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新希望:2021年半年度报告(英文版) 下载公告
公告日期:2021-10-12
                    2021 Semiannual Report of New Hope Liuhe Co., Ltd
New Hope Liuhe Co., Ltd
 2021 Semiannual Report
        2021-99
      August 2021
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                                                 2021 Semiannual Report of New Hope Liuhe Co., Ltd
      Section 1 Important Note, Table of Contents and Definitions
    The board of directors, board of supervisors, directors, supervisors and
senior executives of the company warrant that the contents of this semiannual
report are true, accurate and complete and free of any false recordings,
misleading statements or significant omissions and will be jointly and severally
liable for the legal consequences.
    The company’s CEO Liu Chang, chief accountant Chen Xingyao and
person in charge of accounting organization (accountant in charge) Chen Jing
state that the financial report in the semiannual report is true, accurate and
complete.
    All directors of the company attended the board meeting deliberating this
report.
    Investors are advised to particularly note that the annual financial budget,
business plan and business objectives of the company for 2021 don’t represent
the profit forecast of the company for 2021 and that whether they can be
realized depends on many factors such as changed market condition and level of
effort of the operating team, with huge uncertainties.
    The company shall comply with the disclosure requirements set forth in
“Shenzhen Stock Exchange’s Industry Information Disclosure Guidance No.
1---Listed Companies Engaged in Livestock, Poultry and Aquaculture
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Businesses”.
    I. Epidemic and natural disaster risks
    The animal epidemic disease is the main risk faced in the development of
livestock industry. There are three kinds of risks arising out of the occurrence of
epidemic disease. First, the occurrence of epidemic disease is likely to result in
death of livestock, and leads directly to the reduction in yield, rising costs and
drop in prices. Second, the occurrence and prevalence of epidem ic disease on a
large scale easily influence the consumer psychology, lead to shrinking market
demand, and affect the feed production and operation. Third, after the outbreak
of some infectious epidemic diseases endangering the public health and safety,
the government will take lockdown and other measures to contain the spread of
epidemic disease. These epidemic containment measures will seriously hinder
the transportation of feed, animal healthcare products and live livestock, and the
workers returning to work, and have a great impact on the production and
operation of breeding industry. In addition, the outbreak of infectious epidemic
diseases will force most catering enterprises to close business, some agricultural
product markets to shut down, and consumers to reduce shopping activities
outdoors, resulting in reduced meat demand and consumption. For example, the
African Swine Fever (ASF) with an enormous impact on the entire industry
broke out in 2018. As the ASF is characterized by long latency and high
mortality after onset of the disease, and the effective and reliable vaccine has not
yet been developed successfully, coupled with the fact that it was also the
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concentrated outbreak on a large scale in China for the first time, both the
large-scale breeding enterprises and small farmers lacked effective containment
measures at the onset of epidemic, thereby suffering losses to varying degrees.
From the late 2020 to the first quarter of 2021, attenuated ASF virus bounced
back once again, especially hitting Hebei, Shandong, Henan and other places,
and once again causing prevalent effects to farming companies and farming
households in these areas.
    The COVID-19 outbreak at the beginning of 2020 also posed daunting
challenges to the livestock and poultry breeding industry in China. The
anti-epidemic measures such as lockdown, delay in return to work, suspension of
live poultry trading, and shutdown of slaughter houses led to unavailability of
feed to farms and livestock farmers, newborn livestock nowhere to sell, inability
to slaughter livestock and poultry, and difficulties to conduct breeding
production activities normally. After entry into 2021, despite the stable epidemic
containment situation in China, scattered episodes of the epidemic across the
country and regional lockdown policies would also cause hindrances to
movement of personnel and materials related to business operations.
    In terms of the natural disaster risk, the feed and slaughter are closely
related to planting and livestock breeding industry, so the natural disasters such
as temperature anomalies, drought, flood, earthquake, hail, and snow disaster
will all adversely affect the industry operation and development. The natural
disasters occurring on the production bases of the company and surrounding
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areas may cause substantial damages to production facilities or equipment, and
the natural disasters and extreme climate may also drive the prices of some feed
ingredients and meats up. For example, serious flood disasters broke out in
many places of South China in 2020, adversely affecting the planting, breeding,
farm produce logistics, project implementation and meat prices along the
industry chain to varying degrees: in terms of planting, continuous catastrophic
floods hitting some areas result in decreased output of feed ingredients, thus
impacting the feed ingredients prices, while at the same time decreasing the
quality of raw materials; in terms of breeding, flood might cause pathogenic
microorganisms buried in the land surrounding breeding farms to be exposed in
air and drinking water, and result in spread of pathogenic microorganisms and
trigger epidemic diseases. In addition, several provinces hardest hit by the floods
are major aquatic breeding areas in China, where the impact of floods not only
would destroy fishery production equipment but also is highly likely to wash off
fish-barring facilities and bring away fry and adult fishes, causing losses to
economic income of farmers and thus affecting feed ingredients sales of the
company; in terms of logistics, roads are flooded and roadbeds and road
surfaces destroyed wherever flood sweeps, forcing the freight costs of raw
materials, feed, finished products and breeding pigs to rise and the transport
capacity down, causing pressures on the supply chain of the company; in terms
of project implementation, continuous rainstorms also cause part of capital
investment construction projects of the company to suffer temporary shutdown,
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affecting the construction schedule; in terms of meat prices, flood would also
impact the meat supply and directly contributed to the rising prices of pigs,
while the gap in meat prices between affected areas and unaffected areas was
growing, thus leading to increased allocation and transport of hogs, and
resulting in spread of the pandemic to a certain extent.
    Risk countermeasures: In the face of animal epidemics, the livestock farms
planned and constructed by the company’s breeding base are normalized and
standardized farms staffed with professional breeding technologists and
equipped with strict anti-epidemic measures to effectively prevent and control
the occurrence of epidemic diseases. The company has also summarized some
experience and measures responding to major epidemic diseases through years
of exploration and accumulation, which allow the company to eliminates the
impact of various epidemics by adjusting the product mix when appropriate,
improving the product quality, conducting deep market development actively
and reducing the costs. Since 2014, the company has been guiding technicians to
better serve farmers by establishing animal healthcare laboratories in various
areas, creating the cloud-based animal healthcare system, and conducting the
monitoring and warning of epidemics and diseases in real time. In view of ASF
outbreak in 2018, the company formulated all-round and system-wide
prevention and control measures, covering existing self-run pig farms, fattening
farms in cooperation with farmer households, new pig farms of the company,
swine feed production units and internal animal healthcare laboratories, with a
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view to ensuring proper prevention and control at the source of animal nutrition.
Meanwhile, actively participating in industry exchanges and exploring more
effective containment methods with peers allowed the company’s bio-safety
epidemic prevention system, pig survival rate and marketing rate to achieve
industry-leading levels. From the end of the previous year to the first quarter of
this year, a new round of attenuated ASF outbreak in many northern provin ces
is characterized by extensive outside contamination, numerous channels of
spread, long latency periods and a long phase of effect, thus posing new
challenges to the containment measures formed by the industry based on the
past two years of ASF containment at the initial stage of the outbreak. However,
the company continued summing up its experiences and upgrading containment
and    decontamination    methods   in   the   containment         process,        including
whole-population serum double-antibody and double-screening, application of
thermal imagers, and static attenuation and disinfection of materials; and the
company added up its containment processes then subtracted so as to avoid
slackness resulting from prolonged and excessively trivial containment processes,
which helped restore normal production faster while ensuring containment, as
well as reduce bio-safety containment costs at the same time. With the aforesaid
measures, the number of ASF-affected farms at the end of the first half of the
year has been kept below 1%.
      In response to the COVID-19, the company lost no time to react, formulated
and carried out various containment policies and conducted emergency
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disposition in a coordinated manner. Secondly, the company actively
communicates with the government at all levels, coordinates the transportation
of goods such as livestock products, and raw and auxiliary materials of feed and
products, secures vehicle passes, and implements the green channel policy
enacted by the government at all levels. Thirdly, the company ensures sufficient
procurement for feed plants and production supply through region-wide
coordination, strengthens internal support for poultry industry integration,
arranges its employees to return to work rapidly and orderly, contributes to the
adequate supply of daily necessities across the country, adjusts its food industry
strategy in real time and expands sales through supermarket channel and online
channel. Fourthly, in light of its business practices, the company compiled the
epidemic containment manual, published documents such as technical guidance
on employee prevention and control and quarantine and guidance on
engineering   control amid     epidemics,   makes      the     epidemic         prevention
arrangements in a targeted manner and strengthens employee safety protection.
    In response to natural disasters, although unable to rule out the possibility
that serious natural disasters will occur in areas where its subsidiaries operate,
the company’s extensive business portfolio and presense both at home and
abroad help ensure that the company’s business will not be materially affected
when natural disasters occur in particular regions. Especially for the rainstorms
and floods in south China, which have occurred frequently in these years, the
company has accumulated a large wealth of experience, establishes proven
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contingency plans and maintains sufficient flood prevention supplies in stock at
all times, which allow the company to flexibly guide farmers through production
plan adjustments when the flood season begins in preparation for disaster relief
together. At the same time, the company can also take the advantage of its
nationwide presence to allocate funds, raw materials, equipment, and staff
timely and effectively to resume production as soon as possible and reduce the
losses caused by natural disasters.
    II. Risk of price fluctuations of feed ingredients
    The cost of main feed ingredients for feed production accounts for more
than 90% of total cost of feed production. In the past, the proportion of feed
business in the company’s revenue was large, but as the feed industry generally
adopts the cost-plus pricing method, the fluctuations in prices of feed ingredients
can be partly transmitted to the downstream breeding operations, to relieve the
pressure from the rising prices of feed ingredients. However, with a growing
percentage of livestock breeding business in the company’s revenue, the rising
prices of feed ingredients will have a growing impact on the company.
    Since 2020, due to many influencing factors such as the COVID-19,
changed purchase and storage policies and crop yield in main grain-producing
areas of various countries, the prices of main feed ingredients such as corn and
soybean meal continuously rose, with the average market prices of corn
approaching 3,000 Yuan per ton in early 2021. Coupled with the continuous
tension between China and the US, which brings great uncertainties to the bulk
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produce trade between the two countries and international trade of feed
ingredients in the future, the risk of price fluctuations will exist in the long term.
Moreover, against the background of longtime existence of ASF in China, the
feed enterprises will reduce some high-risk feed ingredients for the safety of
animal nutrition, such as usage of corn, pig blood, and pig bone me al, so as to
make the demand for raw materials concentrate on other types of raw materials,
which will also lead to rise in prices of such alternative raw materials.
     Risk countermeasures: The company is the largest domestic feed enterprise
with the scale advantages and a considerable say in the raw material purchasing.
The company started reorganizing and optimizing its raw material procurement
system in 2017, combed through its supplier system actively, established
strategic partnerships with many domestic and overseas best-run raw material
suppliers, conducted the supply chain financing of various forms actively, and
optimized its purchasing cost and related financial expenses. In 2019, the
company continued to drive transformations in terms of central purchasing of
raw materials, strategic purchasing channel optimization of partners,
acquisition of corn produced in northeast China, and purchasing model
upgrading, realizing a greater purchasing value despite the challenges. The
COVID-19 crisis in 2020 has caused phase-specific impact on the prices of feed
ingredients and feed additives, but the company applied hedging tools more to
control the ingredient price fluctuation risk, while the company’s technology,
purchasing, production and marketing departments worked closely with each
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other during the response to the pandemic, with these experiences already
summarized and applied into the daily operation management of the feed
business. In the first half of 2021, when prices of main feed ingredients such as
corn and soybean meal continuously fluctuated at high levels, the company
actively purchased imported low-price ingredients and alternative ingredients
such as wheat, sorghum and brown rice while properly anticipating the market
condition, in an effort to continually optimize ingredient costs.
    III. Risk of price fluctuations of livestock and poultry
    The finished products of livestock and poultry breeding business of the
company mainly include baby chick, baby duck, white -feathered chicken,
white-feathered duck, breeding pig, piglet, and hog. Especially since 2016, the
pig farming business of the company has been growing rapidly, with 8.29 million
hogs sold in 2020 and more than 500 million self-raised and outsourced
commercial generation chicken and ducks sold, which allowed the livestock and
poultry breeding to contribute greater to the entire revenue and profits of the
company. Along with the further growth of breeding volume of the company in
the future, the prices of livestock and poultry will affect the levels of revenue and
profits of the company even more remarkably.
    In the first half of 2021, the domestic livestock and poultry markets saw
remarkably delinking pork prices and low-level fluctuations of poultry prices. in
the first half of 2021, the marketing rate of hogs rose 34% year-on-year, and
fixed-point monitoring results at the end of the first half of the year showed that
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the fertile sows on hand grew 30% year-on-year, hogs on hand grew 29%
year-on-year and the prices of hogs fell all the way from 36 Yuan/kg in early
2021 to the lowest point of 12 Yuan/kg in June, a decrease of over 60%, even
falling back to the low levels before this pork price cycle began ascending in
March 2019 for a time. In terms of the poultry business, the rising market
condition in 2018 and 2019 resulted in industry overcapacity, as the
grandparental breeding hens on hand, parental breeding hens on hand and sales
volume of commercial-generation baby chicken across the country in the first
half of 2021 were all sustained at the highest levels in the past six years. On the
side of consumption, the rapidly declining pork prices coupled with weakened
consumption demand caused by the COVID-19 allowed poultry meat prices to
remain low for a long period of time, making it more difficult for the poultry
business to profit.
     Risk countermeasures: apart from the impact of sporadic epidemics, the
fluctuations in prices of livestock and poultry mainly depend on the periodic
increase and decrease in breeding and supply quantities. As a result, the process
of livestock and poultry prices going down itself is a process of the survival of
the fittest in the industry. Against this backdrop, the company still can generate
more revenue or suffer fewer losses than its rivals in the process of pric e decline
as long as it increases its breeding efficiency and makes its breeding costs lower
than its rivals. When some participants exit, the total supply declines and the
prices rise again, the company might gain a greater market share and a higher
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return on investment than before. In recent years, the company has been
committed to continuously increasing its breeding efficiency, and enjoying
industry leadership in terms of production of healthy young breeding poultry
and PSY and full cost of pig breeding, which will ensure that the company will
remain highly competitive during the price fall of livestock and poultry.
Although the company’s rapid scale expansion on its pig business in the past
year caused some of its competitiveness to be diluted temporarily, and some best
practices failed to be replicated in time at newly commissioned pig farms, along
with the company’s full transition to a stage of robust operation, the company is
gradually improving its business operation efficiency, reducing farming costs
and restoring its original competitiveness by enhancing its internal management
capabilities through many measures. On the other hand, unlike most of
agricultural and livestock companies, the company has slaughtering and food
processing business at the downstream part of farming and feed business at the
upstream part of farming, which happens to hedge against the farming process.
The price decline of livestock and poultry means that the cost of raw meat in the
slaughtering and processing businesses falls too and its profit margin will be
increased; the declining prices of livestock and poultry also mean the farming
volume of livestock and poultry is at high levels, which also helps increase the
profitability of feed business. Such an industry chain presence can moderately
mitigate the effects of declining prices of livestock and poultry on the company.
    IV. Impact of environmental protection policies
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    In 2014, China started implementing the Regulations on Pollution
Prevention for Large-scale Breeding of Livestock and Poultry, as the
government was strongly determined to keep livestock farms in line and new
regulations were enacted across the country to demolish livestock farms, ban or
restrict livestock farming activities. At the level of central government, the new
“Environmental Protection Law” was enacted in 2015; in 2016, the State Council
issued the “13th Five-Year” Ecological Environment Protection Program”, even
more specifically requiring “local governments to close or relocate livestock
farms (communities) and breeding households within the banned areas
according to law by the end of 2017”. In 2018, the first group of central
environmental protection inspectors conducted the “follow-up reexaminations”,
as the efforts to investigate pollution caused by livestock farms were intensified
across the country, ordering some breeding households to shut down for
environmental remediation or close once for all due to their livestock farming
facilities failing to meet the environmental standards or discharging wa stewater
beyond the set standards. These pressures from the environmental protection
policies will force some livestock and poultry farms failing to meet the
environmental standards to exit the market, and lead to reduced breeding
quantities, which impacted on the growth of feed business of the company and
its acquisition of hogs and poultry for slaughtering business. Some branches and
subsidiaries of the company fail to meet the environmental protection
requirements economically through hardware transformation, or no longer have
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the market basis due to being located in the banned areas, which will lead to
their shutdown. In the long run, however, the exit of these outdated capacities
for incompliance with environmental standards will allow the best-run
producers that remain in the industry to acquire higher profitability, which is
still of a positive significance to the entire industry.
     Risk countermeasures: in light of the changes of the breeding market, the
company makes every effort to maintain existing customers, and strengthens its
cooperation with medium and large-sized farms and farmers that meet the
environmental standards by changing its feed marketing model and making full
use of its industrialized supporting and integrated services . While exploring a
new way of breeding, the company regards ecology, environmental protection,
efficiency and safety as primary considerations in its project design, helps
farmers remodel and build sheds and stalls that meet the higher environmental
standards, increase the profitability of breeding business and actively drive the
domestic livestock and poultry farming industry to grow healthily. On the other
hand, the company actively grows its inventories by cultivating new livestock
and poultry farming bases in environmentally suitable areas through
construction, acquisition, joint venture and cooperation using its existing
business portfolio across the country, thus ensuring the stability of its breeding
resources.
     V. Risk of food safety
     Food safety concerns the physical health and life safety of the general public,
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and is even a matter of life and death for food companies. Occurrence of food
safety problems or accidents would cause food companies to face claims, actions
or related penalties in a way that even affects their brands and reputations,
thereby materially adversely affecting their business, financial condition, stock
prices or business performance. The implementation of the revised “Food Safety
Law” in 2015 also means that China has brought its focus on food safety to an
unprecedented level. The outbreak of ASF in 2018 raised even more demanding
requirements for food safety control. Although the ASF itself is not a zoonotic
disease and the pork with ASF virus is not harmful at all to humans after
conventional heating and cooking, as there is not yet fully effective containment
measure against ASF at present, and the pork and its products are one of the
main vectors of the virus, more costs are required to prevent and control ASF
during the process of hog recovery and slaughter, pork transportation and
vending. In 2019, the State Council issued the “Opinions on Deepening Reforms
and Strengthening Food Safety Efforts”, making clear the need to further beef
up food safety efforts and ensure the “safety on the dining table” of the general
public with the most rigorous standards, the most stringent oversight, the most
severe penalties and the most serious accountability.
    Risk countermeasures: the company has always been highly concerned
about food safety by seriously ensuring food safety in each link of its business
practices. In 2015, the company established its safety and environmental
protection department to ensure safety, health and environmental protection of
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its products, and upgraded the equipment in its “three-level” testing system,
expanded the laboratories of its branches and subsidiaries in terms of human
and material resources, guaranteed the allocation and input of funds, resources
and personnel across the food industry chain, which upgraded the food safety
organization management, equipment and facilities, process management and
key process control., So far, the company has created a food safety control chain
from feed, livestock and poultry breeding all the way to dining table. In 2014,
the “Beiyouzi” branded duck meat produced by the company was the first in
China to achieve end-to-end traceability; in 2015, Chengdu Xiwang Food Co.,
Ltd, a subsidiary of the company, became one of the second group of pilot
companies for implementation of the national standard of “food cold chain
logistics traceability management requirements”. In 2016, the company passed
the food technical standard certification by the British Retail Council (BRC),
and was elected the Vice President of the China Council at the first plenary
session of the Global Food Safety Initiative (GFSI) in China, becoming the first
Chinese private enterprise to be selected as a member of the global board of
directors of GFSI. In 2019, the 8th GFSI Focus Day China organized by the
company was held, marking the first time a private enterprise organized this
event since GFSI began holding the Focus Day China in 2012. At present, all
food businesses of the company have passed China-HACCP certification, and
more than 60 food companies are finishing the BRC and Global-GAP
certifications in succession. In addition, the company systematically explores the
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antibiotic-reducing and antibiotic-free possibilities in cooperation with multiple
parties   using   the GFSI platform resources, and actively drives                           the
popularization of antibiotic-reducing and antibiotic-free successful cases.
    VI. Risk of exchange rate fluctuations
    Currently, the global purchasing of raw materials for feed production is
going deeper, and the feed enterprises have been increasingly affected by the
exchange rate in terms of feed ingredients purchasing centered on foreign supply
such as corn, soybean, whey powder, fish meal and DDGS. At the same time, the
company has larger foreign operations than its Chinese peers, and in the foreign
investment and overseas operations, the cross-border capital transaction and
settlement amounts involved are growing, thus making the company more
vulnerable to exchange rate fluctuations. Since 2019, the bumpy China -US
relations caused the RMB/USD exchange rate to fluctuate frequently.
Throughout 2020, the RMB exchange rate showed a trend of fall before rise and
went down in a zigzag manner due to the impact of the COVID-19 in the first
half of the year, but a new round of rapid appreciation started as China was the
first to contain the pandemic and resumed work and business operations at a
quickened pace in the second half of the year. Such violent turbulences produced
impacts on the foreign exchange management of the company. Besides, in
certain overseas countries where the company operates, the exchange rate of
local currencies against USD depreciated remarkably due to the COVID -19,
political turbulence, and foreign exchange policy adjustments, which also
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produced an adverse impact on the company.
    Risk countermeasures: In response to the growing needs for overseas raw
material purchasing and investment and operation, the company started
building its Singaporean branch into an overseas commercial and trading center
and investment and financing center in 2016, actively conduc ted international
centralized purchasing of raw materials, foreign direct financing, supply chain
finance, foreign exchange risk management and raw materials purchasing risk
management on its Singaporean platform, in order to reduce the impact of
exchange rate fluctuations on its cash flow in overseas operations. Meanwhile,
the company further strengthened its close connection and communication with
overseas financial institutions, overseas agencies of the Chinese government and
host governments to analyze the trends of local currencies’ exchange rates in
host countries in time and ease the adverse impact of exchange rate fluctuations
by means of direct investment in local currencies abroad, etc.
    VII. Risk of human resources
    The risk of human resources to the company is mainly manifested in the
following four aspects. First, the pig farming scale of the company is now at a
phase of leapfrog development. As at the end of the first half of 2021, the
company’s pig farming team totaled 46,000 persons, and management radius of
the company also increased as a result, therefore, there are tremendous
pressures and challenges in terms of rapidly training and retaining a large
number of qualified pig farming workers. If the personnel recruitment, training
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and retention prove inadequate, potential risks will arise for the subsequent pig
farm management and operation. Second, as the company transforms from a
traditional agricultural and animal husbandry enterprise to a agricultural,
animal husbandry and food integrated enterprise, the company will face the risk
of insufficient reserve of high-caliber operation and management personnel in
new business domains and of personnel in food retail, engineering technology, IT
and other emerging fields. Third, along with the rising human cost, employee
compensation has become an important factor in cost increase of the company.
Fourth, as a leading enterprise in China’s agricultural and animal husbandry
industry, the company has cultivated a large number of outstanding employees
in its multiyear history, but the competition for human resources is intensifying
due to the increasing competition in the industry and entry of new players of
different backgrounds into the industry over the past years, meaning the brain
drain will cause losses to the company and subsequently affect the sustainable
development of the company.
    Risk countermeasures: the company has looked at talent cultivation and
organizational activation as a long-term strategic task of the company. In terms
of recruiting talented pig farmers, the company expanded its recruitment
channel beyond college graduates majored in agriculture and animal husbandry
to recruit non-specialized college graduates and veterans. In terms of pig farmer
training, the company broke down daily production processes according to
standards and internalized them using IT means. It offers specialized courses of
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different levels for general manager, farm managers all the way down to the
newly recruited frontline workers through in-house pig farming universities and
pig industry research institutes that offer high-frequency learning, training and
teaching possibilities. Moreover, through the modern apprenticeship system
inside pig farms and one-to-one mentoring and reinforcement by sophisticated
employees, the time to cultivate new employees has been greatly shortened. The
company further perfected its pig industry talent motivation system, whereby
personnel at all levels in pig industry will receive industry-leading economic
return based on their value output. In addition, in order to reduce the pressure
on human cost, the company intensified its efforts to carry out projects such as
pig farming in multistory buildings, intelligent pig farms and things of internet,
which will significantly increase its effic iency of personnel utilization.
     The company also intensified its efforts to recruit talented people in
strategic, new businesses, while actively conducting cross-industry training and
learning to enrich the knowledge structure and capability structure of its
existing personnel. The company realized a continuous increase in per capita
efficiency by efficiency improvement, lean management, optimization of
industry chain design and organization flattening; created the professional
manager development channel with survival of the fittest by constructing the
competition, selection and elimination mechanisms; and creates the growth
community of employees and the company by constructing reasonable
evaluation and incentive mechanisms and value sharing mechanisms. In 2019,
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the company implemented its restricted stock and stock option incentive plan for
the first time to motivate its key technologists and key members of pig farming
teams more for increased cohesion and corporate competiveness and to fully
motivate senior management personnel a part of key employees of the company
at work.
     The company plans not to distribute cash dividends or allot bonus shares or
transfer its capital reserve to share capital.
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                                                  Table of contents
Section 1 Important Note, Table of Contents and Definitions........................................................ 2
Section 2 Company Profile and Key Financial Indicators ........................................................... 26
Section 3 Manage ment Discussion and Analysis ........................................................................... 29
Section 4 Corporate Governance .................................................................................................... 72
Section 5 Environmental and Social Responsibilities ................................................................... 75
Section 6 Significant Events .......................................................................................................... 181
Section 7 Changes in Shares and Information about Shareholders .......................................... 222
Section 8 Details related to Preferred Shares .............................................................................. 232
Section 9 Details related to Corporate Bonds .............................................................................. 233
Section 10 Financial Report .......................................................................................................... 237
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                                                                   2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                 List of Reference Documents
(I) Financial statements signed and stamped by the chief executive officer, person in charge of accounting and
head of accounting organization (chief accountant) of the company.
(II) Originals of all corporate documents and manuscripts of announcements publicly disclosed on China Securities
Journal, Securities Times, Shanghai Securities News and Securities Daily during the reporting period.
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                                                                          2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                                   Definitions
                     Term                    Refers to                                Definition
This company, the company, listed company,
                                             Refers to New Hope Liuhe Co., Ltd
New Hope
CSRC                                         Refers to Securities Regulatory Commission
Sichuan CSRC                                 Refers to Sichuan Office of Securities Regulatory Commission
SZSE                                         Refers to Shenzhen Stock Exchange
CSDC                                         Refers to China Securities Depository and Clearing Co., Ltd
NAFMII                                       Refers to National Association of Financial Market Institutional Investors
Company Law                                  Refers to Company Law of the People’s Republic of China
Securities Law                               Refers to Securities Law of the People’s Republic of China
New Hope Group                               Refers to New Hope Group Co., Ltd
South Hope                                   Refers to South Hope Industrial Co., Ltd
China Minsheng Bank                          Refers to China Minsheng Banking Corp.
New Hope Chemical                            Refers to New Hope Chemical Investment Co., Ltd
                                                         Lhasa Economic and Technological Development Zone Beishuo
Beishuo Investment                           Refers to
                                                         Investment Center (L.P.)
Finance Company                              Refers to New Hope Finance Co., Ltd
Liuhe Group                                  Refers to Shandong New Hope Liuhe Group Co., Ltd
Polaris Bay                                  Refers to Polaris Bay Co., Ltd
Hope Group                                   Refers to Hope Group Co., Ltd
Besun Agricultural                           Refers to Yangling Besun Agricultural Industry Group Co., Ltd
The 2019 incentive plan                      Refers to The 2019 restricted stock and stock option incentive plan
The 2021 incentive plan                      Refers to The 2021 restricted stock incentive plan
                                                                                                                          25
                                                                                    2021 Semiannual Report of New Hope Liuhe Co., Ltd
                Section 2 Company Profile and Key Financial Indicators
I. Company Information
      Stock abbreviation                        New Hope                              Stock code                        000876
   Stock exchange on which
                                                                         Shenzhen Stock Exchange
         stock is listed
Chinese name of the company                                             新希望六和股份有限公司
  Chinese abbreviation of the
                                                                                  新希望
      company(if any)
 English name of the company
                                                                      NEW HOPE LIUHE CO., LTD.
            (if any)
  English abbreviation of the
                                                                                  NEW HOPE
       company (if any)
  Legal representative of the
                                                                                  Liu Chang
            company
II. Contact persons and contact details
                                                              Board secretary                       Securities affairs representative
                     Name                                         Lan Jia                                      Bai Xubo
                                               11F, Block T3A, Wangjing SOHO Center, 11F, Block T3A, Wangjing SOHO Center,
                Contact address                   No. 10, Wangjing Street, Chaoyang                No. 10, Wangjing Street, Chaoyang
                                                              District, Beijing                             District, Beijing
                       Tel                                 (010)53299899-7666               (010)53299899-7666 (028)85950011
                       Fax                                   (010)53299898                              (010)53299898
                     Email                                  000876@newhope.cn                             baixb@newhope.cn
III. Other details
1. Company’s contact details
Whether the company’s registered address, office address, post codes, company website and email address have changed during the
reporting period
□ applicable   √   not applicable
There is no change to the company’s registered address, office address, post codes, company website or email address during the
reporting period, as detailed in the 2020 annual report.
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                                                                                  2021 Semiannual Report of New Hope Liuhe Co., Ltd
2. Information disclosure and filing place
Whether the information disclosure and filing place have been changed during the reporting period
□ applicable    √   not applicable
There was no change to the name of information disclosure newspaper selected by the company, the website address of the website
designated by CSRC for publication of semiannual reports or the filing place of the company’s semiannual reports during the
reporting period, as detailed in the 2020 annual report.
IV. Key accounting data and financial indicators
Whether the company needs to retroactively adjust or restate the accounting data of previous years
□ yes   √ no
                                                                                                            Increase or decrease in this
                                                                             The same period of the
                                                This reporting period                                      reporting period from the same
                                                                                  previous year
                                                                                                            period of the previous year
Business revenue (Yuan)                              61,518,574,560.67              44,696,040,364.08                             37.64%
Net profits attributable to shareholders of
                                                      -3,415,066,136.23              3,163,865,460.00                           -207.94%
the listed company (Yuan)
Net profits attributable to shareholders of
the listed company after deduction of                 -2,304,738,918.62              3,283,676,864.54                           -170.19%
non-recurring profit and loss (Yuan)
Net cash flows from operating activities
                                                      -4,596,606,685.74                658,593,331.58                           -797.94%
(Yuan)
Basic earnings per share (Yuan/share)                               -0.79                          0.76                        -203.95%
Diluted earnings per share (Yuan/share)                              -0.78                          0.75                        -204.00%
Weighted average ROE                                                -9.28%                        11.16%                    20.44% down
                                                                                                           Increase or decrease at the end
                                                 End of this reporting
                                                                             End of the previous year       of this reporting period from
                                                           period
                                                                                                            the end of the previous year
Total assets (Yuan)                                 132,387,884,782.28             109,443,465,562.15                             20.96%
Net assets attributable to shareholders of
                                                     37,195,108,119.35              39,846,334,135.68                              -6.65%
the listed company (Yuan)
V. Differences in accounting data under domestic and overseas accounting standards
1. Differences between the net profit and net assets disclosed in accordance with international accounting
standards and Chinese accounting standards in the financial report
□ applicable    √   not applicable
The company had no difference in net profits and net assets in financial reports disclosed under both international accountin g
standards and Chinese accounting standards during the reporting period.
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                                                                                    2021 Semiannual Report of New Hope Liuhe Co., Ltd
2. Differences between the net profit and net assets disclosed in accordance with overseas accounting
standards and Chinese accounting standards in the financial report
□ applicable   √   not applicable
The company had no difference in net profits and net assets in financial reports disclosed under both overseas accounting standards
and Chinese accounting standards during the reporting period.
VI. Items and amounts of non-recurring profit and loss
√ applicable   □ not applicable
                                                                                                                             Unit: Yuan
                                                Item                                                               Amount
Profit and loss from disposal of noncurrent assets (including the charged-off portion of the
                                                                                                                         -845,492,806.46
accrued provision for asset impairment)
Government grants charged to current profit and loss ((excluding government grants given in
the Company’s ordinary course of business at fixed quotas or amounts as per government’s                                109,067,178.52
uniform standards)
Investment costs for acquisition of subsidiaries, associates and joint venture less than gains
                                                                                                                                 320,326.09
from the fair value of identifiable net assets of the investees
Except for the effective hedging activities related to the Company's ordinary activities, profit or
loss arising from changes in fair value of financial assets held for trading, derivative financial
assets, financial liabilities held for trading, and derivative financial liabilities, and investment                       -17,631,335.35
income from disposal of financial assets held for trading, derivative financial assets, financial
liabilities held for trading, derivative financial liabilities, and other debt investments
Reversal of impairment provision for receivables and contract assets subjected to separate
                                                                                                                            12,461,280.08
impairment test
Other non-operating incomes and expenses other than the aforesaid items                                                  -402,425,817.82
Other items of profit and loss that conform to the definition of non-recurring profit and loss.                                        0.00
Minus: effect of income tax                                                                                                  3,990,494.71
     effect of minority interests (after tax)                                                                              -37,364,452.04
Total                                                                                                                   -1,110,327,217.61
For non-recurring profit and loss items defined by the company according to the “Explanatory Announcement No. 1 on Information
Disclosure for Companies Offering their Secur ities to the Public– Non-recurring Profit and Loss”, and for defining the non-recurring
profit and loss items enumerated in “Explanatory Announcement No. 1 on Information Disclosure for Companies Offering their
Securities to the Public– Non-recurring Profit and Loss” as recurring profit and loss items, the reasons shall be explained.
□ applicable   √   not applicable
During the reporting period, there was no circumstance in which the company defined the non-recurring items of profit and loss as
defined and enumerated in the “Explanatory Announcement No. 1 on Information Disclosure for Companies Offering their Securities
to the Public– Non-recurring Profit and Loss” as items of recurring profit and loss.
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                                                                                 2021 Semiannual Report of New Hope Liuhe Co., Ltd
                         Section 3 Management Discussion and Analysis
I. Main operating activities of the company during the reporting period
     The main businesses that the company operates include feed, white-feathered poultry, pig farming and food processing and
distribution.
     (I) Feed business
     Feed can be classified into three main categories, and they are premix, concentrates and compound feed according to the
nutritional ingredients contained. Premix feed is the mixture of various nutritional additives such as vitamin, mineral substa nce and
amino acid; feed concentrate is with further addition of various animal and vegetable proteins into premix feed; compound feed is the
combination of feed concentrate and additional energy-based raw materials. In terms of the final nutritional needs and formulation,
the amount of nutritional additives required is small but its per-unit value is high, and the energy-based raw materials have a low unit
value but the quantity required is signicant, while the protein-based raw materials fall between the two when it comes to per-unit
value and quantity requirement. Among 250 million tons of feeds nationwide in 2020, the premix feed only accounted for about 2.4%,
and the concentrated feed about 6%, and the compound feed more than 91%. What is produced by the vast majority of feed produc ers
is compound feed. Large companies have large demands for premix feed and concentrated feed due to their large outputs of
compound feed, so they generally would produce premix feed and concentrated feed themselves. The small and medium-sized
companies only produce compound feed due to the smaller scale of their operations, and they purchase required premix or
concentrated feed from large feed businesses or other independent premix producers. Some farmers of considerable scale would also
purchase premix or concentrated feed directly, and then blend it with protein-based and energy-based raw materials for their own use
on farm. The feed business of the company covers premix and concentrated feed as well as compound feed, of which the premix and
concentrated feed are sold directly to external customers as well as comfound feed plants that are internal to the business.
      The feed can also be divided into poultry feed, swine feed, aquaculture feed, and ruminant feed according to animal species.
Among the feed yield nationwide in 2020, the poultry feed, swine feed, aquaculture feed and ruminant feed accounted for 50%, 35%,
8% and 5% respectively. The scope of the company’s feed business covers all the aforementioned categories. As the company has a
downstream business of raising white-feathered poultry and pigs, the poultry feed and swine feed produced by the company are made
available to downstream contract farmers and in-house livestock farms in addition to being sold to external customers. The
aquaculture feed and ruminant feed produced by the company are sold to external markets.
     The main parts of feed business operations include technology development, raw material procurement, production and
processing, and sales service, usually simply referred to as “technology, procurement, production and sales” . The interaction between
technology and procurement is the closest. This is because the raw material cost of feed products accounts for 80-90% of selling
price, and the ability to procure raw materials at a competitive cost is one of key success factors. However, the raw material
procurement should take the nutritional needs into account, rather than only considering the cost. There are hundreds of raw material
types, resulting in thousands of combinations and feed formulae. Companies need to design the most cost-effective formula that
meets the specific nutritional needs according to the nutrient contents and costs of different raw materials at a given time, thereby
making appropriate procurement decisions. The production and processing parts mainly focus on production efficiency and product
quality. The sales service part mainly focuses on business development and maintenance, sells customized products to different
customer groups, helps farmer households enhance the breeding performance through additional services, optimizes the cost and
efficiency of the distribution process, and feeds back customer needs and product problems to the technology research and
development department in time to form good interactions.
     In recent years, the domestic feed industry has entered the mature stage, as the growth rate of national feed yield from 2015 to
2020 was 1.4%, 4.5%, 5.9%, 2.8% and -3.7% and 10.4% respectively on a year-on-year basis. With the steadily growing total
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                                                                                2021 Semiannual Report of New Hope Liuhe Co., Ltd
quantity, the feeds for different animal species would show different growth trends due to different impacts of long-term,
intermediate term as well as short industry-specific cycles. The long cycle refers to the cycle of industrial upgrading and technical
progress, for example, the poultry feed with a higher degree of downstream large scale farming, a higher pene tration rate of
compound feed and relatively more mature technology has slower overall growth than the swine feed and aquaculture feed in recent
years. The intermediate term cycle refers to the cycle of supply-demand relation and price changes of livestock and poultry products,
as the periodic increase and decrease in breeding quantity of a particular type of animal downstream will affect the increase and
decrease of sales volume of the corresponding feed type upstream. The short cycle refers to the natural disasters and animal
epidemics that affect specific animals. For example, H7N9 flu affected poultry feed in the first half year of 2017, and African swine
fever (ASF) has a significant impact on swine feed from the mid-2018 up to now. Another good example is natural disaster including
the rainstorms and floods in the southern China that affected the aqua feed market in 2017, and. In 2019, under the influence of ASF,
the swine feed output nationwide decreased by 26.6% year-on-year. In 2020, the Chinese government actively encouraged the
recovery of pig farming and swine feed output rose again as, by 16.4% year-on-year, reaching 86% of the level of 2018. In the first
half of 2021, swine feeds bounced back across the board, rising by more than 70% year-on-year and beyond the pre-ASF levels.
