Stock Code: 603609 Stock Abbreviation (English): Wellhope
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd.
2020 Interim Report
August 2020
Important StatementsI. The Board of Directors, Supervisory Board, Directors, Supervisors and SeniorManagement of Liaoning Wellhope hereby warrant that there are no false representations,misleading statements or material omissions in this interim report, jointly and severallyaccept full responsibility for the truthfulness, accuracy and completeness of the contentsin this report.II. All the Directors attended the Board Meeting.III. This interim report is unaudited.IV. The Company's Chairman Jin Weidong and the Director of internal audit ZhangWenliang warrant the truthfulness, accuracy and completeness of the informationpresented in the financial statements in this report.V. In the reporting period, there has been no plan for dividend distribution or capitalreserve converted into share capital.VI. Risk Statement of Forward-looking StatementsThe forward-looking descriptions in this report in terms of plans, development strategiesand other information cannot be deemed the Company's commitment to investors. Pleasebeware of the investment risks.VII. There has been no occurrence of the Company's non-business capital being occupiedby controlling shareholder and his related parties.VIII. There has been no occurrence of the Company violating its decision-makingprocedure while providing external guarantees.IX. Material Risk WarningThe Company details possible risks in this report. Please refer to "Possible Risks" in SectionIV "Business Operations Analysis".X. This interim report has been issued in both Chinese and English versions. In case there isany discrepancy or inconsistency between the two versions, the Chinese version shallprevail. The disclosed Chinese version of 2020 Interim Report can be obtained at:
www.sse.com.cn.
Contents
Section I Glossary ...... 4
Section II Company Profile and Key Financial Information ...... 5
Section III Business Overview ...... 8
Section IV Business Operations Analysis ...... 28
Section V Important Disclosures ...... 50
Section VI Changes in Common Shares and Shareholder Information ...... 63
Section VII Preference Share ...... 67
Section VIII Directors, Supervisors and Senior Management ...... 68
Section IX Corporate Bond ...... 69
Section X Financial Statements ...... 70
Section XI Reference ...... 160
Section I Glossary
| CSRC | refers to | China Securities Regulatory Commission |
| SSE | refers to | Shanghai Stock Exchange |
| Wellhope, Liaoning Wellhope, the Company | refers to | Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. |
| Reporting Period | refers to | January 1, 2020-June 30, 2020 |
| Wulian Heli | refers to | Wulian Heli Equity Investment Partnership (LP), one of the shareholders of Wellhope |
| Royal De Heus | refers to | Koninklijke De Heus B.V., the parent company of De Heus Mauritius Ltd., the biggest feed company in the Netherlands |
| Company Constitution | refers to | The Constitution of Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. |
| Shareholders' Meeting | refers to | The Shareholders' Meeting of Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. |
| Board of Directors | refers to | The Board of Directors of Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. |
| Supervisory Board | refers to | The Supervisory Board of Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. |
| Corporate Law | refers to | The Corporate Law of the People's Republic of China |
| Securities Law | refers to | The Securities Law of the People's Republic of China |
| Premix | refers to | Also known as additive premix, it is a well-proportioned mixture prepared by two or more than two kinds of feed additives and carrier or diluents according to appropriate proportion. It is a general name for compound premix, microelement premix and vitamin premix. |
| Concentrate Feed | refers to | It is a well-proportioned mixture consisted of protein feed, mineral feed and feed additives according to appropriate proportion, it can be made into compound feed by mixing with energy feed in a specified proportion. |
| Compound Feed | refers to | Based on the nutritional needs of animals, more feed raw materials and feed additives are industrially processed according to feed formula, it can be directly used for feeding animals. |
| Broiler Breeders | refers to | Broiler breeders lay eggs, the chicks hatched from eggs are the commercial broiler, which have good genetic characteristics for table purpose. |
| Commercial Broiler | refers to | Fattening from the chicks of commercial broilers. |
| Cage-reared | refers to | A method of farming as opposed to floor-reared, i.e., with the special cage as a symbol, a complete set of processes that compose of customized feed, artificial insemination, on-site management, etc. |
Section II Company Profile and Key Financial InformationI. Company Information
| Company name(English) | Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. |
| Abbreviation(English) | Wellhope |
| Company name(Chinese) | 辽宁禾丰牧业股份有限公司 |
| Abbreviation(Chinese) | 禾丰牧业 |
| Legal representative | Jin Weidong |
| Secretary of the Board | Securities Affairs Representative | |
| Name | Zhao Xin | Zhao Changqing |
| Address | No. 169, Huishan Street, Shenbei New District, Shenyang, Liaoning, P. R. of China | No. 169, Huishan Street, Shenbei New District, Shenyang, Liaoning, P. R. of China |
| Tel | 024-88081409 | 024-88081409 |
| Fax | 024-88082333 | 024-88082333 |
| hfmy@wellhope.co | hfmy@wellhope.co |
| Registered address | No. 169, Huishan Street, Shenbei New District, Shenyang, Liaoning, P. R. of China |
| Postal code | 110164 |
| Office address | No. 169, Huishan Street, Shenbei New District, Shenyang, Liaoning, P. R. of China |
| Postal code | 110164 |
| Company website | www.wellhope-ag.com |
| hfmy@wellhope.co |
| Media designated by the Company for disclosing information | China Securities Journal, Shanghai Securities News, Securities Times |
| Website designated by the CSRC for publishing the interim report | www.sse.com.cn |
| Place where the Company prepared its interim report | Securities Department of the Company |
| Stock type | Stock exchange | Stock abbreviation | Stock code |
| A Share | Shanghai Stock Exchange | Wellhope(禾丰牧业) | 603609 |
VI. Other InformationNot applicable
VII. Key Accounting Data and Financial Performance Indicators
1. Key Accounting Data
RMB
| Item | January-June, 2020 | January-June, 2019 | Year-on-year change % |
| Operating revenue | 9,848,379,852.28 | 7,727,400,004.75 | 27.45 |
| Net profit attributable to the shareholders of the Company | 606,015,736.01 | 359,008,639.18 | 68.80 |
| Net profit attributable to the shareholders of the Company deducting non-recurring items | 602,590,219.79 | 358,296,799.48 | 68.18 |
| Net cash flow from operating activities | 451,396,027.78 | 299,291,784.62 | 50.82 |
| June 30, 2020 | December 31, 2019 | Change compared with the end of prior year % | |
