harmonious family of Harvest with careand dedication.-For customersA. Providing high quality products close to customer needsThe Company follows the concept of "constantly developing new products and never sticking to the oldways", strictly controls the quality of products. Through integrated operation, high-quality raw materialprocurement, optimized formula design, professional quality management and intelligent production,the Company provides the society with high-quality and stable products to meet customers' demandfor safe and high-quality products. The R&D team always pays attention to market dynamics, constantlyupgrades products according to customer needs, and continuously develops new products. All productsare strictly tested for performance by experimental farms before being put on the market to providecustomers with reliable assurance. For example, according to the changes of pig farming market, theCompany has launched economic finisher feed, feed products with large percentage of premix, and inresponse to the sluggish market of dairy industry, the Company continues to carry out customizedproduct development, and at the same time, help customers to carry out cost reduction programs togenerate revenue and increase efficiency.B. Innovating technology services to achieve win-win goalsThe Company upholds the concept of common development with customers and constantly innovatestechnical services to vigorously provide farmers with systematic services such as farming technology,feeding process, disease diagnosis and treatment and market information, as well as providingintegrated comprehensive services and solutions such as farm management to help farmers improvetheir business philosophy and farming level in order to obtain the best economic benefits. The
Company actively innovates online and remote service mode, and provides customers with efficientand accurate services such as technical guidance and skills training through media tools such as livewebcast and short video. In response to African swine fever, the Company actively forms professionalteams and matches comprehensive resources to provide customers with disease prevention, and otherrelated services. By using the Company's self-media service platform to push market analysis andfarming tips to customers to help them continuously expand farming knowledge and keep abreast ofthe market situation. Through a professional and systematic service system, the Company can achieve awin-win situation with customers.III. Circumstance of promoting and expanding achievements in poverty alleviation and ruralrevitalization
| Poverty alleviation and rural revitalization projects | Amount/Content | Explanation |
| Total investment (RMB 10k) | 559.57 | See specific instructions below |
| Of which: funds (RMB 10k) | 559.57 | / |
| Converted price of materials (RMB 10k) | / | |
| Forms of assistance (such as poverty alleviation by developing industries, offering job opportunities and supporting education) | poverty alleviation by developing industry | / |
China has achieved a comprehensive victory in the battle against poverty, realizing the first 100-yeargoal. However, there is still a long way to go to consolidate and expand the results of povertyeradication and effective connection with rural revitalization. The No. 1 document of the CentralGovernment in 2022 clearly proposes to resolutely keep the bottom line of not returning to poverty ona large scale, promote the areas lifting out of poverty to rely more on development to consolidate andexpand the results of poverty eradication, strengthen the leading role of industry leading companies topromote the upgrading of industry. As a key leading enterprise of agricultural integration, the Companyhas a positive driving effect on the country to consolidate the results of poverty eradication andpromote the effective connection between comprehensive poverty eradication and rural revitalization,and actively participates in poverty alleviation by developing industriesDuring the reporting period, the Company gave full play to the demonstration and leading role ofleading agricultural enterprises to actively promote rural development, increasing agricultural efficiencyand farmers' income. The Company's subsidiaries, Pingyuan Wellhope Food Processing Company,Dalian Heyuan Animal Husbandry Company and Daqing Wellhope Food Company, cooperated with localgovernment to help revitalize the countryside in the impoverished areas by developing industries,creating jobs for poor households, supporting poor families to participate in the Company's broilerraising, and helping farmers generate income through dividend, with a total expenditure of RMB 5.50million.
The subsidiaries of the company, Heilongjiang Sanjiang Wellhope and Tangshan Wellhope Science andTechnology Company, actively undertook the task of rural revitalization, respectively donatedRMB50,000.00 to participate in the local villages’ development for the rural environmental sanitationremediation and improvement of rural production and living conditions.
Section VI Important DisclosuresI. Execution of Commitment
| Background of making commitment | Type of commitment | Commitment party | Content | Date of making commitment and validity | Whether there is a time limit | Whether performs strictly |
| Commitment relating to IPO | Handling horizontal competition | Nature person shareholders holding more than 5% of the shares | I warrant and commit that I will not directly or indirectly develop, operate or assist in the operation or participate in or engage in any activity that is competitive with the business of Wellhope, if Wellhope will increase any business scope after the date of signing this commitment, I promise to give up the business. | March 2, 2011, long-term valid | Yes | Yes |
| Handling related party transaction | Legal person shareholders holding more than 5% of the shares-Heli Investment | Our company warrants and commits that our company will not directly or indirectly develop, operate or assist in the operation or participate in or engage in any activity that is competitive with the business of Wellhope, if Wellhope will increase any business scope after the date of signing this commitment, our company promises to give up the business. | March 2, 2011, long-term valid | Yes | Yes | |
| Other | Jin Weidong, Wang Fengjiu, Shao Caimei, Wang Zhongtao, Ding Yunfeng | The controlling shareholder Jin Weidong and persons acting in concert with him undertake that there are no false records, misleading statements or material omissions in the prospectus of IPO and its abstract, and shall bear individual and joint legal liabilities for its authenticity, accuracy and completeness. | Long-term valid | Yes | Yes | |
| Other | Wellhope | The Company undertakes that there are no false records, misleading statements or material omissions in the prospectus of IPO and its abstract, and it shall bear individual and joint legal liabilities for its authenticity, accuracy and completeness. | Long-term valid | Yes | Yes | |
| Commitment relating to re-Financing | Other | The Company | Measures taken by the Company for filling dilution resulting from issuing bonds. 1.Strengthening the management of raised funds, supervising the risk of use of raised funds. 2.Promoting the core competitiveness of the company and internal control. 3.Continuously improving corporate governance for providing institutional guarantee for the company. Further improving profit distribution policy, ensuring the return to shareholders. | July 2, 2021, long-term valid | Yes | Yes |
| Other | Controlling shareholder and actual controller | To ensure that the remedial measures for the dilution of immediate returns resulting from issuing bonds can be effectively implemented, the controlling shareholder and actual controller of the Company make the following commitments. | July 2, 2021, long-term valid | Yes | Yes |
| 1.I will not interfere in the operation and management activities of the Company beyond its authority, and will not encroach upon the interests of the Company. 2.If I violate or refuse to perform the above commitments, I agree to bear the corresponding legal liabilities in accordance with the relevant regulations and rules formulated or issued by CSRC, Shanghai Stock Exchange and other securities regulatory authorities. 3.Prior to the completion of the bond, if the regulatory authorities make other detailed provisions on the remedial measures for diluted immediate returns and its undertakings, and when the above undertakings fail to meet the detailed requirements of the regulatory authorities, I will make supplementary undertakings in accordance with the relevant provisions. | ||||||
| Commitment relating to re-Financing | Other | All board directors, senior managers | All board directors, senior managers made the following undertakings to ensure that the remedial measures for the dilution of immediate returns resulting from issuing bonds can be effectively implemented. 1.I will not transfer any interests to other entities or individuals without consideration or with unfair conditions, nor otherwise damage the interests of the Company. 2.I will impose constraints on position-related consumption behavior. 3.I will not make any investment or consumption activity irrelevant to my performance of duties using the Company’s assets. 4. I will propel to link the remuneration policy formulated by the Board or the Remuneration Committee with the implementation of the Company’s remedial measures for returns. 5. In the case that any equity incentive scheme (if any) is introduced hereafter, I will actively support to link the vesting conditions of equity incentive with the implementation of the Company’s remedial measures for returns. 6. Prior to the completion of the Bond, if the regulatory authorities make other detailed provisions on the remedial measures for diluted immediate returns and its undertakings, and when the above undertakings fail to meet the detailed requirements of the regulatory authorities, I will make supplementary undertakings in accordance with the relevant provisions. 7. I promise following the regulations of this commitment. If I fail following the regulations which lead to any financial loss to the company or stockholders, I will take responsibility of compensation. 8.The above commitments are my true intentions. I voluntarily accept the supervision of securities regulatory authorities, self regulatory organizations and the public. If I fail to fulfill the above commitments, I will assume corresponding responsibilities in accordance with relevant laws and regulations and the requirements of regulatory authorities. | July 2, 2021, long-term valid | Yes | Yes |
| Commitment relating to re-Financing | Other | Shareholders holding more than 5% of the shares of the Company, and directors, supervisors and senior management | 1.The company / I and the company or person acting in concert (if any) did not sell the shares of Wellhope from six months prior to the Board Meeting approving the resolution of issuing convertible bonds(June 30, 2021), to the date of making this commitment. As of the date of making this letter of commitment, the company / I and the company or person acting in concert (if any) have no plans or arrangements to sell the shares of Wellhope. 2.If the company / I and the company or person acting in concert (if any) sell the shares of Wellhope within six months prior to the first day of officially issuing convertible bonds (the date of publicly disclosing the prospectus), the company / I and the company or person acting in concert (if any) promise that will not participate in the subscription of convertible bonds, and will not entrust any other entity to participate in the subscription of the convertible bonds. 3.If the company / I and the company or person acting in concert (if any) will not sell the shares of Wellhope within six months prior to the first day of officially issuing convertible bonds (the date of publicly disclosing the prospectus), the company / I and the company or person acting in concert (if any) will decide whether to subscribe for the convertible bonds according to market conditions. If the company / I and the company or person acting in concert (if any) successfully subscribe for the convertible bonds, will promise to strictly abide by relevant provisions of short swing trading, i.e. will not sell the shares of Wellhope and its convertible bonds from the first day of officially issuing convertible bonds (the date of publicly disclosing the prospectus) until six months after the completion of issuing the bonds. 4. If the Company /I and the company or person acting in concert (if any) sell the shares or convertible bonds of Wellhope in violation of above commitments, the earnings will be owned by Wellhope, and the company / I and the company or person acting in concert (if any) will bear the legal liabilities arising therefrom according to law. | 6 months before and after convertible bond subscription | Yes | Yes |
II. Explanation of the Company's analysis of the causes and effects of changes in accountingpolicies, accounting estimates or corrections of significant accounting errorsNonIII. Accounting Firm Engaged by the Company
Unit: 10k yuan Currency: RMB
| Accounting Firm (Local) | Suya Jincheng CPA LLP |
| Payment | 120 |
| Length of Service | 12 years |
| Name of Certified Public Accountant | Zhou Jiawen, Wang Lei |
| Number of consecutive years of audit services of the CPA | Zhou Jiawen has served for 5 consecutive years, and Wang Lei has served for 4 consecutive years |
| Name | Payment | |
| Accounting Firm of Internal Control | Suya Jincheng CPA LLP | 40 |
--Major litigation and arbitration mattersNonIV. Statement of the Integrity of the Company, its Controlling Shareholder and Actual Controllerduring the Reporting PeriodDuring the reporting period, there is no occurrence of the Company, its controlling shareholder andactual controller failing to perform the effective judgment of the court, needing to pay a large amountof unliquidated debt due.V. Significant Related Party Transaction
1. Transactions related to daily operations
Matters do not disclose in the Company's extraordinary announcement.
Unit: 10k yuan Currency: RMB
| Related Party | Relationship | Transaction type | Transaction content | Pricing principle | Transaction amount | Settlement mode |
| Anshan Fengsheng Food Company | Associated company | Selling product | Live broiler | Comparable uncontrolled price | 2,526.70 | Transfer of account |
| Anshan Jiuguhe Food Company | Associated company | Selling product | Live broiler | Comparable uncontrolled price | 7,394.88 | Transfer of account |
| Dalian Chengsan Animal Husbandry Company | Associated company | Selling product | Feed raw material | Comparable uncontrolled price | 737.57 | Transfer of account |
| Dandong Wellhope Chengsan Agri-Tech Company | Associated company | Selling product | Feed raw material | Comparable uncontrolled price | 1,064.52 | Transfer of account |
| Huludao Jiuguhe Food Company | Associated company | Selling product | Feed | Comparable uncontrolled price | 225.37 | Transfer of account |
| Linghai Jiuguhe Feed Mill | Associated company | Selling product | Feed raw material | Comparable uncontrolled price | 6,740.38 | Transfer of account |
| Nepal Wellhope Agri-tech Pvt. Ltd. | Associated company | Selling product | Feed | Comparable uncontrolled price | 344.98 | Transfer of account |
| Qingdao Shenfeng Agri-Tech Company | Associated company | Selling product | Feed raw material | Comparable uncontrolled price | 3,398.94 | Transfer of account |
| Shihaipu (Beijing) Technology and Trade Company | Associated company | Selling product | Other products | Comparable uncontrolled price | 269.70 | Transfer of account |
| Tai'an Jiuguhe Agriculture Development Company | Associated company | Selling product | Feed raw material | Comparable uncontrolled price | 12,767.68 | Transfer of account |
| Dalian Sida Food Company | Associated company | Selling product | Live broiler | Comparable uncontrolled price | 30,300.88 | Transfer of account |
| Shangdong Fengkang Food Company | Associated company | Selling product | Live broiler | Comparable uncontrolled price | 31,868.51 | Transfer of account |
| Dunhua Fengda Broiler Breeding Company | Associated company | Selling product | Feed | Comparable uncontrolled price | 46.05 | Transfer of account |
| Harbin Weierhao Trading Company | Associated company | Selling product | Feed raw material | Comparable uncontrolled price | 6,351.92 | Transfer of account |
| Dazhou Wellhope Bio-Tech Company | Associated company | Selling product | Feed | Comparable uncontrolled price | 6,211.01 | Transfer of account |
| Anshan Jiuguhe Food Company | Associated company | Purchasing product | Broiler parts products | Comparable uncontrolled price | 576.26 | Transfer of account |
| Dalian Chengsan Animal Husbandry Company | Associated company | Purchasing product s | Live broiler | Comparable uncontrolled price | 3,872.59 | Transfer of account |
| Gongzhuling Corn Purchasing and Storing | Associated | Purchasing | Feed raw material | Comparable uncontrolled price | 480.21 | Transfer of account |
| Company | company | product | |||||
| Jinzhou Jiufeng Food Company | Associated company | Purchasing product | Broiler parts products | Comparable uncontrolled price | 1,269.02 | Transfer of account | |
| Linghai Jiuguhe Feed Mill | Associated company | Purchasing product | Other products | Comparable uncontrolled price | 75.71 | Transfer of account | |
| Qingdao Shenfeng Agri-Tech Company | Associated company | Purchasing product | Feed | Comparable uncontrolled price | 15.15 | Transfer of account | |
| Shihaipu (Beijing) Technology and Trade Company | Associated company | Purchasing product | Other products | Comparable uncontrolled price | 257.04 | Transfer of account | |
| Tai'an Jiuguhe Agriculture Development Company | Associated company | Purchasing product | Feed | Comparable uncontrolled price | 6,079.92 | Transfer of account | |
| Jilin Hengfeng Animal Health Products Company | Associated company | Purchasing product | Veterinary drug, vaccine | Comparable uncontrolled price | 50.56 | Transfer of account | |
| Dunhua Fengda Broiler Breeding Company | Associated company | Purchasing product | Day old chick | Comparable uncontrolled price | 164.38 | Transfer of account | |
| Harbin Weierhao Trading Company | Associated company | Purchasing product | Feed raw material | Comparable uncontrolled price | 739.72 | Transfer of account | |
| Beipiao Hongfa Food Company | Associated company | Purchasing product | Broiler parts products | Comparable uncontrolled price | 708.20 | Transfer of account | |
| Anshan Fengsheng Food Company | Associated company | Purchasing product | Feed raw material | Comparable uncontrolled price | 5.32 | Transfer of account | |
| Total | / | 124,543.17 | / | ||||
| Details of large sales returns | Non | ||||||
| Description of related party transactions | Wellhope and its associated companies know each other better and have maintained long-term cooperation relationships, which can strengthen the trust of products produced by partners, reduce transaction cost, improve working efficiency and avoid trading disputes. Meanwhile, purchasing raw materials from related parties can ensure quality of products. Moreover, by participating in the management and exerting influence on related companies can help them to maintain a long-term and stable supply, also help them reduce the marketing pressure. The purpose of conducting related party transactions is to satisfy the needs of Wellhope's production and operation, the purchasing or selling price is determined according to the market price of similar products. Such transactions do not violate relevant laws, Company Constitution, etc., and do not damage the rights and interests of shareholders. | ||||||
VI. The Circumstance of Providing Guarantee
Unit: 10K Currency: RMB
| The guarantee provided by the company and its subsidiaries to its subsidiaries | |
| Total amount of guarantees to subsidiaries incurred during the reporting period | 87,001.49 |
| Balance of guarantee provided to the subsidiaries at the end of the reporting period | 46,905.76 |
| Total amount of guarantee(including the amount for subsidiaries) | |
| Total amount of guarantee | 46,905.76 |
| Percentage of net assets % | 6.48 |
| including | |
| The amount of guarantee provided to shareholders, actual controller and their affiliates (C) | |
| The amount of debt guarantee provided directly or indirectly for the subsidiaries with gearing ratio over 70% (D) | 15,121.16 |
| The amount of total guarantees exceeding 50% of net assets(E) | |
| The sum of the above three type of guarantees(C,D,E) | 15,121.16 |
Section VII Changes in Common Shares and Shareholder InformationI. Changes in Common Shares
1. Changes of common share
| Before changing | Increase or decrease in this year | After changing | ||||
| Shares | Percentage % | Issuing new shares | Subtotal | Shares | Percentage % | |
| 1. Restricted shares | 13,397,291 | 1.45 | -13,397,291 | -13,397,291 | ||
| A. Shares held by the state | ||||||
| B. Shares held by state-owned corporation | ||||||
| C. Shares held by other domestic investors | 11,100,704 | 1.20 | -11,100,704 | -11,100,704 | ||
| including: Shares held by domestic non-state-owned corporation | ||||||
| Shares held by domestic natural person | 11,100,704 | 1.20 | -11,100,704 | -11,100,704 | ||
| D. Shares held by foreign investor | 2,296,587 | 0.25 | -2,296,587 | -2,296,587 | ||
| including: shares held by foreign corporation | 2,296,587 | 0.25 | -2,296,587 | -2,296,587 | ||
| Shares held by foreign natural person | ||||||
| 2.Non-restricted shares | 908,562,905 | 98.55 | 10,867,545 | 10,867,545 | 919,430,450 | 100.00 |
| A. RMB common shares | 908,562,905 | 98.55 | 10,867,545 | 10,867,545 | 919,430,450 | 100.00 |
| 3. Total common shares | 921,960,196 | 100.00 | -2,529,746 | -2,529,746 | 919,430,450 | 100.00 |
Explanation of changes in shares:
---Restricted shares repurchasingThe Company held the tenth meeting of the seventh session of board of directors on April 27, 2022,and held 2021 annual shareholders’ meeting on May 20, 2022, which approved the Proposal on Failingto Fulfill the Conditions for Unlocking the Restricted Shares of the Third Lock-up Period of 2018 StockIncentive Plan and Repurchasing and Cancelling Part of Restricted Stock. 5.742 million shares werewritten off by the Company on June 22, 2022, the total number of shares of the Company decreasedfrom 921,960,196 to 916,218,196 shares.
--- Convertible bond conversionThe Company issued RMB1.5 billion convertible corporate bonds (bond trading symbol 113647) onApril 22, 2022. From October 28, 2022 to December 31, 2022, RMB32,959,000.00 of convertible bondswere converted into shares of the Company with 3,212,254 shares, and the total number of shares ofthe Company increased from 916,218,196 shares to 919,430,450 shares.
2. Changes in restricted shares
| Name of shareholder | Restricted shares held in the beginning of the year | Number of unlocking shares in this year | Increase of restricted shares in this year | Restricted shares in the period end | Reason for lockup | Date of unlocking shares |
| Employees who were granted restricted shares(totaling) | 5,742,000 | -5,742,000 | 0 | Equity incentive | Within 12, 24, 36 months after completing restricted stock registration | |
| Jin Weidong | 3,062,117 | 3,062,117 | 0 | Privately issuing stock | April, 25, 2022 | |
| DE HEUS MAURITIUS | 2,296,587 | 2,296,587 | 0 | Privately issuing stock | April, 25, 2022 | |
| Ding Yunfeng | 1,531,058 | 1,531,058 | 0 | Privately issuing stock | April, 25, 2022 | |
| Wang Zhongtao | 765,529 | 765,529 | 0 | Privately issuing stock | April, 25, 2022 | |
| Total | 13,397,291 | 7,655,291 | -5,742,000 | 0 | / | / |
II. Securities Issuance and Listing
1. Issuance of securities as of the reporting period
| Type of stocks and their derivatives securities | Issue date | Issue price (or interest rate) | Number of issues | Date of listing | Number of admissions to trading | Date of termination of trading |
| Convertible corporate bonds | April 22, 2022 | RMB 100 per bond | 15,000,000 bonds | May 18, 2022 | 15,000,000 bonds | April 21, 2028 |
Approved by China Securities Regulatory Commission, the Company publicly issued 15 millionconvertible bonds on April 22, 2022 at an issue price of RMB 100.00 per bond for a total issue amountof RMB 1.5 billion with a term of 6 years. The Company's convertible bonds were listed for trading onthe Shanghai Stock Exchange on May 18, 2022, with the trading symbol of 113647. For details, pleaserefer to "Section 9 Related Information about Bonds " of this report.
2. Changes in the total number of shares and shareholder structure of the Company and changes inthe structure of the Company's assets and liabilities
During the reporting period, the Company implemented the repurchase and cancellation of restrictedshares as well as the conversion of convertible bonds, the total share capital of the Company changedfrom 921,960,196 shares to 919,430,450 shares, and there was no change in the control of theCompany. At the beginning of the reporting period, the Company had total assets of RMB12.972 billionand total liabilities of RMB5.459 billion, with a gearing ratio of 42.08%; at the end of the reportingperiod, the Company had total assets of RMB15.393 billion and total liabilities of RMB7.037 billion, witha gearing ratio of 45.71%.III. Shareholder and Actual Controller
1. Total shareholders
2. Top ten shareholders and top ten shareholders holding unrestricted shares as at the end of thereporting period
Unit: share
| Shareholding of top ten shareholders | |||||||
| Name of shareholder | Changes in this year | Total shares held at the period-end | % | Restricted shares held | Pledged or Frozen | Nature of shareholder | |
| Status | Shares | ||||||
| Jin Weidong | 149,549,498 | 16.27 | Pledged | 37,050,000 | Domestic natural person | ||
| DE HEUS MAURITIUS | 82,303,939 | 8.95 | Foreign legal person | ||||
| Ding Yunfeng | 81,929,558 | 8.91 | Domestic natural person | ||||
| Shao Caimei | 49,773,878 | 5.41 | Domestic natural person | ||||
| Zhang Tiesheng | 48,360,000 | 5.26 | Domestic natural person | ||||
| Changzhou Heli Venture Capital Partnership (Limited Partnership) | 48,360,000 | 5.26 | Other | ||||
| Wang Fengjiu | 47,964,602 | 5.22 | Pledged | 7,950,000 | Domestic natural person | ||
| Wang Zhongtao | 46,625,229 | 5.07 | Domestic natural person | ||||
| Hong Kong Securities Clearing Company Limited | 16,469,243 | 27,183,352 | 2.96 | Other | |||
| Special account for repurchased shares of the Company | 20,956,579 | 2.28 | Other | ||||
Total number of shareholders as at December 31, 2022
| Total number of shareholders as at December 31, 2022 | 22,998 |
| Total number of shareholders at the end of February 2022 | 24,095 |
| Top ten shareholders holding unrestricted shares | |||
| Name of shareholder | Unrestricted shares held | Shares by type | |
| Type | Shares | ||
| Jin Weidong | 149,549,498 | RMB common stock | 149,549,498 |
| DE HEUS MAURITIUS | 82,303,939 | RMB common stock | 82,303,939 |
| Ding Yunfeng | 81,929,558 | RMB common stock | 81,929,558 |
| Shao Caimei | 49,773,878 | RMB common stock | 49,773,878 |
| Zhang Tiesheng | 48,360,000 | RMB common stock | 48,360,000 |
| Changzhou Heli Venture Capital Partnership (Limited Partnership) | 48,360,000 | RMB common stock | 48,360,000 |
| Wang Fengjiu | 47,964,602 | RMB common stock | 47,964,602 |
| Wang Zhongtao | 46,625,229 | RMB common stock | 46,625,229 |
| Hong Kong Securities Clearing Company Limited | 27,183,352 | RMB common stock | 27,183,352 |
| Special account for repurchased shares of the Company | 20,956,579 | RMB common stock | 20,956,579 |
| Explanation of the special account for repurchased shares of the Company | In 2021, the Company totally repurchased 20,956,579 shares through centralized competitive bidding transactions, accounting for 2.28% of the total share capital of the Company, with the highest trading price of RMB10.54 per share and the lowest price of RMB8.88 per share, and the Company totally paid RMB200,003,612.37 (excluding commission and other taxes). | ||
| Relationship of above shareholders or statement made by the parties acting in concert | 1. Jin Weidong, Ding Yunfeng, Wang Fengjiu, Shao Caimei and Wang Zhongtao act in concert. 2. Jin Weidong is the actual controller of Changzhou Huli Venture Capital Partnership (Limited Partnership). 3. No relation or concerted action is found among other shareholders. | ||
IV. Controlling Shareholder and Actual Controller
1. Controlling shareholder
A. Natural person
| Name | Jin Weidong |
| Nationality | China |
| Whether acquire the right of abode in other countries or regions | No |
| Major occupation and position | Chairman of Wellhope Foods Co., Ltd. |
B. A block diagram of the property rights and controlling relationship between the Company and itscontrolling shareholder
Note: As of December 31, 2022, Jin Weidong directly held 149,549,498 shares of the Company,accounting for 16.27% of the total share capital, indirectly controlled 5.26% of the voting rights of theCompany through holding Changzhou Heli, and jointly controlled 24.61% of the voting rights of theCompany through the Letter of Confirmation and Undertaking of Concerted Action with DingYunfeng(shareholding 8.91%), Wang Fengjiu(shareholding 5.22%), Shao Caimei(shareholding 5.41%)and Wang Zhongtao(shareholding 5.07%). In total, Jin Weidong controls 46.14% of the Company’svoting rights, he is the controlling shareholder of the Company.
2. Actual controller
A. Natural person
| Name | Jin Weidong |
| Nationality | China |
| Whether acquire the right of abode in other countries or regions | No |
| Major occupation and position | Chairman of Wellhope Foods Co., Ltd. |
| Domestic and foreign listed companies once held by the actual controller in the past 10 years | Non |
B. A block diagram of the property rights and controlling relationship between the Company and itsactual controller
Note: As of December 31, 2022, Jin Weidong directly held 149,549,498 shares of the Company,accounting for 16.27% of the total share capital, indirectly controlled 5.26% of the voting rights of theCompany through holding Changzhou Heli, and jointly controlled 24.61% of the voting rights of theCompany through the Letter of Confirmation and Undertaking of Concerted Action with DingYunfeng(shareholding 8.91%), Wang Fengjiu(shareholding 5.22%), Shao Caimei(shareholding 5.41%)and Wang Zhongtao(shareholding 5.07%). In total, Jin Weidong controls 46.14% of the Company’svoting rights, he is the actual controller of the Company.
Section VIII Preference ShareNot Applicable
Section IX Corporate BondI. Status of Convertible Bonds
1. Issuance of bonds
Approved by China Securities Regulatory Commission, the Company publicly issued 15 millionconvertible bonds on April 22, 2022 at an issue price of RMB100.00 per bond for a total issue amountof RMB1.5 billion with a term of 6 years. The Company's convertible bonds were listed for trading onthe Shanghai Stock Exchange on May 18, 2022, with the trading symbol of 113647. For details, pleaserefer to "Section 9 Related Information about Bonds " of this report.
2. Convertible bondholders and guarantors for the reporting period
| Name of convertible bonds | Wellhope convertible bonds | |
| Number of convertible bondholders at the end of the period | 14,883 | |
| Guarantors of the Company's convertible bonds | Not applicable | |
| The top ten convertible bondholders are as follows: | ||
| Name of bondholders | Number of bonds held at the end of the period (RMB yuan) | Percentage % |
| China Construction Bank Corporation- Efunda Enhanced Bond Investment Fund | 69,913,000 | 4.77 |
| Agricultural Bank of China Limited- Dacheng New Industry Combined Securities Investment Fund | 51,929,000 | 3.54 |
| Industrial Bank Co., Ltd.- Tianhong Multi-income Bond Investment Fund | 48,441,000 | 3.30 |
| Industrial and Commercial Bank of China Limited - Tianhong Adding Profit Bond Investment Fund (LOF) | 28,845,000 | 1.97 |
| Bank of China - Efunda Stable Income Bond Investment Fund | 26,816,000 | 1.83 |
| China Construction Bank Corporation- Dongfanghong Zhihua Three-year Holding Period of Combined Securities Investment Fund | 23,745,000 | 1.62 |
| Societe Generale | 23,545,000 | 1.60 |
| Bank of China Limited-Tianhong Enhanced Return Bond Investment Fund | 23,000,000 | 1.57 |
| UBS AG | 22,261,000 | 1.52 |
| Bank of Communications Co., Ltd.- Tianhong Hongfeng Enhanced Return Bond Investment Fund | 21,785,000 | 1.48 |
3. Changes in convertible bonds during the reporting period
Unit: yuan Currency: RMB
| Bond name | Before changing | Changes (increase or decrease) | After changing | ||
| Bonds converted to shares | Redemption | Repurchase | |||
| Wellhope convertible bonds | 1,500,000,000 | 32,959,000 | 1,467,041,000 | ||
Conversion of convertible bonds during the reporting period
| Name of convertible bonds | Wellhope convertible bonds |
| Amount of bonds converted into shares during the reporting period (RMB yuan) | 32,959,000 |
| Number of bonds converted into shares during the reporting period (shares) | 3,212,254 |
| Cumulative number of shares converted (shares) | 3,212,254 |
| Percentage of converted shares to the total number of issued shares of the company before conversion (%) | 0.35 |
| Amount of shares yet to be converted (RMB yuan) | 1,467,041,000 |
| Proportion of unconverted convertible bonds to total number of convertible bonds issued (%) | 97.80 |
4. Adjustments of the conversion price
| Name of convertible bonds | Wellhope convertible bonds | |||
| Conversion price adjustment date | Conversion price after adjustment (RMB yuan) | Disclosure time | Disclosure media | Explanation |
| June 23, 2022 | 10.26 | June 20, 2022 | Securities Journal, Shanghai Securities News, Securities Times and SSE website (www.sse.com.cn) | Adjustment of conversion price due to the repurchase and cancellation of 5.74 million restricted shares by the Company |
| Latest conversion price as of the end of this reporting period | 10.26 | |||
5. The Company's indebtedness, changes in creditworthiness and cash arrangements for debtrepayment in future years---Liabilities of the CompanyAt the end of the reporting period, the total liabilities of the Company were RMB7.037 billion, includingcurrent liabilities of RMB4.155 billion and non-current liabilities of RMB2.882 billion, with a gearingratio of 45.71%.---Changes in creditworthinessDuring the reporting period, Union Credit Appraisal Co., Ltd. issued the 2022 Tracking Rating Report onPublicly Issued Convertible Bonds of Wellhope. There is no change in this rating result compared withthe previous one.----Cash arrangement for debt repayment in future yearsThe funds used to repay the principal and interest of the convertible bonds in the future mainly comefrom the cash flow generated from the production and operation activities of the Company. TheCompany has a good debt service situation and there is no overdue return of bank loans.
Section X Financial StatementsI. Audit Report
Audit ReportSuya Audit No. [2023]412To all the shareholders of Wellhope Foods Co., Ltd.,
1. Opinion
We have audited the financial statements of Wellhope Foods Co., Ltd. (hereinafter referred to as "theCompany"), which comprise the statement of financial position as at December 31, 2022, and theincome statement, statement of changes in equity and cash flow statement for the year then ended,and notes to the financial statements.In our opinion, the financial statements give a true and fair view of the financial position of theCompany as at December 31, 2022, and of its operating performance and cash flow for the year thenended, and have been properly prepared in compliance with the Accounting Standards for BusinessEnterprises ("the ASBE").
2. Basis for Opinion
We conducted our audits in accordance with China's CPA Auditing Standards. Our responsibilitiesunder those standards are further described in the "Auditor’s Responsibilities for the Audit of theFinancial Statements" section of our report. We are independent of the Company in accordance withChina CPA's Code of Ethics for Professional Accountants ("the Code"), and we have fulfilled our otherethical responsibilities in accordance with the Code. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
3. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance inour audit of the financial statements in the current period. These matters were addressed in thecontext of our audit of the financial statements as a whole, and in forming our opinion thereon, and wedo not provide a separate opinion on these matters.
| A. Confirmation and recognition of revenue | |
| Please refer to the accounting policies described in Note 38 of Annotation 5, and Note 61 of Annotation 7, Notes to Consolidated Financial Statements. | |
| Key audit item | How our audit addressed the key audit item |
| In 2022, Wellhope's operating revenue recorded RMB 32.81 billion, increasing RMB 3.34 billion with a year-on-year growth rate of 11.34%, among which the sales revenue of broiler integration business rose RMB 1.03 billion with a year-on-year growth rate of 12.47%, | The audit procedures we performed consisted primarily of: 1: Understanding and evaluating the design of internal controls in the sales process of Wellhope and testing the effectiveness of the implementation of key controls. 2: Identifying contractual rights and obligations by examining a sample of sales contracts, evaluating the timing of performance obligations, and evaluating whether |
| whilst feed raw materials increased by RMB 1.50 billion with a year-on-year growth rate of 40.89%. Since the operating income is one of the key performance indicators of Wellhope, we considered the recognition of operating revenue as a key audit matter. | the judgment of transfer of control related to revenue recognition is in accordance with the Company's accounting policies and the provisions of the Enterprise Accounting Standards. 3: Performing analytical review procedures to identify whether there are significant or unusual fluctuations and to identify the causes of fluctuations; and judge the reasonableness of changes in operating revenue and gross profit. 4: Performing the following procedures on operating revenue using a sample approach, mainly to confirm the occurrence and cut-off of operating income: (1) Examining supporting documents such as sales contracts, sales orders, invoices, and customer bills of lading related to revenue recognition; (2) Issuing external confirmations to recognize the balance of accounts receivable and the amount of operating revenues; (3) Carrying out cut-off tests on operating revenues recognized around the balance sheet date to evaluate whether revenues are recognized in the appropriate period. |
| B. Income from long-term equity investment recognized by the equity method. | |
| Please refer to the accounting policies described in Note 21 of Annotation 5, and Note 68 of Annotation 7, Notes to Consolidated Financial Statements. | |
| Key audit item | How our audit addressed the key audit item |
| The income from long-term equity investments accounted by the equity method amounted to RMB 162.30 million, which had a significant impact on the profit or loss for the current period, and we considered it as a key audit matter. | The audit procedures we performed consisted primarily of: 1: To understand and assess the internal control of Wellhope related to the recognition of investment income under the equity method. 2: Obtaining information about the investee's articles of incorporation and investment agreement to determine whether Wellhope has significant influence over it and whether the accounting method is correct. 3: Obtaining the financial statements of the investee, and reviewing whether the adjustments of unrealized profits from related party transactions and the calculation of investment income are accurate, and whether the share of changes in net assets is correct. 4: Asking management about the reasons for significant or abnormal fluctuations in investment income, and analyzing whether the judgment is reasonable. 5: Performing analysis procedures on operating revenues and costs and inventories of the investees with significant investment income for the current period; obtaining and checking the schedules and related information provided by the investees. |
4. Other Information
The management of the Company is responsible for the other information. The other informationcomprises information covered in the Company's 2022 Annual Report, but excludes the financialstatements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we do not expressany form of assurance conclusion thereon.In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent withthe financial statements or our knowledge obtained during the audit or otherwise appears to bematerially misstated.If, based on the work we have executed, we confirm that there is a material misstatement in the otherinformation, we are required to report the fact. We have nothing to report in this regard.
5. Responsibilities of the Management and Those Charged with Governance for Financial StatementsThe management team of the Company is responsible for preparing the financial statements that givea fair view in accordance with the ASBE, and for designing, executing and maintaining requisite internalcontrol to enable the preparation of the financial statements that are free from material misstatement,whether due to fraud or error.In preparing the financial statements, the management is responsible for assessing the Company’sability to continue as a going concern, disclosing, as applicable, matters related to going concern andusing the going concern basis of accounting unless the management either intends to liquidate theCompany or to cease operation, or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’s financial reportingprocess.
6. Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a wholeare free from material misstatement, whether due to fraud or error, and to issue an auditor’s reportthat includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee thatan audit conducted in accordance with the auditing standards will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and are considered materialif, individually or in the aggregate, they could reasonably be expected to influence the economicdecisions of users taken on the basis of these financial statements.As part of an audit in accordance with the auditing standards, we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
A. Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting amaterial misstatement resulting from fraud is higher than for one resulting from error, as fraud mayinvolve collusion, forgery, intentional omissions, misrepresentations, or the override of internalcontrol.B. Obtain an understanding of the internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances.C. Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by the management.D. Conclude on the appropriateness of the management’s use of the going concern basis of accountingand, based on the obtained audit evidence, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company’s ability to continue as a going concern. Ifwe conclude that a material uncertainty exists, we are required by the auditing standards to draw thestatements users’ attention in our auditor’s report to the related disclosures in the financial statements,or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor’s report. However, future events or conditions maycause the Company to cease to continue as a going concern.E. Evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions and events ina manner that achieves fair presentation.F. Obtain sufficient and appropriate audit evidence regarding the financial information of relatedentities or business activities within the Company to express an opinion on its financial statements. Weare responsible for guiding, overseeing and performing the audit of the Company, and solelyresponsible for our audit opinion.We communicate with those charged with governance regarding, among other matters, the plannedscope and timetable of the audit and significant audit findings, including any noteworthy deficiencies inthe internal control that we identify during our audit.We also provide those charged with governance with a statement to declare that we have compliedwith the professional ethics related to independence, and communicate with the governance on allrelationships and other matters that may reasonably be considered to affect our independence, as wellas the relevant precautions.From the matters communicated with those charged with governance, we determine which matters arethe most important for the audit of the current financial statements and thus constitute the key auditmatters. We describe these matters in the audit report, unless laws and regulations prohibit the publicdisclosure of these matters, or in rare cases, if it is reasonably expected that the negative consequencesof communicating a matter in the audit report will outweigh the benefits in terms of the public interest,we determine that the matter should not be communicated in the audit report.SuyaJincheng CPA LLP CPA: Zhou Jiawen (Project Partner)CPA: Wang LeiChina Nanjing March 29, 2023
II. Financial Statements
Consolidated Balance Sheet
December 31, 2022Wellhope Unit: yuan Currency: RMB
| Item | Dec. 31, 2022 | Dec. 31, 2021 |
| Current Assets | ||
| Monetary capital | 1,688,741,603.60 | 1,233,577,781.76 |
| Derivative financial assets | 4,050,071.80 | 9,667,725.25 |
| Notes receivable | 5,778,682.68 | 11,846,863.22 |
| Accounts receivable | 1,035,056,761.74 | 681,517,885.70 |
| Prepayments | 762,467,440.93 | 479,830,550.25 |
| Other receivables | 97,791,911.95 | 107,988,266.97 |
| including: Interest receivable | ||
| Dividends receivable | 27,535,293.35 | 39,067,761.79 |
| Inventory | 3,361,552,176.45 | 2,691,222,420.95 |
| Contract assets | 1,186,905.42 | 2,505,447.69 |
| Other current assets | 149,114,790.69 | 156,089,468.63 |
| Total current assets | 7,105,740,345.26 | 5,374,246,410.42 |
| Non-current assets | ||
| Long-term equity investment | 2,487,150,109.37 | 2,332,825,972.00 |
| Other equity instruments investment | 17,325,896.26 | 20,082,215.15 |
| Fixed assets | 3,547,181,704.30 | 3,232,947,014.55 |
| Construction in progress | 601,125,529.45 | 602,237,560.51 |
| Biological assets | 186,579,922.68 | 170,216,684.34 |
| Right-of-use asset | 328,428,097.10 | 199,981,121.45 |
| Intangible assets | 362,988,059.95 | 317,230,922.27 |
| Goodwill | 290,425.67 | 2,135,421.24 |
| Long-term prepaid expenses | 64,133,625.16 | 53,309,950.44 |
| Deferred income tax assets | 53,630,302.69 | 47,639,921.10 |
| Other non-current assets | 638,741,381.87 | 618,652,966.25 |
| Total non-current assets | 8,287,575,054.50 | 7,597,259,749.30 |
| Total Assets | 15,393,315,399.76 | 12,971,506,159.72 |
| Consolidated Balance Sheet(continue) | Unit: yuan Currency: RMB | |
| Item | Dec. 31, 2022 | Dec. 31, 2021 |
| Current Liabilities | ||
| Short-term borrowings | 933,785,791.96 | 1,546,199,813.26 |
| Notes payable | 600,000.00 | 3,900,000.00 |
| Accounts payable | 1,691,652,639.28 | 1,296,159,112.55 |
| Advance receipt | 17,873,252.23 | 10,500,434.76 |
| Contract liabilities | 336,134,719.84 | 350,642,122.84 |
| Payroll | 182,394,434.59 | 108,059,107.18 |
| Taxes and surcharges | 55,010,343.51 | 54,470,519.79 |
| Other payables | 460,870,503.46 | 408,226,372.67 |
| including: Interest payable | 3,105,236.78 | 170,000.00 |
| Dividends payable | 14,943,072.75 | 8,409,125.87 |
| Non-current liabilities due within one year | 471,328,595.34 | 191,145,065.59 |
| Other current liabilities | 5,334,961.22 | 9,681,957.60 |
| Total current liabilities | 4,154,985,241.43 | 3,978,984,506.24 |
| Non-current Liabilities | ||
| Long-term borrowings | 1,312,757,309.28 | 1,245,618,946.13 |
| Bonds payable | 1,257,828,066.86 | |
| Lease liabilities | 223,002,370.80 | 123,468,375.46 |
| Long-term payables | 7,685,803.59 | 47,702,610.06 |
| Deferred income | 78,011,407.06 | 60,335,083.33 |
| Deferred income tax liabilities | 2,323,523.78 | 2,792,995.02 |
| Total non-current liabilities | 2,881,608,481.37 | 1,479,918,010.00 |
| Total liabilities | 7,036,593,722.80 | 5,458,902,516.24 |
| Owners' equity (or shareholders' equity) | ||
| Paid-up capital (or share capital) | 919,430,450.00 | 921,960,196.00 |
| Other equity instruments | 233,677,472.64 | |
| Capital reserves | 880,746,284.55 | 877,984,810.18 |
| deduct: Treasury stock | 200,003,612.37 | 224,292,272.37 |
| Other comprehensive income | -20,147,742.90 | -17,064,013.38 |
| Surplus reserves | 454,175,320.97 | 432,238,223.06 |
| Undistributed profits | 4,968,687,250.39 | 4,473,531,926.28 |
| Total owners’ equity attributable to the parent company | 7,236,565,423.28 | 6,464,358,869.77 |
| Non-controlling interests | 1,120,156,253.68 | 1,048,244,773.71 |
| Total owners' equity (or shareholders' equity) | 8,356,721,676.96 | 7,512,603,643.48 |
| Total liabilities and owners' equity (or shareholders' equity) | 15,393,315,399.76 | 12,971,506,159.72 |
Consolidated Balance Sheet of Parent Company
December 31, 2022
Unit: yuan Currency :RMB
| Item | Dec. 31, 2022 | Dec. 31, 2021 |
| Current assets | ||
| Monetary capital | 1,515,847,680.25 | 946,702,509.14 |
| Derivative financial assets | 558,832.00 | 6,701,641.25 |
| Accounts receivable | 44,246,791.88 | 33,295,472.77 |
| Prepayments | 2,251,482.92 | 3,338,458.40 |
| Other receivables | 2,228,913,499.76 | 1,766,869,119.49 |
| including: Interest receivable | ||
| Dividends receivable | 53,759,486.59 | 61,417,020.78 |
| Inventory | 67,625,995.98 | 75,729,603.79 |
| Other current assets | 5,988,458.80 | |
| Total current assets | 3,859,444,282.79 | 2,838,625,263.64 |
| Non-current assets | ||
| Long-term equity investment | 5,986,733,076.32 | 5,348,772,385.71 |
| Other equity instruments investment | 14,849,769.15 | 17,908,947.03 |
| Fixed assets | 136,435,774.98 | 143,032,038.42 |
| Construction in progress | 4,569,791.00 | 7,830,000.00 |
| Intangible assets | 16,321,332.79 | 15,394,193.33 |
| Long-term prepaid expenses | 2,967,008.45 | 2,963,050.73 |
| Deferred income tax assets | 11,001,578.31 | 10,095,907.58 |
| Other non-current assets | 5,454,000.00 | 14,104,000.00 |
| Total non-current assets | 6,178,332,331.00 | 5,560,100,522.80 |
| Total assets | 10,037,776,613.79 | 8,398,725,786.44 |
| Current liabilities: | ||
| Short-term borrowings | 500,513,888.89 | 1,151,248,923.61 |
| Accounts payable | 48,315,158.17 | 35,484,572.18 |
| Advance receipts | 1,147,870.00 | |
| Contract liabilities | 4,307,771.41 | 4,957,638.59 |
| Payroll | 11,269,322.85 | 7,140,406.48 |
| Taxes and surcharges | 1,001,650.34 | 940,950.15 |
| Other payables | 1,752,347,820.38 | 1,450,924,895.65 |
| including: Interest payable | ||
| Dividends payable | ||
| Non-current liabilities due within one year | 421,600,000.00 | 132,500,000.00 |
| Total current liabilities | 2,740,503,482.04 | 2,783,197,386.66 |
| Non-current liabilities | ||
| Long-term borrowings | 1,011,998,911.11 | 1,089,170,833.32 |
| Bonds payable | 1,257,828,066.86 | |
| Deferred income | 44,214,300.00 | 25,673,000.00 |
| Deferred income tax liabilities | 33,390.82 | 227,703.08 |
| Total non-current liabilities | 2,314,074,668.79 | 1,115,071,536.40 |
| Total liabilities | 5,054,578,150.83 | 3,898,268,923.06 |
| Owners' equity (or shareholders' equity) | ||
| Paid-up capital (or share capital) | 919,430,450.00 | 921,960,196.00 |
| Other equity instruments | 233,677,472.64 | |
| Capital reserves | 878,256,358.18 | 870,193,796.83 |
| deduct: Treasury stock | 200,003,612.37 | 224,292,272.37 |
| Other Comprehensive income | -18,697,307.25 | -15,008,939.79 |
| Surplus reserves | 454,175,320.97 | 432,238,223.06 |
| Undistributed profits | 2,716,359,780.79 | 2,515,365,859.65 |
| Total owners' equity | 4,983,198,462.96 | 4,500,456,863.38 |
| Total liabilities and owners' equity (or shareholders' equity) | 10,037,776,613.79 | 8,398,725,786.44 |
Consolidated Income StatementJanuary-December, 2022
| Wellhope | Unit: yuan Currency: RMB | |
| Item | 2022 | 2021 |
| 1. Total operating revenue | 32,811,758,209.54 | 29,468,925,899.60 |
| including: Operating revenue | 32,811,758,209.54 | 29,468,925,899.60 |
| 2. Total operating costs | 32,296,894,302.27 | 29,128,053,212.11 |
| including: Operating costs | 30,839,271,196.05 | 27,900,298,516.35 |
| Taxes and surtaxes | 47,329,082.31 | 41,474,310.80 |
| Selling expenses | 622,444,761.15 | 570,137,322.67 |
| Administrative expenses | 537,063,858.72 | 418,116,582.79 |
| R&D expenses | 90,105,075.01 | 97,360,753.44 |
| Financial expenses | 160,680,329.03 | 100,665,726.06 |
| including: Interest expenses | 167,066,021.40 | 103,590,360.22 |
| Interest income | 13,023,769.68 | 8,487,862.34 |
| add: Other income | 31,616,130.11 | 29,156,319.92 |
| Income from investment | 157,467,033.43 | -80,450,448.13 |
| including: Income from investments in associated companies and joint ventures | 162,299,491.42 | -84,457,885.45 |
| Gain or loss from changes in fair value | -1,700,554.55 | 1,555,420.50 |
| Credit impairment loss | -11,686,265.27 | -44,732,527.34 |
| Assets impairment loss | -30,098,736.85 | -27,296,568.01 |
| Gain or loss from assets disposal | -3,862,500.50 | -11,438,798.91 |
| 3. Operating profit | 656,599,013.64 | 207,666,085.52 |
| add: Non-operating income | 18,003,001.35 | 17,260,320.37 |
| deduct: Non-operating expenditure | 46,266,509.67 | 48,881,098.80 |
| 4. Pretax profit | 628,335,505.32 | 176,045,307.09 |
| deduct: Income tax expense | 91,252,227.58 | 151,503,439.25 |
| 5. Net profit | 537,083,277.74 | 24,541,867.84 |
| Net Profit from continuing operations | 537,083,277.74 | 24,541,867.84 |
| Net profit attributable to the shareholders of parent company | 513,532,382.02 | 118,530,518.15 |
| Non-controlling interests income | 23,550,895.72 | -93,988,650.31 |
| 6. Other comprehensive income, net of tax | -2,613,281.46 | -15,130,398.50 |
| Attributable to owners of parent company | -3,083,729.52 | -14,906,510.77 |
| a. Other comprehensive income that can’t be reclassified into gains or losses | -3,076,318.89 | -4,648,551.75 |
| (a) Changes in fair value of investments in other equity instruments | -3,076,318.89 | -4,648,551.75 |
| b. Other comprehensive income that will be reclassified into the gains or losses | -7,410.63 | -10,257,959.02 |
| (a) Other comprehensive income that can be transferred in gains or losses under the equity method | -587,636.80 | -10,039,513.91 |
| (b) Exchange differences on translation of foreign currency financial statements | 580,226.17 | -218,445.11 |
| Attributable to non-controlling interests | 470,448.06 | -223,887.73 |
| 7. Total comprehensive income | 534,469,996.28 | 9,411,469.34 |
| Attributable to the owners of parent company | 510,448,652.50 | 103,624,007.38 |
| Attributable to non-controlling interests | 24,021,343.78 | -94,212,538.04 |
| 8. EPS | ||
| (1) Basic earnings per share (yuan per share) | 0.58 | 0.13 |
| (2) Diluted earnings per share (yuan per share) | 0.55 | 0.13 |
Consolidated Income Statement of Parent Company
January-December, 2022
Unit: yuan Currency: RMB
| Item | 2022 | 2021 |
| 1. Total operating revenue | 806,587,568.60 | 968,799,306.97 |
| deduct: Operating cost | 620,778,240.03 | 694,849,254.04 |
| Taxes and surtaxes | 2,482,446.75 | 1,864,808.04 |
| Selling expenses | 14,045,030.28 | 12,844,816.42 |
| Administrative expenses | 42,519,575.17 | 38,814,534.47 |
| R&D expenses | 26,442,399.08 | 30,092,284.47 |
| Financial expenses | 75,870,816.26 | 37,671,780.85 |
| including: Interest expenses | 123,813,480.25 | 74,814,532.68 |
| Interest income | 48,021,158.62 | 37,320,299.18 |
| add: Other income | 7,185,222.37 | 5,954,763.44 |
| Income from Investment | 179,711,930.36 | 18,201,280.28 |
| including: Income from investments in associated companies and joint ventures | 174,704,407.03 | -76,100,518.29 |
| Gain or loss from changes in fair value | 222,605.45 | 1,518,020.50 |
| Credit impairment loss | 9,686,576.26 | -12,384,310.43 |
| Assets impairment loss | ||
| Gain or loss from assets disposal | 432,908.21 | |
| 2. Operating profit | 221,255,395.47 | 166,384,490.68 |
| add: Non-operating income | 1,700.00 | 1,286,184.30 |
| deduct: Non-operating expenditure | 797,232.25 | 499,567.36 |
| 3. Pretax profit | 220,459,863.22 | 167,171,107.62 |
| deduct: Income tax expense | 1,088,884.17 | 18,493,940.30 |
| 4. Net profit | 219,370,979.05 | 148,677,167.32 |
| Net profit from continuing operations | 219,370,979.05 | 148,677,167.32 |
| 5. Other comprehensive income, net of tax | -3,688,367.46 | -14,671,746.77 |
| a. Other comprehensive income that can’t be reclassified into gains or losses | -3,059,177.88 | -4,642,760.41 |
| (a) Changes in fair value of investments in other equity instruments | -3,059,177.88 | -4,642,760.41 |
| b. Other comprehensive income that will be reclassified into gains or losses | -629,189.58 | -10,028,986.36 |
| (a) Other comprehensive income that can be transferred in gains or losses under the equity method | -629,189.58 | -10,028,986.36 |
| 6. Total comprehensive income | 215,682,611.59 | 134,005,420.55 |
Consolidated Statement of Cash FlowJanuary-December, 2022Wellhope Unit: yuan Currency: RMB
| Item | 2022 | 2021 |
| 1. Cash flow from operating activities | ||
| Cash received by selling products, providing labor services | 33,699,345,225.81 | 29,966,232,708.34 |
| Tax refunds | 47,599,364.44 | 31,250,910.84 |
| Cash received from other activities related to operating | 196,572,108.74 | 165,276,095.86 |
| Sub-total of cash inflow of operating activities | 33,943,516,698.99 | 30,162,759,715.04 |
| Cash paid for goods purchase and labor services | 31,966,060,633.58 | 28,110,569,320.03 |
| Cash paid to and for employee | 1,104,906,823.52 | 980,734,697.19 |
| Tax payments | 162,294,011.40 | 219,496,991.43 |
| Cash paid to other activities related to operating | 513,988,720.15 | 552,798,484.03 |
| Sub-total of cash outflow of operating activities | 33,747,250,188.65 | 29,863,599,492.68 |
| Net cash flow from operating activities | 196,266,510.34 | 299,160,222.36 |
| 2. Cash flow from investing activities | ||
| Cash received from disinvestment | 915,200.00 | 56,873,659.92 |
| Cash received from return on investment | 27,243,680.56 | 38,621,461.03 |
| Net cash received from disposal of fixed assets, intangible assets and other long-lived assets | 100,849,426.02 | 98,276,338.40 |
| Net cash received from disposal of subsidiaries and other business units | 1,594,899.44 | 3,496,498.08 |
| Cash received from other activities related to investment | 5,685,477.01 | 973,716.92 |
| Sub-total of cash inflow of investing activities | 136,288,683.03 | 198,241,674.35 |
| Cash paid for acquiring and building fixed assets, intangible assets and other long-lived assets | 842,818,657.41 | 1,184,900,722.79 |
| Cash paid for investments | 26,247,136.90 | 29,577,482.00 |
| Net cash paid for acquiring subsidiaries and other business units | 321,545.94 | 1,877,800.30 |
| Cash paid to other activities related to investment | 10,041,254.22 | 32,913,146.13 |
| Sub-total of cash outflow of investing activities | 879,428,594.47 | 1,249,269,151.22 |
| Net cash flow from investing activities | -743,139,911.44 | -1,051,027,476.87 |
| 3. Cash flow from financing activities | ||
| Cash received by absorbing investments | 76,449,000.00 | 118,110,000.00 |
| including: Capital contributed by non-controlling interests to subsidiaries | 76,449,000.00 | 118,110,000.00 |
| Cash received from borrowings | 2,056,945,703.41 | 3,109,591,138.44 |
| Cash received from issuing bonds | 1,492,100,000.00 | |
| Cash received from other activities related to financing | 52,488,976.77 | 98,020,000.00 |
| Sub-total of cash inflow of financing activities | 3,677,983,680.18 | 3,325,721,138.44 |
| Repayments of borrowings | 2,390,674,821.29 | 1,927,897,631.73 |
| Cash paid for dividends, profits, or paid for interests | 139,539,838.45 | 338,300,252.69 |
| including: Dividends or profits paid by subsidiaries | 24,240,402.26 | 41,267,853.87 |
| to non-controlling interests | ||
| Cash paid to other activities related to financing activities | 152,276,562.43 | 294,763,092.95 |
| Sub-total of cash outflow of financing activities | 2,682,491,222.17 | 2,560,960,977.37 |
| Net cash flow from financing activities | 995,492,458.01 | 764,760,161.07 |
| 4. Effect of foreign exchange rate fluctuations on cash and cash equivalents | 2,087,604.00 | -816,987.69 |
| 5. Net increase in cash and cash equivalents | 450,706,660.91 | 12,075,918.87 |
| add: Opening balance of cash and cash equivalents | 1,198,273,561.91 | 1,186,197,643.04 |
| 6. Closing balance of cash and cash equivalents | 1,648,980,222.82 | 1,198,273,561.91 |
Consolidated Statement of Cash Flow of Parent Company
January-December, 2022
Unit: yuan Currency: RMB
| Item | 2022 | 2021 |
| 1. Cash flow from operating activities | ||
| Cash received by selling products, providing labor services | 794,579,846.42 | 954,038,873.96 |
| Tax refunds | ||
| Cash received from other activities related to operating | 92,780,893.47 | 52,089,796.38 |
| Sub-total of cash inflow of operating activities | 887,360,739.89 | 1,006,128,670.34 |
| Cash paid for goods purchase and labor services | 582,929,002.90 | 712,117,728.85 |
| Cash paid to and for employee | 47,803,787.13 | 43,731,530.38 |
| Tax payments | 4,581,203.25 | 31,214,046.61 |
| Cash paid to other activities related to operating | 33,968,355.04 | 29,785,831.88 |
| Sub-total of cash outflow of operating activities | 669,282,348.32 | 816,849,137.72 |
| Net cash flow from operating activities | 218,078,391.57 | 189,279,532.62 |
| 2. Cash flow from investing activities | ||
| Cash received from disinvestment | 5,980,621.31 | 77,776,343.01 |
| Cash received from return on investment | 31,262,648.33 | 106,552,607.61 |
| Net cash received from disposal of fixed assets, intangible assets and other long-lived assets | 123,907.06 | 494,213.58 |
| Net cash received from disposal of subsidiaries and other business units | ||
| Cash received from other activities related to investment | ||
| Sub-total of cash inflow of investing activities | 37,367,176.70 | 184,823,164.20 |
| Cash paid for acquiring and building fixed assets, intangible assets and other long-lived assets | 5,007,634.51 | 43,607,901.60 |
| Cash paid for investments | 353,955,584.30 | 445,171,729.61 |
| Net cash paid for acquiring subsidiaries and other business units | ||
| Cash paid to other activities related to investing | 532,635,932.02 | 473,103,570.26 |
| Sub-total of cash outflow of investing activities | 891,599,150.83 | 961,883,201.47 |
| Net cash flow from investing activities | -854,231,974.13 | -777,060,037.27 |
| 3. Cash flow from financing activities | ||
| Cash received from borrowings | 894,000,000.00 | 2,100,000,000.00 |
| Cash received from issuing bonds | 1,492,100,000.00 | |
| Cash received from other activities related to financing | 275,464,363.91 | |
| Sub-total of cash inflow of financing activities | 2,661,564,363.91 | 2,100,000,000.00 |
| Repayments of borrowings | 1,332,500,000.00 | 982,000,000.00 |
| Cash paid for dividends, profits, or paid for interests | 85,884,532.93 | 276,529,164.72 |
| Cash paid to other activities related to financing | 26,505,160.00 | 200,447,277.37 |
| Sub-total of cash outflow of financing activities | 1,444,889,692.93 | 1,458,976,442.09 |
| Net cash flow from financing activities | 1,216,674,670.98 | 641,023,557.91 |
| 4. Effect of foreign exchange rate fluctuations on cash and cash equivalents | 344.66 | 64,399.65 |
| 5. Net increase in cash and cash equivalents | 580,521,433.08 | 53,307,452.91 |
| add: Opening balance of cash and cash equivalents | 925,056,554.62 | 871,749,101.71 |
| 6. Closing balance of cash and cash equivalents | 1,505,577,987.70 | 925,056,554.62 |
Change Statement of Owner's EquityJanuary-December, 2022
Unit: yuan Currency: RMB
| Item | 2022 | |||||||||||
| Equity Attributable to the Owners of Parent Company | Non-controlling interests | Total owners' equity | ||||||||||
| Share capital | Other equity instruments | Capital reserve | Deduct: Treasury stock | Other comprehensive income | Surplus reserve | Undistributed profits | Subtotal | |||||
| preferred stock | perpetual bond | Other | ||||||||||
| 1. Closing balance of prior period | 921,960,196.00 | 877,984,810.18 | 224,292,272.37 | -17,064,013.38 | 432,238,223.06 | 4,473,531,926.28 | 6,464,358,869.77 | 1,048,244,773.71 | 7,512,603,643.48 | |||
| add: Changes in accounting policies | ||||||||||||
| Other | ||||||||||||
| 2. Opening balance of current period | 921,960,196.00 | 877,984,810.18 | 224,292,272.37 | -17,064,013.38 | 432,238,223.06 | 4,473,531,926.28 | 6,464,358,869.77 | 1,048,244,773.71 | 7,512,603,643.48 | |||
| 3. Changes of current period | -2,529,746.00 | 233,677,472.64 | 2,761,474.37 | -24,288,660.00 | -3,083,729.52 | 21,937,097.91 | 495,155,324.11 | 772,206,553.51 | 71,911,479.97 | 844,118,033.48 | ||
| A. Total comprehensive income | -3,083,729.52 | 513,532,382.02 | 510,448,652.50 | 24,021,343.78 | 534,469,996.28 | |||||||
| B. Capital contributed and reduced by owners | -2,529,746.00 | 233,677,472.64 | 2,761,474.37 | -24,288,660.00 | 258,197,861.01 | 78,664,485.33 | 336,862,346.34 | |||||
| a. Common stock invested by owners | 83,367,623.25 | 83,367,623.25 | ||||||||||
| b. Capital invested by holders of other equity instruments | 3,212,254.00 | 233,677,472.64 | 30,296,373.97 | 267,186,100.61 | 267,186,100.61 | |||||||
| c. Amount of share-based payment recorded in owner's equity | -5,742,000.00 | -22,106,700.00 | -24,288,660.00 | -3,560,040.00 | -3,560,040.00 | |||||||
| d. Other | -5,428,199.60 | -5,428,199.60 | -4,703,137.92 | -10,131,337.52 | ||||||||
| C. Profit distribution | 21,937,097.91 | -18,377,057.91 | 3,560,040.00 | -30,774,349.14 | -27,214,309.14 | |||||||
| a. Appropriation of surplus reserves | 21,937,097.91 | -21,937,097.91 | ||||||||||
| b. Extraction of general risk provisions | ||||||||||||
| c. Dividend to owners (or shareholders) | 3,560,040.00 | 3,560,040.00 | -30,774,349.14 | -27,214,309.14 | ||||||||
| d. Other | ||||||||||||
| D. Internal carry-over of owners’ equity | ||||||||||||
| a. Carry-over of other comprehensive income to retained earnings | ||||||||||||
| 4. Closing balance of current period | 919,430,450.00 | 233,677,472.64 | 880,746,284.55 | 200,003,612.37 | -20,147,742.90 | 454,175,320.97 | 4,968,687,250.39 | 7,236,565,423.28 | 1,120,156,253.68 | 8,356,721,676.96 |
| Item | 2021 | ||||||||
| Equity Attributable to the Owners of Parent Company | Non-controlling interests | Total owners' equity | |||||||
| Share capital | Capital reserve | Deduct: Treasury stock | Other comprehensive income | Surplus reserve | Undistributed profits | Subtotal | |||
| 1. Closing balance of prior period | 922,059,896.00 | 888,159,916.65 | 45,695,815.00 | -2,157,502.61 | 417,370,506.33 | 4,572,660,487.98 | 6,752,397,489.35 | 1,149,304,061.85 | 7,901,701,551.20 |
| add: Changes in accounting policies | |||||||||
| Other | |||||||||
| 2. Opening balance of current period | 922,059,896.00 | 888,159,916.65 | 45,695,815.00 | -2,157,502.61 | 417,370,506.33 | 4,572,660,487.98 | 6,752,397,489.35 | 1,149,304,061.85 | 7,901,701,551.20 |
| 3. Changes of current period | -99,700.00 | -10,175,106.47 | 178,596,457.37 | -14,906,510.77 | 14,867,716.73 | -99,128,561.70 | -288,038,619.58 | -101,059,288.14 | -389,097,907.72 |
| A. Total comprehensive income | -14,906,510.77 | 118,530,518.15 | 103,624,007.38 | -94,212,538.04 | 9,411,469.34 | ||||
| B. Capital contributed and reduced by owners | -99,700.00 | -10,175,106.47 | 178,596,457.37 | -188,871,263.84 | 45,733,125.20 | -143,138,138.64 | |||
| a. Common stock invested by owners | -99,700.00 | -383,845.00 | -483,545.00 | 45,733,125.20 | 45,249,580.20 | ||||
| b. Capital invested by holders of other equity instruments | |||||||||
| c. Amount of share-based payment recorded in | -10,029,622.03 | -21,407,155.00 | 11,377,532.97 | 11,377,532.97 | |||||
| owner's equity | |||||||||
| d. Other | 238,360.56 | 200,003,612.37 | -199,765,251.81 | -199,765,251.81 | |||||
| C. Profit distribution | 14,867,716.73 | -217,659,079.85 | -202,791,363.12 | -52,579,875.30 | -255,371,238.42 | ||||
| a. Appropriation of surplus reserves | 14,867,716.73 | -14,867,716.73 | |||||||
| b. Extraction of general risk provisions | |||||||||
| c. Dividend to owners (or shareholders) | -202,791,363.12 | -202,791,363.12 | -48,176,979.74 | -250,968,342.86 | |||||
| d. Other | -4,402,895.56 | -4,402,895.56 | |||||||
| D. Internal carry-over of owners’ equity | |||||||||
| a. Carry-over of other comprehensive income to retained earnings | |||||||||
| 4. Closing balance of current period | 921,960,196.00 | 877,984,810.18 | 224,292,272.37 | -17,064,013.38 | 432,238,223.06 | 4,473,531,926.28 | 6,464,358,869.77 | 1,048,244,773.71 | 7,512,603,643.48 |
Change Statement of Owner's Equity of Parent Company
January-December, 2022
Unit: yuan Currency: RMB
| Item Item | 2022 | |||||||||
| Share capital | Other equity instruments | Capital reserve | Deduct: Treasury stock | Other comprehensive income | Surplus reserve | Undistributed profits | Total owners' equity | |||
| preferred stock | perpetual bond | Other | ||||||||
| 1. Closing balance of prior period | 921,960,196.00 | 870,193,796.83 | 224,292,272.37 | -15,008,939.79 | 432,238,223.06 | 2,515,365,859.65 | 4,500,456,863.38 | |||
| add: Changes in accounting policies | ||||||||||
| Other | ||||||||||
| 2. Opening balance of current period | 921,960,196.00 | 870,193,796.83 | 224,292,272.37 | -15,008,939.79 | 432,238,223.06 | 2,515,365,859.65 | 4,500,456,863.38 | |||
| 3. Changes of current period | -2,529,746.00 | 233,677,472.64 | 8,062,561.35 | -24,288,660.00 | -3,688,367.46 | 21,937,097.91 | 200,993,921.14 | 482,741,599.58 | ||
| A. Total comprehensive income | -3,688,367.46 | 219,370,979.05 | 215,682,611.59 | |||||||
| B. Capital contributed and reduced by owners | -2,529,746.00 | 233,677,472.64 | 8,062,561.35 | -24,288,660.00 | 263,498,947.99 | |||||
| a. Common stock invested by owners | ||||||||||
| b. Capital invested by holders of other equity instruments | 3,212,254.00 | 233,677,472.64 | 30,296,373.97 | 267,186,100.61 | ||||||
| c. Amount of share-based payment recorded in owner's equity | -5,742,000.00 | -22,106,700.00 | -24,288,660.00 | -3,560,040.00 | ||||||
| d. Other | -127,112.62 | -127,112.62 | ||||||||
| C. Profit distribution | 21,937,097.91 | -18,377,057.91 | 3,560,040.00 | |||||||
| a. Appropriation of surplus reserves | 21,937,097.91 | -21,937,097.91 | ||||||||
| b. Dividend to owners (or shareholders) | 3,560,040.00 | 3,560,040.00 | ||||||||
| c. Other | ||||||||||
| D. Internal carry-over of owners’ equity | ||||||||||
| a. Carry-over of other comprehensive income to retained earnings | ||||||||||
| 4. Closing balance of current period | 919,430,450.00 | 233,677,472.64 | 878,256,358.18 | 200,003,612.37 | -18,697,307.25 | 454,175,320.97 | 2,716,359,780.79 | 4,983,198,462.96 |
| Item Item | 2021 | |||||||||
| Share capital | Other equity instruments | Capital reserve | Deduct: Treasury stock | Other comprehensive income | Surplus reserve | Undistributed profits | Total owners' equity | |||
| preferred stock | perpetual bond | Other | ||||||||
| 1. Closing balance of prior period | 922,059,896.00 | 885,579,203.34 | 45,695,815.00 | -337,193.02 | 417,370,506.33 | 2,584,347,772.18 | 4,763,324,369.83 | |||
| add: Changes in accounting policies | ||||||||||
| Other | ||||||||||
| 2. Opening balance of current period | 922,059,896.00 | 885,579,203.34 | 45,695,815.00 | -337,193.02 | 417,370,506.33 | 2,584,347,772.18 | 4,763,324,369.83 | |||
| 3. Changes of current period | -99,700.00 | -15,385,406.51 | 178,596,457.37 | -14,671,746.77 | 14,867,716.73 | -68,981,912.53 | -262,867,506.45 | |||
| A. Total comprehensive income | -14,671,746.77 | 148,677,167.32 | 134,005,420.55 | |||||||
| B. Capital contributed | -99,700.00 | -15,385,406.51 | 178,596,457.37 | -194,081,563.88 | ||||||
| and reduced by owners | ||||||||||
| a. Common stock invested by owners | 200,047,596.37 | -200,047,596.37 | ||||||||
| b. Capital invested by holders of other equity instruments | ||||||||||
| c. Amount of share-based payment recorded in owner's equity | -99,700.00 | -11,885,622.38 | -21,451,139.00 | 9,465,816.62 | ||||||
| d. Other | -3,499,784.13 | -3,499,784.13 | ||||||||
| C. Profit distribution | 14,867,716.73 | -217,659,079.85 | -202,791,363.12 | |||||||
| a. Appropriation of surplus reserves | 14,867,716.73 | -14,867,716.73 | ||||||||
| b. Dividend to owners (or shareholders) | -202,791,363.12 | -202,791,363.12 | ||||||||
| c. Other | ||||||||||
| D. Internal carry-over of owners’ equity | ||||||||||
| a. Carry-over of other comprehensive income to retained earnings | ||||||||||
| 4. Closing balance of current period | 921,960,196.00 | 870,193,796.83 | 224,292,272.37 | -15,008,939.79 | 432,238,223.06 | 2,515,365,859.65 | 4,500,456,863.38 |
III. Basic Information of the Company
1. Overview of the Company
Wellhope Foods Co., Ltd. (formerly known as Liaoning Wellhope Agri-Tech Co., Ltd., hereinafterreferred to as the Company) is a joint-stock company established by 23 natural persons, including JinWeidong and Ding Yunfeng, etc., with the approval of Liaoning Provincial People's Government(Liaozheng [2003] No. 40). The Company was incorporated on March 27, 2003 with a registered capitalof RMB 53 million, of which: Jin Weidong contributed RMB 12.19 million, accounting for 23.00% of theshare capital; Ding Yunfeng contributed RMB 7.68 million, accounting for 14.50% of the share capital;Wang Fengjiu, Zhang Tiesheng, Shao Caimei and Wang Zhongtao each contributed RMB 4.50 million,accounting for 8.50% of the share capital respectively, other 17 shareholders contributed RMB 15.11million, accounting for 28.50% of the share capital.On August 22, 2006, the Company issued 5.89 million new shares to De Heus (China) with the approvalof the Ministry of Commerce of the People's Republic of China, and the total share capital was changedto 58.89 million shares. After the approval of Liaoning Foreign Trade and Economic CooperationDepartment, the Company issued 3.46 million shares to De Heus (China) on November 15, 2007, andthe total share capital was increased to 62.35 million shares.In 2010, with the approval of the second extraordinary shareholders meeting, the Company issued 50bonus shares for every 10 shares based on the total share capital as of December 31, 2009, after whichthe total share capital of the Company was increased to 374.12 million shares. Moreover, the thirdextraordinary shareholders meeting of the Company in 2010 approved to use capital reserves forconverting 100 million shares into capital, after which the total share capital of the Company wasincreased to 474.12 million shares.Approved by China Securities Regulatory Commission (CSRC License [2014] No. 675), the Companyissued 80 million new shares at a price of RMB 5.88 per share on August 4, 2014, and the total sharecapital of the Company after the initial public offering was increased to 554.12 million shares.The second extraordinary shareholders meeting of the Company in 2015 approved to convert capitalreserve into share capital by issuing 5 bonus shares for every 10 shares, the total share capital of theCompany increased to 831.18 million shares.The second extraordinary shareholders meeting of the Company in 2018 approved to issue 14.575million restricted shares to 372 natural persons at RMB 4.85 per share on December 29, 2018, and thetotal share capital of the Company was increased to 845.75 million shares.Approved by China Securities Regulatory Commission (CSRC License [2018] No. 1742), the Companyprivately issued 76.55 million common shares on April 18, 2019, with the total share capital of 922.30million shares after the change.On March 27, 2020, the Company repurchased and written off 244,500 restricted shares, and the totalshare capital was changed to 922.06 million shares.
On March 24, 2021, the name of the Company was changed to Wellhope Foods Co., Ltd.On May 19, 2021, the Company repurchased and written off 99,700 restricted shares, and the totalshare capital was changed to 921.96 million shares.On June 22, 2022, the Company repurchased and written off 5.74 million restricted shares, and thetotal share capital was changed to 916.22 million shares.In 2022, the Company increased its shareholding by 3.21 million shares due to issuing convertiblebonds, and the total share capital was changed to 919.43 million shares.Social credit code: 9121000074712989XUType of company: Joint stock limited company (sino-foreign joint venture, listed)Legal representative: Jin WeidongPrimary business of the Company and its subsidiaries: feed and feed additives production and sales,feed raw materials trading, broiler farming, slaughtering and processing, livestock farming, frozen foodprocessing, packaging, refrigeration, sales, agricultural and local specialties processing, etc.Registered address (head office address): No. 169, Huishan Street, Shenbei New District, Shenyang,Liaoning Province.These financial statements were approved for external reporting by the Company at the 15th meetingof the 7th Board of Directors on March 29, 2023.
2. Scope of the consolidated financial statements
The Company's consolidated financial statements is determined on the basis of control, all thecontrolled subsidiaries are included in the consolidated financial statements.The changes of the consolidated financial statements are shown in the table below.A. The subsidiaries which are newly included in the consolidation statements in the reporting period
| Company | Way of obtaining |
| Lankao Skyland Feed Co. | Combination under different control |
| Linyi Wellhope Animal Husbandry Co. | Invested |
| Jilin Dalong Wellhope Animal Husbandry Co. | Invested |
| Huairen Dazhuang Farming Co. | Invested |
| Fuxin Wellhope Agricultural and Animal Husbandry Technology Co. | Invested |
| Harbin Wellhope Agricultural and Animal Husbandry Technology Co. | Invested |
| Jiyuan Helai Feed Co. | Invested |
| Daqing Wellhope Animal Husbandry Co. | Invested |
| Lixin Rongfeng Agriculture and Animal Husbandry Co. | Invested |
| Wan'an Wellhope Feed Co. | Invested |
| Baotou Hechen Animal Husbandry Co. | Invested |
| Qiqihar Wellhope Animal Husbandry Co. | Invested |
| Haicheng New Hongzunda Animal Husbandry Co. | Combination under different control |
| Hebei Linfeng Shengyi Trading Co. | Invested |
| Chifeng Wellhope Animal Husbandry Co. | Invested |
| Suihua Wellhope Animal Husbandry Co. | Invested |
| Neihuang County Wellhope Animal Husbandry Co. | Invested |
B. The subsidiaries excluded from the consolidated statements in the reporting period
| Company | Reason of excluding from the consolidation scope |
| Henan Hejiang Agricultural Development Co. | Transferred |
| Zhengning Wellhope Zhaosheng Cattle Feed Processing Co. | Transferred |
| Tongxu Wellhope Agriculture and Animal Husbandry Co. | Cancelled |
| Hengyang Wellhope Agricultural Technology Co. | Cancelled |
| Dahongda Construction Engineering Chongqing Co. | Transferred |
| Jinzhai Wellhope Agricultural and Animal Husbandry Co. | Cancelled |
IV. Basis of Preparing Financial Statements
1. Basis of preparing
The Company prepares financial statements on a going concern basis.
2. Going concern
he Company's management believes that the Company is a going concern for at least 12 months fromthe reporting period.V. Important Accounting Policies and Accounting EstimatesThe following important accounting policies and accounting estimates of the Company are formulatedin accordance with the Accounting Standards for Business Enterprises. The business that does notmentioned is subject to relevant accounting policies in the Accounting Standards for BusinessEnterprises.
1. Declaration about compliance with Accounting Standards for Business EnterprisesThe financial statements prepared by the Company are in line with the requirements of AccountingStandards for Business Enterprises, which truly and completely reflect the financial position, operatingresults, changes in shareholders' equity, cash flow, and other relevant information during the reportingperiod.
2. Accounting period
The Financial Year of the Company starts from January 1 and ends on December 31 of the Gregoriancalendar.
3. Operating cycle
The Company takes a 12-month operating cycle.
4. Bookkeeping base currency
RMB
5. Accounting arrangement methods for business combination under the same control or the
different control
(1). Accounting arrangement methods for business combination under the same controlThe Company adopts pooling of interest method to deal with the accounting of business combination,which is under the same control.On the date of combination, the assets and liabilities acquired by the Company in business combinationunder the same control shall be measured according to the book value of assets and liabilities of thecombining party in the consolidated financial statements of the final controlling party. The share of thebook value of the owner's equity held by the combining party, which is owned, by the final controllingparty in the consolidated statement of the final controlling party is regarded as the initial investmentcost of long-term equity investment in the individual financial statements. The balance between initialcost of investment of long-term equity investment and paid combining consideration (including paidcash, non-cash assets transferred, book value of occurred or assumed debt as well as the total facevalue of issued stocks), capital reserve (equity premium or capital premium) shall be adjusted; If thebalance of capital reserve (equity premium or capital premium) is not sufficient for offset, the surplusreserves and undistributed profit shall be offset successively.
(2). Accounting arrangement methods for business combination under the different controlThe Company adopts acquisition method to deal with the accounting of business combination, which isunder the different control.
① The identifiable assets, liabilities and contingent liabilities acquired in the business combinationunder the different control are measured at fair value. Based on the fair value of assets, liabilitiesincurred or assumed and issued equity securities paid out as the combining consideration on theacquisition date, the balance between the fair value and the book value of the Company is includedinto current gains and losses.
② Combined cost shall be recognized according to the following conditions respectively:
(A) For the business combination realized by one-time transaction, the combined costs shall berecognized by the sum of the fair values, on the acquisition date, of the assets paid, the liabilitiesoccurred or assumed and the equity securities issued by the Company to obtain the control right on theacquiree and the contingent consideration complying with the recognition conditions. Combined cost isinitial investment cost of such long-term equity investment.(B) For business combination realized step by step through multiple exchange transactions, thecombined cost shall be the sum of the amount of equity investments held prior to the acquisition datethat are re-measured at fair value on the acquisition date and the investment cost newly increased onthe acquisition date. The long-term equity investment in individual financial statements is the sum ofthe book value of the equity investment held before the acquisition date and the investment cost newlyincreased on the acquisition date. Exclude package deal.
③ The Company allocates the combined cost between the identifiable assets and liabilities acquiredon the acquisition date.(A) Where other assets other than intangible assets obtained from the Acquiree in the businesscombination (not only finite to the assets which have been originally recognized by the Acquiree), thefuture economic benefits are expected to flow into the Company and the fair values reliably measured,they shall be separately recognized and measured at the fair values.(B) Where the fair value of the intangible assets of the Acquiree acquired by the Company in businesscombination can be reliably measured, it shall be separately recognized and measured at the fair value.(C) Where the acquiree's liabilities, other than contingent liabilities, acquired by the Company inbusiness combination, are expected to result in the outflow of economic benefits from the Companyand the fair value can be reliably measured, they shall be separately recognized and measured at thefair value.(D) Where the fair value of the contingent liabilities of the Acquiree acquired by the Company inbusiness combination can be reliably measured, they shall be separately recognized as liabilities andshall be measured at the fair values.(E) When the Company allocates the cost of business combination and confirms that it has acquiredidentifiable assets and liabilities in the combination, it shall not consider the goodwill and deferredincome tax items that have been recognized by the Acquiree before the combination.
④ Disposal of the balance of the business combination cost and the share of the fair value of theidentifiable net assets obtained from the Acquiree in the combination.(A) The balance between the business combination costs greater than the share of fair value of theidentifiable net assets obtained from the Acquiree in the combination, shall be recognized as goodwill.(B) The balance between the business combination cost less than the share of fair value of theidentifiable net assets obtained from the Acquiree in the combination shall be disposed pursuant to thefollowing provisions.(a) The measurement of the fair values of the identifiable assets, liabilities and contingent liabilitiesobtained from the Acquiree as well as the combination costs shall be reviewed;(b) After the review, if the combined costs are still less than the fair value share of the identifiable netassets obtained from the Acquiree in the combination, the balance shall be included into the currentgains and losses.
(3) Disposal of relevant expenses accrued due to business combination by the Company
① All direct related expenses accrued due to business combination of the Company (including audit,legal service, assessment consultation and other agency expense and other relevant administrativeexpenses accrued due to business combination), shall be included into current gains and losses whenaccruing.