     The competition has become increasingly fierce as the industry matures. On one hand, each company has a solid position in
their existing business and specialty and strives to innovate. On the other hand, they are extending their business across the industry
chain to optimize their strategic positioning. In terms of technology research and development, has given rise to the development of
bio-environmentally friendly feeds, while aquaculture feed is being upgraded from sinking granulated feed to floating expanded feed.
In other feed categories, more specialised feed types and formulae have emerged that are specific to the various phases of feeding. In
terms of raw materials procurement, companies continuously explore new raw materials and are looking to achieve a more
diversified mix. While for the traditional commodity type of materials , businesses, through various means including strategic
partnership, equity investment and in-house operations, to secure the production capacity of their upstream production sites, and the
procurement of those materials is also aided with big data, futures and other financial instruments to improve efficiency and precision,
particularly when it comes to timing. In terms of production and processing, more efficient and agile logistics can support the
transportation of a larger radius, thus giving rise to more and more feed factories with larger capacities. Companies then improve
efficiency through more centralized large-scale production, while at the same time enhancing the quality through specialized
workshops or production lines. In terms of sales service, companies provide various types of value-added services to farmers in
addition to selling feed products. Some good examples are technical guidance, animal healthcare & veterinarian services, financing
support, information & insights service, and livestock and poultry sales. The value-added services help strengthen the customer
relationship, shorten the sales & distribution process, increase the ratio of direct supply, and increase the breeding efficiency and
income.
     In terms of the upstream and downstream extension of the industry chain, companies can expand towards upstream operations
like raw material planting and trade , while some expand downstream to incorporate breeding, slaughter or food processing. Due to
the difference between pig and poultry industries (see the description in the white-feathered poultry business for details), many of the
poultry feed producers extends downstream to include poultry breeding and slaughtering a while back. In comparison to poultry,
swine feed producers extends to the pig breeding and slaughtering much later. But in the recent two pork price cycles, such extension
is becoming more common, especially in the wake of the ASF. Such extension to the downstream reflects the desire of feed producers
to control the downstream breeding and consumer needs, so that they can gain the profits from the downstream while ensuring the
upstream feed capacities can be fully utilized. The reason behind this lies in the shift of supply-demand relation across the industry
and gradual scale-up of the downstream breeding operations, as the focus of industry value gradually changes from the feed
operations in the past to the downstream breeding and food production.
     Be it the enhancement and innovation of existing business or extension of the upstream and downstream of industry chain, they
all need to be supported by the overall competence of companies. Due to greater comprehensive strength, large companies tend to
have increasingly obvious advantages in the competition and growing market shares, thus leading to gradual increase in the market
concentration. From 2013 to 2019, the toal number of feed producers nationwide dropped to more than 7,800 from more than 10,000,
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                                                                               2021 Semiannual Report of New Hope Liuhe Co., Ltd
while the number of producers with larger per-plant output continuously grew. The total number of producers with annual output of
more than 0.1 million tons per plant in 2020 was 749, and is 128 more than the total number in 2019. The combined output of the
large produces accounted for 52.8% of the industry’s production, with a year-on-year growth rate of 19.8%, which is above the
industry growth rate. The ASF in 2019 had further accelerated the reshuffle and consolidation of the industry. Compared with the
large companies, small and medium-sized feed producers are weak in terms of technology, bio-safety and other aspects, and sell their
products mostly to family farms and small-scale free-ranging households, the latter of which are more affected by ASF, so that the
small and medium-sized feed producers are more affected than their large counterparts. Large companies will face more market
spaces after surviving the impact of ASF.
     The feed business of the company has been the largest in the domestic feed industry for many years, with the poultry feed
business ranking first nationwide, swine feed and aquaculture feed ranking among top three nationwide, and ruminant feed also holds
a leading position nationwide. The company leads the industry to embrace the changes by relying on its leading position, and
strengthens its product power, purchasing power, productivity and service ability constantly, by launching biological
environment-friendly feed and antibiotic-free feed, eliminating the outdated capacities, and building high-output benchmarking
plants. On this basis, it actively pursues business extension accross industry chain and explores transformation and upgrading of its
business model. On one hand, we make full use of the downstream industry chain foundation, actively develop the integrated projects
of feed – breeding – slaughter, actively invest in and acquire food-related operations, and they have steadily promote our
transformation from a feed producer to a breeder and food producer. On the other hand, the company was the first in the industry to
launch the project of “everything flourishing” (poultry flourishing, pig flourishing, fish flourishing, cattle flourishing, s heep
flourishing) to provide technical and financial services to farmers, as well as the swine managemenet service targeting large pig
farms. We set up breeding training management companies or breeding service companies to facilitate the direct engagement wit h
large farms or farmers, and in the meantime, we also develop our financing guarrantee services steadily, and the two operations
jointly promote the development of feed business.
     (II) White-feathered poultry business
     The white-feathered poultry refers to large white-feathered broilers and white-feathered meat ducks, characterized by short
growth cycle and high feed conversion ratio. More than 4 billion white-feathered broilers and about 3 billion white-feathered meat
ducks are slaughtered in China every year, and with another 3 billion yellow-feathered broilers, they make up the main source of
poultry meat consumption in China. The white-feathered poultry business includes breeding poultry propagation, commercial
generation poultry breeding, poultry slaughter, and processed poultry meat. As the large-scale and industrial development of
white-feathered poultry industry started early and is now highly mature in China, coupled with the fact that the number of single
slaughtering batch of white-feathered poultry bred is large, it generally needs to work with the large-scale slaughter operations.
Therefore, numerous companies tend to fully intergrate the end-to-end industry chain in their operations, “poultry feed – commercial
poultry breeding – poultry slaughter” or what it is called in the market, “a fully integrated model”. A small number of large
companies would also further extend in the breeding poultry upstream and prepared poultry meat downstream respectively, so as to
form a more complete industry chain.
     The breeding poultry propagation operations can be divided into breeding and breeder farming. Breeding refers to selective
breeding of high intergenerational good stock, while breeding poultry farming refers to expanding propagation of good breeds
selected, and output of commercial generation baby chicks and baby ducks. The breeding part has very high technological
complexity and needs long-term research and development accumulation. At present, it is mostly controlled by foreign pountry
breeding techonology companies, although some domestic leading companies have made breakthroughs in recent years, by
developing chickens and duck breeds that are of their own proprietary intellectual property. It is much more technologically
sophisticated than the commercial breeding, and it requires significant capital investment, particularly when it comes to breeding
poultry farms and breeding egg hatcheries, so it is generally invested and accomplished by companies instead of individual farmers.
As for the domestic white-feathered poultry industry, in terms of breeding poultry, great grandparent is introduced mostly from
foreign specialized breeding poultry companies, before carrying out the expanding propagation of grandparents and parents in China,
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and then outputting the commercial generation baby chicks and baby ducks. However, as for particular companies, it mainly consists
of two categories. Most companies still focus on the downstream of the industry, especially the commercial generation breedin g and
slaughter, and extend the upstream breeding poultry cultivation only to the parent generation, and output the commercial generation
baby chicks and baby ducks for self use, although some of them will further extend to the grandparent generations for breeding. A
small number of specialized breeding poultry companies lay particular emphasis on the upstream, focus on introducing fine varieties
from abroad, and sell the baby chicks and baby ducks after expanding propagation in China, without getting involved in the
commercial generation breeding.
     There are two main models involved in the commercial generation breeding, i.e., integrated company-run breeding and breeding
through cooperation between company and farmer households. The integrated company-run breeding means the commercial
generation chicken and duck breeding is run by a company itself, who ultimately slaughters and sells the chicken and ducks; the
breeding through cooperation between company and farmer households means a company provides or sells commercial generation
baby chicken and ducks to farmer households and ultimately recovers the adult chickens and ducks for slaughtering. According to the
settlement mode and the ownership of chickens and ducks as agreed in the contract, i.e. whether chickens and ducks are owned by
the company or farmer households, or whether the baby chicken and ducks are provided or sold by the company to farmer
households, the company-farmer cooperative breeding can be further divided into traditional contract breeding model and outsourced
breeding model. Whether a company chooses to run the commercial generation breeding on its own or not is related to the technical
attributes of this operation. Due to shorter growth cycle and faster turnover speed of the poultry than those of pigs, the fa rming
technology for the poultry is less technically difficult than pig farming, and the single-farm investment threshold is also relatively low.
Thus, the domestic poultry farming industry started earlier and is more mature and larger than the pig farming industry. As a result,
during the process of commercial ge neration breeding alone, there is usually no obvious difference in technology and efficiency
between companies and farmer households. The significance of companies choosing to operate commercial generation breeding
alone lie more in higher requirements raised by the downstream food industry, i.e. the upstream breeding operations are controllable
from the beginning to end so as to ensure the food safety. However, in recent years, stricter environmental regulation has br ought
new changes, as some commercial generation breeding companies or farmer households have to limit or stop production activities or
even exit the industry due to being located in banned areas or incompliance with environmental standards despite being locate d in
areas restricted or suitable for breeding. Therefore, the existing participants or new entrants in the industry must first ensure they
operate in the areas suitable for breeding, and then need to input more resources in the sheds, environmental protection and other
aspects. In order to adopt new environment-friendly technologies and sheds, even those companies sticking to the “company +
farmer” cooperative breeding model also need to build some sheds, adopt new technology and then play a demonstrative role by
running breeding operations themselves before popularizing them to farmers.
     The capital investment in the poultry slaughter part is huge and is generally accomplished by companies. As described earlier ,
most poultry slaughtering plants would form the industry chain complementation with the upstream poultry breeding and even
poultry feed operations, focus on or preferentially recover the commercial generation chickens or ducks raised by themselves alone
or in cooperation with farmer households, but in some areas, the commercial generation chickens or ducks bred and sold by
independent farmers in the market would also be flexibly recovered in consideration of reducing the raw material costs and operating
costs based on the market quotations. At the same time, there are some poultry slaughter companies in the industry who possess no
breeding facilities and feed upstream, but purely rely on recovering the commercial generation chickens or ducks in the marke t for
slaughtering, thus making profits by acquiring at a low price and selling at a high price, and by taking advantage of the incomplete
synchronization between the quotations of commercial generation chicken and duck markets and those of chicken and duck meat
markets. But such business model is unstable, and many companies often suffer great losses due to misjudgment of market
quotations.
     As poultry farming in China is more mature and large-scaled than pig farming, the poultry industry did not see apparent trends
of greater corporate investment in place of household farming in recent years like the pig industry did. What’s more commonly seen
is the normal industry cycle or ups and downs caused by unexpected epidemic factors, leading to capacity expansion and reduct ion of
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companies and large-scaled farmer households to varying degrees, but the overall industry structure and market shares of leading
players remain stable compared with     the pig industry. An effect that materially affected the industry structure in recent ye ars is the
strict environmental regulation in summer of 2017, where demolition of a large number of breeding sheds for substandard
environmental protection facilities and drastically reduced capacities of poultry breeding resulted in the capacity shortage of poultry
breeding since 2018 and the rising prices and profit recovery in terms of poultry breeding. The shortage of pork caused by ASF drove
the alternative supply of poultry meat since the beginning of 2019. Although the poultry breeding quantities have been at a h igher
level than the past years, the poultry industry was in a booming state with high prices and profitability throughout the year. But along
with the gradual stabilization of the ASF situation, the hog capacities nationwide bounced back gradually, which, coupled with the
weakened demand due to the COVID-19, caused the poultry cycle to show apparent downward trends faster than pork price cycle, as
the prices of commercial generation baby chicken and baby ducks started falling remarkably after peaking for recent two years in
2019, by 64% and 72% respectively in 2020,and the prices of baby chicken and baby ducks showed different situations in the first
half of 2021 by falling by 5.73% year-on-year and rising by 101% year-on-year respectively, as opposed to a 8% and 13% increase in
prices of non-slaughtered chicken and ducks year-on-year. Therefore, the white-feathered poultry industry still needs to improve all
parts of the industry chain in order to overcome the impact of cyclic fluctuations of poultry. In the short run, the important
opportunities for the industry is to accommodate the requirements of environmental protection upgrading and actively control
commercial generation breeding bases that meet the environmental requirements, starting with environment-friendly renovations and
shed upgrading, thereby realizing control over supply quantity and cost, food safety and production rhythm of commercial generation
breeding operations; in the long run, the industry still needs the synergy between breeding and slaughtering operations, so a s to
realize the channel upgrading on the sales end and enable high-standard input in the breeding operations to obtain a higher-premium
return in the poultry meat sales.
     In terms of breeding poultry propagation, the company is the largest supplier of parental baby ducks and the second largest
supplier of commercial generation baby chicks and baby ducks in , enjoying industry leading technologies especially in the field of
breeding duck propagation. The company cooperates with the Chinese Academy of Agricultural Sciences, and elaborately selected
and bred the “Zhongxin” Beijing Duck in view of the characteristics of domestic consumption of ducks, which received the
certificate of new breed of livestock and poultry (complete set line) issued by China National Commission of Animal Genetic
Resources in April 2019, followed by official marketing. Part of baby chicks of the company are sold to other vendors, and the other
part are used for its downstream commercial generation breeding. The baby ducks are mainly used for the downstream commer cial
generation breeding of the company. In the first half of 2021, the company furthered its digital management of breeding poultry and
continued enhancing its industry competitiveness in cost, quality and technology research and development of baby chickens and
baby ducks.
     In terms of commercial generation breeding, the company currently focuses on the “company + farmer household” cooperative
breeding model, and is upgrading from the traditional contract breeding model to the outsourced breeding model, while gradually
intensifying its efforts of in-house, integrated commercial generation breeding in areas where conditions permit. The ownership of
commercial generation chickens and ducks in the outsourced breeding model and in-house integrated breeding model belongs to the
company and is charged to its production and sales volume of poultry breeding. The total quantity of commercial generation ch icken
and ducks bred in the aforesaid two models has exceeded 440 million. In terms of the source of baby poultry, the outsourced breeding
and in-house integrated breeding operations would first choose the baby poultry produced by the company, while the company also
purchases baby poultry from other vendors in the traditional contract breeding model.
     In term of poultry slaughter, the company has been ranking first in the industry for many years with its annual slaughtering
quantity of about 750 million poultries and poultry meat production and sales volume of about 2 million tons every year. The “Liuhe”
branded poultry meat under the flag of the company was the designated poultry meat for Shanghai World Expo 2010 and the Qingdao
Summit of Shanghai Cooperation Organization Qingdao 2018, enjoying a strong brand influence. Due to large production and sales
volumes, the poultry meat slaughtered and produced by the company has been sold mainly through the traditional trade mode of
wholesale markets for a long time. The wholesale market channel can help digest the enormous yields upstream, but is detrimental to
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establishing the brand image and gaining a larger value space for the poultry meat products of the company in the long run. Therefore,
the company has been vigorously advancing the poultry slaughter business to implement the strategic transformation since 2014, by
intensifying the short-distance fresh product sales, and expanding the connection with multiple emerging channels such as
downstream food processors, supermarket chains, and restaurant chains, reducing its dependence on wholesale market channel, a nd
promoting the channel upgrading.
     (III) Pig farming business
     The pig farming has much in common with poultry breeding in various intergenerational production processes, i.e. division of
work between domestic and overseas companies. The pig farming business includes breeding pig propagation and commercial pig
fattening. The breeding pig propagation can be subdivided into breeding and breeding pig farming. Breeding specifically refer s to
selection and breeding of high intergenerational good stock, while breeding pig farming refers to further expanding propagation of
original breeding pigs, and output of boar semen, sows, and commercial generation piglets. The breeding of pigs also needs
long-term research and development accumulation due to very high technological complexity. At present, it is mostly controlled by
foreign specialized breeding pig companies, although some leading companies in China have made breakthroughs in recent years.
However, most domestic companies only introduce the great grandparental pigs from foreign suppliers and carry out the expanding
propagation of grandparents and parents in China, without setting foot in the upstream breeding operations. In this regard, some of
them are specialized breeding pig companies, who directly sell the breeding pigs and piglets to other companies after expanding
propagation of great grandparental pigs introduced abroad, without setting foot in the commercial generation breeding. Some other
cases are extension made by large commercial generation pig companies towards the breeding pig cultivation operations upstream in
order to ensure in-house availability of breeding pigs and piglets, with the parental breeding pigs and commercial generation piglets
produced for their own use. To ensure availability of piglets to themselves, some farmer households would also participate in the
parental breeding operations, i.e. they purchase the parental sows and boar semen from companies and then propagate piglets
themselves. This is different from the fact that the farmer households only breed the commercial generation poultry in the poultry
farming, instead of breeding poultry. Even so, more and more farmer households are exiting from the parental breeding operations
gradually. This is mainly because the large companies engage in large-scale and intensive piglet production along with development
of the breeding technologies, demonstrating obvious efficiency differences compared with the piglet breeding by farmer households
themselves. This is embodied in the most common indicator PSY in the industry. In years before the ASF outbreak, the average PSY
of the entire industry was about 17, PSY of large companies is generally over 20, and the average PSY of self propagation and self
breeding by farmer households is about 15. After the ASF outbreak, due to the impacts of the epidemic and extensive use of ternary
sows resulting from rapid recovery of production, the PSY of the entire industry in the past two years decreased a whole, but the
difference in this regard between major companies and farmer households still exists. During the fattening process of commercial
pigs, companies are also considerably different from with the farmers in technology and efficiency, but such difference in ef ficiency
is not as large as it is in the piglet production operations. Coupled with the fact that self-built fattening farms also require additional
huge investments of fixed assets, which are detrimental to rapid asset-light expansion, large companies engaged in breeding and
piglet production and farmer households focused on the fattening process constitute an allocation with the optimal efficiency formed
so far in the industry.
     There are also two main models in the commercial pig fattening process, i.e., in-house integrated breeding and “company +
farmer household” cooperative breeding. The in-house integrated breeding means the commercial generation pig fattening is run
entirely by a company itself. The “company + farmer household” cooperative breeding means a company provides or sells
commercial generation piglets to farmer households, who fatten the piglets. This is somewhat different from poultry breeding, i.e. it
focuses on outsourced breeding model under the “company + farmer household” cooperative model, whereby piglets are provided t o
farmer households by a company, and the ownership of piglets and hogs remains with the company, which recovers the hogs after
completion of the fattening process. Or alternatively, a company directly sells commercial generation piglets to farmer house holds,
but is not responsible for hog recovery, i.e. the traditional contract breeding model of selling baby chicks and baby ducks and then
recovering in the poultry breeding exists less. Similarly, the question of whether companies choose to operate the commercial pig
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fattening process themselves or not is related to the technical attribute of this operation. During the process of commercial pig
fattening, the difference in efficiency between companies and farmers is not as large as it is in the piglet production effic iency at the
present stage. Meanwhile, the large investment in in-house fattening affects the return on investment. Therefore, when numerous
companies invested in the pig farming industry in recent years, especially at the early stage where they compete for market s hares,
the vast majority of them first chose the “company+ farmer household” cooperative farming mode l, i.e, they invested first in
breeding capacities instead of fattening capacities, although the fully integrated in-house fattening model is still less frequently used
at the current stage. On the other hand, influenced by the ASF epidemic in recent years, numerous free -range farming households
find it relatively difficult to achieve good containment results due to limited access to equipment and facilities, thus posing a higher
bio-safety risk. Best-run companies using the integrated in-house farming model in the industry can realize epidemic containment
better than household farming to a certain extent through fine management of the in-house fattening operations. Although companies
adopting the “company + farmer household” cooperative farming model would help cooperative households with equipment and
facility upgrading to varying degrees, such upgrading is after all not as convenient as that of self-run fattening farms; moreover, there
are a growing number of automated and IT-enabled equipment emerging that can help reduce costs in long term, these new
equipment and technologies are easier to adopt and implement in company-run fattening farms than in cooperative fattening farms of
farmer households. Coupled with the gradual elapse of the early stage of competition for market shares and gradual stabilizat ion of
the industry structure, major companies shifted their attention again to continuously reducing costs in the long run. These factors
made major companies generally willing to subsequently increase the ratio of in-house fattening operations.
     The biggest difference between pig breeding and poultry breeding is the degree of vertical integration towards the downstream
slaughtering operations. Due to the smaller batches of pigs to be slaughtered than those of poultry to be slaughtered, the small
slaughtering houses are capable to do the job, resulting in little motivation to develop pig breeding business in para llel with
large-scale industrial pig slaughtering business at the early stage of development. Regardless of whether purchasing sows from pig
breeding companies for self propagation and self breeding or directly purchasing piglets, farmer households can choose to contact pig
vendors for sale after completion of fattening, before pig vendors sell to slaughtering plants or small slaughter houses. Eve n though
the ratio of large-scale breeding has been increasing in recent years, the annual slaughter scale of breeding clusters of large
companies mostly ranges from 300,000 to 500,000 pigs, as opposed to the annual capacity of at least 1 million pigs of large -scale
slaughtering plants. At present, after fattening of commercial pigs, large companies still have to se ll a large proportion of pigs to pig
vendors, although they can sell a limited number of pigs directly to slaughtering plants. Thus, most of the domestic pig bree ding
companies and pig slaughter companies develop their business independently nowadays.
     Due to the longer cycle of pig breeding, the pig breeding has more obvious and stable cyclic characteristics than poultry
breeding. A “pork price cycle” is generally 3-5 years, which has been gradually extended as pig breeding companies and farming
households have been growing in size over the past years and became more capable to sustain their business during the trough period.
Since 2006, China experienced three complete cycles and is currently experiencing the fourth cycle. The present cycle started in the
mid-2018, and in the first half of 2018, the entire industry saw the lowest pork prices since 2011 due to the capacity expansion in the
previous pork price cycle. In the second half of 2018, the serious ASF broke out in, causing losses to both pig breeding companies
and farmers to varying degrees. Under the dual impact of depressed market and epidemics, this round of expansion investment has
been slowing down, with some companies even stopping expanding. In 2019, when the ASF remained rampant and relevant va ccines
and effective treatments are still not available in the industry so far, companies and small and medium-sized farming households
continued exiting the industry and only those large companies with good bio-safety track records were capable to expand their
business, which led to a sharp reduction in the industry capacity. The swine livestock on hand at the end of 2019 fell by 27. 5%, and
the number of hogs marketed in 2019 fell by 21.6%. After the hog prices exceeded a historic high of 40 Yuan/kg in the second half of
2019, the prices remain relatively high above 30 Yuan/kg for a long period of time. Since 2020, while accumulating certain bio-safety
control experience, companies pursued large-scale capacity expansions, further recovering the basic production capacity in the hog
industry. By the end of 2020, the hogs and fertile sows in stock across the country increased remarkably from the end of the previous
year, as hogs in stock reached 407 million, 31.0% up from the end of 2019, and fertile sows in stock reached 41.61 million, 35.1% up
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from the end of 2019. In the first half of 2021, hog supply continued rising remarkably, as the marketing rate of hogs grew by 34%
year-on-year in the first half of the year and fixed-point monitoring results of the first half of the year showed that the fertile sows in
stock grew by 30% year-on-year and hogs in stock grew by 29% year-on-year, to 439 million. The increased supply drove the prices
to fall remarkably, as the hog prices fell all the way from 36 Yuan/kg in early 2021 to the lowest point of 12 Yuan/kg in June, a
decrease of over 60%, even falling back to the low levels before this pork price cycle began ascending in March 2019 for a time.
     The company started late in the pig farming business, but has been insist ing on business development to high standards since
starting its pig farming business. Using a highly automated and intensive production mode, the 1 million swine production pro ject
financed and implemented by the company in Xiajin of Shandong since 2013 is dedicated to establishing a benchmark in the
domestic pig farming industry. In February 2016, the board of directors of the company deliberated and passed the Strategic P lan for
Pig Farming Business, starting to greatly develop its pig farming business. Over the past two years, the company invested heavily in
pig farming business in order to capitalize on the opportunities arising in the wake of the ASF outbreak. By the end of 2020, the
company realized and reserved a capacity portfolio of over 70 million pigs nationwide, in-house fattening capacities of nearly 4
million pigs in stock and live hog sales of 8.29 million pigs throughout the year, allowing the company to maintain its spot among the
top listed companies in the country.
     1. Farming model of the company’s pig farming business
     In terms of breeding of breeding pigs, the company has established the PIC and Hypor dual-system breeding pig architecture to
select pig breeds suitable for regional markets according to the differences between the markets in north and south.. Meanwhile, the
company conducts differentiated allocation of its resources according to market regions, and actively establishes its presenc e in
regions where it has comprehensive strengths in terms of consumption, land, environment and logistics to preferentially build pig
breeding farms for piglet production. Over the past years, the average PSY of the company’s normal two-way cross-bred sow
production has been above 24, an industry-leading figure. In the fattening process of commercial generation, the company gradually
built fattening farms according to specific conditions of different regions and projects, and nowadays still focuses on the "company +
farmer household" cooperative farming model, supported by in-house integrated farming practices. In 2021, the company’s ratio of
integrated in-house farming to cooperative free-range farming was about 1:4. Along with gradual commencement and commissioning
of in-house fattening capacities in the second half of 2020, the ratio of integrated in-house farming will gradually increase in the
future and the company will realize a business presence centered on integrated in-house farming and supported by “company+ farmer
household” cooperative farming. In regions where the comprehensive advantages are not obvious but the company operates swine
feed business or has plans to build breeding pig farms but hopes to have suitable cooperative fattening farms that match its free -range
farming requirements once commissioned, the company would purchase piglets from other large pig raising companies or specialized
breeding pig companies phase by phase, while at the same time adopting cooperative farming mode l, thus achieving collaborative
development of its feed business and pig farming business or early development of cooperative farming households. But as the
company’s breeding pig farm construction and areas of presence gradually expanded and improved, the company’s piglet acquisit ion
business has now fully stopped and piglets used have all been replaced by homegrown piglets.
     2. Division of duties in cooperative farming
     In the cooperative farming, the company and farmers respectively invest different production factors, assume different duties ,
and share different earnings and risks. In terms of input of production factors, the company is responsible for the input of piglets,
feed, veterinary drugs, vaccines, etc., while farmers provide the input of fixed assets such as piggery. In addition, farmers need to pay
a breeding deposit and bear the costs of labor, water, electricity and fuel on fattening farms. In terms of division of duties, the
company is responsible for piglet supply, feed production, epidemic disease prevention and treatment, breeding technology guidance,
collection and sales, while farmers are only responsible for daily feeding and cleaning. In terms of earnings and risks, the company
bears the market price risk and enjoys the opportunity profit, while farmers neither bear the market risk nor enjoy the oppor tunity
profit. The returns are relative ly stable and not directly related to the market prices, but closely related to the breeding results. In
addition, from the perspective of the company, there is a risk that farmers don’t abide by the contract or the company’s guidance, and
sell pigs or use medication without authorization. However, as the scale of cooperative farming has been growing and cooperative
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period became longer in recent years, in case of the aforesaid breaches, farmers will bear huge risk of bad faith, and the co mpany will
retain the breeding deposit and sue to the court for breach of contract. Therefore, such breaches are becoming increasingly less in real
life.
        3. Pricing and settlement of the cooperative farming
        When the company signs the contract of cooperative farming with farmers, a basic unit price is first formed according to the
market conditions at that time, which would change appropriately according to the latest market changes at the time of pig re covery
and settlement. When fattened pigs reach the marketable weight, they are weighed, and the basic price is formed by the base unit
price multiplying the average weight, before the settlement price is adjusted according to the specific weight of each pig that exceeds
or fails to reach the ideal weight range, marketing rate (i.e., the survival rate), rate of conforming products, feeding days, total weight
gain, end-to-end ratio of feed to pork, daily average weight gain, excessive consumption of feed and the other production indicators,
thus deriving the final breeding service fee.
        4. Number and structure of cooperative farmers and their changes
        Before the 2021 Semiannual Report was published, there were 1,975 free-range farming households with pigs on hand in
cooperation with the company, 11.83% less than that at the end of 2020. In the farming cooperation in 2021, the company continued
optimizing small-sized farmer households and replaced them with larger farmer households for upgrading. Therefore, although the
total number of cooperative farmer households fell somewhat from the end of 2020, the average size and quality of farmer
households further improved. From the perspective of scale of livestock on hand, farmers each with less than 500 pigs accounted for
about 0.76%, 14.24% less than that at the end of 2020; farmers each with 501-1,000 pigs accounted for 24.96%, 11.04% down from
that at the end of 2020; farmers each with more than 1,001 pigs accounted for 74.28%, 25.28% higher than that at the end of 2020.
        From the perspective of farmers' regional distribution, according to the five regions divided by the Ministry of Agriculture for
ASF containment, farmers in the north region accounted for about 19%, 3% down from that at the end of 2020; farmers in the ea st
region accounted for about 24%, 14% down from that at the end of 2020; farmers in the south central region accounted for about
33%, 15% higher than that at the end of 2020; farmers in the southwest region accounted for about 14%, 2% higher than that at the
end of 2020; farmers in the northwest region accounted for about 10%, unchanged from that at the end of 2020.
        (IV) Food Business
        The company classified poultry slaughtering as white-feathered poultry business so as to strengthen its interaction with upstream
breeding operations. Therefore, its food business only includes pig slaughtering, processed meat products, central kitchen and other
segments.
        Food business is the last stage before the value of agriculture and animal husbandry is embodied on the side of consumption in
the form of meat products. Among them, slaughtering, as a typical manufacturing industry, has developed for a long time towards
maturity in China. Moreover, due to the slow growth of the downstream meat consumption demand, there is a serious overcapacity of
slaughtering for a long time, as the average capacity utilization of slaughter houses of considerable size nationwide is merely about
30%. As previously explained in the description of pig farming business, there is little motivation to develop pig farming business in
parallel with large-scale industrial pig slaughtering business at the early stage of the industry Despite the increased ratio of
large-scaled farming in recent years, pig farming businesses and pig slaughtering businesses have been developing independently in
most cases. From the perspective of slaughtering plants, which often need to collect pigs through pig vendors, they would also face
the pressures of short-term shortage of pigs or overcapacity. The government's protection of the production motivation of the
breeding industry in rural areas and the stabilization of the consumer prices in urban areas also make the slaughtering industry face
the implicit dual price restriction in the upstream acquisition and downstream sales. The occasional happening of livestock a nd
poultry epidemics would also cause periodic fear of meat shortage and bring a negative impact to the industry. In addition, as a
labor-intensive processing industry, the rising cost of labor further squeezes the profit margin of slaughterhouses. Therefore, the new
growth opportunities of the pig slaughtering industry in recent years are to continuously optimize the process to improve the
production efficiency and gradually introduce automatic and semi-automatic equipment to replace labor force, when looked at from
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within the industry. From the external perspective, on the one hand, the premium can be increased by improving the product mix,
including extending from slaughter and cutting with raw and fresh meat as the final product to the further processing of meat
products and even the production of prepared dishes with higher added value, and the shift from sales of frozen meat to that of the
chilled fresh meat; on the other hand, it is to improve the sales channels, that is, shifting from the traditional multilevel wholesale
channels to direct supply channels of supermarket chains, chain restaurants, food processing enterprises and other key accounts; the
opportunities also lie in cooperating with product optimization and channel optimization to strengthen brand building, promote the
transformation of unbranded meat into branded meat, and seek a greater presence in sales channels so as to obtain brand premium. In
addition, the gradual development of the cold chain logistics industry in China in recent years is also conducive to the sales and direct
supply of meat products in a fresher state to supermarkets, restaurants and other channels.
     The processed meat products and the central kitchen are the downstream parts of slaughtering process, representing the
extension from simple slaughter and cutting to the conditioning and processing operations with a higher added value. Compared with
the slaughtering part, the processed meat products and central kitchen have higher gross profit rates and relatively stable prices, and
have been growing fast in recent years. However, due to longtime habits of Chinese consumers, the purchase of raw meat by Chinese
consumers still accounts for a very large proportion, while the ratio of meat products purchased remains relatively small. This means
the current overall market space for processed meat products is still limited. In recent years, the focus of food processing companies
has been on constantly developing new product forms, changing the consumption structure dominated by ham sausage in the past,
creating new consumption scenarios, stimulating more consumer demand for meat products, and expanding the overall market spac e.
     Central kitchen is a typical direction in the exploration of these new forms and new scenarios. With prepared dishes as the main
products and catering companies as the main customers, it helps explore new growth opportunities through such product forms a nd
consumption scenarios which are more easily accepted by consumers. Of course, compared with the ordinary processed meat
products, central kitchen is more complex in product form, processing technology, preservation technology and supporting logistics,
and poses more demanding requirements for business management of companies. In recent years, although numerous companies,
especially catering companies, invested in central kitchen, many of them are poorly run and have created excess capacity in this
market segment in the short term. On the contrary, food manufacturers can gain unique advantages in the field of central kitchen with
their rich experience in factory management and lean production.
     As hog is the main cost of pig slaughtering, and fresh meat is the main cost of processed meat products and central kitchen, the
selling prices of food business would change in the same direction as the prices of hogs, However, due to the alternative consumption
of meat food and the government’s efforts to stabilize consumer prices, the price elasticity of meat food is usually smaller than that of
hogs. When market prices go up, the food business will also, to a certain degree, bear the pressure of increased slaughtering cost (i.e.,
purchase prices of hogs) and raw meat cost; especially when the market prices peak, it means hogs are most undersupplied on the
markets and not only the slaughtering costs are the highest but also the amortized overheads due to low outputs. From 2017 to 2020,
the hogs in stock nationwide at the end of each year were 433 million, 428 million, 310 million and 407 million respectively. So, the
entire year of 2020 saw the lowest level of hogs in stock nationwide in recent years, causing considerable cost pressures to
downstream industries. The pig slaughtering industry, processed meat products and central kitchen industries still need to flexibly
control the inventories and reduce costs in a lean manner. In particular, the slaughtering industry also need to properly acquire hogs
while there are minimum hogs on hand, while at the same time paying close attention to the containment of ASF in pork and meat
products, in order to really make profits in the seemingly booming market.
     The company's food business has a certain influence in China, and enjoys a leading position in specific regions. The company's
"Kinghey" branded pork was the designated supplier of the 2008 Beijing Olympic Games, the annual sales of "Meihao" branded pork
products’ rank the second in four southwest provinces, "Liuhe" branded poultry meat products are sold across the country and the
Porridge Jiahe central kitchen business is one of the largest central kitchens in Beijing market. Over the past years, the company
gradually opened a segment market of hotpot catering by starting with “Xiao-Su-Rou”deep fried pork slices and other products.
Overall, the company's food business and poultry slaughtering business are facing the same challenges of product upgrading and
channel upgrading, but unlike its poultry slaughtering business, which is the largest in , the food business also faces the c hallenge of
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cross-regional market development. In these years, the company will also make full use of the existing capacity portfolio and
channels of white-feathered poultry, combined with the planned pig farming business, to drive its food business to grow in a larger
domestic market and help the company's food brand gradually grow from a local brand to a national one.
     The company shall comply with the disclosure requirements set forth in “Shenzhen Stock Exchange’s Industry Information
Disclosure Guidance No. 1---Listed Companies Engaged in Livestock, Poultry and Aquaculture Businesses”.
II. Analysis of core competitiveness
     (I) The company's core competitiveness in the feed business: Technological legacy coupled with innovative organization and
products allows the company to rapidly enhance its scientific research capabilities and bio-safety and performance of products so as
to meet the upgraded demand for breeding with a greater power of product. On the basis of scale barrier, the company moves towards
specialization and industrialization, while the efficiency increase and cost reduction brought about by accumulated strength are
beyond the reach of its competitors, making the moat wider and deeper.
     1. Strong bargaining power and resource integration capabilities brought by the largest scale. The larger the scale of feed factory,
the lower the production cost per ton, which ensures decreased purchase cost of raw materials, therefore, scale is one of the m ost
essential competitive factors in the feed industry. The company's feed sales rank the first in China and the second in the world, and
feed production and sales now cover 25 provinces, municipalities and autonomous regions in China. The industry-leading production
and sales volume and the extensive market coverage enable the company to connect with domestic and foreign grain busine ss
magnates and large channels of the same magnitude, bringing strong bargaining power by virtue of its scale advantage. At the same
time, as the largest feed producer in China and one of the largest in the world, the company has easy access to cooperation with
multinational magnates, leading companies in other industries and local governments at all levels in various forms, suggesting a
salient advantage of resource integration.
     2. The technological legacy plus organizational innovation allows the company to continuously improve its scientific research
capabilities. Through many years of accumulation, the company now has established the industry's largest feed nutrition and
ingredient database, works closely with several raw material suppliers at home and abroad, keeps track of information about quality
of feed ingredients nationwide, allowing the company to formulate the optimal combination of nutrition and cost in a timely manner
and reduce the negative impact brought by price fluctuation of raw materials. The company's feed research institute now has 69
bachelors, 184 masters and 36 doctors. The company has cutting-edge near infrared detection technology, and has created near
infrared databases comprising over 0.46 million sample spectrums, established near infrared analysis models covering 43 categories
of feed ingredients, 85 types of complete feed, 26 categories of vitamin premixed feed and 3 types of animal fat. In recent years, the
company won 6 national science and technology awards, 20 ministerial, provincial and municipal science and technology awards,
and owns 5 national key laboratories or centers, 4 provincial key laboratories or centers and 2 academician (postdoctoral)
workstations. The company has successively undertaken over 100 national, provincial and municipal key research and development
projects, including “13th five-year plan” key R&D projects of “Construction and Demonstration of China-EU Food Safety Process
Control System based on Digital Information Technology”, “Application and Demonstration of Green, Efficient and Safe Breeding
Technology for Aquatic Birds”     and “Regulation and Mechanism formed by Daily Ration Composition and Feeding System for
Healthy and High-quality Meat of Livestock and Poultry”, and presided over Shandong Province’s key research and development
project of "Key Technology Research and Industrialization Promotion of Environment-Friendly Antibiotic-free Feed for Swine and
Poultry", earning the first prize of Shandong provincial animal husbandry science and technology award 2020 for its safe, efficient
and innovative technology research and pilot application of feed ingredient fermentation. “Development and Application of Key
Technologies of Feed Nutrition for High-quality Pork Production” was awarded the first prize of the 2020-2021 Shen Nong China
Agricultural Science and Technology Award, and the “Key Technologies of Healthy and Efficient Farming of Broilers and their
Application” was awarded the second prize of Shen Nong China Agricultural Science and Technology Award. In recent years, the
company applied for 2,158 patents and was granted 1.423 patents. In 2020, the company applied for 295 patents, including 93
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invention patents. In the first half of 2021, the company applied for 152 patents, including 27 invention pa tents.
     3. The procurement model is constantly upgraded, and the specialized procurement capabilities are continuously improved.
Since 2014, the company has further taken stock of and optimized its raw material procurement system, strengthened the centra lized
procurement at different levels in various forms, actively sorted out its supplier system through a new management platform, and
established strategic partnerships with COFCO, Sinograin, Jilin Wine, Xiangyu, Cargill, Bunge, Yihai, DaChan and other excellent
raw materials suppliers at home and abroad, which allow the company to access reliable, cost effective raw material supply upstream.