| Net assets attributable to the shareholders of the Company | 6,129,390,491.71 | 5,698,139,557.54 | 7.57 |
| Total assets | 10,447,642,061.07 | 9,149,772,043.85 | 14.18 |
| Item | January-June, 2020 | January-June, 2019 | Year-on-year change % |
| Basic earnings per share (RMB per share) | 0.66 | 0.41 | 60.98 |
| Diluted earnings per share (RMB per share) | 0.66 | 0.41 | 60.98 |
| Basic earnings per share deducting non-recurring items (RMB per share) | 0.65 | 0.41 | 58.54 |
| Weighted average return on equity (%) | 10.16 | 8.37 | Increased 1.79 percentage points |
| Weighted average return on equity deducting non-recurring items (%) | 10.10 | 8.36 | Increased 1.74 percentage points |
VIII. Non-Recurring Items
RMB
| Item | Amount |
| Gains or losses on disposal of non-current assets | -567,086.15 |
| Government grants charged to current gains or losses (excl. the government grants that are closely related to the Company's ordinary course of business and gained constantly at fixed quotas or amounts as per certain standards based on the state polices) | 12,625,199.07 |
| Gains or losses on fair value changes in holding the trading financial assets and liabilities as well as derivative financial assets and liabilities, and investment income from disposal of the trading financial assets and liabilities, derivative financial assets and liabilities as well as other debt investment (excl. the effective portion of hedges that arise in the Company's ordinary course of business) | -1,899,996.55 |
| Non-operating income and expense other than those described above | -4,960,053.70 |
| Non-controlling interests effects | -596,370.19 |
| Income tax effects | -1,176,176.26 |
| Total | 3,425,516.22 |
Section III Business OverviewI.Principal Business, Operation Model and Circumstance of Related Industries in theReporting PeriodPrincipal businesses of Wellhope (hereinafter referred to as "the Company") primarilyconsist of feed production and sale, feed raw materials trade, broiler integration, hograising and related businesses. Whilst further expanding feed business, the Company aimsto take 5-8 years to vigorously boost broiler integration and hog raising businesses, forgingan operation model fueled by broiler and hog integration businesses to further heightenits market power in animal husbandry industry.
1. Feed and feed raw materials trade
A. Industry overviewThe gross production of China’s commercial feed reached 229 million tons in the year of2019, which exceeded its target of 220 million tons in advance, according to the 13thFive-Year Plan of the feed industry. Its gross output of more than 200 million tons for 5years on end, has ranked top one for 9 consecutive years worldwide. It is expected thatnational feed production will achieve further breakthrough in 2020. At the beginning ofthis year, the spread of Coronavirus Disease 2019 (referred to as COVID-19 hereof) led tonationwide suspension and stoppage of production. In the initial stage of COVID-19,adverse factors such as transport restriction, rising freight rates, tight supply of rawmaterials and panicked market, etc., have caused definite impacts and influences on thefeed industry. Based on the promulgated government policy of “fulfilling theresponsibilities of safeguarding residents’ vegetable and meat supply” and along withgradual stabilization of this pandemic, the production and supply of feed industry hasgradually returned to normal level in the second quarter. The COVID-19 and African SwineFever (referred to as ASF hereof) reset the trajectory of feed industry and accelerated thepace of consolidation, weeded out unqualified players. Against this backdrop, thoselarge-scale enterprises with robust system capacity and competitiveness who have beenstill able to retain high-quality products and services during in the pandemic crisis, thusobtained greater development opportunities.In the first half of 2020, rapid recovery of both hog and reproductive sow inventories inChina pushed up the demand of swine feed. The national output of sow feed has realized
year-on-year growth for 5 consecutive months with a 54% increase in June. Statisticsreleased by the Ministry of Agriculture and Rural Affairs indicated that beef and muttonproduction was up 3.4% over a year earlier, eggs and milk production have year-on-yeargrowth rates of 7.1% and 7.9% respectively. This also led to an increasing demand withinthe poultry and ruminant industry. There were 76,000 new hog raising enterprises in China,with a growth rate of 109% compared with the same period of prior year. High hog raisingenthusiasm driven by high profit has brought well-known real estate companies andinternet giants stepping into this cross border business, also broadened opportunities forthe feed industry.In June 2020, China’s gross feed production increased by 2.2% compared to the precedingmonth and 7.5% over a year earlier. Judging from the trend, the aggregate output of feedincreased on a month-on-month basis in March, April and June. Despite a slightyear-on-year decline in March, the output of all other months has gained year-on-yeargrowth since February and reached a record high in June within the last three years. Fromthe perspective of varieties, swine feed output in June increased by 9.3% over a yearearlier, which has recorded positive growth again since October 2018. The production oflayer, broiler and ruminant feed rose by 14.1%, 10.4% and 9.8% respectively, whilst aquaticfeed fell by 11.6%. Overall, in the first half of 2020, the feed consumption was higher thanmarket expectations with a remarkable recovery, which showed a booming trend in bothproduction and marketing.Note: Source of above-mentioned data—China Feed Industry AssociationB. Business profileThe Company manufactures and sells animal feed for swine, poultry, ruminant, aquaticand fur-farmed animals, which are marketed in 29 provinces and regions across China. Ithas also built feed plants in Nepal, Indonesia and the Philippines, etc. Driven by theprinciple of “constantly working on new products, never following the beaten path”, theCompany always designs tailor-made products for animals in different growth stages and itis committed to offering farmers integrated services in terms of animal raising, diseaseprevention as well as operation management, helping them to achieve the best economicbenefits.The subsidiary trade companies mainly trade in feed raw materials in terms of fish meal,
soybean meal and co-products of corn, also engage in feed additives including amino acid,antioxidant, mold inhibitors and vitamin. In addition, the trade companies are the salesagents of animal health products such as vaccines and veterinary drug produced by globalstrategic suppliers. Meanwhile, the Company also launched pet clinics business. Now itstrade business is active in the regions of Northeast, Northern, Eastern and SouthwestChina, Guangdong province and other areas, some products have been exported to Nepal,Mongolia and other countries.