② The commission and service fee paid by the Company for issuing debt securities for the merger of
enterprise shall be included in the initial measurement amount of debt securities.(A) If the bond is issued at the discount or par value, the amount of discount will be increased.(B) If the bond is issued at premium, the premium amount shall be reduced in this part of expenses.
③ The commission and service fee paid by the Company for issuing equity securities as considerationfor the business combination shall be included in the initial measurement amount of equity securities.(A) When equity securities are issued at the premium, the cost shall be deducted from the capitalreserve (equity premium).(B) When equity securities are issued at par value or at discount, the retained earnings shall be writtendown from the fee.
6. Preparation methods for consolidated financial statements
(1) Uniform accounting policy and accounting period
All the accounting policies and accounting period adopted by subsidiaries included in the consolidatedfinancial statements shall be consistent with the Company. In case of any inconsistency, adjustmentaccording to the accounting policies and accounting period is necessary when preparing consolidatedfinancial statements.
(2) Preparation methods for consolidated financial statements
Based on the financial statements of the Company and its subsidiaries, according to other relevantinformation, the parent company prepares consolidated financial statements after adjusting thelong-term equity investment in the subsidiaries according to the equity method to offset the impact ofinternal transactions among the Company and its subsidiaries on the consolidated financial statements.
(3) The reflection of excess deficit of subsidiaries in consolidated financial statementsIn the consolidated financial statements, if the current loss shared by the parent company exceeds itsshare of the owner's equity of the subsidiary company at the beginning of the period, the balance ofwrite-downs shall be attributed to the owner's equity of the parent company (undistributed profits). Ifthe current loss shared by the non-controlling shareholders of the subsidiaries exceeds its share of theowner's equity of the subsidiary company at the beginning of the period, the balance shall continuallyoffset the non-controlling interests.
(4) Disposal of increased or decreased number of subsidiaries during the report period
①Disposal of increased number of subsidiaries during the report period
(A) Disposal of increased number of subsidiary due to business combination under the same controlduring the report periodDuring the report period, if the number of subsidiary increases due to business combination under thesame control, the Company shall adjust the opening balance of consolidated balance sheet, take theincome, expenses and profit of such subsidiary from the beginning to the end of combination into theconsolidated income statement, and the cash flow of the subsidiary from the acquisition date to theend of the report period shall be included in the consolidated cash flow statement.
(B) Disposal of increased number of subsidiary due to business combination under the different controlduring the report periodDuring the report period, if the number of subsidiaries increases due to business combination underthe different control, the Company shall not adjust the opening balance of consolidated balance sheet,take the income, expenses and profit of such subsidiary from the acquisition date to the end of thereport period into the consolidated income statement, and the cash flow of the subsidiary from theacquisition date to the end of the report period shall be included in the consolidated cash flowstatement.
②Disposal of subsidiary during the report period
Where the company disposes a subsidiary during the report period, the opening balance of theconsolidated balance sheet shall not be adjusted, take the income, expenses and profit of suchsubsidiary from the beginning of the beginning to the disposal date into the consolidated profitstatement, and include the cash flow of such subsidiary into the consolidated cash flow statement, andthe cash flow of the subsidiary from the beginning to the disposal date shall be included in theconsolidated cash flow statement.
7. Recognition standard of cash and cash equivalents
Cash shall include cash on hand of the Company, as well as bank deposit and other monetary funds thatcan be used for payment at any time.The investments with short term (generally refer to three months from the acquisition date), highliquidity, convenience to convert into known amount of cash and with low risk of change in valueowned by Company shall be recognized as cash equivalent.
8. Foreign currency transactions and foreign currency statement translation
(1) Accounting methods of foreign currency transactions
①Initial recognition of foreign currency transaction
For foreign currency transactions, the Company shall convert the amount of foreign currency into theamount of the book-keeping base currency according to the spot exchange rate (intermediate price)announced by the People's Bank of China on the date of the transaction. Of which, for foreign currencyexchange or related transactions, the Company shall convert according to the exchange rate on thedate of the transaction.
②Adjustment or settlement of balance sheet date or settlement date
On the balance sheet date or settlement date, the Company shall dispose the foreign currencymonetary items and foreign currency non-monetary items according to the following methods:
(A) Accounting arrangement principle for foreign currency monetary itemFor foreign currency monetary items, on the balance sheet date or settlement date, the Companyadopts spot exchange rate (intermediate price) for conversion on the balance sheet date or settlementdate to adjust the amount of the accounting base currency of foreign currency monetary items caused
by exchange rate fluctuations, and treat them as exchange balances. Among them, the exchangebalance between foreign currency loans related to the acquisition, construction or production of assetseligible for capitalization is included in the cost of assets eligible for capitalization. Other balance ofexchange shall be included into current financial expense.(B) Accounting arrangement principle for foreign currency non-monetary item(a) For the foreign non-monetary currency asset measured at historical cost, the Company shall convertat spot rate (intermediate price) on transaction date with unchanging its original recording currencyamount and without exchange balance.(b) For inventory measured at a lower cost between the cost and net realizable value, if the netrealizable value is recognized in foreign currency, the Company first converts the net realizable valueinto the accounting standard currency, and then compares it with the inventory cost reflected by theaccounting standard currency when determining the end value of the inventory.(c) For non-monetary items measured at fair values, if the fair value at the end of the period is reflectedin foreign currency, the Company shall convert the foreign currency into the amount of recordingcurrency based on the spot exchange rate on the day when fair values are recognized, then comparethem with the original amount of recording currency, and the balance shall be treated as gains andlosses from the changes in fair value and included into current gains and losses.
(2) Accounting arrangement methods for foreign currency statement translation
①The Company shall conduct translation of the financial statements of overseas operations as thefollowing methods:
(A) The asset and liability items in the balance sheets shall be translated at a spot exchange rate on thebalance sheet date, among the equity items of owner, except for the items as “undistributed profits”,other items shall be translated at the spot exchange rate at the time when they are incurred.(B) The income and expense items in the profit statements shall be c translated at the spot exchangerate of the transaction date, or at a spot exchange rate which is recognized through a systematic andrational method and which is approximate to the spot exchange rate on the transaction date.The balance in the financial statement of foreign currency translated by the above-mentioned methodsshall be listed in the owners’ equity item "Other Comprehensive Income" of consolidated balancesheet.
②The Company shall translate the financial statements of overseas operations in hyperinflationeconomy according to the following methods:
(A) The Company shall restate the balance sheet items by utilizing the general price index, restate theitems of the income statement by utilizing the variation of the general price index, and then translatethem at the spot exchange rate on the recent balance sheet date.(B) If an overseas business is no longer situated in the hyperinflationary economy, the Company shallstop the restatement and shall translate the restated financial statements at the price of the cessation
date.
③When the Company disposes any overseas operation, shall translate the balance of foreign currencyfinancial statements related to the overseas business as shown below under the owner's equity itemsin the balance sheet, and the balance shall be transferred from the owner's equity items and disposedas current gains and losses; When the Company disposes part of the overseas operations, shallcalculate the balance according to the proportion of the disposal of foreign currency financialstatements, and record the balance as the current gains and losses.
9. Financial instrument
The financial instrument refers to a contract that forms the financial assets of one party and thefinancial liabilities or equity instruments of the other party.
(1) Classification of financial instruments
①Classification of financial assets
According to the business model of financial assets management and the contractual cash flowcharacteristics of financial assets, the Company classifies financial assets into the following threecategories :(A) financial assets measured at amortized cost; (B) financial assets measured at fair valueand the changes included in other comprehensive income (including financial assets designated to bemeasured at fair value and the changes are included in other comprehensive income);(C) financialassets measured at fair value and the changes recorded in current gains or losses.
②Classification of financial liabilities
According to business characteristics and risk management requirements, the Company divides thefinancial liabilities into the following two categories: (A) The financial liabilities measured at fair valueand the changes included in current gains and losses (including trading financial liabilities and thefinancial liabilities designated to be measured at fair value and of the changes included in current gainsor losses); (B) Other financial liabilities.
(2) Recognition basis and measurement method of financial instruments
①Recognition basis of financial instruments
When becoming one party of financial instrument contract, the Company shall confirm a financial assetor financial liability.
②Measurement method of financial instruments
(A)Financial assetsFinancial assets shall be measured at fair value when they are initially recognized.For financial assets measured at fair value and the changes booked into current gains or losses, relevanttransaction expenses shall be directly recorded into current gains or losses; for other financial assets,relevant transaction expenses shall be included in the initial recognized amount. Accounts receivable ornotes receivable arising from selling products or providing labor services that do not contain asignificant financing component or do not consider the financing component of contracts that do not
exceed one year, shall take the amount of consideration to which it is expected to be entitled as theinitially recognized amount.(a) Financial assets measured at amortized costAfter the initial recognition, the real interest method shall be adopted to implement follow-upmeasurement of such financial assets at amortized cost. Gains or losses of financial assets measured atamortized cost and not belong to part of any hedging relationship shall be recorded into current gainsand losses when recognition is terminated, reclassified, amortized or recognized as impairmentaccording to the real interest method.(b) Financial assets measured at fair value and the changes included in other comprehensive incomeAfter the initial recognition, such financial assets shall be subsequently measured at fair value. Theimpairment loss or gain, exchange gain or loss and the interest calculated by the real interest methodshall be recorded into current gains or losses, other gains or losses shall be booked into othercomprehensive income. When the recognition is terminated, the accumulated gains or losses bookedinto other comprehensive income before shall be transferred out from other comprehensive incomeand booked into current gains or losses.Where the Company designates part of non-trading equity instrument investments as the financialassets that measured at fair value and the changes included in other comprehensive income, relevantdividend income of such financial assets shall be included in current gains or losses, and changes in fairvalue shall be included in other comprehensive income. When the recognition is terminated, theaccumulated gains or losses recorded in other comprehensive income shall be transferred to retainedincome, and not recorded in current gains or losses.(c) Financial assets measured at fair value and the changes recorded in current gains and losses.Besides the financial assets measured at amortized cost and those measured at fair value and thechanges included in other comprehensive income, the Company classifies other financial assets as theassets measured at fair value and the changes included in current gains or losses.In addition, in the initial recognition, in order to eliminate or significantly reduce accountingmismatches, the Company designates some financial assets as the financial assets measured at fairvalue and the changes recorded into current gains or losses. For such financial assets, the Companyadopts fair value for follow-up measurement, and the changes in fair value are recorded into currentgains or losses.(B) Financial liabilities(a) Financial liabilities measured at fair value and the changes included in current gains or lossesTrading financial liabilities (including derivative instruments belonging to financial liabilities) shall besubsequently measured in accordance with the fair value, and the changes in fair value shall berecorded into current gains or losses except for those related to hedge accounting. For the financialliabilities that are designated to be measured at fair value and the changes included in current gains or
losses, in case the changes in the fair value of liabilities are caused by the changes in the Company'sown credit risk shall be included in other comprehensive income, and when terminates such liabilities,the accumulated changes in fair value shall be transferred to retained earnings. Other changes in fairvalue shall be booked into current gains or losses.(b) Financial liabilities measured at amortized costBesides the financial liabilities that do not meet the condition of derecognition or the financial liabilitiesformed by transferred financial assets or financial guarantee contract, other financial liabilities shall bemeasured at amortized cost, gains or losses arising from the termination of recognition or amortizationshall be booked into current gains or losses.
(3) The recognition basis and measurement method of financial assets transfer
If the Company transfers almost all the risks and rewards in the ownership of financial assets, it shallterminate to recognize the financial assets and separately recognize the rights and obligationsgenerated or retained in the transfer as assets or liabilities; if almost all the risks and rewards in theownership of financial assets are retained, the transferred financial assets shall continue to berecognized. If the Company neither transfers nor retains almost all the risks and rewards on theownership of the financial asset, it shall deal with the following situations:
① If it does not retain control of the financial asset, the recognition of the financial asset shall beterminated, and the rights and obligations generated or retained in the transfer shall be separatelyrecognize as assets or liabilities;
② If the control of the financial asset is retained, the relevant financial asset shall be recognizedaccording to the phases of transferred financial asset, and relevant liabilities shall be recognizedaccordingly.
(4) Terminating the recognition of financial liabilities
When the current obligation of the financial liability (or part thereof) has been discharged, theCompany shall terminate the recognition of such financial liability (or part thereof) and record thedifference between its book value and the consideration paid (including non-cash assets transferred orliabilities assumed) into the current gains or losses.
(5) Offsetting financial assets and financial liabilities
Financial assets and financial liabilities shall be listed separately in the balance sheet and shall not beoffset mutually. However, if the following conditions are met at the same time, the net offset shall beshown in the balance sheet:
①The Company has the legal right to offset recognized amount, and such legal right is currentlyenforceable.
②The Company plans to implement net settlement, or simultaneously sell off the financial assets andliquidate such financial liabilities.
(6) Equity instrument
Equity instruments are the contracts that prove the ownership of the residual equity in the Company'sassets after deducting all liabilities. Instruments issued (including refinancing), repurchased, sold orwritten off by the Company shall be taken as the disposal of changes in equity. The company does notrecognize changes in the fair value of equity instruments.Transaction expenses associated with equity transactions shall be deducted from equity.The Company shall take the distribution of equity instrument holders as profit distribution, and thestock dividends paid will not affect the total equity of shareholders.
(7) The method of recognizing the fair value of financial instruments
When implement initial recognition, if the fair value of the financial asset or financial liability isdetermined by quoting the same asset or liability in an active market or by other means other thanvaluation techniques of observable market data, the Company will defer the difference between thatfair value and the trading price. After the initial recognition, the Company recognizes the deferreddifference as the gain or loss of the corresponding accounting period based on the degree of change ofa factor in the corresponding accounting period.
(8) Impairment of financial assets
Regarding the financial assets measured at amortized cost and the debt instrument investmentmeasured at fair value and the changes recorded in other comprehensive income, the Companyrecognizes loss provision based on expected credit losses.
①Recognition method of impairment provision
(A)General methodAt each balance sheet date, the Company measures the expected credit losses of financial instrumentsat different stages. If the credit risk of the financial instrument has not significantly increased since itsinitial recognition, it is in the first stage. The Company measures the loss provision according to theexpected credit loss within the next 12 months. If the credit risk of the financial instrument hassignificantly increased since its initial recognition but no credit impairment has occurred, it is in thesecond stage, the Company measures the loss provision according to the expected credit loss of theinstrument during the whole period. If the financial instrument has experienced credit impairmentsince its initial recognition, it is in the third stage, and the Company measures the loss provisionaccording to the expected credit loss of the instrument during the whole period. For the financialinstruments (such as time deposit in commercial banks with high credit rating, financial instrumentswith external credit rating of "investment grade" or above), that have lower credit risk in the balancesheet date, assuming that the credit risk has not increased significantly since the initial recognition, theCompany measures the loss provision according to expected credit loss within the next 12 month.(B)Simplified methodFor accounts receivable and revenue-related notes receivable that do not contain a significant financingcomponent or do not consider the financing component of contracts that do not exceed one year, the
Company measures the loss provision in accordance with the expected credit loss for the entireduration.
②Criteria for determining whether credit risk has increased significantly since the initial recognitionIf the probability of default of the financial asset recognized on the balance sheet date is significantlyhigher than the probability of default at the time of initial recognition, the credit risk of the financialasset is proved to be significantly increased.No matter which way used by the Company to assess whether a significant increase in credit risk, if thecontract payment is overdue more than 30 (included), usually can presume the credit risk of financialassets increase significantly, unless rational and evidence-based information is available to be obtainedby the company at reasonable cost to prove that the credit risk does not increase significantly evenafter 30 days of delayExcept for special cases, the Company uses the change of default risk within the next 12 months as areasonable estimate of default risk in the whole duration to determine whether the credit risk hasincreased significantly since the initial recognition.
③ The combination method and determination basis of credit risk assessment based on combinationThe Company respectively evaluates the credit risks of notes receivable, accounts receivable and otherreceivables with the following characteristics. Such as: the receivables in dispute with the other party orinvolving litigation or arbitration; receivables with a clear indication that the debtor is likely to beunable to repay.When it is impossible to evaluate the information of the expected credit loss of each financial asset at areasonable cost, the Company divides the receivables into several portfolios according to the credit riskcharacteristics and calculates the expected credit loss based on the portfolios.
| Portfolio | Accrual method |
| Bank's acceptance bill, commercial acceptance bill | For the notes receivable divided into portfolios, the expected credit loss shall be calculated based on the default risk exposure and the expected credit loss rate of the entire duration by referring to the experience of past credit losses and combining the current situation and the forecast of future economic conditions. It will not accrue the allowance for doubtful accounts of bank’s acceptance bill |
| Aging | For the accounts receivable divided into aging portfolios, the Company shall, by referring to the experience of past credit loss and combining with the current situation and the prediction of future economic situation, prepare a table comparing the aging of accounts receivable with the expected credit loss rate of the whole period to calculate the expected credit loss. |
| Other | For receivables that shall be paid by the subsidiary included in the scope of consolidation, the Company shall, by referring to the experience of past credit loss and combining with the current situation and the prediction of future economic situation, prepare a table comparing the aging of accounts receivable with the expected credit loss rate of the whole period to calculate the expected credit loss. |
10. Notes receivable
The recognition method and accounting arrangement method for the expected credit loss of thereceivables have been shown in "Financial Instruments".Receivables include notes receivable, accounts receivable, other receivables, and long-term receivables.
11. Accounts receivable
The recognition method and accounting arrangement method for the expected credit loss of thereceivables have been shown in "Financial Instruments".Receivables include notes receivable, accounts receivable, other receivables, and long-term receivables.
12. Other receivables
The recognition method and accounting arrangement method for the expected credit loss of thereceivables have been shown in "Financial Instruments".Receivables include notes receivable, accounts receivable, other receivables, and long-term receivables.
13. Inventory
(1) Classification of inventory
The Company's inventory is divided into materials in transit, raw materials, revolving materials(including packaging and low-value consumables), in process products, finished products (inventory),delivered products, expendable biological assets, project construction costs and so on. Expendablebiological assets include broiler, piglet, finishing swine, etc.
(2) Valuation method for delivery of inventory
The delivered materials, delivered finished products, and delivered expendable biological assets shallbe calculated by weighted average method.
(3) Recognition basis of net realizable value of inventory and the accrual method for inventory fallingprice reserves
① Recognition basis of net realizable value of inventory
(A) For merchandise inventory (or finished products) for sale including materials for direct sale, duringthe normal production and operation, the net realizable value shall be recognized by the amount ofestimated sales price of the inventory deducting the estimated selling expenses and related taxes anddues.(B) The materials inventory needs to be processed, during the normal process of production andmanagement, the estimated sale price of the finished products minus the estimated costs whenfinished the works, the estimated selling expenses and related tax payments, the net realizable valuecan be recognized.(C) For the inventory hold to execute sale contract or labor contract, its net realizable value shall becalculated based on the contract price; In case inventory quantity hold by the Company is more thanthe order quantity of the sale contract, the net realizable value of the exceeding part inventory shall becalculated based on general sale price.(D) But for materials held for production, etc., if the net realizable value of finished products made fromthe materials is higher than the cost, the materials shall still be measured at the cost; If the decline ofmaterial prices indicates that the net realizable value of finished products is lower than the cost, thematerials can be measured based on net realizable value.
(E) For expendable biological Assets: on the balance sheet date, the expendable biological assets shallbe measured at the lower of cost and net realizable value, and the falling price reserves shall becalculated by the same way as that for recognizing the falling price reserves of inventory. If theinfluencing factors of impairment have disappeared, the amount of write-down shall be recovered andthe amount of write-down shall be reversed back and recorded into the current gains or losses. If theCompany changes the use of consumable biological assets, the cost after the change of use shall bedetermined by the book value at the time of the change of use.
②Accrual method of inventory falling price reserves
The Company shall accrue inventory falling price reserves according to the lower of cost and netrealizable value of a single inventory item. For those inventories with large number and low unit price,the falling price reserves for inventory shall be accrued according to the categories.
(4) Inventory system
The Company adopts perpetual inventory system for the stock inventory and regularly conductsphysical inventory.
(5) The amortization method for revolving materials
① The amortization method of low-value consumption goods
The Company adopts fifty percent amortization method for ring mould and wooden pallets, andone-time amortization method for other low-value consumables.
② Amortization method of packing material
The Company shall conduct amortization by once write-off process in case of receiving packingmaterials.
14. Contract assets
The contract assets refer to that, the company has rights to charge consideration for products that havebeen transferred to the customer, and such rights shall depend on factors other than the passage oftime. The Company's contract assets mainly include completed and unsettled assets, and qualityretention money. The contract assets and contract liabilities under the same contract shall be shown ona net amount, and the contract assets and contract liabilities under different contracts shall not beoffset.
15. Long-term equity investment
(1) Initial investment cost recognition of long-term equity investment
① The recognition of the initial investment cost of long-term equity investment formed by businesscombination can be seen in the accounting arrangement of business combination under the samecontrol and under the different control in Note 5.
② Besides the long-term equity investment formed by business combination, the initial investmentcost of the long-term equity investment obtained by other means shall be recognized in accordancewith the following provisions:
(A) For long-term equity investment acquired through paying cash, the acquisition price actually paidshall be taken as the initial investment cost. The initial investment cost includes the expenses directlyrelated to the long-term equity investment obtained, taxes and other necessary expenses.(B) The long-term equity investment obtained by issuing equity securities (equity instruments) isregarded as its initial investment cost according to the fair value of equity securities (equity instruments)issued. If there is conclusive evidence that the fair value of long-term equity investment obtained ismore reliable than that of equity securities (equity instruments) issued, the initial investment cost isrecognized on the basis of the fair value of long-term equity investment invested by investors. If thefees directly related to the issuance of equity securities (equity instruments), including service fees andcommissions, are reduced by the issuance premium, and if the premium is insufficient to be reduced,the surplus reserve and undistributed profits are reduced in turn. Long-term equity investmentobtained by issuing debt securities (debt instruments) shall be treated by issuing equity securities(equity instruments).(C) For the long-term equity investment obtained through debt restructuring, the Company takes thefair value of the shares enjoyed by the creditor's rights into equity as its initial investment cost.(D) For long-term equity investment acquired through non-monetary assets exchange, if non-monetaryassets exchange is of commercial substance and fair value of converted assets can be reliably measured.The Company confirms its initial investment cost on the basis of fair value of converted assets, unlessthere is solid evidence that the fair value of converted assets is more reliable. If the above-mentionedconditions cannot be met, the book value of swap-out assets and related payable taxes shall be takenas the initial investment cost of swap-in long-term equity investments.The expenses, taxes and other necessary expenses incurred by the Company directly related to theacquisition of long-term equity investment are included in the initial investment cost of long-termequity investment.No matter how the Company acquires long-term equity investment, the cash dividends or profitsdeclared but not yet paid in actual payments or consideration shall be accounted for separately as thedividend receivable and shall not constitute the cost of long-term equity investment.
(2) The subsequent measurement and loss and profit recognition method of long-term equityinvestment
① The long-term equity investment checked and calculated by cost method
(A) The Company shall adopt method to calculate the long-term equity investment can be controlled bythe invested unit, that is, investment in subsidiaries.(B) For long-term equity investment calculated by cost method, except for cash dividends or profitswhich have been declared but not yet paid in the actual price or consideration at the time ofinvestment, the Company, regardless of whether it belongs to the net profits realized by the investedunits before and after investment, shall recognize the investment income according to the cash
dividends or profits declared by the invested units.
② The long-term equity investment checked and calculated by equity method(A) A Company shall adopt the equity method to account for joint venture under the joint control of theinvested entity or joint venture with significant influence.(B) For long-term equity investment adopted equity method, if the initial investment cost is more thanthe enjoyed share of net asset fair value identified by the invested units when the investment happens,the initial investment cost of the long-term equity interest investment shall not be adjusted; If theinitial investment cost is less than the enjoyed share of net asset fair value identified by the investedunits when the investment happens, its balance shall be included into the current gains and losses andthe initial investment cost of the long-term equity investment shall be adjusted simultaneously.(C) After obtaining a long-term equity investment, the Company shall confirm the investment lossesand profits and other comprehensive income respectively and adjust the book value of the long-termequity investment in terms of the due owned or borne share of the net gains or losses and othercomprehensive income achieved by the invested unit. When confirming the net loss and profit of theinvested unit that shall be owned or borne, recognition shall be conducted for the net profit of theinvested unit upon adjustment based on fair value of net identifiable assets of the invested unit whenobtaining the investment. However, if the Company is unable to reasonably confirm the fair value of theidentifiable assets of the invested unit at the time of obtaining investment, the balance between thefair value of the identifiable assets of the invested unit at the time of investment and book value issmall or it is impossible to obtain relevant information of the invested unit due to other reasons, theCompany shall directly calculate and confirm the investment gains and losses on the basis of the netbook gains and losses of the invested unit. The Company shall reduce correspondingly the book value ofthe long-term equity investment according to the deserved portion of assigning cash dividends or profitdeclared by the invested unit. As for other changes concerning owner's equity of the invested unitbesides net profit or loss, other comprehensive income and profit distribution, the Company shalladjust the book value of the long-term equity investment and include them into the owner's equity.When affirming the investment income generated by the investment of joint ventures, the Companyoffsets the unrealized internal transaction income between the Company and the joint venture whichbelongs to the Company according to the share-holding ratio, and affirms the investment gains andlosses. The internal transaction loss occurred between the Company and invested unit belongs to assetsimpairment loss, which shall be recognized in full amount. The Company shall offset the unrealizedinternal transaction gains and losses between subsidiaries incorporated into combination and jointventures in accordance with the above-mentioned principles, and confirm the investment gains andlosses.When net deficiency of the invested entity that recognized to be borne, it shall be disposed as thefollowing orders: The book value of the long-term equity investment shall be offset at first. If the book
value of long-term equity investment is not enough to be offset, the investment losses shall berecognized continuously according to the limit that the book value of other long-term equityinvestments substantially constitutes the net investment in the invested entity, to offset the book valueof long-term receivables. After the process above, if the Company still shall share extra duty accordingto investment contract or the agreement, confirm beforehand liabilities according to estimated dutythat shall be undertaken and include it in the current investment loss. If the invested unit realizes to beprofitable in the following period, the Company shall process it in the sequence contrary to thementioned above after deducting the contribution of loss that hasn’t been recognized, write down thebook value that has been recognized to be estimated liabilities, resume other book values thatconstitute the long-term interest and long-term equity investment of the invested unit in substance andmeanwhile confirm investment income.
(3) The basis recognized to have joint control and significant influence on the invested entity
① The basis recognized to have joint control on the invested entity
The joint control refers to the control jointly performed towards certain arrangement as per the relatedagreements, and the related activities thereof must be agreed by all the participants who share thecontrol rights before making decisions. The relevant activities generally include sale and purchase ofgoods or labor services, management of financial assets, acquisition and disposal of asset, R&Dactivities and financing activities. Joint venture refers to the joint venture arrangement that theCompany has the right to arrange the net assets of the Company. The joint venture arrangement inwhich the joint venture party enjoys assets related to arrangement and bears relevant liabilities iscooperation rather than joint venture.
② The basis recognized to have significant influence on the invested entity
The significant influence refers to having the rights to participate in the decision-making of the financialand business policies of the invested entity, but not being able to control or jointly control theformulation of these policies together with other parties. When the Company is able to exert significantinfluence on the invested entity, the invested entity shall be its associated company.
16. Fixed assets
(1). Recognition conditions
The fixed assets refer to the tangible assets held for commodity production, rendering service, lease oroperation management with a service life of more than one accounting year. The fixed assets arerecognized when the following conditions are met,
① The economic interests related to the fixed assets are likely to flow into the Company;
② The costs of the fixed assets can be calculated reliably.
(2). Method of depreciation
| Item | Method of depreciation | Period of depreciation（year） | RM value rate % | Yearly depreciation % |
| Office and buildings | straight-line | 10-40 | 3 | 2.43-9.70 |
| depreciation | ||||
| Machinery equipment | straight-line depreciation | 10 | 3 | 9.70 |
| Transportation equipment | straight-line depreciation | 4 | 3 | 24.25 |
| Other equipment | straight-line depreciation | 5 | 3 | 19.40 |
17. Construction in progress
(1) Category of construction in process
Construction in process shall be calculated separately according to the approved projects
(2) The standard and time point for construction in process carried down fixed assetsAll expenditures of the construction in progress that incurred before it reaches the estimatedserviceable condition shall be regarded as entry value of the fixed assets. The self-operatingengineering shall be measured according to direct materials, direct wages, direct mechanicalconstruction costs, etc.; Package project is measured according to the payable project price; Theborrowing expenses that meet the capitalization conditions and occur before the project underborrowing reaches its intended usable state shall be capitalized and included in the cost of the projectunder construction.If the fixed assets have reached the intended usable state but have not yet completed the finalaccounts, the Company shall, from the date of reaching the intended usable state, determine its costaccording to the project budget, cost or actual cost of the project, as well as the estimated value,transfer it to the fixed assets, and calculate the depreciation of the fixed assets in accordance with theCompany's fixed assets depreciation policy; After final account is completed, the Company shall adjustthe original provisionally estimated value according to actual cost, but not adjust the previouslyaccrued amount of depreciation.
18. Borrowing costs
(1) Range of the borrowing costs
The borrowing cost of the Company shall include interest on borrowings, amortization of discount orpremium, auxiliary expenses, and exchange balance incurred from foreign currency borrowings.
(2) Recognition principle of borrowing costs
Where the incurred borrowing cost of the Company can be directly attributable to the acquisition andconstruction or production of assets eligible for capitalization, it shall be capitalized and reckoned in thecosts of relevant assets. Other borrowing costs shall be recognized as costs on the basis of the actualamount accrued, and shall be included into current gains and losses.The term "assets eligible for capitalization" shall refer to the fixed assets, investment real estate,inventories and other assets, of which the acquisition and construction or production may take quite along time to get ready for its intended use or for sale.
(3) Recognition of the time period for capitalization of the borrowing cost
① Recognition of the time point for capitalization of the borrowing cost
After assets expenditures and the borrowing expenses have happened, the necessary acquisition andconstruction or production activities have already started in order to reach the pre-recognized usable ormarketable state for the assets, the borrowing expenses can begin capitalization. The asset expensesshall include the cash, transferred non-cash assets or expenses that bearing debts paid for theacquisition and construction or production for assets eligible for capitalization
② Recognition of the suspending time point for capitalization of the borrowing costsIf assets eligible for capitalization is interrupted abnormally during the course of acquisition andconstruction or production, and the interruption lasts more than 3 months, the capitalization ofborrowing costs shall be suspended. The borrowing costs occurred during the interruption shall berecognized as current gains or losses, until the acquisition and construction or production activities ofthe asset restart, the capitalization of borrowing costs shall be continued. If the interruption is anecessary step for making the acquired, built or produced assets which are eligible for capitalizationreaching estimated usable and marketable status, the capitalization of the borrowing costs shall becontinued.
③ Recognition of the suspending time point for capitalization of the borrowing costsWhen the acquired, built or produced assets which are eligible for capitalization can reach estimatedusable and marketable state, shall stop capitalizing on borrowing costs; the borrowing costs incurredthereafter shall be recognized as current gains and losses according to the real amount.Where each part of the acquired, built or produced assets which are eligible for capitalization iscompleted separately, and every single part is available to use or sell during the continuing constructionof other parts, and the acquisition and construction or production activities, which are necessary tomake such part of asset reaching the estimated status of being available to use or sell, have alreadybeen completed substantially, shall stop capitalizing on the borrowing costs in relation to this part ofasset. Where each part of the acquired, built or produced assets which are eligible for capitalization iscompleted separately and but it cannot be available to use or sell till the whole construction finishing,shall stop capitalizing on the borrowing costs when the assets can be completed entirely.
(4) The recognition of the amount of the capitalization of borrowing costs
① The recognition of the amount of the capitalization of borrowing interests
During the capitalization period, the interests' capitalization amount (including the amortization ofdiscounts or premiums) in each accounting period shall be recognized according to the followingprovisions:
(A) As for special borrowing costs arising from the acquisition and construction or production of assetswhich are eligible for capitalization, the amount shall be recognized based on the interests cost of thespecial borrowings costs occurred actually in the current period deducting the interests' income earnedfrom depositing the unused borrowing costs or the income from temporary investment.
(B) If ordinary borrowings used for acquisition and construction or production of assets which areeligible for capitalization, the interests' amount of ordinary borrowings to be capitalized shall berecognized by the weighted average of the asset expenditures for cumulative capital expenditure thatexceed the capital expenditure of specific borrowings to multiply the capitalization rate of ordinaryborrowings. The capitalization rate is recognized by the calculation of the weighted average interestrate of general borrowing costs.(C) If there is any discount or premium of the borrowings, the number of discounts or premiumsamortized during each accounting period shall be recognized by the effective interest rate method, andan adjustment shall be made to the amount of interests in each period.(D) Within period of the capitalization, the interest capitalization amount of each accounting periodshall not exceed the amount of interest actually occurred to the relevant borrowings in the currentperiod.
② The recognition of the amount of the capitalization of borrowing auxiliary expenses(A) Article For the ancillary expense incurred to a specifically borrowings, those incurred before assetseligible for capitalization under acquisition, construction or production is ready for the intended use orsale shall be capitalized at the incurred amount when they are incurred, and shall be included into thecosts of the asset eligible for capitalization those incurred after a qualified asset under acquisition andconstruction or production is ready for the intended use or sale shall be recognized as expenses on thebasis of the incurred amount when they are incurred, and shall be recorded into the gains and losses ofthe current period.(B) The auxiliary expenses arising from general borrowings shall be recognized as expenses at the timeof occurrence and shall be included into the gains and losses of the current period.
③ The recognition of the amount of the capitalization of the balance of exchangeDuring the period of capitalization, the exchange balance on foreign currency specific borrowings shallbe capitalized, and shall be included in the cost of assets eligible for capitalization.
19. Biological assets
(1) Classification of biological assets
Biological assets refer to live animals and plants. The Company's biological assets are divided intoexpendable biological assets and productive biological assets.
(2) Conformation conditions of biological assets
The Company confirms the biological assets that satisfy the following conditions at the same time:
① The Company possesses or controls the biological asset as a result of past transaction or matter.
② The economic benefits or service potential concerning this biological asset are likely to flow into theCompany.
③ The cost of the biological asset can be measured reliably.
(3) Depreciation of productive biological assets
The Company shall depreciate the productive biological assets that have achieved the predeterminedpurposes of production and operation, and reasonably confirm their service life, estimated net residualvalue and depreciation method according to nature, usage and expected realization of the economicbenefits involved.The type, service life, anticipated net residual value and yearly depreciation of the Company'sproductive biological assets are as follows:
| Type | Service life | Anticipated net residual value | Depreciation method |
| Pig breeder | 36 months | 20.00% | Straight-line service life |
| Broiler breeder | 30 weeks | RMB22.50 per broiler | Workload |
| Laying duck | 10 months | RMB30.00 per duck | Straight-line service life |
| Layer | 14 months | RMB21.00 per layer | Straight-line service life |
| Cattle breeder | 6 years | 30.00% | Straight-line service life |
The depreciation rate and depreciation amount of the productive biological assets, which have beenprepared for impairment, are recalculated according to the book value, estimated net residual valueand usable life of the productive biological assets.The Company reviews the service life, estimated net residual value and depreciation methods ofproductive biological assets at regular intervals. If the expected number of service life or estimated netresidual value is different from the original estimate, or if there is any significant change in the expectedrealization of the economic benefits involved, it shall be treated as a change in accounting estimate.
20. Right-of-use asset
A right-of-use asset is the right of the lessee to use the leased asset during the period of leasing. At thecommencement date of the lease term, the Company recognizes a right-of-use asset and a leaseliability for the lease as a lessee, except for short-term leases and leases of low-value assets that aresubject to simplified treatment.The categories of right-of-use assets, service life and annual depreciation rate are listed below.
| Categories of right-of-use assets | Depreciable life | Annual depreciation rate% |
| Houses and buildings | 5-20 | 5.00-20.00 |
| Equipment | 2-20 | 5.00-50.00 |
| Land | 5-40 | 2.50-20.00 |
21. Intangible assets
(1). Valuation methods, service life, and impairment test
①Initial measurement of intangible assets
(A) Initial measurement of outsourcing intangible assetsThe cost of outsourcing intangible assets, including acquisition price, relevant taxes and dues as well as
other expenditures which is directly attributed to make intangible assets to the estimated purpose.When the payment of purchased intangible assets, price exceeding normal credit conditions is delayedin payment, with financing nature in essence, the intangible assets cost shall be recognized based onthe present value of purchase price. The balance between the cost actually paid and the present valueof the purchasing cost will be included into the current gains and losses during the credit period exceptthe part that shall be capitalized.(B) Initial calculation for independently developed intangible assetsThe cost of self-developed intangible assets shall be recognized according to the total expenditureincurred from meeting the capitalization conditions to reaching the intended purpose, and theexpenditure already expended in the previous period shall not be adjusted.For the intangible assets researched and developed by the Company, the expenditure during researchstage shall be recorded into the current gains and losses as occurring; if the expenditures indevelopment stage which don't meet the conditions of capitalization shall be included into currentgains and losses when it occurs. Those meeting the condition of capitalization shall be recognized asintangible assets. When the expenditures occur during research or development stage cannot bedistinguished, all the R&D expenditures occurred shall be included into the current gains and losses.
②Subsequent measurement of intangible assets
The service life shall be analyzed and recognized by the Company when obtaining the intangible assets.The intangible assets acquired by the Company include intangible assets with finite service life andindefinite service life.(A) Subsequent calculation for intangible assets with finite service lifeFor intangible assets with limited service life, the Company will adopt the straight-line method toamortize them in phases during their service life from the time they reach their intended purpose,without reserving residual value. The amortization amount of intangible assets shall be included intocurrent gains and losses. If the economic benefits of an intangible asset are realized through product orother assets, the amortization amount shall be included into the cost of the relevant assets.The categories of intangible assets, estimated service life, estimated net residual value and annualamortization rate are listed as follows:
| Categories | Estimated service life(year) | Estimated net residual value % | Annual amortization rate % |
| Land use rights | According to the service life of land license | 0 | - |
| Computer software and other | 5-10 | 0 | 10-20 |
The Company shall review the service life and the amortization method of intangible assets with thefinite service life on the balance sheet date.(B) The subsequent measurement for intangible assets with indefinite service lifeThe Company shall not amortize intangible assets with uncertain service life during the holding period.
③Estimate the service life of intangible assets
(A) The service life of the intangible asset derived from the contractual rights or other statutory rightsshall be recognized according to the limit not exceed the contractual rights or other statutory rights; Ifwhen the contract rights or other statutory rights are due, they can be extended because of renewal,and there is evidence that the Company does not need to pay a large amount of cost to renew contract,then the renewal period shall be included into the service life.(B) If the service life is not stipulated in the contract or law, the Company shall confirm the period whenintangible assets can bring economic benefits to the Company by employing relevant experts fordemonstration or comparing with those in the same industry and referring to the Company's historicalexperience.(C) In accordance with the above method, if it is still unable to reasonably confirm the time limit whenthe intangible assets can bring economic benefits for the Company, the intangible assets shall bedeemed as the intangible assets with uncertain service life.
④Arrangement of land use right
(A) The land use right acquired by the Company is usually recognized as intangible assets, but if the landuse right is used to earn rent or capital appreciation, it will be converted into investment real estate.(B) If the Company develops and constructs buildings such as factory buildings, it shall treat therelevant land use rights and buildings separately.(C) The price paid for the acquisition of land and buildings shall be allocated between the building andthe right to use the land. If they cannot be reasonably distributed, they shall be recognized as fixedassets.
(2). Accounting policies of internal R&D expenditure
①The specific standard for the partition of the research stage and development stage of the Companyinternal R&D projectAccording to the actual situation of R&D, the Company divides R&D projects into two stages: researchstage and development stage.(A) Research stageResearch stage refers to the stage for ingenious and planned investigation, research activities so as toacquire and understand new scientific or technical knowledge, etc.(B) Development stageDevelopment stage refers to before the commercial manufacture or use, the stage for the application ofresearch achievement and other knowledge to a certain plan or design to produce new or substantialimproved materials, devices or products, etc.The expenditure of the internal R&D projects at the research stage shall be included into current gainsand losses when incurred.
②The specific standards for expenditure at development stage which meet capitalization
The expenditure of the internal R&D projects at the development stage shall be recognized as theintangible assets when meeting the following conditions simultaneously:
(A) Complete the intangible assets to make them feasible to be used or sold in technology;(B) Possess the intention to complete the intangible assets and use or sell them;(C) The ways of intangible assets to generate economic benefits include the ability to prove theexistence of the market where there are the products produced by the intangible assets or theexistence of that of the intangible assets, and prove its usefulness if intangible assets will be usedinternally;(D) There are sufficient technologies, financial resources and other resources supporting to completethe development of the intangible assets, and the Company is able to use or sell the intangible assets;(E) Expenditures that belong to the development stage of the intangible assets can be measuredreliably.