In the past two years, due to the China-US trade war and ASF, etc, the changes of the raw material market were intricate, but the feed
supply chain system has rapidly strengthened the raw materials market price research center, significantly improving the spec ialized
procurement capabilities and continuously upgrading the procurement models for corn, soybean meal and by-products. In terms of
corn procurement, as the number of the company’s factories licensed to import corn increases, the cost-reduction effect brought by
choosing low-price imported ingredients at the right time became increasingly apparent. In terms of soybean meal procurement, the
purchase was concentrated on leading companies to give full play to the advantages of centralized procurement, while reducing costs
through protein price difference, cross-regional arbitrage, bulk cargo logistics and precise dosing. In the first half of 2021, the
centralized procurement rate at the headquarters level reached 72%, 20% up from the previous year, the centralized procurement rate
of key varieties was as high as 95%, and the turnover rate of ingredient was also increased steadily. Meanwhile, the company actively
carried out supply chain financing business, significantly reduced financial costs, and realized the cumulative financing proceeds of
about 67.43 million Yuan in the first half of 2021, over 100% up year-on-year. In addition, the company will create an end-to-end
procurement operation system guided by digitization with a view to constructing a digital supply chain ecosystem for continuously
improving its core competitiveness in procurement.
     4. Fully serving farmers, and maintaining closer relationship with downstream customers. Relying on its strong strength, the
company launched the "pig flourishing" project to provide small and medium-sized farmer households with comprehensive
supporting services such as technical and financial services through various forms of cooperation to help them continue pig farming.
The "everything flourishing" project, an extension from the "pig flourishing" project, was also tried out for other feed varieties such
as aquaculture feed, ruminant feed and so on, with satisfactory results, for example, fish flourishing, cattle flourishing, sheep
flourishing, etc. Through these projects, the company’s service and support to farmers greatly improved the service experienc e of
farmers and further solidified the partnership between farmers and the company.
     5. The expansion of farming business makes the product structure more balanced. The large scale of farming increases the
bargaining power in the breeding operations, which means that it is increasingly important for feed companies to control the farming
operations. Since 2016, the company has gradually increased its pig farming business by adopting the "company + large farmers "
cooperation, etc. In the times of ASF, farming volume has rapidly increased in recent years due to strong bio-safety technologies in
the hands of major farming companies. Moreover, the company has also gradually increased the in-house feeding and outsourced
feeding of commercial generation table poultry in its white-feathered poultry business, and directly controls farmers through
multiyear co-breeding contracts. The company's feed business has strengthened the control over the farming operations through the
aforesaid extension of industry chain, while the synergistic effects of feed and farming have improved the profitability of the feed
business, with the product structure more balanced and the competitiveness greatly enhanced.
     (II) The company's core competitiveness in the white-feathered poultry business: the company masters the proprietary core
technology of breeding, seeks continuous innovation in farming facility upgrading and data utilization and strengthens its control
over the market through rapid production and sales by leveraging its bargaining power on supply and sale.
     1. In terms of breeding of breeding poultry, the company enjoys a remarkable leadership position at home with respect to
production technology management, cost management, production efficiency, and product quality, and the company has formed
systematic technology and management capabilities. The company's breeding hens each remained producing over 115 healthy
chickens in the past two years, and each breeding duck remained producing over 220 healthy ducklings, which are at the domest ic
leading level. Especially in terms of selection of breeding ducks, the company cooperated with the Institute of Animal Sciences of
CAAS to breed "Zhongxin" ducks with complete intellectual property rights, which broke the monopoly of foreign varieties and
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filled the gap of domestic white-feathered meat duck breeding industry. Consumption-wise, "Zhongxin" ducks are characterized by
"high lean meat ratio, low sebum ratio and good meat quality". The ratio of breast and leg meat is as high as 28%, and the se bum
ratio is lower than 22%, which addressed the difficult problem that duck meat of some foreign varieties is "too fat and fishy" and not
suitable for Chinese taste. Farming-wise, "Zhongxin" Beijing ducks are characterized by fast growth, high feed conversion rate,
strong resistance to stress, easy feeding and high survival rate, as the ratio of feed to weight reaches 1.9:1 after 40 days of feeding,
with all production indicators reaching the international advanced level.
     2. In terms of farming of commercial poultry, the company always maintains continuous innovation to go beyond traditional
farming bottlenecks in terms of farming model, equipment and management support, leading the industry development as an examp le.
In 2021, a total of 144 patents were filed, including 20 invention patents and 84 patents granted. The company built a digital farming
system to bring all production management process data from farms onto cloud to form a big data center in a way that bases onsite
management on evidence, while equipping farms wit automatic data acquisition and automatic equipment control systems, in an
effort to replace traditional experience-based farming with digital intelligent farming. The company set up large-scaled stage-wise
broiler breeding and fattening farms equipped with cages, feeding, heating and transit systems dedicated for the breeding and
fattening phases as well as bio-safety, feeding management, epidemic disease control and other field management schemes, a farming
model proven feasible through farming of 5 batches of nearly 1.00 million broilers, capable to effectively increase the shed operation
efficiency by 70%. To resolve issues with traditional manual duck harvesting such as difficult access to labor, low efficienc y, high
attrition rate and high costs, the company developed an automatic duck harvesting system that increases the efficiency by 150%,
reduces costs by 60% and lowers the attrition rate by 80%. Meanwhile, the company compiled 10-odd farming standards such as
“Equipment Maintenance and Servicing Standard”, “Standard Operating Technique for Three-dimensional Farming of
White-feathered Meat Ducks”, “Bio-safety Management Standard for Farms” and “Commercial Poultry Farming SOP”, which are
used to guide efficient production onsite.
     3. In terms of poultry slaughtering, the company has the largest share of the white-feathered poultry slaughtering market in
China, enjoying a leadership position especially in the field of white-feathered meat duck, where it has a strong bargaining power
when facing the downstream markets. In terms of raw materials supply, as the main producing areas are concentrated in Shandong
and surrounding provinces such as Henan, Hebei, Shanxi, Liaoning, coupled with the fact that the company continued increasing the
ratio of in-house breeding of commercial generation in recent years, the company has strong bargaining power in poultry farming
contracts or market poultry acquisition in those regional markets. In terms of slaughtering and processing operations, the co mpany
presided over the formulation and revision of the industry standard "Operating Procedures for Livestock and Poultry Slaughtering -
Duck" by virtue of its    largest scale of duck slaughtering in China and the leading technology level; In recent years, throug h
construction and transformation, the company increased the automatic and intelligent levels of its slaughtering plants, and also
strengthened the standardization and SOP development, while all of its plants constantly improve and optimize existing operat ions
and process standards in light of reality, thus resulting in remarkably increased flexible manufacturing capabilities and product
premiumization capabilities, and enhanced ability of fast production and fast sale. In terms of sales, the company further pr omotes
the policy of “setting sales targets by consumption, setting production targets by sales, and fast production and fast sale", which
allows the inventory turnover rate of products to remain at a high level, and overcame the adverse impact of cyclic fluctuations of
agricultural product prices on the company's operations to a certain extent.
     (III) The company's core competitiveness in pig farming business
     1. The clustered, integrated pig farming model highlights the cost advantage
     The holistically planned clustered, integrated pig farming model at least configures grandparental farms and parental farms
within a cluster and will also configure fattening farms at the same time in the upgraded version of cluster called “Xiaolong” model,
thus achieving the aggregation of full matching of pig breeding process, talent sharing, environment-friendly technology optimization
and industry chain, with higher production efficiency and lower cost than the traditional farming model.
     First, the industry-leading pig farm construction capabilities and advanced production technology help effectively reduce the
bio-safety risks of pig farms and ensure the healthy production of pig herds. The production technology and process are more in line
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with the principle of whole-in, whole-out, pigsty matching, separate production of sows and weaned pigs, automatic regulation of
shed environment and reasonable planning of excrement and urine storage and transportation.
     Second, the production efficiency is high, and each indicator is at the industry leading level. In terms of production of breeding
pigs, the company now cooperates with the best-run international breeding pig companies of PIC and Hypor to establish a
dual-system breeding pig architecture , which allows selecting suitable pig breeds according to the market differences between the
south and north China; in terms of breeding capabilities, the company adopts multi-angle combination of algorithm technology,
dynamic core group management technology and full-automatic breeding pig determination technology, all of which are the most
advanced breeding technologies in the world. Through cooperation with breeding experts in universities of the US and China, the
algorithm is constantly optimized, and the intensity of breeding is improved. In the clustered model, each cluster has its own core
propagation group, thus ensuring the bio-safety of breeding boars and the efficient production of piglets. In 2020, the total number of
piglets per pigsty, the number of piglets per pigsty and number of weaned piglets per pigsty of self-reproduced sows at the company
were all industry-leading.
     Last, through systematic application of production and management technologies, the cost of fattening pigs has been
continuously reduced. In recent years, the company orderly implemented application and practice of various new technologies in the
industry, and formed a complete set of production management technologies. By standardizing the costing items and methods of all
branch companies and refining the weight gain cost mode l to realize the comparison of cost management, the company quickly
identified each branch's key indicators of cost control. Through the nine-stage scientific nutrition formulation of self-made feed for
precise feeding, coupled with the comfortable growth environments provided by best-run, automatic, intelligent and transparent pig
farms, the full cost of fattening of the company’s self-produced piglets has been kept at the industry-leading level. In the future, along
with further construction of the company’s self-raising fattening farms, the ratio of self-raising fattening will increase gradually.
     2. Industry-leading bio-safety control technologies
     After two years of exploration, 65 research results in 10 categories have been obtained in the field of ASF c ontainment. With the
closed-loop bio-safety containment system, the company won the battle of defense against ASF by stages, as the survival rate of
fattening has restored to nearly 90% from the ASF outbreak in the mid-2018 to the end of 2020, an industry-leading figure.
     As for the ASF containment for pig farms operated by the company, the company has effectively contained the ASF through
transformation of physical facilities and establishment of a scientific ASF management system. In terms of physical facilities, the
original breeding pig farms have been actively transformed; all newly-built breeding pig farms were built according to the latest
safety standards for ASF containment, with a four-level containment system of red, orange, yellow and green zones in pig farms put
into use to effectively isolate ASF virus. In terms of management system, the company established an ASF containment organiza tion,
formulated the bio-safety management standards and management processes at all levels, established a complete set of scientific
containment work mechanisms and containment programs, set up a multilevel management system from the HQ to echelons and then
to frontline business unit, whereby the HQ directs the containment efforts across the board, the echelons provide daily tracking
reports, and all feed mills, breeding pig farms and slaughterhouses act in strict accordance with the standard ASF containment
policies. This, coupled with flight inspections, point inspections and video monitoring guided by the HQ, and the one-level
supervisory system for monitoring the execution process and verifying the results, fully realize implementation of unified standards
from top to bottom. Although the attenuated ASF outbreak at the end of 2020 and in early 2021 brought new challenges to the
original containment technologies, the company was still able to rapidly respond and timely adjust and upgrade its solutions, thus
rapidly reducing the impacts of the epidemic and keeping the overall containment level stable.
     For the ASF containment on fattening farms centered on the cooperative breeding model, the company also carried out more
strict management according to the containment standards to ensure the safe production of hogs and production interests of farmers.
Firstly, the company subsidizes and assists farmers to complete the renovation and upgrading of sheds, so that the farming conditions
meet the ASF containment standards. Secondly, the ASF detection and monitoring was carried out throughout the fattening proce ss of
the family farms, including site test before providing piglets, transport vehicle test, feed plant test and materials test, with a timely
reporting policy formed in place. Thirdly, for biological assets and production safety, veterinary medicine management,
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environmental management and other standards, comprehensive upgrade has been made according to requirements for ASF
containment, farmers are repeatedly trained, and the standards are fully implemented. The cooperative farmer's understanding of ASF
has been effectively deepened through a series of measures, and farmers were enabled to gradually act in accordance with the
standards through "communication, assistance, mentoring and inspection", thus effectively guaranteeing safe production of hogs.
     3. Leading pigsty design capabilities for the future
     The company has been following the concept of "meeting the needs of pigs, the needs of pig farmers, and the needs of
sustainable development" in the design of pig farms, so as to create scientific and automated, intelligent and transparent modern pig
farms both for the present use and the future needs, which are the starting point of comprehensive operational capabilities of
successful business. The present use means paying attention to the details of production requirements, scientific planning, and
eliminating waste. For example, the functional areas, pigstys and pens that match with the established production model; clea rly
defining the pig, material and other flows in a way that meet the efficiency and bio-safety requirements at the same time; meeting the
environmental needs of pigs in different climates and at different stages. Facing the future means focusing on sustainable
development needs. For example, intensive construction of pigsties in response to the scarcity of land; zero emissions of pigsty
construction; the intelligent and automated design of piggeries in response to increased labor cost.
     4. Industry-leading environment-friendly treatment capabilities
     The environment-friendly treatment at the plants consists of sewage treatment, solid manure treatment and treatment of sick or
dead pigs. In all treatment processes, the company has made available a separate odor treatment method in order to achieve the
environmental objectives that fully meet the national standar ds, and industry-leading environment-friendly treatment capabilities. In
terms of sewage treatment, the company adopts the "pre-treatment + UASB + two-stage A/O process", so that the effluents reach the
standard of farmland irrigation and allow direct discharge to farmland. The company's treatment method for returning biogas slurry to
farmland can make the sow bearing capacity of 1 mu of land reach 30 sows, far more than the industry average of no more than 3
sows, meaning the company only needs 400-500 mu of land to build a sow farm accommodating 12,000 sows. In terms of solid
manure treatment, the company adopts the method of vertical fermentation tank, which is closed throughout the process and occ upies
a small area. Solid manure produced by a farm of 12,000 sows can be treated in only 10-15 days; at the same time, it meets the
national discharge standards, and the fermentation process can reach a high temperature of 60-70℃, which can effectively kill the
pathogenic microorganisms in feces and avoid the spread of diseases. In addition, the vertical fermentation tank can also deal with
sick and dead pigs arising in the plant, thus enhancing the bio-safety and containment capabilities.
     5. Continuously innovating in sales method and increasing the sales efficiency across the board
     The company's self-raised commercial pigs are sold completely according to the holistically planned pig sales method, so as to
ensure the optimal prices of large pigs on the market. Apart from a small portion of hogs which can be transported to the
company-owned slaughtering plants for slaughter, other marketable hogs are sold through the "easy pig trading" and “Jubaozhu”,
both being hog trading platforms developed by the company. After more than one year's accumulation, the system of this trading
platform is becoming increasingly mature in algorithm and trading data, guiding pig sales through the generated pork price index,
forming regional price comparison and monitoring, and helping increase the company's average pig sales prices.
     Although the company’s rapid scale expansion in the past year weakened its competitive power, and some good practices failed
to be replicated at newly-bulit pig farms, the company now takes a full transition to a stage of robust operation. The company is
gradually improving its business operation efficiency, reducing farming costs and restoring its original competitiveness by enha ncing
its internal management capabilities through many measures.
     (IV) The company's core competitiveness in the food business: high-quality resources across the industry chain, traceability of
food safety, and gradual upgrading of brands and sales channels
     1. In the terms of products: Safety, precise research and development, and flexible production across the industry chain. Relying
on the company's whole farming industry chain, the company’s food business can acquire safe raw livestock and poultry that is
controlled in the upstream operations of feed, breeding and farming, and truly achieve food safety from farmland to table through the
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safe production in slaughtering and food processing operations, which allows the safest and most trusted fresh chilled meat to reach
dining tables of consumers. In 2018, the company established its food industry research institute and set up an excellent food research
and development team for product development. The strong research and development capabilities support the company to develop a
variety of To B and To C products for customers and consumers at the food end. The company is capable of standardized and
efficient production, has participated in the formulation of " GBT 9959.1-2019 Fresh or Frozen Pork and Pork By-products: Part 1:
Pork Slices" and other national standards, and constantly raises the level of automated and intelligent operations through construction
and transformation in recent years. The company also constantly strengthens standardization and SOP development, while its
factories constantly improve and optimize the existing operations and process standards in light of reality, re sulting in significantly
increased flexible processing capabilities and product premiumization capabilities.
     2. In the terms of branding: a strong combination of parent and subsidiary brands created. In the context of consumption upgrade,
the food business is being established fast in a brand new manner. The "New Hope Food", as the parent brand, is supported by
high-quality resources across the agriculture and animal husbandry industry chain whether on the To B end "New Hope Liuhe" or To
C end "New Hope Food" , which makes the parent brand more viable. Meanwhile, “Kinghey”, “Liuhe”, “Meihao” and “Porridge
Jiahe”, as the subsidiary brands, have also been recognized by the customers and partners in the industry for many years. In recent
years, the company, relying on product development and channel promotion in a series of segment markets, created a whole new
brand positioning “Meihao exclusive for hotpot” and officially launched a high-end western-style low-temperature meat product
brand “Le matre charcutier" created with a European farming industry leader Cooperl in early 2021, which gradually won the heart
and mind of catering customers and consumers and will also help the company open new spaces for its food business.
     3. In the terms of sales channels: The advantages of traditional channels are solid, while the emerging channels are growing
rapidly. The company has been operating the whole farming and food industry chains for many years, further consolidates and
strengthens its traditional circulation channels such as wholesale markets, farm markets and raw materials processing, while
synchronously upgrading and moving forward new channels in the context of intensified market competition and consumption
upgrade. At the To B end, the company focuses on the catering market, establishes specialized sales service teams, and provides
long-term services to Haidilao Hotpot, Kungfu Fastfood, Yunhaiyao Restaurant, Yuanjiyun Dumplings and other catering companies,
winning the honor of high-quality supplier many times. At the To C end, the company has made good progress in the supermarket
and e-commerce channels. In the terms of supermarket, we have established presence in Wal-Mart, RT-Mart, Yonghui, Carrefour,
Hema, Wumart, Metro and other national supermarket KAs, covering a total of over 5,000 stores. In terms of e-commerce, the
company has deeply penetrated JD and Tmall platforms. In 2021, “Meihao” won the first place in the category of quick dishes on
Tmall.com’s “618” shopping festival and “Meihao Homemade Deep Fried Pork Slices” ranked first on the list of repeat purchase
list and the top-rated list. Meanwhile, the company made quick entry into socia l media e-commerce platforms such as Pinduoduo and
Weimob, as well as content e-commerce platforms such as Kuaishou and Tik Tok to jointly fuel the rapid growth of “Meihao” brand in
the first half of the year. The company actively reached out into new reta il and new business formats, and carried out full cooperation
with Ali Retail System, JD New Channel and other emerging channel customers to make continuous innovation and upgrading of
products and supply chain. Relying on operations across the whole industry chain, the company will continue to optimize and
upgrade its channel structure, provide good value-added services through integration of internal and external resources, constantly
improve the premiumization capabilities for products and services, and build barriers to competition.
III. Analysis of main business
Overview
     In recent years, the company has been adhering to the medium-and long-term strategy of "strengthening the feed business,
expanding pig business, refining meat and poultry business, providing excellent food, and deepening overseas operations", creating a
balanced portfolio of inter-industry livestock and poultry diversification and integration of agriculture and food in the industry. The
company is committed to becoming a high-quality blue-chip enterprise with stable growth, a modern enterprise that leads the
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industry’s scientific and technological innovation, the vanguard of international operations for Chinese farming and food companies,
an investor-friendly company, and a wonderful company that actively fulfills social responsibility.
     In the first half of 2021, when upheavals were seen in domestic farming industry, especially the pig farming industry, an ove rall
situation arose, where pig and poultry farming business worsened but feed an d food business turned favorable. In terms of pig
business, on the one hand, the industry supply continued rising dramatically. According to the Ministry of Agriculture statis tics, hogs
marketed in the first half of the year grew by 34% year-on-year and the fixed-point monitoring results of the first half of the year
showed fertile sows in stock grew by 30% year-on-year and hogs in stock grew by 29% year-on-year.             The increased supply drove
the prices to fall remarkably, as the hog prices fell all the way from 36 Yuan/kg in early 2021 to the lowest point of 12 Yuan/kg in
June, a decrease of over 60%, even falling back to the low levels before this pork price cycle began ascending in March 2019 for a
time. On the other hand, the changed industry environment in recent years also caused remarkably increased cost of the pig farming
industry. According to related industry statistics, in the first half of 2021, compared with 2018, the pig raising cost generally
increased by 4.5 Yuan/kg due to rising prices of feed ingredients, increased input in ASF containment and increased input in manure
treatment; from the end of the previous year to the first quarter of this year, a new round of attenuated ASF outbreak in man y
northern provinces caused prevalent effects to farming companies and farming households in these areas; according to the MoA
statistics, from March to June of this year, the cost of mass-farmed hogs nationwide was 2,700-2,900 Yuan/pig, or about 22.5-24
Yuan/kg, while the cost of free-ranging pigs was 2,600-3,000 Yuan/pig, or about 22-25 Yuan/kg, meaning the whole industry has
begun suffering losses in May and June.
     In terms of the poultry business, the rising market condition in 2018 and 2019 resulted in industry overcapacity, as the
grandparental breeding hens on hand, parental breeding hens on hand and sales volume of commercial-generation baby chicken
across the country in the first half of 2021 were all sustained at the highest levels in the past six years. On the side of c onsumption,
the rapidly declining pork prices coupled with weakened consumption demand caused by the COVID-19 allowed poultry meat prices
to remain low for a long period of time, making it more difficult for the poultry business to make profits.
     In the feed business, the whole industry’s swine feed output increased by 71% year-on-year in the first half of 2021 along with
the rapidly recovering hogs marketed and on hand; In the feed business, the volume of swine feed produced in the industry increased
by 71% year-on-year in the first half of 2021 due to the rapidly recovering pig farming industry. Poultry feed sales stopped growing
in this year due to poultry farming volume having reached a historic high in the previous year, with a 6% year -on-year decrease in
poultry feed throughout the industry in the first half of the year. Stimulated by rapidly rising fish prices, the whole industry’s
aquaculture feed output grew by 10% year-on-year in the first half of the year, but there is structured difference among different
category segments, with decreased demands for ordinary aquaculture feeds and increased demands for famous, high-quality and
specialty categories. At the side of feed ingredients, the prices of corn, which is a major ingredient in feed, remained high , thus
continuously exerting pressure on the cost of the feed industry. Overall, the company faced more opportunities than risks on its feed
business in the first half of the year.
     In its food business, the increased marketed hogs also drove the slaughtering business to grow, as the slaughtering volume of
designated pig slaughterhouses above a designated size grew by 45% year-on-year and pork production increased by 36%
year-on-year in the first half of 2021. Increased production helps slaughterhouses increase their capacity utilizat ion rate and reduce
costs, but pork prices also went down synchronously with pork prices. According to the MoA statistics, the average wholesale price
of pork nationwide fell from the highest point of 47 Yuan/kg in early 2021 to 19 Yuan/kg, an almost 60% decrease. This situation
contributed little to the profitability increase of slaughterhouses, but was beneficial to deep-processed meat products using raw and
fresh meat as ingredients to a certain extent.
     Policy-wise, along with the full victory won in China’s decisive battle against poverty in late 2020, the No.1 central government
document issued in early 2021 reflected an overall shift of policy focus from the work related to “agriculture, rural areas, and
farmers” in the past two years to rural revita lization, as “accelerating resumption of hog production” that once appeared as a separate
section in the previous year’s No. 1 document went back into a subsection thereof this year, i.e., “accelerating the construc tion of a
modern farming system, protecting the basic production capacities of hogs and perfecting the long-acting mechanism for steady and
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orderly development of the hog industry.” However, as the prices once again fell after resumption of capacities in the first half of the
year, causing losses to part of pig farms (farmers), the Ministry of Agriculture and other related ministries and commissions once
again jointly issued the “Opinion on Promoting Sustainable and Healthy Development of Hog Industry” in early August, laying down
a development objective of “substantially forming a new pattern of high-quality development of hog industry featuring efficient
output, product safety, resource conservation, environmental friendliness and effective regulation within the next 5-10 years to
significantly increase the industry competitiveness, remarkably enhance the epidemic and disease prevention and control abilities,
substantially perfect the policy assurance system and effectively alleviate the cyclic fluctuations of markets.” Under the guidance of
this policy, China’s farming enterprises will pay more attention to increasing their core competitiveness in the future and work to
achieve healthy growth through true high-quality development, instead of suffering P/L fluctuations simply following the cyclic
fluctuations of markets.
     Despite the suddenly changed external environments that caused tremendous pressures, the company still copes with them
calmly while seeking changes actively.        On every line of its business, the company continuously advanced organizational
optimization and upgrading, and further enhanced the construction of its middle office on its pig business in order to accomm odate
the remarkable and rapid expansion of its management scale previous year; in its feed business, the company set up a corporate-level
feed business management committee, which is also equipped with related middle office functions to make overall planning for its
domestic and overseas feed units and feed plants run as part of its pig business and poultry business, so as to more adequately
leverage the scale economy of its total volume of internal and external feed sales that exceed 20.00 million tons each year, as well as
level the management capabilities of each feed unit upwards; in its food business, the company continued advancing the operation of
its food business headquarters, enhanced the interaction between food business and poultry business on meat food sales and
collaboration among other regional and channel teams, while strengthening its middle office of food bus iness by starting with
“seeking, research, manufacture and promotion”. In terms of capital management, the company’s 8.15 billion-Yuan convertible
corporate bond project launched in the second half of the previous year was approved by CSRC in late April; the company also
successfully completed issue of 1.0 billion-Yuan renewable corporate bonds in early June, thus becoming the only private company
to successfully issue renewable corporate bonds since 2020 and also the first agricultural product manufacturer to successfully do so,
which helped the company broaden its financing channels, enhanced its short-term solvency and provided stable medium and
long-term funding support for it to survive the difficult period of the current bottoming of pork prices. Faced with fluctuations of the
company’s stock price and phase-specific operational difficulties, the company’s board of directors and management remain
confident in that the company once again launched a new round of repurchase in late January after completing a 800 million-Yuan
repurchase in early January that was started in the second half of the previous year, with nearly 230 million-Yuan repurchases
completed so far; the company’s management also started a plan in early May to hold additional shares in the company through
contractual PE fund, with nearly 160 million Yuan-worth additional shareholding completed so far.
     Within the reporting period, the company achieved business revenue of 61.519 billion Yuan, 16.823 billion Yuan more
year-on-year, registering a growth rate of 37.64%; due to the rapidly declining pork prices, rising prices of feed ingredients,
attenuated ASF outbreak and depressed market condition of the poultry business, the company’s pig business suffered losses, c ausing
the net profits attributable to shareholders of the listed company in this reporting period to be 3.415 billion Yuan in deficits, but these
deficits included impairment loss accrued on various assets by the company according to the enterprise accounting standards a nd
prudent requirements, which had a total effect of a 1.080 billion Yuan decrease in current net profits.
     (I) Feed business: organizational adjustment provides precise empowerment, with sales margin growing steadily.
     The feed business is still a major pillar of the company, which can provide a stable profit base for the company in the fluctuating
price cycle of swine and poultry. In the first half of 2021, the company improved its customer service of the feed business, especially
of those key accounts. Despite the price of raw materials stay high, the company consistently adjusts its feed formulas to keep
competitive in price while meeting the dietary needs of the animals. The company also further optimized its organization, fully
leveraged its resource superiority, promoted business collaboration, and precise empowerment by establishing a feed business
management committee.
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     1. Strengthen customer service and perfect supporting infrastructure for both upstream and downstream of the industry chain.
The ASF significantly accelerated the process of livestock and poultry farming going big, and the demands of farming customers for
feed suppliers also gradually transitioned from a single source of feed supply to one-stop solutions. To seize the opportunities, the
company worked on increasing the sales volume to group and large customers as a main thrust of its feed business development,
advanced construction of bio-safe high-standard plants, formed more professionally capable “marketing + technology” team to
approach customers, actively matched customers with seedlings and animal healthcare resources of every major category of farming
while establishing many animal healthcare testing labs and providing customers with support in terms of bio-safety and epidemic
containment, etc.
     2. Collaboration between procurement and R&D for optimized formula cost. In the first half of the year, the continuous zigzag
high levels of prices of corn and soybean meal as main feed ingredients exerted pressure on the cost of the company’s feed business.
While properly purchasing domestic ingredients, the company increased the purchasing ratio of low-price imported ingredients when
appropriate by leveraging the market condition research center’s ability to anticipate the price trends of ingredients, so as to cope
with the continuous high levels of domestic corn prices. The company also leveraged its technical expertise to continuously iterate
and promote daily ration formulas comprising low-price alternative ingredients such as wheat, sorghum and brown rice, and launched
a variety of formula categories such as non-corn hybrid daily ration, wheat-based daily ration and brown-rice-based daily ration
while satisfying animal nutrition requirements, allowing the company to rapidly and flexibly adjust its formulas and keep its cost
competitive even when ingredient prices fluctuate. In addition, the company developed a proprietary feed formula system in the first
half of the year, which was commissioned in early August and will make the company’s feed formulation more efficient and faster
and promote data sedimentation and multisystem interconnectivity.
     3. Build a feed middle-office to aggregate organization capabilities. In the first half of the year, the company set up a feed
business management committee at the company’s headquarter to make overall planning for its domestic and oversea feed plants,
including those run as part of the company’s pig and poultry businesses. The committee is responsible for formulating strateg ic
direction, market panning, pricing mechanism and other related policies for externally-sold feeds. By setting up various middle-office
departments under the committee, the committee helps raise the level of specialized operation of various parts of the feed business
and intensifies the interaction among various parts so as to more adequately leverage the scale economy of total volume of internal
and external feed sales that exceed 20.00 million tons per year. In the first half of 2021, the centralized procurement rate at the
headquarters level reached 72%, 20% higher than the previous year, and the centralized procurement rate of key varieties was as high
as 95%. Meanwhile, the company actively carried out measures in the supply chain financing business, significantly reduced
financial costs, and realized the cumulative financing proceeds of about 67.43 million Yuan in the first half of 2021, an over 100%
year-on-year increase.
     During the reporting period, the company sold 13.53 million tons of various feed products in total, 3.01 million tons more
year-on-year, or 29% up; 10.11 million tons of feeds were sold externally, 27% up year-on-year (a year-on-year growth of 21% in
national total feed output). Among them,2.65 million tons of swine feed were sold externally, 98% up year-on-year (a year-on-year
growth of 71% in national swine feed output); 6.54 million tons of poultry feed were sold externally, 10% up year-on-year (-8% up
year-on-year in national poultry feed output); 0.64 million tons of aquaculture feeds were sold, 29% up year-on-year (9% up
year-on-year in national aquaculture feed output) ;0.21 million tons of ruminant feeds were sold, 42% up year-on-year (18% up
year-on-year in national ruminant feed output);   the company achieved business revenue of 32.827 billion Yuan, 10.241 billion Yuan
more and 45.34% up year-on-year.
     (II) White-feathered table poultry business: holding fast to strategic marketing transformation and building up internal strength
for efficiency increase and cost reduction.
     The white-feathered table poultry business is an important cornerstone of the company’s business growth and also an important
part of the company’s extension towards the downstream end of food. Since the beginning of 2021, the rapid recovery of hog
capabilities nationwide coupled with the impact of the COVID-19 resulted in weakened demands for poultry meat consumption and
caused the poultry price cycle to begin going down faster than the pork price cycle. In view of this, the company held fast to its
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strategic direction, actively explored the best possible industry development model, optimized its channel structure on the sales side,
increased the percentage of key accounts and actively pursued marketing transformation to broaden the room for profitability, while
ensuring lean operations in terms of internal management and continuously improving operating efficiency.
     1. Firmly advancing marketing transformation on the side of poultry meat and pursuing automation and digitalization on the side
of slaughtering for improved operating efficiency. In the first half of the year, the rapidly declining pork prices caused by continuous
expensing of pork production capabilities caused tremendous impacts on the consumption of poultry meat.                   The company
continuously pursued marketing transformation and channel sinking strategy by making greater efforts to develop various channels
such as food processors, restaurants, malls and supermarkets and new retail outlets and intensifying efforts to develop fresh products
and customized products for differentiated needs of the aforesaid channels on the one hand. Of them, in terms of sideline poultry
products typified by duck blood, the company has become the most essential supplier to major hotpot chain brands in China suc h as
Haidilao, and the “golden duck webs” that the company worked hard building also realized over 70.00 million Yuan in sales in the
first half of the year, now on its way to become a year-round 100 million-Yuan-worth single item as planned; on the other hand, the
company intensified its efforts to acquire nearby customers, reach nearby outlets, increase premium and make its poultry meat
products more profitable. The sales volumes from the aforesaid advantageous channels grew by 12% year-on-year. The company
created customer-hierarchical differentiated management standards and differentiated marketing and service strategies for its
integrated business units following the “whole chain”, “semi-chain” and “efficiency first” development models, while accelerating
automation upgrading and transformation efforts for its business units that match advantageous channels.
     2. Solidly developing bases on the farming side to increase the ratio of direct supply and optimize launch cost. In order to match
its development strategies involving three models of “whole cha in”, “semi-chain” and “efficiency first”, and stabilize supply of
non-slaughtered chicken and duck ingredients, the company held fast to developing its self-run farming bases. In the first half of the
year, the company completed leasing, trusteeship and construction of 10 in-house commercial generation farms with additional
capacities equivalent to annual output of about 30.00 million birds. Facing the existing company-farmer cooperation system, the
company further optimized the ratio of direct supply in the first half of the year to sustain 100% in case of chicken business and rise
to 92% in case of duck business, 12% up from the end of the previous year.
     3. Optimizing the seeding output rhythm on the side of breeding birds for strictly controling farming cost In the first half of the
year, faced with the fluctuating prices of chicken and duck seedlings, in terms of seedling output rhythm, the company optimized the
seedling output rhythm and controlled the best possible sale timing through agile operation sc heduling; in terms of cost control, the
company increased its operating efficiency through optimizing operation processes, increased the seedling survival rate by bu ilding
provenance health databases, optimized labor and energy costs by adopting and increasing the application of automated equipment
(automatic feeding, closed environmental control, automatic egg collection system, farming shed thermal energy recovery devic e and
other advanced technological equipment), and optimized its selling cost by selling seedlings via online digital marketing platforms.
     During the reporting period, the company sold a total of 264 million baby chicks and baby ducks, 11 million more and 4% up
year-on-year, 220 million commodity chicks and ducks were sold, 21 million more and 11% up year-on-year; 352 million adult
chicks and ducks were slaughtered, unchanged year-on-year, indicating a further increased matching ratio of commercial generation
farming and slaughtering business; 0.8640 million tons of chicken and duck meats were sold, 40,900 tons less and 5% down
year-on-year; the company achieved business revenue of 9.209 billion Yuan, 130 million Yuan more and 1.43% up year-on-year.
     (III) Pig farming business: building up internal strength for stabilized operation and adjusting paces to start a new journey
     With the operation scale constantly expanding,, pig farming has become a core business that affects the company’s profitability
most. In the first half of 2021, the drastically   dropping pork prices, rising prices of feed ingredients and a new round of attenuated
ASF outbreak affecting many northern provinces from the end of the previous year to the first quarter of this year all causedour pig
farming business to encounter extremely terriable external environments. Meanwhile, the company’s pig business managed over 200
subsidiaries with independent accountability in 2020, increasing 100% year-on-year. We managed nearly 1.20 million fertile sows,
three times more year-on-year; employees approached 45,000, 3.5 times more year-on-year. Such a leapfrog development, on the one
hand,seized the window of dual opportunity of market and policy in the last two years thus increasing the market share, formi ng a
                                                                                                                                       48
                                                                                   2021 Semiannual Report of New Hope Liuhe Co., Ltd
balanced presence across advantageous regions of the country, facilitating the production resumption and supply assurance of hogs
across the country and laying a foundation for the next stage of operations; on the other hand, it also posed new requirements and
challenges to the management capabilities of the company. From the beginning of 2021, the company also fully shifted from a stage
of rapid expansion in the past two years to a stage of robust operation, where the company enhanced its internal management
capabilities through many measures, improved business operation efficiency, gradually reducing farming costs and survived the
difficult period of cyclic bottoming.
     1. Adjusting the pace of development and controlling capital expenditure. By the end of the first half of this year, the bree ding
pigs on hand ,at breeding pig farms , exceeded 1.60 million, and the stock scale of fattening farms built in place also reached 6.00
million. Besides, fattening farms of 3.90 million pigs is currently under construction or to be built. On this basis, the capacity
portfolio also further improved, as the marketing rate of hogs accounted for nearly 20% of the total in the central and south region in
the first half of the year, increasing 100% form last year. The aforesaid capacities are sufficient to meet the needs for piglet
production and auxiliary in-house fattening operations for the next two years, so the company has now slowed down the construction
of new breeding pig farms.And the company flexibly scheduled the construction progress of fattening farms,based on the availa bility
of supporting facilities for fattening capacities in the regions where it operates.Also, we changed the previous self-built fattening
farms ,which temporarily used for breeding farms, now adjusted back to the fattening purpose according to production rhythm. The
company’s capital spending in the first half of the year fell by 46% from the second half of the previous year, and the Q2 capita l
spending also fell by 45% from the first quarter; The company’s startup cost in the first half of the year fell by 18% from the second
half of the previous year, and the Q2 startup cost also fell by 56% from the first quarter, with both the capital spending and startup
cost expected to be further decreased in subsequent periods.
     2. Iterating containment measures to fight the attenuated ASF outbreak. From the end of the previous year to the first quarter of
this year, a new round of attenuated ASF outbreak in many Northern provinces caused prevalent effects to farming companies and
farming households.     This round of attenuated ASF outbreak is characterized by extensive outside contamination, numerous
channels of spread, long latency periods and a long phase of effect, thus posing new challenges to the containment measures. Around
the Spring Festival, all officers of the company’s pig business unit including senior executives conducted field surveys in order to
strengthen the ASF containment efforts, to comfort the frontline employees.Meanwhile, at the levels of the head and teams, key
person were assigned to do ASF task ,they are supposed to provide prioritized assistance in those ] challenging regions             In this
process, the company continuously summed up its experience and upgraded containment and decontamination methods, including
whole-population serum double-antibody and double-screening, application of thermal imagers and static attenuation and disinfection
of materials; and first added up its containment processes before subtracting in a way that avoids slackness resulting from prolonged
and excessively trivial containment processes, which helped restore normal production faster while ensuring containment, as well as
reduce bio-safety containment costs at the same time. With the aforesaid measures, the number of ASF-affected farms at the end of
the first half of the year has been kept below 1%.
     3. Optimizing the organizational structure and assigning capable individuals back to production. As the company rapidly
expanded in the past two years, its pig farming team also continuously split up and expanded. As a result, many vertical teams
separately organized and managed. And managers of frontline units are responsible for development, construction and public af fairs.