2. Broiler integration business
A. Industry overviewThe outbreak of COVID-19 in early 2020 had a huge impact on national economy anddisrupted the original supply and demand pattern of white feather broiler industry.Regarding supply, the overall supply of white feather broiler in China resumedyear-on-year growth from January to June, yet the growth rate fell short of expectations.In terms of grandparent stock, the renewal in the first half year slightly changed incomparison to the same period of prior year, but decreased by about 36.8% comparedwith prior month, presenting a slower expansion of grandparent stock' production capacity.In terms of parent stock, the output of day old chick of parent stock realized an increase ofapproximately 30% over the same period prior year. However, under the impact ofCOVID-19, the market was mandated to cut production capability by forced molting andfaster eliminating week-old broilers, making the inventories of forced molting broilersdecline significantly. In terms of commercial broiler, COVID-19 impaired the productioncapability of white feather broilers in the first quarter, while along with gradually stabilizedpandemic in April nationwide, thus the deliveries of commercial broiler stepwiserecovered to a high level in May and June. Looking back the first half year, the deliveries ofdomestic commercial broiler increased by about 4% over a year earlier. Compared to thatwas expected before the COVID-19, the growth rate was lowered about 8 percentagepoints.In regard of demand, chicken has still played the role of filling the gap in consumptioncaused by a severe shortage in China's pork supply. However, the increasing demand forchicken declined due to the outbreak of COVID-19, which led to dropped profits of relatedbusinesses in the industrial chain. In the first quarter, the COVID-19 influenced domestic
consumption relatively hard with a presence of the sharp decrease in catering and groupmeal. Affected by this, the overall consumption of chicken dropped off about 10% over thesame period prior year, among which, chicken consumed by catering and group mealdecreased by more than 30%. However, the demand has been recovered since thepandemic being stabilized in April. In May and June, positive factors, such as social contactbasically resumed, some schools were reopened, a vast majority of enterprises were backto work, the sales channels of chicken hampered by the epidemic situation was recoveredin succession, the supply of pork was lower still, etc., effectively boosted the recovery ofchicken consumption. It is worth mentioning that COVID-19 has led to a temporary closureof social venues and home quarantine, which has directly altered the path for chickenconsumption. Away-from-home consumption, such as catering and group meal, hasshifted to at-home consumption, thus pushing chicken producers to change theirmarketing strategies and step up efforts to expand the consumer market.To conclude, in the first half of 2020, COVID-19 has broken the original expectations of “anincrease both in production and sales, a bloom both in supply and demand” within whitefeather broiler industry. Instead, the growth rate of broiler supply was compressed, whilethe demand of chicken was changed from increase to decrease. In the second half year,chicken consumption demand is expected to rapidly rebound, while the import of meatproducts will slow down due to the impact of COVID-19. In addition, stocking density thatlimited by ASF will weigh on the recovery of domestic hog production capacity, yet thesubstitution demand caused by the shortage of pork will still be significant.Note: Source of above-mentioned data—www.boyar.cnB. Business profileThe Company's broiler integration business, with three business units in terms of broilerraising, raw meat processing and further processing, owns more than 40 holding andassociated entities, which are mainly located in the provinces of Liaoning, Hebei, Henan,Jilin and Shandong, etc. Its value chain contains breeding, day old chick hatching, feedproducing, commercial broiler raising, slaughtering and processing of raw meat, furtherprocessing of prepared and cooked food. The integrated operation can effectively ensurethe production and supply of all operating segments and facilitate the Company to controlfood safety across the entire chain. Meanwhile, through standardized management and
streamline operation, the Company consolidates the controls of bio-safety, drug residueand in-process hygiene to achieve traceable food safety. Based on the number of broilersslaughtered by holding and associated plants, the Company has stepped into the firstechelon of white feather broiler industry and become one of the leading suppliers ofbroiler products nationwide.
◆ Broiler raising: This unit covers breeder raising, day old chick hatching, commercialbroiler rearing and feed production. By formulating scientific and rational feedingprograms, light programs and disease prevention systems for breeders, the Companyprovides qualified eggs for the hatching farms. Meanwhile, it has established thoroughmanagement system in the hatching process and introduced intelligent facilities that areavailable for hatching in batches, also equipped high-efficient and energy-saving hatcherand micro-environment control system for supplying healthy day old chicks. Enteringcommercial broiler sector, the Company mainly raises broiler by own farms andcontract(out-sourcing) farms under the pattern of unifying nine aspects, including unifiedsite selection and planning, unified construction standards, unified day old chick supply,unified disease prevention, unified feed supply, unified drug supply, unified technologicalguidance, unified testing and unified slaughtering and processing. Guided by scientificraising standards, all the farms apply three-tier cage system and automate all theprocesses from feed intake, water temperature to moisture control, etc., meanwhile, thefarms combine crop planting with animal raising to reduce manure pollution and promoteresource recycling. The weight of the Company’s commercial broiler has reached over 3.0
kg with the livability of over 95%, and the European production index exceeded 390, whichhave received wide recognition from the cooperative farms.◆Raw meat processing: The Company has invested 16 holding and associatedslaughtering and processing plants, which are equipped with domestically state-of-the-artproduction lines that are available to slaughter 650-750 million broilers per year. Driven byall-in and all-out inspection and quarantine, every single plant has established a totalquality guarantee system and traceability system to monitor all the processes. Meanwhile,the Company constantly strengthens and improves slaughtering and processing techniquesby ways of systematic pre-job training and skill promotion training as well as conducting"6S" management (i.e., Seiri, Seiton, Seiketsu, Shitsuke, Seiso, Safety), making thekilling-out percentage and per capita slaughtering efficiency stand out among companieswith similar scale. Now the Company’s broiler parts products have entered the supplychain of Shineway Group, Jinluo Group, Yurun Group, China’s McDonalds and KFC,Yoshinoya, Wallace, Dili Fresh Food, Yonghui Superstores, RT-MART, food servicecompanies and other local fresh food markets, etc., in the meantime, related productshave also been sold to the regions of Hong Kong and Macao, and exported to somecountries in terms of Mongolia and Bahrain, etc.◆Further processing: Relying on the advantage of integration, the Company useshigh-quality chicken supplied by own slaughterhouses as raw materials and introducesefficient and energy-saving equipment to process raw meat into prepared products. Atpresent it supplies over 100 kinds of further-processed chicken products to largerestaurant chains, supermarkets, local markets, canteens of enterprises and schools. Interms of online marketing, Wellhope’s flagship store of raw meat product has beenlaunched on JDcom, whilst its official food store has been initiated on Taobao, some ofindependent-brand products of Wellhope's subordinated companies have also beenentering e-commerce platforms of some residents’ communities. Moreover, under thebackdrop of continuous expansion of consumer demand, the Company has vigorouslyexplored its food export business, now some products have entered the markets of Japanand South Korea.