22. Impairment of long-lived assets
The impairment test shall be made to long-term equity investments, investment property measured byusing the cost model, fixed assets, projects under construction, intangible assets with finite service lifeand other long-term assets with signs of impairment on the balance sheet date. If the impairment testresult is indicated that the recoverable amount of assets is lower than its book value, it is withdrawnimpairment reserves in accordance with the balance and calculated into the impairment loss. Therecoverable amount shall be the higher one of the net amounts of the fair value of the assets deductedby the disposal expenses and the present value of the expected future cash flow of the assets. Calculateand confirm the assets impairment reserves based on single asset; shall it be difficult to estimate therecoverable amount of single asset, the recoverable amount of the asset group shall be recognizedbased on its belonging asset group. Asset group is the minimum asset portfolio that can generate cashinflow independently.Each year, the Company performs the impairment test on the goodwill and the intangible assets withuncertain service life, no matter whether there are signs of impairment or not.When the Company conducts the impairment test on business reputation, as for the book value ofgoodwill formed due to the business combination, it shall be amortized to related assets groups fromthe acquisition date according to the reasonable methods; The part that is hard to be allocated torelated assets groups shall be amortized to related combined assets groups. When apportioning thebook value of the goodwill to the relevant asset groups or combinations of asset groups, it shall beapportioned on the basis of the proportion of the fair value of each asset group or combination of assetgroups to the total fair value of the relevant asset groups or combinations of asset groups. Where it isdifficult to measure the fair value reliably, it shall be apportioned on the basis of the proportion of thecarrying value of each asset group or combination of asset groups to the total carrying value of therelevant asset groups or combinations of asset groups. When making an impairment test on the
relevant asset groups or combinations of asset groups including goodwill, if any evidence shows thatthe impairment of asset groups or combinations of asset groups is possible, the Company first makes animpairment test on the asset groups or combinations of asset groups not including goodwill, calculatethe recoverable amount, compare it with the relevant carrying value and confirm the correspondingimpairment losses. The Company makes an impairment test of the asset groups or combinations ofasset groups containing business reputation, and compares the book value of these relevant assetgroups or combinations of asset groups (including the book value of goodwill amortized thereto) andtheir recoverable amount. Where the recoverable amount of relevant assets or combinations of theasset groups is lower than the book value thereof, the depreciation of the goodwill losses shall berecognized.Once the impairment loss of above-mentioned asset is recognized, it shall not be reversed in followingaccounting periods.
23. Long-term prepaid expenses
(1) Scope of long-term prepaid expense
The long-term prepaid expense refers to an expense that has incurred but shall be amortized by thecurrent period and subsequent periods with the time limit of more than 1 year (exclusive), and includesimprovement expenditures incurred in fixed assets by way of operating lease.
(2) Initial calculation for long-term prepaid expense
The long-term prepaid expense received initial calculation based on the actual cost.
(3) Amortization of long-term prepaid expense
Long-term prepaid expenses in benefit period will be of amortization average using the straight-linemethod.
24. Contract liabilities
Recognition method of contract liabilitiesContract liabilities refer to the obligation of the Company to transfer commodities to customers as theCompany has received the consideration or needs to receive the consideration from customers. Beforethe Company transferring the commodities to the customer, if the customer has paid the contractconsideration or the Company has obtained an unconditional right to collect the accounts, theCompany shall record the accounts received or needed to receive as the contractual liabilities based onthe time when the customer actually pays the accounts or when the accounts become due. Thecontract assets and contract liabilities under the same contract shall be recorded on a net basis, and thecontract assets and contract liabilities under different contracts shall not be offset.
25. Employee remuneration
(1). The accounting arrangement method of short-term remuneration
Short-term remuneration refers to employee remuneration that needs to be paid in full amount within12 months after the end of annual report period that the employee provides related service, except for
the remuneration given for labor relation removing with the employee.Short-term remuneration includes: Employee salary, bonus, allowance and subsidy, employee welfareexpenses, medical insurance premiums, industrial injury insurance premium, birth insurance premiumand other social insurance premiums, housing accumulation fund, labor union expenditure andemployee education expenditure, short-term compensated absence, short-term profit-sharing plan,non-monetary welfare and other short-term remunerations.The Company shall confirm the actual short-term remuneration accrued as liabilities and include it intocurrent gains and losses or related asset cost during the accounting period of services provided by staff.
(2). The accounting arrangement method of post-employment welfare
The Company participates in the establishment of withdrawal plans, which include basic pensioninsurance premiums, unemployment insurance premiums and enterprise annuity payments foremployees in accordance with relevant regulations. The amount due for deposit shall be recognized asthe debt of employee remuneration on the balance sheet date in order to exchange for the serviceprovided by employees during accounting period, and include into the current gains and losses orrelevant asset cost.
(3). Accounting arrangement method of dismissal welfare
Dismissal welfare refers to the remuneration for the employee when the Company terminates the laborrelationship with the employee before the labor contract expires or when the Company encourages theemployee to receive layoff voluntarily. If the Company provides dismissal welfare for staffs, the staffremuneration liability generating from confirming dismissal welfare on the earlier one of the followingtwo dates shall be included into current gains and losses:
① When the Company cannot unilaterally withdraw the dismissal welfare provided by laborrelationship relief plan or reduction suggestion.
② When the Company confirms cost or expense relevant to the restructuring involved in payingdismissal welfare.
(4). Accounting arrangement method of other long-term employee benefitsOther long-term employee welfare refers to other welfares of all employees other than short-termremuneration, welfare after demission and dismisses welfare. At the end of report period, staffremuneration cost generating from other permanent staff welfare shall be recognized to the followingconstituent parts:
① Cost to serve.
② Net interest amount of net liabilities or net asset of other permanent staff welfares.
③ The change generating from the recalculation of net liability or net asset of other permanent staffwelfares.In order to simplify the relevant accounting arrangements, the total net amount of above items isrecorded into current gains and losses or relevant asset costs.
26. Lease liabilities
The lease liability is initially measured at the present value of the lease payments outstanding at thecommencement date of the lease term.At the commencement date of the lease term, the Company recognizes a right-of-use asset and a leaseliability for the lease as a lessee, except for short-term leases and leases of low-value assets that aresubject to simplified treatment.
27. Estimated liabilities
(1) Recognition principles of estimated liabilities
When the external guarantees, pending litigation or arbitration, product quality assurance, loss ofcontract, the obligation of restructuring matters or the relevant business meet three of the followingconditions, it shall be recognized as estimated liabilities:
① That obligation is a current obligation undertaken by the Company;
② It is likely to cause the economic benefit to flow out of the Company due to the performance of theobligation;
③ The amount of the obligation can be measured reliably.
(2) Calculated method for estimated liabilities
The amount of the estimated liability is measured in accordance with the best estimate of theexpenditure required for the contingency.
① If there is a sequent range for the necessary expenses and if all the outcomes within this range areequally likely to occur, the best estimate shall be recognized in accordance with the middle estimatewithin the range.
② In other cases, the best estimate shall be disposed according to the following cases respectively:
(A) If the contingencies involve a single item, it shall be recognized according to the most likelyoutcome.(B) If the contingencies involve two or more items, the best estimate shall be calculated and recognizedaccording to all possible outcomes and the relevant probabilities.
28. Share-based payment
The share-based payments shall consist of equity-settled share-based payments and cash-settledshare-based payments.
(1) Accounting arrangement on the grant date
In addition to share-based payments of the immediate vesting, regardless of equity-settled share-basedpayment or cash-settled share-based payment, the Company shall not accept accounting arrangementon the grant date.
(2) Accounting arrangement on each balance sheet date in the waiting periodIn the waiting period of each balance sheet date, services acquired in hiring employees or other partiesshall be included in the cost, and the owner's equity or liabilities shall be recognized.
As for share-based payments with market conditions, as long as employees meet all other non-marketconditions, the acquired service shall be recognized. When the performance conditions are non-marketconditions, after the waiting period is fixed, if the subsequent information indicates that the estimationof feasible rights needs to be adjusted, the earlier estimate shall be modified.As for equity-settled share-based payment involving employees, according to fair value of equityinstruments in the grant date, it shall be included in cost and capital reserve (other capital reserve), andits subsequent changes of fair value shall not be recognized. As for cash-settled share-based paymentinvolving employees, it shall be recounted according to fair value of equity instruments at each balancesheet date to recognize the cost and payable employee remuneration.On each balance sheet date within the waiting period, the Company shall make the best estimatesaccording to the newly obtained changes in exercisable right staff number variation and other follow-upinformation, and amend the number of equity instruments of expected exercisable right.According to the fair value of the above-mentioned equity instruments and the number of equityinstruments with predicted feasible rights, the cumulative cost and expense amount that shall berecognized up to the current period is calculated, with the cumulative recognized amount in theprevious period subtracted, as the cost and expense amount that shall be recognized in the currentperiod.
(3) Accounting Arrangement on the Vesting Date
① As for equity-settled share-based payment, after vesting date, the recognized cost and the totalowner equity shall no longer be adjusted. On the vesting date, the Company shall confirm the sharecapital and share premium according to the exercise situation, and the capital reserve (other capitalreserve) in the waiting period shall be carried forward at the same time.
② As for cash-settled share-based payment, after the vesting date, the Company shall no longerconfirm the cost, and changes in fair value of liabilities (staff remuneration) shall be included in currentgains and losses (changes of profit or loss in fair value).
(4) Accounting arrangement for using repurchased share as incentive stock option for staff Where theCompany rewards its employees in the form of share repurchase, when it repurchases shares, it shalltreat all the expenditures of the share repurchase as stock shares, and make a record. On each balancesheet date during the waiting period, according to the fair value of equity instruments on the grantingdate, the obtained staff services are included in the cost and expenses, and the capital reserve (othercapital reserve) is increased. When the employee's right to purchase shares of Company receives theprice, the cost of the stocks in stock delivered to the employee and the accumulated amount of capitalreserve (other capital reserve) during the waiting period shall be resold, and the capital reserve (equitypremium) shall be adjusted according to its balance.
29. Revenue
The revenues mainly consist of the income of selling goods, providing labor services, and transferring
the right to use assets. And the principles of income recognition shall be driven as below:
(1) Confirming principle of the revenue for selling products
The main risks and rewards of the property in the commodities have been transferred to the acquireeby the Company; The Company retains neither continuing management right related with theownership nor effective control over the products sold; The amount of revenue can be measured in areliable way; The relevant economic interests may be flowed into the Company; When the relevant costincurred or to incur can be measured reliably, it shall be recognized as the realization of product salesincome. The Company's sales revenue, mainly includes feed products, feed raw materials, poultryproducts and raising business. The revenue shall be recognized after receipt of payment or completionof credit procedures and delivery of products.
(2) Confirming principle of the revenue for providing labor services
① Principle of recognition of labor income is to provide labor transactions in the case of reliableestimationOn the balance sheet date, when the labor service transaction results rendered can be reliablyestimated, the Company shall confirm the revenue from providing labor service by thepercentage-of-completion method.When the amount of income can be reliably measured, the relevant economic benefits may flow intothe Company, the completion schedule of the transaction can be reliably recognized, and the costs thathave occurred and will occur in the transaction can be reliably measured, the results of the labortransaction can be reliably estimated.
②Recognition principle of labor income under the condition that provide labor transactions in thecase of unreliable estimationOn the balance sheet date, when the labor service transaction results provided by the Company cannotbe reliably measured, it shall confirm labor services income by the following three kinds of condition.(A) If labor service cost incurred is estimated to be compensated in full amount, provision of laborservice income shall be recognized according to the amount that has been regained or can be regainedby estimation and carry forward the labor service cost that has accrued;(B) If the labor cost estimation that has occurred can be compensated partly, the labor revenue shall berecognized to provide as the labor cost amount that has occurred or can be compensated, and theoccurred labor cost will be carried over;(C) If the cost of labor services incurred is expected not to be compensated, the cost incurred shall beincluded into current gains and losses (main business cost), and no income from the provision of laborservices will be recognized.
(3) Recognition principles of transferring the right to use assets
When the trade-related economic interest is likely flow into this Company, and the relevant revenuethat can be reliably calculated, the realization of the revenue from transferring the right to use assets
shall be recognized.
30. Contract costs
Contract costs can be divided into contract performance costs and contract acquisition costs.Costs incurred by the Company in the performance of a contract shall be recognized as an asset whenthe following conditions are met.
(1) Such costs are directly related to a current or anticipated contract
(2) Such costs increase the Company's resources that will be used in the future to meet performanceobligations.
(3) Such costs are expected to be recovered
Assets related to contract costs are amortized on the same basis as the revenue recognition ofcommodities or services related to such assets. However, if the amortization period of the contractacquisition costs is less than one year, the Company shall record such amortization into current gains orlosses when it is incurred.If the book value of the assets related to the contract costs is higher than the difference between thefollowing two items, the Company will make provision for impairment of the excess part and recognizeit as impairment loss of the assets.
(1) The remaining consideration that is expected to be obtained as a result of transferring thecommodities or services related to such assets.
(2) The estimated costs that will be incurred due to transfer such commodities or services.
31. Government grant
(1) Category of government grant
Government grant refers to the monetary assets or non-monetary assets that the Company obtainsfrom the government free of charge, including the government grant related to assets and income.The government grants pertinent to assets refer to the government assets that are obtained byenterprises used for purchase or construction, or forming the long-term assets by other ways.The government grants related to earnings refer to the government grants besides the governmentgrants related to assets.
(2) Recognition principle and recognition time-point of government grant
Recognition principle of government grant
① The Company can meet all attached conditions for governmental grant.
② The Company is able to receive governmental grant.
Government grant may be recognized on condition that it meets the above conditions simultaneously.
(3) Measurement for government grant
① If the government grants belong to monetary assets, shall be calculated according to the receivedor receivable amount.
② Non-monetary assets of government grants shall be measured by the fair value; if the fair value
cannot be obtained reliably, it shall be measured according to the nominal amount (the nominalamount is RMB 1.00).
(4) Accounting arrangement method for government grants
① The government grant related to assets shall, when acquired, be deducted with the book value ofthe relevant assets or recognized as deferred income. If it is recognized as deferred income, it shall bedivided into gains and losses in stages according to a reasonable and systematic method during theservice life of the relevant assets. The governmental grants calculated according to the nominal amountshall be directly included in the current gains and losses.
② Government grant related to the incomes shall be disposed separately according to the conditions:
(A) If the grants are used to compensate for related expenses or losses in the later period of theCompany, it shall be recognized as deferred income and included in the current gains and losses duringrecognition of relevant expenses or loss(B) Those used for compensating the related expenses or losses have been incurred shall be included incurrent gains and losses directly or relevant offset cost as obtaining.
③ If government grants that include both asset-related and revenue-related parts can be distinguished,they are treated separately in different parts. If it is difficult to distinguish, it shall be wholly recognizedas government grants related to incomes.
④ Government grants related to the day-to-day operation of the Company shall be accounted for asother benefits or deducted with relevant costs in accordance with the nature of its economicoperations. Government grants unrelated to the daily activities of enterprise are included in the incomeand expenditure of non-business activities. If the finance allocates the discount funds directly to theCompany, the Company will deduct the relevant borrowing costs from the corresponding discount.
⑤ If it is necessary to return governmental grants which have been recognized, it shall be disposedrespectively according to the following conditions:
(A) If the book value of the relevant assets is deducted at the time of initial recognition, the book valueof the assets shall be adjusted.(B) If there is the deferred income concerned, the book balance of the deferred income shall be offsetagainst, but the excessive part shall be included in the current gains and losses.(C) In other circumstances, it shall be directly included in the gains and losses of the current period.
32. Deferred income tax assets or deferred income tax liabilities
The Company adopts the balance sheet debt method to calculate the income tax.
(1) Recognition of the deferred income tax assets and the deferred income tax liabilities
① When the Company obtains the assets or liabilities, it shall determine its tax basis. On the balancesheet date, the Company analyses and compares the book value of assets and liabilities with their taxbasis, and the book value of assets and liabilities with their tax basis. If there is temporary balancebetween the book value of assets and liabilities and their tax basis, the Company shall recognize
deferred income tax liabilities or deferred income tax assets respectively for taxable temporary balanceor deductible temporary balance if the relevant temporary balance occurs in the current period andmeets the recognition conditions. Tax assets.
② Recognition basis of deferred income tax assets
(A) The Company shall confirm the deferred income tax assets arising from a deductible temporarybalance to the extent of the amount of the taxable income which it is likely to obtain and which can bededucted from the deductible temporary balance. The amount of taxable income likely to be obtainedin the future period includes the amount of taxable income realized in normal production andoperation activities in the future period, and the amount of taxable income increased due to the returnof temporary balance of taxable income during the period of deductible temporary balance.(B) As for any deductible losses and tax deduction that can be carried over to the next years, thecorresponding deferred income tax assets shall be recognized to the extent that the amount of futuretaxable income to be offset for the deductible loss and tax to be likely obtained.(C) On the balance sheet date, the book value of deferred income tax assets shall be re-checked. If it isunlikely to obtain sufficient taxable income to deduct from the benefit of the deferred income tax asset,the carrying amount of the deferred income tax assets shall be written down. The write-down amountshall be reversed when it is likely that the sufficient taxable income is available.
③ Recognition basis of the deferred income tax liabilities
The Company shall confirm the current or past taxable temporary balance that shall be paid but is notpaid as deferred income tax liabilities. But it doesn’t include goodwill and transaction formed by non-business combination and the temporary balance neither affects the accounting profit nor taxableincome when transaction incurred.
(2) Measurement for the deferred income tax assets and the deferred income tax liabilities
① On the balance sheet date, the deferred income tax assets and deferred income tax liabilities shallbe measured at the applicable tax rate of the period during which the assets are expected to berecovered or the liabilities are expected to be settled.
② If the applicable tax rate varies, the deferred income tax assets and deferred income tax liabilitieswhich have been recognized are re-measured, excluding the deferred income tax assets and deferredincome tax liabilities arising from any transactions or events directly recognized as the owners' equities,the amount affected by them shall be included into the income tax expenses of the current periodduring which the change occurs.
③ When measuring deferred income tax assets and deferred income tax liabilities, the Companyadopts tax rates and tax basis consistent with the expected way of recovering assets or paying off debts.
④ The Company shall not discount any deferred income tax asset and deferred income tax liability.
33. Lease
(1) Accounting arrangement method of operating lease
A tenant includes the rental payment of operation lease into the relevant cost of assets or current gainsand losses according to the straight-line method in each period of the lease term. The initial direct costsaccrued to the Company shall be included into current gains or losses. The contingent rental shall beincluded into the current gains or losses when it is actually accrued.A lessor includes the assets subject to operating lease in relevant items of its balance sheets in light ofthe nature of the asset. The rent in operating lease shall be recognized as current gains and lossesduring each lease term according to straight-line method. The initial direct costs accrued to theCompany shall be included into current gains and losses. The depreciation of fixed assets in theoperation lease assets shall be withdrawn by adopting depreciation policy of similar asset; otheroperation lease assets shall be amortized adopting systematic and reasonable method. The contingentrental shall be included into gains and losses of the current period when it is actually accrued.
(2) Accounting arrangement methods of financial lease
As tenant, on the commencement date of the lease term, the lower one between fair value of leasedasset and present value of minimum lease payments as account record value of leased asset, andregard the minimum lease payments as account record value of long-term payables, and their balanceshall be treated as the unrecognized financing costs. The initial direct costs such as commissions,attorney's fees and traveling expenses, stamp duties, etc. directly attributable to the leased itemincurred during the process of lease negotiating and signing the leasing agreement shall be includedinto the rent asset value. The unrecognized financing costs shall be amortized during each lease term,and the current financing costs shall be recognized adopting real interest method. The contingent rentalshall be included into gains and losses of the current period when it is actually accrued.On the commencement date of the lease term, a lessor recognizes the sum of the minimum leasereceipts on the lease commencement date and the initial direct costs as the entry value in an accountof the finance lease values receivable, and record the un-guaranteed residual value at the same time.The balance between the sum of the minimum lease collection amount, the initial direct expenses andthe non-guaranteed residual value, and the sum of their present values shall be recognized as theunrealized financing income. The unrealized financing income shall be allocated to each period duringthe lease term. The lessor shall calculate and recognize the financing income at the current period byadopting the effective interest rate method. The contingent rental shall be included into the gains andlosses of the current period when it is actually accrued.
VI. Tax
1. Categories of taxes and tax rate
| Categories | Taxation basis | Tax rate |
| Value-added tax | Output VAT--deductible input VAT | 1%、9%、13% |
| Urban maintenance and construction tax | Turnover tax payable | 1%、5%、7% |
| Corporate income tax | Income tax payable | 15%、20%、25% |
| Extra charges of education funds | Turnover tax payable | 3% |
| Extra charges of local education funds | Turnover tax payable | 2% |
| Taxpayer | Income tax rate% |
| Wellhope Foods Co., Ltd., Beijing Sanyuan Wellhope Agri-Tech Company, Beijing Helai Sci-Tech Company, Xi'an Wellhope Feed Sci-Tech Company, Gansu Wellhope Agri-Tech Company, Guangzhou Xiangshun Livestock Equipment Company, Chongqing Dahong Agriculture and Animal Husbandry Equipment Company, Shenyang Fame Bio-Tech Company, Yangling Wellhope Agriculture and Animal Husbandry Company, Yunnan Wellhope Feed Mill, Lankao Wellhope Agri-Tech Company | 15 |
| Dalian Huakang Xinxin Food Company, Kaifeng Wellhope Meat Products Company, Puyang Wellhope Food Company, Dalian Heyuan Agri-Tech Company, Wafangdian Yifeng Agri-Tech Company, Shandong Heyuan Food Company, Shandong Heyuan Agri-Tech Company, Pingyuan Wellhope Food Processing Company, Fuyu Wellhope Taolaizhao Poultry Raising Company, Puyang Wellhope Agri-Tech Company, Changchun Wellhope Food Company, Dehui Wellhope Agri-Tech Company, Tongliao Wellhope Tianyi Prataculture Company, Kaifeng Wellhope Agriculture and Animal Husbandry Company, Shenyang Huakang Broiler Company, Shenyang Huakang Agriculture and Animal Husbandry Company, Tangshan Hejia Agriculture and Animal Husbandry Company, Shenyang Wellhope Poultry Industry Company, Fushun Wellhope Agriculture and Animal Husbandry Company, Anhui Wellhope Haoxiang Agricultural Development Company, Suizhong Renhe Fishery Company, Lixin Xiangfeng Agriculture and Animal Husbandry Company, Lixin Hongfeng Agriculture and Animal Husbandry Company, Shulan Fengtai Agriculture and Animal Husbandry Company, Shulan Fengtai Farming Company, Hebei Deheng Farming Company, Dalian Hongtu Agri-tech Company, Liaoning Wellhope Agriculture and Animal Husbandry Development Company, Luoyang Wellhope Agriculture and Animal Husbandry Company, Tongxu Wellhope Agriculture and Animal Husbandry Company, Gongzhuling Wellhope Swine Farming Company, Lishu Wellhope Ecological Farming Company, Anyang Wellhope Agriculture and Animal Husbandry Company, Hebei Taihang Wellhope Food Company, Hebei Taihang Wellhope Agri-Tech Company, Yixian Dingli Hesheng Livestock and Poultry Feeding Company, Yixian Weijing Livestock and Poultry Feeding Company, Yixian Hekang Agri-Tech Company, Hebei Hetai Livestock and Poultry Farming Company, Anhui Wellhope Haoxiang Swine Breeding Company, Nanyang Wellhope Cattle Sci-Tech Company, Daqing Wellhope Food Company, Zhumadian Wellhope Agriculture Development Company, Datong Hejia Agriculture and Animal Husbandry Company, Shijiazhuang Hejia Agriculture and Animal Husbandry Company, Fuxin Wellhope Agriculture and Animal Husbandry Company , Dalian Zhongjia Food Company, Wafangdian Huinong Poultry Industry Company, Shenyang Wellhope Extruded Feed Mill , Jilin Hefeng Swine Breeding Company, Dunhua | Enterprises that engaged in primary processing of agricultural products, livestock and poultry raising businesses exempt from levying corporate income tax |
| Fengda Agriculture and Animal Husbandry Development Company, Shenyang Xiaohe Agriculture and Animal Husbandry Company, Shenyang Wellhope Swine Breeding Company, Shenyang Wellhope Agriculture and Animal Husbandry Technology Company, Lingyuan Wellhope Agriculture and Animal Husbandry Company, Fuyang Wellhope Agriculture and Animal Husbandry Technology Company, Dehui Fengyuan Agriculture and Animal Husbandry Company, Kaifeng Jiufeng Agriculture and Animal Husbandry Company, Jinzhai Wellhope Agriculture and Animal Husbandry Company, Fuyu Wellhope Layer Company, Anhui Wellhope Food Company, Lixin Rongfeng Farming & Animal Husbandry Company, Fuxin Wellhope Farming & Animal Husbandry Science & Technology Company, Huairen Dajiang Farming Company, Suihua Wellhope Farming Company, | |
| Russia Wellhope Agri-Tech Company | 20 |
| Other companies | 25 |
2. Tax preference
A. Value-added taxIn accordance with the Notice on the Exemption of Value-added Tax on Feed Products and otherdocuments, the sales of feed products of the Company and related subsidiaries are exempted fromvalue-added tax.According to the regulation issued by the Ministry of Finance and Taxation of China, from April 1, 2019,taxpayers occurred taxable sales of VAT, where the tax rates of 16% and 10% were originally applicable,the tax rates shall be adjusted to 13% and 9% respectively.According to the announcement issued by the General Tax Bureau of the Ministry of Finance, VAT shallbe levied at a rate of 1% for small-scale taxpayers.Pursuant to the Announcement on VAT Exemption for Small-Scale Taxpayers of VAT (AnnouncementNo. 15 of 2022 of the Ministry of Finance and State Administration of Taxation), from April 1, 2022 toDecember 31, 2022, small-scale taxpayers of VAT shall be exempted from VAT on their taxable salesrevenues to which the taxable rate of 3% applies; and the prepayment of VAT on prepaid VAT items towhich the prepayment rate of 3% applies shall be suspended.B. Income taxThe Company and related subsidiaries, which are suitable to related government policies, such asreceiving the certificates of High-Tech enterprise, the applicable corporate income tax rate is 15% in thevalid period.VII. Notes to the Items of Consolidated Financial Statements
1. Monetary capital
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Cash on hand | 695,108.20 | 446,403.52 |
| Cash at bank | 1,648,285,114.62 | 1,197,827,158.39 |
| Other monetary capital | 39,761,380.78 | 35,304,219.85 |
| Total | 1,688,741,603.60 | 1,233,577,781.76 |
| including: total amount of funds deposited abroad | 1,992,589.38 | 773,934.10 |
Other explanation:
At the end of the period, other monetary funds included RMB10,480,765.63 for letter of credit deposits,RMB29,160,615.15 for futures deposits and RMB120,000.00 for bank acceptances.
2. Derivative financial assets
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Futures | 4,050,071.80 | 9,667,725.25 |
| Total | 4,050,071.80 | 9,667,725.25 |
Explanation: The accounting method of futures refer to fair value disclosure.
3. Notes receivable
A. Classification
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Bank's acceptance bill | 5,778,682.68 | 11,846,863.22 |
| Total | 5,778,682.68 | 11,846,863.22 |
4. Accounts receivable
A. Categorized by aging
Unit: yuan Currency: RMB
| Aging | Closing book balance |
| Within 1 year | 975,504,766.68 |
| 1-2 years | 92,727,459.46 |
| 2-3 years | 19,276,853.32 |
| Over 3 years | 130,520,511.25 |
| Total | 1,218,029,590.71 |
B. Categorized by bad debt accrual method
Unit: yuan Currency: RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Percentage % | Amount | Accrual percentage % | Amount | Percentage % | Amount | Accrual percentage % | |||
| Accruing bad debt provision individually | 46,975,455.73 | 3.86 | 45,145,551.28 | 96.10 | 1,829,904.45 | 38,449,931.04 | 4.58 | 38,449,931.04 | 100.00 | |
| Accruing bad debt provision by portfolio | 1,171,054,134.98 | 96.14 | 137,827,277.69 | 11.77 | 1,033,226,857.29 | 801,603,643.95 | 95.42 | 120,085,758.25 | 14.98 | 681,517,885.70 |
| including | ||||||||||
| Aging portfolio | 1,171,054,134.98 | 96.14 | 137,827,277.69 | 11.77 | 1,033,226,857.29 | 801,603,643.95 | 95.42 | 120,085,758.25 | 14.98 | 681,517,885.70 |
| Total | 1,218,029,590.71 | / | 182,972,828.97 | / | 1,035,056,761.74 | 840,053,574.99 | / | 158,535,689.29 | / | 681,517,885.70 |
? Accruing bad debt provision individually
Unit: yuan Currency: RMB
| Name | Closing balance | |||
| Book balance | Bad debt provision | Accruing percentage % | Reason | |
| Customer 1 | 23,998,355.83 | 23,998,355.83 | 100.00 | Expected uncollectible |
| Customer 2 | 4,734,285.00 | 4,734,285.00 | 100.00 | Expected uncollectiblee |
| Customer 3 | 2,348,413.70 | 2,348,413.70 | 100.00 | Expected uncollectiblee |
| Customer 4 | 1,631,640.00 | 1,631,640.00 | 100.00 | Expected uncollectible |
| Customer 5 | 1,395,549.91 | 1,395,549.91 | 100.00 | Expected uncollectible |
| Other bad debt provision accrued individually | 12,867,211.29 | 11,037,306.84 | 85.78 | Expected uncollectible |
| Total | 46,975,455.73 | 45,145,551.28 | 96.10 | / |
? Accruing bad debt provision according to aging
Unit: yuan Currency: RMB
| Aging | Closing balance | ||
| Account receivable | Bad debt provision | Accruing percentage % | |
| Within 1 year | 970,107,421.82 | 24,751,334.23 | 2.55 |
| 1-2 years | 92,727,459.46 | 13,909,118.92 | 15.00 |
| 2-3 years | 18,104,858.32 | 9,052,429.16 | 50.00 |
| Over 3 years | 90,114,395.38 | 90,114,395.38 | 100.00 |
| Total | 1,171,054,134.98 | 137,827,277.69 | 11.77 |
C. Bad debt provision
Unit: yuan Currency: RMB
| Category | Opening balance | Changes in 2022 | Closing balance | ||
| Accruing | Charged off or written off | Other changes | |||
| Accounts receivable | 158,535,689.29 | 24,687,984.19 | 1,000,556.80 | 749,712.29 | 182,972,828.97 |
| Total | 158,535,689.29 | 24,687,984.19 | 1,000,556.80 | 749,712.29 | 182,972,828.97 |
D. Accounts receivables that were actually written off in current period
Unit: yuan Currency: RMB
| Item | Write-off amount |
| Actual write-off of accounts receivable | 1,000,556.80 |
Circumstances of other important accounts receivable that were written off
Unit: yuan Currency: RMB
| Name | Nature | Written off amount | Reason | Whether generated by related party transactions |
| Customer 1 | Payment for products | 200,000.00 | uncollectible after filing of a lawsuit | No |
| Customer 2 | Payment for products | 183,899.57 | uncollectible after filing of a lawsuit | No |
| Customer 3 | Payment for products | 128,000.00 | uncollectible | No |
| Customer 4 | Payment for products | 100,000.00 | uncollectible | No |
| Customer 5 | Payment for products | 87,250.00 | uncollectible | No |
| Total | / | 699,149.57 | / | / |
E. Top 5 accounts receivable at the end of the reporting period
Unit: yuan Currency: RMB
| Debtor | Closing balance | Percentage of the closing balance of total accounts receivable % | Closing balance of bad debt provision |
| 1 | 67,894,560.19 | 5.57 | 1,357,891.20 |
| 2 | 31,391,484.65 | 2.58 | 627,829.69 |
| 3 | 27,112,815.51 | 2.23 | 908,116.57 |
| 4 | 25,777,657.55 | 2.12 | 515,553.15 |
| 5 | 23,998,355.83 | 1.97 | 23,998,355.83 |
| Total | 176,174,873.73 | 14.47 | 27,407,746.44 |
5. Prepayments
A. Presenting by aging
Unit: yuan Currency: RMB
| Aging | Closing balance | Opening balance | ||
| Amount | Percentage % | Amount | Percentage % | |
| Within 1 year | 760,310,068.40 | 99.72 | 478,437,536.73 | 99.71 |
| Over 1 year | 2,157,372.53 | 0.28 | 1,393,013.52 | 0.29 |
| Total | 762,467,440.93 | 100.00 | 479,830,550.25 | 100.00 |
B. Top 5 prepayments at the end of the reporting period
Unit: yuan Currency: RMB
| Company | Closing balance | Percentage of the closing balance of total prepayments % |
| 1 | 88,259,546.73 | 11.58 |
| 2 | 71,595,754.88 | 9.39 |
| 3 | 71,901,957.76 | 9.43 |
| 4 | 28,803,194.89 | 3.78 |
| 5 | 28,734,031.34 | 3.77 |
| Total | 289,294,485.60 | 37.95 |
6. Other receivables
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Interest receivable | ||
| Dividends receivable | 27,535,293.35 | 39,067,761.79 |
| Other receivables | 70,256,618.60 | 68,920,505.18 |
| Total | 97,791,911.95 | 107,988,266.97 |
A. Dividends receivable
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Dividends from long-term investment under the equity method | 27,535,293.35 | 39,067,761.79 |
| Total | 27,535,293.35 | 39,067,761.79 |
B. Other receivablesa. Presenting by aging
Unit: yuan Currency: RMB
| Aging | Closing book balance |
| Within 1 year | 44,686,949.41 |
| 1-2 years | 9,835,874.78 |
| 2-3 years | 1,120,189.00 |
| Over 3 years | 28,041,960.29 |
| Total | 83,684,973.48 |
b. Presenting by natureUnit:yuan Currency: RMB
| Nature | Closing book balance | Opening book balance |
| General operating receivables | 38,356,333.90 | 26,443,343.39 |
| Guarantee deposit | 38,978,639.58 | 36,964,811.02 |
| Disposal of investment receivables | 2,000,000.00 | 2,764,218.95 |
| Other | 4,350,000.00 | 31,438,968.38 |
| Total | 83,684,973.48 | 97,611,341.74 |
c. Accruing bad debt provision
Unit: yuan Currency: RMB
| Bad debt provision | First stage | Second stage | Third stage | Total |
| Expected credit losses over the next 12 months | Expected credit loss for the entire duration (no credit impairment) | Expected credit loss for the entire duration (credit impairment occurred) | ||
| Balance on January 1, 2022 | 19,983,512.68 | 8,707,323.88 | 28,690,836.56 | |
| -recorded in the second stage | ||||
| - recorded in the third stage | -1,224,576.91 | 1,224,576.91 | ||
| -recovered in the second stage | ||||
| - recovered in the first stage | ||||
| Accrued in the reporting period | 705,813.52 | 2,326,214.06 | 3,032,027.58 | |
| Reversing | 16,033,746.50 | 16,033,746.50 | ||
| Write-off | 3,025,954.27 | 3,025,954.27 | ||
| Other changes | 765,191.51 | 765,191.51 |
| Balance on December 31, 2022 | 4,196,194.30 | 9,232,160.58 | 13,428,354.88 |
d. Bad debt provision
Unit: yuan Currency: RMB
| Category | Opening balance | Changes in 2022 | Closing balance | |||
| Accruing | Recovery or reversal | Charged off or written off | Other changes | |||
| Other receivables | 28,690,836.56 | 3,032,027.58 | 16,033,746.50 | 3,025,954.27 | 765,191.51 | 13,428,354.88 |
| total | 28,690,836.56 | 3,032,027.58 | 16,033,746.50 | 3,025,954.27 | 765,191.51 | 13,428,354.88 |
e. Top 5 other receivables at the end of the reporting period
Unit: yuan Currency: RMB
| Company | Nature | Closing balance | Aging | Percentage of closing balance of other receivables % | Closing balance of bad debt provision |
| 1 | Guarantee deposit | 12,000,000.00 | less than 1 year | 14.34 | 240,000.00 |
| 2 | Guarantee deposit | 5,820,000.00 | less than 1 year | 6.95 | 582,000.00 |
| 3 | Temporary loan | 4,350,000.00 | 1-2 year | 5.20 | 652,500.00 |
| 4 | Security deposit | 3,290,177.00 | less than 1 year | 3.93 | 65,803.54 |
| 5 | Guarantee deposit | 2,955,000.00 | less than 1 year | 3.53 | 56,100.00 |
| Total | / | 28,415,177.00 | / | 33.95 | 1,596,403.54 |
7. Inventory
A. Category of inventory
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Falling price reserve or provision for impairment of contract performance costs | Book value | Book balance | Falling price reserve or provision for impairment of contract performance costs | Book value | |
| Raw materials | 1,375,671,622.26 | 2,068,802.37 | 1,373,602,819.89 | 1,201,310,756.99 | 1,783,484.21 | 1,199,527,272.78 |
| In-production products | 70,241,872.06 | 2,467.69 | 70,239,404.37 | 81,084,071.92 | 420,356.13 | 80,663,715.79 |
| Inventory products | 1,129,292,339.70 | 5,663,491.75 | 1,123,628,847.95 | 792,423,259.27 | 1,434,137.22 | 790,989,122.05 |
| Expendable biological assets | 750,801,994.48 | 12,755,035.13 | 738,046,959.35 | 573,760,700.47 | 2,313,510.86 | 571,447,189.61 |
| Low-value consumables | 30,261,679.70 | 30,261,679.70 | 23,320,387.54 | 23,320,387.54 | ||
| Packaging | 25,772,465.19 | 25,772,465.19 | 22,959,063.70 | 22,959,063.70 | ||
| Engineering construction | 2,315,669.48 | 2,315,669.48 | ||||
| Total | 3,382,041,973.39 | 20,489,796.94 | 3,361,552,176.45 | 2,697,173,909.37 | 5,951,488.42 | 2,691,222,420.95 |
B. Falling price reserves and provision for impairment of contract performance costs
Unit: yuan Currency: RMB
| Item | Opening balance | Increased amount | Decreased amount | Closing balance |
| Accrued | Recovered or charged off | |||
| Raw materials | 1,783,484.21 | 3,704,043.93 | 3,418,725.77 | 2,068,802.37 |
| In-production products | 420,356.13 | 417,888.44 | 2,467.69 | |
| Inventory products | 1,434,137.22 | 10,531,187.07 | 6,301,832.54 | 5,663,491.75 |
| Expendable biological assets | 2,313,510.86 | 13,192,295.25 | 2,750,770.98 | 12,755,035.13 |
| Total | 5,951,488.42 | 27,427,526.25 | 12,889,217.73 | 20,489,796.94 |
8. Contract assets
A. Circumstance of contract assets
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Guarantee deposit | 1,256,805.00 | 69,899.58 | 1,186,905.42 | 2,677,247.54 | 171,799.85 | 2,505,447.69 |
| Total | 1,256,805.00 | 69,899.58 | 1,186,905.42 | 2,677,247.54 | 171,799.85 | 2,505,447.69 |
B. Accruing provision for impairment of contract assets in 2022
Unit: yuan Currency: RMB
| Item | Accrued in current period | Recovered in current period | Charged off or written off | Other change |
| Guarantee deposit | 76,029.36 | 25,870.91 | ||
| Total | 76,029.36 | 25,870.91 |
9. Other current assets
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Available for deducting VAT and prepaid tax | 149,114,790.69 | 156,089,468.63 |
| Total | 149,114,790.69 | 156,089,468.63 |
10. Long-term equity investment
Unit: yuan Currency: RMB
| Investee | Opening balance | Changes in the current period | Closing balance | Closing balance of impairment provision | |||||
| Additional investment | Reducing investment | Gains or losses on investments recognized under the equity method | Adjustment of other comprehensive income | Declaration of cash dividends or profits | Other | ||||
| 1. Joint Venture | |||||||||
| Unphung Joint Venture Company | 4,167,616.44 | 4,167,616.44 | |||||||
| Nepal Wellhope Agri-tech Pvt. Ltd. | 7,501,575.10 | 7,501,575.10 | |||||||
| NEXUS WELL-HOPE AGRITECH INTERNATIONAL LIMITED | 17,900,000.00 | 17,900,000.00 | 17,900,000.00 | ||||||
| Subtotal | 29,569,191.54 | 29,569,191.54 | 17,900,000.00 | ||||||
| 2. Associated Company | |||||||||
| Qingdao Shenfeng Agri-Tech Company | 12,767,002.96 | 1,179,279.24 | 1,845,000.00 | 12,101,282.20 | |||||
| Anshan Jiuguhe Food Company | 205,321,279.08 | 23,391,706.01 | 6,232,950.00 | 222,480,035.09 | |||||
| Tai’an Jiuguhe Agriculture Development Company | 55,495,593.32 | 14,022,023.03 | 69,517,616.35 | ||||||
| Linghai Jiuguhe Feed Mill | 42,241,727.23 | 9,966,620.27 | 52,208,347.50 | ||||||
| Huludao Jiuguhe Food Company | 68,828,874.29 | 4,605,651.97 | 73,434,526.26 | ||||||
| Dandong Wellhope Chengsan Food Company | 79,403,327.22 | 13,154,756.33 | 92,558,083.55 | ||||||
| Dandong Wellhope Chengsan Agri-Tech Company | 116,098,861.48 | 3,813,192.30 | 119,912,053.78 | ||||||
| Haicheng New Hongzunda Agri-Tech Company | 15,853,051.94 | 386,989.19 | -16,240,041.13 | ||||||
| Beipiao Hongfa Food | 493,149,090.03 | 70,925,071.50 | 5,390,000.00 | 558,684,161.53 | |||||
| Company | |||||||||
| Beijing Dahong Hengfeng Agri-Tech Company | 26,321,552.40 | -3,212,231.58 | 23,109,320.82 | ||||||
| Tai'an Jiufeng Agri-Tech Company | - | - | |||||||
| Shihaipu (Beijing) Technology and Trade Co., Ltd. | 1,905,245.10 | 113,944.42 | 2,019,189.52 | ||||||
| Shenyang Wenjie Bio-Tech Company | 13,538,951.01 | 354,037.25 | 13,892,988.26 | ||||||
| Huludao Jiuguhe Feed Mill | 1,640,940.34 | 1,446,050.82 | 3,086,991.16 | ||||||
| Jinzhou Jiufeng Food Company | 90,831,509.42 | 8,392,237.69 | 99,223,747.11 | ||||||
| Zhangjiakou Jiahe Agriculture and Animal Husbandry Company | 90,394,700.76 | -4,853,505.27 | 85,541,195.49 | ||||||
| Tai'an Fengjiu Agri-Tech Company | 55,361,191.33 | 8,713,129.49 | 243,262.12 | 63,831,058.70 | |||||
| Anshan Fengsheng Food Company | 54,871,812.33 | 7,340,968.23 | 62,212,780.56 | ||||||
| Dalian Chengsan Animal Husbandry Company | 350,422,338.11 | 30,302,986.98 | 380,725,325.09 | ||||||
| Tailai Jiahe Agriculture and Animal Husbandry Company | 63,751,596.83 | -24,392,489.15 | -1,559,644.35 | 37,799,463.33 | |||||
| Gongzhuling Corn Purchasing and Storing Company | 58,782,533.14 | 2,685,883.18 | 61,468,416.32 | ||||||
| Lankao Skyland Duck Company | 31,735,288.77 | 1,994,577.20 | 1,306,877.90 | 35,036,743.87 | |||||
| Hainan Nongken Wenfeng Wenchang Chicken Industry(Group)Company | 1,090,183.46 | 561.49 | 1,090,744.95 | ||||||
| PT SEKAR GOLDEN HARVESTA INDONESIA | 36,360,437.54 | -1,302,462.63 | -269,639.16 | 125,653.83 | 34,913,989.58 | ||||
| GOLDEN HARVESTA INC. | 98,958,392.92 | 5,105,258.75 | 1,845.88 | 104,065,497.55 |
| PT. Mulia Harvest Agritech | 47,923,891.82 | 7,511,736.32 | -361,396.30 | 55,074,231.84 | |||||
| Shulan Fengtai Organic Fertilizer Company | 2,055,159.27 | -211,753.66 | 1,843,405.61 | ||||||
| Shenyang Zhongwenjia Bio-Tech Company | 6,394,995.20 | 1,431,102.26 | 7,826,097.46 | ||||||
| Liaoning Mubang Animal Husbandry Equipment Manufacturing Company | 15,197,637.58 | 2,007,890.41 | 17,205,527.99 | ||||||
| Liaoning Yufeng Bio-tech Company | 6,345,273.41 | 3,800,000.00 | -8,780,780.49 | 1,364,492.92 | |||||
| Weifang Wellhope Xinhesheng Feed Mill | 5,780,417.23 | 252,934.56 | 6,033,351.79 | ||||||
| Dunhua Fengda Broiler Breeding Company | 5,794,221.03 | 30,221.45 | 5,824,442.48 | ||||||
| Tai’an Huijun Biomass Energy Company | 2,242,570.99 | 3,723,200.00 | -1,719,990.55 | 4,245,780.44 | |||||
| Dazhou Wellhope Bio-Tech Company | 6,934,535.85 | 7,500,000.00 | -1,757,787.42 | 12,676,748.43 | |||||
| Anshan Jiujianhe Paper Packaging Company | 4,257,931.65 | 823,159.73 | 5,081,091.38 | ||||||
| Anshan Antai Plastic Products Company | 2,835,740.23 | 777,655.29 | 3,613,395.52 | ||||||
| Bei’an Nongken Shengda Pasture Specialized cooperative | 11,472,828.85 | 1,630,152.02 | 13,102,980.87 | ||||||
| Heilongjiang Province North an agricultural reclamation Zhongwang Cow Breeding Professional Cooperative | 474,403.89 | 290,410.14 | 764,814.03 | ||||||
| Jiyuan Sunshine rabbit Industry Technology Co., LTD | 5,282,607.40 | 7,800,000.00 | -907,734.01 | 12,174,873.39 | |||||
| Dalian Wellhope Fishery Company | 9,614,154.88 | 1,286,076.11 | 10,900,230.99 | ||||||
| Liaoning Petmate Bio-Tech Company | 8,485,207.09 | -785,553.31 | 7,699,653.78 |
| Guangzhou Yikun Trading Company | 133,018.65 | 915,200.00 | 782,181.35 | ||||||
| Jilin Hengfeng Animal Health Products Company | 4,170,752.87 | 1,849,488.09 | 6,020,240.96 | ||||||
| Harbin Weierhao Trading Company | 7,576,285.27 | 3,077,176.97 | 10,653,462.24 | ||||||
| Shenyang Yihe Enterprise Management Partnership (Limited partnership) | 1,855,106.00 | -43.71 | 1,855,062.29 | ||||||
| Shenyang Wanlitian Agriculture and Animal Husbandry Company | 7,127,748.77 | 3,231,445.64 | 2,000,000.00 | 8,359,194.41 | |||||
| Daqing Supply and Marketing Agri-Tech Company | 5,695,862.23 | 547,919.26 | 6,243,781.49 | ||||||
| Indonesia Max Animal Husbandry Technology Company | 1,389,973.56 | 74,201.40 | 1,464,174.96 | ||||||
| Dalian Sida Food Company | 43,531,779.06 | 2,408,318.95 | 45,940,098.01 | ||||||
| Shandong Fengkang Food Company | 43,459,196.67 | -25,282,768.62 | 18,176,428.05 | ||||||
| Shenyang Wellhope Huafu Food Technology Company | 350,000.00 | -67,847.92 | 282,152.08 | ||||||
| Dahongda Construction Engineering Chongqing Company | 2,400,000.00 | -258,354.15 | 2,141,645.85 | ||||||
| Subtotal | 2,321,156,780.46 | 25,573,200.00 | 915,200.00 | 162,299,491.42 | -554,988.18 | 15,711,212.12 | -16,367,153.75 | 2,475,480,917.83 | |
| Total | 2,350,725,972.00 | 25,573,200.00 | 915,200.00 | 162,299,491.42 | -554,988.18 | 15,711,212.12 | -16,367,153.75 | 2,505,050,109.37 | 17,900,000.00 |
1. The investment of Unphung Joint Venture Company, Nepal Wellhope Agri-tech Pvt. Ltd. and NEXUS WELL-HOPE AGRITECH INTERNATIONAL LIMITED adoptscost method due to the particularity of local market and regulatory environment as well as the effects that the Company can exert on these three companies.
