Stock Code: 000553(200553) Stock Abbreviations: ADAMA A(B) Announcement No.2024-5
Abstract of the 2023 Annual Report of ADAMA Ltd.I. Important Reminder
The Abstract is from the full text of the Annual Report. Investors are advised to read the full text of the AnnualReport published on the media designated by China Securities Regulatory Commission for having a roundunderstanding of the Company’s performance, financial status and future development plan.
All the directors attended the Board of Directors meeting to review the Annual Report.
Non-standard auditor report
□ Applicable √Not applicable
Plan approved by the Board of Directors for dividend distribution of ordinary shares or increasing the capital bythe transfer of capital reserves.
□Applicable √Not applicable
The Company does not plan to distribute cash or share dividends, nor plan to transfer capital reserve to equitycapital.
Plan approved by the Board of Directors for dividend distribution of preferred shares
□ Applicable √ Not applicable
II. Basic information about the Company
1. Company profile
| Stock name | ADAMA A, ADAMA B | Stock code | 000553, 200553 | |
| Stock exchange | Shenzhen Stock Exchange | |||
| Contact Information | Board Secretary | Securities Affairs Representative & Investor Relations Manager | ||
| Name | Guo Zhi | Wang Zhujun | ||
| Address | 6/F, No.7 Office Building, No.10 Courtyard, Chaoyang Park South Road, Chaoyang District, Beijing | |||
| Tel. | 010-56718110 | 010-56718110 | ||
| irchina@adama.com | irchina@adama.com | |||
2. Main Business or Products during the Reporting Period
Main Business and ProductsThe Company is a global leader in crop protection, engaging in the development, manufacturing andcommercialization of a wide range of crop protection products, that are largely off-patent. The Company providessolutions to farmers to combat weeds, insects and disease, and sells its products in over 100 countries, throughapproximately 60 subsidiaries worldwide.
The Company’s main products are herbicides, insecticides and fungicide, which protect agricultural and other cropsagainst weeds, insects and disease, respectively. The Company also utilizes its expertise to adapt such products alsofor the development, manufacturing and commercialization of similar products for non-agricultural purposes(Consumer and Professional Solutions). In addition, the Company leverages its core capabilities in the agricultural
and chemical fields and operates in several other non-agricultural areas, none of which, individually, is material forthe Company. These activities, collectively reported as Intermediates and Ingredients, include primarily, (a) themanufacturing and marketing of dietary supplements, food colors, texture and flavor enhancers, and foodfortification ingredients; (b) fragrance products for the perfume, cosmetics, body care and detergents industries; (c)the manufacturing of industrial products and (d) other non-material activities.
The Company's business model integrates end-customer access, regulatory expertise, state-of-the art global R&D,production and formulation facilities, thereby providing the Company a significant competitive edge and allowingit to launch new and differentiated products that meet local farmers and customer needs in key markets.
The Company's primary operations are global, spanning activities in North America, Latin America, Asia-Pacific(including China) and Europe, Africa and the Middle East.
General crop protection market environmentKey commodity crop prices declined substantially during 2023 as weather conditions normalized and the globalcrop supply situation improved. However, key commodity crop prices were still relatively high through 2023,supporting planted area and investment in crops, leading to healthy demand, at the farmer level, of crop inputs,including crop protection products. However, due to very high channel inventory across all geographies, channeldemand was weak during 2023. The high interest rate environment coupled with low prices of active ingredientfrom China, also encouraged the just-in-time purchasing approach adopted by the channel. As a result, sales intothe channel declined sharply across the entire industry. Going into 2024, channel inventories have improved acrossmost geographies but they have still not normalized everywhere. The cost environment further improved in 2023 asactive ingredient prices in China continued to decline all through 2023 reaching low levels.
Market Competition and the Company’s Market ShareThe global crop protection market is dominated by seven multinational companies, including the Group, five ofwhich are originator companies. In the past decade, a number of mergers and acquisitions were completed amongthe largest players in the crop protection industry. Nonetheless, the crop protection industry as a whole is relativelydecentralized, with a number of local manufacturers competing in each country against the global multinationalcompanies. The Group believes that entry barriers for the crop protection market are relatively high, although theyvary from region to region.