3. Hog raising business
A. Industry overviewIn the first half of the year, as hog supply fell into a sharp slump, recovering productioncapacity was still the central theme of hog industry, whilst the overlap of ASF andCOVID-19 pandemics made the supply and demand pattern more complicated.On the supply side, taking more commercial sows as breeders in the fourth quarter of2019 has further widened the gap between pork supply and demand. In the first half of2020, China's hog deliveries continued to decline and caused tight supply of pork. FromJanuary to June, hog deliveries fell by 49.89% on a year-on-year base, declined by 19.23%compared to the second half of 2019; pork production fell by 41.21% over a year earlier,went down 9.76% compared to the second half of 2019, whilst piglet supply decreased by
30.54% on a year-on-year base and dropped off 3.61% compared with the second half of2019. Thereby, certain policies have been issued to stabilize hog production and ensurepork supply. Large-scale enterprises have been continuously expanding their businesses tocapture market opportunities supported by their financing, technology, talents and otheradvantages. Some companies that fatten hog by own farms and contract farms alsoupgraded the selection criteria for cooperative farmers to stock more than 500 heads ofhog, which quickened the process of large-scale raising, thus the decline of productioncapacity gradually slowed. The domestic sow inventories bottomed out in October 2019and rebounded modestly. Coming to this year, the reproductive sow inventories increasedby 13.65% on year-on-year base in the end of June, 16.41% higher than the end of 2019.However, it is remarkable that, as at the end of June, the percentage of commercial sowstaken as breeders exceeded 60% of reproductive sows, which would bring greatuncertainties in the production performance.On the demand side, the COVID-19 has inflicted a rather big impact on national economy,the sales of high-priced pork became difficult under this backdrop. Away-from-home foodconsumption such as catering and group meal was hindered, which boosted thepercentage of at-home consumption increasing. Driven by the increased porkconsumption fueled by two festivals and the difficulties in purchasing hogs due to theobstructed logistics in the early stage of COVID-19, hog prices shocked up to RMB 38.0 perkg in January and February. Since March, a series of government policies werepromulgated to stabilize production and maintain supply, whilst the decreased final
consumption led to declined hog prices, especially in May, the prices fell drastically to RMB
27.0 per kg caused by certain adverse factors, such as, the recovery of domesticconsumption was lower than expectation, circumstances of COVID-19 abroad continuouslyworsened, market confidence weakened and farmers sold out hogs in a panic. Later, manylarge overseas meat processers shut down due to the pandemic, China also suspendedpork import from infected enterprises. Meanwhile, the gap between pork supply anddemand emerged again supported by gradual recovery of domestic consumption, hogprices bottomed out in late May and rose back to over RMB 35.0 per kg in June.To conclude, hog market still showed strained supply--according to third-party researchinstitutions, hog deliveries are expected to go down 30% compared to 2019, accompaniedby a 20-25% decline of pork production. Besides, bio-safety has heightened the entrybarriers of hog farming industry and the pace of consolidation has been constantlyimproving.Note: Source of above-mentioned data—www.boyar.cnB. Business profileThrough solely-invested and co-invested operations, the Company has actively built farmsand expanded businesses in Liaoning, Jilin, Heilongjiang, Henan, Hebei, Anhui provincesand other areas suitable for hog raising. Among these projects, the farms located in Hebeiand Heilongjiang provinces were jointly built by the Company and Hunan Jiahe Agricultureand Animal Husbandry Company, top-15 in hog raising industry nationwide, the farmslocated in Anhui province were jointly constructed with Anhui Haoxiang Agriculture andAnimal Husbandry Company, a leading enterprise in agricultural integration in Anhuiprovince and a member of the National Hog Joint Breeding Cooperative Group, otherfarms were invested by the Company solely. At present, the Company's hog raisingbusiness mainly adopts the operation model that composes of breeder raising and sales,commercial piglet sales, hog fattening via own farms and family farms(contract). At thesame time, each sow farm has boar house to reserve excellent boars to maintain breedingadvantage. Through establishing strict bio-safety system, advanced breeding system andscientific feeding management system, the Company is devoting to crafting an integratedchain that contains breeding, hog raising, marketing, slaughtering and processing.