2. At the end of the period, the net assets of Tai’an Jiufeng Animal Husbandry Company recorded RMB -2,910,701.44, the book value of the long-terminvestment was written down to RMB 0, and unrecognized investment loss recorded RMB -967,629.28 at the end of the period.
11. Other equity instruments Investment
A. Other equity instruments Investment
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| China-Russia Friendship Association of Liaoning Province | 10,000.00 | 10,000.00 |
| Hengshui Hejia Agriculture and Animal Husbandry Company | 813,621.88 | 151,379.65 |
| Xinji Jiayu Agriculture and Animal Husbandry Company | 1,915,770.37 | 1,828,273.88 |
| Shenze Jiahe Agriculture and Animal Husbandry Company | 1,868,551.23 | 2,813,479.85 |
| Dalian Xuelong Heniu Import and Export Company | 10,241,825.67 | 13,105,813.65 |
| Henan Shanghui Feed Development Company | 156,127.11 | 146,214.43 |
| Gansu Judinghe Agriculture and Animal Husbandry Company | 2,027,053.69 | |
| Guizhou Pumeixin Agricultural Technology Company | 2,320,000.00 | |
| Total | 17,325,896.26 | 20,082,215.15 |
B. Non-transactional equity instrument investment
Unit: yuan Currency: RMB
| Item | Dividend income recognized in the current period | Cumulative gains | Cumulative losses | Amount of other comprehensive income transferred into retained earnings |
| China-Russia Friendship Association of Liaoning Province | ||||
| Hengshui Hejia Agriculture and Animal Husbandry Company | 786,378.12 | |||
| Xi'an Micro Monkey E-commerce Company | 340,000.00 | |||
| Xinji Jiayu Agriculture and Animal Husbandry Company | 115,770.37 | |||
| Shenze Jiahe Agriculture and Animal Husbandry Company | 1,131,448.77 | |||
| Dalian Xuelong Heniu Import and Export Company | 4,758,174.33 | |||
| Henan Shanghui Feed Development Company | 343,872.89 | |||
| Total | 115,770.37 | 7,359,874.11 |
12. Fixed assets
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Fixed assets | 3,547,181,704.30 | 3,232,947,014.55 |
| Disposal of fixed assets | ||
| Total | 3,547,181,704.30 | 3,232,947,014.55 |
Circumstance of fixed assets
Unit: yuan Currency: RMB
| Item | Buildings and structures | Machinery equipment | Transportation vehicle | Other equipment | Total |
| 1. Original value | |||||
| A. Opening balance | 2,644,041,797.43 | 1,943,783,885.53 | 128,168,613.14 | 128,816,422.79 | 4,844,810,718.89 |
| B. Increased amount | 375,546,671.02 | 295,745,320.04 | 8,776,124.09 | 19,707,790.79 | 699,775,905.94 |
| a. Purchased | 44,071,561.30 | 85,922,095.12 | 6,739,057.29 | 16,946,198.56 | 153,678,912.27 |
| b. Construction in progress transferred in | 286,752,105.98 | 174,381,343.68 | 377,539.83 | 1,923,320.12 | 463,434,309.61 |
| c. Increased by business combination | 44,723,003.74 | 35,441,881.24 | 1,659,526.97 | 838,272.11 | 82,662,684.06 |
| C. Decreased amount | 50,957,084.32 | 32,915,079.23 | 6,891,468.99 | 3,796,565.92 | 94,560,198.46 |
| a. Disposed or scrapped | 28,634,050.56 | 28,241,220.42 | 6,891,468.99 | 3,576,394.04 | 67,343,134.01 |
| b. Decreased by business combination | 5,541,000.00 | 1,634,500.00 | 220,171.88 | 7,395,671.88 | |
| c. Transferred in construction in progress | 16,782,033.76 | 3,039,358.81 | 19,821,392.57 | ||
| D. Closing balance | 2,968,631,384.13 | 2,206,614,126.34 | 130,053,268.24 | 144,727,647.66 | 5,450,026,426.37 |
| 2. Accumulated depreciation | |||||
| A. Opening balance | 589,168,805.08 | 767,624,504.44 | 84,002,095.35 | 73,436,727.98 | 1,514,232,132.85 |
| B. Increased amount | 116,741,252.20 | 190,247,925.91 | 15,822,280.02 | 15,137,604.67 | 337,949,062.80 |
| a. Accruing | 112,094,811.79 | 182,002,783.97 | 14,387,515.65 | 14,658,898.48 | 323,144,009.89 |
| b. Increased by business combination | 4,646,440.41 | 8,245,141.94 | 1,434,764.37 | 478,706.19 | 14,805,052.91 |
| C. Decreased amount | 16,290,520.40 | 14,476,887.93 | 5,993,743.54 | 2,537,168.61 | 39,298,320.48 |
| a. Disposed or scrapped | 12,424,327.12 | 14,261,643.33 | 5,993,743.54 | 2,478,811.70 | 35,158,525.69 |
| b. Decreased by | 65,799.39 | 40,119.27 | 15,255.47 | 121,174.13 |
| business combination | |||||
| c. Transferred in construction in progress | 3,800,393.89 | 175,125.33 | 43,101.44 | 4,018,620.66 | |
| D. Closing balance | 689,619,536.88 | 943,395,542.42 | 93,830,631.83 | 86,037,164.04 | 1,812,882,875.17 |
| 3. Impairment provision | |||||
| A. Opening balance | 56,042,409.76 | 40,870,315.06 | 91,498.28 | 627,348.39 | 97,631,571.49 |
| B. Increased amount | 981,289.51 | 126,954.88 | 1,108,244.39 | ||
| a. Accruing | 981,289.51 | 126,954.88 | 1,108,244.39 | ||
| C. Decreased amount | 5,542,605.93 | 3,231,767.66 | 3,595.39 | 8,777,968.98 | |
| a. Disposed or scrapped | 5,542,605.93 | 3,231,767.66 | 3,595.39 | 8,777,968.98 | |
| D. Closing balance | 51,481,093.34 | 37,765,502.28 | 91,498.28 | 623,753.00 | 89,961,846.90 |
| 4. Book value | |||||
| A. Closing book value | 2,227,530,753.91 | 1,225,453,081.64 | 36,131,138.13 | 58,066,730.62 | 3,547,181,704.30 |
| B. Opening book value | 1,998,830,582.59 | 1,135,289,066.03 | 44,075,019.51 | 54,752,346.42 | 3,232,947,014.55 |
13. Construction in progress
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Construction in progress | 601,125,529.45 | 602,237,560.51 |
| Engineering material | ||
| Total | 601,125,529.45 | 602,237,560.51 |
A. Circumstance of construction in progress
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance | ||
| Book balance | Book value | Book balance | Book value | |
| Hebei Taihang Wellhope-broiler slaughtering and processing | 360,243,376.35 | 360,243,376.35 | 208,406,557.28 | 208,406,557.28 |
| Hainan Wellhope-feed production line with 200,000 tons per year | 543,876.00 | 543,876.00 | 1,621,699.60 | 1,621,699.60 |
| Lingyuan Wellhope-pig farm construction | 2,002,418.44 | 2,002,418.44 | 2,774,796.14 | 2,774,796.14 |
| Dalian Zhongjia-phase II chicken processing and slaughtering project | 7,050,377.03 | 7,050,377.03 | 10,512,513.85 | 10,512,513.85 |
| Qingyuan Wellhope-feed production line with 400,000 tons per year | 829,817.00 | 829,817.00 | 78,918,778.10 | 78,918,778.10 |
| Changchun Wellhope Food-factory renovation | 7,814,693.83 | 7,814,693.83 | 18,042,252.26 | 18,042,252.26 |
| Fushun Agriculture and Animal Husbandry-pig farm construction | 67,419.00 | 67,419.00 | 82,600.00 | 82,600.00 |
| Shenyang Nongda- phase II plant construction and renovation | 83,291,607.80 | 83,291,607.80 | 23,206,381.97 | 23,206,381.97 |
| Lixin Xiangfeng-pig farm construction | 1,888,058.82 | 1,888,058.82 | 22,895,026.25 | 22,895,026.25 |
| Heilongjiang Wellhope-creep feed and nursery feed workshop | 4,755,981.00 | 4,755,981.00 | 7,638,039.00 | 7,638,039.00 |
| Gongzhuling Ruminant- Production line renovation | 5,405,758.00 | 5,405,758.00 | ||
| Fuxin Wellhope Agriculture and Animal Husbandry Company-pig breeding integration project | 79,445,055.99 | 79,445,055.99 | ||
| Anhui Wellhope-pig integration project with the capacity of slaughtering 1 million heads of pig per year | 25,328,546.45 | 25,328,546.45 | 85,763,150.43 | 85,763,150.43 |
| Neihuang County Wellhope- workshop equipment replacement and upgrading project | 17,476,767.29 | 17,476,767.29 | ||
| Fuzhou Wellhope - feed production line with 200,000 tons per year | 15,690,619.74 | 15,690,619.74 | ||
| Daqing Wellhope Food- Phase II plant upgrading | 7,335,512.62 | 7,335,512.62 | ||
| Other piecemeal projects | 66,806,458.08 | 66,806,458.08 | 57,524,951.64 | 57,524,951.64 |
| Total | 601,125,529.45 | 601,125,529.45 | 602,237,560.51 | 602,237,560.51 |
B. Changes of important constructions in progress
Unit: yuan Currency: RMB
| Project | Budget | Opening balance | Increased Amount in the reporting period | Amount transferred in fixed assets in the reporting period | Closing balance | Percentage of accumulated input accounting for the budget % | Construction progress | Source of funds |
| Hebei Taihang Wellhope-broiler slaughtering and processing | 400,000,000.00 | 208,406,557.28 | 151,836,819.07 | 360,243,376.35 | 90.06 | 83% | Self-financing | |
| Hainan Wellhope-feed production line with 200,000 tons per year | 72,000,000.00 | 1,621,699.60 | 1,077,823.60 | 543,876.00 | 82.00 | 95% | Self-financing | |
| Lingyuan Wellhope-pig farm construction | 85,000,000.00 | 2,774,796.14 | 10,290,202.41 | 11,062,580.11 | 2,002,418.44 | 100.00 | 100% | Self-financing, and raised funds from capital markets |
| Dalian Zhongjia-Phase II chicken processing and slaughtering project | 250,000,000.00 | 10,512,513.85 | 1,185,684.20 | 4,647,821.02 | 7,050,377.03 | 13.07 | 10% | Self-financing |
| Qingyuan Wellhope-feed production line with 400,000 tons per year | 100,000,000.00 | 78,918,778.10 | 22,725,629.77 | 100,814,590.87 | 829,817.00 | 100.00 | 100% | Self-financing |
| Changchun Wellhope Food-factory renovation | 97,300,000.00 | 18,042,252.26 | 6,789,020.18 | 17,016,578.61 | 7,814,693.83 | 25.52 | 15% | Self-financing |
| Fushun Agriculture and Animal Husbandry-pig farm construction | 380,300,000.00 | 82,600.00 | 13,910,583.39 | 13,925,764.39 | 67,419.00 | 100.00 | 100% | Raised funds from capital markets |
| Shenyang Nongda- phase II plant construction and renovation | 103,000,000.00 | 23,206,381.97 | 65,309,134.72 | 5,223,908.89 | 83,291,607.80 | 90.00 | 95% | Self-financing, and raised funds from capital markets |
| Liaoning Wellhope Egg Industry- Renovation of production line and related equipment | 46,685,000.00 | 22,895,026.25 | 18,744,759.00 | 39,751,726.43 | 1,888,058.82 | 89.19 | 90% | Self-financing |
| Heilongjiang Wellhope-creep feed and nursery feed workshop | 50,000,000.00 | 7,638,039.00 | 1,844,425.00 | 4,726,483.00 | 4,755,981.00 | 31.00 | 15% | Self-financing, and raised funds from capital markets |
| Gongzhuling Ruminant- Production line renovation | 6,300,000.00 | 5,405,758.00 | 916,246.00 | 6,322,004.00 | 100.00 | 100% | Self-financing | |
| Fuxin Wellhope Agriculture and Animal Husbandry Company-pig breeding integration project | 88,000,000.00 | 79,445,055.99 | 11,878,850.03 | 91,323,906.02 | 100.00 | 100% | Self-financing, and raised funds from capital markets | |
| Anhui Wellhope-pig integration project with the capacity of slaughtering 1 million heads of pig per year | 162,000,000.00 | 85,763,150.43 | 20,429,496.02 | 80,864,100.00 | 25,328,546.45 | 90.00 | 90% | Self-financing, and raised funds from capital markets |
| Neihuang County Wellhope- workshop equipment replacement and upgrading project | 23,930,262.41 | 17,526,767.29 | 50,000.00 | 17,476,767.29 | 91.00 | 91% | Self-financing | |
| Fuzhou Wellhope - feed production line with 200,000 tons per year | 80,000,000.00 | 15,690,619.74 | 15,690,619.74 | 41.30 | 41.30% | Self-financing | ||
| Daqing Wellhope Food- Phase II plant upgrading | 23,000,000.00 | 7,435,512.62 | 100,000.00 | 7,335,512.62 | 54.00 | 70% | Self-financing | |
| Total | 1,967,515,262.41 | 544,712,608.87 | 366,513,749.44 | 376,907,286.94 | 534,319,071.37 | / | / | / |
14. Productive biological asset
Productive biological assets using cost measurement model
Unit: yuan Currency: RMB
| Item | Animal husbandry | Total | ||||
| Broiler breeder | Pig breeder | Laying duck | Laying hen | Cattle breeder | ||
| 1. Original value | ||||||
| A. Opening balance | 75,295,258.91 | 132,936,563.79 | 2,894,820.05 | 5,467,046.96 | 216,593,689.71 | |
| B. Increased amount | 56,312,211.72 | 178,894,234.37 | 4,768,788.34 | 32,492,686.37 | 1,957,036.79 | 274,424,957.59 |
| a. Externally purchased | 16,984,596.82 | 78,173,324.55 | 1,658,100.00 | 9,559,029.36 | 1,271,856.00 | 107,646,906.73 |
| b. Breeding by own farm | 39,327,614.90 | 100,720,909.82 | 3,110,688.34 | 22,933,657.01 | 685,180.79 | 166,778,050.86 |
| C. Decreased amount | 71,410,602.46 | 164,412,901.52 | 4,585,170.72 | 15,674,812.24 | 256,083,486.94 | |
| a. Disposed | 52,760,457.92 | 114,421,089.39 | 4,585,170.72 | 15,674,812.24 | 187,441,530.27 | |
| b. Other | 18,650,144.54 | 49,991,812.13 | 68,641,956.67 | |||
| D. Closing balance | 60,196,868.17 | 147,417,896.64 | 3,078,437.67 | 22,284,921.09 | 1,957,036.79 | 234,935,160.36 |
| 2.Accumulated depreciation | ||||||
| A. Opening balance | 16,777,634.29 | 27,191,816.83 | 916,720.01 | 1,490,834.24 | 46,377,005.37 | |
| B. Increased amount | 44,220,924.44 | 23,024,589.84 | 1,067,897.62 | 8,577,575.03 | 14,010.21 | 76,904,997.14 |
| a. Accruing | 44,220,924.44 | 23,024,589.84 | 1,067,897.62 | 8,577,575.03 | 14,010.21 | 76,904,997.14 |
| C. Decreased amount | 41,481,483.09 | 30,316,446.33 | 1,377,393.06 | 1,751,442.35 | 74,926,764.83 | |
| a. Disposed | 39,802,970.00 | 21,588,905.45 | 1,377,393.06 | 1,751,442.35 | 64,520,710.86 | |
| b. Other | 1,678,513.09 | 8,727,540.88 | 10,406,053.97 | |||
| D. Closing balance | 19,517,075.64 | 19,899,960.34 | 607,224.57 | 8,316,966.92 | 14,010.21 | 48,355,237.68 |
| 3. Impairment provision | ||||||
| 4. Book value | ||||||
| A. Closing book value | 40,679,792.53 | 127,517,936.30 | 2,471,213.10 | 13,967,954.17 | 1,943,026.58 | 186,579,922.68 |
| B. Opening book value | 58,517,624.62 | 105,744,746.96 | 1,978,100.04 | 3,976,212.72 | 170,216,684.34 | |
15. Right-of-use asset
Unit: yuan Currency: RMB
| Item | Buildings and structures | Machinery equipment | Land | Total |
| 1. Original value | ||||
| A. Opening balance | 108,995,738.16 | 27,382,221.38 | 84,315,919.73 | 220,693,879.27 |
| B. Increased amount | 129,001,527.83 | 33,290,953.08 | 2,491,222.86 | 164,783,703.77 |
| a. New lease | 129,001,527.83 | 33,290,953.08 | 2,491,222.86 | 164,783,703.77 |
| C. Decreased amount | 561,813.15 | 561,813.15 | ||
| a. Expiry of lease | 561,813.15 | 561,813.15 | ||
| D. Closing balance | 237,997,265.99 | 60,673,174.46 | 86,245,329.44 | 384,915,769.89 |
| 2. Accumulated amortization |
| A. Opening balance | 8,818,386.53 | 2,658,305.01 | 9,236,066.28 | 20,712,757.82 |
| B. Increased amount | 19,555,273.12 | 6,579,380.32 | 9,683,477.89 | 35,818,131.33 |
| a. Accruing | 19,555,273.12 | 6,579,380.32 | 9,683,477.89 | 35,818,131.33 |
| C. Decreased amount | 43,216.36 | 43,216.36 | ||
| a. Expiry of lease | 43,216.36 | 43,216.36 | ||
| D. Closing balance | 28,373,659.65 | 9,237,685.33 | 18,876,327.81 | 56,487,672.79 |
| 3. Impairment provision | ||||
| 4. Book value | ||||
| A. Closing book value | 209,623,606.34 | 51,435,489.13 | 67,369,001.63 | 328,428,097.10 |
| B. Opening book value | 100,177,351.63 | 24,723,916.37 | 75,079,853.45 | 199,981,121.45 |
16. Intangible assets
Unit: yuan Currency: RMB
| Item | Land use rights | Computer software and other | Total |
| 1. Original value | |||
| A. Opening balance | 371,887,831.37 | 15,060,026.77 | 386,947,858.14 |
| B. Increased amount | 53,996,558.31 | 3,289,770.88 | 57,286,329.19 |
| a. Purchased | 44,989,000.02 | 3,269,770.88 | 48,258,770.90 |
| b. Increased by business combination | 9,007,558.29 | 20,000.00 | 9,027,558.29 |
| C. Decreased amount | 24,161.48 | 24,161.48 | |
| a. Disposed | 24,161.48 | 24,161.48 | |
| b. Decreased by business combination | |||
| D. Closing balance | 425,884,389.68 | 18,325,636.17 | 444,210,025.85 |
| 2. Accumulated amortization | |||
| A. Opening balance | 61,717,231.94 | 7,999,703.93 | 69,716,935.87 |
| B. Increased amount | 9,527,694.39 | 2,001,497.12 | 11,529,191.51 |
| a. Accruing | 8,844,108.85 | 1,990,385.93 | 10,834,494.78 |
| b. Increased by business combination | 683,585.54 | 11,111.19 | 694,696.73 |
| C. Decreased amount | 24,161.48 | 24,161.48 | |
| a. Disposed | 24,161.48 | 24,161.48 | |
| b. Decreased by business combination | |||
| D. Closing balance | 71,244,926.33 | 9,977,039.57 | 81,221,965.90 |
| 3. Impairment provision | |||
| 4. Book value | |||
| A. Closing book value | 354,639,463.35 | 8,348,596.60 | 362,988,059.95 |
| B. Opening book value | 310,170,599.43 | 7,060,322.84 | 317,230,922.27 |
17. Goodwill
A. Original value of goodwill
Unit: yuan Currency: RMB
| Name of investee or matters forming goodwill | Opening balance | Increased amount | Decreased amount | Closing balance |
| Formed by business combination | Disposal | |||
| Dalian Zhongjia Food Company | 290,425.67 | 290,425.67 | ||
| Tianyi Chuwei (Beijing) | 1,844,995.57 | 1,844,995.57 |
| Technology Company | ||||
| Total | 2,135,421.24 | 2,135,421.24 |
B. Provision for goodwill impairment
| Name of investee or matters forming goodwill | Opening balance | Increased amount | Decreased amount | Closing balance |
| Accruing | Disposal | |||
| Tianyi Chuwei (Beijing) Technology Company | 1,844,995.57 | 1,844,995.57 | ||
| Total | 1,844,995.57 | 1,844,995.57 |
18. Long-term prepaid expenses
Unit: yuan Currency: RMB
| Item | Opening balance | Increased amount | Amortized amount | Closing balance |
| Land leveling fee | 16,664,049.90 | 6,090,605.08 | 7,275,486.67 | 15,479,168.31 |
| Fixed assets betterment | 29,213,626.38 | 23,372,765.07 | 9,949,125.40 | 42,637,266.05 |
| Other | 7,432,274.16 | 6,093,507.39 | 7,508,590.75 | 6,017,190.80 |
| Total | 53,309,950.44 | 35,556,877.54 | 24,733,202.82 | 64,133,625.16 |
19. Deferred income tax assets or deferred income tax liabilities
A. Deferred income tax assets that have not been offset
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Provision for the impairment of assets | 199,498,451.76 | 43,947,379.75 | 166,894,781.86 | 39,742,636.56 |
| Unrealized profit on internal transactions | 34,592,551.69 | 4,505,312.11 | 35,467,433.36 | 6,168,376.86 |
| Carry forward of future years' expenses | 77,727.40 | 19,431.85 | ||
| Deferred income | 29,693,799.99 | 4,678,903.33 | 8,845,833.32 | 1,681,458.33 |
| Fair value changes | 1,994,830.00 | 498,707.50 | 112,070.00 | 28,017.50 |
| Total | 265,779,633.44 | 53,630,302.69 | 211,397,845.94 | 47,639,921.10 |
B. Deferred income tax liabilities that have not been offset
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance | ||
| Taxable temporary differences | Deferred income tax liabilities | Taxable temporary differences | Deferred income tax liabilities | |
| Book value of assets greater than the tax basis | 11,248,696.96 | 2,323,523.78 | 13,664,000.45 | 2,792,995.02 |
| Total | 11,248,696.96 | 2,323,523.78 | 13,664,000.45 | 2,792,995.02 |
C. Details of unrecognized deferred income tax asset
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Deductible temporary difference | 51,089,203.08 | 77,871,091.24 |
| Deductible losses | 333,855,709.70 | 224,786,186.38 |
| Total | 384,944,912.78 | 302,657,277.62 |
D. The Deductible losses on unrecognized deferred income tax assets will expire in the followingyears
Unit: yuan Currency: RMB
| Year | Closing balance | Opening balance |
| 2023 | 24,164,167.70 | 27,857,702.87 |
| 2024 | 51,516,234.05 | 62,542,627.15 |
| 2025 | 38,711,534.19 | 45,699,786.83 |
| 2026 | 63,889,215.61 | 67,356,270.20 |
| 2027 | 135,382,865.67 | 4,420,084.90 |
| 2028 | 8,255,571.42 | 8,255,571.42 |
| 2029 | 4,278,584.71 | 4,278,584.70 |
| 2030 | 75,655.03 | 75,655.03 |
| 2031 | 4,299,903.28 | 4,299,903.28 |
| 2032 | 3,281,978.04 | |
| Total | 333,855,709.70 | 224,786,186.38 |
20. Other non-current assets
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance | ||
| Book balance | Book value | Book balance | Book value | |
| Prepayments of long-lived assets | 85,901,907.05 | 85,901,907.05 | 130,937,088.17 | 130,937,088.17 |
| Prepayments of fees to contract farms | 549,839,474.82 | 549,839,474.82 | 479,715,878.08 | 479,715,878.08 |
| Prepayments of house rent | 3,000,000.00 | 3,000,000.00 | 8,000,000.00 | 8,000,000.00 |
| Total | 638,741,381.87 | 638,741,381.87 | 618,652,966.25 | 618,652,966.25 |
21. Short-term borrowing
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Guaranteed loan | 232,845,975.15 | 222,076,291.24 |
| Credit loan | 699,146,360.00 | 1,322,240,000.00 |
| Accrued interest | 1,793,456.81 | 1,883,522.02 |
| Total | 933,785,791.96 | 1,546,199,813.26 |
Explanation: The guaranteed loan is the bank loan guaranteed by the Company for its subsidiarycompanies, including Lingyuan Wellhope, Liaoning Expert Trading Company, Puyang Wellhope Food,Lixin Xiangfeng Agriculture and Animal Husbandry, Chongqing Dahong Machinery, and Daqing WellhopeAgri-Tech.
22. Notes payable
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Bank acceptance | 600,000.00 | 3,900,000.00 |
| Total | 600,000.00 | 3,900,000.00 |
23. Accounts payable
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Accounts payable related to purchasing and expenses | 1,607,441,382.04 | 1,173,223,100.50 |
| Accounts payable related to long-lived assets | 84,211,257.24 | 122,936,012.05 |
| Total | 1,691,652,639.28 | 1,296,159,112.55 |
24. Advance receipt
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Proceeds from sale | 17,873,252.23 | 10,500,434.76 |
| Total | 17,873,252.23 | 10,500,434.76 |
25. Contract Liabilities
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Proceeds from sale | 336,134,719.84 | 350,642,122.84 |
| Total | 336,134,719.84 | 350,642,122.84 |
26. Payroll
A. Payroll payable
Unit: yuan Currency: RMB
| Item | Opening balance | Increased amount | Decreased amount | Change in scope of consolidation | Closing balance |
| 1. Short-term benefits | 106,671,033.53 | 1,097,839,754.05 | 1,025,830,448.67 | 966,775.29 | 179,647,114.20 |
| 2. Post-employment benefits- defined contribution plan | 1,388,073.65 | 82,979,839.98 | 81,634,072.52 | 13,479.28 | 2,747,320.39 |
| 3. Dismission welfare | 2,342,821.00 | 2,342,821.00 | |||
| 4. Other benefits due within one year | |||||
| Total | 108,059,107.18 | 1,183,162,415.03 | 1,109,807,342.19 | 980,254.57 | 182,394,434.59 |
B. Short-term benefits
Unit: yuan Currency: RMB
| Item | Opening balance | Increased amount | Decreased amount | Change in scope of consolidation | Closing balance |
| 1. Wages, bonuses, allowances and subsidies | 104,537,629.84 | 961,733,525.79 | 890,008,865.77 | 956,296.61 | 177,218,586.47 |
| 2. Staff benefits expenses | 63,120,219.01 | 63,120,219.01 | |||
| 3. Social insurance charges | 967,327.11 | 47,687,960.35 | 47,583,901.19 | 11,020.21 | 1,082,406.48 |
| including: Medical insurance premiums | 854,043.66 | 42,184,664.12 | 42,095,829.28 | 9,707.68 | 952,586.18 |
| Occupational injury insurance premium | 51,184.57 | 4,002,926.15 | 3,947,498.48 | 963.63 | 107,575.87 |
| Birth insurance premium | 62,098.88 | 1,500,370.08 | 1,540,573.43 | 348.9 | 22,244.43 |
| 4. Housing provident fund | 215,527.00 | 17,879,221.53 | 17,930,081.77 | -3,280.00 | 161,386.76 |
| 5. Employee labor union dues, employee education expense | 950,549.58 | 7,418,827.37 | 7,187,380.93 | 2,738.47 | 1,184,734.49 |
| Total | 106,671,033.53 | 1,097,839,754.05 | 1,025,830,448.67 | 966,775.29 | 179,647,114.20 |
C. Defined contribution plan
Unit: yuan Currency: RMB
| Item | Opening balance | Increased amount | Decreased amount | Change in scope of consolidation | Closing balance |
| Basic endowment insurance | 1,327,168.92 | 78,872,486.90 | 77,553,741.80 | 12,677.36 | 2,658,591.38 |
| Unemployment insurance expense | 60,904.73 | 2,716,330.45 | 2,689,308.09 | 801.92 | 88,729.01 |
| Enterprise annuity | 5,007.05 | 5,007.05 | |||
| Other post-employment benefits | 1,386,015.58 | 1,386,015.58 | |||
| Total | 1,388,073.65 | 82,979,839.98 | 81,634,072.52 | 13,479.28 | 2,747,320.39 |
27. Tax payable
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Value-added tax | 2,410,807.08 | 1,447,164.11 |
| Corporate income tax | 39,651,968.46 | 45,909,366.61 |
| Individual income tax | 5,167,196.20 | 1,904,128.68 |
| City maintenance and construction tax | 215,239.13 | 151,023.81 |
| Extra charges of education funds | 164,093.37 | 115,710.52 |
| House property tax | 1,452,755.25 | 1,070,552.52 |
| City and town land use tax | 1,743,036.67 | 1,543,358.19 |
| Stamp tax | 3,823,586.78 | 1,784,763.84 |
| Other | 381,660.57 | 544,451.51 |
| Total | 55,010,343.51 | 54,470,519.79 |
28. Other payables
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Interest payable | 3,105,236.78 | 170,000.00 |
| Dividends payable | 14,943,072.75 | 8,409,125.87 |
| Other payables | 442,822,193.93 | 399,647,246.80 |
| Total | 460,870,503.46 | 408,226,372.67 |
A. Dividends payable
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Common stock dividends | 14,943,072.75 | 8,409,125.87 |
| Total | 14,943,072.75 | 8,409,125.87 |
B. Other payablesOther payables presented by nature
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Operational payables related to expenses and transactions | 340,661,315.53 | 272,908,586.80 |
| Investment related payables | 4,885,578.40 | 6,300,000.00 |
| Transactions with external companies | 97,275,300.00 | 96,150,000.00 |
| Repurchasing obligations of non-restricted stock | 24,288,660.00 | |
| Total | 442,822,193.93 | 399,647,246.80 |
29. Non-current liability due within 1 year
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Long-term borrowings due within 1 year | 429,600,000.00 | 141,500,000.00 |
| Long-term payables due within 1 year | 18,656,882.06 | 40,575,280.50 |
| Lease liabilities due within 1 year | 23,071,713.28 | 9,069,785.09 |
| Total | 471,328,595.34 | 191,145,065.59 |
30. Other non-current liability
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Unamortized output VAT | 5,334,961.22 | 9,681,957.60 |
| Total | 5,334,961.22 | 9,681,957.60 |
31. Long-term borrowings
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Guaranteed loan | 178,291,600.00 | 69,791,600.00 |
| Credit loan | 1,132,564,210.00 | 1,174,564,210.00 |
| Interest payable | 1,901,499.28 | 1,263,136.13 |
| Total | 1,312,757,309.28 | 1,245,618,946.13 |
The guaranteed loans at the end of the period were bank loans guaranteed by the Company for itssubsidiaries Anhui Wellhope Food Company, Daqing Wellhope Food Company, Dalian Heyuan AnimalHusbandry Company and Dalian Zhongjia Food Company.Other notes, including interest rate range:
The borrowing rate for the Company's long-term loans is 3.00%-7.74%.
32. Bonds Payable
A. Bonds payable
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Wellhope convertible bond | 1,257,828,066.86 | |
| Total | 1,257,828,066.86 |
B. Changes of bonds payable
Unit: yuan Currency: RMB
| Bond name | Par value | Issuing date | Bond duration | Total issuing amount | Opening balance | Issuing in the reporting period | Interest accrued at par value | Amortization of premium and discount | Current period Reimbursement | Closing balance |
| Wellhope convertible bond | 100 | Apr. 22, 2022 | 6 years | 1,500,000,000.00 | 1,500,000,000.00 | 3,175,000.00 | 212,387,933.14 | 32,959,000.00 | 1,257,828,066.86 | |
| Total | / | / | / | 1,500,000,000.00 | 1,500,000,000.00 | 3,175,000.00 | 212,387,933.14 | 32,959,000.00 | 1,257,828,066.86 |
33. Lease liabilities
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Lease liabilities | 246,074,084.08 | 132,538,160.55 |
| Lease liabilities due within 1 year | -23,071,713.28 | -9,069,785.09 |
| Total | 223,002,370.80 | 123,468,375.46 |
34. Long-term payables
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Long-term payable | 7,685,803.59 | 47,702,610.06 |
| Special payable | ||
| Total | 7,685,803.59 | 47,702,610.06 |
Long-term payable presented by nature
Unit: yuan Currency: RMB
| Item | Opening balance | Closing balance |
| Non-bank long-term borrowings | 7,685,803.59 | 47,702,610.06 |
35. Deferred income
Unit: yuan Currency: RMB
| Item | Opening balance | Increased amount | Decreased amount | Closing balance | Reason |
| Government grants | 60,335,083.33 | 30,754,800.00 | 13,078,476.27 | 78,011,407.06 | |
| Total | 60,335,083.33 | 30,754,800.00 | 13,078,476.27 | 78,011,407.06 | / |
Projects receiving government grants
Unit: yuan Currency: RMB
| Liability item | Opening balance | Amount of newly increased grant | Amount recorded in other income | Closing balance | Related to assets or related to income |
| Lingyuan Wellhope ruminant feed project with 100,000 tons capacity | 2,500,000.00 | 500,000.00 | 2,000,000.00 | related to asset | |
| Lingyuan Wellhope corn purchasing and storage barn | 1,800,000.00 | 300,000.00 | 1,500,000.00 | related to asset | |
| Shenyang city central industrial transformation and upgrading funds | 7,255,250.00 | 2,664,000.00 | 4,591,250.00 | related to asset | |
| Lingyuan Wellhope 50,000 tons of organic fertilizer construction | 2,100,000.00 | 300,000.00 | 1,800,000.00 | related to asset | |
| Agricultural policy project funds | 3,448,000.00 | 431,000.00 | 3,017,000.00 | related to asset | |
| 2019 Central Government’s development funds for high-quality development of manufacturing industry (green manufacturing) | 6,480,000.00 | 21,724,800.00 | 1,552,500.00 | 26,652,300.00 | related to asset |
| 2020 Liaoning province industrial internet innovation and development special project funds | 5,000,000.00 | 5,000,000.00 | related to asset | ||
| Provincial scientific research funds for collaborators with corn major special project | 1,000,000.00 | 1,000,000.00 | related to asset | ||
| Broiler green platform construction project | 336,000.00 | 336,000.00 | - | related to asset | |
| Funds for the Hebao pig project | 13,300,000.00 | 1,400,000.00 | 11,900,000.00 | related to asset | |
| Key technology for livestock and poultry breeding and whole industry chain production in Liaoning province | 5,845,833.33 | 1,850,000.00 | 3,995,833.33 | related to asset | |
| Shenyang science and technology plan project in 2021 | 3,000,000.00 | 3,000,000.00 | related to asset | ||
| Cold chain logistics grant from the Development and Reform Commission | 5,770,000.00 | 5,770,000.00 | related to asset | ||
| Support funds for the conversion of new and old dynamic energy | 2,500,000.00 | 2,000,000.00 | 2,107,142.94 | 2,392,857.06 | related to asset |
| 2020 large-scale pig farm construction grant | 3,300,000.00 | 990,000.00 | 2,310,000.00 | related to asset | |
| Grant for modern agricultural industry in 2018 | 850,000.00 | 297,500.00 | 552,500.00 | related to asset | |
| Provincial special funds for high-quality development of manufacturing | 1,870,000.00 | 249,333.33 | 1,620,666.67 | related to asset | |
| Funds for the service industry in 2022 | 1,010,000.00 | 101,000.00 | 909,000.00 | related to asset | |
| Total | 60,335,083.33 | 30,754,800.00 | 13,078,476.27 | 78,011,407.06 |
36. Share capital
Unit: yuan Currency: RMB
| Opening balance | Changes (increase or decrease) | Closing balance | |||
| Bonds converted to shares | Other | Subtotal | |||
| Total shares | 921,960,196.00 | 3,212,254.00 | -5,742,000.00 | -2,529,746.00 | 919,430,450.00 |
Explanation:
As the conditions for unlocking restricted shares in the third lock-up period of the 2018 Restricted ShareIncentive Plan had not been achieved, the Company repurchased and cancelled 5,742,000 restrictedshares that had been granted and not yet unlocked.As of December 31, 2022, a total of RMB32,959,000 Wellhope Convertible Bonds have been convertedinto shares of the Company. The conversion price was RMB 10.26 per share, and the number of sharesformed by the conversion was 3,212,254 shares, accounting for 0.35% of the total issued shares of theCompany before the conversion.