When the company fully transitioned to a stage of robust operation, HR arrangements were also adjusted accordingly to focus
organizational strengths on production and emphasize more concentration and aggregation, thereby helping unified standards and
systems realize a full coverage both horizontally and vertically and facilitating rapid replication and adoption of best practices inside
the company. First of all, at the corporate level, with five middle offices of the swine business that started being built in late 2020, the
company further refined and strengthened the HQ function of pig business by, for example, spinning off a feed supply department
from the feed nutrition department in order for the former to focus on nutrition formula and feeding methods and for the latter to
focus on production and quality control of feed plants affiliated to the pig business, as well as conduct centralized procurement and
logistics in collaboration with the companywide feed system; the company also planned to extend a bio-safety route from its health
management department in order for the former to focus on technology research and development for epidemic prevention and
                                                                                                                                         49
                                                                                   2021 Semiannual Report of New Hope Liuhe Co., Ltd
testing and treatment and for the latter to focus on supervising and guiding the implementation of containment measures.       Sec ondly,
on the levels of vertical teams and operating regions,      one the one hand, corresponding routes and jobs were added in conjunction
with the HQ function refining to ensure related work can be carried out level by level; on the other hand, the duties of deve lopment
and construction and public affairs that largely preoccupied general managers of various levels at the previous stage of development
were reallocated to the counterpart departments of the HQ for vertical management so as to allow general managers of various levels
to focus more on production and operations inside pig farms. Last, on frontline production units, skill certification was further
pursued, as the HQ enacted 73 standards and 15 certificates covering 5 work sections as well as supporting section-specific learning
hand cards in a unified manner to conduct online and onsite theoretical exams for more than 20,000 frontline production workers as
well as onsite operation certification inside pig farms. Exams and certifications are used to drive all employees to refresh themselves
on basic production skills and link the certification results to job adjustment and grade change, with a work permit system adopted to
help motivate teams and optimize the workforce structure. As the next step, the company will also extend its skill certificat ion efforts
from production units to health management, sales and other functional areas, and encourage all senior managers in its pig business
to participate in certification for an increased understanding of frontline practice.
     4. Building up information systems and working hard on planning and operational control. For a long time, the company
maintained high production indicators, effective ASF containment and low cost. But after rapid expansion of management scale, the
former management model that relied too much on the elites couldn’t ensure various standard systems and good practices, formed in
the past, effectively replicating inside the company. In the second quarter of the year, the company started a project of building a
planning and operation management system, which, oriented towards the frontline production units, can generate daily plans based
on the scientific full-load rhythmical production requirements and pig population allocation inside pig farms, and then push and
distribute assignments to employees before work based on the production action specification and standards of each work section,
provide early warning and prompts for undesirably scheduled tasks in work and form evaluations timely based on work results a fter
work to help employees review and improve, so as to help the line managers increase their management efficiency and ensure orderly
conduct of production. Meanwhile, this system can also form data dashboard timely from the aforesaid plans and achievement da ta in
order for management teams at various levels to perfor m backend analysis, adjustment and deviation correction and to reduce the
deviations between plans and actual operation results.       Currently, this system has completed the phase I test of business processes
related to producing sows in the pilot unit and he lped the pilot unit significantly increase production achievements and plan
attainment rates, expected to proceed with system development and test gradually for reserve sows, piglets and fattening pigs , in
addition to rollout to other units after stabilization proven through tests.
     During the reporting period, the company sold a total of 0.5634 million breeding pigs and piglets and 3.8977 million hogs,
totaling 4.4611 million pigs, 2.3382 million more and 110% up year-on-year; the company achieved business revenue of 10.182
billion Yuan, 3.234 billion Yuan more and 46.55% up year-on-year。 Despite the rapidly falling prices, rising prices of feed
ingredients, the attenuated ASF outbreak and phase-specific management effectiveness dilution after the rapid expansion, which
affected the profitability of the company together,        With the aforesaid adjustment and optimization measures, the company’s
production indicators in various aspects all showed apparent improvement; 35-day conception rate, matching and farrowing rate,
marketing rate and rate of acceptable products all rose gradually, the number of healthy piglets per pigsty and the number of weaned
piglets per pigsty reached 10 and 9.4 respectively in June, the average piglet weaning cost fell to 470 Yuan/pig in July, and the
average piglet weaning cost in several operating regions already fell below 350 Yuan/pig, all these improvements to be embodied
gradually in fat pigs to be marketed in the second half of the year.
     (IV) Food business: Continuously expanding the product mix and actively developing KA channels
     Food business is the direction of the company's long-term transformation and development. After entry into 2021, the company
continued expanding its product mix and its hotpot food material business has formed a sequence of orderly growth, with new
product series such as beef slice and meatball growing in succession under the trendsetting effect of deep fried pork slice. Meanwhile,
the company established its presence primarily in KA channels, as a newly-formed Catering Supply Chain team actively acquired
leading high-quality customers in the fields of hotpot restaurant chains, food manufacturers, KA supermarkets and new retail outlets,
                                                                                                                                      50
                                                                                2021 Semiannual Report of New Hope Liuhe Co., Ltd
etc.
       1. Launch new hotpot food SKUs and get the product-line formed:The deep fried pork slice series has become an industry
benchmark in this category and continuously grew fast, with a 180% increase in sales revenue in the first half of this year. A series of
food ingredients suitable for hotpot scenarios such as beef slice, large-particle shrimp meatballs and luncheon meat developed well
once launched, which, together with pot-stewed and meat roll series products, formed an echelon sequence of benign progression,
thus solidifying a whole-new brand positioning “Meihao exclusive for hotpot”, gradually wining the heart and mind of catering
customers and consumers and greatly facilitating the development of hotpot chain customers.         The company will continue reusin g
its channel resources accumulated from its hotpot ingredient business to replicate a growth model and develop “Meihao Kebab” and
other BBQ food ingredient products in an orderly fashion. In addition, the company officially launched a high-end western-style
low-temperature meat product brand “Le matre charcutier" created with a European farming industry leader Cooperl in early 2021,
which further enriched its product line and helped develop high-end channels.
       2. To improve market penetration in Sichuan and to enter into more regions nationwide: On the one hand, the company
endeavors to penetrate throughout markets in Sichuan, stabilize its dominant presence at its stronghold, leverage its existing
customers in Sichuan to further penetrate sales outlets at county and township levels, and concentrate its marketing resources at
critical sales outlets to provide consumers with more valuable product mixes. On the other hand, the company continued accele rating
its expansion to the rest of the country, strengthened region-by-region management of sales teams, further divided markets outside
Sichuan into six operating regions of south, northeast and central China, Henan and Anhui, northwest and east China, set their sales
targets and fully empowered teams. In the first half of the year, the company established a food business marketing department to
help sales teams and distributors open markets through a series of measures such as pre-season tour of market and tasting events, as a
result of which 2,112 tier-2 downstream customers were newly acquired within half a year and revenue contribution of top 50
distributors were helped to increase by 14.5% year-on-year.      In addition, the company continued expanding into tier-1 cities of
Beijing, Shanghai, Guangzhou and Shenzhen across the board by intensifying cooperation with leading KA supermarkets.
       3. Focus on KA acquisition and emerging channels development:In 2021, we identified KA development as an important
driving force behind the channel transformation plan. At the beginning of the year, the company established a Catering Supply Chain
team in response to the industry trends, which has won bids for several important projects within half a year and fully leveraged the
advantageous supply capabilities of the company that maintain presence across the industry chain and primary focus on food sa fety.
In the future, the company will also build a food material supply chain system catering for more types of customers such as schools,
hospitals, major companies and special channels with safe, high-quality food ingredient services.
With deep fried pork slices as the “pacesetter”, the company brought hotpot food materials to over 90 of top 100 hotpot chains
nationwide. For its raw and fresh meat business, the company further expanded its KA pool by newly contracting with food and
catering companies such as Yuanjiyun Dumplings. In terms of C-end retail channels, the company established a dedicated KA
supermarket sales team to make overall planning for mall and supermarket business of its business units and make deal with national
KA malls and supermarkets such as Fresh Herma, RT-Mart, Wulmart, Walmart and Metro. In the first half of the year, sales of
processed food to KA supermarket channel grew by 220% year-on-year, and fresh meat sales grew by 29% year-on-year, showing
good growth momentums. In terms of e-commerce and new retail channels, the company won the first place in the category of quick
dishes on Tmall.com’s “618” shopping festival and Meihao homemade deep fried pork slices ranked first on the list of repeat
purchase list and the top-rated list. “Meihao” has become the 7th-level (the highest leve l) vendor on Tmall.com, and the company
also actively establishes its presence on many platforms such as pinduoduo.com, chengxinyouxuan.com and xsyxsc.com in order to
jointly fuel the rapid development of “Meihao” brand in new retail channels. In order to ensure rapid scale-up in e-commerce
channels, the company also further intensified cooperation with third-party specialized cold chain logistics companies such as SF
Express, Jiuye Supply Chain and Fresh Life Style Supply Chain Management to build up its presence in frontend warehouses
nationwide and continuously strengthen its supply chain distribution capabilities.
       During the reporting period, the company sold 123,000 tons of pork products, 19,400 tons more and 19% up year-on-year; the
company sold 121,500 tons of various deep-processed meat products and prepared dishes, 26,300 tons more and 28% up
                                                                                                                                     51
                                                                              2021 Semiannual Report of New Hope Liuhe Co., Ltd
year-on-year, with a further increased ratio of deep-processed product sales; the company’s food business realized business revenue
of 4.474 billion Yuan, 339 million Yuan more and 8.18% up year-on-year.
Year-on-year changes in key financial data
                                                                                                                        Unit: Yuan
                                                                           Year-on-year
                                                  The same period of
                         This reporting period                              increase or                Reasons for change
                                                   the previous year
                                                                             decrease
                                                                                           Mainly due to remarkable growth in
   Business revenue       61,518,574,560.67        44,696,040,364.08          37.64%       business revenue from feed, pig and
                                                                                           trade businesses of the company.
                                                                                           Mainly due to increased business
   Operating costs        59,181,012,728.29        38,883,226,717.75          52.20%       revenue and consequential increased
                                                                                           operating cost of the company.
                                                                                           Mainly due to increased size, business
 Marketing expenses         886,165,806.70          645,291,464.41            37.33%       revenue and consequential increased
                                                                                           costs of the company.
                                                                                           Mainly due to increased size and
Management expenses        2,071,241,942.81        1,620,715,240.33           27.80%       consequential increased costs of the
                                                                                           company.
                                                                                           Mainly      due   to    increased     interest
  Financial expenses        753,564,042.97          431,355,596.36            74.70%       expense resulting from increased debt
                                                                                           financing scale of the company.
                                                                                           Mainly due to remarkably increased
                                                                                           profits   from     feed    business       and
 Income tax expense         255,813,436.08          171,269,538.95            49.36%
                                                                                           consequential increased income tax
                                                                                           expense of the company.
                                                                                           Mainly due to increased R&D input
      R&D input             147,076,799.89          103,889,170.64            41.57%
                                                                                           from the company.
                                                                                           Mainly      due   to    decreased current
 Net cash flows from                                                                       operating     profits     and       increased
                           -4,596,606,685.74        658,593,331.58          -797.94%
  operating activities                                                                     inventory     and receivables        of the
                                                                                           company.
                                                                                           Mainly due to decrease in net input of
                                                                                           long-term assets in the pig business of
 Net cash flows from
                          -10,459,350,214.73      -15,567,369,290.18          32.81%       the company in this period compared
  investing activities
                                                                                           with the same period of the previous
                                                                                           year.
 Net cash flows from
                          17,916,417,332.72        19,232,700,766.30          -6.84%
  financing activities
                                                                                                                                       52
                                                                                     2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                                                                                  Mainly due to effects of a large
 Net increase in cash
                               2,839,612,152.66          4,323,226,543.31           -34.32%       increase in borrowings acquired by the
 and cash equivalents
                                                                                                  company in the corresponding period.
                                                                                                  Due to increased insurance contract
Net insurance liability
                                14,883,920.78              9,814,421.35             51.65%        reserve accrued by the guarantee
    reserve accrued
                                                                                                  company
                                                                                                  Mainly due to increased stamp duty
 Taxes and surcharges           103,141,924.10            77,628,934.48             32.87%        resulting from additional loan contracts
                                                                                                  and lease contracts of the company.
                                                                                                  Due to increased current income of the
     Other income               107,232,509.12            66,064,040.01             62.32%
                                                                                                  company from government subsidies.
 Income on change in                                                                              Mainly due to changes in fair va lue of
                                -11,086,791.11             -4,111,949.63           -169.62%
       fair value                                                                                 financial products of the company.
                                                                                                  Mainly due to increased accounts
   Credit impairment                                                                              receivable and consequential increased
                                -77,108,559.38            -47,300,672.93            -63.02%
          loss                                                                                    credit impairment loss accrued of the
                                                                                                  company.
                                                                                                  Mainly due to increase in impairment
Asset impairment loss         -1,002,396,508.13            -2,555,550.61          -39,124.29%     loss of consumptive biological assets
                                                                                                  accrued.
                                                                                                  Mainly due to effects of loss suffered
  Income from asset                                                                               by the company from disposal of
                                22,936,727.98             -65,147,148.15            135.21%
        disposal                                                                                  productive biological assets in the
                                                                                                  corresponding period.
                                                                                                  Mainly due to increased revenue of the
Non-business revenue            53,491,540.63             31,392,988.99             70.39%
                                                                                                  company from insurance indemnities.
                                                                                                  Mainly due to increase in destruction,
     Non-business                                                                                 scrapping      and    interim     loss   of
                               1,330,740,961.06           143,494,162.87            827.38%
      expenditure                                                                                 productive biological assets of the
                                                                                                  company.
Material changes in composition or source of profits of the company in the reporting period
□ applicable    √   not applicable
There were no material changes in composition or source of profits of the company in the reporting period.
Composition of business revenue
                                                                                                                                  Unit: yuan
                                       This reporting period                  The same period of the past year
                                                                                                                          Year-on-year
                                                     Proportion of                                Proportion of
                                Amount                                         Amount                                  increase or decrease
                                                    business revenue                            business revenue
    Total business
                           61,518,574,560.67             100%              44,696,040,364.08          100%                   37.64%
       revenue
                                                                                                                                               53
                                                                                 2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                                                By industry
        Feeds             32,826,596,340.18            53.36%          22,585,863,819.30           50.54%                45.34%
   Poultry business        9,208,733,591.23            14.97%          9,078,957,817.31            20.31%                1.43%
     Pig business         10,181,674,908.62            16.55%          6,947,750,208.95            15.54%                46.55%
         Food              4,473,503,994.85            7.27%           4,135,206,512.58            9.25%                 8.18%
Commerce and trade         4,509,825,357.68            7.33%           1,721,078,828.70            3.85%              162.03%
        Others              318,240,368.11             0.52%            227,183,177.24             0.51%                 40.08%
                                                                By product
        Feeds             32,826,596,340.18            53.36%          22,585,863,819.30           50.54%                45.34%
   Poultry business        9,208,733,591.23            14.97%          9,078,957,817.31            20.31%                1.43%
     Pig business         10,181,674,908.62            16.55%          6,947,750,208.95            15.54%                46.55%
         Food              4,473,503,994.85            7.27%           4,135,206,512.58            9.25%                 8.18%
Commerce and trade         4,509,825,357.68            7.33%           1,721,078,828.70            3.85%              162.03%
        Others              318,240,368.11             0.52%            227,183,177.24             0.51%                 40.08%
                                                                By region
      Overseas             6,681,133,536.17            10.86%          4,696,266,485.34            10.51%                42.26%
      Domestic            54,837,441,024.50            89.14%          39,999,773,878.74           89.49%                37.09%
Industries, products or regions that account for more than 10% of the company’s business revenue or operating profits
√ applicable    □ not applicable
                                                                                                                           Unit: Yuan
                                                                                  Increase or          Increase or        Increase or
                                                                                  decrease in          decrease in        decrease in
                                                                                business revenue     operating cost      gross margin
                   Business revenue          Operating costs     Gross margin
                                                                                 from the same       from the same    from the same
                                                                                  period of the       period of the      period of the
                                                                                 previous year        previous year      previous year
                                                                By industry
    Feeds         32,826,596,340.18      30,555,569,387.68          6.92%           45.34%                 46.85%           -0.95%
   Poultry
                   9,208,733,591.23      8,752,300,644.50           4.96%            1.43%                 1.76%            -0.30%
  business
Pig business      10,181,674,908.62      10,840,863,115.86          -6.47%          46.55%              171.85%            -49.07%
    Food           4,473,503,994.85      4,421,045,486.02           1.17%            8.18%                 20.58%          -10.17%
                                                                By product
    Feeds         32,826,596,340.18      30,555,569,387.68          6.92%           45.34%                 46.85%           -0.95%
   Poultry
                   9,208,733,591.23      8,752,300,644.50           4.96%            1.43%                 1.76%            -0.30%
  business
                                                                                                                                         54
                                                                                  2021 Semiannual Report of New Hope Liuhe Co., Ltd
Pig business         10,181,674,908.62      10,840,863,115.86         -6.47%          46.55%              171.85%         -49.07%
    Food             4,473,503,994.85        4,421,045,486.02         1.17%           8.18%                20.58%         -10.17%
                                                                  By region
  Overseas           6,681,133,536.17        5,665,190,394.40        15.21%           42.26%               42.34%          -0.04%
  Domestic           54,837,441,024.50      53,515,822,333.89         2.41%           37.09%               53.33%         -10.33%
Data about main business of the company after the most recent adjustment according to the statistical specification at the end of
reporting period if the statistical specification of main business data of the company was adjusted during the reporting period
□ applicable   √     not applicable
Remarks on causes of more than 30% year-on-year change in related data
√ applicable   □ not applicable
The company’s business revenue from its feed business increased by 45.34% year-on-year, mainly due to remarkably increased feed
sales volume thanks to the greater efforts of the company to intensify feed product research and development and pursue digital
marketing transformation.
The company’s business revenue from its pig business increased by 46.55% year-on-year, mainly due to remarkably increased
volume of hogs marketed by the company.
The company’s gross margin on its pig business decreased by 49.07% year-on-year, mainly due to remarkably decreased selling
prices of hogs in this period compared with the corresponding period.
IV. Analysis of non-main business
√ applicable   □ not applicable
                                                                                                                          Unit: Yuan
                                                         Percentage of total      Remarks on reasons for       Whether sustainable or
                                        Amount
                                                                profits                 formation                       not
                                                                                   Mainly consisting of
                                                                               investment income accounted
                                                                               for and recognized under the
   Investment income              1,176,596,066.35              -43.58%                                                 Yes
                                                                               equity method due to holding
                                                                               of equities in China Minsheng
                                                                                           Bank
   Profit and loss from
                                    -11,086,791.11              0.41%
   change in fair value
    Asset impairment             -1,079,505,067.51              39.99%
 Non-business revenue               53,491,540.63               -1.98%
      Non-business
                                  1,330,740,961.06              -49.29%
       expenditure
                                                                                                                                        55
                                                                                  2021 Semiannual Report of New Hope Liuhe Co., Ltd
V. Analysis of assets and liabilities
1. Significant changes in asset composition
                                                                                                                        Unit: Yuan
                                 The end of this reporting period               The end of the previous year           Increase or
                                                      Percentage of total                        Percentage of total   decrease in
                                   Amount                                       Amount
                                                             assets                                    assets          proportion
 Cash at bank and
                              11,674,800,886.30             8.82%           8,799,264,356.20           8.04%             0.78%
     on hand
     Accounts
                              1,504,568,263.46              1.14%            865,340,970.83            0.79%             0.35%
    receivable
  Contract assets                                           0.00%                                      0.00%             0.00%
    Inventories               19,654,525,975.42             14.85%          15,649,735,402.26          14.30%            0.55%
    Investment
                               174,306,520.36               0.13%              364,645.04              0.00%             0.13%
    properties
Long-term equity
                              23,538,638,058.14             17.78%          22,702,080,340.55          20.74%           -2.96%
   investments
   Fixed assets               32,537,004,193.25             24.58%          28,861,009,355.16          26.37%           -1.79%
 Construction in
                              15,962,053,442.98             12.06%          11,006,466,489.26          10.06%            2.00%
     progress
   Right-of-use
                              6,324,700,984.83              4.78%                                      0.00%             4.78%
       assets
    Short-term
                              19,010,984,011.32             14.36%          10,399,072,204.60          9.50%             4.86%
    borrowings
     Contract
                              2,248,863,709.87              1.70%           2,285,698,452.30           2.09%            -0.39%
     liabilities
    Long-term
                              32,294,983,344.43             24.39%          22,901,808,635.67          20.93%            3.46%
    borrowings
 Lease liabilities            5,113,375,251.89              3.86%                                                        3.86%
    Productive
                              9,722,917,996.68              7.34%           11,797,596,610.49          10.78%           -3.44%
 biological assets
2. Major overseas assets
□ applicable      √   not applicable
3. Assets and liabilities measured at fair value
√ applicable      □ not applicable
                                                                                                                                     56
                                                                                        2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                                                                                                                 Unit: Yuan
                                                          Accumulat
                                                                         Current
                                        Current profit     ed fair                                                    Othe
                                                                         provision       Current
                        Beginning       and loss from       value                                     Current sales      r
         Item                                                               for         purchase                             Ending amount
                         amount         change in fair     changes                                       amount       chan
                                                                        impairmen        amount
                                            value         charged to                                                   ges
                                                                             t
                                                           equities
Financial
assets
1.
Held-for-tradi
ng financial
assets
                        2,196,760.08       6,050,516.72                               125,330,769.56 102,671,409.46           22,076,125.34
(excluding
derivative
financial
assets)
4.
Investments
in other              320,276,827.48                                                                                         320,276,827.48
equity
instruments
Subtotal of
financial             322,473,587.56       6,050,516.72                          0.00 125,330,769.56 102,671,409.46          342,352,952.82
assets
Total of the
                      322,473,587.56       6,050,516.72         0.00             0.00 125,330,769.56 102,671,409.46          342,352,952.82
above
Financial
                       16,850,229.73    -17,137,307.83                                                                        17,137,307.83
liabilities
Contents of other changes
Whether the measurement attributes of major assets of the company changed significantly during the reporting period
□ yes     √ no
4. Restrictions on asset rights as of the end of the reporting period
                          Item                              Ending book value (Yuan)                     Cause of restrictions
                Cash at bank and on hand                            325,969,835.08                              Margin
                                                                                                    Used as collaterals for long and
                      Fixed assets                                  294,033,430.25
                                                                                                        short-term borrowings
                                                                                                    Used as collaterals for long and
                    Intangible assets                                 50,831,208.80
                                                                                                        short-term borrowings
                                                                                                                                              57
                                                                                          2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                                                                                         Used as pledges for short-term
                Accounts receivable                                   11,012,274.60
                                                                                                                    borrowings
                                                                                                        Used as collaterals for short-term
         Consumptive biological assets                               150,000,000.00
                                                                                                                    borrowings
                                                                                                          Used as pledges for long-term
         Long-term equity investments                                837,091,597.65
                                                                                                                    borrowings
                         Total                                       1,668,938,346.38
VI. Analysis of Investments
1. General condition
√ applicable    □ not applicable
   Invested amount during the reporting               Invested amount during the same period of
                                                                                                                    Extent of change
                  period (Yuan)                                the previous year (Yuan)
                23,905,100,494.03                                22,732,259,166.94                                       5.16%
2. Significant equity investments acquired during the reporting period
□ applicable    √   not applicable
3. Ongoing significant non-equity investments during the reporting period
□ applicable    √   not applicable
4. Investments in financial assets
(1) Investments in securities
□ applicable    √   not applicable
The company had no investments in securities during the reporting period.
(2) Investments in derivatives
√ applicable    □ not applicable
                                                                                                                                  Unit: 10,000 Yuan
 Name Rela Whe                       Initi                                                                  Amount Endin Percenta Amount
                         Type of                                                 Purchase      Sales
   of    ted-p ther                   al                                                                      of         g       ge of    of actual
                         derivativ                                   Beginning    amount      amount
 operat arty relat                   amo                                                                   impairm investe ending profit and
                            es               Start date   End date    invested   within the within the
 or of relati ed-p                   unt                                                                      ent        d    invested       loss
                         investme                                     amount     reporting    reporting
derivat onsh arty                     of                                                                   provisio amoun amount           during
                            nt                                                    period       period
  ives    ip     trans               deri                                                                      n         t       in net      the
                                                                                                                                                    58
                                                                                        2021 Semiannual Report of New Hope Liuhe Co., Ltd
invest           actio               vativ                                                              accrued           assets of reporting
ment             n or                 es                                                                (if any)            the       period
                 not                 inve                                                                                 compan
                                     stme                                                                                 y at the
                                      nt                                                                                   end of
                                                                                                                          reportin
                                                                                                                          g period
Future
  s      Non-            Futures
broker relat               and                 October      January
                 No                                                   -627.17   12,533.08 11,667.52        0       -64.89 0.00%      -1,759.69
 age      ed              option               12, 2020    31, 2022
compa party              contracts
 nies
                         Interest
                           rate
         Non-             swap
Comm
         relat             and                 May 22,      January
ercial           No                                                   -838.18       0       -1,400.39      0       558.77 0.00%        -3.44
          ed              foreign                2020      19, 2022
banks
         party           exchang
                            e
                         forwards
               Total                   0          --            --    -1,465.35 12,533.08 10,267.13        0       493.88 0.00%      -1,763.13
   Source of funding for
                                                                                  Self financed
  derivatives investments
 Involvement in litigations
                                                                                 Not applicable
            (if any)
 Date on which the board                                                         August 31, 2018
  approval of derivatives
 investment is announced                                                         August 31, 2020
   and disclosed (if any)
                                             Remarks on risk analysis and control measures of derivatives positions during the reporting
                                     period (including but not limited to market risk, liquidity risk, credit risk, operational risk and legal
 Remarks on risk analysis            risk)
  and control measures of                    I. Risk analysis
derivatives positions during                 Commodity futures hedging operation can effectively manage the purchase price risk of raw
      the reporting period           materials, especially reduce the impact of falling price loss caused by high inventories on the
(including but not limited to company when raw materials fall sharply, but there will also be certain risks:
 market risk, liquidity risk,       1. Risk of abnormal price fluctuations: In theory, the futures market prices and the spot market
credit risk, operational risk prices of all the trade categories at the closing date will return to the same level. In the rare cases of
       and legal risk)        irrational market, the futures prices and spot prices might still not return at the closing date, thus
                                     giving rise to a systemic risk event, which in turn affects hedging operation scheme of the company,
                                     even causing losses.
                                                                                                                                               59
                                                      2021 Semiannual Report of New Hope Liuhe Co., Ltd
     2. Capital risk: If the amount of investment in futures trading is too large according to the
operating instructions issued by the company, it may lead to capital liquidity risk, or even result in
actual losses caused by forced liquidation due to insufficient time to supplement the margin.
     3. Technical risk: Technical risk may be caused by incomplete computer systems.
     In order to prevent the adverse impact of exchange rate and interest rate fluctuations on the
company's profits and shareholders' equity, the company needs to conduct capital transaction business
of value-preserved exchange rate and interest rate to reduce the risk exposure of foreign exchange and
interest rate, but at the same time there are certain risks:
     1. Market risk: The difference between the contract exchange rate / interest rate and the actual
exchange rate / interest rate at maturity date will generate investment gains and losses in the
value-preserved capital transaction business; During the duration of the value-preserved capital
transaction business, there will be revaluation gains and losses in each accounting period, and the
cumulative value of the revaluation gains and losses at maturity date is equal to the gains and losses
on investment.
     2. Liquidity risk: The value-preserved foreign exchange capital transaction business is based on
the company's foreign exchange revenue and expenditure budget, and matches the actual foreign
exchange revenue and expenditure to ensure that the company has sufficient capital for clearing at the
time of closing, or selects the derivatives for close-out netting to reduce the cash flow requirements at
maturity date; The value-preserved interest rate capital transaction business will all be closed based on
the net amount of interest rate difference.
     3. Performance risk: The counterparties of the company in value-preserved capital transaction
business are all banks with good credit standing and maintaining long-term business relations with the
company, for which there is substantially no performance risk.
     4. Other risks: When conducting business, if the operators fail to follow the prescribed
procedures for the operation of value-preserved capital transaction business or to fully understand the
derivatives information, the operational risks will occur; If the terms of the transaction contract are
not clear, the legal risks will be likely to occur.
     II. Risk management strategies
     Risk management strategies for commodity futures hedging:
     1. Match the hedging business with the company's production and operation, and strictly control
the futures position.
     2. Strictly control the capital scale of hedging, reasonably plan and use the margins, issue
operating instructions in strict accordance with the company's policies on futures trading
management, and conduct operations only after approval according to the regulations.
     3. The company has established the Derivatives Investment Management Policy and the Futures
Management Policy, making clear provisions for hedging business, and set up a dedicated futures
operation team, dedicated futures operation monitoring team and corresponding business processes
for control through implementation of authorization and post constraints, internal audit and other
measures.
     4. The warning mechanism for medium and long-term trends of major varieties has been
established. According to the monitoring mechanism of market price trends, the futures operation and
monitoring team of the company regularly predicts the future trends of major varieties in a certain
period, so as to ensure timely judgment and disposition of futures varieties in case of abnormal
                                                                                                        60
                                                                                  2021 Semiannual Report of New Hope Liuhe Co., Ltd
                               fluctuations.
                                    Risk management strategies for value-preserved capital transaction business
                                    1. The company conducts value-preserved capital transaction business for the purpose of
                               reducing the impact of exchange rate fluctuations on the company, and prohibits any risky
                               speculations; The amount of the company's value-preserved capital transaction business may not
                               exceed the upper limit of the authorized amount approved by the board of directors or the general
                               meeting; the company may not engage in any leveraged capital transactions.
                                    2. The business working group of the company shall conduct risk analysis on transactions before
                               carrying out the capital transaction business, and formulate and submit the transaction plans
                               (including capital transaction variety, term, amount, trading bank, etc.) and feasibility analysis reports
                               to the business leadership group.
                                    3. The value-preserved capital transaction business contracts of the company shall be executed
                               after the business working group submits them to and obtain approval from the chief f inancial officer,
                               president and chairman.
                                    4. The company shall sign contracts with trading banks with accurate and clear terms, and strictly
                               implement the risk management system to prevent legal risks.
                                    5. The finance department of the company shall timely track the changes in open market prices
                               or fair value of capital transaction contracts, timely assess the changes in risk exposure of the traded
                               contracts, and regularly report to the risk control committee of the board of directors; if any abnormal
                               situation is found, it shall be reported to the risk control committee of the board of directors to prompt
                               the business working group to implement emergency measures.
                                    6. The company's internal audit department shall conduct compliance audit on capital transactio n
                               contracts on a regular basis.
Changes in market prices or
   product fair value of
    derivatives that the
 company has invested in
                               The hedging transaction variety of the company is the value-preserved capital transaction business for
during the reporting period,
                               the prevalent varieties in the domestic futures markets, for which the market transparency is high and
  with the analysis of fair
                               the transactions are active, and the transaction prices and the intraday settlement unit price fully
  value of derivatives to
                               reflect the fair value of derivatives.
   disclose the specific
methods used and setting of
  related assumptions and
        parameters.
 Remarks on whether the
  accounting policies and
                               The accounting policies and accounting principles related to the company's derivatives transactions
accounting principles of the
                               have been implemented in accordance with the relevant provisions of the “Enterprise Accounting
 company for derivatives
                               Standards—Recognition and Measurement of Financial Instruments” and the “Enterprise Accounting
during the reporting period
                               Standards—Hedging” issued by the Ministry of Finance of the People's Republic of China, without
   changed significantly
                               any changes.
compared with the previous
     reporting period.
                                                                                                                                        61
                                                                                    2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                  The company has the Securities Investment Management Policy in place and the company’s
                                  investments in securities are conducted while ensuring the security of the company’s investments,
                                  daily operation and funds and will not affect the company’s normal turnover of funds or normal
                                  conduct of its main business. While making investments in securities, the company should
                                  continuously improve its business policies, further specify the control procedures for key moving
     Special opinions of          parts of investment and financing operations from authorization, execution, supervision to
  independent directors on        information disclosure, strengthen obligations and duties of directors, supervisors and senior
 derivatives investments and executives and establish internal accountability system to enhance funds management of the
 risk control of the company company’s investment and financing activities. The Company’s derivatives investments for the
                                  purpose of hedging have been assessed by designated related department in terms of investment risk.
                                  To put an end to speculation in the investment process, the company has established the Derivatives
                                  Investment Management Policy and the Futures Management Policy. While conducting derivatives
                                  business, the company should continue to enhance the professional competency and capabilities of
                                  operating personnel and strengthen supervision.
VII. Sales of significant assets and equities
1. Sales of significant assets
□ applicable   √   not applicable
The company did not sell any significant assets during the reporting period.
2. Sales of significant equities
□ applicable   √   not applicable
VIII. Analysis of major subsidiaries and minority-owned companies
√ applicable   □ not applicable
Major subsidiaries and minority-owned companies that have an impact on the company's net profits of more than 10%
                                                                                                                              Unit: Yuan
  Company       Compan                                           Registered    Total                   Business   Operating
                                      Main business                                       Net assets                          Net profits
    name         y type                                           capital      assets                  revenue     profits
                          Feeding, sale and slaughter of
                          pigs; agricultural science research
                          and experimental development;
Tibet                     promotion and training of related
Xinhao          Subsidia technologies;             production, 500,000,0      73,685,14 3,990,491,6 9,233,642, -3,709,202 -4,845,521,
Technology ry             processing and sale of animal 00.00                  0,113.88        04.96     280.25     ,388.43       443.14
Co., Ltd                  farming equipment; production,
                          processing and sale of compound
                          feed,     concentrated   feed   and
                          concentrate      supplements    (the
                                                                                                                                           62
                                                                                                2021 Semiannual Report of New Hope Liuhe Co., Ltd
                           aforesaid items and terms are
                           subject to license): import and
                           export             business:         project
                           investment          and      management;
                           science and technology exchange
                           and promotion services
                           Venture investment, investment
                           management, financial advisory,
New Hope                   wealth management consulting,
Liuhe           Subsidia business                      reorganization 576,555,6          20,918,98 20,918,989,              1,108,947, 1,108,947,1
                                                                                                                     0.00
Investment      ry         consulting, market survey, credit 00.00                        9,197.10      197.10                  153.79         53.79
Co., Ltd                   investigation,                   technology
                           development             and         transfer,
                           technical consulting services.
                           Import and export business: sale
Shandong
                           of   medicated            feed     additives;
New Hope        Subsidia                                                   3,458,823, 24,471,13 6,843,232,9 31,259,63 336,087,3 260,432,51
                           dealing       in     feed        ingredients;
Liuhe Group ry                                                             529.00         6,805.85       73.28   6,215.16        82.74          5.07
                           enterprise management consulting
Co., Ltd
                           services, etc.
                           Feed research and development:
Sichuan
                           wholesale          and retail of feed
New Hope
                Subsidia ingredients            and         feed-related 800,000,0       13,489,52 2,601,926,2 12,191,86 170,527,7 -22,613,16
Liuhe
                ry         products; planting of cereals and 00.00                        6,482.74       33.63   0,541.89        24.71          6.70
Farming
                           other crops; sale of veterinary
Co., Ltd
                           drugs, etc.
Acquisition and disposal of subsidiaries during the reporting period
√ applicable   □ not applicable
                                                                     Way of acquisition and disposal of          Effects on overall production,
                     Company name
                                                                   subsidiaries during the reporting period       operation and performance
           Jiangsu Suxinyuan Feed Co., Ltd                                          Share purchase                Losses of 161,333.21 Yuan
           Puyang New Hope Feed Co., Ltd                                            Share purchase                  Profits of 435.15 Yuan
   Changxing Heping Huatong Livestock Co., Ltd                                      Share purchase                 Profits of 16,332.41 Yuan
        Changxing Huatong Livestock Co., Ltd                                        Share purchase                 Losses of 41,963.56 Yuan
        Zhangjiajie Xinruixing Feed Co., Ltd                                        Share purchase               Profits of 2,232,065.98 Yuan
           Hezhou Jiuding Farming Co., Ltd                                          Share purchase                Losses of 106,418.85 Yuan
     Huzhou Haihuang Biotechnology Co., Ltd                                         Share purchase                Losses of 590,409.36 Yuan
   Zibo Xinmu Mechanical Technology Co., Ltd                                        Share transfer               Profits of 6,494,745.48 Yuan
  Qingdao New Hope Xinrong Technology Group
                                                                            Established by investment             Losses of 615,857.93 Yuan
                        Co., Ltd
        Shen County Xinliu Farming Co., Ltd                                 Established by investment                       No effects
                                                                                                                                                   63
                                                                     2021 Semiannual Report of New Hope Liuhe Co., Ltd
 Yingshan Xinyue Farming Technology Co., Ltd        Established by investment                  No effects
 Rongxian Xinyue Farming Technology Co., Ltd        Established by investment                  No effects
    Sichuan New Hope Liuhe Swine Breeding
                                                    Established by investment                  No effects
              Technology Co., Ltd
Laibin New Hope Liuhe Farming Technology Co.,
                                                    Established by investment           Profits of 38,278.55 Yuan
                      Ltd
 New Hope Liuhe (Zibo) Agricultural Technology
                                                    Established by investment           Profits of 34,014.63 Yuan
             Development Co., Ltd
     Wuwei New Hope Liuhe Feed Co., Ltd             Established by investment           Losses of 27,504.11 Yuan
        Sishui Dasheng Breeding Co., Ltd            Established by investment                  No effects
     Qingdao Xinjia Biotechnology Co., Ltd          Established by investment           Profits of 95,562.91 Yuan
        Guiyang Xinhao Farming Co., Ltd             Established by investment                  No effects
New Hope Animal Nutrition Bangladesh Co., Ltd       Established by investment           Losses of 64,855.11 Yuan
         Dingzhou Xinhao Feed Co., Ltd              Established by investment           Losses of 72,396.15 Yuan
          Yulin Guoxiong Feed Co., Ltd              Established by investment          Losses of 851,169.11 Yuan
          Huizhou Liuhe Feed Co., Ltd               Established by investment          Losses of 731,888.47 Yuan
Jiangmen Xinhui District Liuhe Biotechnology Co.,
                                                    Established by investment          Losses of 199,191.31 Yuan
                      Ltd
Wushan New Hope Boar Breeding Technology Co.,
                                                    Established by investment                  No effects
                      Ltd
        Heishan New Hope Feed Co., Ltd              Established by investment             Losses of 510.2 Yuan
   Guangzhou Xinhe Biological Feed Co., Ltd         Established by investment            Profits of 527.71 Yuan
      Fenxi New Hope Liuhe Food Co., Ltd            Established by investment         Losses of 9,683,649.81 Yuan
Guangxi Xinwang Supply Chain Management Co.,
                                                    Established by investment                  No effects
                      Ltd
Hainan New Hope Liuhe Supply Chain Technology
                                                    Established by investment                  No effects
                    Co., Ltd
Shandong Xiangan Livestock & Poultry Breeding
                                                    Established by investment            Losses of 445.37 Yuan
                    Co., Ltd
         Ziyang New Hope Feed Co., Ltd              Established by investment                  No effects
 Shibing New Hope Agricultural Technology Co.,
                                                    Established by investment                  No effects
                      Ltd
         Ya’an New Hope Feed Co., Ltd              Established by investment                  No effects
        New Hope Davao Agriculture Inc.             Established by investment                  No effects
Qingdao New Hope Herun Biotechnology Co., Ltd       Established by investment             Losses of 1,240 Yuan
  Zouping Xinmu Meat Duck Breeding Co., Ltd         Established by investment                  No effects
                                                                                                                    64
                                                                                2021 Semiannual Report of New Hope Liuhe Co., Ltd
     Lvliang New Hope Liuhe Farming Co., Ltd                 Established by investment                       No effects
  Shandong New Hope Liuhe Farming Technology
                                                             Established by investment                 Profits of 661.83 Yuan
                        Co., Ltd
      Zhecheng Liuhe Xingnong Feed Co., Ltd                         Deregistered                       Losses of 123.73 Yuan
   Weiyuan Xinliu Farming Technology Co., Ltd                       Deregistered                             No effects
           Fei County Liuhe Feed Co., Ltd                           Deregistered                        Losses of 5,460 Yuan
     Kaili Xinyue Farming Technology Co., Ltd                       Deregistered                             No effects
     MSFX Food Technology (Beijing) Co., Ltd                        Deregistered                        Losses of 41.99 Yuan
            Julu Xinhao Farming Co., Ltd                            Deregistered                             No effects
       Beichuan Xinchangle Farming Co., Ltd                         Deregistered                       Profits of 202.89 Yuan
 Hainan Danzhou Xinliu Farming Technology Co.,
                                                                    Deregistered                             No effects
                           Ltd
          Sishui Dasheng Breeding Co., Ltd                          Deregistered                             No effects
         Haiyang Xinhao Livestock Co., Ltd                          Deregistered                             No effects
    Linqing Xinliu Farming Technology Co., Ltd                      Deregistered                             No effects
Remarks on major majority-owned and minority-owned companies
IX. Structured entities controlled by the company
□ applicable   √   not applicable
X. Risks facing the company and countermeasures
     I. Epidemic and natural disaster risks
     The animal epidemic disease is the main risk faced in the development of livestock industry. There are three kinds of risks
arising out of the occurrence of epidemic disease. First, the occurrence of epidemic disease is likely to result in death of livestock,
and leads directly to the reduction in yield and drop in prices. Second, the occurrence and prevalence of epidemic disease on a large
scale easily influence the consumer psychology, lead to shrinking market demand, and also affect the feed production and operation.