a. Building farms with high-standard:
In compliance with the principle of moderate scale for every single farm along with thesite planning of multi-point layout, the Company strictly controls bio-safety anddynamically combines hog raising with planting via eco-friendly technologies to protectenvironment. Driven by the goal of building first-rate modern farms, Fushun farm locatedin Liaoning province was jointly designed by well-known domestic experts andArchitectural Design and Research Institute of Tsinghua University CO. LTD., breeder farmlocated in Jilin province introduced efficient Dutch farm management technology, whilstthe farms located in Hebei and Henan provinces introduced Danish breeding managementsystem. All newly-built and under-construction projects have been equipped withadvanced production technique and equipment. In particular, the Company has carefullydesigned the bio-safety systems for farms. Through automatic and information-basedmeans such as smart feeding system, environmental control equipment and productionmanagement software, the intelligent hog raising system has been established to realize ahog raising model based on equipment, environment and information, so as to create acomfortable growth environment for animals and improve production efficiency.b. All-round operation:
In terms of genetic selection and breeding: The Company introduces high-qualitybreeders with French, American and Danish gene to match different business areas toprovide parent stock with pure blood and clear pedigree, truly grasps the source to supplyexcellent breeders, commercial piglets and finishers to enhance the Company's corecompetitiveness in the field of hog raising, which is conducive to forge the synergy effectamong hog raising business with feed and other businesses.In terms of nutrition and supply: Relying on Europe's technical practices andself-accumulated experiences in swine feed technology and hog industry, the Companyhas launched a system-wide database to dynamically formulate nutrition for animals. TheCompany, according to data and conditions of raw materials and hog markets, timely anddynamically adjusts diet nutrition, feed processing technique and product portfolios torealize tailor-made nutrition, accurate production and precise feeding, as well as to reduceoperating cost, improve production performance and provide marketable hogs. Moreover,the Company has established antibiotic-free nutrition system and successfully changed all
swine feed to antibiotic free (referred to as ABF hereof).In terms of bio-safety prevention: Relying on well-designed bio-safety control system, allthe Company’s farms have been strictly equipped with bio-safety facilities and equipment,applied corresponding quarantine and blocking schemes for the areas with different safetylevel in the farm, meanwhile, all the farms are continuously optimizing and upgradingrelated facilities. Besides, a professional team has been set up outside each farm toconduct off-site bio-safety work, especially for breeder farm (there should be no otherfarms within at least 3 kilometers). In the meantime, the Company has established adiagnostic system for ASF by fluorogenic quantitative PCR and implemented monitoringand early warning of risk points through real-time patrol inspection by bio-safetysupervision department and engineering department to ensure farm safety. In addition,the Company regularly trains the staff in the farms about bio-safety principles and dailyoperation details, and continuously improves the safety awareness of all staff via variousmeans such as job rotation and inspection notification.In terms of feeding management: The Company's farms adopt benchmarkingmanagement to enhance internal operation and reduce costs in the aspect of bio-safetyprevention, production performance, equipment and facilities, etc. At the same time, thefarms analyze key indicators related to production and other data through internalmanagement system to immediately adjust diet, micro-environment control, immunehealth care and herd structure to ensure orderly feeding management.II. Core Competitiveness Analysis within the Reporting PeriodCore competitiveness of the Company lies in a highly educated, loyal and stablemanagement team, rationally planned and steady-development based business strategy,increasingly matured and competitive business distribution, systematic, scientific andunceasingly innovated technology system, constantly enhanced and full-fledged WellhopeBrand, development-oriented and strongly rooted corporate culture.
1. Highly educated, loyal and stable management team
Talents are the primary resources and the core competitiveness of the Company. Themanagement team, led by seven founders, are highly educated with professionalbackground. They have deep insights into the Company’s core value and corporate culture.They have been united, stable and always fighting in the front line of business operation
with strong cohesion. The seven founders, who are praised as "Seven Pioneers of theIndustry”, always hold together and fight together, the high solidarity of the start-upshareholders has become the Company's most significant competitiveness, whilst “Unity isPower” is also part of the core culture. Almost all the middle and senior managers areinternally selected and cultivated by the Company, the core members have been grantedwith many forms of medium and long-term incentives, they have strong sense ofownership and devote themselves to the sustainable development of the Company. Forthe past 25 years, the management team has maintained high stability, almost none of thechief director and higher-level managers leave the Company. In regard of over 100 generalmanagers, besides those who are adjusted due to substandard performance, few of themquit the job. Meanwhile, newly promoted members of the management team born in the1980s and 1990s are selected from key talents’ cultivation programs, such as “SeedlingPlan” and “Sunflower Program”. They love the Company, highly recognize the corporateculture and have become the backbone force of the management team. The Company alsoattaches great importance to the continuous learning and ability improvement of thesemanagers, providing them with different training programs, including ExecutiveDevelopment Program, Leadership Training Camp, etc., which include strict training,appraisal rules and opportunities for managers to study from some leading companies athome and abroad so as to expand their horizons for further progress. The main reasonthat causes the failure of some domestic companies has been the “unstable and disunitedmanagement team”. In contrast, the highly educated, loyal and stable management teamis one of our core competitiveness, boost the Company’s having confidence to moveforward.Continuous talent growth and supply can be attributed to the advanced human resourcepolicy. In terms of talent introduction, the Company always adheres to the principle ofhigh-standard recruitment and upholds the core culture of "knowledge is power, unity isstrength". In terms of talent training, the Company formulates progressive anddual-channel training system according to its strategic goals and the needs of staff’s careerdevelopment to help them to grow. In terms of talent incentives, the Companycontinuously improves and optimizes the remuneration policy, providing a fair, just andmerit-based environment for rewarding employees. It also conducts separate performance
appraisal system for the sales team and administrative departments to keep the teamdynamic. At the same time, driven by the principle of "sharing bumper harvest", theCompany shares its development achievements with managers in various ways, such asholding shares in parent company and subsidiaries, profit sharing and elasticity welfare. In2018, the Company carried out share incentive program, where 372 core talents weregranted restricted shares. Through this program, the interests of Company, shareholdersand key-employees have been combined to ensure the sustainable and stabledevelopment of the Company and ultimately achieve mutual benefits for all. In themeantime, the Company has been echeloning its talents team based on corporationstrategic to build a more competitive and sustainable team to realize its long-term goal.