ADAMA is a leading company (in sales terms) among the crop-protection companies that focus on off-patent cropprotection solutions. The Company’s global crop protection market share was approximately 5.1% in 2023, basedon preliminary estimation made by AgBio Investor regarding total sales in the agrochemical industry, and 6.5% in2022.
3. Main Accounting Data and Financial Indicators
(1) Main Accounting Data and Financial Indicators of the Latest Three Years
Whether the Company performed any retroactive adjustments to or restatement of its accounting data
√Yes □No
Reasons for Retroactive Adjustments or Restatement of the Accounting Data: Other reasons
Unit: RMB’000
| 2023 | 2022 | +/- (%) | 2021 | |||
| Before adjustment | After adjustment | Before adjustment | After adjustment | |||
| Operating revenue (RMB’000) | 32,779,456 | 37,381,915 | 37,381,915 | -12.31% | 31,038,605 | 31,038,605 |
| Net profit attributable to the shareholders (RMB’000) | (1,605,887) | 609,391 | 609,391 | -363.52% | 157,397 | 157,397 |
| Net profit attributable to the shareholders, excluding non-recurring profit and loss (RMB’000) | (1,851,491) | 490,428 | 501,621 | -469.1% | 77,853 | 106,438 |
| Net cash flows from operating activities (RMB’000) | 2,617,877 | 940,745 | 940,745 | 178.28% | 4,561,875 | 4,561,875 |
| Basic EPS (RMB/share) | (0.6893) | 0.2616 | 0.2616 | -363.49% | 0.0676 | 0.0676 |
| Diluted EPS (RMB/share) | N/A | N/A | N/A | N/A | N/A | N/A |
| Weighted average return on equity | (7.13%) | 2.76% | 2.76% | -9.89% | 0.74% | 0.74% |
| 31.12.2023 | 31.12.2022 | +/- (%) | 31.12.2021 | |||
| Before adjustment | After adjustment | Before adjustment | After adjustment | |||
| Total assets (RMB’000) | 55,405,803 | 57,980,489 | 57,980,489 | -4.44% | 50,235,308 | 50,235,308 |
| Net assets attributable to the shareholders (RMB’000) | 21,924,475 | 23,124,655 | 23,124,655 | -5.19% | 21,075,083 | 21,075,083 |
Reason for retroactive adjustments: The Company recognized the non-recurring profit and loss items in accordancewith the “Explanatory Announcement No. 1 on Information Disclosure for Companies Offering their Securities tothe Public - Non-Recurring Profit and Loss (2023 Revised)” and made retrospective adjustments. Theimplementation of this regulation has no significant impact on the non-recurring profit and loss in comparableaccounting periods.
(2) Main Accounting Data by Quarter
Unit: RMB’000
| Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | |
| Operating revenue | 8,610,576 | 8,642,625 | 7,406,903 | 8,119,352 |
| Net profit attributable to the shareholders | 83,273 | (325,429) | (800,317) | (563,414) |
| Net profit attributable to the shareholders excluding non-recurring profit and loss | 44,893 | (343,038) | (845,864) | (707,482) |
| Net cash flows from operating activities | (2,905,168) | 2,840,292 | 590,706 | 2,092,047 |
Any material differences between the financial indicators above or their summations and those which have beendisclosed in quarterly or semi-annual reports
□ Yes √ No
4. Shares and Shareholders
(1) Number of Common Shareholders and Preferred Shareholders with Vote Right Restored and
Shareholding Table of Top-10 Shareholders
Unit: share
| Total number of shareholders at the reporting period | 41,388 | Total number of shareholders on the 30th trading day before the disclosure date of the annual report | 41,393 | Total number of preferred stockholder with vote right restored | 0 | Total number of preferred stockholder with vote right restored on the 30th trading day before the disclosure date of the annual report | 0 |
| Shareholding of Top-10 Shareholders (Excluding Shares Lent for the Relending Financing) | |||||||
| Name of shareholder | Nature of shareholder | Holding percentage | Number of shares | Number of shares held subject to trading moratorium | Pledged or frozen shares | |
| Status of shares | Amount | |||||