37. Other equity instrument
A. Basic information of other financial instruments such as preferred shares and perpetual bonds atthe end of the periodApproved by China Securities Regulatory Commission, the Company publicly issued 15 millionconvertible bonds on April 22, 2022 at an issuing price of RMB100.00 per bond, with a total issueamount of RMB1.5 billion and a term of 6 years. With the consent of Shanghai Stock Exchange, theCompany's convertible bonds were listed for trading on SSE from May 18, 2022, with the tradingsymbol of 113647.B. Table of changes in financial instruments such as preferred shares and perpetual bonds at theend of the period
Unit: yuan Currency: RMB
| Financial instruments issued | Opening balance | Increased amount | Decrease amount | Closing balance | ||||
| Numbers | Book value | Numbers | Book value | Numbers | Book value | Numbers | Book value | |
| Wellhope convertible bond | 15,000,000 | 238,927,343.52 | 329,590 | 5,249,870.88 | 14,670,410 | 233,677,472.64 | ||
| Total | 15,000,000 | 238,927,343.52 | 329,590 | 5,249,870.88 | 14,670,410 | 233,677,472.64 | ||
38. Capital reserve
Unit: yuan Currency: RMB
| Item | Opening balance | Increased amount | Decreased amount | Closing balance |
| Capital premium (share capital premium) | 877,110,758.45 | 30,296,373.97 | 26,614,806.68 | 880,792,325.74 |
| Other capital reserves | 874,051.73 | 920,092.92 | -46,041.19 | |
| Total | 877,984,810.18 | 30,296,373.97 | 27,534,899.60 | 880,746,284.55 |
Explanation--The change in capital premium was due to the conversion of bonds to the Company’sshares that increased RMB30,296,373.97, repurchasing and cancelling restricted shares that did notmeet the unlocking conditions, which decreased RMB22,106,700.00, as well as the change in theCompany's share of interests in subsidiaries that decreased RMB4,508,106.68
39. Treasury stock
Unit: yuan Currency: RMB
| Item | Opening balance | Increased amount | Decreased amount | Closing balance |
| Restricted stock | 24,288,660.00 | 24,288,660.00 | ||
| Repurchase of stock of the Company | 200,003,612.37 | 200,003,612.37 | ||
| Total | 224,292,272.37 | 24,288,660.00 | 200,003,612.37 |
Explanation: The Company granted restricted shares to 372 managers in December 2018 andrecognized the treasury shares of restricted stock with repurchase obligation. Those restricted sharesthat did not meet unlocking conditions in the third lock-up period reduced treasury shares byRMB24,288,660.00. Further information on share-based payments, please see "Share-based Payments"in Note.
40. Other comprehensive income
Unit: yuan Currency: RMB
| Item | Opening balance | 2022 | Closing balance | ||
| Pre-tax | After-tax, attributable to parent company | After-tax, attributable to non-controlling interest | |||
| 1. Other comprehensive income that can’t be reclassified into gains or losses | -4,167,784.85 | -3,113,249.95 | -3,076,318.89 | -36,931.06 | -7,244,103.74 |
| Changes in the fair value of other equity instruments investment | -4,167,784.85 | -3,113,249.95 | -3,076,318.89 | -36,931.06 | -7,244,103.74 |
| 2. Other comprehensive income that will be reclassified into gains or losses | -12,896,228.53 | 499,968.49 | -7,410.63 | 507,379.12 | -12,903,639.16 |
| including: Other comprehensive income that can be transferred in gains or losses under the equity method | -11,207,368.16 | -554,988.18 | -587,636.80 | 32,648.62 | -11,795,004.96 |
| Translation balance of foreign currency financial statements | -1,688,860.37 | 1,054,956.68 | 580,226.17 | 474,730.51 | -1,108,634.20 |
| Total other comprehensive income | -17,064,013.38 | -2,613,281.46 | -3,083,729.52 | 470,448.06 | -20,147,742.90 |
41. Surplus reserve
Unit: yuan Currency: RMB
| Item | Opening balance | Increased amount | Decrease amount | Closing balance |
| Statutory surplus reserve | 432,238,223.06 | 21,937,097.91 | 454,175,320.97 | |
| Total | 432,238,223.06 | 21,937,097.91 | 454,175,320.97 |
42. Undistributed profit
Unit: yuan Currency: RMB
| Item | 2022 | 2021 |
| Undistributed profit at the end of prior period before adjustment | 4,473,531,926.28 | 4,572,660,487.98 |
| Adjusting total undistributed profit at the beginning of current period | ||
| Undistributed profit at the beginning of current period after adjustment | 4,473,531,926.28 | 4,572,660,487.98 |
| add: Net profit attributable to the owners of the parent company in current period | 513,532,382.02 | 118,530,518.15 |
| deduct: Extraction of statutory surplus reserve | 21,937,097.91 | 14,867,716.73 |
| Dividends payable on common shares | -3,560,040.00 | 202,791,363.12 |
| Undistributed profit at the end of current period | 4,968,687,250.39 | 4,473,531,926.28 |
43. Operating revenue and cost
Unit: yuan Currency: RMB
| Item | 2022 | 2021 | ||
| Revenue | Cost | Revenue | Cost | |
| Primary businesses | 32,779,235,244.83 | 30,794,818,901.75 | 29,452,990,772.26 | 27,892,391,512.38 |
| Other businesses | 32,522,964.71 | 44,452,294.30 | 15,935,127.34 | 7,907,003.97 |
| Total | 32,811,758,209.54 | 30,839,271,196.05 | 29,468,925,899.60 | 27,900,298,516.35 |
44. Taxes and surtaxes
Unit: yuan Currency: RMB
| Item | 2022 | 2021 |
| City maintenance and construction tax | 1,211,228.52 | 1,197,512.60 |
| Extra charges of education funds | 903,575.64 | 1,168,918.84 |
| House property tax | 12,202,473.48 | 10,212,345.55 |
| Land use tax | 13,964,383.42 | 13,020,111.37 |
| Stamp tax | 14,921,643.21 | 11,595,193.43 |
| Other | 4,125,778.04 | 4,280,229.01 |
| Total | 47,329,082.31 | 41,474,310.80 |
45. Sales expenses
Unit: yuan Currency: RMB
| Item | 2022 | 2021 |
| Payroll | 370,582,343.28 | 300,225,142.79 |
| Travelling expense | 123,986,949.75 | 130,024,839.18 |
| Transportation and handling expense and vehicle expense | 16,911,259.03 | 12,371,169.60 |
| Service fee | 19,630,978.25 | 19,251,413.24 |
| Business entertainment expense | 21,269,353.99 | 23,345,224.32 |
| Business advertising expense | 8,973,524.39 | 19,049,863.42 |
| Lease expense | 7,214,334.31 | 7,414,709.11 |
| Meeting expenditure | 2,261,324.49 | 5,791,658.40 |
| Sales service charge | 9,487,078.17 | 12,794,816.40 |
| Office and communication fee | 9,387,087.31 | 8,913,887.87 |
| Subtotal of other items | 32,740,528.18 | 30,954,598.34 |
| Total | 622,444,761.15 | 570,137,322.67 |
46. Administration expense
Unit: yuan Currency: RMB
| Item | 2022 | 2021 |
| Payroll | 296,418,682.64 | 215,614,679.11 |
| Depreciation | 55,468,193.25 | 44,935,753.84 |
| Office and communication fee | 27,190,260.46 | 22,077,192.12 |
| Travelling expense | 13,367,047.99 | 12,677,974.95 |
| Repair charge | 17,031,777.04 | 18,612,603.22 |
| Lease expense | 7,718,800.87 | 7,506,239.77 |
| Amortization of intangible assets | 11,708,435.13 | 10,096,886.20 |
| Business entertainment expense | 14,974,999.77 | 11,635,461.94 |
| Water and electricity | 8,920,820.19 | 6,478,509.91 |
| Service fee | 19,336,571.21 | 22,583,604.92 |
| Heating fee | 7,804,942.76 | 5,779,868.34 |
| Vehicle costs | 8,088,330.87 | 8,412,103.93 |
| Other | 49,034,996.54 | 31,705,704.54 |
| Total | 537,063,858.72 | 418,116,582.79 |
47. R&D expenditure
Unit: yuan Currency: RMB
| Item | 2022 | 2021 |
| Payroll | 32,577,171.30 | 27,272,470.29 |
| Design and experiment fee | 25,734,570.75 | 34,736,166.24 |
| Material and appliance charge | 22,218,959.19 | 27,837,304.88 |
| Travel expense | 3,570,012.37 | 2,321,084.86 |
| Depreciation and amortization expense | 4,317,828.49 | 4,046,591.46 |
| Subtotal of other items | 1,686,532.91 | 1,147,135.71 |
| Total | 90,105,075.01 | 97,360,753.44 |
48. Financial expense
Unit: yuan Currency: RMB
| Item | 2022 | 2021 |
| Interest expenditure | 167,066,021.40 | 103,590,360.22 |
| Interest income | -13,023,769.68 | -8,487,862.34 |
| Exchange loss | 1,003,506.14 | -466,206.65 |
| Service charge | 5,634,571.17 | 6,029,434.83 |
| Total | 160,680,329.03 | 100,665,726.06 |
49. Other income
Unit: yuan Currency: RMB
| Item | 2022 | 2021 |
| Government grant recorded in | 31,462,128.67 | 28,971,966.52 |
| Income tax return | 154,001.44 | 184,353.40 |
| Total | 31,616,130.11 | 29,156,319.92 |
50. Income from investment
Unit: yuan Currency: RMB
| Item | 2022 | 2021 |
| Income from long-term equity investment measured by the equity method | 162,299,491.42 | -84,457,885.45 |
| Income from disposal of long-term equity investment | -161,422.19 | -2,539,583.92 |
| Investment income from financial assets held for trading | 819,282.27 | |
| Investment income from disposal of derivative financial instruments, | -4,671,035.80 | 177,738.97 |
| Investment income earned during the period of holding investments in other equity instruments | 5,550,000.00 | |
| Total | 157,467,033.43 | -80,450,448.13 |
51. Income from changes in fair value
Unit: yuan Currency: RMB
| Source of income from changes in fair value | 2022 | 2021 |
| Gain on fair value changes arising from derivative financial instruments | -1,700,554.55 | 1,555,420.50 |
| Total | -1,700,554.55 | 1,555,420.50 |
52. Credit impairment loss
Unit: yuan Currency: RMB
| Item | 2022 | 2021 |
| Bad debt loss on notes receivable | 32,632.65 | |
| Bad debt loss on accounts receivable | -24,687,984.19 | -32,471,871.78 |
| Bad debt loss on other receivables | 13,001,718.92 | -12,293,288.21 |
| Total | -11,686,265.27 | -44,732,527.34 |
53. Asset impairment loss
Unit: yuan Currency: RMB
| Item | 2022 | 2021 |
| Loss on decline in value of inventories and impairment loss on contract performance costs | -27,221,526.25 | -27,212,552.20 |
| Impairment loss on fixed assets | -1,108,244.39 | |
| Impairment loss on goodwill | -1,844,995.57 | |
| Other | 76,029.36 | -84,015.81 |
| Total | -30,098,736.85 | -27,296,568.01 |
54. Income from assets disposal
Unit: yuan Currency: RMB
| Item | 2022 | 2021 |
| Gain or loss from disposal of fixed assets | -1,300,520.53 | -337,539.13 |
| Gain or loss from disposal of productive biological asset | -2,561,979.97 | -11,101,259.78 |
| Total | -3,862,500.50 | -11,438,798.91 |
55. Non-operating Income
Unit: yuan Currency: RMB
| Item | 2022 | 2021 | Amount included in current extraordinary items |
| Total gains or losses from disposal of non-current assets | 128,153.63 | 334,121.56 | 128,153.63 |
| Government grants | 8,612,756.40 | 11,104,684.70 | 8,612,756.40 |
| Other | 9,262,091.32 | 5,821,514.11 | 9,262,091.32 |
| Total | 18,003,001.35 | 17,260,320.37 | 18,003,001.35 |
--Government grants recorded in current gains and losses
Unit: yuan Currency: RMB
| Item | 2022 | 2021 | Related to assets or related to income |
| State meat storage grant | 2,300,000.00 | related to income | |
| 2021 green cycle development incentive funds | 1,000,000.00 | related to income | |
| Special incentives for high-quality development | 983,236.20 | related to income | |
| Enterprise accelerated growth support program incentives | 800,000.00 | related to income | |
| Tax refund | 533,628.47 | related to income | |
| Subtotal of other projects under RMB 500,000 | 2,995,891.73 | 2,460,003.48 | related to income |
56. Non-operating expenditure
Unit: yuan Currency: RMB
| Item | 2022 | 2021 | Amount included in current extraordinary items |
| Total losses from disposal of non-current assets | 20,395,373.87 | 28,430,512.03 | 20,395,373.87 |
| External donations | 1,995,398.27 | 934,994.50 | 1,995,398.27 |
| Extraordinary losses | 12,532,661.32 | 16,110,599.82 | 12,532,661.32 |
| Penalty expenses | 8,625,688.37 | 2,460,681.97 | 8,625,688.37 |
| Other | 2,717,387.84 | 944,310.48 | 2,717,387.84 |
| Total | 46,266,509.67 | 48,881,098.80 | 46,266,509.67 |
57. Income tax expense
Unit: yuan Currency: RMB
| Item | 2022 | 2021 |
| Current income tax expense | 97,531,345.19 | 159,615,020.59 |
| Deferred income tax expense | -6,279,117.61 | -8,111,581.34 |
| Total | 91,252,227.58 | 151,503,439.25 |
Adjustment procedure for accounting profit and income tax expense
Unit: yuan Currency: RMB
| Item | 2022 |
| Total profit | 628,335,505.32 |
| Income tax expenses calculated at statutory or applicable tax rates | 94,250,325.80 |
| Effect of different tax rates applied to subsidiaries | 23,902,404.81 |
| Effects of adjusting the income tax of prior periods | -1,496,837.99 |
| Effects of non-taxable income | -42,184,349.71 |
| Effects of non-deductible costs, expenses and losses | 3,031,582.05 |
| Effects of using deductible losses of deferred income tax assets that have not been recognized in previous period | -4,518,748.31 |
| Effects of deductible temporary differences or deductible losses on deferred income tax assets that have not been recognized in current period | 35,969,547.42 |
| Calculation and deduction of R&D expenditure | -11,189,105.16 |
| Other | -6,512,591.33 |
| Income tax expense | 91,252,227.58 |
58. Other comprehensive income
See note.
59. Items in cash flow statement
A. Cash received from other activities related to operating
Unit: yuan Currency: RMB
| Item | 2022 | 2021 |
| Government grants | 61,676,108.80 | 63,508,984.55 |
| Interest income | 9,098,869.68 | 8,151,739.59 |
| Subtotal of transactions and other | 125,797,130.26 | 93,615,371.72 |
| Total | 196,572,108.74 | 165,276,095.86 |
B. Cash paid for other activities related to operating
Unit: yuan Currency: RMB
| Item | 2022 | 2021 |
| Travelling expense | 140,924,010.10 | 145,023,898.99 |
| Transportation and handling expense | 12,647,746.63 | 12,371,169.60 |
| R&D expenditure | 47,953,529.94 | 62,573,471.12 |
| Business entertainment expense | 36,244,353.76 | 34,980,686.26 |
| Office and communication fee | 36,577,347.77 | 30,991,079.99 |
| Service fee | 38,967,549.46 | 41,835,018.16 |
| Other operating expenses paid | 127,414,649.52 | 130,968,209.77 |
| Transactions and other paid | 73,259,532.97 | 94,054,950.14 |
| Total | 513,988,720.15 | 552,798,484.03 |
C. Cash received from other activities related to investment
Unit: yuan Currency: RMB
| Item | 2022 | 2021 |
| Futures margin decreased | 4,772,457.53 | |
| Net cash received from acquiring subsidiaries | 913,019.48 | 740,956.92 |
| Cash received from interest on funds recovered | 232,760.00 | |
| Total | 5,685,477.01 | 973,716.92 |
D. Cash paid for other activities related to investment
Unit: yuan Currency: RMB
| Item | 2022 | 2021 |
| Futures margin increased | 22,410,208.30 | |
| Increase of letter of credit margin | 9,889,618.46 | 588,855.43 |
| Net cash paid for disposal of subsidiaries | 151,635.76 | 9,914,082.40 |
| Total | 10,041,254.22 | 32,913,146.13 |
E. Cash received from other activities related to financing
Unit: yuan Currency: RMB
| Item | 2022 | 2021 |
| Receiving borrowings of other companies | 43,590,224.96 | 96,150,000.00 |
| Decrease in banker's acceptances margin | 660,000.00 | |
| Capital increase received in advance from minority shareholders of subsidiaries | 1,320,128.56 | |
| Cash received from disposal of part of equity interest in subsidiaries | 6,918,623.25 | 1,870,000.00 |
| Total | 52,488,976.77 | 98,020,000.00 |
F. Cash paid for other activities related to financing
Unit: yuan Currency: RMB
| Item | 2022 | 2021 |
| Parent company repurchased shares that did not meet the unlocking conditions | 24,288,660.00 | 443,665.00 |
| Finance lease commission | 530,868.88 | 1,437,369.51 |
| Cash paid for buying non-controlling interests of subsidiaries | 24,183,999.00 | 68,987,441.16 |
| Increase in deposit for bank acceptance bills | 780,000.00 | |
| Cash paid for repurchasing shares | 200,003,612.37 | |
| Convertible bond issuance costs | 1,766,500.00 | |
| Paying borrowings for external companies | 46,864,924.96 | |
| Payment of rent and interest on right-to-use assets | 54,641,609.59 | 23,111,004.91 |
| Total | 152,276,562.43 | 294,763,092.95 |
60. Supplementary information of cash flow statement
A. Supplementary information
Unit: yuan Currency: RMB
| Further information | 2022 | 2021 |
| 1. Adjusting net profit to cash flow from operating activities | ||
| Net profit | 537,083,277.74 | 24,541,867.84 |
| add: Assets impairment provision | 30,098,736.85 | 27,296,568.01 |
| Credit impairment losses | 11,686,265.27 | 44,732,527.34 |
| Depreciation of fixed assets, depletion of oil and gas assets, depreciation of productive biological assets | 435,669,568.47 | 393,657,905.30 |
| Amortization of intangible assets | 10,655,309.84 | 8,822,917.48 |
| Amortization of long-term unamortized expense | 24,710,907.16 | 52,140,944.08 |
| Losses on disposal of fixed assets, intangible assets and other long-lived assets | 3,862,500.50 | 11,438,798.91 |
| Loss on scrapping of fixed assets | 20,267,220.24 | 28,096,390.47 |
| Losses due to changes in fair value | 1,700,554.55 | -1,555,420.50 |
| Financial expense | 165,747,270.18 | 106,024,355.94 |
| Investment losses | -157,467,033.43 | 80,450,448.13 |
| Decrease of deferred income tax assets | -5,990,381.59 | -8,848,289.73 |
| Increase of deferred income tax liabilities | -469,471.24 | 856,141.79 |
| Decrease of inventory | -817,339,137.15 | -298,142,113.68 |
| Decrease of operating receivables | -666,578,755.01 | -387,285,788.19 |
| Increase of operating payables | 550,156,440.68 | 295,024,579.03 |
| Other | 52,473,237.28 | -78,091,609.86 |
| Net cash flow from operating activities | 196,266,510.34 | 299,160,222.36 |
| 2. Net changes in cash and cash equivalents | ||
| Closing balance of cash | 1,648,980,222.82 | 1,198,273,561.91 |
| deduct: Opening balance of cash | 1,198,273,561.91 | 1,186,197,643.04 |
| add: Closing balance of cash equivalent | ||
| deduct: Opening balance of cash equivalent | ||
| Net increase in cash and cash equivalents | 450,706,660.91 | 12,075,918.87 |
B. Net cash paid for acquiring subsidiaries
Unit: yuan Currency: RMB
| Amount | |
| Cash or cash equivalents paid for business combinations occurred in current period | 662,800.00 |
| including: Haicheng New Hongzunda Animal Husbandry Company | 662,800.00 |
| Lankao Skyland Feed Company | |
| deduct: Cash and cash equivalents held by the subsidiary on the acquiring date | 1,254,273.54 |
| including: Haicheng New Hongzunda Animal Husbandry Company | 341,254.06 |
| Lankao Skyland Feed Company | 913,019.48 |
| add: Cash or cash equivalents paid in the current period for business combinations that occurred in prior periods | |
| Net cash paid for acquiring subsidiaries | -591,473.54 |
C. Net cash received from disposal of subsidiaries during current period
Unit: yuan Currency: RMB
| Amount | |
| Cash or cash equivalents received during current period for the disposal of subsidiaries | 8,897,750.56 |
| including: Henan Hejiang Agricultural Development Company | 5,980,609.00 |
| Zhengning Wellhope Zaosheng Cattle Feed Processing Company | |
| Dahongda Construction Engineering Chongqing Company | 2,917,141.56 |
| deduct: Cash and cash equivalents held by the subsidiary on the date of loss of control | 7,454,486.88 |
| including: Henan Hejiang Agricultural Development Company | 6,058,338.74 |
| Zhengning Wellhope Zaosheng Cattle Feed Processing Company | 73,906.02 |
| Dahongda Construction Engineering Chongqing Company | 1,322,242.12 |
| add: Cash or cash equivalents received in current period by disposing subsidiaries in prior periods | |
| Net cash received from disposal of subsidiaries | 1,443,263.68 |
D. Cash and cash equivalents
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| 1. Cash | 1,648,980,222.82 | 1,198,273,561.91 |
| including: Cash on hand | 695,108.20 | 446,403.52 |
| Bank deposits readily available for disbursement | 1,648,285,114.62 | 1,197,827,158.39 |
| 2. Cash equivalent | ||
| 3. Closing balance of cash and cash equivalents | 1,648,980,222.82 | 1,198,273,561.91 |
61. Assets with restricted ownership or use rights
Unit: yuan Currency: RMB
| Item | Closing book value | Reason for restriction |
| Monetary capital | 29,160,615.15 | Futures margin |
| Monetary capital | 10,480,765.63 | L/C guarantee deposit |
| Monetary capital | 120,000.00 | Bank acceptance deposit |
| Total | 39,761,380.78 | / |
62. Foreign currency monetary items
A. Foreign currency monetary items
Unit: yuan
| Item | Closing balance of foreign currency | Translating exchange rate | Closing balance translated into RMB |
| Monetary capital | - | - | 29,132,916.18 |
| including: US dollar | 953,640.73 | 6.9646 | 6,641,726.23 |
| Euro | 82.87 | 7.4229 | 615.14 |
| HK dollar | 23,068,778.42 | 0.89327 | 20,606,647.70 |
| Ruble | 20,005,597.40 | 0.09417 | 1,883,927.11 |
| Accounts receivable | - | - | 23,312,021.38 |
| US dollar | 2,284,781.59 | 6.9646 | 15,912,589.86 |
| HK dollar | 8,283,533.00 | 0.89327 | 7,399,431.52 |
| Short-term borrowing | - | - | 56,638,379.83 |
| including: US dollar | 8,132,323.44 | 6.9646 | 56,638,379.83 |
| Accounts payable | - | - | 120,055.63 |
| including: Ruble | 1,274,881.89 | 0.09417 | 120,055.63 |
| Prepayment | - | - | 248,473.20 |
| including: Ruble | 2,638,560.05 | 0.09417 | 248,473.20 |
| Other payables | - | - | 3,308,116.93 |
| including: Ruble | 35,129,201.80 | 0.09417 | 3,308,116.93 |
B. Explanation of overseas business entity
| Name | Business place abroad | Recording currency | Currency selection basis |
| Russia Wellhope Agri-Tech Company | Russia | Ruble | Local currency |
63. Government grants
Unit: yuan Currency: RMB
| Category | Amount | Presented item | Amount recorded in current gains or losses |
| Job stabilization subsidy | 3,217,045.83 | Other income | 3,217,045.83 |
| Special funds for enterprise listing development | 3,000,000.00 | Other income | 3,000,000.00 |
| Subsidy for national meat storage and investment | 2,300,000.00 | Non-operating income | 2,300,000.00 |
| Subsidy for production performance determination and feed conversion rate determination | 1,420,000.00 | Other income | 1,420,000.00 |
| 2021 green cycle development incentive funds | 1,000,000.00 | Non-operating income | 1,000,000.00 |
| Special incentive for high-quality development | 983,236.20 | Non-operating income | 983,236.20 |
| Subsidy for processing of agricultural and livestock products in Weihai in 2020 | 900,000.00 | Other income | 900,000.00 |
| Training subsidy | 874,500.00 | Other income | 874,500.00 |
| Funds for technical transformation of small and medium-sized enterprises in Shanxi Province 2021 | 870,000.00 | Other income | 870,000.00 |
| 2020 high enterprise recognition incentive | 800,000.00 | Other income | 800,000.00 |
| Anhui Science and Technology Department | 800,000.00 | Other income | 800,000.00 |
| 2022 innovation environment fund | |||
| Enterprise accelerated growth support program incentives | 800,000.00 | Non-operating income | 800,000.00 |
| The third batch of financial special funds in 2022 | 600,000.00 | Other income | 600,000.00 |
| Tax and fee rebate | 533,628.47 | Non-operating income | 533,628.47 |
| Subtotal of other projects under RMB 500,000 | 5,902,106.57 | Other income | 5,902,106.57 |
| Subtotal of other projects below RMB 500,000 | 2,995,891.73 | Non-operating income | 2,995,891.73 |
| Financial interest discount | 3,924,900.00 | Finance cost | 3,924,900.00 |
| Transfer of deferred income for the reporting period | 13,078,476.27 | Other income | 13,078,476.27 |
| Total | 43,999,785.07 | / | 43,999,785.07 |
VIII. Change of Consolidation Scope
1. Business combination under different control
A. Business combination under different control occurred in current period
Unit: yuan Currency: RMB
| Investee | Time of acquiring equity | Acquisition cost | Shareholding % | Way of acquisition | Acquisition date | Basis for determining acquisition date | Investee's income from acquisition date to the period end | Investee's net profit from acquisition date to the period end |
| Lankao Skyland Feed Company | Jan. 22, 2022 | 16,069,798.90 | 100.00 | Debt to Equity | Jan. 22, 2022 | Control transfer | 249,825,405.47 | 1,538,624.64 |
| Haicheng New Hongzunda Animal Husbandry Company | May 25, 2022 | 16,902,841.13 | 51.00 | Cash | May 25, 2022 | Control transfer | 349,920,164.09 | 2,451,799.25 |
B. Combined cost and goodwill
Unit: yuan Currency: RMB
| Combined cost | Lankao Skyland Feed Company | Haicheng New Hongzunda Animal Husbandry Company |
| Cash | 662,800.00 | |
| Fair value of equity interests held prior to the date of purchase at the acquisition date | 16,240,041.13 | |
| Other | 16,069,798.90 | |
| Total cost of consolidation | 16,069,798.90 | 16,902,841.13 |
| Less: Share of fair value of identifiable net assets acquired | 16,069,798.90 | 16,902,899.95 |
| Amount by which goodwill/consolidation cost is less than the share of fair value of identifiable net assets acquired | -58.82 |
In January 2022, the Company purchased 100.00% equity interest in Lankao Skyland Feed Company, asubsidiary of Lankao Skyland Duck Industry Company.
C. Identifiable assets and liabilities of the investee on the acquisition date
Unit: yuan Currency: RMB
| Lankao Skyland Feed Company | Haicheng New Hongzunda Animal Husbandry Company | |||
| Fair value on acquisition date | Book value on acquisition date | Fair value on acquisition date | Book value on acquisition date | |
| Assets: | 95,377,316.71 | 82,713,800.86 | 164,618,105.27 | 164,618,105.27 |
| Monetary capital | 913,019.48 | 913,019.48 | 341,254.06 | 341,254.06 |
| Account receivable | 2,616,955.30 | 2,616,955.30 | 40,325,857.56 | 40,325,857.56 |
| Prepayment | 19,432,073.67 | 19,432,073.67 | 78,371,441.92 | 78,371,441.92 |
| Other receivables | 9,529,251.24 | 9,529,251.24 | 27,320.08 | 27,320.08 |
| Inventory | 13,435,532.09 | 13,435,532.09 | 12,672,548.98 | 12,672,548.98 |
| Long-term equity investments | 3,000,000.00 | 3,000,000.00 | ||
| Fixed assets | 37,321,228.00 | 28,723,686.62 | 30,536,403.15 | 30,536,403.15 |
| Construction in progress | 1,858,585.03 | 1,858,585.03 | ||
| Intangible assets | 8,332,861.56 | 4,266,887.09 | ||
| Long-term deferred expenses | 785,165.87 | 785,165.87 | 66,827.11 | 66,827.11 |
| Deferred income tax assets | 11,229.50 | 11,229.50 | 417,867.38 | 417,867.38 |
| Liabilities: | 79,307,517.81 | 79,307,517.81 | 131,475,164.19 | 131,475,164.19 |
| Borrowings | 10,000,000.00 | 10,000,000.00 | ||
| Accounts payable | 16,326,005.94 | 16,326,005.94 | 93,768,908.39 | 93,768,908.39 |
| Contract liabilities | 10,861,846.00 | 10,861,846.00 | 37,237,567.49 | 37,237,567.49 |
| Payroll | 1,183,938.94 | 1,183,938.94 | 194,504.71 | 194,504.71 |
| Taxes and surcharges | 119,105.17 | 119,105.17 | 274,183.60 | 274,183.60 |
| Other payables | 40,816,621.76 | 40,816,621.76 | ||
| Net assets | 16,069,798.90 | 3,406,283.05 | 33,142,941.08 | 33,142,941.08 |
| Less: Non-controlling interests | 16,240,041.13 | 16,240,041.13 | ||
| Net assets acquired | 16,069,798.90 | 3,406,283.05 | 16,902,899.95 | 16,902,899.95 |
2. Disposal of subsidiary
Unit: yuan Currency: RMB
| Subsidiary | Disposal price | Percentage of disposed shareholding % | Disposal way | Date of losing control | Basis for determining the date of losing control | Difference between the share of the net assets of the subsidiary in the consolidated financial statement, which caused by the disposal of price and the disposal of the investment | Remaining equity interest at the date of losing control % | Carrying value of the remaining equity interest at the date of losing control | Fair value of the remaining equity interest at the date of losing control | Gain or loss from remeasurement of remaining equity interest at fair value |
| Henan Hejiang Agricultural Development Company | 5,980,609.00 | 51 | Transfer | Mar. 31, 2022 | Losing control | 12,460.70 | ||||
| Zhengning Wellhope Zaosheng Cattle Feed Processing Company | 43 | Transfer | Jan. 1, 2022 | Losing control | 135,412.66 | 12 | -37,789.58 | 37,789.58 | ||
| Dahongda Construction Engineering Chongqing Company | 2,917,141.56 | 60 | Transfer | Dec. 30, 2022 | Losing control | 40 | 2,400,000.00 | 1,944,761.04 | -455,238.96 |
3. Change of consolidation scope caused by other reasons
During the year, 15 subsidiaries were newly established; 2 subsidiaries were cancelled and decreased. See Note 3-2 for information on new and cancelledsubsidiaries.