2. Rationally planned and steady-development based business strategyBased on in-depth understanding of domestic and global politics, economies andindustries trends, the Company has always attached great importance to its sustainabledevelopment and risk control, focused on operation quality and investment return of newprojects. Driven by a stable and conscientious attitude towards investment, the Company,with a goal of building to last, rationalizes its business layout and boosts expansion step bystep instead of investing and expanding businesses rashly, to maintain the rationality andsafety of industrial structures and to avoid all sorts of risks.Rationally planned and steady-development based business strategy reflects in thefollowing aspects:
a. Business divisionsStaring from premix business, the Company has been dedicated to expanding its feedbusiness over the years, at present it has become one of the top 10 commercial feedproducers nationwide. In 2008, the Company entered broiler integration business afterstrategic considerations. After 12 years of efforts, the number of broilers slaughtered bythe Company’s holding and associated entities has been standing in the forefront of thewhite feather broiler industry, with its management and key technical indicators rankingthe top both at home and abroad. In 2018, under the considerations of seizing marketopportunities and controlling operating risks, the Company decided to take hog raising as astrategic business after careful evaluations and investigations. Since then, it has beenfaster forming the core competitive of this business through talents cultivation, practice
accumulation and cooperating with leading companies. Meanwhile, in the year 2018, theCompany further confirmed its development strategy in the next ten years, i.e., whilstunceasingly expanding feed business, it would further boost broiler and hog integrationbusinesses to create an operation model powered by these two complementary engines.Such business layout with high risk hedging will not lead the Company to the woes andebbs due to tremendous blow or sharp downturn suffered by one of the businesses.b. Operation modelThe Company has gradually formed a value chain with high competitiveness and capabilityof withstanding risk in the fields of feed production and selling, animal raising,slaughtering and further processing, which enables all business divisions to connect closely,reduce the cost of intermediate processes, lower trading risks, improve profit margin andensure food safety. Such set up has become a future direction for agricultural companiesunder an increasingly complicated and changing economy.c. Market expansionInstead of rapidly expanding nationwide markets supported by the success of feedbusiness in Northeast regions and broiler integration business, the Company, with richexperiences in market expanding, insists on exploring new markets based on overallanalysis and investigations, entering the markets step by step in Northeast, Northern China,Henan, Shandong provinces and other areas, always moves forward steadily and pursuesasset-light operation, making much account of operation efficiency and returns oninvestment.d. Product mixThe Company has a full range of feed products. The sales volume and development ofswine, poultry, ruminant and aquatic feed products have achieved great achievementsrespectively, which could avoid operational risks caused by diseases in animals or othercircumstances.e. Financial risk controlThe Company always attaches great importance to financial risk control. Since going public,it has gradually improved internal control system, regulated corporate governance andenhanced the awareness of risk control to avoid financial risks. The Company takes avertical management in finance, managing loans, cashes and guarantee policies in a
centralized manner to improve capital usage efficiency, lower capital costs and ensurecapital safety. Meanwhile, it effectively controls liabilities and financial costs according toeconomic circumstances, industry development and internal operations. Theasset-to-liability ratio was 32.31% at the end of reporting period. Due to outstandingoperating indicators and risk control, the Company was rated as one of the Top 50Financial Health Companies listed on the main board market by the Data, a new mediaplatform of China’s Securities Times, only three enterprises involved in agriculture andanimal husbandry industries were selected. Entering 2020, corporate risk control becomescritically important especially under the complicated political and economy caused byCOVID-19. Thus, the Company will further improve its risk control whilst maintain stableoperation.
3. Increasingly matured and competitive business distributionThe advantages of the Company’s business distribution mainly reflect in geographicallocation and business portfolio.a. Geographical locationThe head office of the Company is located in Shenyang of Liaoning province, with its mainbusinesses mainly distributing in Northern China, especially in the Northeast regions.Northeast China is a potential growth area for animal husbandry designated by thegovernment, where is suitable for agricultural companies to expand business supported byits high-quality raw materials, mild climates, low raising density and relatively low humanresource costs. For instance, corn produced by Northeast region, featured by high bulkdensity, low toxicity and low moisture, enables the Company to reduce purchasing costswhilst ensuring feed product quality. Meanwhile, white feather broiler production ofLiaoning, Jilin, Henan, Hebei and Shandong provinces, where the Company’s broilerintegration business mainly distributed in, account for over 75% of national production,and these areas are the most important regions for developing white feather broilerindustry in China, with a good basis for broiler raising and more mature marketing system.Moreover, the Company actively explores overseas markets in answering the call of “theBelt and Road Initiative”, building plants in the Philippines, Indonesia and Nepal, whereanimal husbandry develops well with high potential.
b. Business portfolioCentered on agricultural and animal husbandry industries, the Company adopts the layoutstrategy of "diversification and integration" to constantly optimize its business portfolio,which has increasingly heightened its capacity of risk withstanding and sustainedprofitability. In terms of diversification, the Company has been further expanding its feedbusiness, whilst vigorously promoting its broiler and hog integration businesses, aiming tobuild an operation model powered by these two integrated businesses. The staggeredfluctuations in broiler and hog industries can effectively weaken risks from cyclical swingand promote information sharing and synergy effects among the Company’s differentbusiness divisions. In terms of integration, both from seeing the history of companies inagriculture and animal husbandry industries in developed countries and seeing China'srapidly changing industrial landscape, the integrated business model is the inevitabledirection for domestic companies that are active in these two industries. After years ofdevelopment in the raw materials trading, feed, animal raising, slaughtering, furtherprocessing and food businesses, the Company has basically formed an value chain withcompetitiveness and risk prevention, meantime, it is gradually perfecting the supportingcapability of each business segment in the chain, whilst constantly standardizing andoptimizing know-how and operation system to further enhance the synergy effect amongthem.