Third, after the outbreak of some infectious epidemic diseases endangering the public health and safety, the government will take
lockdown and other measures to contain the spread of epidemic disease. These epidemic containment measures will seriously hinder
the transportation of feed, animal healthcare products and live livestock, and the workers returning to work, and have a great impact
on the production and operation of breeding industry. In addition, the outbreak of infectious epidemic diseases will force most
catering enterprises to stop doing business, some agricultural product markets to shut down, and consumers to reduce shopping
activities outdoors, resulting in reduced meat demand and consumption. For example, the African Swine Fever (ASF) with an
enormous impact on the entire industry broke out in 2018. As the ASF is characterized by long latency and high mortality after onset
of the disease, and the effective and reliable vaccine has not yet been developed successfully, coupled with the fact that it was also
the concentrated outbreak on a large scale in China for the first time, both the large-scale breeding enterprises and small farmers
lacked effective containment measures at the onset of epidemic, thereby suffering losses to varying degrees. From the late 20 20 to the
first quarter of 2021, attenuated ASF bounced back once again, especially hitting Hebei, Shandong and Henan and once again
causing prevalent effects to farming companies and farming households in these areas.
     The COVID-19 outbreak at the beginning of 2020 also posed daunting challenges to the livestock and poultry breeding industry
                                                                                                                                    65
                                                                                  2021 Semiannual Report of New Hope Liuhe Co., Ltd
in Chhina. The anti-epidemic measures such as lockdown, delay in return to work, suspension of live poultry trading, and shutdown
of slaughter houses led to unavailability of feed to farms and livestock farmers, newborn livestock nowhere to sell, inability to
slaughter livestock and poultry, and difficulties to conduct breeding production activities normally. After entry into 2021, despite the
stable epidemic containment situation at home overall, scattered episodes of the epidemic across the country and regional lockdown
policies would also cause hindrances to movement of personnel and materials related to business operations..
     In terms of the natural disaster risk, the feed and slaughter are closely related to plant ing and livestock breeding industry, so the
natural disasters such as temperature anomalies, drought, flood, earthquake, hail, and snow disaster will all adversely affec t the
industry operation and development. The natural disasters occurring on the production bases of the company and surrounding areas
may cause substantial damages to production facilities or equipment, and the natural disasters and extreme climate may also drive the
prices of some feed ingredients and meats up. For example, serious flood disasters broke out in many places of South China in
summer of 2016, adversely affecting the planting, breeding, farm produce logistics, project implementation and meat prices along the
industry chain to varying degrees; in terms of planting, continuous catastrophic floods hitting some areas will result in decreased
output of feed ingredients, thus impacting the feed ingredients prices, while at the same time decreasing the quality of raw materials;
in terms of breeding, flood might cause pathogenic microorganisms buried in the land surrounding breeding farms to be exposed in
air and drinking water, and will result in spread of pathogenic microorganisms and trigger epidemic diseases. In addition, se veral
provinces hardest hit by the floods are major aquatic breeding areas in China, where the impact of floods not only would destroy
fishery production equipment but also is highly likely to wash off fish-barring facilities and bring away fish fries and adult fishes,
causing losses to economic income of farmers and thus affecting feed ingredients sales of the company; in terms of logistics, roads
are flooded and roadbeds and road surfaces destroyed wherever flood sweeps, forcing the freight costs of raw materials, feed,
finished products and breeding pigs to rise and the transport capacity down, causing pressures on the supply chain of the company; in
terms of project implementation, continuous rainstorms will also cause part of capital investment construction projects of the
company to suffer temporary shutdown, affecting the construction schedule; in terms of meat prices, flood would also impact the
meat supply and directly contributed to the rising prices of pigs, while the gap in meat prices between affected areas and unaffected
areas was growing, thus leading to increased allocation and transport of hogs, and resulting in spread of the pandemic to a certain
extent.
     Risk countermeasures: In the face of animal epidemics, the livestock farms planned and constructed by the company’s breeding
base are normalized and standardized farms staffed with professional breeding technologists and equipped with strict anti-epidemic
measures to effectively prevent and control the occurrence of epidemic diseases. The company has also summarized some experie nce
and measures responding to major epidemic diseases through years of exploration and accumulation, which allow the company to
eliminates the impact of various epidemics by adjusting the product mix when appropriate, improving the product quality, cond ucting
deep market development actively and reducing the costs. Since 2014, the company has been guiding technicians to better serve
farmers by establishing animal healthcare laboratories in various areas, creating the cloud-based animal healthcare system and
conducting the monitoring and warning of epidemics and diseases in real time. In particular, in view of ASF outbreak in 2018, the
company formulated all-round and system-wide prevention and control measures, covering existing self-run pig farms, fattening
farms in cooperation with farmer households, new pig farms of the company, swine feed production units and internal animal
healthcare laboratories, with a view to ensuring proper prevention and control at the source of animal nutrition. Meanwhile, actively
participating in industry exchanges and exploring more effective containment methods with peers allowed the company’s bio-safety
epidemic prevention system, pig survival rate and marketing rate to achieve industry-leading levels. From the end of the previous
year to the first quarter of this year, a new round of attenuated ASF outbreak in many northern provinces is characterized by
extensive outside contamination, numerous channels of spread, long latency periods and a long phase of effect, thus posing ne w
challenges to the containment measures formed by the industry based on the past two years of ASF containment at the initial stage of
the outbreak. However, the company continued summing up its experiences and upgrading containment and decontamination
methods in the containment process, including whole-population serum double-antibody and double-screening, application of
thermal imagers and static attenuation and disinfection of materials; and first added up its containment processes before subtracting
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in a way that avoids slackness resulting from prolonged and excessively trivial containment processes, which helped restore normal
production faster while ensuring containment, as well as reduce bio-safety containment costs at the same time. With the aforesaid
measures, the number of ASF-affected farms at the end of the first half of the year has been kept below 1%.
     In response to the COVID-19, the company lost no time to react, formulated and carried out various containment policies and
conducted emergency disposition in a coordinated manner. Secondly, the company actively communicates with the government at all
levels, coordinates the transportation of goods such as livestock products, and raw and auxiliary materials of feed and products,
secures vehicle passes, and implements the green channel policy enacted by the government at all levels. Thirdly, the company
ensures sufficient procurement from feed plants and production supply through region-wide coordination, strengthens internal
support for poultry industry integration, arranges its employees to return to work rapidly and orderly, contributes to the adequate
supply of daily necessities across the country, adjusts its food industry strategy in real time and expands sales through supermarket
channel and online channel. Fourthly, in light of its business practices, the company compiled the epidemic containment manual,
published documents such as technical guidance on employee prevention and control and quarantine and guidance on engineering
control amid epidemics, makes the epidemic prevention arrangements in a targeted manner and strengthens employee safety
protection.
     In response to natural disasters, although unable to rule out the possibility that serious natural disasters will occur in areas where
its subsidiaries operate, the company’s extensive business portfolio and presense both at home and abroad help ensure that the
company’s business as a whole will not be materially affected when natural disasters occur in particular regions. Especially for the
rainstorms and floods in south China, which have occurred frequently in these years, the company has accumulated a large wealth of
experience, established proven contingency plans and maintains sufficient flood prevention supplies in stock at all times, wh ich allow
the company to flexibly guide farmers through production plan adjustments when the flood season begins in preparation for disaster
relief together. At the same time, the company can also take the advantage of its nationwide presence to allocate funds, raw materials,
equipment, and staff timely and effectively to resume production as soon as possible and reduce the losses caused by natural
disasters.
     II. Risk of feed ingredient price fluctuations
     The cost of main feed ingredients for feed production accounts for more than 90% of total cost of feed production. In the past,
the proportion of feed business in the company’s revenue was large, but as the feed industry generally adopts the cost-plus pricing
method, the fluctuations in prices of feed ingredients can be partly transmitted to the downstream breeding operations, so as to relieve
the pressure from the rising prices of feed ingredients. However, with a growing percentage of livestock breeding business in the
company’s revenue, the rising prices of feed ingredients will have a growing impact on the company as a whole.
     Since 2020, due to many influencing factors such as the COVID-19, changed purchase and storage policies and crop yield in
main grain-producing areas of various countries, the prices of main feed ingredients such as corn and soybean meal continuously rose,
with the average market prices of corn even approaching 3,000 Yuan/t in early 2021. Coupled with the continuous tension betwe en
China and the US, which brings great uncertainties to the bulk produce trade between the two countries and international trade of
feed ingredients in the future, the risk of price fluctuations will exist in the long term. Moreover, against the background of longtime
existence of ASF in China, the feed enterprises will reduce some high-risk feed ingredients for the safety of animal nutrition, such as
usage of corn, pig blood, and pig bone meal, so as to make the demand for raw materials concentrate on other types of raw materials,
which will also lead to rise in prices of such alternative raw materials.
     Risk countermeasures: The company is the largest domestic feed enterprise with the scale advantages and a considerable say in
the raw material purchasing. The company started reorganizing and optimizing its raw material procurement syste m in 2017, combed
through its supplier system actively, established strategic partnerships with many domestic and overseas best-run raw material
suppliers, conducted the supply chain financing of various forms actively, and optimized its purchasing cost and related financial
expenses. In 2019, the company continued to drive transformations in terms of central purchasing of raw materials, strategic
purchasing channel optimization of partners, acquisition of corn produced in northeast and purchasing model upgrading, realizing a
greater purchasing value despite the challenges. The COVID-19 crisis in 2020 has caused phase-wise impact on the prices of feed
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ingredients and feed additives, but the company intensified application of hedging tools to control the raw material price fluctuation
risk, while the company’s technology, purchasing, production and marketing departments worked closely with each other during the
response to the pandemic, with these experiences already summarized and applied into the daily opera tion management of the feed
business. In the first half of 2021, when prices of main feed ingredients such as corn and soybean meal continuously fluctuated at
high levels, the company actively purchased imported low-price ingredients and alternative ingredients such as wheat, sorghum and
brown rice while properly anticipating the market condition, in an effort to continually optimize ingredient costs.
        III. Risk of price fluctuations of livestock and poultry
        The finished products of livestock and poultry breeding business of the company mainly include baby chick, baby duck,
white-feathered chicken, white-feathered duck, breeding pig, piglet, and hog. Especially since 2016, the pig farming business of the
company has been growing rapidly, with 8.29 million hogs sold in 2020 and more than 500 million self-raised and outsourced
commercial generation chicken and ducks sold, which allowed the livestock and poultry breeding to contribute greater to the e ntire
revenue and profits of the company. Along with the further growth of breeding volume of the company in the future, the prices of
livestock and poultry will affect the levels of revenue and profits of the company even more remarkably.
        In the first half of 2021, the domestic livestock and poultry markets saw remarkably delinking pork prices and low-level
fluctuations of poultry prices as a whole. in the first half of 2021, the marketing rate of hogs rose 34% year-on-year, and fixed-point
monitoring results at the end of the first half of the year showed that the fertile sows on hand grew 30% year-on-year, hogs on hand
grew 29% year-on-year and the prices of hogs fell all the way from 36 Yuan/kg in early 2021 to the lowest point of 12 Yuan/kg in
June, a     decrease of over 60%, even falling back to the low levels before this pork price cycle began ascending in March 2019 for a
time.       In terms of the poultry business, the rising market condition in 2018 and 2019 resulted in industry overcapacity, as the
grandparental breeding hens on hand, parental breeding hens on hand and sales volume of commercial-generation baby chicken
across the country in the first half of 2021 were all sustained at the highest levels in the past six years. On the side of c onsumption,
the rapidly declining pork prices coupled with weakened consumption demand caused by the COVID-19 allowed poultry meat prices
to remain low for a long period of time, making it more difficult for the poultry business to make profits.
        Risk countermeasures: apart from the impact of sporadic epidemics, the fluctuations in prices of livestock and poultry mainly
depend on the periodic increase and decrease in breeding and supply quantities. As a result, the process of livestock and pou ltry
prices going down itself is a process of the survival of the fittest in the industry. Against this backdrop, the company still can generate
more revenue or suffer fewer losses than its rivals in the process of price decline as long as it increases its breeding efficiency and
makes its breeding costs lower than its rivals. When some partic ipants exit, the total supply declines and the prices rise again, the
company might gain a greater market share and a higher return on investment than before. In recent years, the company has bee n
committed to continuously increasing its breeding efficiency, and enjoying industry leadership in terms of production of healthy
young breeding poultry and PSY and full cost of pig breeding, which will ensure that the company will remain competitive during
the price fall of livestock and poultry. Although the company’s rapid scale expansion on its pig business in the past year caused some
of its competitiveness to be diluted phase by phase, and some best practices formed            failed to be replicated in time at newly
commissioned pig farms, along with the company’s full transition to a stage of robust operation, the company is gradually improving
its business operation efficiency, reducing farming costs and restoring its original competitiveness by enhancing its interna l
management capabilities through many measures. On the other hand, unlike most of agricultural and livestock companies, the
company has slaughtering and processing business at the downstream part of farming and feed business at the upstream part of
farming, which happens to hedge against the farming process. The price decline of livestock and poultry means that the cost of raw
meat in the slaughtering and processing businesses falls too and its profit margin will be increased; the declining prices of livestock
and poultry also mean the farming volume of livestock and poultry is at high levels, which also helps increase the profitability of feed
business. Such an industry chain presence can moderately mitigate the effects of declining prices of livestock and poultry on the
company as a whole.
        IV. Impact of environmental protection policies
        In 2014, China started implementing the Regulations on Pollution Prevention for Large-scale Breeding of Livestock and Poultry,
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as the government was strongly determined to keep livestock farms in line and new regulations we re enacted across the country to
demolish livestock farms, ban or restrict livestock farming activities. At the level of central government, the new “Environmental
Protection Law” was enacted in 2015; in 2016, the State Council issued the “13th Five-Year” Ecological Environment Protection
Program”, even more specifically requiring “local governments to close or relocate livestock farms (communities) and breeding
households within the banned areas according to law by the end of 2017”. In 2018, the first grou p of central environmental protection
inspectors conducted the “follow-up reexaminations”, as the efforts to investigate pollution caused by livestock farms were
intensified across the country, ordering some breeding households to shut down for environmental remediation or close once for all
due to their livestock farming facilities failing to meet the environmental standards or discharging wastewater beyond the se t
standards. These pressures from the environmental protection policies will force some livestock and poultry farms failing to meet the
environmental standards to exit the market, and lead to reduced breeding quantities, which will produce a certain impact on the
growth of feed business of the company and its acquisition of hogs and poultry for slaughtering business. Some branches and
subsidiaries of the company fail to meet the environmental protection requirements economically through hardware transformation,
or no longer have the market basis due to being located in the banned areas, which will lead to their shutdown. In the long run,
however, the exit of these outdated capacities for incompliance with environmental standards will allow the best-run producers that
remain in the industry to acquire higher profitability, which is still of a positive significance to the entire industry.
     Risk countermeasures: in light of the changes of the breeding market, the company makes every effort to keep its stock under
control, makes full use of its industrialized supporting and integrated services by changing its feed marketing model, and strengthens
its cooperation with medium and large-sized farms and farmers that meet the environmental standards. While exploring a new way of
breeding, the company regards ecology, environmental protection, efficiency and safety as primary considerations in its project
design, helps farmers remodel and build sheds and stalls that meet the higher environmental standards, increase the profitability of
breeding business and actively drive the domestic livestock and poultry farming industry to grow healthily. On the other hand, the
company actively grows its inventories by cultivating new livestock and poultry farming bases in environmentally suitable are as
through construction, acquisition, joint venture and cooperation using its existing business portfolio across the country, thus ensuring
the stability of its breeding resources.
     V. Risk of food safety
     Food safety concerns the physical health and life safety of the general public, and is even a matter of life and death for food
companies. Occurrence of food safety problems or accidents would cause food companies to face claims, actions or related penalties
in a way that even affects their brands and reputations, thereby materially adversely affecting their business, financial con dition,
stock prices or business performance. The implementation of the revised “Food Safety Law” in of 2015 also means China has
brought its focus on food safety to an unprecedented level. The outbreak of ASF in 2018 raised even more demanding requirements
for food safety control. Although the ASF itself is not a zoonotic disease and the pork with ASF virus is not harmful at all to humans
after conventional heating and cooking, as there is not yet fully effective containment measure against ASF at present, and the pork
and its products are one of the main vectors of the virus, more costs are required to prevent and control ASF during the proc ess of
hog recovery and slaughter, pork transportation and vending. In 2019, the State Council issued the “Opinions on D eepening Reforms
and Strengthening Food Safety Efforts”, making clear the need to further beef up food safety efforts and ensure the “safety o n the
dining table” of the general public with ht most rigorous standards, the most stringent oversight, the most severe penalties and the
most serious accountability.
     Risk countermeasures: the company has always been highly concerned about food safety by seriously ensuring food safety in
everything it does. In 2015, the company established its safety and environmenta l protection department to ensure safety, health and
environmental protection of its products, and upgraded the equipment in its “three-level” testing system, expanded the laboratories of
its branches and subsidiaries in terms of human and material resources, guaranteed the allocation and input of funds, resources and
personnel across the food industry chain, which upgraded the food safety organization management, equipment and facilities, process
management and key process control., So far, the company has created a food safety control chain from feed, livestock and poultry
breeding all the way to dining table. In 2014, the “Beiyouzi” branded duck meat produced by the company was the first in China to
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achieve end-to-end traceability; in 2015, Chengdu Xiwang Food Co., Ltd, a subsidiary of the company, became one of the second
group of pilot companies for implementation of the national standard “food cold chain logistics traceability management
requirements”. In 2016, the company passed the food technical standard certification by the British Retail Council (BRC), and was
elected the Vice President of the China Council at the first plenary session of the Global Food Safety Initiative (GFSI) in , becoming
the first Chinese private enterprise to be selected as a member of the global board of directors of GFSI. In 2019, the 8th GFSI Focus
Day China organized by the company was held, marking the first time a private enterprise organized this event since GFSI bega n
holding the Focus Day China in 2012. At present, all food enterprises under the flag of the company have passed China-HACCP
certification, and more than 60 food companies are finishing the BRC and Global-GAP certifications in succession. In addition, the
company systematically explores the antibiotic-reducing and antibiotic-free possibilities in cooperation with multiple parties using
the GFSI platform resources, and actively drives the popularization of antibiotic-reducing and antibiotic-free successful cases.
     VI. Risk of exchange rate fluctuations
     Currently, the global purchasing of raw materials for feed production is going deeper, and the feed enterprises have been
increasingly affected by the exchange rate in terms of feed ingredients purchasing centered on foreign supply such as corn, soybean,
whey powder, fish meal and DDGS. At the same time, the company has larger foreign operations than its Chinese peers, and in the
foreign investment and overseas operations, the cross-border capital transaction and settlement amounts involved are growing, thus
making the company more vulnerable to exchange rate fluctuations. Since 2019, the bumpy China -US relations caused the
RMB/USD exchange rate to fluctuate frequently. Throughout 2020, the RMB exchange rate showed a trend of fall before rise as a
whole and went down in a zigzag manner due to the impact of the COVID-19 in the first half of the year, but a new round of rapid
appreciation started as China was the first to contain the pandemic and resumed work and business operations at a quickened pace in
the second half of the year. Such violent turbulences produced impacts on the foreign exchange management of the company. Besides,
in certain overseas countries where the company operates, the exchange rate of local currencies against USD depreciated remar kably
due to the COVID-19, political turbulence and foreign exchange policy adjustments, which also produced an adverse impact on the
company.
     Risk countermeasures: In response to the growing needs for overseas raw material purchasing and investment and operation, the
company started building its Singaporean branch into an overseas commercial and trading center and investment and financing c enter
in 2016, actively conducted international centralized purchasing of raw materials, foreign direct financing, supply chain finance,
foreign exchange risk management and raw materials purchasing risk management on its Singaporean platform, in order to reduce
the impact of exchange rate fluctuations on its cash flow in overseas operations. Meanwhile, the company further strengthene d its
close connection and communication with overseas financial institutions, overseas agencies of the Chinese government and host
governments to analyze the trends of local currencies’ exchange rates in host countries in time and ease the adverse impact of
exchange rate fluctuations by means of direct investment in local currencies abroad, etc.
     VII. Risk of human resources
     The risk of human resources to the company is mainly manifested in the following four aspects. First, the pig farming scale of
the company is now at a phase of leapfrog development. As at the end of the first half of 2021, the company’s pig farming team
totaled 46,000 persons, and management radius of the company also increased as a result, therefore, there are tremendous pres sures
and challenges in terms of rapidly training and retaining a large number of pig raisers. If the personnel recruitment, training and
retention proves inadequate, potential risks will arise for the subsequent pig farm management and operation; second, as the company
transforms from a traditional agricultural and animal husbandry enterprise to a agricultural, animal husbandry and food integrated
enterprise, the company will face the risk of insufficient reserve of high-caliber operation and management personnel in new business
domains and of personnel in food retail, engineering technology, IT and other emerging fields; third, along with the rising human cost,
employee compensation has become an important factor in cost increase of the company; fourth, as a leading enterprise in China’s
agricultural and animal husbandry industry, the company has cultivated a large number of outstanding employees in its multiye ar
history, but the competition for human resources is intensifying due to the increasing competition in the industry and entry of new
players of different backgrounds into the industry over the past years, meaning the brain drain will cause losses to the company and
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subsequently affect the sustainable development of the company.
     Risk countermeasures: the company has looked at talent cultivation and organizational activation as a long-term strategic task of
the company. In terms of recruiting talented pig farmers, the company expanded its recruitment channel beyond college graduates
majored in agriculture and animal husbandry to recruit non-specialized college graduates and veterans. In terms of pig farmer
training, the company broke down its daily production processes according to standards and internalized them using IT means. It
offers specialized courses of different levels for general manager, farm managers all the way down to the newly recruited frontline
workers through in-house pig farming universities and pig industry research institutes that offer high-frequency learning, training and
teaching possibilities. Moreover, through the modern mentoring system inside pig farms and one-to-one mentoring and
intensification by sophisticated employees, the time to cultivate new employees has been greatly shortened. The company further
perfected its pig industry talent motivation system, whereby personnel at all levels in pig industry will receive industry-leading
economic return based on their value output. In addition, in order to reduce the pressure on human cost, the company intensif ied its
efforts to carry out projects such as pig farming in multistory buildings, intelligent pig farms and things of internet, which will
significantly increase its efficiency of personnel utilization.
     The company also intensified its efforts to recruit talented people in strategic, new businesses, while actively conducting
cross-industry training and learning to enrich the knowledge structure and capability structure of its existing personnel. The company
realized a continuous increase in per capita efficiency by efficiency improvement, lean management, optimization of industry chain
design and organization flattening; created the professional manager development channel with survival of the fittest by cons tructing
the competition, selection and elimination mechanisms; and creates the growth community of employees and the company by
constructing reasonable evaluation and incentive mechanisms and value sharing mechanisms. In 2019, the company implemented its
restricted stock and stock option incentive plan for the first time to motivate its key technologists and key members of pig farming
teams more for increased cohesion and corporate competiveness and to fully motivate senior management personnel an part of ke y
employees of the company at work.
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                                       Section 4 Corporate Governance
I. Details of annual general meeting of shareholders and interim general meeting of
shareholders held within the reporting period
1. General meetings of shareholders during this reporting period
                                          Ratio of
     Session          Meeting type      participating      Date held         Date disclosed           Meeting resolutions
                                          investors
                                                                                              As         detailed        in        the
                                                                                              “Announcement of the 2021 First
                                                                                              Interim       General           Meeting
                                                                                              Resolutions” (announcement No:
 The 1st interim
                     Interim general                                                          2021-22)      published         by   the
 general meeting                          56.51%        January 29, 2021   January 30, 2021
                        meeting                                                               company on China Securities
     of 2021
                                                                                              Journal,      Securities         Times,
                                                                                              Shanghai       Securities        News,
                                                                                              Securities Daily on January 30,
                                                                                              2021.
                                                                                              As         detailed        in        the
                                                                                              “Announcement of the 2020
                                                                                              Annual        General           Meeting
                                                                                              Resolutions” (announcement No:
   2020 annual       Annual general                                                           2021-79)      published         by   the
                                          56.36%         May 28, 2021        May 29, 2021
 general meeting        meeting                                                               company on China Securities
                                                                                              Journal,      Securities         Times,
                                                                                              Shanghai       Securities        News,
                                                                                              Securities Daily on May 29,
                                                                                              2021.
2. Interim general meetings of shareholders requested by preferred shareholders with voting rights
restored
□ applicable   √   not applicable
II. Changes in directors, supervisors, and senior manage ment
√ applicable   □ not applicable
      Name                     Position held              Type                  Date                          Reason
  Chen Xingyao             Vice president, CFO          Appointed          January 10, 2021           Appointed by board of
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                                                                                                                     directors
                      Board secretary, chief strategic                                                        Appointed by board of
      Lan Jia                                               Appointed            January 25, 2021
                             investment officer                                                                      directors
                       Director of human resources                                                            Appointed by board of
      Gao Li                                                Appointed            February 9, 2021
                             (chief HR officer)                                                                      directors
  Wang Shuhua              Vice president, CFO              Dismissed             January 8, 2021                Personal reasons
       Hu Ji                  Board secretary               Dismissed             January 8, 2021                Personal reasons
III. Profit distribution and converting capital reserves into share capital for the reporting
period
□ applicable   √   not applicable
The company plans not to distribute cash dividends or allot bonus shares or transfer its capital reserve to share capital in the first half
of the year.
IV. Imple mentation of equity incentive plans, employee stock ownership plans or other
employee incentives
√ applicable   □ not applicable
     1. The 19th meeting of the 8th board of directors of the company, the 10th meeting of the 8th board of supervisors and the 1st
interim general meeting of shareholders of 2020 deliberated and approved the “Proposal regarding Cancellation of Part of Stock
Options and Repurchase and Cancellation of Part of Restricted Stocks”, agreeing to cancel a total of 105,000 stock options currently
granted to but not yet approved to be exercised by 2 incentive recipients who failed to meet the appraisal standards, with the currently
granted restricted stocks totaling 22,500 shares.
     The 28th meeting of the 8th board of directors of the company, the 15th meeting of the 8th board of supervisors and the 1st
interim general meeting of 2021 deliberated and approved the “Proposal regarding Cancellation of Part of Stock Options and
Repurchase and Cancellation of Part of Restricted Stocks”, agreeing to cancel a total of 2,835,000 stock options granted to but not yet
exercised by 7 incentive recipients who separated from the company, repurchasing and cancelling a total of 1,215,000 shares of
restricted stocks already granted but not yet unlocked.
     The company completed the repurchase and cancellation formalities for stock options and restricted stocks with CSDC
Shenzhen Branch on May 18, 2021, of which cancelled stock options totaled 2,940,000 and repurchased and cancelled restricted
stocks totaled 1,237,500 shares.
     2. The 28th meeting of the 8th board of directors of the company, the 15th meeting of the 8th board of supervisors and the 1st
interim general meeting of 2021 deliberated and approved the “Proposal regarding the 2021 Restricted Stock Incentive Plan (Draft)
and its Summary” respectively, and the company publicized the list of incentive recipients under the 2021 stock incentive plan inside
the company, which was verified by the board of supervisors who made remarks on the publication of the list. The company’s
independent directors expressed related independent opinions, and legal firm and other intermediaries also issued reports.
     The 34th meeting of the 8th board of directors and the 17th meeting of the 8th board of supervisors of the company deliberate d
and passed the “Proposa l regarding Adjustments to the List of Incentive Recipients and Quantities Granted under the 2021 Restricted
Stock Incentive Plan” and the “Proposal regarding First Grant of Restricted Stocks to Incentive Recipients” respectively, whe reby
given that 5 incentive recipients in the company’s 2021 restricted stock incentive plan voluntarily waived subscription for all
restricted stocks to be granted for personal reasons, the number of the first group of grantees under this incentive plan was adjusted
from 161 to 156, the quantity of restricted stocks for the first grant was adjusted from 29.63 million shares to 29.34 million shares,
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and the quantity of reserved restricted stocks was adjusted from 1.724366 million shares to 2.014366 million shares. The firs t grant
date under this incentive plan is March 30, 2021 and 29.34 million shares of restricted stocks were granted to 156 incentive recipients
for the first time.
     The 38th meeting of the 8th board of directors of the company and the 20th meeting of the 8th board of supervisors deliberated
and approved the “Proposal regarding Termination of <2021 Restricted Stock Incentive Plan (Draft)> and Related Proposals”,
whereby the company’s medium and long-term strategic objectives of growing and strengthening its pig farming business remain
unchanged, but along with the changed external environments this year, the company decided to terminate the implementation of its
2021 incentive plan and continue using repurchased shares for stock incentive of its core team in the future.