IX. Equity in other Entities
1. Equity in subsidiaries
A. Composition of the Company
| Subsidiary | Business site | Registered site | Business type | Shareholding % | Way of acquisition | |
| Direct | Indirect | |||||
| Haicheng Xinzhongxin Wellhope Feed Mill | Haicheng city | Haicheng city | production | 51.00 | investment | |
| Dalian Huakang Xinxin Food Company | Dalian city | Dalian city | production | 65.00 | 11.00 | investment |
| Changchun Hengfeng Agriculture and Animal Husbandry Company | Changchun city | Changchun city | trading | 49.47 | investment | |
| Jinan Xinweita Trading Company | Jinan city | Jinan city | trading | 62.00 | investment | |
| Henan Wellhope Agri-Tech Company | Kaifeng city | Kaifeng city | production | 100.00 | investment | |
| Zhengzhou Wellhope Agri-Tech Company | Zhengzhou city | Zhengzhou city | production | 100.00 | investment | |
| Zhumadian Wellhope Agri-Tech Company | Zhumadian city | Zhumadian city | production | 90.00 | investment | |
| Jiaozuo Wellhope Feed Mill | Jiaozuo city | Jiaozuo city | production | 99.70 | investment | |
| Nanyang Wellhope Feed Mill | Nanyang city | Nanyang city | production | 100.00 | investment | |
| Zhangwu Wellhope Agriculture Development Company | Zhangwu county | Zhangwu county | production | 60.00 | investment | |
| Sanjiang Wellhope Agri-Tech Company | Jixian county | Jixian county | production | 61.00 | investment | |
| Jixian Expert Trading Company | Jixian county | Jixian county | trading | 65.00 | investment | |
| Gongzhuling Wellhope Agri-Tech Company | Gongzhuling city | Gongzhuling city | production | 100.00 | investment | |
| Shenyang Expert Trading Company | Shenyang city | Shenyang city | trading | 100.00 | investment | |
| Liaoning Skyland Livestock Equipment Company | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Shenyang Wellhope Ruminant Feed Mill | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Shenyang Wellhope Extruded Feed Mill | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Shenyang Wellhope Aquatic Feed Mill | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Shenyang Jiahe Tianfeng Commerce and Trade Company | Shenyang city | Shenyang city | trading | 100.00 | investment | |
| Liaoning Wellhope Food Company | Beipiao city | Beipiao city | production | 60.00 | investment | |
| Haicheng Wellhope Agri-Tech Feed Mill | Haicheng city | Haicheng city | production | 100.00 | investment | |
| Tai'an Wellhope Feed Mill | Tai'an county | Tai'an county | production | 100.00 | investment | |
| Lingyuan Wellhope Agri-Tech Company | Lingyuan city | Lingyuan city | production | 90.50 | investment | |
| Beijing Helai Sci-Tech Company | Beijing | Beijing | production | 100.00 | investment | |
| Beijing Wellhope Agri-Tech Company | Beijing | Beijing | trading | 100.00 | investment | |
| Beijing Sanyuan Wellhope Agri-Tech Company | Beijing | Beijing | production | 70.00 | investment | |
| Jilin Wellhope Agri-Tech Company | Jilin city | Jilin city | production | 100.00 | investment | |
| Jilin Hefeng Swine Breeding Company | Gongzhuling city | Gongzhuling city | production | 100.00 | investment | |
| Daqing Wellhope Bayi Nongda Animal Sci-Tech Company | Daqing city | Daqing city | production | 70.00 | investment | |
| Mudanjiang Wellhope Agri-Tech Company | Mudanjiang city | Mudanjiang city | production | 100.00 | investment | |
| Jinzhou Wellhope Agri-Tech Company | Jinzhou city | Jinzhou city | production | 100.00 | investment | |
| Gongzhuling Wellhope Ruminant Feed Mill | Gongzhuling city | Gongzhuling city | production | 100.00 | investment | |
| Heilongjiang Wellhope Agri-Tech Company | Harbin city | Harbin city | production | 100.00 | investment | |
| Tangshan Wellhope Feed Mill | Tangshan city | Tangshan city | production | 85.00 | investment | |
| Cangzhou Helai Sci-Tech Company | Cangzhou city | Cangzhou city | production | 70.00 | investment | |
| Xi'an Wellhope Feed Sci-Tech Company | Xi'an city | Xi'an city | production | 80.00 | investment | |
| Gansu Wellhope Agri-Tech Company | Wuwei city | Wuwei city | production | 100.00 | investment | |
| Jining Wellhope Agri-Tech Company | Jining city | Jining city | production | 70.00 | investment | |
| Shanghai Wellhope Feed Mill | Shanghai city | Shanghai city | production | 65.00 | investment | |
| Shanghai Hehong Trading Company | Shanghai city | Shanghai city | trading | 70.00 | investment | |
| Zhejiang Pinghu Wellhope Agri-Tech Company | Pinghu city | Pinghu city | production | 85.00 | investment | |
| Huai'an Wellhope Feed Mill | Huai'an city | Huai'an city | production | 100.00 | investment | |
| Qingdao Wellhope Agri-Tech Company | Pingdu city | Pingdu city | production | 95.00 | investment | |
| Guangzhou Xiangshun Livestock Equipment Company | Guangzhou city | Guangzhou city | production | 56.00 | investment | |
| Hainan Wellhope Agri-Tech Company | Chengmai county | Chengmai county | production | 60.00 | investment | |
| Fuyu Wellhope Agri-Tech Company | Fuyu city | Fuyu city | production | 97.00 | investment | |
| Fuyu Wellhope Taolaizhao Poultry Raising Company | Fuyu city | Fuyu city | production | 98.19 | investment | |
| Changchun Wellhope Feed Mill | Nong'an county | Nong'an county | production | 98.00 | investment | |
| Lankao Wellhope Agri-Tech Company | Lankao county | Lankao county | production | 100.00 | investment | |
| Tongliao Wellhope Tianyi Prataculture Company | Tongliao city | Tongliao city | production | 51.00 | investment | |
| Liaoning Wellhope Purchasing and Trading Company | Shenyang city | Shenyang city | trading | 100.00 | investment |
| Shenyang Wellhope Agri-Tech Company | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Liaoning Expert Trading Company | Shenyang city | Shenyang city | trading | 100.00 | combined under the same control | |
| Shenyang Fame Bio-Tech Company | Shenyang city | Shenyang city | production | 100.00 | combined under the same control | |
| Shenyang Pufeng Commerce and Trade Company | Shenyang city | Shenyang city | trading | 100.00 | combined under the same control | |
| Shenyang Huawei Pharmaceutical Company | Shenyang city | Shenyang city | production | 51.00 | combined under the same control | |
| Liaoning Wellhope Agriculture and Animal Husbandry Development | Shenyang city | Shenyang city | production | 100.00 | combined under different control | |
| Puyang Wellhope Food Company | Puyang city | Puyang city | production | 49.81 | combined under different control | |
| Jingzhou Wellhope Agricultural Sci-Tech Company | Jingzhou city | Jingzhou city | production | 86.00 | investment | |
| Dalian Heyuan Agri-Tech Company | Dalian city | Dalian city | production | 57.00 | investment | |
| Shenyang Nongda Wellhope Feed Mill | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Dalian Wellhope Feed Mill | Dalian city | Dalian city | production | 100.00 | investment | |
| Xingcheng Wellhope Feed Mill | Xingcheng city | Xingcheng city | production | 100.00 | investment | |
| Yunnan Wellhope Feed Mill | Kunming city | Kunming city | production | 97.00 | investment | |
| Liaoning Godaji E-commerce Company | Shenyang city | Shenyang city | trading | 100.00 | investment | |
| Anhui Wellhope Agri-Tech Company | Haozhou city | Haozhou city | production | 70.00 | investment | |
| Shanxi Wellhope Agri-Tech Company | Yuanping city | Yuanping city | production | 100.00 | investment | |
| Pingyuan Wellhope Food Processing Company | Handan city | Handan city | production | 100.00 | investment | |
| Shenyang Huaweida Animal Health Products Company | Shenyang city | Shenyang city | trading | 100.00 | investment | |
| Dalian Zhongjia Food Company | Dalian city | Dalian city | production | 100.00 | combined under different control | |
| Wellhope Food(Shenyang) Company | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Changchun Wellhope Food Company | Changchun city | Changchun city | production | 85.00 | investment | |
| Pingyuan Wellhope Agri-Tech Company | Handan city | Handan city | production | 100.00 | investment | |
| Puyang Wellhope Agri-Tech Company | Puyang city | Puyang city | production | 100.00 | investment | |
| Chongqing Dahong Agriculture and Animal Husbandry Equipment Company | Chongqing city | Chongqing city | production | 50.00 | combined under different control | |
| Beijing Brilliant Dragon Commerce and Trade Company | Beijing | Beijing | trading | 51.00 | investment | |
| Tangshan Hejia Agriculture and Animal Husbandry | Tangshan city | Tangshan city | production | 65.00 | investment |
| Company | ||||||
| Tangshan Wellhope Sci-Tech Company | Tangshan city | Tangshan city | production | 70.00 | combined under different control | |
| Shenyang Huakang Xinxin Food Company | Shenyang city | Shenyang city | production | 85.00 | investment | |
| Kaifeng Wellhope Meat Products Company | Kaifeng city | Kaifeng city | production | 100.00 | investment | |
| Shenyang Huakang Broiler Company | Shenyang city | Shenyang city | production | 95.00 | investment | |
| Kaifeng Wellhope Agriculture and Animal Husbandry Company | Kaifeng city | Kaifeng city | production | 100.00 | investment | |
| Fushun Wellhope Agriculture and Animal Husbandry Company | Fushun city | Fushun city | production | 100.00 | investment | |
| Shenyang Wellhope Poultry Industry Company | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Shenyang Huakang Agriculture and Animal Husbandry Company | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Dehui Wellhope Agri-Tech Company | Dehui city | Dehui city | production | 100.00 | investment | |
| Chongqing Wellhope Agri-Tech Company | Chongqing city | Chongqing city | production | 65.00 | investment | |
| Dahong Agriculture and Animal Husbandry Technology Research Institute Chongqing Branch | Chongqing city | Chongqing city | production | 100.00 | investment | |
| Russia Wellhope Agri-Tech Company | Overseas | Overseas | production | 55.00 | investment | |
| Suizhong Renhe Fishery Company | Suizhong county | Suizhong county | production | 90.00 | combined under different control | |
| Shulan Fengtai Agriculture and Animal Husbandry Company | Shulan city | Shulan city | production | 80.00 | investment | |
| Shulan Fengtai Farming Company | Shulan city | Shulan city | production | 51.00 | combined under different control | |
| Linxi Helai Agri-Tech Company | Linxi city | Linxi city | production | 100.00 | combined under different control | |
| Nanchang Wellhope Agri-Tech Company | Nanchang city | Nanchang city | production | 65.00 | investment | |
| Anhui Wellhope Haoxiang Agricultural Development Company | Lixin county | Lixin county | production | 100.00 | investment | |
| Lixin Xiangfeng Agriculture and Animal Husbandry Company | Lixin county | Lixin county | production | 100.00 | investment | |
| Lixin Hongfeng Agriculture and Animal Husbandry Company | Lixin county | Lixin county | production | 100.00 | investment | |
| Guangzhou Dashang Trading Company | Guangzhou city | Guangzhou city | trading | 51.00 | investment | |
| Shandong Heyuan Food Company | Weihai city | Weihai city | production | 100.00 | investment | |
| Wafangdian Yifeng Agri-Tech | Wafangdian | Wafangdian | production | 51.00 | investment |
| Company | city | city | ||||
| Hebei Deheng Farming Company | Handan city | Handan city | production | 100.00 | combined under different control | |
| Yangling Wellhope Agriculture and Animal Husbandry Company | Xianyang city | Xianyang city | production | 100.00 | combined under different control | |
| Yixian Dingli Hesheng Livestock and Poultry Feeding Company | Yixian county | Yixian county | production | 100.00 | combined under different control | |
| Yixian Weijing Livestock and Poultry Feeding Company | Yixian county | Yixian county | production | 100.00 | combined under different control | |
| Hebei Hetai Livestock and Poultry Farming Company | Yuanshi county | Yuanshi county | production | 100.00 | combined under different control | |
| Yixian Hekang Agri-Tech Company | Yixian county | Yixian county | production | 100.00 | combined under different control | |
| Dunhua Wellhope Agri-Tech Company | Dunhua city | Dunhua city | production | 51.00 | combined under different control | |
| Dunhua Fengda Agriculture and Animal Husbandry Development Company | Dunhua city | Dunhua city | production | 51.00 | combined under different control | |
| Anhui Wellhope Haoxiang Swine Breeding Company | Lixin county | Lixin county | production | 100.00 | investment | |
| Anhui Wellhope Food Company | Lixin county | Lixin county | production | 100.00 | investment | |
| Anyang Wellhope Agriculture and Animal Husbandry Company | Anyang city | Anyang city | production | 100.00 | investment | |
| Hebei Taihang Wellhope Food Company | Baoding city | Baoding city | production | 90.00 | investment | |
| Hebei Taihang Wellhope Agri-Tech Company | Baoding city | Baoding city | production | 62.00 | investment | |
| Shenyang Xiangmai Electronic Commerce Company | Shenyang city | Shenyang city | trading | 65.00 | investment | |
| Chifeng Wellhope Fuxinyuan Food Company | Chifeng city | Chifeng city | production | 70.00 | investment | |
| Hongkong Expert Trading Company | Hongkong | Hongkong | trading | 100.00 | investment | |
| Hainan Expert Trading Company | Chengmai county | Chengmai county | trading | 71.00 | investment | |
| Liaoning Qingyuan Wellhope Agriculture and Animal Husbandry Company | Fushun city | Fushun city | production | 95.00 | investment | |
| Nanyang Jinwan Animal Husbandry Company | Nanyang city | Nanyang city | production | 100.00 | investment | |
| Fuzhou Wellhope Xingyuan Animal Husbandry Development Company | Fuzhou city | Fuzhou city | production | 70.00 | investment | |
| Tianjin Fullyond Supply Chain Company | Tianjin city | Tianjin city | other | 100.00 | investment | |
| Daqing Wellhope Food Company | Daqing city | Daqing city | production | 51.00 | investment | |
| Zhumadian Wellhope Agricultural Development Company | Zhumadian city | Zhumadian city | production | 94.01 | investment |
| Datong Hejia Agriculture and Animal Husbandry Company | Datong city | Datong city | production | 65.00 | investment | |
| Shijiazhuang Hejia Agriculture and Animal Husbandry Company | Shijiazhuang city | Shijiazhuang city | production | 65.00 | investment | |
| Fuxin Wellhope Agriculture and Animal Husbandry Company | Fuxin city | Fuxin city | production | 100.00 | investment | |
| Dalian Hongtu Agri-tech Company | Dalian city | Dalian city | production | 51.00 | investment | |
| Shandong Heyuan Agri-tech Company | Weihai city | Weihai city | production | 100.00 | investment | |
| Wafangdian Huinong Poultry Industry Company | Wafangdian city | Wafangdian city | production | 52.94 | investment | |
| Luoyang Wellhope Agriculture and Animal Husbandry Company | Luoyang city | Luoyang city | production | 100.00 | investment | |
| Gongzhuling Wellhope Swine Farmig Company | Gongzhuling city | Gongzhuling city | production | 68.50 | investment | |
| Lishu Wellhope Ecological Farming Company | Siping city | Siping city | production | 68.50 | investment | |
| Kaifeng Jiufeng Agriculture and Animal Husbandry Company | Kaifeng city | Kaifeng city | production | 94.00 | investment | |
| Tianjin Expert Trading Company | Tianjin city | Tianjin city | trading | 100.00 | investment | |
| Fuyang Wellhope Agriculture and Animal Husbandry Technology Company | Fuyang city | Fuyang city | production | 75.00 | investment | |
| Liaoning Wellhope Egg Industry Company | Anshan city | Anshan city | production | 75.15 | investment | |
| Shenyang Wellhope Agriculture and Animal Husbandry Technology Company | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Lingyuan Wellhope Agriculture and Animal Husbandry Company | Lingyuan city | Lingyuan city | production | 100.00 | investment | |
| Shenyang Wellhope Swine Farming Company | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Shenyang Xiaohe Agriculture and Animal Husbandry Company | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Qingdao Haifeng Animal Husbandry Company | Qingdao city | Qingdao city | production | 100.00 | combined under different control | |
| Xi'an Linfeng Shengyi Trading Company | Xi'an city | Xi'an city | trading | 100.00 | combined under different control | |
| Beijing Linfeng Shengyi Trading Company | Beijing | Beijing | trading | 60.00 | investment | |
| Tianyi First Taste (Beijing) Technology Company | Beijing | Beijing | 70.00 | combined under different control | ||
| Inner Mongolia Bifeng Animal Husbandry Technology Development Company | Tongliao city | Tongliao city | production | 48.30 | investment |
| Dehui Fengyuan Agriculture and Animal Husbandry Company | Dehui city | Dehui city | production | 51.00 | investment | |
| Fame (Shenyang) Biological High-tech Industry Research Institute Company | Shenyang city | Shenyang city | other | 100.00 | investment | |
| Changsha Wellhope Animal Husbandry Company | Changsha city | Changsha city | production | 83.00 | investment | |
| Fuyu Wellhope Layer Company | Fuyu city | Fuyu city | production | 52.00 | investment | |
| Harbin Linfeng Shengyi Trading Company | Harbin city | Harbin city | trading | 51.00 | investment | |
| Yixian Hekang Biotechnology Company | Yixian county | Yixian county | production | 100.00 | investment | |
| Lixin Rongfeng Agriculture and Animal Husbandry Company | Haozhou city | Haozhou city | production | 100.00 | investment | |
| Fuxin Wellhope Agricultural and Animal Husbandry Technology Company | Fuxin city | Fuxin city | production | 100.00 | investment | |
| Hebei Linfeng Shengyi Trading Company | Tangshan city | Tangshan city | trading | 100.00 | investment | |
| Huairen Dazhuang Farming Company | Shuozhou city | Shuozhou city | production | 70.00 | investment | |
| Harbin Wellhope Agricultural and Animal Husbandry Development Company | Harbin city | Harbin city | production | 51.00 | investment | |
| Suihua Wellhope Agri-tech Company | Suihua city | Suihua city | production | 50.00 | investment | |
| Jilin Dalong Wellhope Agri-tech Company | Jilin city | Jilin city | production | 59.00 | investment | |
| Daqing Wellhope Agri-tech Company | Daqing city | Daqing city | production | 51.00 | investment | |
| Qiqihar Wellhope Agri-tech Company | Qiqihar city | Qiqihar city | production | 51.00 | investment | |
| Lankao Skyland Feed Company | Lankao county | Lankao county | production | 100.00 | combined under different control | |
| Linyi Wellhope Agri-tech Company | Linyi city | Linyi city | production | 100.00 | investment | |
| Jiyuan Helai Feed Company | Jiyuan city | Jiyuan city | production | 100.00 | investment | |
| Wan’an Wellhope Feed Company | Ji’an city | Ji’an city | production | 52.00 | investment | |
| Baotou Hechen Agri-tech Company | Baotou city | Baotou city | production | 50.60 | investment | |
| Haicheng New Hongzunda Animal Husbandry Company | Haicheng city | Haicheng city | production | 51.00 | combined under different control | |
| Chifeng Wellhope Agri-tech Company | Chifeng city | Chifeng city | production | 85.00 | investment | |
| Neihuang County Wellhope Agri-tech Company | Anyang city | Anyang city | production | 75.00 | 20.00 | investment |
B. Important non-wholly owned subsidiary
Unit: yuan Currency: RMB
| Subsidiary | Shareholding of non-controlling interests % | Gain or loss attributable to non-controlling interests | Declared dividends to non-controlling interests | Closing balance of non-controlling interests |
| Dalian Heyuan Agri-Tech Company | 43.00 | 18,008,159.95 | 385,787,870.19 | |
| Xi'an Wellhope Feed Sci-Tech Company | 20.00 | 4,124,913.30 | 47,933,497.78 | |
| Beijing Sanyuan Wellhope Agri-Tech Company | 30.00 | 7,082,924.20 | 68,139,172.27 | |
| Tangshan Wellhope Feed Mill | 15.00 | -388,086.87 | 10,652,554.02 |
C. Financial figures of important non-wholly owned subsidiary
Unit: yuan Currency: RMB
| Subsidiary | Closing balance | Opening balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Dalian Heyuan Agri-Tech Company | 738,742,888.64 | 946,569,429.72 | 1,685,312,318.36 | 725,201,733.40 | 120,911,992.99 | 846,113,726.39 | 506,204,642.74 | 1,020,407,305.82 | 1,526,611,948.56 | 646,421,786.77 | 48,251,638.87 | 694,673,425.64 |
| Xi'an Wellhope Feed Sci-Tech Company | 210,940,240.84 | 94,843,830.53 | 305,784,071.37 | 65,416,997.60 | 699,584.87 | 66,116,582.47 | 170,751,836.24 | 107,927,796.70 | 278,679,632.94 | 59,064,004.39 | 714,417.06 | 59,778,421.45 |
| Beijing Sanyuan Wellhope Agri-Tech Company | 279,148,717.73 | 18,468,034.94 | 297,616,752.67 | 70,486,178.44 | 70,486,178.44 | 228,188,485.88 | 20,493,495.10 | 248,681,980.98 | 45,161,154.08 | 45,161,154.08 | ||
| Tangshan Wellhope Feed Mill | 45,122,640.07 | 63,815,230.87 | 108,937,870.94 | 37,920,844.17 | 37,920,844.17 | 53,926,763.26 | 65,757,298.80 | 119,684,062.06 | 46,079,789.51 | 46,079,789.51 | ||
| Subsidiary | 2022 | 2021 | ||||||
| Operating revenue | Net profit | Total comprehensive income | Cash flow from operating activities | Operation revenue | Net profit | Total comprehensive income | Cash flow from operating activities | |
| Dalian Heyuan Agri-Tech Company | 3,229,796,473.64 | 7,260,069.05 | 7,260,069.05 | 31,462,527.18 | 3,032,629,405.81 | -34,669,277.94 | -34,669,277.94 | 107,366,509.77 |
| Xi'an Wellhope Feed Sci-Tech Company | 771,733,668.09 | 20,624,566.49 | 20,624,566.49 | 31,021,085.82 | 1,069,721,308.15 | 50,634,863.64 | 50,634,863.64 | 37,195,437.04 |
| Beijing Sanyuan Wellhope Agri-Tech Company | 871,228,954.22 | 23,609,747.33 | 23,609,747.33 | 20,606,664.14 | 738,731,297.16 | 36,808,285.75 | 36,808,285.75 | 15,284,842.29 |
| Tangshan Wellhope Feed Mill | 211,823,047.29 | -2,587,245.78 | -2,587,245.78 | 3,153,153.76 | 288,439,869.54 | 1,620,754.14 | 1,620,754.14 | 14,539,409.42 |
2. Transactions that change the share of owner's equity of the Company in subsidiaries but theCompany still controls the subsidiaryA. Circumstance of the change of owner's equityDuring the period, the Company transferred shares held in some subsidiaries, including transferring35% equity interest in Fuyu Wellhope Layer Company, 39% in Sanjiang Wellhope Agri-Tech Company,14% in Jinan Xinweita Trading Company, 5% in Suizhong Renhe Fishery Company, and 1.53% inChangchun Hengfeng Agriculture and Animal Husbandry Company.During the period, the Company purchased shares of some subsidiaries, including purchasing 17.15%equity interest in Liaoning Wellhope Egg Industry Company, 10% in Shenyang Huakang Broiler Company,35% in Shandong Heyuan Food Company, 30% in Zhengzhou Wellhope Agri-Tech Company, 1.40% inJiaozuo Wellhope Feed Mill, 10% in Fuzhou Wellhope Xingyuan Animal Husbandry DevelopmentCompany, 9% in Hebei Taihang Wellhope Food Company, 1.19% in Fuyu Wellhope Taolaizhao PoultryRaising Company, and 11% in Dalian Huakang Xinxin Food Company.
B. The impact of the transaction on non-controlling interests and the equity attributable to the owners of parent company
Unit: yuan Currency: RMB
| Fuyu Wellhope Layer Company | Sanjiang Wellhope Agri-Tech Company | Jinan Xinweita Trading Company | Suizhong Renhe Fishery Company | Changchun Hengfeng Agriculture and Animal Husbandry Company | Liaoning Wellhope Egg Industry Company | Shenyang Huakang Broiler Company | |
| Cost of acquisition/disposal considerations | |||||||
| -Cash | 4,900,000.00 | 853,623.25 | 400,000.00 | 765,000.00 | 30,870,000.00 | 9,400,000.00 | |
| -Fair value of non-cash assets | |||||||
| Total cost of acquisition or disposal considerations | 4,900,000.00 | 853,623.25 | 400,000.00 | 765,000.00 | 30,870,000.00 | 9,400,000.00 | |
| Less: Share of net assets of subsidiaries based on percentage of equity acquired/ disposed shareholdings | -795,793.04 | 2,485,721.47 | 891,361.07 | 424,493.58 | 741,705.98 | 30,273,902.40 | 6,703,317.52 |
| Difference | 795,793.04 | 2,414,278.53 | -37,737.82 | -24,493.58 | 23,294.02 | 596,097.60 | 2,696,682.48 |
| including: Adjusting capital reserve | 795,793.04 | 2,414,278.53 | -37,737.82 | -24,493.58 | 23,294.02 | -596,097.60 | -2,696,682.48 |
| Adjusting surplus reserve | |||||||
| Adjusting undistributed profits |
| Zhengzhou Wellhope Agri-Tech Company | Jiaozuo Wellhope Feed Mill | Liaoning Qingyuan Wellhope Agriculture and Animal Husbandry Company | Fuzhou Wellhope Xingyuan Animal Husbandry Development Company | Hebei Taihang Wellhope Food Company | Fuyu Wellhope Taolaizhao Poultry Raising Company | Dalian Huakang Xinxin Food Company | |
| Cost of acquisition/disposal considerations | |||||||
| -Cash | 2,853,799.00 | 1,230,200.00 | 6,500,000.00 | 36,765,000.00 | 312,000.00 | 7,965,449.84 | |
| -Fair value of non-cash assets | 47,250,721.44 | ||||||
| Total cost of acquisition or disposal considerations | 2,853,799.00 | 1,230,200.00 | 47,250,721.44 | 6,500,000.00 | 36,765,000.00 | 312,000.00 | 7,965,449.84 |
| Less: Share of net assets in the subsidiary calculated by the percentage of equity | 1,534,830.22 | 585,596.26 | 42,525,649.30 | 6,318,456.70 | 36,765,000.00 | 115,175.69 | 10,646,001.32 |
| acquired or disposed shareholdings | |||||||
| Difference | 1,318,968.78 | 644,603.74 | 4,725,072.14 | 181,543.30 | 196,824.31 | -2,680,551.48 | |
| including: Adjusting capital reserve | -1,318,968.78 | -644,603.74 | -4,725,072.14 | -181,543.30 | -196,824.31 | 2,680,551.48 | |
| Adjusting surplus reserve | |||||||
| Adjusting undistributed profits |
3. Equity in joint ventures or associated companies
A. Important joint ventures or associated companies
Unit: yuan Currency: RMB
| Company | Business site | Registered site | Business type | Shareholding % | Accounting arrangement method | |
| Direct | Indirect | |||||
| Beipiao Hongfa Food Company | Beipiao city | Beipiao city | production | 35.00 | equity method | |
| Anshan Jiuguhe Food Company | Tai'an county | Tai'an county | production | 41.55 | equity method | |
| Tai’an Jiuguhe Agriculture Development Company | Tai'an county | Tai'an county | production | 41.55 | equity method | |
| Dalian Chengsan Animal Husbandry Company | Dalian city | Dalian city | production | 20.00 | equity method | |
B. Financial figures of important joint ventures or associated companies
Unit: yuan Currency: RMB
| 2022 | 2021 | |||||||
| Beipiao Hongfa Food Company | Anshan Jiuguhe Food Company | Tai’an Jiuguhe Agriculture Development Company | Dalian Chengsan Animal Husbandry Company | Beipiao Hongfa Food Company | Anshan Jiuguhe Food Company | Tai’an Jiuguhe Agriculture Development Company | Dalian Chengsan Animal Husbandry Company | |
| Current assets | 1,221,903,313.61 | 787,915,184.91 | 677,252,697.26 | 1,786,787,135.76 | 1,024,543,972.13 | 755,377,943.00 | 535,153,741.55 | 1,918,572,679.73 |
| Non-current assets | 1,313,933,212.77 | 155,926,134.02 | 86,748,298.65 | 674,735,944.68 | 1,218,785,629.10 | 125,800,128.70 | 59,430,294.90 | 644,908,489.88 |
| Total assets | 2,535,836,526.38 | 943,841,318.93 | 764,000,995.91 | 2,461,523,080.44 | 2,243,329,601.23 | 881,178,071.70 | 594,584,036.45 | 2,563,481,169.61 |
| Current liabilities | 740,031,823.24 | 397,167,516.02 | 595,169,902.34 | 799,092,034.01 | 694,332,201.13 | 376,651,134.90 | 457,883,678.79 | 1,139,336,663.82 |
| Non-current liabilities | 199,564,241.61 | 11,221,371.88 | 13,500.00 | 41,452,025.80 | 140,000,000.00 | 10,372,233.84 | 94,500.00 | 5,171,428.12 |
| Total liabilities | 939,596,064.85 | 408,388,887.90 | 595,183,402.34 | 840,544,059.81 | 834,332,201.13 | 387,023,368.74 | 457,978,178.79 | 1,144,508,091.94 |
| Non-controlling interests | 300,197,953.25 | 249,706,945.20 | ||||||
| Equity attributable to shareholders of parent company | 1,596,240,461.53 | 535,452,431.03 | 168,817,593.57 | 1,320,781,067.38 | 1,408,997,400.10 | 494,154,702.96 | 136,605,857.66 | 1,169,266,132.47 |
| Share of net assets calculated by shareholdings | 558,684,161.53 | 222,480,485.09 | 70,143,710.13 | 264,156,213.47 | 493,149,090.03 | 205,321,279.08 | 56,759,733.86 | 233,853,226.49 |
| Adjustment | -450.00 | -626,093.78 | 116,569,111.62 | -1,264,140.54 | 116,569,111.62 | |||
| --Goodwill | 116,569,111.62 | 116,569,111.62 | ||||||
| --Unrealized profit of internal transaction | -626,093.78 | -1,264,140.54 | ||||||
| Other | -450.00 | |||||||
| Book value of equity investment in associated companies | 558,684,161.53 | 222,480,035.09 | 69,517,616.35 | 380,725,325.09 | 493,149,090.03 | 205,321,279.08 | 55,495,593.32 | 350,422,338.11 |
| Operating revenue | 3,406,895,331.57 | 1,871,840,202.95 | 2,515,337,879.70 | 5,142,391,071.08 | 3,071,583,370.65 | 1,980,851,480.62 | 2,295,821,884.37 | 4,449,826,190.22 |
| Net profit | 202,643,061.43 | 56,297,728.07 | 32,211,735.91 | 151,514,934.91 | -6,556,579.30 | 59,869,422.39 | -89,180,792.22 | -127,809,745.66 |
| Total comprehensive income | 202,643,061.43 | 56,297,728.07 | 32,211,735.91 | 151,514,934.91 | -6,556,579.30 | 59,869,422.39 | -89,180,792.22 | -127,809,745.66 |
| Dividends received from associated companies | 5,390,000.00 | 6,232,950.00 | 10,780,000.00 |
C. Financial information of unimportant joint ventures and associated companies
Unit: yuan Currency: RMB
| 2022 | 2021 | |
| Joint venture: | ||
| Book value of investment | 11,669,191.54 | 11,669,191.54 |
| The following items were calculated according to the shareholdings | ||
| --Net profit | 4,632,218.03 | 5,057,870.18 |
| --Other comprehensive income | -105,632.51 | -1,151,957.84 |
| --Total comprehensive income | 4,526,585.52 | 3,905,912.34 |
| Associated company: | ||
| Book value of investment | 1,244,073,779.77 | 1,216,768,479.92 |
| The following items were calculated according to the shareholdings | ||
| --Net profit | 23,657,703.90 | -43,919,377.45 |
| --Other comprehensive income | -554,988.18 | -13,547,569.69 |
| --Total comprehensive income | 23,102,715.72 | -57,466,947.14 |
Note: Unphung Joint Venture Company, Nepal Wellhope Agri-tech Pvt. Ltd., NEXUS WELL-HOPEAGRITECH INTERNATIONAL LIMITED use cost method.
X. Risks Related to Financial InstrumentsThe Company's major financial instruments include equity investments, borrowings, accountsreceivable and accounts payable. A detailed description of each financial instrument is provided in therelated item in Note V of this document. The Company's management manages and monitors theseexposures to ensure that the aforementioned risks are kept within the limits.The Company engages in risk management with the goal of striking an appropriate balance betweenrisk and return, minimizing the negative impact of risk on the Company's operating performance, andmaximizing the interests of shareholders and other equity investors. Based on such risk managementobjective, the Company's basic strategy for risk management is to identify and analyze various risks towhich the Company is exposed, establish appropriate risk tolerance and conduct risk management, andmonitor various risks in a timely and reliable manner in order to control the risks within the limits.
1. Market risks
A. Interest rate riskThe Company's risk of cash flow changes in financial instruments due to the changes in interest ratesmainly related to floating-rate bank loans. The Company's policy is to maintain the floating-rate ofthese loans.B. Foreign exchange risksForeign exchange risk refers to the risk of loss caused by exchange rate movement. The Company'smain business activities are settled in RMB, with a small amount of import and export business,changes in exchange rate have little impact on the Company.
2. Credit risk
The maximum credit risk exposure that may cause financial losses to the Company mainly comes fromfinancial assets loss caused by the other party of contract failed to perform duty.In order to reduce credit risk, the Company constantly strengthens the risk management awareness ofaccounts receivable, and only deals with recognized and reputable third parties. In accordance with theCompany's policies, it is necessary to conduct credit audit and approval, carefully confirm the creditlimit, implement other monitoring procedures and take necessary measures to recover overdue claims.
3. Liquidity risk
In regard of managing liquidity risk, the Company monitors cash and cash equivalents, to satisfy itsoperation demand, and to reduce the influence caused by cash flow fluctuation. The management ofthe Company supervises the usage circumstances of bank loans and ensures the Company complyingwith the agreement of loan.XI. Disclosure of fair value
1. Fair value of assets and liabilities in the end of period
Unit: yuan Currency: RMB
| Item | Closing fair value | |||
| Level 1 fair value measurement | Level 2 fair value measurement | Level 3 fair value measurement | Total | |
| Continuous fair value measurement | ||||
| 1. Financial assets held for trading | ||||
| 2. Derivative financial assets | 4,050,071.80 | 4,050,071.80 | ||
| 3. Other equity instrument investment | 17,325,896.26 | 17,325,896.26 | ||
| Total assets continuously measured at fair value | 4,050,071.80 | 17,325,896.26 | 21,375,968.06 | |
2. The basis for determining the market price of continuous and non-continuous first-level fairvalue measurement itemsThe derivative financial assets of the Company are futures that are measured at unadjusted quotedprices in active markets for identical assets or liabilities at the balance sheet date.XII. Related Party and Transaction
1. Snapshot of joint ventures and associated companies
Circumstance of the joint ventures and associated companies, which had related transactions with theCompany in the period.
| Company | Relationship |
| Unphung Joint Venture Company | joint venture |
| Nepal Wellhope Agri-tech Pvt. Ltd. | joint venture |
| Anshan Fengsheng Food Company | associated company |
| Anshan Jiuguhe Food Company | associated company |
| Beipiao Hongfa Food Company | associated company |
| Dalian Chengsan Animal Husbandry Company | associated company |
| Dalian Wellhope Fish Meal Company | associated company |
| Daqing Supply and Marketing Agri-Tech Company | associated company |
| Dandong Wellhope Chengsan Agri-Tech Company | associated company |
| Gongzhuling Corn Purchasing and Storing Company | associated company |
| Haicheng New Hongzunda Agri-Tech Company | associated company |
| Huluodao Jiuguhe Food Company | associated company |
| Huluodao Jiuguhe Feed Mill | associated company |
| Jinzhou Jiufeng Food Company | associated company |
| Lankao Skyland Duck Company | associated company |
| Linghai Jiuguhe Feed Mill | associated company |
| Qingdao Shenfeng Agri-Tech Company | associated company |
| Shenyang Wenjie Bio-Tech Company | associated company |
| Shihaipu (Beijing) Technology and Trade Company | associated company |
| Tai'an Fengjiu Agri-Tech Company | associated company |
| Tai'an Jiufeng Agri-Tech Company | associated company |
| Tai'an Jiuguhe Agriculture Development Company | associated company |
| Tailai Jiahe Agriculture and Animal Husbandry | associated company |
| Zhangjiakou Jiahe Agriculture and Animal Husbandry Company | associated company |
| Shenyang Zhongwenjie Bio-Tech Company | associated company |
| Liaoning Mubang Animal Husbandry Equipment Manufacturing Company | associated company |
| Dalian Sida Food Company | associated company |
| Bei’an Nongken Shengda Pasture Specialized Cooperative | associated company |
| Shangdong Fengkang Food Company | associated company |
| Anshan Jiuguhe Paper Packaging Company | associated company |
| Anshan Antai Plastic Products Company | associated company |
| Harbin Weierhao Trading Company | associated company |
| Jiyuan City Sunshine Rabbit Technology Company | associated company |
| Heilongjiang Province Bei’an Nongken Zhongwang Dairy Farming Professional Cooperative | associated company |
Other explanation:
In April 2022, the Company purchased 2.00% shares of the minority shareholder of Haicheng NewHongzunda, and its shareholding in Haicheng New Hongzunda reached 51.00% after the purchase,which changed this company from an associate to a subsidiary within the scope of consolidation.
2. Snapshot of other related parties
| Related party | Relationship |
| Associated natural persons | Controlling shareholder, natural person shareholders who hold more than 5% shares of the Company, board directors, supervisors, senior managers and their relatives |
| Changzhou Heli Venture Capital Partnership (Limited Partnership) | Shareholder who holds more than 5% shares of the Company |
3. Snapshot of related party transaction
A. Purchasing products, accepting labor service
Unit: yuan Currency: RMB
| Relate party | Transaction | 2022 | 2021 |
| Dalian Wellhope Fish Meal Company | Feed raw material | 102,266,988.92 | 76,585,284.15 |
| Anshan Jiuguhe Food Company | Broiler product | 5,762,586.00 | 11,265,582.23 |
| Dalian Chengsan Animal Husbandry Company | Live broiler | 38,725,935.09 | 126,096,323.21 |
| Huludao Jiuguhe Food | Broiler product | 304,992.66 | |
| Shihaipu (Beijing) Technology and Trade Company | Other | 2,570,408.93 | 1,009,951.97 |
| Tai'an Fengjiu Agri-Tech Company | Day old chick | 19,257,125.96 | 24,165,720.65 |
| Zhangjiakou Jiahe Agriculture and Animal Husbandry Company | Piglet | 22,035,499.40 | 22,409,819.60 |
| Tai’an Jiuguhe Agriculture Development Company | Feed, live broiler | 60,799,179.98 | 258,438,420.36 |
| Haicheng New Hongzunda Agri-Tech Company | Feed | 5,604,675.04 | |
| Shenyang Wenjie Bio-Tech Company | Other | 3,135,329.56 | 3,883,333.36 |
| Jinzhou Jiufeng Food Company | Broiler product | 12,690,178.50 | 9,133,688.00 |
| Daqing Supply and Marketing Agri-Tech Company | Feed raw material | 26,596,127.86 | 27,913,007.76 |
| Linghai Jiuguhe Feed Mill | Feed, live broiler | 757,085.00 | 142,764,456.73 |
| Gongzhuling Corn Purchasing and Storing Company | Feed raw material | 4,802,114.70 | 2,160,838.20 |
| Qingdao Shenfeng Agri-Tech Company | Feed | 151,514.24 | 14,412,823.18 |
| Liaoning Yufeng Bio-tech Company | Feed raw material | 19,194,394.95 | 33,330,654.62 |
| Anshan Jiuguhe Paper Packaging Company | Other | 3,114,856.43 | 3,788,562.19 |
| Anshan Antai Plastic Products Company | Other | 585,052.50 | 783,214.95 |
| Dunhua Fengda Broiler Breeding Company | Day old chick | 1,643,845.00 | 253,485.00 |
| Jilin Hengfeng Animal Health Products Company | Animal medicine, vaccine | 505,577.94 | 874,388.93 |
| Shenyang Wanlitian Agriculture and Animal Husbandry Company | Animal medicine, vaccine | 2,874,247.91 | 2,917,056.53 |
| Beipiao Hongfa Food Company | Broiler product | 7,081,994.06 | 11,857,558.25 |
| Tailai Jiahe Agriculture and Animal Husbandry Company | Piglet | 7,922,976.80 | |
| Harbin Weierhao Trading Company | Feed raw material | 7,397,188.88 | 766,308.23 |
| Anshan Fengsheng Food Company | Feed raw material | 53,211.01 | |
| Total | 342,000,442.82 | 788,643,122.60 |
Selling products or providing labor service
Unit: yuan Currency: RMB
| Relate party | Transaction | 2022 | 2021 |
| Linghai Jiuguhe Feed Mill | Feed raw material, feed | 67,403,844.03 | 85,163,159.42 |
| Tai’an Jiuguhe Agriculture Development Company | Feed raw material, feed | 127,676,845.57 | 87,770,479.99 |
| Anshan Jiuguhe Food Company | Live broiler | 73,948,755.57 | 63,190,247.94 |
| Qingdao Shenfeng Agri-Tech Company | Feed raw material, feed | 33,989,357.61 | 33,791,134.36 |
| Beipiao Hongfa Food Company | Feed raw material | 3,833,240.00 |
| Huludao Jiuguhe Food Company | Broiler product | 2,253,666.06 | 12,229,432.11 |
| Haicheng New Hongzunda Agri-Tech Company | Feed raw material | 5,978,442.02 | 70,419,925.40 |
| Dandong Wellhope Chengsan Agri-Tech Company | Feed raw material, feed | 10,645,214.70 | 8,988,156.71 |
| Tai'an Jiufeng Agri-Tech Company | Feed raw material | 80,570.10 | 1,501,685.99 |
| Huludao Jiuguhe Feed Mill | Feed raw material, broiler product | 45,685,168.02 | 39,938,908.32 |
| Shihaipu (Beijing) Technology and Trade Company | Other | 2,696,970.22 | 2,235,850.87 |
| Zhangjiakou Jiahe Agriculture and Animal Husbandry Company | Feed | 25,437,678.39 | 35,983,740.54 |
| Dalian Wellhope Fish Meal Company | Feed raw material | 233,628.32 | 233,716.81 |
| Anshan Fengsheng Food Company | Live broiler | 25,267,017.27 | 105,439,436.48 |
| Dalian Chengsan Animal Husbandry Company | Feed raw material, feed | 7,375,666.19 | 14,201,134.36 |
| Tailai Jiahe Agriculture and Animal Husbandry Company | Feed raw material, feed | 57,067,001.08 | 71,340,667.33 |
| Daqing Supply and Marketing Agri-Tech Company | Feed raw material, feed | 92,831,460.07 | 91,892,742.18 |
| Lankao Skyland Duck Company | Feed raw material | 1,482,911.17 | |
| Liaoning Yufeng Bio-tech Company | Broiler product | 19,102,682.44 | 384,229.05 |
| Dunhua Fengda Broiler Breeding Company | Feed | 460,500.16 | 3,696,607.22 |
| Shangdong Fengkang Food Company | Live broiler | 318,685,102.91 | 168,063,355.14 |
| Dalian Sida Food Company | Live broiler | 303,008,793.95 | 264,394,474.66 |
| Liaoning Mubang Animal Husbandry Equipment Manufacturing Company | Equipment, steel | 264,016.08 | |
| Dazhou Wellhope Bio-tech Company | Feed raw material, feed | 62,110,129.84 | 128,532,271.72 |
| Harbin Weierhao Trading Company | Feed raw material | 63,519,205.04 | 18,269,598.93 |
| Bei’an Nongken Shengda Pasture Specialized Cooperative | Feed | 1,284,072.43 | |
| Jiyuan City Sunshine Rabbit Technology Company | Other | 535,981.69 | |
| Heilongjiang Province Bei’an Nongken Zhongwang Dairy Farming Professional Cooperative | Feed raw material | 214,960.00 | |
| Nepal Wellhope Agri-tech Pvt. Ltd. | Feed | 6,258,226.96 | |
| Total | 1,353,750,940.64 | 1,313,241,122.78 |
B. Related party guaranteeThe Company acted as the guarantor
Unit: yuan Currency: RMB
| Guaranteed party | Amount of guarantee | Guarantee date | Guarantee maturity date | Whether the guarantee has been completed |
| Liaoning Expert Trading Company | 23,750,020.69 | Feb. 23, 2022 | Feb. 22, 2023 | No |
| Liaoning Expert Trading Company | 24,083,386.80 | Dec. 12, 2022 | Oct. 26, 2023 | No |
| Liaoning Expert Trading Company | 9,012,567.66 | May 23, 2022 | Apr. 30, 2023 | No |
| Lixin Xiangfeng Agriculture and Animal Husbandry Company | 25,000,000.00 | May 30, 2022 | May 29, 2023 | No |
| Lixin Xiangfeng Agriculture and Animal Husbandry Company | 10,000,000.00 | Mar. 30, 2022 | Mar. 29, 2023 | No |
| Lixin Hongfeng Agriculture and Animal Husbandry Company | 20,000,000.00 | Nov. 17, 2022 | Nov. 16, 2023 | No |
| Puyang Wellhope Food Company | 50,000,000.00 | Mar. 31. 2022 | Mar. 31. 2023 | No |
| Chongqing Dahong Agriculture and Animal Husbandry Equipment Company | 11,000,000.00 | Oct. 8, 2019 | Oct. 7, 2022 | No |
| Lingyuan Wellhope Agri-Tech Company | 10,000,000.00 | Jun. 10, 2022 | Jun. 9, 2025 | No |
| Lingyuan Wellhope Agri-Tech Company | 20,000,000.00 | Jun. 10, 2022 | Jun. 9, 2025 | No |
| Daqing Wellhope Agri-Tech Company | 30,000,000.00 | Sep. 7, 2022 | Sep. 7, 2023 | No |
| Anhui Wellhope Food Company | 70,291,600.00 | Mar. 6, 2021 | Mar. 5, 2026 | No |
| Dalian Zhongjia Food Company | 50,000,000.00 | Oct. 28, 2022 | Oct. 27, 2025 | No |
| Dalian Heyuan Agri-Tech Company | 50,000,000.00 | May 31, 2022 | May 30, 2025 | No |
| Daqing Wellhope Food Company | 9,000,000.00 | Sep. 30, 2021 | Sep. 29, 2024 | No |
| Daqing Wellhope Food Company | 21,920,000.00 | Jul. 27, 2022 | 2027.07.27 Jul. 27, 2027 | No |
C. Borrowings to related party
Unit: yuan Currency: RMB
| Related party | Borrowings | Starting date | Due date | Note |
| Bei’an Nongken Shengda Pasture Specialized Cooperative | Bei’an Nongken Shengda Pasture Specialized Cooperative is an associated company of Wellhope. Each member of the cooperative provides funds to the cooperative according to the proportion of shares held in accordance with the agreement. |
D. Remuneration for key management
Unit: 10k yuan Currency: RMB
| Item | 2022 | 2021 |
| Remuneration for key management | 848.84 | 826.74 |
4. Related party receivables and payables
A. Receivables
Unit: yuan Currency: RMB
| Item | Related party | Closing balance | Opening balance | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Accounts receivable | Linghai Jiuguhe Feed Mill | 8,139,479.10 | 162,789.58 | 7,628,380.00 | 152,567.60 |
| Accounts receivable | Tai’an Jiuguhe Agriculture Development Company | 13,081,701.90 | 261,634.04 | 11,453,320.00 | 229,066.40 |
| Accounts receivable | Anshan Jiuguhe Food Company | 31,391,484.65 | 627,829.69 | 20,021,748.90 | 400,434.98 |
| Accounts receivable | Zhangjiakou Jiahe Agriculture and Animal Husbandry Company | 11,418,541.47 | 228,370.83 | 5,584,963.70 | 81,973.52 |
| Accounts receivable | Huludao Jiuguhe Feed Mill | 4,786,800.00 | 95,736.00 | 5,049,300.00 | 100,986.00 |
| Accounts receivable | Dalian Chengsan Animal Husbandry Company | 845,840.00 | 16,916.80 | 2,109,601.80 | 42,192.04 |
| Accounts receivable | Tailai Jiahe Agriculture and Animal Husbandry Company | 12,827,310.23 | 256,546.20 | 18,373,436.11 | 367,468.72 |
| Accounts receivable | Nepal Wellhope Agri-tech Pvt. Ltd. | 287,730.02 | 5,754.60 | ||
| Accounts receivable | Daqing Supply and Marketing Agri-Tech Company | 10,165,125.79 | 203,302.52 | ||
| Accounts receivable | Dalian Sida Food Company | 15,391,105.00 | 307,822.10 | ||
| Accounts receivable | Shenyang Wenjie Bio-Tech Company | 378,530.00 | 7,570.60 | ||
| Accounts receivable | Bei’an Nongken Shengda Pasture Specialized Cooperative | 6,745,785.43 | 134,915.71 | 6,168,138.00 | 123,362.76 |
| Accounts receivable | Dunhua Fengda Broiler Breeding Company | 8,387.16 | 167.74 | ||
| Accounts receivable | Heilongjiang Bei’an Nongken Zhongwang Dairy Breeding Professional Cooperative | 1,333,862.00 | 26,677.24 | 1,333,862.00 | 26,677.24 |
| Accounts receivable s | Shandong Fengkang Food Company | 67,894,560.19 | 1,357,891.20 | 6,914,947.14 | 138,298.94 |
| Accounts receivable | Dandong Wellhope Chengsan Agri-Tech Company | 783,860.00 | 15,677.20 | ||
| Accounts receivable | Dazhou Wellhope Bio-tech Company | 3,872,726.06 | 77,454.52 | ||
| Accounts receivable | Harbin Weierhao Trading Company | 306,557.00 | 6,131.14 | ||
| Other receivables | Lankao Skyland Duck Company | 27,067,493.00 | 16,033,746.50 | ||
| Other receivables | Bei’an Nongken Shengda Pasture Specialized Cooperative | 4,350,000.00 | 652,500.00 | 4,350,000.00 | 435,000.00 |
| Prepayment | Zhangjiakou Jiahe Agriculture and Animal Husbandry Company | 71,250.00 | |||
| Prepayment | Harbin Weierhao Trading Company | 185,600.00 | |||
| Prepayment | Dalian Wellhope Fish Meal Company | 4,743,296.00 | |||
| Prepayment | Beipiao Hongfa Food Company | 18,042.78 |
B. Payables
Unit: yuan Currency: RMB
| Item | Related party | Closing book balance | Opening book balance |
| Accounts payable | Tai’an Jiuguhe Agriculture Development Company | 2,041,726.20 | 31,695,862.49 |
| Accounts payable | Qingdao Shenfeng Agri-Tech Company | 5,100,000.00 | 5,300,000.00 |
| Accounts payable | Zhangjiakou Jiahe Agriculture and Animal Husbandry Company | 15,200,000.00 | 15,200,000.00 |
| Accounts payable | Shenyang Wenjie Bio-Tech Company | 2,057,790.00 | 2,177,580.00 |
| Accounts payable | Dalian Chengsan Animal Husbandry Company | 2,051,433.95 | |
| Accounts payable | Anshan Jiuguhe Paper Packaging Company | 197,950.36 | 599,868.30 |
| Accounts payable | Anshan Antai Plastic Products Company | 14,161.00 | |
| Accounts payable | Dalian Wellhope Fish Meal Company | 5,366,854.28 | 949,440.00 |
| Accounts payable | Jilin Hengfeng Animal Health Products Company | 315,120.00 | |
| Accounts payable | Shenyang Wanlitian Agriculture and Animal Husbandry Company | 621,656.00 | 338,120.00 |
| Accounts payable | Daqing Supply and Marketing Agri-Tech Company | 136,900.40 | |
| Accounts payable | Linghai Jiuguhe Feed Mill | 1,632,332.73 | |
| Accounts payable | Liaoning Yufeng Bio-tech Company | 5,151,573.00 | 4,270,798.00 |
| Accounts payable | Dunhua Fengda Broiler Breeding Company | 2,500.00 | |
| Accounts payable | Harbin Weierhao Trading Company | 39,562.50 | |
| Accounts payable | Anshan Jiuguhe Food Company | 5,000,000.00 | |
| Accounts payable | Jinzhou Jiufeng Food Company | 3,000,000.00 | |
| Accounts payable | Tai’an Fengjiu Agri-Tech Company | 423,697.23 | |
| Advance receipt | Nepal Wellhope Agri-tech Pvt. Ltd. | 38,700.00 | 38,700.00 |
| Advance receipt | Liaoning Mubang Animal Husbandry Equipment Manufacturing Company | 42,261.50 | |
| Advance receipt | Harbin Weierhao Trading Company | 585,750.00 | |
| Advance receipt | Tai’an Jiuguhe Agriculture Development Company | 725,000.00 | |
| Advance receipt | Huludao Jiuguhe Feed Mill | 46,000.00 | |
| Advance receipt | Liaoning Yufeng Bio-tech Company | 47,048.40 | |
| Contract liability | Linghai Jiuguhe Feed Mill | 2,907,700.00 | |
| Contract liability | Tai’an Jiuguhe Agriculture Development Company | 3,807,600.00 | |
| Contract liability | Huludao Jiuguhe Feed Mill | 1,903,800.00 | |
| Contract liability | Dazhou Wellhope Bio-Tech Company | 1,142.95 | |
| Other payables | Nepal Wellhope Agri-tech Pvt. Ltd. | 2,999.41 | 2,999.41 |
| Other payables | Unphung Joint Venture Company | 71,682.43 | 71,682.43 |
XIII. Share-based Payment
1. Circumstance of share-based payment
Unit: share Currency: RMB
| Total amount of each equity instrument lapsed during the period | 5,742,000 |
Note:
In accordance with the approved resolutions--Wellhope 2018 Restricted Stock Incentive Plan and ItsAbstract (draft), Adjusting Related Items regarding to 2018 Restricted Stock Incentive Plan, theCompany issued 14.575 million restricted shares to 372 key managers at the price of 4.85 yuan pershare in 2018, increased RMB 14.575 million of the registered capital.This incentive plan should be valid from the date of granting restricted shares to the date when allrestricted shares could be unlocked or repurchased and written off by the Company, with a maximumperiod of no more than 48 months. The restricted shares should not be transferred, used for guaranteeor repaying debts before removing the trading restrictions, and the shares and dividends obtained fromthe restricted shares due to the Company conducting capital reserve converted to share capital, payingdividends, etc., should be simultaneously locked according to the incentive plan. After the expiration ofrestricted period, the Company shall cope with related matters, such as removing trading restrictions,whilst the restricted shares held by the managers who could not meet the conditions of unlockingshares, should be repurchased and written off by the Company, relevant equity could not be deferredto the next period.Arrangement of restricted shares
| Arrangement of unlocking restricted shares | Time of unlocking shares | Percentage of unlocking shares |
| The first lockup period | The first trading day after 12 months from the date of finishing the registration of granted shares to the last trading day within 24 months from the date of finishing the registration of granted shares | 30.00% |
| The second lockup period | The first trading day after 24 months from the date of finishing the registration of granted shares to the last trading day within 36 months from the date of finishing the registration of granted shares | 30.00% |
| The third lockup period | The first trading day after 36 months from the date of finishing the registration of granted shares to the last trading day within 48 months from the date of finishing the registration of granted shares | 40.00% |
On March 27, 2020, the Board of Directors and Supervisory Board approved the proposal of unlockingrestricted shares after achieving the performance objective stated in the first lockup period of 2018Restricted Stock Incentive Plan, 367 managers could totally unlock 4.233 million restricted shares in thefirst lockup period. On April 9, 2020, these 4.233 million shares could be traded in the capital market.On March 29, 2021, the Board of Directors and Supervisory Board approved the proposal of unlockingrestricted shares after achieving the performance objective stated in the second lockup period of 2018
Restricted Stock Incentive Plan, 364 managers could totally unlock 4.256 million shares. On April 9,2021, these 4.256 million shares could be traded in the capital market.On April 27, 2022, the Board of Directors and Supervisory Board approved the proposal of repurchasingand cancelling restricted shares in the third lockup period of 2018 Restricted Stock Incentive Plan dueto failing to meet the unlocking conditions. On June 22, 2022, the Company repurchase and cancelled
5.742 million restricted shares.