4. Systematic, scientific and unceasingly innovative R&D systemThe Company’s R&D system always lives up to the mission of “using advanced technology,excellent service and outstanding products to promote the development of China’slivestock industry, conserving resources, protecting the environment, providing foodsecurity and benefiting the society”. Driven by the market-oriented and customer-orientedprinciple and the goals of “safe products, stable quality, tailor-made nutrition andpowering business performance”, the R&D team is constantly innovating technology anddeveloping new products.a. Excellent R&D teamRelying on a relatively complete industrial chain, the Company has built a R&D teamspecialized in animal raising, product formulating, manufacturing and other technologiesin the fields of feed, poultry, hog, biological feed additive, etc. Assisted by more than one
hundred masters, doctors, professors and senior experts who have profound knowledgeand experiences, the R&D team has applied cutting-edge technology into practice to boostthe Company’s know-how improvement. Relying on powerfully technical strength, theCompany has received national and local level of accreditations and honors, includingNational-recognized Enterprise Technology Center, National and Local CollaborativeEngineering Research Center for New Biological Feed, Branch Center of Feed Processing ofNational Agricultural Product Processing, Comprehensive Trial Farm for National HogRaising Industry Technology System, Agricultural Products Further Processing andBio-pharmaceutical Industry Cluster of Liaoning Province, Innovation Team for FeedTechnology and Safety of Liaoning Province.b. Competitive R&D cooperationIn 2006, the Company partnered with Royal De Heus, a centurial-old Dutch company. Bydrawing on its global reach, advanced technical resources, leading know-how and acentury of management experience, the Company has made breakthroughs in safe andhigh quality feed, precise and efficient nutrition as well as ABF technology. The R&D teamsof the two sides have maintained high-frequency exchanges, which enables the Companyto keep abreast of the world's latest technologies. Meanwhile, by combing own 25-year’stechnology with the latest technology in the industry, the Company is committed toproviding customers with high quality products and technical service, it has alsoestablished technical cooperation and other cooperative projects such as "AcademicianWorkstation" and " Official Research Base for Postdoctoral Fellows".c. Fruitful research achievementsIn the first half of 2020, the Company has initiated over 40 research projects. By far 70patents have been authorized, including 47 patents for invention. It also received twoNational Science and Technology Progress Awards, one National Technological InventionAward and nearly 20 Science and Technology Awards at provincial-level andministerial-level. In the first half of the year, the Company led and participated in morethan 10 sci-tech projects and setting national standards and group standards, includingformulating 7 group standards for Concentrate Supplement with Co-Fermented Bacteriaand Enzyme for Lactating Cow organized by Beijing Bio-feed Industry TechnologyInnovation Strategic Alliance. As an organizer, the Company undertook the major sci-tech
project of Liaoning province- Feed Quality and Safety Control and Low Protein Feed in2019 to 2021 with other 8 companies. Meanwhile, the Company participated in relatedprojects, including Jointly Building Chicken Net Energy Nutrition Technology Systemchaired by Professor Guo Yuming from China Agricultural University, and the Application ofFermented Feed for Piglet under Antibiotic-free Farming together with Zhejiang University.As the leading organizer, the project of Research and Promotion of Energy-saving andEco-friendly Animal Feed won the second prize of Science and Technology Award ofLiaoning province, the project of the Establishment and Application of Swine IntestinalHomeostasis Nutrition Technology System cooperated with Professor Zheng Xin from JilinAgricultural University, has been approved by the re-examination of the first prize of JilinProvince Science and Technology Progress Award. Moreover, the R & D team successfullyscreened and designed a series of high cost-effective antibiotic-free feed formula solutions,which had been fully applied before the end of June, showing stable performance in thefarms and being well received by customers.Along with continuously improved nutrition technologies and farming programs, relatedtechnologies in the field of broiler and hog integration businesses have been becomingincreasingly mature. Through researches on nutrition strategy, feed processing and feedingprogram, the growth performance and slaughtering performance of animals have beenfurther improved, which maximized the value of single animal.d. Top-class testing ability and databaseThe Company's R&D and testing center has been accredited as National Laboratory byCNAS (China National Accreditation Service for Conformity Assessment), equipped withadvanced testing equipment and composed of three types of testing rooms in terms ofphysics and chemistry, microbiology and precision instruments. From micro to macro, thetesting center is able to secure quality in every step. The Company has become one of thefirst companies capable of testing prohibited additives. As a national key laboratory, itstest results can be recognized in 60 countries or regions around the world. Meanwhile, theCompany has established own raw material database and shares data resources of theDutch partner, using regression equations to calculate the energy dynamics of rawmaterial, whilst basing on animal’s growth performance and feed intake to preciselyformulate nutrition with lowest cost to achieve the best cost-effective.
5. Constantly enhanced and full-fledged Wellhope Brand
The Company has successfully established its product and corporate brand in domesticagriculture and animal husbandry industries over the past 25 years. As related industrieskeep evolving, its brand effect will be further highlighted.a. Product brandOver the years, relying on leading-edge technology, high quality products and continuouslyimproved customer service, the Company's brand has been widely recognized and trustedby customers. With the outbreak of ASF, the demand of products with high nutrition andimmunization rose, moreover, high pork price fueled the need of products with high yieldand fast weight-gain. In the first half of 2020, the Company’s swine feed realized ayear-on-year growth rate of 61%, such explosive growth could prove the products’ highquality, R&D strength and market recognition. Meanwhile, the brand “Wellhope” has beenhonored as Liaoning Province Famous-brand Product, Liaoning Province FamousTrademark, China Famous Brand, China’s Top 500 Most Valuable Brands, Most InfluentialBrand in National Animal Husbandry Industry, Trustworthy Product in China's FeedIndustry, etc. In 2019, the Company won the Liaoning Governor's Quality Award for itsexcellent business management and product strength.b. Corporate brandDriven by the core values of "Integrity, Responsibility, Win-Win", some of the Company’sbusinesses are joint ventures with partners, it has been working together with manypartners for more than 10 or even 20 years, including a 14-year’s good relationship withRoyal De Heus. These successful cases of cooperation can adequately prove that“Wellhope”, as a corporate brand, has been well recognized and trusted by its partners.Meanwhile, the strength of the Company's brand can also be proved by long-termstrategic partnerships with some multinational and domestic suppliers, by financialinstitutions granting loans on credit due to our good reputation. As an employer brand,“Wellhope” has been recognized and favored by employees as well as pursued by jobseekers. In 2019, in the recommendation and selection of national model enterprise orindustrial park with harmonious labor relations initiated by the Ministry of HumanResources and Social Security, the Company was awarded as "National Model Enterprisewith Harmonious Labor Relations", commended by the National Tripartite Evaluation and
Commendation Office, it was also awarded as the "Best Employer" again by Zhaopin.com.Meanwhile, the Company's online recruitment and "Wellhope Cup" research papercontest held in the first half of 2020 displayed the strength of its employer brand.