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                    Section 5 Environmental and Social Responsibilities
I. Major environmental issues
Whether the listed company and its subsidiaries are key emitters announced by the environmental protection department
√    Yes □ No
Name      Name of key            Way       Numb      Distri    Emission               Pollutant emission     Total    Appro     Exces
of        pollutant and          of        er of     bution    concentration          standards              emissi   ved       sive
comp      characteristic         discha    discha    of                               implemented            ons      total     disch
any or    pollutant              rge       rge       discha                                                           emissi    arge
subsi                                      outlets   rge                                                              ons
diary                                                outlets
Linyi     Waste gases:           Waste     6 (5      Waste     COD:450mg/L           Meat Processing        COD: COD: None
Liuhe     nitrogen oxides,       gas:      for       gases:    Total nitrogen:       Industry Water         486t/a   486t/a
Food      particulates, sulfur   directl   waste     east      50mg/L                 Pollutant Discharge    ;        ;
Co.,      dioxide, hydrogen      y         gases,    side of   Ammonia                Standard GB            ammo     ammo
Ltd       sulfide, ammonia,      discha    1 for     the       nitrogen:35mg/L       13457-92               nia      nia
          odor concentration     rge       waste     factor    Total phosphorus: Agreements with            nitrog   nitrog
                                 after     water)    y         6mg/L                  sewage treatment       en:     en:
          wastewater:            treatm              premis    pH:6-8.5              plants                 37.82t   37.82t
          chemical oxygen        ent                 es        Suspended solids: Malodorous                 /a       /a
          demand, ammonia        waste               waste     200mg/L                Pollutant Discharge
          nitrogen, total        water:              water:    BOD5:120mg/L          Standard GB
          nitrogen, total        indire              south     Animal and             14554-93,
          phosphorus, pH         ct                  side of   vegetable oils:       Boiler Air Pollutant
          value, five-day        discha              the       50mg/L                 Discharge Standard
          biochemical oxygen     rge                 west      Nitrogen oxides : GB 13271-2014,
          demand, animal and                         gate      150mg/Nm3              Emission Standard
          vegetable oils,                                      Sulfur dioxide:       for Boiler Air
          suspended solids,                                    50mg/Nm3               Pollutants DB37
          coliform bacteria.                                   Fumes:                2374-2018
                                                               10mg/Nm3
Qiuxi     Waste gases (sulfur    Waste     7         Waste     100 mg/m3 of           "Boiler Air            COD      COD1      None
an        dioxide, nitrogen      gas:      (disch    gases:    sulfur dioxide,        Pollutant Standard”   11.18t   1.18t/
Liuhe     oxides)                directl   arge      east      400 mg/m3 of           (GB13271-2001)         /a,     a,
Kang      wastewater (COD,       y         outlets   side of   nitrogen oxides,       Class II Time          ammo     ammo
yuan      ammonia nitrogen,      discha    of        the       PH6-9,                 Period                 nia      nia
Food      five-day               rge       origin    factor    SS70mg/L,              third level standard   nitrog   nitrog
Co.,      biochemical oxygen     after     al 3t/d   y         COD300mg/L,            in Table 3 of the      en       en
Ltd       demand,                treatm    boiler,   premis    animal and             “Meat Processing      0.5t/a   0.5/a,
          particulates, animal   ent       discha    es        vegetable oils         Industry Water         ,       sulfur
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                                                                            2021 Semiannual Report of New Hope Liuhe Co., Ltd
        and vegetable oils,   waste     rge       waste     100mg/L,            Pollutant Discharge    sulfur   dioxid
        SS, pH value)         water:    outlets   water:    ammonia nitrogen    Standard”             dioxid   e
                              indire    of 3      south     25mg/L, BOD5        (GB13457-92),        e        0.222
                              ct        photo     side of   100mg/L             while meeting the      0.222t   2t/a,
                              discha    oxidat    the                           incoming water         /a,     nitrog
                              rge       ion       factor                        quality requirements   nitrog   en
                                        machi     y                             of Qiu County          en       oxides
                                        nes,      premis                        Sewage Treatment       oxides   1.207t
                                        additi    es                            Plant                  1.207    /a
                                        onal                                                           t/a
                                        discha
                                        rge
                                        outlets
                                        of 6t/d
                                        boiler
                                        and 1
                                        discha
                                        rge
                                        outlet
                                        for
                                        duck
                                        feathe
                                        r
                                        drying
                                        )
Lanli   Waste gas:            Waste     4 (3      East      Ammonia             Boiler Air Pollutant   COD      COD      None
ng      ammonia (ammonia      gas:      for       side of   nitrogen <5mg/L,    Emission Standard      13.1t/   13.1t/
New     gas), hydrogen        directl   waste     the       COD<50mg/L;         DB37 2374-2018,        a,       a,
Hope    sulfide, odor         y         gases,    factor                        Malodorous             ammo     ammo
Liuhe   concentration,        discha    1 for     y         Boiler<50mg/Nm      Pollutant Emission     nia      nia
Hongj   sulfur dioxide,       rge       waste     premis    3, odor             Standard GB            nitrog   nitrog
un      nitrogen oxides,      after     water)    es        concentration       14554-93               en       en
Food    particulates,         treatm                        2000mg/Nm3,        Notice on Approval     1.3t/a   1.3t/a
Co.,    Ringelmann            ent                                               and Publication of
Ltd     blackness             waste                                             the Modification
        Wastewater: COD,      water:                                            Forms for four
        pH value, dissolved   indire                                            standards including
        total solids,         ct                                                the Comprehensive
        ammonia nitrogen      discha                                            Emission Standard
        (NH3-N), total        rge                                               of Water Pollutants
        nitrogen (N), total                                                     Along the
        phosphorus (P),                                                         South-to-North
        suspended solids,                                                       Water Transfer
        BOD5, flow rate,                                                        Project of Shandong
                                                                                                                           76
                                                                               2021 Semiannual Report of New Hope Liuhe Co., Ltd
         animal and                                                                Province
         vegetable oil, total                                                      (Luzhijianbiaofa
         coliform groups.                                                          [2011] 35),
                                                                                   Meat Processing
                                                                                   Industry Water
                                                                                   Pollutant Emission
                                                                                   Standard GB
                                                                                   13457-92
Pingy    Waste gas:             Waste     3 (2     Waste     Ammonia               Boiler Air Pollutant   CODc      CODc      None
i        ammonia (ammonia       gas:      for      gas:      nitrogen 45mg/l       Emission Standard      r         r
Refri    gas), hydrogen         directl   waste    north     COD 500mg/l           DB372374 -2018,        11.8t/a   11.8t/a
gerati   sulfide, odor          y         gases,   west      Total phosphorus      Malodorous             Amm       Amm
on       concentration,         discha    1 for    side of   8mg/l                 Pollutant Emission     onia      onia
Plant    sulfur dioxide,        rge       waste    the       Total nitrogen        Standard GB            nitrog    nitrog
of       nitrogen oxides,       after     water)   factor    70mg/l                14554-93               en        en
Shand    particulates,          treatm             y                               Water Quality          0.23t/    0.23t/
ong      Ringelmann             ent                premis                          Standard for           a         a
New      blackness              waste              es and                          Sewage Discharged      Total     Total
Hope     Wastewater: COD,       water:             within                          into Urban Sewers      phosp     phosp
Liuhe    pH value, dissolved    indire             the                             GB/T 31962-2015,       horus     horus
Grou     total solids,          ct                 factor                          Meat Processing        5.29t/    5.29t/
p Co.,   ammonia nitrogen       discha             y                               Industry Water         a         a
Ltd      (NH3-N), total         rge                premis                          Pollutant Emission     Total     Total
         nitrogen (N), total                       es of                           Standard GB            nitrog    nitrog
         phosphorus (P),                           the                             13457-92               en        en
         suspended solids,                         compa                                                  46.3t/    46.3t/
         BOD5, flow rate,                          ny                                                     a         a
         animal and                                waste
         vegetable oil, total                      water:
         coliform groups.                          northe
                                                   ast
                                                   side of
                                                   the
                                                   compa
                                                   ny
Qingd    Waste gas:             Waste     3 (2     Waste     COD 50mg/l,           Catering Industry      CODc      CODc      None
ao       ammonia (ammonia       gas:      for      gas:      ammonia nitrogen      Oil Fume Emission      r         r
Tianr    gas), hydrogen         directl   waste    northe    5mg/l, total          Standard               112.75    112.75
un       sulfide, odor          y         gases,   ast       phosphorus 1mg/l,     GB18483-2001,          t/a       t/a
Food     concentration,         discha    1 for    side of   total nitrogen        Shandong               Amm       Amm
Co.,     sulfur dioxide,        rge       waste    the       20mg/l, pH6-9         Provincial Boiler      onia      onia
Ltd      nitrogen oxides,       after     water)   factor                          Air Pollutant          nitrog    nitrog
         particulates, dyeing   treatm             y                               Emission Standard      en        en
         and finishing fumes    ent                premis                          No. 2 Modification     18.79     18.79
                                                                                                                                77
                                                                         2021 Semiannual Report of New Hope Liuhe Co., Ltd
        Wastewater: COD,       waste             es and                      Form for Ultralow      2t/a     2t/a
        pH value, dissolved    water:            within                      Emission               Total    Total
        total solids,          indire            the                         Luzhijianbiaofa        nitrog   nitrog
        ammonia nitrogen       ct                factor                      [2016] No. 46,         en       en
        (NH3-N), total         discha            y                           Malodorous             46.98t   46.98t
        nitrogen (in N),       rge               premis                      Pollutant Emission     /a       /a
        total phosphorus (in                     es of                       Standard GB
        P), suspended                            the                         14554-93
        solids, BOD5, flow                       compa                       Comprehensive
        rate, animal and                         ny                          Emission Standard
        vegetable oil,                           waste                       of Water Pollutants
        coliform groups                          water:                      in the Peninsula
                                                 north                       Basin of Shandong
                                                 west                        Province
                                                 side of                     DB37/676-2007,
                                                 the                         Water Pollutant
                                                 factor                      Emission Standard
                                                 y                           for Meat Processing
                                                 premis                      Industry GB
                                                 es                          13457-92
Xiaoy   Waste gas:             Direct   4 (3     Waste     Ammonia           Boiler Air Pollutant   CODc     CODc     None
i New   ammonia (ammonia       discha   for      gas:      nitrogen:5       Emission Standard      r        r
Hope    gas), hydrogen         rge      waste    northe    COD:50           GB 13271-2014,         9.358t   9.358t
Liuhe   sulfide, odor          after    gases,   ast                         Malodorous             /a       /a
Food    concentration,         treatm   1 for    side                        Pollutant Emission     Amm      Amm
Co.,    sulfur dioxide,        ent      waste    and                         Standard GB            onia     onia
Ltd     nitrogen oxides,                water)   south                       14554-93,              nitrog   nitrog
        particulates, dyeing                     west                        Comprehensive Air      en       en
        and finishing fumes                      side of                     Pollutant Emission     0.936t   0.936t
        Wastewater: COD,                         the                         Standard               /a       /a
        pH value, dissolved                      factor                      GB16297-1996,
        total solids,                            y                           Surface Water          NOx      NOx
        ammonia nitrogen                         premis                      Environmental          0.37t/   0.37t/
        (NH3-N), total                           es of                       Quality Standard       a        a
        nitrogen (in N),                         the                         GB3838-2002,
        total phosphorus (in                     compa                       Pollutant Emission
        P), suspended                            ny                          Standard for Urban
        solids, BOD5, flow                       waste                       Sewage Treatment
        rate, animal and                         water:                      Plants GB
        vegetable oil,                           Xiaoh                       18918-2002
        coliform groups                          e
                                                 discha
                                                 rge
                                                 outlet
                                                                                                                        78
                                                                                2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                                   south
                                                   of
                                                   factor
                                                   y
                                                   premis
                                                   es
Yishu   Waste gas:             Waste     1         North                            Malodorous             CODc     CODc     None
i New   ammonia (ammonia       gas:                west      COD:500mg/L           Pollutant Discharge    r        r
Hope    gas), odor             directl             side of   Total nitrogen:       Standard GB            139.5    139.5
Liuhe   concentration,         y                   the       70mg/L                 14554-93,              9t/a     9t/a
Food    hydrogen sulfide       discha              factor    Ammonia                Water Quality          Amm      Amm
Co.,    Wastewater: COD,       rge                 y         nitrogen:45mg/L       Standard for           onia     onia
Ltd     pH value, dissolved    after               premis    Total phosphorus: Sewage Discharged          nitrog   nitrog
        total solid, ammonia   treatm              es        8mg/L                  into Urban Sewers      en       en
        nitrogen (NH3-N),      ent                           pH:6-8.5              GB/T 31962-2015,       2.8t/a   2.8t/a
        total nitrogen (in     waste                         Suspended solids: Meat Processing            Total    Total
        N), total phosphorus   water:                        200mg/L                Industry Water         nitrog   nitrog
        (in P), suspended      indire                        BOD5:250mg/L          Pollutant Discharge    en       en
        matter, BOD5, flow     ct                            Animal and             Standard GB            73.58t   73.58t
        rate, animal and       discha                        vegetable oils:       13457-92               /a       /a
        vegetable oil,         rge                           50mg/L                                        Total    Total
        coliform groups                                                                                    phosp    phosp
                                                                                                           horus    horus
                                                                                                           8.41t/   8.41t/
                                                                                                           a        a
Guant   Waste gas:             Waste     8 (2      North                            Discharge Standard     CODc     CODc     None
ao      ammonia (ammonia       gas:      boiler    west      COD:50 mg/L           for Urban Sewage       r        r
Liuhe   gas), odor             directl   discha    side of   BOD5:10mg/L           Treatment Plants       8.115t   8.115t
Food    concentration,         y         rge       the       Ammonia                (GB18918-2002),        /a       /a
Co.,    hydrogen sulfide,      discha    outlets   factor    nitrogen:5mg/L        Meat Processing        Amm      Amm
Ltd     fumes                  rge       ,4        y         SS:10mg/L             Industry Water         onia     onia
        Wastewater: COD,       after     odor      premis    Animal and             Pollutant Discharge    nitrog   nitrog
        pH value, dissolved    treatm    discha    es        vegetable oils:       Standard               en       en
        total solids,          ent       rge                 1mg/L                  (GB13457-92),          0.812t   0.812t
        ammonia nitrogen       waste     outlets                                    Farmland Irrigation    /a       /a
        (NH3-N), total         water:    ,1                                         Water Quality          SO2:    SO2:
        nitrogen (in N),       indire    fume                                       Standard               2.276t   2.276t
        total phosphorus (in   ct        outlet                                     (GB5084-2005),         /a       /a
        P), suspended          discha    and 1                                      Boiler Air Pollutant   NOx:    NOx:
        matter, BOD5, flow     rge       waste                                      Emission Standard      6.829t   6.829t
        rate, animal and                 water                                      (GB13271-2014),        /a       /a
        vegetable oils,                  discha                                     Catering Industry
        coliform groups                  rge                                        Oil Fume Emission
                                                                                    Standard (trial)
                                                                                                                               79
                                                                                 2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                          outlet)                                    (GB18483-2001)
Binzh    Waste gas:             Waste     4 (3      Waste                            Malodorous             COD      No       None
ou       ammonia (ammonia       gas:      for       gas:      COD:50 mg/L           Pollutant Emission     11.85t   total
Liuhe    gas), hydrogen         directl   waste     east      BOD5:10mg/L           Standard GB            /a       quanti
Long     sulfide, odor          y         gases,    side of   Ammonia                14554-93                        ty
da       concentration,         discha    1 for     the       nitrogen:5mg/L        Boiler Air Pollutant   Amm      requir
Farmi    particulate matter,    rge       waste     factor    SS:10mg/L             Emission Standard      onia     ement
ng       sulfur dioxide,        after     water)    y         Animal and             (DB37/2374-2018)       nitrog   s
Co.,     Ringelmann             treatm              premis    vegetable oils:       Boiler Air Pollutant   en
Ltd      blackness, nitrogen    ent                 es        1mg/L                  Emission Standard      0.65t/
         oxide                  waste               Waste                            (GB13271-2014)         a
         Wastewater: COD,       water:              water:                           Meat Processing
         pH value, dissolved    indire              west                             Industry Water
         total solids,          ct                  side of                          Pollutant Emission
         ammonia nitrogen       discha              the                              Standard GB
         (NH3-N), total         rge                 factor                           13457-92
         nitrogen (in N),                           y                                Water Quality
         total phosphorus (in                       premis                           Standard for
         P), suspended                              es                               Sewage Discharged
         solids, BOD5, flow                                                          into Urban Sewers
         rate, animal and                                                            GB/T 31962-2015
         vegetable oils,
         coliform groups
Wudi     Waste gas: odor        Waste     1         South     COD:500mg/L           Malodorous             CODc     CODc     None
Liuhe    concentration,         gas:                of the    Total nitrogen:       Pollutant Emission     r        r
Xinya    hydrogen sulfide,      directl             factor    70mg/L                 Standard GB            189t/a   189t/a
ng       ammonia (ammonia       y                   y         Ammonia                14554-93               Amm      Amm
Food     gas)                   discha              premis    nitrogen:45mg/L       Water Pollutant        onia     onia
Co.,     Wastewater: COD,       rge                 es        pH:6-8.5              Emission Standard      nitrog   nitrog
Ltd      ammonia nitrogen       after                         Suspended solids: for Meat Processing        en       en
         (NH3-N), total         treatm                        300mg/L                Industry GB            17.01t   17.01t
         nitrogen (in N),       ent                           BOD5:250mg/L          13457-92               /a       /a
         BOD5, pH value,        waste                         Animal and                                    Total    Total
         suspended solids,      water:                        vegetable oils:                              nitrog   nitrog
         coliform groups,       indire                        50mg/L                                        en       en
         animal and             ct                                                                          26.46t   26.46t
         vegetable oils         discha                                                                      /a       /a
                                rge
Zoupi    Waste gas:             Waste     1         Sewag     COD:500mg/L           Malodorous             COD:     No       None
ng       hydrogen sulfide,      gas:                e         Total nitrogen:       Pollutant Discharge    18t/a,   total
Liuhe    ammonia (ammonia       directl             discha    70mg/L                 Standard GB            Amm      quanti
Livest   gas), odor             y                   rge       Ammonia                14554-93               onia     ty
ock      concentration          discha              outlet    nitrogen:45mg/L       Water Quality          nitrog   requir
                                                                                                                                80
                                                                               2021 Semiannual Report of New Hope Liuhe Co., Ltd
Co.,    Wastewater: COD,       rge                at the    Total phosphorus: Standard for               en:      ement
Ltd     ammonia nitrogen       after              northe    8mg/L                  Sewage Discharged      2.6t/a,   s
        (NH3-N), total         treatm             ast       pH:6-8.5              into Urban Sewers      Total
        nitrogen (in N), pH    ent                corner    Suspended solids: GB/T 31962-2015,           phosp
        value, animal and      waste              of the    200mg/L                Meat Processing        horus:
        vegetable oils,        water:             compa     BOD5:250mg/L          Industry Water         0.3t/a,
        BOD5, suspended        indire             ny        Animal and             Pollutant Discharge    Total
        solids, coliform       ct                           vegetable oils:       Standard GB            nitrog
        groups                 discha                       50mg/L                 13457-92               en:
                               rge                                                                        4.8t/a
Shanx   Waste gas:             Waste     4 (3     Waste     COD:500mg/L           Boiler Air Pollutant   COD:      COD:     None
ian     ammonia (ammonia       gas:      for      gas:      Total nitrogen:       Emission Standard      405t/a    405t/a
Liuhe   gas), hydrogen         directl   waste    north     70mg/L                 DB37 2374-2018,        ,         ,
Feed    sulfide, odor          y         gases,   west      Ammonia                Malodorous             Amm       Amm
Co.,    concentration,         discha    1 for    side of   nitrogen:21mg/L       Pollutant Emission     onia      onia
Ltd     sulfur dioxide,        rge       waste    the       Total phosphorus: Standard GB                nitrog    nitrog
Food    nitrogen oxides,       after     water)   factor    8mg/L                  14554-93,              en:      en:
Branc   particulates,          treatm             y         pH:6-8.5              Shandong               28.35t    28.35t
h       Ringelmann             ent                premis    Suspended solids: Provincial Boiler          /a,       /a,
        blackness              waste              es        300mg/L                Air Pollutant          Total     Total
        Wastewater: COD,       water:             waste     BOD5:250mg/L          Emission Standard      nitrog    nitrog
        pH value, dissolved    indire             water:    Total salt content: "Ultra-low               en:      en:
        total solids,          ct                 northe    1600mg/L               Emission Standard      94.5t/    94.5t/
        ammonia nitrogen       discha             ast                              No. 2 Modification     a         a
        (NH3-N), total         rge                side of                          Form
        nitrogen (N), total                       the                              Luzhijianbiaofa
        phosphorus (P),                           factor                           [2016] No. 46,
        suspended solids,                         y                                Comprehensive Air
        BOD5, flow rate,                          premis                           Pollutant Emission
        animal and                                es                               Standard
        vegetable oil, total                                                       GB16297-1996
        coliform groups.                                                           Water Quality
                                                                                   Standard for
                                                                                   Sewage Discharged
                                                                                   into Urban Sewers
                                                                                   GB/T 31962-2015,
                                                                                   Notice on the
                                                                                   Approval and
                                                                                   Publication of the
                                                                                   Modification List of
                                                                                   Four Standards,
                                                                                   Including the
                                                                                   Comprehensive
                                                                                   Discharge Standard
                                                                                                                               81
                                                                                2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                                                                    for Water Pollutants
                                                                                    Along the
                                                                                    South-to-North
                                                                                    Water Transfer
                                                                                    Project of Shandong
                                                                                    Province,
                                                                                    Luzhijianbiaofa
                                                                                    [2011] No. 35,
                                                                                    Notice on the
                                                                                    Approval and
                                                                                    Issuance of the
                                                                                    modification list of
                                                                                    four standards
                                                                                    including the
                                                                                    Comprehensive
                                                                                    Discharge Standard
                                                                                    for Water Pollutants
                                                                                    along the
                                                                                    South-to-North
                                                                                    Water Transfer
                                                                                    Project of Shandong
                                                                                    Province, adding the
                                                                                    limits of total salt
                                                                                    content indicator,
                                                                                    Luzhijianbiaofa
                                                                                    [2014] No. 7
Caoxi    Waste gas:              Waste     1       West      COD:300mg/L           Malodorous             COG1     COD1     None
an       hydrogen sulfide,       gas:              side of   Ammonia                Pollutant Discharge    5.84T/   6T/a;
Liuhe    odor concentration,     directl           the       nitrogen:21mg/L       Standard GB            a        Amm
Food     ammonia (ammonia        y                 factor    pH:6-8.5              14554-93               Amm      onia
Co.,     gas)                    discha            y         Suspended solids: Water Quality              onia     nitrog
Ltd      Wastewater: COD,        rge               premis    300mg/L                Standard for           nitrog   en
         ammonia nitrogen        after             es        BOD5:250mg/L          Sewage Discharged      en       8T/a
         (NH3-N),                treatm                      Animal and             into Urban Sewers      7.04T/
         suspended solids,       ent                         vegetable oils:       GB/T 31962-2015,       a
         BOD5, animal and        waste                       50mg/L                 Meat Processing
         vegetable oils, total   water:                                             Industry Water
         coliform groups         indire                                             Pollutant Discharge
                                 ct                                                 Standard GB
                                 discha                                             13457-92
                                 rge
Jiaxia   Waste gas: odor         Waste     5 (4    Waste     COD230mg/L,            Malodorous             COD      COD      None
ng       concentration,          gas:      for     gas:      ammonia nitrogen       Pollutant Emission     41.36t   45.56t
New      ammonia (ammonia        directl   waste   south     8mg/l, total           Standard GB            /a,      /a
                                                                                                                               82
                                                                              2021 Semiannual Report of New Hope Liuhe Co., Ltd
Hope    gas), hydrogen         y         gases,   and       nitrogen 11mg/L       14554-93               ammo      Amm
Liuhe   sulfide, particulate   discha    1 for    east                            Comprehensive Air      nia       onia
Food    matter, malodorous     rge       waste    sides                           Pollutant Emission     nitrog    nitrog
Co.,    Wastewater: COD,       after     water)   of the                          Standard               en        en
Ltd     ammonia nitrogen       treatm             factor                          GB16297-1996,          2.8t/a,   3.96t/
        (NH3-N), total         ent                y                               Meat Processing        total     a
        nitrogen (in N),       waste              premis                          Industry Water         nitrog    Total
        total phosphorus (in   water:             es                              Pollutant Emission     en        nitrog
        P), pH value,          indire             Waste                           Standard GB            76t/a     en
        suspended matter,      ct                 water:                          13457-92,                        88.83
        BOD5, animal and       discha             west                            Water Quality                    t/a
        vegetable oils,        rge                side of                         Standard for
        coliform groups                           the                             Sewage Discharged
                                                  factor                          into Urban Sewers
                                                  y                               GB/T 31962-2015,
                                                  premis                          Comprehensive
                                                  es                              Sewage Discharge
                                                                                  Standard
                                                                                  GB8978-1996
Yunc    Waste gas: odor        Waste     2 (1     Waste     COD 34.4mg/I,         Boiler Air Pollutant   COD       COD      None
heng    concentration,         gas:      for      gas:      ammonia nitrogen      Emission Standard      6.5 t/a   32.4
Liuhe   ammonia (ammonia       directl   waste    north     1.03 mg/I             DB37 2374-2018,        Amm       t/a
Food    gas), hydrogen         y         gases,   side of                         Malodorous             onia      Amm
Co.,    sulfide, particulate   discha    1 for    the                             Pollutant Emission     nitrog    onia
Ltd     matter, malodorous     rge       waste    factor                          Standard GB            en        nitrog
        Wastewater: COD,       after     water)   y                               14554-93,              0.5t/a    en
        ammonia nitrogen       treatm             premis                          Comprehensive Air                5.4t/a
        (NH3-N), total         ent                es                              Pollutant Emission
        nitrogen (in N),       waste              Waste                           Standard GB
        total phosphorus (in   water:             water:                          16927-1996
        P), pH value,          indire             west                            Comprehensive
        suspended matter,      ct                 side of                         Emission Standard
        BOD5, animal and       discha             the                             for Water Pollutants
        vegetable oils,        rge                factor                          Along the
        coliform groups                           y                               South-to-North
                                                  premis                          Water Transfer
                                                  es                              Project in Shandong
                                                                                  Province DB37/
                                                                                  599-2006,
                                                                                  Modification Forms
                                                                                  DB37/599-2006 for
                                                                                  four standards
                                                                                  including the
                                                                                  Comprehensive
                                                                                                                              83
                                                                             2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                                                                 Emission Standard
                                                                                 of Water Pollutants
                                                                                 Along the
                                                                                 South-to-North
                                                                                 Water Transfer
                                                                                 Project in Shandong
                                                                                 Province, adding the
                                                                                 limit of total
                                                                                 nitrogen
Ansh    Waste gas:            Waste     2 (1     Waste     Suspended solids: Boiler Air Pollutant      COD      COD      None
an      particulate matter,   gas:      for      gas:      300mg/L               Emission Standard      153      153
Liuhe   sulfur dioxide,       directl   waste    north     Coliform groups:     GB 13271-2014,         t/a      t/a
Food    nitrogen oxides,      y         gases,   west      10000 /L              Malodorous             Amm      Amm
Co.,    smoke blackness,      discha    1 for    side of   Ammonia               Pollutant Emission     onia     onia
Ltd     mercury and its       rge       waste    the       nitrogen              Standard GB            nitrog   nitrog
        compounds,            after     water)   factor    (NH3-N):           14554-93,              en       en
        hydrogen sulfide,     treatm             y         30mg/L                Comprehensive Air      15.3t/   15.3t/
        odor concentration,   ent                premis    BOD5:250mg/L         Pollutant Emission     a        a
        ammonia               waste              es        pH value:6.0-8.5     Standard
        Wastewater: pH        water:             Waste     Total dissolved       GB16297-1996
        value, COD, total     indire             water:    solids:2000mg/L      Comprehensive
        dissolved solids,     ct                 east      Animal and            Sewage Discharge
        flow rate, ammonia    discha             side of   vegetable oils:       Standard DB
        nitrogen (NH3-N),     rge                the       50mg/L                21/1627-2008,
        suspended solids,                        factor    COD: 300mg/L          Meat Processing
        BOD5, animal and                         y                               Industry Water
        vegetable oils,                          premis                          Pollutant Emission
        coliform groups                          es                              Standard GB
                                                                                 13457-92,
                                                                                 Water Quality
                                                                                 Standard for
                                                                                 Sewage Discharged
                                                                                 into Urban Sewers
                                                                                 GB/T 31962-2015.
Panji   Waste gas:            Waste     2 (1     Waste     Suspended solids: Boiler Air Pollutant      COD      COD      None
n       particulate matter,   gas:      for      gas:      20mg/L                Emission Standard      45t/a,   45t/a,
Liuhe   sulfur dioxide,       directl   waste    north     Coliform groups:     GB 13271-2014,         Amm      Amm
Farmi   nitrogen oxides,      y         gases,   west      10000 /L              Malodorous             onia     onia
ng      smoke blackness,      discha    1 for    side of   BOD5:10mg/L          Pollutant Emission     nitrog   nitrog
Co.,    mercury and its       rge       waste    the       Ammonia               Standard GB            en       en
Ltd     compounds,            after     water)   factor    nitrogen              14554-93               7.2t/a   7.2t/a
        hydrogen sulfide,     treatm             y         (NH3-N):           Comprehensive          Total    Total
        odor concentration,   ent                premis    8mg/L                 Sewage Discharge       nitrog   nitrog
        ammonia               waste              es        COD:50mg/L           Standard DB            en:     en:
                                                                                                                            84
                                                                              2021 Semiannual Report of New Hope Liuhe Co., Ltd
        Wastewater: pH        water:             waste     Animal and             21/1627-2008,          13.5t/    13.5t/
        value, COD, total     indire             water:    vegetable oils:       Meat Processing        a         a
        dissolved solids,     ct                 northe    20mg/L                 Industry Water
        flow rate, ammonia    discha             ast       pH value:6.0-8.5      Pollutant Emission
        nitrogen (NH3-N),     rge                side of   Total nitrogen(in     Standard GB
        suspended solids,                        the       N):15mg/L            13457-92
        BOD5, animal and                         factor
        vegetable oils,                          y
        coliform groups                          premis
                                                 es
Dong    Waste gas:            Waste     2 (1     Waste     Ammonia                Malodorous             Cod:1     No       None
e       particulate matter,   gas:      for      gas:      nitrogen 4.32          Pollutant Emission     3.100     total
Liuhe   sulfur dioxide,       directl   waste    northe    mg/L,                  Standard GB            000t/a    quanti
Lvjia   nitrogen oxides,      y         gases,   ast       COD                    14554-93,              ;         ty
Food    smoke blackness,      discha    1 for    side of   concentration:        Notice on the          ammo      requir
Co.,    mercury and its       rge       waste    the       49mg/L                 Implementation of      nia       ement
Ltd     compounds,            after     water)   factor    Odor:724              Special Emission       nitrog    s
        hydrogen sulfide,     treatm             y                                Limits of Air          en:
        odor concentration,   ent                premis                           Pollutants in          1.300
        ammonia               waste              es                               Beijing-Tianjin-Heb    000t/a
        Wastewater: pH        water:             Waste                            ei Air Pollution       ; total
        value, COD, total     indire             water:                           Transmission           phosp
        dissolved solids,     ct                 northe                           Channel Cities         horus:
        flow rate, ammonia    discha             ast                              (Ministry of           0.200
        nitrogen (NH3-N),     rge                side of                          Environmental          000t/a
        suspended solids,                        the                              Protection Notice      ; total
        BOD5, animal and                         factor                           No. 9, 2018)           nitrog
        vegetable oils,                          y                                Notice on Approval     en:
        coliform groups                          premis                           and Issue of the       13.50
                                                 es                               Modification Forms     0000t/
                                                                                  for four standards     a
                                                                                  including the
                                                                                  Comprehensive
                                                                                  Emission Standard
                                                                                  for Water Pollutants
                                                                                  along the
                                                                                  South-to-North
                                                                                  Water Transfer
                                                                                  Project of Shandong
                                                                                  Province,
                                                                                  Luzhijianbiaofa
                                                                                  [2011] No. 35,
                                                                                  Water Pollutant
                                                                                  Discharge Standard
                                                                                                                              85
                                                                            2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                                                                for Meat Processing
                                                                                Industry GB
                                                                                13457-92
Liaoc   Waste gas:            Waste     2 (1     Waste     CODcr≤300mg/L,      Malodorous             COD:     COD:     None
heng    particulate matter,   gas:      for      gas:      BOD5≤150mg/L,       Pollutant Discharge    708.7    708.7
Liuhe   sulfur dioxide,       directl   waste    east      SS≤200mg/L,         Standard GB            5t/a     5t/a
Rong    nitrogen oxides,      y         gases,   side of   NH3-N≤20mg/L,       14554-93,              Amm      Amm
da      smoke blackness,      discha    1 for    the       TP≤5mg/L,           Announcement on        onia     onia
Farmi   mercury and its       rge       waste    factor    TN≤45mg/L           the Implementation     nitrog   nitrog
ng      compounds,            after     water)   y                              of Special Air         en:     en:
Co.,    hydrogen sulfide,     treatm             premis                         Pollutant Emission     63.78    63.78
Ltd     odor concentration,   ent                es                             Limits for Cities in   75       75
        ammonia               waste              Waste                          Beijing-Tianjin-Heb
        Wastewater: pH        water:             water:                         ei Air Pollution
        value, COD, total     indire             east                           Transmission
        dissolved solids,     ct                 side of                        Channel
        flow rate, ammonia    discha             the                            Meat Processing
        nitrogen (NH3-N),     rge                factor                         Industry Water
        suspended solids,                        y                              Pollutant Discharge
        BOD5, animal and                         premis                         Standard GB
        vegetable oils,                          es                             13457-92,
        coliform groups                                                         Water Quality
                                                                                Standard for
                                                                                Sewage Discharged
                                                                                into Urban Sewers
                                                                                GB/T 31962-2015
Shenx   Waste gas:            Waste     4 (3     Waste     CODcr 50mg/L,        Malodorous             COD:     COD:     None
ian     particulate matter,   gas:      for      gas:      BOD5 10mg/L,         Pollutant Emission     25.2t/   25.2t/
New     sulfur dioxide,       directl   waste    within    NH3-N 5mg/L,         Standard GB            a        a
Hope    nitrogen oxides,      y         gases,   the       Animal and           14554-93               Amm      Amm
Liuhe   smoke blackness,      discha    1 for    factor    vegetable oils       DB/372376-2013         onia     onia
Qings   mercury and its       rge       waste    y         3mg/L                Shandong               nitrog   nitrog
izhai   compounds,            after     water)   premis                         Provincial             en:     en:
Food    hydrogen sulfide,     treatm             es                             Comprehensive Air      2.52t/   2.52t/
Co.,    odor concentration,   ent                Waste                          Pollutant Emission     a        a
Ltd     ammonia               waste              water:                         Standard No. 2
        Wastewater: pH        water:             north                          Modification Form
        value, COD, total     indire             side of                        Luzhijianbiaofa
        dissolved solids,     ct                 the                            (2016) No. 46
        flow rate, ammonia    discha             factor                         Down Industry
        nitrogen (NH3-N),     rge                y                              Water Pollutant
        suspended solids,                        premis                         Emission Standard
        BOD5, animal and                         es                             GB 21901-2008,
        vegetable oils,                                                         Notice on Approval
                                                                                                                           86
                                                                              2021 Semiannual Report of New Hope Liuhe Co., Ltd
        coliform groups                                                           and Issue of
                                                                                  Modification Forms
                                                                                  for four standards
                                                                                  including the
                                                                                  Comprehensive
                                                                                  Emission Standard
                                                                                  for Water Pollutants
                                                                                  Along the
                                                                                  South-to-North
                                                                                  Water Transfer Line
                                                                                  of Shandong
                                                                                  Province "
                                                                                  Luzhijianbiaofa[201
                                                                                  1] 35,
                                                                                  Water Pollutant
                                                                                  Discharge Standard
                                                                                  for Meat Processing
                                                                                  Industry GB
                                                                                  13457-92
Yang    Waste gas:             Waste     3 (2     Waste     Ammonia               Malodorous             COD:     COD:     None
gu      ammonia (ammonia       gas:      for      gas:      nitrogen:5mg/L.      Pollutant Emission     24.6t/   24.6t/
Liuhe   gas), hydrogen         directl   waste    northe    COD: 40mg/L.          Standard GB            a        a
Luxin   sulfide, odor          y         gases,   ast of    Total nitrogen:       14554-93,              Amm      Amm
Food    concentration,         discha    1 for    the       15mg/L.               Comprehensive Air      onia     onia
Co.,    particulate matter,    rge       waste    factor    Total phosphorus:     Pollutant Emission     nitrog   nitrog
Ltd     nitrogen oxide,        after     water)   y         0.5mg/L               Standard               en:     en:
        sulfur dioxide,        treatm             premis                          GB16297-1996,          1.04t/   1.04t/
        Ringelmann             ent                es                              Notice on the          a        a
        blackness              waste              Waste                           Implementation of
        Wastewater: pH         water:             water:                          Special Air
        value, COD, BOD5,      indire             northe                          Pollutant Emission
        suspended matter,      ct                 ast                             Limits in
        ammonia nitrogen       discha             side of                         Beijing-Tianjin-Heb
        (NH3-N), total         rge                the                             ei Air Pollution
        nitrogen (in N),                          factor                          Transmission
        total phosphorus (in                      y                               Channel Cities
        P), animal and                            premis                          (Ministry of
        vegetable oils,                           es                              Environmental
        coliform groups,                                                          Protection Notice
        anionic surfactant                                                        No. 9, 2018)
                                                                                  Notice on Approval
                                                                                  and Issue of the
                                                                                  Modification Forms
                                                                                  for Four Standards
                                                                                                                             87
                                                                            2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                                                                including the"
                                                                                Comprehensive
                                                                                Emission Standard
                                                                                for Water Pollutants
                                                                                Along the
                                                                                South-to-North
                                                                                Water Transfer
                                                                                Project of Shandong
                                                                                Province"
                                                                                Luzhijianbiaofa
                                                                                [2011] 35,
                                                                                Comprehensive
                                                                                Discharge Standard
                                                                                for Water Pollutants
                                                                                along the
                                                                                South-to-North
                                                                                Water Transfer
                                                                                Project in Shandong
                                                                                Province: DB37/
                                                                                599--2006,
                                                                                Meat Processing
                                                                                Industry Water
                                                                                Pollutant Discharge
                                                                                standard GB
                                                                                13457-92,
                                                                                Down Industry
                                                                                Water Pollutant
                                                                                Discharge Standard
                                                                                GB 21901 -2008
Weifa   Waste gas:             Waste     2 (1     Waste    COD 500mg/L ,        Shandong               COD:     COD:     None
ng      particulate matter,    gas:      for      gas:     Ammonia              Provincial             225t/a   225t/a
Tianh   hydrogen sulfide,      directl   waste    north    nitrogen 45mg/L,     Comprehensive          Amm      Amm
ui      ammonia (ammonia       y         gases,   side     Total phosphorus     Emission Standard      onia     onia
Food    gas), odor             discha    1 for    within   8mg/L,               for Regional Air       nitrog   nitrog
Co.,    concentration,         rge       waste    the      Total nitrogen       Pollutants             en:     en:
Ltd     sulfur dioxide,        after     water)   factor   8mg/L,               DB37/2376-2013,        20.25t   20.25t
        nitrogen oxides,       treatm             y                             Malodorous             /a       /a
        Ringelmann             ent                premis                        Pollutant Emission     Total    Total
        blackness              waste              es                            Standard GB            nitrog   nitrog
        Wastewater: COD,       water:             Waste                         14554-93,              en:     en:
        ammonia nitrogen       indire             water:                        Boiler Air Pollutant   31.5t/   31.5t/
        (NH3-N), total         ct                 south                         Emission Standard      a        a
        nitrogen (in N),       discha             side                          DB37 2374-2018
        total phosphorus (in   rge                within                        Water Pollutant
                                                                                                                           88
                                                                           2021 Semiannual Report of New Hope Liuhe Co., Ltd
        P), pH value,                             the                          Emission Standard
        BOD5, suspended                           factor                       for Meat Processing
        solids, animal and                        y                            Industry GB
        vegetable oils,                           premis                       13457-92,
        coliform groups,                          es                           Water Quality
        anionic surfactant                                                     Standard for
                                                                               Sewage Discharged
                                                                               into Urban Sewers
                                                                               GB/T 31962-2015
Weifa   Waste gas:             Waste     5 (4     Waste     COD 70mg/L ,       Malodorous             COD:     COD:     None
ng      ammonia (ammonia       gas:      for      gas:      Ammonia            Pollutant Emission     667.7t   667.7t
Heshe   gas), hydrogen         directl   waste    north     nitrogen 10mg/L,   Standard GB            /a       /a
ngyua   sulfide, odor          y         gases,   west                         14554-93,              Amm      Amm
n       concentration,         discha    1 for    side of                      Catering Industry      onia     onia
Food    fumes, Ringelmann      rge       waste    the                          Oil Fume Emission      nitrog   nitrog
Co.,    blackness,             after     water)   factor                       Standard DB37/         en:     en:
Ltd     particulate matter,    treatm             y                            597-2006,              60.09    60.09
        sulfur dioxide,        ent                premis                       Boiler Air Pollutant   3t/a     3t/a
        nitrogen oxides        waste              es,                          Emission Standard      Total    Total
        Wastewater: COD,       water:             east                         DB37 2374-2018         nitrog   nitrog
        ammonia nitrogen       indire             side                         Water Pollutant        en:     en:
        (NH3-N), total         ct                 inside                       Emission Standard      93.47    93.47
        nitrogen (in N),       discha             the                          for Meat Processing    8t/a     8t/a
        total phosphorus (in   rge                factor                       Industry GB
        P), pH value,                             y                            13457-92,
        suspended solids,                         premis                       Water Quality
        BOD5, coliform                            es                           Standard for
        groups, animal and                        Waste                        Sewage Discharged
        vegetable oil                             water:                       into Urban Sewers
                                                  northe                       GB/T 31962-2015
                                                  ast
                                                  side of
                                                  the
                                                  factor
                                                  y
                                                  premis
                                                  es
Luoy    Waste gas:             Waste     2 (1     Waste     COD:70mg/L        Catering Industry      COD:     COD:     None
ang     ammonia (ammonia       gas:      for      gas:      Ammonia            Oil Fume Emission      10t/a    10t/a
Liuhe   gas), odor             directl   waste    east      nitrogen:15mg/L   Standard               Amm      Amm
Huiqu   concentration,         y         gases,   side of   pH:6-8.5          GB18483-2001,          onia     onia
an      hydrogen sulfide,      discha    1 for    the       Total phosphorus: Malodorous             nitrog   nitrog
Food    fumes                  rge       waste    factor    0.5mg/L            Pollutant Emission     en:     en:
Co.,    Wastewater: COD,       after              y         Suspended solids: Standard GB            2.43t/   2.43t/
                                                                                                                          89
                                                                                2021 Semiannual Report of New Hope Liuhe Co., Ltd
Ltd     ammonia nitrogen        treatm    water)   premis    60mg/L                 14554-93              a        a
        (NH3-N), total          ent                es        BOD5:25mg/L           Meat Processing
        phosphorus (in P),      waste              Waste     Animal and             Industry Water
        pH value, BOD5,         water:             water:    vegetable oils:       Pollutant Emission
        suspended solids,       indire             south     15mg/L                 Standard GB
        animal and              ct                 west      Coliform groups:      13457-92,
        vegetable oils,         discha             side of   5000 /L                Comprehensive
        coliform groups.        rge                the       Fumes:                Sewage Discharge
                                                   factor    2.0mg/Nm               Standard
                                                   y                                GB8978-1996
                                                   premis
                                                   es
Hebi    Waste gas: odor         Waste     1        North     COD45mg/L,            COD350mg/L,          COD1     COD6     None
Liuhe   concentration,          gas:               east      ammonia nitrogen       ammonia nitrogen      4.641    4.123
Zhizh   ammonia (ammonia        directl            corner    0.5mg/L,total         35mg/L,total         5t/a,   2t/a,
en      gas), hydrogen          y                  of the    phosphorus             phosphorus 4mg/L, ammo        ammo
Food    sulfide                 discha             factor    4mg/L,total           total nitrogen        nia      nia
Co.,    Wastewater: COD,        rge                y         nitrogen 35mg/L,       45mg/L,               nitrog   nitrog
Ltd     ammonia nitrogen        after              premis                                                 en       en
        (NH3-N), pH value,      treatm             es                                                     1.335    10.68
        suspended solids,       ent                                                                       9t/a     72t/a
        BOD5,     animal        waste
        and vegetable oils,     water:
        coliform groups,        indire
        total nitrogen(in N),   ct
        total phosphorus (in    discha
        P)                      rge
Laiw    Waste gas: sulfur       Waste     7 (6     Waste     COD:500mg/L           Malodorous            COD:     COD:     None
u       dioxide, nitrogen       gas:      for      gas:      Ammonia                Pollutant Discharge   675t/a   675t/a
New     oxides, soot,           directl   waste    north     nitrogen:45mg/L       Standard GB           Amm      Amm
Hope    ammonia (ammonia        y         gases,   side of   Total nitrogen:       14554-93,             onia     onia
Liuhe   gas), hydrogen          discha    1 for    the       70mg/L                 " Provincial Boiler   nitrog   nitrog
Food    sulfide, odor           rge       waste    factor    pH:6.5-9.5            Air Pollutant         en:     en:
Co.,    concentration           after     water)   y         Total phosphorus: Emission Standard         60.75t   60.75t
Ltd     Wastewater: COD,        treatm             premis    8mg/L                  "Ultra-low            /a       /a
        ammonia nitrogen        ent                es        Suspended solids: Emission Standard         Partic   Partic
        (NH3-N), pH value,      waste              Waste     400mg/L                No. 2 Modification    ulate    ulate
        BOD5, total             water:             water:    BOD5:350mg/L          Form                  matter   matter
        nitrogen (in N),        indire             north     Animal and             Luzhijianbiaofa       :       :
        total phosphorus (in    ct                 side of   vegetable oils:       [2016] No. 46,        0.2t/a   0.2t/a
        P), animal and          discha             the       100mg/L                Water Quality         SO2:0    SO2:0
        vegetable oils,         rge                factor    Nitrogen oxides:      Standard for          .1t/a    .1t/a
        suspended solids                           y         200mg/Nm3              Sewage Discharged     NOx:0    NOx:0
                                                   premis    Sulfur dioxide:       into Urban Sewers     .406t/   .406t/
                                                                                                                              90
                                                                                 2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                                    es        50mg/Nm3               GB/T 31962-2015        a         a
                                                              Fumes:
                                                              10mg/Nm3
Dezh     Waste gas: sulfur       Waste     3 (2     Waste     COD:500mg/L           Boiler Air Pollutant   COD:      COD:      None
ou       dioxide, nitrogen       gas:      for      gas:      Ammonia                Emission Standard      23.3t     23.3t
Liuhe    oxides, soot,           directl   waste    north     nitrogen:45mg/L       DB372374 -2018,
Zhika    ammonia (ammonia        y         gases,   side of   Total nitrogen:       Boiler Air Pollutant
ng       gas), hydrogen          discha    1 for    the       70mg/L                 Emission Standard
Food     sulfide, odor           rge       waste    factor    pH:6.0-8.5            GB 13271-2014,
Co.,     concentration           after     water)   y         Total phosphorus: Malodorous
Ltd      Wastewater: COD,        treatm             premis    8mg/L                  Pollutant Emission
         ammonia nitrogen        ent                es        Suspended solids: Standard GB
         (NH3-N), pH value,      waste              Waste     300mg/L                14554-93
         BOD5, total             water:             water:    BOD5:250mg/L          Water Quality
         nitrogen (in N),        indire             north     Animal and             Standard for
         total phosphorus (in    ct                 side of   vegetable oils:       Sewage Discharged
         P), animal and          discha             the       50mg/L                 into Urban Sewers
         vegetable oils,         rge                factor    Ringelmann             GB/T 31962-2015,
         suspended solids                           y         blackness:level 1     Meat Processing
                                                    premis    Nitrogen oxides:      Industry Water
                                                    es        150mg/Nm3              Pollutant Emission
                                                              Sulfur dioxides:      Standard GB
                                                              50mg/Nm3               13457-92
                                                              Fumes:
                                                              10mg/Nm3
Feixia   Waste gas: odor         Indire    1        South     COD:50mg/L            Malodorous             COD:      COD:      None
n        concentration,          ct                 side of   Ammonia                Pollutant Discharge    11.6t/a   11.6t/a
Liuhe    ammonia (ammonia        discha             the       nitrogen:5mg/L        Standard GB            Amm       Amm
Huah     gas), hydrogen          rge                factor    Total phosphorus: 14554-93,                  onia      onia
ai       sulfide                                    y         0.3mg/L                Notice on Approval     nitrog    nitrog
Food     Wastewater: COD,                           premis    pH:6-8.5              and Issue of the       en:      en:
Co.,     ammonia nitrogen                           es        Suspended solids: Modification Forms         1.16t/    1.16t/
Ltd      (NH3-N), pH value,                                   20mg/L                 for Four Standards     a         a
         suspended solids,                                    Total nitrogen:       Including the          Total     Total
         BOD5,     animal                                     20mg/L                 Comprehensive          nitrog    nitrog
         and vegetable oils,                                  BOD5:10mg/L           Discharge Standard     en:      en:
         coliform groups,                                     Animal and             for Water Pollutants   14t/a     14t/a
         total nitrogen(in N),                                vegetable oils:       Along the              Total     Total
         total phosphorus (in                                 3mg/L                  South-to-North         phosp     phosp
         P)                                                   Coliform groups:      Water Transfer         horus:    horus:
                                                              10000 /L               Project of Shandong    0.63t/    0.63t/
                                                                                     Province               a         a
                                                                                     Luzhijianbiaofa
                                                                                     [2011] No. 35,
                                                                                                                                  91
                                                                              2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                                                                  Water Pollutant
                                                                                  Emission Standard
                                                                                  for Meat Processing
                                                                                  Industry GB
                                                                                  13457-92,
                                                                                  Comprehensive
                                                                                  Discharge Standard
                                                                                  for Water Pollutants
                                                                                  Along the
                                                                                  South-to-North
                                                                                  Water Transfer
                                                                                  Project in Shandong
                                                                                  Province DB37/
                                                                                  599-2006,
                                                                                  Modification Forms
                                                                                  DB37 / 599-2006
                                                                                  for Four Standards
                                                                                  including the
                                                                                  Comprehensive
                                                                                  Discharge Standard
                                                                                  for Water Pollutants
                                                                                  along the
                                                                                  South-to-North
                                                                                  Water transfer
                                                                                  Project in Shandong
                                                                                  Province, adding the
                                                                                  limit of total
                                                                                  nitrogen.