2. Equity-settled share-based payment
Unit: yuan Currency: RMB
| Recognition method of fair value of equity instrument at the grant date | Closing price at the grant date |
| Basis for determining the number of exercised equity instrument | It is expected that in case the conditions of unlocking restricted shares can be met, each individual can exercise the equity |
| Accumulated amount of equity-settled share-based payment that recorded into capital reserve | 23,278,454.68 |
| Total expenses recognized by equity-settled share-based payment in current period |
XIV. Post Balance Sheet Events
1. Circumstance of paying profit
Unit: yuan Currency: RMB
| Profit or dividend planned to be paid | 107,816,864.52 |
| Declared profit or dividend after receiving internal approval | 107,816,864.52 |
XV. Other important mattersLease
| Item | Amount(RMB yuan) |
| Short-term lease expense included in current gain or loss | 12,988,488.82 |
| Lease fees of low value asset | 1,944,646.36 |
| Total cash outflows related to leases | 43,807,439.51 |
XVI. Notes to major Items of the Parent Company's Financial Statements
1. Accounts receivable
A. Categorized by aging
Unit: yuan Currency: RMB
| Aging | Closing book balance |
| Within 1 year | 41,640,129.64 |
| 1-2 years | 1,297,508.00 |
| 2-3 years | 4,191,691.30 |
| Over 3 years | 27,370,009.30 |
| Total | 74,499,338.24 |
B. Categorized by bad debt provision method
Unit: yuan Currency: RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Percentage% | Amount | Accruing % | Amount | Percentage% | Amount | Accruing % | |||
| Accruing bad debt provision on an individual basis | 686,300.00 | 0.92 | 686,300.00 | 100.00 | 686,300.00 | 1.11 | 686,300.00 | 100.00 | ||
| Accruing bad debt provision by portfolio | 73,813,038.24 | 99.08 | 29,566,246.36 | 40.06 | 44,246,791.88 | 61,197,217.60 | 98.89 | 27,901,744.83 | 45.59 | 33,295,472.77 |
| including: | ||||||||||
| Aging portfolio | 60,483,943.90 | 81.19 | 29,566,246.36 | 48.88 | 30,917,697.54 | 61,197,217.60 | 98.89 | 27,901,744.83 | 45.59 | 33,295,472.77 |
| Other portfolios | 13,329,094.34 | 17.89 | 13,329,094.34 | |||||||
| Total | 74,499,338.24 | / | 30,252,546.36 | / | 44,246,791.88 | 61,883,517.60 | / | 28,588,044.83 | / | 33,295,472.77 |
Accruing bad debt provision on an individual basis
Unit: yuan Currency: RMB
| Aging | Closing balance | |||
| Book balance | Bad debt provision | Accruing percentage % | Reason for accruing | |
| Customer 1 | 312,000.00 | 312,000.00 | 100.00 | Uncollectable |
| Customer 2 | 200,000.00 | 200,000.00 | 100.00 | Uncollectable |
| Customer 3 | 174,300.00 | 174,300.00 | 100.00 | Uncollectable |
| Total | 686,300.00 | 686,300.00 | 100.00 | / |
Accruing bad debt provision by grouping
Unit: yuan Currency: RMB
| Aging | Closing balance | ||
| Accounts receivable | Bad debt provision | Accruing percentage % | |
| Within 1 year | 28,311,035.30 | 592,065.21 | 2.09 |
| 1 -2 year | 1,297,508.00 | 194,626.20 | 15.00 |
| 2-3 years | 4,191,691.30 | 2,095,845.65 | 50.00 |
| Over 3 years | 26,683,709.30 | 26,683,709.30 | 100.00 |
| Total | 60,483,943.90 | 29,566,246.36 | 48.88 |
C. Bad debt provision
Unit: yuan Currency: RMB
| Category | Opening balance | Changes in current period | Closing balance |
| Accruing | |||
| Aging | 28,588,044.83 | 1,664,501.53 | 30,252,546.36 |
| Total | 28,588,044.83 | 1,664,501.53 | 30,252,546.36 |
D. Top 5 accounts receivable
Unit: yuan Currency: RMB
| Debtor | Closing balance | Percentage of total accounts receivable % | Closing balance of bad debt provision |
| 1 | 9,065,670.00 | 12.17 | 181,313.40 |
| 2 | 7,628,380.00 | 10.24 | 152,567.60 |
| 3 | 7,350,077.71 | 9.87 | 7,350,077.71 |
| 4 | 7,053,335.00 | 9.47 | 7,053,335.00 |
| 5 | 6,651,961.00 | 8.93 | 5,064,611.20 |
| Total | 37,749,423.71 | 50.68 | 19,801,904.91 |
2. Other receivables
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Interests receivable | ||
| Dividends receivable | 53,759,486.59 | 61,417,020.78 |
| Other receivables | 2,175,154,013.17 | 1,705,452,098.71 |
| Total | 2,228,913,499.76 | 1,766,869,119.49 |
A. Dividends receivable
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Dividends from long-term investment under cost method | 26,224,193.24 | 25,611,477.43 |
| Dividends from long-term investment under equity method | 27,535,293.35 | 35,805,543.35 |
| Total | 53,759,486.59 | 61,417,020.78 |
B. Other receivablesa. Categorized by aging
Unit: yuan Currency: RMB
b. Categorized by nature
Unit: yuan Currency: RMB
| Nature | Closing book balance | Opening book balance |
| Operating receivables | 1,293,062.89 | 470,234.69 |
| Cash pledge and guarantee deposit | 257,900.00 | 472,286.62 |
| Related party- transactions | 2,170,286,771.54 | 1,687,513,083.45 |
| Disposal of investment receivables | 2,764,218.95 | |
| Other | 4,350,000.00 | 31,417,493.00 |
| Total | 2,176,187,734.43 | 1,722,637,316.71 |
c. Bad debt provision accruing
Unit:yuan Currency: RMB
| Bad debt provision | Phase 1 | Phase 2 | Phase 3 | Total |
| Expected credit losses over the next 12 months | Expected credit loss for the entire duration (no credit impairment occurred) | Expected credit loss for the entire duration (credit impairment occurred) | ||
| Balance on January 1, 2022 | 16,863,110.00 | 322,108.00 | 17,185,218.00 | |
| -charged to phase 2 | ||||
| - charged to phase 3 | -414,632.84 | 414,632.84 | ||
| -recovered in phase 2 | ||||
| - recovered in phase 1 | ||||
| Accrued in the reporting period | 434,490.60 | 4,248,178.11 | 4,682,668.71 | |
| Recovered in the reporting period | 16,033,746.50 | 16,033,746.50 | ||
| Written off in the reporting period | 4,800,418.95 | 4,800,418.95 |
Aging
| Aging | Closing book balance |
| Within 1 year | 2,163,550,850.93 |
| 1-2 years | 8,043,183.50 |
| 2-3 years | 198,700.00 |
| Over 3 years | 4,395,000.00 |
| Total | 2,176,187,734.43 |
| Balance on December 31, 2022 | 849,221.26 | 184,500.00 | 1,033,721.26 |
d. Bad debt provision
Unit:yuan Currency: RMB
| Category | Opening balance | Changes in current period | Closing balance | ||
| Accruing | Collected or recovered | Charged off or written off | |||
| Other receivables | 17,185,218.00 | 4,682,668.71 | 16,033,746.50 | 4,800,418.95 | 1,033,721.26 |
| Total | 17,185,218.00 | 4,682,668.71 | 16,033,746.50 | 4,800,418.95 | 1,033,721.26 |
e. Top 5 other receivables
Unit: yuan Currency: RMB
| Company | Type | Closing balance | Aging | % of closing balance of total other receivables | Closing balance of bad debt provision |
| 1 | current payments | 351,292,811.73 | within 1 year | 15.76 | |
| 2 | current payments | 135,184,028.01 | within 1 year | 6.07 | |
| 3 | current payments | 126,145,869.38 | within 1 year | 5.66 | |
| 4 | current payments | 113,601,936.00 | within 1 year | 5.10 | |
| 5 | current payments | 113,556,500.00 | within 1 year | 5.09 | |
| Total | / | 839,781,145.12 | / | 37.68 |
3. Long-term equity investment
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Investment in subsidiaries | 3,628,321,267.36 | 3,628,321,267.36 | 3,157,180,628.33 | 3,157,180,628.33 | ||
| Investment in associates and joint ventures | 2,376,311,808.96 | 17,900,000.00 | 2,358,411,808.96 | 2,209,491,757.38 | 17,900,000.00 | 2,191,591,757.38 |
| Total | 6,004,633,076.32 | 17,900,000.00 | 5,986,733,076.32 | 5,366,672,385.71 | 17,900,000.00 | 5,348,772,385.71 |
A. Investment in subsidiaries
Unit: yuan Currency: RMB
| Company | Jan. 1, 2023 | Increase in 2022 | Decrease in 2022 | Dec. 31, 2022 |
| Haicheng Wellhope Feed Mill | 12,614,789.85 | 12,614,789.85 | ||
| Tai'an Wellhope Feed Mill | 33,055,140.93 | 33,055,140.93 | ||
| Shenyang Wellhope Ruminant Feed Mill | 6,038,738.05 | 6,038,738.05 | ||
| Liaoning Wellhope Agriculture and Animal Husbandry Company | 97,604,896.30 | 97,604,896.30 | ||
| Shenyang Nongda Wellhope Feed Mill | 44,562,397.18 | 44,562,397.18 |
| Xingcheng Wellhope Feed Mill | 82,794,584.59 | 82,794,584.59 | ||
| Dalian Wellhope Feed Mill | 42,386,167.87 | 42,386,167.87 | ||
| Jinzhou Wellhope Agri-Tech Company | 17,260,917.78 | 17,260,917.78 | ||
| Shenyang Wellhope Extruded Feed Mill | 33,042,083.51 | 33,042,083.51 | ||
| Shenyang Wellhope Aquatic Feed Mill | 15,286,167.88 | 15,286,167.88 | ||
| Shenyang Wellhope Agri-Tech Company | 82,988,342.49 | 82,988,342.49 | ||
| Shenyang Wellhope Poultry Industry Company | 60,565.62 | 60,565.62 | ||
| Gongzhuling Wellhope Agri-Tech Company | 35,514,907.90 | 35,514,907.90 | ||
| Jilin Wellhope Agri-Tech Company | 16,241,715.94 | 16,241,715.94 | ||
| Gongzhuling Wellhope Ruminant Feed Mill | 5,084,167.03 | 5,084,167.03 | ||
| Sanjiang Wellhope Agri-Tech Company | 13,022,410.76 | 13,022,410.76 | ||
| Mudanjiang Wellhope Agri-Tech Company | 23,286,048.10 | 23,286,048.10 | ||
| Heilongjiang Wellhope Agri-Tech Company | 120,848,465.45 | 120,848,465.45 | ||
| Beijing Helai Sci-Tech Company | 25,472,592.05 | 25,472,592.05 | ||
| Beijing Wellhope Agri-Tech Company | 5,071,980.16 | 5,071,980.16 | ||
| Huai'an Wellhope Feed Mill | 30,230,704.60 | 30,230,704.60 | ||
| Gansu Wellhope Agri-Tech Company | 40,108,690.76 | 40,108,690.76 | ||
| Henan Wellhope Agri-Tech Company | 52,769,238.99 | 52,769,238.99 | ||
| Lankao Wellhope Agri-Tech Company | 43,084,167.03 | 43,084,167.03 | ||
| Henan Wellhope Agri-Tech Company Kaifeng Branch | 302,615.65 | 302,615.65 | ||
| Shenyang Huaweida Animal Health Product Company | 36,032.42 | 36,032.42 | ||
| Jilin Hefeng Swine Breeding Company | 15,000,000.00 | 15,000,000.00 | ||
| Shenyang Expert Trading Company | 30,010,648.28 | 30,010,648.28 | ||
| Shenyang Jiahe Tianfeng Commerce and Trade Company | 10,143,614.30 | 10,143,614.30 | ||
| Liaoning Expert Trading Company | 73,771,350.84 | 73,771,350.84 |
| Shenyang Pufeng Commerce and Trade Company | 1,999,788.72 | 1,999,788.72 | ||
| Liaoning Wellhope Purchasing & Trading Company | 30,278,344.48 | 30,278,344.48 | ||
| Liaoning Skyland Livestock Equipment Company | 28,667,982.56 | 28,667,982.56 | ||
| Shenyang Fame Bio-Tech Company | 20,494,308.42 | 20,494,308.42 | ||
| Pingyuan Wellhope Food Processing Company | 210,203,167.88 | 210,203,167.88 | ||
| Pingyuan Wellhope Agri-Tech Company | 264,258.47 | 264,258.47 | ||
| Kaifeng Wellhope Meat Product Company | 100,000,000.00 | 100,000,000.00 | ||
| Wellhope Food (Shenyang) Company | 5,160,191.67 | 5,160,191.67 | ||
| Liaoning Godaji E-commerce Company | 20,496,378.16 | 20,496,378.16 | ||
| Linxi Helai Agri-Tech Company | 33,038,762.97 | 33,038,762.97 | ||
| Luoyang Wellhope Agriculture and Animal Husbandry Company | 75,000,000.00 | 75,000,000.00 | ||
| Anyang Wellhope Agriculture and Animal Husbandry Company | 55,000,000.00 | 55,000,000.00 | ||
| Hainan Expert Trading Company | 9,151.86 | 9,151.86 | ||
| Tianjin Fullyond Supply Chain Company | 10,000,000.00 | 10,000,000.00 | ||
| Zhumadian Wellhope Agriculture and Animal Husbandry Development Company | 30,000,000.00 | 30,000,000.00 | ||
| Linyi Wellhope Agri-tech Company | 15,000,000.00 | 15,000,000.00 | ||
| Jiyuan Helai Feed Company | 23,000,000.00 | 23,000,000.00 | ||
| Lankao Skyland Feed Company | 46,069,798.90 | 46,069,798.90 | ||
| Fuxin Wellhope Agriculture and Animal Husbandry Company | 30,000,000.00 | 30,000,000.00 | ||
| Lingyuan Wellhope Agriculture and Animal Husbandry Company | 5,000,000.00 | 5,000,000.00 | ||
| Fame (Shenyang) Biological High-tech Industry Research | 10,000,000.00 | 10,000,000.00 |
| Institute Company | ||||
| Lingyuan Wellhope Agri-Tech Company | 16,910,917.77 | 16,910,917.77 | ||
| Haicheng Xinzhongxin Feed Mill | 6,002,315.70 | 6,002,315.70 | ||
| Fuyu Wellhope Agri-Tech Company | 46,602,083.51 | 46,602,083.51 | ||
| Changchun Wellhope Feed Mill | 84,597,782.33 | 84,597,782.33 | ||
| Daqing Wellhope Bayi Nongda Animal Sci-Tech Company | 30,694,098.94 | 30,694,098.94 | ||
| Beijing Sanyuan Wellhope Agri-Tech Company | 8,719,369.88 | 8,719,369.88 | ||
| Tangshan Wellhope Feed Mill | 43,434,466.04 | 43,434,466.04 | ||
| Cangzhou Helai Sci-Tech Company | 3,531,614.46 | 3,531,614.46 | ||
| Shanxi Wellhope Agri-Tech Company | 40,042,083.51 | 8,000,000.00 | 48,042,083.51 | |
| Tangshan Hejia Agriculture and Animal Husbandry Company | 19,634,667.24 | 19,634,667.24 | ||
| Tangshan Wellhope Sci-Tech Company | 21,033,666.81 | 21,033,666.81 | ||
| Shanghai Wellhope Feed Mill | 2,295,632.60 | 2,295,632.60 | ||
| Pinghu Wellhope Agri-Tech Company | 1,026,750.75 | 1,026,750.75 | ||
| Anhui Wellhope Agri-Tech Company | 112,148,987.28 | 112,148,987.28 | ||
| Xi'an Wellhope Feed Sci-Tech Company | 4,688,849.43 | 4,688,849.43 | ||
| Zhengzhou Wellhope Agri-Tech Company | 4,044,206.82 | 2,853,799.00 | 6,898,005.82 | |
| Zhumadian Wellhope Agri-Tech Company | 9,052,956.04 | 9,052,956.04 | ||
| Nanyang Wellhope Feed Mill | 17,925,324.47 | 17,925,324.47 | ||
| Jiaozuo Wellhope Feed Mill | 49,210,804.92 | 1,230,200.00 | 50,441,004.92 | |
| Jingzhou Wellhope Agri-Sci-Tech Company | 21,432,261.58 | 21,432,261.58 | ||
| Qingdao Wellhope Agri-Tech Company | 28,887,168.30 | 28,887,168.30 | ||
| Jining Wellhope Agri-Tech Company | 19,726,723.27 | 19,726,723.27 | ||
| Yunnan Wellhope Feed Mill | 24,294,994.77 | 24,294,994.77 | ||
| Fuyu Wellhope Taolaizhao Poultry Raising Company | 5,657,551.60 | 20,100,000.00 | 25,757,551.60 | |
| Changchun Hengfeng | 235,667.66 | 235,667.66 |
| Agriculture and Animal Husbandry Company | ||||
| Beijing Brilliant Dragon Commerce and Trade Company | 205,085.39 | 205,085.39 | ||
| Shanghai Hehong Trading Company | 203,454.84 | 203,454.84 | ||
| Jinan Xinweita Trading Company | 157,757.98 | 157,757.98 | ||
| Zhangwu Wellhope Agriculture Development Company | 1,800,000.00 | 1,800,000.00 | ||
| Tongliao Wellhope Tianyi Prataculture Company | 10,200,000.00 | 10,200,000.00 | ||
| Chongqing Dahong Agriculture and Animal Husbandry Equipment Company | 117,833.83 | 117,833.83 | ||
| Guangzhou Xiangshun Livestock Equipment Company | 3,000,500.21 | 3,000,500.21 | ||
| Dalian Huakang Xinxin Food Company | 11,662,375.47 | 11,662,375.47 | ||
| Dalian Heyuan Agri-Tech Company | 103,890,054.28 | 103,890,054.28 | ||
| Dalian Zhongjia Food Company | 155,824.28 | 155,824.28 | ||
| Shenyang Huakang Broiler Company | 2,158,404.83 | 66,400,000.00 | 68,558,404.83 | |
| Shenyang Huakang Xinxin Food Company | 1,969,334.47 | 1,969,334.47 | ||
| Shenyang Huakang Agriculture and Animal Husbandry Company | 694,899.21 | 694,899.21 | ||
| Changchun Wellhope Food Company | 8,668,334.04 | 8,668,334.04 | ||
| Dehui Wellhope Agri-Tech Company | 45,424.21 | 45,424.21 | ||
| Puyang Wellhope Food Company | 20,210,417.54 | 20,210,417.54 | ||
| Puyang Wellhope Agri-Tech Company | 45,424.21 | 45,424.21 | ||
| Kaifeng Wellhope Agriculture and Animal Husbandry Company | 40,348.21 | 40,348.21 | ||
| Liaoning Wellhope Food Company | 30,041,809.18 | 30,041,809.18 | ||
| Chongqing Wellhope Agri-Tech Company | 2,230,000.00 | 2,230,000.00 | ||
| Nanchang Wellhope Agri-Tech Company | 6,500,000.00 | 6,500,000.00 | ||
| Hengyang Wellhope | 4,600,000.00 | 1,167,000.00 | 5,767,000.00 |
| Agri-Sci-Tech Company | ||||
| Shulan Fengtai Agriculture and Animal Husbandry Company | 63,394,541.16 | 63,394,541.16 | ||
| Shulan Fengtai Farming Company | 5,100,000.00 | 5,100,000.00 | ||
| Hainan Agri-Tech Company | 68,155,732.34 | 68,155,732.34 | ||
| Russia Wellhope Agri-Tech Company | 11,700,000.00 | 11,700,000.00 | ||
| Chifeng Wellhope Fuxinyuan Food Company | 125,000,000.00 | 125,000,000.00 | ||
| Shenyang Xiangmai E-commerce Company | 650,000.00 | 650,000.00 | ||
| Hebei Taihang Wellhope Food Company | 162,000,000.00 | 72,150,000.00 | 234,150,000.00 | |
| Dunhua Wellhope Agri-Tech Company | 7,652,794.97 | 7,652,794.97 | ||
| Dunhua Fengda Agriculture and Animal Husbandry Development Company | 13,095,094.63 | 13,095,094.63 | ||
| Heibei Taihang Agri-Tech Company | 74,400,000.00 | 74,400,000.00 | ||
| Nanyang Jinwan Agri-Tech Company | 10,000,000.00 | 10,000,000.00 | ||
| Liaoning Qingyuan Wellhope Agriculture and Animal Husbandry Company | 95,000,000.00 | 19,000,000.00 | 114,000,000.00 | |
| Fuzhou Wellhope Xingyuan Agri-Tech Development Company | 3,600,000.00 | 39,500,000.00 | 43,100,000.00 | |
| Daqing Wellhope Food Company | 7,650,000.00 | 7,650,000.00 | ||
| Shandong Heyuan Food Company | 37,759.87 | 37,759.87 | ||
| Shijiazhuang Hejia Agriculture and Animal Husbandry Company | 13,000,000.00 | 13,000,000.00 | ||
| Inner Mongolia Bifeng Animal Husbandry Technology Development Company | 9,660,000.00 | 9,660,000.00 | ||
| Changsha Wellhope Animal Husbandry Company | 8,300,000.00 | 8,300,000.00 | ||
| Dehui Fengyuan Agriculture and Animal Husbandry Company | 2,550,000.00 | 2,550,000.00 | ||
| Henan Hejiang Agricultural Development | 5,100,000.00 | 5,100,000.00 |
| Company | ||||
| Fuzhou Wellhope Xingyuan Animal Husbandry Development Company | 2,400,000.00 | 2,400,000.00 | ||
| Wan’an Wellhope Feed Company | 7,800,000.00 | 7,800,000.00 | ||
| Fuyu Wellhope Layer Company | 5,200,000.00 | 5,200,000.00 | ||
| Chifeng Wellhope Agri-tech Company | 6,800,000.00 | 6,800,000.00 | ||
| Baotou Hechen Agri-tech Company | 4,554,000.00 | 4,554,000.00 | ||
| Qiqihar Wellhope Agri-tech Company | 7,650,000.00 | 7,650,000.00 | ||
| Neihuang County Wellhope Agri-tech Company | 37,500,000.00 | 37,500,000.00 | ||
| Jilin Dalong Wellhope Agri-tech Company | 4,130,000.00 | 4,130,000.00 | ||
| Haicheng New Hongzunda Animal Husbandry Company | 16,902,841.13 | 16,902,841.13 | ||
| Kaifeng Jiufeng Agriculture and Animal Husbandry Company | 42,000,000.00 | 42,000,000.00 | ||
| Total | 3,157,180,628.33 | 482,007,639.03 | 10,867,000.00 | 3,628,321,267.36 |
B. Investment in associated companies and joint ventures
Unit: yuan Currency: RMB
| Investee | Opening balance | Changes in the current period | Closing balance | Closing balance of impairment provision | |||||
| Additional investment | Gains or losses on investments recognized under the equity method | Adjustment of other comprehensive income | Other changes in equity | Declaration of cash dividends or profits | Other | ||||
| 1. Joint Venture | |||||||||
| Unphung Joint Venture Company | 7,501,575.10 | 7,501,575.10 | |||||||
| Nepal Wellhope Agri-tech Pvt. Ltd. | 4,167,616.44 | 4,167,616.44 | |||||||
| NEXUS WELL-HOPE AGRITECH INTERNATIONAL LIMITED | 17,900,000.00 | 17,900,000.00 | 17,900,000.00 | ||||||
| Subtotal | 29,569,191.54 | 29,569,191.54 | 17,900,000.00 | ||||||
| 2. Associated Company | |||||||||
| Qingdao Shenfeng Agri-Tech Company | 12,859,981.63 | 1,086,300.57 | 1,845,000.00 | 12,101,282.20 | |||||
| Anshan Jiuguhe Food Company | 205,321,279.08 | 23,391,706.01 | 6,232,950.00 | 222,480,035.09 | |||||
| Tai’an Jiuguhe Agriculture Development Company | 56,759,733.86 | 13,383,976.27 | 70,143,710.13 | ||||||
| Linghai Jiuguhe Feed Mill | 42,624,662.98 | 9,890,599.97 | 52,515,262.95 | ||||||
| Huludao Jiuguhe Food Company | 68,828,874.29 | 4,605,651.97 | 73,434,526.26 | ||||||
| Dandong Wellhope Chengsan Food Company | 79,403,327.22 | 13,154,756.33 | 92,558,083.55 | ||||||
| Dandong Wellhope Chengsan Agri-Tech Company | 116,098,861.48 | 3,813,192.30 | 119,912,053.78 | ||||||
| Haicheng New Hongzunda Agri-Tech Company | 15,853,051.94 | 386,989.19 | -16,240,041.13 | ||||||
| Beipiao Hongfa Food | 493,149,090.03 | 70,925,071.50 | 5,390,000.00 | 558,684,161.53 | |||||
| Company | |||||||||
| Beijing Dahong Hengfeng Agri-Tech Company | 26,321,552.40 | -3,212,231.58 | 23,109,320.82 | ||||||
| Shihaipu (Beijing) Technology and Trade Co., Ltd. | 1,905,245.10 | 113,944.42 | 2,019,189.52 | ||||||
| Shenyang Wenjie Bio-Tech Company | 13,538,951.01 | 354,037.25 | 13,892,988.26 | ||||||
| Huludao Jiuguhe Feed Mill | 1,640,940.34 | 1,446,050.82 | 3,086,991.16 | ||||||
| Jinzhou Jiufeng Food Company | 90,831,509.42 | 8,392,237.69 | 99,223,747.11 | ||||||
| Zhangjiakou Jiahe Agriculture and Animal Husbandry Company | 90,394,700.76 | -4,853,505.27 | 85,541,195.49 | ||||||
| Tai'an Fengjiu Agri-Tech Company | 55,361,191.33 | 8,713,129.49 | 243,262.12 | 63,831,058.70 | |||||
| Anshan Fengsheng Food Company | 54,871,812.33 | 7,340,968.23 | 62,212,780.56 | ||||||
| Dalian Chengsan Animal Husbandry Company | 350,422,338.11 | 30,302,986.98 | 380,725,325.09 | ||||||
| Tailai Jiahe Agriculture and Animal Husbandry Company | 63,751,596.83 | -24,392,489.15 | -1,559,644.35 | 37,799,463.33 | |||||
| Gongzhuling Corn Purchasing and Storing Company | 46,890,849.17 | 2,685,883.18 | 49,576,732.35 | ||||||
| Lankao Skyland Duck Company | 34,512,166.48 | 1,994,577.20 | 1,306,877.90 | 37,813,621.58 | |||||
| Hainan Nongken Wenfeng Wenchang Chicken Industry(Group)Company | 1,090,183.46 | 561.49 | 1,090,744.95 | ||||||
| PT SEKAR GOLDEN HARVESTA INDONESIA | 36,360,437.54 | -1,302,462.63 | -269,639.16 | 125,653.83 | 34,913,989.58 | ||||
| GOLDEN HARVESTA INC. | 98,958,392.92 | 5,105,258.75 | 1,845.88 | 104,065,497.55 | |||||
| PT. Mulia Harvest Agritech | 47,923,891.82 | 7,511,736.32 | -361,396.30 | 55,074,231.84 |
| Shulan Fengtai Organic Fertilizer Company | 2,055,159.27 | -211,753.66 | 1,843,405.61 | ||||||
| Shenyang Zhongwenjia Bio-Tech Company | 6,394,995.20 | 1,431,102.26 | 7,826,097.46 | ||||||
| Liaoning Mubang Animal Husbandry Equipment Manufacturing Company | 15,197,637.58 | 2,007,890.41 | 17,205,527.99 | ||||||
| Liaoning Yufeng Bio-tech Company | 6,345,273.41 | 3,800,000.00 | -8,780,780.49 | 1,364,492.92 | |||||
| Weifang Wellhope Xinhesheng Feed Mill | 4,960,038.96 | 252,934.56 | 5,212,973.52 | ||||||
| Dunhua Fengda Broiler Breeding Company | 5,794,221.03 | 30,221.45 | 5,824,442.48 | ||||||
| Tai’an Huijun Biomass Energy Company | 2,242,570.99 | 3,723,200.00 | -1,719,990.55 | 4,245,780.44 | |||||
| Dazhou Wellhope Bio-Tech Company | 6,934,535.85 | 7,500,000.00 | -1,757,787.42 | 12,676,748.43 | |||||
| Anshan Jiujianhe Paper Packaging Company | 4,257,931.65 | 823,159.73 | 5,081,091.38 | ||||||
| Anshan Antai Plastic Products Company | 2,835,740.23 | 777,655.29 | 3,613,395.52 | ||||||
| Bei’an Nongken Shengda Pasture Specialized cooperative | 11,472,828.85 | 1,630,152.02 | 13,102,980.87 | ||||||
| Jiyuan Sunshine Rabbit Industry Technology Company | 5,282,607.40 | 7,800,000.00 | -907,734.01 | 12,174,873.39 | |||||
| Heilongjiang Province Bei’an Nongken Zhongwang Dairy Farming Professional Cooperative | 474,403.89 | 290,410.14 | 764,814.03 | ||||||
| Subtotal | 2,179,922,565.84 | 22,823,200.00 | 174,704,407.03 | -629,189.58 | -127,112.62 | 13,711,212.12 | -16,240,041.13 | 2,346,742,617.42 | |
| Total | 2,209,491,757.38 | 22,823,200.00 | 174,704,407.03 | -629,189.58 | -127,112.62 | 13,711,212.12 | -16,240,041.13 | 2,376,311,808.96 | 17,900,000.00 |
4. Operating revenue and cost
Unit: yuan Currency: RMB
| Item | 2022 | 2021 | ||
| Revenue | Cost | Revenue | Cost | |
| Revenue from primary businesses | 804,332,359.69 | 620,243,627.16 | 964,938,328.77 | 694,318,200.64 |
| Revenue from other businesses | 2,255,208.91 | 534,612.87 | 3,860,978.20 | 531,053.40 |
| Total | 806,587,568.60 | 620,778,240.03 | 968,799,306.97 | 694,849,254.04 |
5. Income from investment
Unit: yuan Currency: RMB
| Item | 2022 | 2021 |
| Income from long-term equity investments under cost method | 14,340,353.00 | 86,063,136.77 |
| Income from long-term equity investments under equity method | 174,704,407.03 | -76,100,518.29 |
| Income from disposal of long-term equity investments | -4,886,391.00 | 362,065.72 |
| Income from disposal of derivative financial assets | -4,446,438.67 | 1,507,313.81 |
| Income from holding period of financial assets for trading | 819,282.27 | |
| Income from disposal of investments in other equity instruments | 5,550,000.00 | |
| Total | 179,711,930.36 | 18,201,280.28 |
XVII. Supplementary Information
1. Extraordinary items in 2022
Unit: yuan Currency: RMB
| Item | Amount | Note |
| Gains or losses from disposal of non-current assets | -4,023,922.69 | |
| Government grants charged to current gains or losses (excl. the government grants which are closely related to the Company's ordinary course of business and gained constantly at fixed quotas or amounts as per certain standards based on the state polices) | 43,999,785.07 | |
| Income generated from the investment costs for acquiring subsidiaries, associated companies and joint ventures being lower than the fair value of the investee’s net identifiable assets acquired by the Company | 58.82 | |
| Gains or losses on fair-value changes in trading financial assets and liabilities, derivative financial assets and liabilities, and the income from disposal of trading financial assets and liabilities, derivative financial assets and liabilities as well as other debt investment (excl. the effective portion of hedges that arise in the Company's ordinary course of business) | -6,371,590.35 | |
| Non-operating income and expense other than those described above | -36,876,323.54 |
| Other items that meet the definition of extraordinary items | 154,001.44 | |
| Less: Income tax effects | 4,291,726.21 | |
| Non-controlling interests effects | -1,308,553.68 | |
| Total | -6,101,163.78 |
2. Return on equity and earnings per share
| Profit in 2022 | Weighted average ROE % | Earnings per share | |
| Basic EPS | Diluted EPS | ||
| Net profit attributable to shareholders who hold common stock | 7.48 | 0.58 | 0.55 |
| Net profit attributable to common shareholders deducting extraordinary items | 7.57 | 0.58 | 0.56 |
Chairman Jin WeidongDate of approval of Board of Directors—March 31, 2022