| Syngenta Group Co., Ltd. | State-owned legal person | 78.47% | 1,828,137,961 | -- | -- | -- |
| China Cinda Asset Management Co., Ltd. | State-owned legal person | 1.34% | 31,115,916 | -- | -- | -- |
| Bosera Funds-China Merchants Bank- Bosera Funds Xincheng No.2 Collective Asset Management Plan | Others | 0.28% | 6,500,000 | -- | -- | -- |
| Hong Kong Securities Clearing Company Ltd. (HKSCC) | Overseas legal person | 0.27% | 6,374,253 | -- | -- | -- |
| Wu Feng | Domestic Individual | 0.27% | 6,190,669 | -- | -- | -- |
| Bosera Funds-Postal Savings Bank- Bosera Funds Xincheng No.3 Collective Asset Management Plan | Others | 0.26% | 6,000,000 | -- | -- | -- |
| Zhu Shenglan | Domestic Individual | 0.25% | 5,756,000 | -- | -- | -- |
| China Universal Fund-Industrial Bank-China Universal-Strategic Enhancement No.3 Collective Asset Management Plan | Others | 0.19% | 4,400,000 | -- | -- | -- |
| Qichun County State-owned Assets Operation Center | State-owned legal person | 0.18% | 4,169,266 | -- | -- | -- |
| Bosera Funds-Postal Savings Bank- Bosera Funds Xincheng No.4 Collective Asset Management Plan | Others | 0.17% | 4,000,000 | -- | -- | -- |
| Explanation on associated relationship or/and persons | Syngenta Group Co., Ltd. is not related party or acting-in-concert party as prescribed in the Administrative Methods for Acquisition of Listed Companies to other shareholders. It is unknown to the Company whether shareholders above are related parties or acting-in-concert parties as prescribed in the Administrative Methods for Acquisition of Listed Companies. | |||||
| Particular about shareholder participate in the securities lending and borrowing business ( if any) | Shareholder Wu Feng held 4,809,943 shares of the Company through a common securities account and 1,380,726 shares of the Company through a credit collateral securities trading account, altogether 6,190,669 shares. Shareholder Zhu Shenglan held 5,756,000 shares of the Company through a credit collateral securities trading account. | |||||
Involvement of Top 10 Shareholders in Lending of Shares in the Relending Financing of Funds and Securities
□ Applicable √ Not Applicable
Change of the Top 10 Shareholders from the Previous Reporting Period
√ Applicable □ Not Applicable
| Change of the Top 10 Shareholders from the Previous Reporting Period | |||||
| Full Name of the Shareholder | Addition or Withdrawal Shares during the Reporting Period | Shares Lent for the Relending Financing at the Ending Period and Amount not yet Returned | Shares in General Shareholders’ Accounts, Credit Accounts and Lent for the Relending Financing at the Ending Period and Amount not yet Returned | ||
| Total | Proportion of the Total Equity | Total | Proportion of the Total Equity | ||
| Zhu Shenglan | Addition | 0 | 0 | 5,756,000 | 0.25% |
| Qichun County State-owned Assets Operation Center | Addition | 0 | 0 | 4,169,266 | 0.18% |
| Bosera Funds-Postal Savings Bank- | Addition | 0 | 0 | 4,000,000 | 0.17% |
| Bosera Funds Xincheng No.4 Collective Asset Management Plan | |||||
| Wang Xiuqin | Withdrawal | 0 | 0 | 3,181,579 | 0.14% |
| Portfolio No.503 of National Social Security Fund | Withdrawal | 0 | 0 | 0 | 0 |
| CITIC Securities - Huarong Ruitong Equity Investment Management Co., Ltd. - CITIC Securities - Changfeng Single Asset Management Plan | Withdrawal | 0 | 0 | 0 | 0 |
(2) Number of Preferred Shareholders and Shareholding Table of Top-10 Preferred Shareholders
□ Applicable √ Not applicable
None in the Reporting Period.
(3) Block Diagram of Equity and Control Relationship between the Company and Actual controller
5. Corporate Bonds on the Reporting Date
□ Applicable √ Not applicable
III. Important MattersNone.For introduction to Company business during the reporting period, please refer to Section III. ManagementDiscussion and Analysis of the full text of 2023 Annual Report.
ADAMA Ltd.Legal Representative：Steve Hawkins
March 27
th
, 2024