Fuxin   Waste gas: nitrogen   Waste     3 (2     Waste     COD:300mg/L           Boiler Air Pollutant   CODc     CODc     None
Liuhe   oxides, fume          gas:      for      gas:      Ammonia                Emission Standard      r:      r:
Farmi   blackness,            directl   waste    north     nitrogen:30mg/L       GB 13271-2014,         78.61t   78.61t
ng      particulate matter,   y         gases,   west      pH:6-8.5              Malodorous             /a       /a
Co.,    sulfur dioxide,       discha    1 for    and       Suspended solids: Pollutant Emission         Amm      Amm
Ltd     ammonia (ammonia      rge       waste    south     300mg/L                Standard GB            onia     onia
Food    gas), hydrogen        after     water)   side of   BOD5:250mg/L          14554-93               nitrog   nitrog
Branc   sulfide, odor         treatm             the       Animal and             Water Pollutant        en:7.8   en:7.8
h       concentration         ent                factor    vegetable oils:       Emission Standard      6t/a     6t/a
        Wastewater: COD,      waste              y         50mg/L                 for Meat Processing
        suspended solids,     water:             premis                           Industry GB
        ammonia nitrogen      indire             es                               13457-92,
        (NH3-N), pH value,    ct                 Waste                            Comprehensive
        BOD5, animal and      discha             water:                           Sewage Discharge
        vegetable oils,       rge                west                             Standard DB
        coliform groups                          side of                          21/1627-2008
                                                                                                                             92
                                                                              2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                                  the
                                                  factor
                                                  y
                                                  premis
                                                  es
Taiqia   Waste gas:            Waste     4 (3     Waste     NOx: 150mg/m3         Boiler Air Pollutant   COD      None     None
n        ammonia (ammonia      gas:      for      gas       SO2: 50mg/m3          Emission Standard      236t/a
New      gas), hydrogen        directl   waste    discha    Fume particles:       GB 13271-2014,         ;
Hope     sulfide, odor         y         gases,   rge       20mg/m3                Provincial            Amm
Liuhe    concentration,        discha    1 for    outlet:   Benchmark             Program for            onia
Luxin    particulate matter,   rge       waste    at the    oxygen content:       Integrated Boiler      nitrog
Food     nitrogen oxides,      after     water)   sewag     3.5%                  Renovation 2019        en
Co.,     sulfur dioxide,       treatm             e         Fume blackness:       Malodorous             2.3t/a
Ltd      Ringelmann            ent                treatm    level 1               Pollutant Emission
         blackness             waste              ent                             Standard GB
         Wastewater: COD,      water:             plant                           14554-93
         ammonia nitrogen      indire             in the                          Water Pollutant
         (NH3-N), total        ct                 north                           Emission Standard
         phosphorus (in P),    discha             west                            for Meat Processing
         pH value, BOD5,       rge                corner                          Industry GB
         suspended solids,                        of the                          13457-92
         animal and                               factor
         vegetable oils,                          y
         coliform groups                          premis
                                                  es
                                                  Waste
                                                  water
                                                  discha
                                                  rge
                                                  outlet
Laoti    Waste gas:            Waste     4 (2     Waste     COD 500mg/L           Malodorous             COD:     COD:     None
ng       ammonia (ammonia      gas:      for      gas       Ammonia               Pollutant Emission     9.31t/   9.31t/
Liuhe    gas), hydrogen        directl   waste    discha    nitrogen 45mg/L       Standard GB            a        a
Xinm     sulfide, odor         y         gases,   rge       Total phosphorus      14554-93               Amm      Amm
eizi     concentration         discha    1 for    outlet:   8mg/L                 Water Quality          onia     onia
Food     wastewater: COD,      rge       waste    sewag     pH6-8.5mg/L           Standard for           nitrog   nitrog
Co.,     ammonia nitrogen,     after     water)   e         Suspended solids      Sewage Discharged      en:     en:
Ltd      total nitrogen,       treatm             treatm    300mg/L               into Urban Sewers      5.87t/   5.87t/
         animal and            ent                ent       Total nitrogen:       GB/T 31962-2015,       a        a
         vegetable oils,       waste              plant     70mg/L                Meat Processing        Total    Total
         suspended solids,     water:             in the    BOD5 250mg/L          Industry Water         nitrog   nitrog
         fecal coliform,       indire             north     Animal and            Pollutant Emission     en(in   en(in
         BOD5                  ct                 west      vegetable oils        Standard GB            N):    N):
                               discha             corner                                                 40.5t/   40.5t/
                                                                                                                             93
                                                                           2021 Semiannual Report of New Hope Liuhe Co., Ltd
                             rge                of the    50mg/L               13457-92               a        a
                                                factor
                                                y
                                                premis
                                                es,
                                                and
                                                produ
                                                ction
                                                shops
                                                Waste
                                                water
                                                discha
                                                rge
                                                outlet:
                                                sewag
                                                e
                                                treatm
                                                ent
                                                plant
Qixia    Waste gas:          Waste     4 (3     Waste     Ammonia              Malodorous             COD:     COD:     None
Refri    ammonia (ammonia    gas:      for      gas       nitrogen: 5m/L       Pollutant Emission     14.4t/   14.4t/
gerati   gas), hydrogen      directl   waste    discha    COD 50mg/l           Standard GB            a        a
on       sulfide, odor       y         gases,   rge       pH: 6-9              14554-93               Amm      Amm
Plant    concentration       discha    1 for    outlet:                        Boiler Air Pollutant   onia     onia
of       wastewater: COD,    rge       waste    sewag                          Discharge Standard     nitrog   nitrog
Shand    ammonia nitrogen,   after     water)   e                              DB37 2374-2018         en:     en:
ong      total nitrogen,     treatm             treatm                         Comprehensive          1.5t/a   1.5t/a
New      animal and          ent                ent                            Emission Standard
Hope     vegetable oils,     waste              plant                          of Water Pollutants
Liuhe    suspended solids,   water:             in the                         in the Peninsula
Grou     fecal coliform,     indire             northe                         Basin of Shandong
p Co.,   BOD5                ct                 ast                            Province
Ltd                          discha             corner                         DB37/676-2007,
                             rge                of the                         Water Pollutant
                                                factor                         Emission Standard
                                                y                              for Meat Processing
                                                premis                         Industry GB
                                                es,                            13457-92
                                                and
                                                produ
                                                ction
                                                shops
                                                Waste
                                                water
                                                                                                                          94
                                                                                   2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                                      discha
                                                      rge
                                                      outlet:
                                                      sewag
                                                      e
                                                      treatm
                                                      ent
                                                      plant
Laiya      Waste gas: odor         Waste     2 (1     Waste     COD 30mg/l,            Shandong              CODc
ng         concentration,          gas:      for      gas:      ammonia nitrogen       Provincial Boiler     r        None     None
Tiany      ammonia (ammonia        directl   waste    north     1.5mg/l, total         Air Pollutant         112.75
e          gas), hydrogen          y         gases,   side of   phosphorus             Emission Standard     t/a
Food       sulfide, sulfur         discha    1 for    the       0.5mg/l, total         No. 2 Modification    Amm
Co.,       dioxide, nitrogen       rge       waste    factor    nitrogen 15mg/l,       Form                  onia
Ltd        oxides, particulates,   after     water)   y         pH6-9                  (Luzhijianbiaofa      nitrog
           fume blackness          treatm             premis                           [2016] No. 46,        en
           (Ringelmann             ent                es and                           Malodorous            3.02t/
           blackness, scale)       waste              within                           Pollutant Emission    a
           Wastewater: COD,        water:             the                              Standard GB           Total
           ammonia nitrogen        indire             factor                           14554-93              nitrog
           (NH3-N), pH value,      ct                 y                                Comprehensive         en
           suspended solids,       discha             premis                           Emission Standard     3.32t/
           BOD5, animal and        rge                es of                            of Water Pollutants   a
           vegetable oils,                            the                              in the Peninsula      total
           coliform groups,                           compa                            Basin of Shandong     phosp
           total nitrogen (in                         ny                               Province              horus
           N),                                        Waste                            DB37/676-2007,        0.016t
                                                      water:                           Water Pollutant       /a
                                                      west                             Emission Standard
                                                      side of                          for Meat Processing
                                                      the                              Industry GB
                                                      compa                            13457-92
                                                      ny
Tai’an    Waste gases:            Waste     6 (5     Waste     COD:350mg/L           Water Quality         COD: COD: None
     Tai   nitrogen oxides,        gas:      for      gases:    Total nitrogen:       Standard for          533.0    533.0
     sha   particulates, sulfur    directl   waste    west      70mg/L                 Sewage Discharged     5t/a;    5t/a;
     n     dioxide, hydrogen       y         gases,   side of   Ammonia                into Urban Sewers     ammo     ammo
     Liu   sulfide, ammonia,       discha    1 for    the       nitrogen:45mg/L       GB/T 31962-2015,      nia      nia
     he    odor concentration,     rge       waste    compa     Total phosphorus: Meat Processing           nitrog   nitrog
     Fo    Ringelman               after     water)   ny’s     8mg/L                  Industry Water        en:     en:
     od    blackness               treatm             factor    pH:6-8.5              Pollutant Discharge   45.69t   45.69t
     Co.   Wastewater:             ent                y         Suspended solids: Standard GB               /a       /a
     ,     chemical oxygen         waste              premis    256mg/L                13457-92
           demand, ammonia         water:             es,       BOD5:150mg/L          Malodorous
                                                                                                                                 95
                                                                                  2021 Semiannual Report of New Hope Liuhe Co., Ltd
     Ltd   nitrogen, total        indire             inside    Animal and             Pollutant Discharge
           nitrogen, total        ct                 the       vegetable oils:       Standard GB
           phosphorus, pH         discha             compa     50mg/L                 14554-93
           value, five-day        rge                ny        Hydrogen sulfide:      DB/372376-2013
           biochemical oxygen                        waste     0.1mg/nm3              Shandong
           demand, animal and                        water:    Ammonia:               Provincial
           vegetable oils,                           west      2mg/nm3                Comprehensive Air
           suspended solids,                         side of   Particles:             Pollutant Emission
           coliform bacteria                         the       10mg/nm3               Standard No. 2
           count, anionic                            west      Sulfur dioxide:        Modification Form
           surfactant                                gate      50mg/nm3               Luzhijianbiaofa
                                                     of the    nitrogen oxides:       (2016) No. 46,
                                                     compa     100mg/nm3              Boiler Air Pollutant
                                                     ny                               Emission Standard
                                                                                      DB37/2374-2018
Shand      Waste gas:             Waste     3 (2     Waste     Ammonia                Boiler Air Pollutant   CODc     CODc     None
ong        ammonia (ammonia       gas:      for      gases:    nitrogen 45mg/l        Emission Standard      r        r
New        gas), hydrogen         directl   waste    east      COD 500mg/l            DB372374 -2018,        8.68t/   8.68t/
Hope       sulfide, odor          y         gases,   side of   Total phosphorus       Malodorous             a        a
Liuhe      concentration,         discha    1 for    the       8mg/l                  Pollutant Emission     Amm      Amm
Grou       sulfur dioxide,        rge       waste    compa     Total nitrogen         Standard GB            onia     onia
p Co.,     nitrogen oxides,       after     water)   ny’s     70mg/l                 14554-93               nitrog   nitrog
Ltd        particulates,          treatm             factor                           Water Quality          en       en
Linyi      Ringelmann             ent                y                                Standard for           0.68t/   0.68t/
Branc      blackness              waste              premis                           Sewage Discharged      a        a
h          Wastewater: COD,       water:             es                               into Urban Sewers      Total    Total
           pH value, dissolved    indire             Waste                            GB/T 31962-2015,       phosp    phosp
           total solids,          ct                 water:                           Meat Processing        horus    horus
           ammonia nitrogen       discha             southe                           Industry Water         0.88t/   0.88t/
           (NH3-N), total         rge                ast                              Pollutant Emission     a        a
           nitrogen (N), total                       side of                          Standard GB            Total    Total
           phosphorus (P),                           the                              13457-92               nitrog   nitrog
           suspended solids,                         compa                                                   en       en
           BOD5, flow rate,                          ny                                                      4.1t/a   4.1t/a
           animal and
           vegetable oil, total
           coliform groups.
Qingd      Waste gases:           Waste     7 (6     Waste     Fumes:                 Boiler Air Pollutant   COD:     COD:     None
ao         nitrogen oxides,       gases:    for      gases:    1.5mg/Nm3              Emission Standard      18.45t   18.45t
Liuhe      sulfur dioxide,        directl   waste    west      COD:500mg/L           DB37 2374-2018         /a       /a
Wanf       hydrogen sulfide,      y         gases,   side of   Ammonia                Shandong               Amm      Amm
u          fumes, Ringelman       discha    1 for    the       nitrogen:45mg/L       Provincial Fume        onia     onia
Food       blackness, ammonia     rged      waste    factor    Total nitrogen:       Emission Standard      nitrog   nitrog
Co.,       (ammonia gas),         after              y         70mg/L                 for Catering           en:     en:
                                                                                                                                 96
                                                                              2021 Semiannual Report of New Hope Liuhe Co., Ltd
Ltd     hydrogen sulfide,     treatm    water)   premis    pH:6.5-9.5            Industry               1.75t/   1.75t/
        odor concentration,   ent                es        Total phosphorus: DB37/597-2006              a        a
        Wastewater: COD,      Waste                        8mg/L                  Malodorous             Partic   Partic
        ammonia nitrogen      water:             Waste     Suspended solids: Pollutant Emission         ulate    ulate
        (NH3-N), pH value,    discha             water:    400mg/L                Standard GB            matter   matter
        BOD5, total           rged               south     BOD5:350mg/L          14554-93,              :       :
        nitrogen (as N),      into               west      Animal and             Shandong               10.5t/   10.5t/
        total phosphorus,     sewag              side of   vegetable oils:       Provincial             a        a
        animal and            e                  the       100mg/L                Comprehensive          SO2:1    SO2:1
        vegetable oils,       treatm             factor    Nitrogen oxides:       Emission Standard      .8t/a    .8t/a
        suspended solids,     ent                y         200mg/Nm3              for Regional Air       NOx:8    NOx:8
        coliform bacteria     plant              premis    Sulfur dioxide:        Pollutants             .55t/a   .55t/a
        count                 after              es        50mg/Nm3               DB37/2376-2019,
                              treatm                       Soot: 10mg/Nm3         Comprehensive Air
                              ent.                                                Pollutant Emission
                                                                                  Standard
                                                                                  GB16297-1996,
                                                                                  Water Quality
                                                                                  Standard for
                                                                                  Sewage Discharged
                                                                                  into Urban Sewers
                                                                                  GB/T 31962-2015
Fenxi   Waste gases:          Waste     4 (3     Waste     COD 40mg/l,            Boiler Air Pollutant   COD:     COD:     None
New     nitrogen oxides,      gases:    for      gas       ammonia nitrogen       Emission Standard      2.90t/   2.90t/
Hope    sulfur dioxide,       directl   waste    discha    2mg/l, total           GB 13271-2014,         a        a
Liuhe   particles             y         gases,   rge       phosphorus             Malodorous             Amm      Amm
Food    Wastewater: COD,      discha    1 for    outlets   0.4mg/l, total         Pollutant Emission     onia     onia
Co.,    suspended solids,     rged      waste    :         nitrogen 2mg/l,        Standard GB            nitrog   nitrog
Ltd     ammonia nitrogen      after     water)   boiler    pH6-9                  14554-93               en:     en:
        (NH3-N), pH value,    treatm             rooms                            Water Pollutant        0.70t/   0.70t/
        BOD5, animal and      ent                and                              Emission Standard      a        a
        vegetable oils,       Waste              produ                            for Meat Processing
        coliform bacteria     water:             ction                            Industry GB
        count                 directl            shops                            13457-92,
                              y                  in                               Comprehensive
                              discha             north                            Sewage Discharge
                              rged               west                             Standard DB
                              after              and                              21/1627-2008
                              treatm             south
                              ent.               west
                                                 of the
                                                 factor
                                                 y
                                                 premis
                                                                                                                             97
                                                                                 2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                                     es.
                                                     Waste
                                                     water
                                                     discha
                                                     rge
                                                     outlet:
                                                     sewag
                                                     e
                                                     treatm
                                                     ent
                                                     plant
Beijin   Waste gas:               Waste     4 (3     Waste     Non methane           Comprehensive         COD: COD: None
g        hydrogen sulfide,        gas:      for      gas       hydrocarbons          Water Pollutant       186.1    186.1
Kingh    odor concentration,      directl   waste    discha    (rendering shop):     Discharge Standards   5t/a;    5t/a;
ey       ammonia (ammonia         y         gases,   rge       50mg/m3               (DB11/307-2013)     ammo     ammo
Food     gas), particulate        discha    1 for    outlets   Non methane                                 nia      nia
Co.,     matter, non-methane      rge       waste    :         hydrocarbons:        Comprehensive Air     nitrog   nitrog
Ltd      total hydrocarbons,      after     water)   cantee    10mg/m3;              Pollutant Discharge   en:     en:
         particulates,            treatm             ns,       Fumes:               Standard DB11/        18.61    18.61
         nitrogen oxides,         ent                render    1mg/Nm3;              501—2017             5t/a     5t/a
         sulfur dioxide,          waste              ing       PM10:5mg/Nm3
         fume, sulfur             water:             shops     COD: 220mg/L,         Catering Industry
         dioxide, nitrogen        indire             Waste     ammonia               Oil Fume Emission
         oxides, Ringelmann       ct                 water     nitrogen: 35mg/L,     Standard(Trial)
         blackness                discha             discha    total phosphorus 6    GB18483-2001
         Wastewater: pH,          rge                rge       mg/L, total
         COD, BOD5,                                  outlets   nitrogen 50mg/L
         suspended solids,                           : south
         ammonia nitrogen                            side of
         (NH3-N), animal                             the
         and vegetable oils,                         sewag
         total phosphorus (in                        e
         P), total nitrogen (in                      treatm
         N), coliform groups                         ent
                                                     station
                                                     .
Hebei    Waste gas:               Indire    6 (5     Waste     Odor: 2000            Comprehensive         COD: COD: None
Kingh    hydrogen sulfide,        ct        for      gas       Non methane           Water Pollutant       23.63t   23.63t
ey       ammonia (ammonia         discha    waste    discha    hydrocarbons          Emission Standard     /a;      /a;
Meat     gas), odor               rge       gases,   rge       (rendering shop):    (DB11/307-2013),      ammo     ammo
Indust   concentration,                     1 for    outlets   80mg/m3               Industrial VOC        nia      nia
ry       non-methane total                  waste    :                               Emission Control      nitrog   nitrog
Co.,     hydrocarbons,                      water)   cantee    COD: 120mg/L,         Standard              en:     en:
         particulates,                               ns,       ammonia nitrogen      DB13/2322-2016        2.29t/   2.29t/
                                                                                                                               98
                                                                          2021 Semiannual Report of New Hope Liuhe Co., Ltd
Ltd     nitrogen oxides,                      render    25mg/L, total         Malodorous Odor        a         a
        sulfur dioxide                        ing       phosphorus            Pollutant Emission
        Wastewater: COD,                      shops,    8mg/L, total          Standard GB
        ammonia nitrogen,                     waitin    nitrogen 75mg/L,      14554- 93
        total nitrogen, total                 g         BOD: 60mg/L,
        phosphorus, pH,                       pens,     total suspended
        BOD5, suspended                       deslim    solids: 120mg/L
        solids, animal and                    ing
        vegetable oils,                       rooms
        coliform groups,                      ,
        phosphate.                            floatat
                                              ion
                                              tank
                                              North
                                              side of
                                              the
                                              sewag
                                              e
                                              treatm
                                              ent
                                              station
Liaon   Waste gas:              Waste     1   Outlet    COD:300 ㎎/L,       Comprehensive          COD: COD: None
ing     ammonia (ammonia        gas:          of the    ammonia               Sewage Discharge       462t/a    462t/a
Kingh   gas), odor              directl       sewag     nitrogen:30 ㎎/L, Standard DB              ;         ;
ey      concentration,          y             e         total phosphorus 5    21/1627-2008           ammo      ammo
Food    sulfur dioxide,         discha        treatm    ㎎/L,total           Water Pollutant        nia       nia
Co.,    hydrogen sulfide,       rge           ent       nitrogen 50 ㎎/L,    Emission Standard      nitrog    nitrog
Ltd     nitrogen oxides,        after         station   BOD:250mg/L,         for Meat Processing    en:      en:
        particulates            treatm        (north    total suspended       Industry GB            46.2t/    46.2t/
        Wastewater: COD,        ent           east      solids:300mg/L       13457-92               a         a
        ammonia nitrogen        waste         corner                          Malodorous
        (NH3-N), total          water:        of the                          Pollutant Emission
        nitrogen (in N),        indire        factor                          Standard GB
        total phosphorus (in    ct            y                               14554-93,
        P), pH, BOD5,           discha        premis                          Comprehensive Air
        suspended solids,       rge           es)                             Pollutant Emission
        animal and                                                            Standard
        vegetable oils,                                                       GB16297-1996
        coliform groups,
        flow rate.
Chen    Waste water: COD,       Waste     4   Waste     COD: 500mg/L          Boiler Air Pollutant   COD:      None     None
gdu     BOD5, ammonia           water:        gas       Ammonia               Discharge Standard     11.9t/a
Hope    nitrogen, total         discha        discha    nitrogen: 45mg/L      GB13271-2014           total
Food    phosphorus, total       rged          rge       total nitrogen:       Water Quality          nitrog
                                                                                                                          99
                                                                                2021 Semiannual Report of New Hope Liuhe Co., Ltd
Co.,     nitrogen, suspended    into               outlet:   70mg/L                 Standard for          en:
Ltd      solids, pH, animal     urban              east of   pH: 6.0-8.5            Sewage Discharged     6.3t/a
         and vegetable oils,    sewag              the       Total phosphorus:      into Urban Sewers     ammo
         coliform groups        e                  low-te    8mg/L                  GB/T 31962-2015,      nia
         Waste gas: nitrogen    treatm             mpera     Suspended solids:      Meat Processing       nitrog
         oxides, sulfur         ent                ture      400mg/L                Industry Water        en:
         dioxide,               plant              plant,    BOD5: 300mg/L          Pollutant Emission    3.7t/a
         particulates,          after              south     Animal and             Standard GB           total
         Ringelmann             treatm             west      vegetable oils:        13457-92              phosp
         blackness, hydrogen    ent                of the    60mg/L                                       horous
         sulfide, ammonia,      Waste              high-t    Ringelman                                    :
         odor                   gas:               emper     blackness: level 1                           0.3t/a
                                directl            ature     Nitrogen oxides                              nitrog
                                y                  plant     150mg/Nm3                                    en
                                discha             Waste     Sulfur dioxide:                              oxides
                                rged               water     50mg/Nm3                                     :
                                                   discha    Particulate matter                           0.7t/a
                                                   rge       20mg/Nm3                                     sulfur
                                                   outlet:                                                dioxid
                                                   south                                                  e:
                                                   west                                                   0.2t/a
                                                   of the
                                                   low-te
                                                   mpera
                                                   ture
                                                   plant,
                                                   south
                                                   of
                                                   high-t
                                                   emper
                                                   ature
                                                   plant
Zheji    Waste gases:           Waste     1                  COD:450mg/L           Meat Processing       COD: COD: None
ang      nitrogen oxides,       gas:      waste              Total nitrogen:       Industry Water        16.63t   16.63t
Xindo    particulates, sulfur   directl   water    Waste     50mg/L                 Pollutant Discharge   /a;      /a;
ngwa     dioxide, hydrogen      y         discha   water:    Ammonia                Standard GB           ammo     ammo
n        sulfide, ammonia,      discha    rge      off-sit   nitrogen:35mg/L       13457-92              nia      nia
Agric    odor concentration     rge       outlet   e         Total phosphorus: Agreements with           nitrog   nitrog
ultura   wastewater:            after              enviro    6mg/L                  sewage treatment      en:     en:
l        chemical oxygen        treatm             nment     pH:6-8.5              plants                2.49t/   2.49t/
Devel    demand, ammonia        ent                al        Suspended solids: Malodorous                a        a
opme     nitrogen, total        waste              protec    200mg/L                Pollutant Discharge
nt       nitrogen, total        water:             tion      BOD5:120mg/L          Standard GB
Co.,     phosphorus, pH         indire             station   Animal and             14554-93,
                                                                                                                             100
                                                                               2021 Semiannual Report of New Hope Liuhe Co., Ltd
Ltd     value, five-day        ct                 of the    vegetable oils:       Boiler Air Pollutant
        biochemical oxygen     discha             compa     50mg/L                 Discharge Standard
        demand, animal and     rge                ny        Nitrogen oxides : GB 13271-2014,
        vegetable oils,                                     150mg/Nm3              Emission Standard
        suspended solids,                                   Sulfur dioxide:       for Boiler Air
        coliform bacteria.                                  50mg/Nm3               Pollutants DB37
                                                            Fumes:                2374-2018
                                                            10mg/Nm3
Hang    Waste gases:           Waste     1                  COD:450mg/L           Meat Processing        COD: COD: None
zhou    nitrogen oxides,       gas:      waste    Waste     Total nitrogen:       Industry Water         16.63t   16.63t
Guan    particulates, sulfur   directl   water    water:    50mg/L                 Pollutant Discharge    /a;      /a;
glv     dioxide, hydrogen      y         discha   off-sit   Ammonia                Standard GB            ammo     ammo
Breed   sulfide, ammonia,      discha    rge      e         nitrogen:35mg/L       13457-92               nia      nia
ing     odor concentration     rge       outlet   enviro    Total phosphorus: Agreements with            nitrog   nitrog
Co.,    wastewater:            after              nment     6mg/L                  sewage treatment       en:     en:
Ltd     chemical oxygen        treatm             al        pH:6-8.5              plants                 2.49t/   2.49t/
        demand, ammonia        ent                protec    Suspended solids: Malodorous                 a        a
        nitrogen, total        waste              tion      200mg/L                Pollutant Discharge
        nitrogen, total        water:             station   BOD5:120mg/L          Standard GB
        phosphorus, pH         indire             of the    Animal and             14554-93,
        value, five-day        ct                 compa     vegetable oils:       Boiler Air Pollutant
        biochemical oxygen     discha             ny        50mg/L                 Discharge Standard
        demand, animal and     rge                          Nitrogen oxides : GB 13271-2014,
        vegetable oils,                                     150mg/Nm3              Emission Standard
        suspended solids,                                   Sulfur dioxide:       for Boiler Air
        coliform bacteria.                                  50mg/Nm3               Pollutants DB37
                                                            Fumes:                2374-2018
                                                            10mg/Nm3
Ruian   Waste gases:           Waste     One                COD:380mg/L           Meat Processing        COD: COD: None
New     nitrogen oxides,       gas:      waste              Total nitrogen:       Industry Water         2.64t/   2.64t/
Hope    particulates, sulfur   directl   water    Waste     40mg/L                 Pollutant Discharge    a;       a;
Liuhe   dioxide, hydrogen      y         discha   water:    Ammonia                Standard GB            ammo     ammo
Farmi   sulfide, ammonia,      discha    rge      off-sit   nitrogen:70mg/L       13457-92               nia      nia
ng      odor concentration     rge       outlet   e         Total phosphorus: Agreements with            nitrog   nitrog
Co.,    wastewater:            after              enviro    7mg/L                  sewage treatment       en:     en:
Ltd     chemical oxygen        treatm             nment     pH:6-8                plants                 0.26t/   0.26t/
        demand, ammonia        ent                al        Suspended solids: Malodorous                 a        a
        nitrogen, total        waste              protec    160mg/L                Pollutant Discharge
        nitrogen, total        water:             tion      BOD5:140mg/L          Standard GB
        phosphorus, pH         indire             station   Animal and             14554-93,
        value, five-day        ct                 of the    vegetable oils:       Boiler Air Pollutant
        biochemical oxygen     discha             compa     0.16t/a                Discharge Standard
        demand, animal and     rge                ny        Nitrogen oxides:       GB 13271-2014,
        vegetable oils,                                     150mg/Nm3              Emission Standard
                                                                                                                            101
                                                                                2021 Semiannual Report of New Hope Liuhe Co., Ltd
         suspended solids,                                   Sulfur dioxide:        for Boiler Air
         coliform bacteria.                                  50mg/Nm3               Pollutants DB37
                                                             Fumes:                 2374-2018
                                                             10mg/Nm3
Ningb    Waste gases:           Waste     One                COD:300mg/L           Water Quality          COD: COD: None
o        nitrogen oxides,       gas:      waste              Total nitrogen:       Standard for           2.64t/   2.64t/
New      particulates, sulfur   directl   water    Waste     40mg/L                 Farmland Irrigation    a;       a;
Hope     dioxide, hydrogen      y         discha   water:    Ammonia                GB5084-2005,           ammo     ammo
Liuhe    sulfide, ammonia,      discha    rge      off-sit   nitrogen:70mg/L       Malodorous             nia      nia
Farmi    odor concentration     rge       outlet   e         Total phosphorus: Pollutant Emission         nitrog   nitrog
ng       wastewater:            after              enviro    7mg/L                  Standard GB            en:     en:
Co.,     chemical oxygen        treatm             nment     pH:6-8                14554-93,              0.26t/   0.26t/
Ltd      demand, ammonia        ent                al        Suspended solids: Boiler Air Pollutant       a        a
         nitrogen, total        waste              protec    200mg/L                Emission Standard
         nitrogen, total        water:             tion      BOD5:150mg/L          GB13271-2014
         phosphorus, pH         indire             station   Animal and             Boiler Air Pollutant
         value, five-day        ct                 of the    vegetable oils:       Emission Standard
         biochemical oxygen     discha             compa     0.16t/a                DB37/2374-2018
         demand, animal and     rge                ny        Nitrogen oxides:
         vegetable oils,                                     150mg/Nm3
         suspended solids,                                   Sulfur dioxide:
         coliform bacteria.                                  50mg/Nm3
                                                             Fumes:
                                                             10mg/Nm3
Zhen     Waste gases:           Waste     One                COD:300mg/L           Water Quality          COD: COD: None
gjiang   nitrogen oxides,       gases:    waste              Total nitrogen:       Standard for           73.36t   73.36t
Yihai    particulates, sulfur   directl   water    Waste     70mg/L                 Farmland Irrigation    /a;      /a;
Agric    dioxide, hydrogen      y         discha   waters    Ammonia                GB5084-2005,           ammo     ammo
ultura   sulfide, ammonia,      discha    rge      : north   nitrogen:30mg/L       Malodorous             nia      nia
l        odor concentration     rged      outlet   side of   Total phosphorus: Pollutant Emission         nitrog   nitrog
Devel    wastewater:            after              the       7mg/L                  Standard GB            en:     en:
opme     chemical oxygen        treatm             enviro    pH:6-8                14554-93,              7.34t/   7.34t/
nt       demand, ammonia        ent                nment     Suspended solids: Boiler Air Pollutant       a        a
Co.,     nitrogen, total        Waste              al        200mg/L                Emission Standard
Ltd      nitrogen, total        water:             protec    BOD5:150mg/L          GB13271-2014
         phosphorus, pH         directl            tion      Animal and             Boiler Air Pollutant
         value, five-day        y                  station   vegetable oils:       Emission Standard
         biochemical oxygen     discha             of the    0.16t/a                (DB37/2374-2018)
         demand, animal and     rged               compa     Nitrogen oxides:
         vegetable oils,        after              ny        150mg/Nm3
         suspended solids,      treatm                       Sulfur dioxide:
         coliform bacteria.     ent.                         50mg/Nm3
                                                             Fumes:
                                                                                                                             102
                                                                           2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                                              10mg/Nm3
Construction and operation of pollution control facilities
                                  Name of
                                  pollution                              Treatment                                Operation
      Company name                                Treatment process                     Time commissioned
                                   control                                capacity                                  status
                                   facility
                                   Sewage
  Linyi Liuhe Food Co.,                           Anaerobic + aerobic    1,200 cubic      Commissioned in          Running
                                  treatment
             Ltd                                     (A/O process)       meters/day              2015              normally
                                   system
                                   Sewage              Hydrolytic
       Qiuxian Liuhe                                                     1000 cubic       Commissioned in          Running
                                  treatment       acidification + A/O
 Kangyuan Food Co., Ltd                                                  meters/day              2014              normally
                                   system                process
    Lanling New Hope               Sewage
                                                  Anaerobic + aerobic    600 cubic        Commissioned in          Running
   Liuhe Hongjun Food             treatment
                                                     (A/O process)       meters/day              2013              normally
           Co., Ltd                system
                                                                                          Acquired in 1997,
   Pingyi Refrigeration
                                   Sewage                                                 operated using the
  Plant of Shandong New                            Biological contact    1,200 cubic                               Running
                                  treatment                                             original tanks, further
  Hope Liuhe Group Co.,                            oxidation process     meters/day                                normally
                                   system                                                    improved in
             Ltd
                                                                                             2002/2004.
                                                                                          SBR system was
                                   Sewage
  Qingdao Tianrun Food                            SBR process + A/O      2000 cubic       commissioned in          Running
                                  treatment
           Co., Ltd                                      process         meters/day       2005, followed by        normally
                                   system
                                                                                         A/O process in 2009
                                                                                          Commissioned in
                                   Sewage
 Xiaoyi New Hope Liuhe                            Anaerobic + aerobic    1600 cubic         2012, process          Running
                                  treatment
       Food Co., Ltd                                 (A/O process)       meters/day       improved in 2016,        normally
                                   system
                                                                                        with bio-filters added
                                                                                          Commissioned in
                                   Sewage                                                 2010, and further
 Yishui New Hope Liuhe                            Anaerobic + aerobic    1800 cubic                                Running
                                  treatment                                               improved in 2014
       Food Co., Ltd                                 (A/O process)       meters/day                                normally
                                   system                                                  through sewage
                                                                                          treatment system
                                   Sewage                                                 Commissioned in
   Guantao Liuhe Food                             Anaerobic + aerobic    3400 cubic                                Running
                                  treatment                                               2009, and further
           Co., Ltd                                  (A/O process)       meters/day                                normally
                                   system                                                 improved in 2017
                                   Sewage
  Binzhou Liuhe Longda                            SBR process + A/O      500 cubic        Commissioned in          Running
                                  treatment
     Farming Co., Ltd                                    process         meters/day              2008              normally
                                   system
                                   Sewage
   Wudi Liuhe Xinyang                             SBR process + A/O      1000 cubic                                Running
                                  treatment                                                      2006
       Food Co., Ltd                                     process         meters/day                                normally
                                   system
                                                                                                                        103
                                                             2021 Semiannual Report of New Hope Liuhe Co., Ltd
                         Sewage                                             Commissioned in
    Zouping Liuhe                    Anaerobic + aerobic   1000 cubic                                Running
                         treatment                                        2004 and transformed
  Livestock Co., Ltd                   (A/O process)       meters/day                                normally
                          system                                          and upgraded in 2012
                         Sewage
 Shanxian Liuhe Feed                     Hydrolytic        1300 cubic       Commissioned in          Running
                         treatment
 Co., Ltd Food Branch                acidification + BRN   meters/day              2012              normally
                          system
                         Sewage
 Caoxian Liuhe Food                                        1400 cubic       Commissioned in          Running
                         treatment      FBR process
       Co.,Ltd                                             meters/day              2007              normally
                          system
                         Sewage
  Jiaxiang New Hope                  Anaerobic + aerobic   3000 cubic                                Running
                         treatment                                           September 2017
 Liuhe Food Co., Ltd                   (A/O process)       meters/day                                normally
                          system
                                                                            Commissioned in
                         Sewage
 Yuncheng Liuhe Food                 Anaerobic + aerobic   800 cubic       2006, and upgraded        Running
                         treatment
       Co., Ltd                        (A/O process)       meters/day       in 2011 and 2017         normally
                          system
                                                                               respectively.
                         Sewage
Anshan Liuhe Food Co.,               Anaerobic + aerobic   2000 cubic       Commissioned in          Running
                         treatment
         Ltd                           (A/O process)       meters/day              2007              normally
                          system
                         Sewage
 Panjin Liuhe Farming                Biological contact    1,200 cubic      Commissioned in          Running
                         treatment
       Co., Ltd                       oxidation process    meters/day              2011              normally
                          system
                         Sewage
  Dong’e Liuhe Lvjia                Anaerobic + aerobic   600 cubic        Commissioned in          Running
                         treatment
    Food Co., Ltd                      (A/O process)       meters/day              2010              normally
                          system
                                     High efficiency air
   Liaocheng Liuhe       Sewage          floatation +                       Commissioned in
                                                           2500 cubic                                Running
 Rongda Farming Co.,     treatment       hydrolytic                       2013 and accepted in
                                                           meters/day                                normally
         Ltd              system     acidification (A/O                         May 2015
                                          process)
                                        Combined air
 Shenxian New Hope       Sewage         floatation and                      Commissioned in
                                                           2000 cubic                                Running
Liuhe Qingsizhai Food    treatment    biological contact                   December 2013 and
                                                           meters/day                                normally
       Co., Ltd           system       oxidation (A/O                     accepted in July 2014
                                          process)
                                                                          The contact oxidation
                         Sewage                                            process was put into
 Yanggu Liuhe Luxin                  Anaerobic + aerobic   3000 cubic                                Running
                         treatment                                          operation in 2009,
    Food Co., Ltd                      (A/O process)       meters/day                                normally
                          system                                           followed by the A/O
                                                                             process in 2015
                                                                          The contact oxidation
                         Sewage
 Weifang Tianhui Food                 Contact oxidation    700 cubic       process was put into      Running
                         treatment
       Co., Ltd                        process + SBR       meters/day     operation in 2007 and      normally
                          system
                                                                              SBR in 2009
                                                                                                          104
                                                             2021 Semiannual Report of New Hope Liuhe Co., Ltd
                         Sewage
Weifang Heshengyuan                  Anaerobic + aerobic   5700 cubic       Commissioned in          Running
                         treatment
    Food Co., Ltd                      (A/O process)       meters/day              2018              normally
                          system
                         Sewage                                             Commissioned in
Luoyang Liuhe Huiquan                Anaerobic + aerobic   1000 cubic                                Running
                         treatment                                          2008, and further
    Food Co., Ltd                      (A/O process)       meters/day                                normally
                          system                                            improved in 2015
                         Sewage                                             Commissioned in
 Hebi Liuhe Zhizhen                  Anaerobic + aerobic   2000 cubic                                 Under
                         treatment                                        2011 and upgraded in
    Food Co., Ltd                      (A/O process)       meters/day                                 testing
                          system                                                   2015
                         Sewage
Laiwu New Hope Liuhe                 Anaerobic + aerobic   3000 cubic                                Running
                         treatment                                                 2014
    Food Co., Ltd                      (A/O process)       meters/day                                normally
                          system
                         Sewage                                             Commissioned in
Dezhou Liuhe Zhikang                 Anaerobic + aerobic   1000 cubic                                Running
                         treatment                                          2008 and system
    Food Co., Ltd                      (A/O process)       meters/day                                normally
                          system                                            improved in 2020
                                                                            Commissioned in
                         Sewage                                             2013, and further
 Feixian Liuhe Huahai                Anaerobic + aerobic   2000 cubic                                Running
                         treatment                                          improved in 2016
    Food Co., Ltd                      (A/O process)       meters/day                                normally
                          system                                             through sewage
                                                                            treatment system
                         Sewage
 Fuxin Liuhe Farming                 Anaerobic + aerobic   1500 cubic       Commissioned in          Running
                         treatment
 Co., Ltd Food Branch                  (A/O process)       meters/day              2007              normally
                          system
  Taiqian New Hope       Sewage
                                     Anaerobic + aerobic   2000 cubic                                Running
Liuhe Luxin Food Co.,    treatment                                                44105
                                       (A/O process)       meters/day                                normally
         Ltd              system
                         Sewage
Laoting Liuhe Xinmeizi               Anaerobic + aerobic   1500 cubic       Commissioned in          Running
                         treatment
    Food Co., Ltd                      (A/O process)       meters/day              2016              normally
                          system
  Qixia Refrigeration
                         Sewage
Plant of Shandong New                Anaerobic + aerobic   1,200 cubic      Commissioned in          Running
                         treatment
Hope Liuhe Group Co.,                  (A/O process)       meters/day              2012              normally
                          system
         Ltd
                                                                            Commissioned in
                         Sewage                                             2008, and further
 Laiyang Tianye Food                                       1,200 cubic                               Running
                         treatment      A/O process                         improved in 2016
       Co., Ltd                                            meters/day                                normally
                          system                                             through sewage
                                                                            treatment system
                         Sewage
 Tai’an Taishan Liuhe               Anaerobic + aerobic   1500 cubic       Commissioned in          Running
                         treatment
    Food Co., Ltd                      (A/O process)       meters/day              2015              normally
                          system
 Shandong New Hope       Sewage                                             Commissioned in
                                     Anaerobic + aerobic   1500 cubic                                Running
 Liuhe Group Co., Ltd    treatment                                          2013, and further
                                       (A/O process)       meters/day                                normally
     Linyi Branch         system                                            improved in 2019
                                                                                                          105
                                                                              2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                                                                                through sewage
                                                                                               treatment system
                                 Sewage
  Qingdao Liuhe Wanfu                                                       800 cubic          Commissioned in              Running
                                treatment          SBR process
       Food Co., Ltd                                                       meters/day                 2012                 normally
                                  system
                                                                                               Commissioned in
                                 Sewage                                                        2011, and further
  Fenxi New Hope Liuhe                                                     1000 cubic                                       Running
                                treatment           A/O process                                improved in 2018
       Food Co., Ltd                                                       meters/day                                      normally
                                  system                                                        through sewage
                                                                                               treatment system
                                 Sewage
  Beijing Kinghey Food                          Biological contact         1500 cubic          Commissioned in              Running
                                treatment
          Co., Ltd                               oxidation process         meters/day                 2004                 normally
                                  system
                                 Sewage
   Hebei Kinghey Meat                                                      1500 cubic          Commissioned in              Running
                                treatment           A/O process
     Industry Co., Ltd                                                     meters/day                 2006                 normally
                                  system
                                                                                              The first phase was
                                 Sewage         Biological contact
 Liaoning Kinghey Food                                                     3000 cubic          commissioned in              Running
                                treatment       oxidation process,
          Co., Ltd                                                         meters/day       2006, followed by the          normally
                                  system            A/O process
                                                                                             second phase in 2019
                                 Sewage
  Chengdu Xiwang Food                          Anaerobic + aerobic         1400 cubic          Commissioned in              Running
                                treatment
          Co., Ltd                                 (A/O process)           meters/day                 2010                 normally
                                  system
  Zhejiang Xindongwan            Sewage
                                                 Aerobic aeration          1500 cubic                                         Not
        Agricultural            treatment                                                     Not commissioned
                                                      process              meters/day                                       operated
  Development Co., Ltd            system
                                               Pooled into Zhejiang
                                                    Xindongwan
                                 Sewage
    Hangzhou Guanglv                                Agricultural
                                treatment
     Breeding Co., Ltd                          Development Co.,
                                  system
                                              Ltd for sharing of one
                                                      system.
                                 Sewage
 Ruian New Hope Liuhe                           UASB+ two-level             430 cubic                                         Not
                                treatment                                                     Not commissioned
     Farming Co., Ltd                                   AO                 meters/day                                       operated
                                  system
       Zhejiang Yihai            Sewage
                                                UASB+ two-level             670 cubic          Commissioned in
        Agricultural            treatment                                                                                 Rectification
                                                        AO                 meters/day                 2021
  Development Co., Ltd            system
                                 Sewage
    Ningbo New Hope                             UASB+ two-level             731 cubic          Commissioned in              Running
                                treatment
 Liuhe Farming Co., Ltd                                 AO                 meters/day                 2021                 normally
                                  system
Environmental impact assessment of construction projects and other administrative licenses for environmental protection
 Company name                      Document name                      Approving           Date approved             Approval No
                                                                                                                                 106
                                                                   2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                                          authority
                                                         Dezhou City
                                                          Bureau of
                  Approval of environmental impact       Environment
                                                                                                      Dehuanyan
                assessment report of Linyi Liuhe Food         al            December 24, 2010
                                                                                                    (2010) No. 65
                               Co., Ltd                  Protection,
                                                          Shandong
                                                          Province
 Linyi Liuhe
                                                            Linyi
Food Co., Ltd
                                                           County
                                                          Bureau of
                      Acceptance Test Report on
                                                         Environment                                 Linhuanjianzi
                Environmental Protection of Completed                           June 2017
                                                              al                                    2017 YS06-07
                         Construction Project
                                                         Protection,
                                                          Shandong
                                                          Province
                  Approval of Environmental Impact
                                                         Qiu County
                 Assessment Report on the 20 million
                                                          Bureau of                                  Qiuhuanshu
                white-feathered meat duck farming and                       February 02, 2012
                                                         Enviornment                                 [2012] No. 1
                processing project of Hebei Kangyuan
                                                         al Proetction
                        HALAL Food Co., Ltd
                     Supplement to the 20 million        Qiu County
                white-feathered meat duck farming and     Bureau of                                  Qiuhuanshu
                                                                            December 23, 2013
                processing project of Hebei Kangyuan     Enviornment                                 [2013] No. 4
                        HALAL Food Co., Ltd              al Proetction
Qiuxian Liuhe                                            Qiu County
                 The 20 million white-feathered meat
Kangyuan Food                                             Bureau of                                  Qiuhuanyan
                duck farming and processing project of                             2013
   Co., Ltd                                              Enviornment                                 [2013] No.07
                Hebei Kangyuan Islamic Food Co., Ltd
                                                         al Proetction
                                                         Qiu County
                  Duck feather drying and processing      Bureau of                                Qiushenhuanbia
                                                                                   2019
                                project                  Administrati                              o 【2019】No.11
                                                         ve Approval
                  Construction project environmental
                                                         Filed by the
                 impact registration form for UV light                       October 15, 2018      2018130400000
                                                          company
                 oxygen deodorization environmental                             (time filed)             0054
                                                            online
                          protection project
                  Approval of Environmental Impact
                                                          Linyi City
                Assessment Report on the 15 million/a
 Lanling New                                              Bureau of                                   Linhuanfa
                   meat duck slaughtering and food                            April 10, 2013
 Hope Liuhe                                              Environment                               【2013】No. 53
                processing project of Cangshan County
Hongjun Food                                             al Protection
                        Hongjun Food Co., Ltd
   Co., Ltd
                     Acceptance Opinions on the           Linyi City                                Linhuanpingha
                                                                             August 20, 2018
                      Completion Acceptance of            Bureau of                                  n (2014) No.
                                                                                                                107
                                                                      2021 Semiannual Report of New Hope Liuhe Co., Ltd
                  Environmental Protection for the 15       Environment                                      341
                  million/a meat duck slaughtering and      al Protection
                 food processing project of Lanling New
                   Hope Liuhe Hongjun Food Co., Ltd
                  Written Reply regarding the Approval       Linyi City
                                                                                                        Linhuanhan
                    Opinions on the Second Phase of          Bureau of
   Pingyi                                                                      December 07, 2001        【2001】No.
                  Broiler Slaughtering Line Project of      Environment
Refrigeration                                                                                                103
                          Pingyi Liuhe Co., Ltd             al Protection
  Factory of
                      Acceptance Opinions on the
Shandong New                                                 Linyi City
                       Completion Acceptance of
 Hope Liuhe                                                  Bureau of                                 Pinghuanshenzi
                 Environmental Protection of the Second                          June 02, 2003
Group Co., Ltd                                              Environment                                 (2008)No. 41
                   Phase of Broiler Slaughtering Line
                                                            al Protection
                    Project of Pingyi Liuhe Co., Ltd
                                                               Jiehua
                    “Environmental Impact Report on        Environment
                   Poultry Slaughterhouse Expansion              al              Feberuray 2020       1581306565000
                                Project”                   Technology
                                                              Co., Ltd
   Qingdao                                                  Pingdu City
                 Environmental Impact Report on the 6
Tianrun Food                                                 Bureau of                                 Pinghuanjianzi
                  million/a Meat Duck Processing Plant                             2015-01-18
   Co., Ltd                                                 Environment                                (2005) No. 20
                                 Project
                                                            al Protection
                  Acceptance Opinions on Completion         Pingdu City
                      Acceptance of Environmental            Bureau of                                 Pinghuanjianzi
                                                                                   2006-12-19
                 Protection of the Meat Duck Processing     Environment                                (2003) No. 53
                              Plant Project                 al Protection
                   Approval of Environmental Impact
                                                            Lvliang City
                   Assessment Report on the proposed                                                   Lvhuanxingshe
                                                             Bureau of
                  60,000 t/a chicken cutting production                            2010-12-09           n [2010]No.
                                                            Environment
                 line project of Xiaoyi Daxiang Farming                                                      335
                                                            al Protection
 Xiaoyi New                 & Food Co., Ltd
 Hope Liuhe       Acceptance Opinions on Completion
Food Co., Ltd         Acceptance of Environmental           Lvliang City
                  Protection of the proposed 60,000 t/a      Bureau of                                  Xiaohuanhan
                                                                                   2017-09-30
                 chicken cutting production line project    Environment                                [2017] No. 167
                   of Xiaoyi Daxiang Farming & Food         al Protection
                                Co., Ltd
                   Approval of Environmental Impact
                                                             Linyi City
                   Assessment Report of the proposed                                                    Linhuanhan
                                                             Bureau of
 Yishui New         90,000 t/a poultry meat and food                             May 04, 2009           【2009】No.
                                                            Environment
 Hope Liuhe      processing plant project of Yishui Liuhe                                                    245
                                                            al Protection
Food Co., Ltd             Kailida Food Co., Ltd
                       Approval of Application for           Linyi City                                 Linhuanhan
                                                                                August 21, 2010
                  Commissioning of the new 90,000 t/a        Bureau of                                  【2010】No.
                                                                                                                   108
                                                                      2021 Semiannual Report of New Hope Liuhe Co., Ltd
                poultry meat and food processing plant      Environment                                      596
                 project of Yishui Liuhe Kailida Food       al Protection
                                Co., Ltd
                  Approval of Environmental Impact           Linyi City
                                                                                                        Linhuanhan
                  Assessment Report on the Sewage            Bureau of
                                                                                  June 24, 2011         【2011】No.
                  Treatment Improvement Project of          Environment
                                                                                                             330
                  Yishui Liuhe Kailida Food Co., Ltd        al Protection
                      Approval of Application for            Linyi City
                                                                                                        Linhuanhan
                    Commissioning of the Sewage              Bureau of
                                                                                October 12, 2012        【2012】No.
                  Treatment Improvement Project of          Environment
                                                                                                             554
                  Yishui Liuhe Kailida Food Co., Ltd        al Protection
                  Approval of Environmental Impact          Handan City
                   Assessment Report on the Broiler          Bureau of
                                                                                 March 04, 2009        [2009] No. 36
                  Slaughtering and Cutting Project of       Environment
                     Guantao Liuhe Food Co., Ltd            al Protection
                 Acceptance Opinions on Completion
                                                            Handan City
                     Acceptance of Environmental
Guantao Liuhe                                                Bureau of                                  Hanhuanyan
                 Protection of the Broiler Slaughtering                        December 02, 2010
Food Co., Ltd                                               Environment                                [2010] No. 89
                 and Cutting Project of Guantao Liuhe
                                                            al Protection
                             Food Co., Ltd
                                                            Handan City
                 Meat packing and sewage treatment           Bureau of                                 Huanguanbiao
                                                                                 May 22, 2017
                project of Guantao Liuhe Food Co., Ltd      Environment                                【2017】No. 9
                                                            al Protection
                                                              Binzhou
                                                            City Bureau
                  The 0.90 million/a broiler and duck            of                                    Binchenghuanb
                slaughtering and cutting plant project of   Environment          March 16, 2007        iao [2007] No.
                    Binzhou Longda Food Co., Ltd            al Protection                                    11
Binzhou Liuhe                                                Bincheng
   Longda                                                     Branch
Farming Co.,                                                  Binzhou
     Ltd                                                    City Bureau
                                                                 of
                                                                                                      Huanyan [2008]
                         Acceptance opinions                Environment       September 20, 2008
                                                                                                          No.1-15
                                                            al Protection
                                                             Bincheng
                                                              Branch
                                                              Binzhou
 Wudi Liuhe     The 40,000/a broiler slaughtering plant     City Bureau
                                                                                                         Binhuanzi
Xinyang Food    project of Binzhou Qinghe Fushi Food             of            February 26, 2007
                                                                                                       [2007] No. 30
  Co., Ltd                      Co., Ltd                    Environment
                                                            al Protection
Zouping Liuhe     Approval of Environmental Impact            Zouping         September 08, 2009       Zouhuanuanzi
                                                                                                                    109
                                                                     2021 Semiannual Report of New Hope Liuhe Co., Ltd
Livestock Co.,        Assessment Report on the 0.90            County                                  (2009) No.72
     Ltd             million/a broiler slaughtering line      Bureau of
                  project of Zouping Liuhe Farming Co.,      Environment
                                    Ltd                      al Protection
                   Acceptance Opionios on Completion           Zouping
                       Acceptance of Environmental             County
                                                                                                      Zouhuanyanbia
                  Protection of the 0.90 million/a broiler    Bureau of       December 07, 2010
                                                                                                      o (2010) No. 13
                    slaughtering line project of Zouping     Environment
                          Liuhe Farming Co., Ltd             al Protection
                        The 30 million/a meat duck            Heze City
                     slaughtering and processing plant        Bureau of                                Hehuanshen
                                                                                 June 11, 2012
                  project of Shanxian Liuhe Feed Co., Ltd    Environment                              [2012] No. 46
Shanxian Liuhe                 Food Branch                   al Protection
 Feed Co., Ltd          Completion Acceptance of
                                                              Heze City
 Food Branch        Enviornmental Protection of the 30
                                                              Bureau of                              Huanyan [2017]
                   million/a meat duck slaughtering and                      September 30, 2017
                                                             Environment                                 No. 108
                   processing plant project of Shanxian
                                                             al Protection
                     Liuhe Feed Co., Ltd Food Branch
                                                             Cao County
                  The 20 million/a duck slaughtering and
                                                              Bureau of                                Caohuanshen
                    processing plant project of Caoxian                         April 11, 2007
                                                             Environment                              [2007] No. 44
                           Liuhe Food Co., Ltd
                                                             al Protection
Caoxian Liuhe
                        Completion acceptance of
 Food Co.,Ltd                                                Cao County
                    environmental protection of the 20
                                                              Bureau of                                Caohuanshen
                      million/a duck slaughtering and                           June 10, 2008
                                                             Environment                              [2008] No. 26
                    processing plant project of Caoxian
                                                             al Protection
                           Liuhe Food Co., Ltd
                                                               Jiaxiang
 Jiaxiang New       The meat poultry slaughtering and          County
                                                                                                       Jiahuanshen
 Hope Liuhe        packing plant project of Jiaxiang New      Bureau of        August 17, 2016
                                                                                                      [2016] No. 02
 Food Co., Ltd          Hope Liuhe Food Co., Ltd             Environment
                                                             al Protection
                                                              Yuncheng
                  Approval of the Environmental Impact
                                                               County
                    Assessment Report on Wastewater                                                    Yunhuanshen
                                                              Bureau of          July 25, 2010
                    Treatment Improvement Project of                                                 【2010】No. 62
                                                             Environment
  Yuncheng            Yuncheng Liuhe Food Co., Ltd
                                                             al Protection
Liuhe Food Co.,
                                                              Yuncheng
     Ltd
                   Completion Acceptance Form for the          County
                                                                                                      Yunhuanpingha
                   Wastewater Treatment Improvement           Bureau of        October 13, 2014
                                                                                                      n (2018) No.6
                                  Project                    Environment
                                                             al Protection
Anshan Liuhe            The 15 million/a meat duck              Tai’an                               Taihuanshenzi
                                                                                 May 11, 2007
 Food Co., Ltd     slaughtering and packing plant project      County                                  [2007] No. 8
                                                                                                                   110
                                                                     2021 Semiannual Report of New Hope Liuhe Co., Ltd
                     of Liaoning Honglu Agricultural          Bureau of
                          Development Co., Ltd               Environment
                                                             al Protection
                   Acceptance Opinions on Completion
                                                                Tai’an
                       Acceptance of Environmental
                                                               County
                  Protection of the 15 million/a meat duck                                             Taihuanyanzi
                                                              Bureau of         June 29, 2008
                   slaughtering and packing plant project                                              [2008] No. 6
                                                             Environment
                     of Liaoning Honglu Agricultural
                                                             al Protection
                          Development Co., Ltd
                    Approval of Environmental Impact
                                                             Panjin City
                   Assessment Report on the Meat Duck
                                                              Bureau of                                 Panhuanfa
                   Cutting, Processing and Refrigeration                      December 30, 2010
                                                             Environment                              [2010] No. 350
                   Plant Project of Panjin Liuhe Farming
                                                             al Protection
 Panjin Liuhe                    Co., Ltd
 Farming Co.,      Acceptance Opinions on Completion
     Ltd               Acceptance of Environmental           Panjin City
                   Protection of the Meat Duck Cutting,       Bureau of                                Panhuanhan
                                                                             November 29, 2012
                    Processing and Refrigeration Plant       Environment                              [2012] No. 117
                   Project of Panjin Liuhe Farming Co.,      al Protection
                                    Ltd
                                                                Donge
                  The 0.90 million/a poultry slaughtering      County
                                                                                                        Dongjibei
                  and refrigeration plant project of Donge    Bureau of          July 15, 2008
                                                                                                      [2008 ] No. 55
                        Liuhe Lvjia Food Co., Ltd            Environment
Dong’e Liuhe
                                                             al Protection
Lvjia Food Co.,
                   Acceptance Opinions on Completion            Donge                                 Environmental
     Ltd
                     Acceptance of the 0.90 million/a          County                                   Protection
                   poultry slaughtering and refrigeration     Bureau of       December 29, 2010          Report on
                    plant project of Donge Liuhe Lvjia       Environment                               Construction
                               Food Co. Ltd                  al Protection                                Project
                    Approval of Environmental Impact           Gaotang
                   Assessment Report on the Meat Duck          County
                                                                                                       Gaohuanyan
                  Slaughtering Production Line Project of     Bureau of       February 24, 2012
                                                                                                      [2012] No. 02
  Liaocheng       Liaocheng Liuhe Rongda Farming Co.,        Environment
Liuhe Rongda                        Ltd                      al Protection
 Farming Co.,                                                  Gaotang
     Ltd          Acceptance Opinions on Environmental         County
                                                                                                       Gaohuanyan
                   Protection of Completed Construction       Bureau of          July 21, 2017
                                                                                                      [2017] No. 10
                                  Project                    Environment
                                                             al Protection
Shenxian New        Approval of Environmental Impact         Shen County
 Hope Liuhe       Assessment Report on the 48 million/a       Bureau of                               Shenhuanshen
                                                                                May 28, 2013
  Qingsizhai        Duck Slaughtering Plant Project of       Environment                             【2013】No. 43
Food Co., Ltd     Shenxian New Hope Liuhe Qingsizhai         al Protection
                                                                                                                    111
                                                                    2021 Semiannual Report of New Hope Liuhe Co., Ltd
                            Food Co., Ltd
                 Acceptance Opinions on Completion
                     Acceptance of Environmental          Shen County
                  Protection of the 48 million/a Duck      Bureau of                                  Shenhuanyan
                                                                                July 28, 2014
                Slaughtering Plant Project of Shenxian    Environment                               【2014】No. 12
                New Hope Liuhe Qingsizhai Food Co.,       al Protection
                                  Ltd
                                                            Yanggu
Yanggu Liuhe     Opinions on Filing of the 32 million/a     County
                                                                                                      Yanghuanhan
 Luxin Food     Meat Duck Slaughtering Plant Project       Bureau of         December 28, 2016
                                                                                                     [2016] No. 123
   Co., Ltd      of Yanggu Liuhe Luxin Food Co., Ltd      Environment
                                                          al Protection
                  Approval of Environmental Impact        Shouguang
                Assessment Report on the Duck Product     City Bureau
                                                                                                     Shouhuanshenz
                   Food Processing Industrialization           of              March 30, 2007
                                                                                                     i (2007) No. 2
                  Demonstration Project of Weifang        Environment
  Weifang
                        Tianhui Food Co., Ltd             al Protection
Tianhui Food
                                                          Shouguang
   Co., Ltd       Acceptance Opinions on the Duck
                                                          City Bureau
                      Product Processing Packing
                                                               of               October 2007              None
                Industrialization Demonstration Project
                                                          Environment
                  of Weifang Tianhui Food Co., Ltd
                                                          al Protection
                                                          Anqiu City
                   Modern White-feathered Broiler
                                                           Bureau of                                    Anhuanzi
                   Industry Integrated Development                          September 09, 2016
                                                          Environment                                [2016] No. 58
  Weifang            Project, Anqiu, Weifang City
                                                          al Protection
Heshengyuan
                                                          Anqiu City
Food Co., Ltd
                Pollution Control Facilities Acceptance    Bureau of                                  Anhuanyanzi
                                                                                January 2019
                             Form (Trial)                 Environment                                [2019] No. 034
                                                          al Protection
                                                           Luoyang
                   Review Opinions on New Broiler         City Bureau
                                                                                                       Luoshihuan
                 Processing Project of Luoyang Liuhe           of               July 30, 2008
                                                                                                     (2008) No. 226
                        Huiquan Food Co., Ltd             Environment
                                                          al Protection
Luoyang Liuhe     Approval of Environmental Impact         Provincial
Huiquan Food    Assessment Report on the New Broiler       Bureau of                                  Yuhuanshen
                                                                            November 14, 2008
   Co., Ltd      Processing Project of Luoyang Liuhe      Environment                                (2008) No. 262
                        Huiquan Food Co., Ltd             al Protection
                Acceptance Opinions on Environmental       Provincial
                     Protection of the New Broiler         Bureau of                                 Luohuanjianyan
                                                                              October 15, 2010
                 Processing Project of Luoyang Liuhe      Environment                                [2010] No. 52
                        Huiquan Food Co., Ltd             al Protection
 Hebi Liuhe       Status Quo Environmental Impact           Without                                    Status Quo
                                                                                                                   112
                                                                   2021 Semiannual Report of New Hope Liuhe Co., Ltd
Zhizhen Food    Assessment Report retroactively filed in     official                               Environmental
  Co., Ltd                       2016                        written                                    Impact
                                                              replies                                Assessment
                                                                                                        Report
                                                            Laicheng
                  Environmental Impact Assessment
                                                             District
                Report on the Meat Poultry Processing                                                 Laihuanju
                                                            Bureau of        August 19, 2011
                Industrialization Project of Laiwu New                                             【2011】No. 82
 Laiwu New                                                 Environment
                      Hope Liuhe Food Co., Ltd
Hope Liuhe                                                 al Protection
Food Co., Ltd                                              Laiwu City
                 Environmental Impact Report on Air                                                 Laihuanbaogao
                                                            Bureau of
                Pollution Control of Laiwu New Hope                        November 14, 2018         biao {2018}
                                                           Environment
                          Liuhe Food Co., Lt                                                          No. 11142
                                                           al Protection
                  Acceptance Monitoring Report on          Ling County
                    Environmental Protection of the        Environment
                                                                                                    Linghuanjianzi
                    Completed 30,000/d Meat Duck            al Testing      December 01, 2009
                                                                                                     2009 No. 39
                 Slaughtering Plant Project of Dezhou        Station,
Dezhou Liuhe         Liuhe Zhikang Food Co., Ltd           Dezhou City
Zhikang Food    Acceptance Opinions on Environmental
  Co., Ltd          Protection of on Environmental         Ling County
                 Protection of the Completed 30000/d        Bureau of                                Linghuanyan
                                                                              May 10, 2010
                 Meat Duck Slaughtering Plant Project      Environment                              【2010】No. 3
                 of Dezhou Liuhe Zhikang Food Co.,         al Protection
                                  Ltd
                  Approval of Environmental Impact
                                                            Linyi City
Feixian Liuhe   Assessment Report on the 20 million/a
                                                            Bureau of                                 Linhuanfa
Huahai Food       Broiler Slaughtering and Processing                         April 27, 2012
                                                           Environment                               (2012)No. 51
  Co., Ltd       Plant Project of Feixian Liuhe Huahai
                                                           al Protection
                             Food Co., Ltd
                                                            Fuxin City
                  Approval of Environmental Impact          Bureau of
                                                                                                    Fuhuantaishens
                Assessment Report on the 25 million/a      Environment
                                                                             January 10, 2017       hu [2017] No.
                 Broiler Slaughtering Plant Project of     al Protection
Fuxin Liuhe                                                                                               01
                     Fuxin Liuhe Farming Co., Ltd            Taiping
Farming Co.,
                                                             Branch
  Ltd Food
                Approval of Completion Acceptance of
   Branch                                                   Fuxin City
                  Environmental Facilities for the 15
                                                            Bureau of                                  Fuhuanfa
                   million/a White-feathered Broiler                          March 10, 2010
                                                           Environment                              [2010] No. 49
                  Slaughtering Plant Project of Fuxin
                                                           al Protection
                 Liuhe Farming Co., Ltd Food Branch
Taiqian New        Environmental impact report for         Puyang City
                                                                                                    Taihuangongjia
Hope Liuhe         approval of 120,000 meat ducks/d         Bureau of
                                                                               July 27, 2020         nban (2019)
 Luxin Food     slaughterhouse project of Taiqian New      Ecological
                                                                                                        No. 26
  Co., Ltd         Hope Liuhe Luxin Food Co., Ltd          Environment
                                                                                                                  113
                                                                      2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                                               Leting
                  Broiler processing food production line
                                                              County
                    project of Leting New Hope Liuhe                                                     Lehuanshu
                                                             Bureau of        September 21, 2012
                   Zhaotai Food Co., Ltd constructed by                                               【2012】No. 08
                                                            Environment
                    Leting Shengxiang Trade Co., Ltd
                                                            al Protection
                                                             Tangshan
                                                            City Bureau
 Leting Liuhe
                                                                 of
Xinmeizi Food
                                                            Ecological
   Co., Ltd
                                                            Environment
                  Broiler processing food production line                                             Lehuanpingbiao
                                                               Leting         September 25, 2020
                   upgrading and transformation project                                               【2020】No. 49
                                                            CountyEnvir
                                                              onment
                                                               Leting
                                                              County
                                                              Branch
    Qixia           Approval of environmental impact
 Refrigeration         report on the factory building        Qixia City
  Factory of           renovation and sewage plant           Bureau of
                                                                                   2012-12-18               None
Shandong New      reconstruction and expansion project of   Environment
 Hope Liuhe       Qixia Refrigeration Plant of Shandong     al Protection
Group Co., Ltd       New Hope Liuhe Group Co., Ltd
                                                            Yantai City
                                                             Bureau of
                   Environmental protection acceptance
                                                            Ecological
                  and monitoring report on completion of
                                                            Environment                                   Laihuanfa
                   20 million /a broiler slaughtering and                        May 01, 2020
                                                              Laiyang                                   [2020]No. 12
                  processing line of Laiyang Tianye Food
                                                              Branch,
                                 Co., Ltd
                                                             Shandong
Laiyang Tianye                                               Province
 Food Co., Ltd                                              Yantai City
                                                             Bureau of
                                                            Ecological
                                                            Environment                                   Laihuanfa
                           Acceptance opinions                                   May 01, 2020
                                                              Laiyang                                  [2020] No. 12
                                                              Branch,
                                                             Shandong
                                                             Province
 Taian Taishan
Liuhe Food Co.,                    None                        None
     Ltd
Shandong New        Approval of Environmental Impact         Linyi City
                                                                                                         Linhuanfa
 Hope Liuhe       Report of Shandong Dazhong Food Co.,       Bureau of            July 07, 2007
                                                                                                      【2007】No. 73
Group Co., Ltd      Ltd on Relocation, Rebuilding and       Environment
                                                                                                                   114
                                                                   2021 Semiannual Report of New Hope Liuhe Co., Ltd
Linyi Branch        Expansion of 30,000t/a Poultry       al Protection
                 Slaughtering, Cutting and Processing
                                Plant
                Environmental Acceptance Opinion on
                 Shandong Dazhong Food Co., Ltd’s        Linyi City
                 Project of Relocation, Rebuilding and    Bureau of                                   Linhuanyan
                                                                            December 08, 2008
                    Expansion of 30,000t/a Poultry       Environment                               【2008】No.82
                 Slaughtering, Cutting and Processing    al Protection
                                 Plant
                  Environmental Impact Report and
                Water Environmental Impact Report on
                                                            Ocean
                  20,000t/a Meat Product and Quick
                                                          University            2011-05-12          HDHP112137
                  Frozen Vegetable Processing Plant
                                                          of China
                Project of Qingdao Liuhe Wanfu Food
                               Co., Ltd
                  Approval of Environmental Impact
                   Report and Water Environmental         Laixi City
                   Impact Report on 20,000t/a Meat       Environment                                  Xihuanshen
                                                                                2011-06-03
                 Product and Quick Frozen Vegetable      al Protection                               [2011]No. 43
                 Processing Plant Project of Qingdao       Bureau
Qingdao Liuhe
                      Liuhe Wanfu Food Co., Ltd
 Wanfu Food
                Completion Environmental Protection
   Co., Ltd                                               Laixi City
                   Acceptance and Testing Form for
                                                         Environment
                  20,000t/a Meat Product and Quick                                                    Xiyanjianzi
                                                              al                  2014.1
                  Frozen Vegetable Processing Plant                                                 (2013) No. 027
                                                         Monitoring
                Project of Qingdao Liuhe Wanfu Food
                                                           Station
                               Co., Ltd
                     Letter regarding Completion
                Environmental Protection Acceptance       Laixi City
                 Opinion on 20,000t/a Meat Product       Environment                                  Xihuanyan
                                                                                2015-02-27
                and Quick Frozen Vegetable Processing    al Protection                               [2015] No. 9
                Plant Project of Qingdao Liuhe Wanfu       Bureau
                            Food Co., Ltd
                  Approval of Environmental Impact
                                                         Linfen City
 Fenxi New          Report on Broiler Breeding and
                                                         Environment                                Linhuanshenfa
 Hope Liuhe       Slaughtering and Feed Processing                              2010-11-17
                                                         al Protection                              [2010] No. 16
Food Co., Ltd   Project of Fenxi Hongchang Breeding
                                                           Bureau
                               Co., Ltd
                 Approval of Beijing Pinggu District       Pinggu
                 Bureau of Environmental Protection        District
   Beijing                                                                                          Jingpinghuanpi
                regarding Environmental Impact Report     Bureau of
Kinghey Food                                                                       2014             ngshen [2014]
                  on Project of Processing of Quick      Environment
   Co., Ltd                                                                                            No. 450
                   Frozen Food, Meat Products and             al
                         Supporting Facilities           Protection,
                                                                                                                 115
                                                                 2021 Semiannual Report of New Hope Liuhe Co., Ltd
                                                         Pinggu
                                                         District
                                                        Bureau of                                  Pinghuanyan
                       Acceptance opinions                                       2015
                                                       Environment                                [2015] No. 71
                                                            al
                                                       Protection,
                Approval of Environmental Impact        Provincial
                Report on Pig Slaughtering and Meat     Bureau of                                   Jihuanguan
                                                                                 2004
                Packing Project of Beijing Kinghey     Environment                                [2014] No. 193
                     Food Co., Ltd in Nangong          al Protection
Hebei Kinghey
                                                          Hebei
Meat Industry
                                                        Provincial
   Co., Ltd
                                                       Department                                    Jihuanyan
                       Acceptance opinions                                       2010
                                                            of                                    (2010) No. 006
                                                       Environment
                                                       al Protection
                                                        Shenyang
                                                       City Bureau
                                                            of
                                                                                                  Shennonghuanb
                Pig Slaughtering Project of Liaoning   Environment
                                                                                 2005             aoshenzi [2005]
                      Kinghey Food Co., Ltd            al Protection
                                                                                                       No. 7
                                                        Puhe New
                                                          Town
  Liaoning
                                                         Branch
Kinghey Food
                                                        Shenyang
   Co., Ltd
                                                       City Bureau
                                                            of
                                                       Environment                                Puhuanfenyan
                       Acceptance opinions                                       2010
                                                       al Protection                              [2010] No. 71
                                                        Puhe New
                                                          Town
                                                         Branch
                                                          Xinjin
                Environmental protection acceptance     County of
                                                                                                   Xinhuanyan
                  application registration card for     Bureau of        September 08, 2009
                                                                                                  [2009] No. 17
                 completion of construction project    Environment
                                                       al Protection
Chengdu Hope                                              Xinjin
Food Co., Ltd   Environmental protection acceptance     County of
                                                                                                   Xinhuanyan
                  application registration card for     Bureau of        September 08, 2009
                                                                                                  [2009] No. 18
                 completion of construction project    Environment
                                                       al Protection
                  Low-temperature meat product            Xinjin                                   Xinhuanjian
                                                                           October 14, 2008
                  processing plant (phase I and II)     County of                                  (2008)No. 79
                                                                                                               116
                                                                    2021 Semiannual Report of New Hope Liuhe Co., Ltd
                           construction project               Bureau of
                                                             Environment
                                                             al Protection
                                                                Xinjin
                     High-temperature meat product            County of
                                                                                                      Xinhuanjian
                 processing plant (phase III) construction    Bureau of      N

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