6. Development-oriented and deeply rooted corporate culture
After 25 years of development, the Company has formed development-oriented andwidely recognized corporate value, among which, the core value of "Integrity,Responsibility, Win-Win" and the management culture of "Innovation, Efficiency,Self-Discipline", have been deeply entrenched in the thinking and behaviors of employees.The core culture, represented by Wellhope Vision, declared at the very beginning ofestablishment, which is mainly described as "Always put customers’ needs first andconstantly work on new products, never follow the beaten path, always conduct businesshonestly, always aim to provide value to our society and to maintain sustained growththrough technology, innovation and creative work”, and by Wellhope Mission, described as"Save resources, protect the environment, provide food security and benefit the society",has become the basic principle of business operation of the Company and powers itsfurther progresses.In the aspect of publicizing and implementing corporate culture in 2020, the Companyaims to further implement its culture into practice and combine the implementation withperformance appraisal, making culture integrate with the operation of each business line.It is planned to hold 4 times of live streaming with the theme of “Telling StoriesExperienced in Wellhope", 40 employees and managers have been invited to tell stories bytheir side. The first session attracted 110,000 viewers, which vigorously publicizedWellhope culture. Meanwhile, the Company ushers in its 25th anniversary in 2020, it willutilize this opportunity to carry out a number of culture promotion activities, includingbrand and marketing promotion competition, physical fitness programs involving all ourpeople, job skill competition, essay writing, photography, calligraphy and painting activities,etc., to enrich staff's leisure life and display their strengths. Moreover, its Corporate Codeof Conduct will be launched in the second half year, which will integrate the practice ofcore values with all staff’s performance appraisal.In the face of COVID-19 in 2020, the Company is one of the first agricultural enterprises toresume work. In order to maintain operations and meet customer’s demand, many
managers and employees overcame difficulties to actively return to work, doing their bestto organize production and ensure supply. Their devotions and passions touched our staffdeeply. The Company, together with managers and employees, donated more than RMB12 million of materials and money for pandemic control. All these stems from the strengthof the Company's culture, the sense of mission and responsibility as well as the love forthe Company. The history of the Company fully proves that each time when Wellhopefaces difficulties and trials, the corporate culture assists it to defeat hard time and to soarto broader horizons.
Section IV Business Operations AnalysisI. OverviewIn the first half of 2020, worldwide spread of the COVID-19 pandemic has hit globaleconomy particularly hard; the Sino-US relationship continued to deteriorate, whilst thepolitical and economic situation became extremely complicated; the ASF situationremained severe due to the impact of heavy precipitation in the south China. Pressured byCOVID-19, globally economic downturn and ASF, the Company did a good job in pandemicprevention and at the same time fully implemented its business strategy that focused onthree pillar business divisions in terms of feed and feed raw materials trade, broilerintegration and hog raising, fully captured market changes and opportunities. Whileexpanding feed business, it vigorously promoted white feather broiler integration and hograising businesses. Relying on fully leveraging its strengths including brand, technology,R&D, marketing innovation and other aspects, the Company achieved high-quality and fastdevelopment in all business divisions, showing strong profitability and capability ofwithstanding risk. The Company's operating revenue and net profit attributable toshareholders have continued to grow for six consecutive years with record highs, and itwas shortlisted into the Fortune China 500 in 2020.
1. Business highlight
During the reporting period, the Company realized an operating revenue of RMB 9.848billion with a year-on-year growth rate of 27.45%. Pre-tax profit reached RMB 762 millionwith a year-on-year growth rate of 65.25%, net profit attributable to the shareholders ofthe Company reached RMB 606 million, net profit attributable to the shareholdersdeducting non-recurring items reached RMB 603 million, respectively increased by 68.80%and 68.18% compared with the corresponding period of prior year. The weighted averagereturn on equity reached 10.16%, net profit margin on sales reached 6.92% andcomprehensive gross margin reached 10.58%, increased by 1.79 percentage points, 1.36percentage points and 0.98 percentage points respectively over the same period prioryear. Meanwhile, the period expense ratio decreased from 5.65% in the same period ofprior year to current 4.15%. At the end of the reporting period, the Company's debt assetratio was 32.31%, which has been lowered 40% since going public.The main accounting data and financial indicators of the Company in the last three years
(2018-2020) from January to June present as follows:
2. Business review
A. Feed businessIn the first half of 2020, the Company fully leveraged its strengths as a leading player interms of brand image and technology advantages to increase market exploration andcontinuously improve online and offline services, which have significantly heightenedcustomer stickiness and market reach. Meanwhile, by constantly improved productionefficiency and operating costs, the period expense ratio decreased by nearly 3 percentagepoints. During the reporting period, the Company's feed business realized a sales revenueof RMB 5.074 billion with a year-on-year increase of 50%.Feed sales volume of the Company amounted to 1.64 million tons, increased by 41.96%compared with the same period of prior year. From the perspective of varieties, swinefeed increased by 61%, among which high gross margin products in terms of creep feed,piglet feed in the nursery period and sow feed in the lactation period grew 76%, weaningpiglet feed rose 72%, the percentage of these two kinds of feed respectively accounted for26% and 50% of swine feed. Poultry feed increased by 38.61%, whilst ruminant feed grew
25.41%, among which beef cattle and mutton sheep feed increased by 62%. Aquatic
products increased by 7.61%. From the perspective of categories, compound feed realizeda year-on-year growth rate of 43% and concentrated feed increased by 39%. From theperspective of regions, sales volume contributed by the regions in Northeast Chinaincreased by 51%, swine feed of which grew 102%, whilst the sales volume contributed bythe regions in East, North, Central, South, Southwest and Northwest China rose by 46%.Overall, the Company's feed business in the first half year showed explosive growth, all thefeed varieties realized progresses, especially for swine feed, which achieved a growth ratefar beyond the average level of the industry.Feed sales volume in January-June 2020:
a. Technology powers progress deeply, researches on antibiotic-free earlyFacing the changing market and the new era of ABF, the Company actively upgraded andinnovated products to constantly meet market demand. In response to ASF, it hassuccessfully developed the line of products named “Wellhope Immune Nutrition”, whichhave received higher recognition by farmers, whilst under the backdrop of historicallyhigher hog prices, the Company has launched high-yielding and fast-growing products, alsodeveloped extra-large swine feed to meet the demand of raising over 120kg hogs in someareas, as well as upgraded fermented feed, etc., these marketable high quality productshas won the favor of customers and gained the increase of market share. In terms ofantibiotic-free feed, relying on leading technical team and research strength as well as byabsorbing practices of De Heus, the Company has conducted unceasing explorations andhundreds’ times of trials regarding ABF, by the end of June 2020, all products have beenupgraded to antibiotic-free feed, all ABF schemes have been stable and received goodfeedback, which have further enhanced product competence.
| Item | Jan.-Jun. 2020 (10k tons) | Jan.-Jun. 2019 (10k tons) | Year-on-Year Change |
| Swine feed | 61.23 | 38.03 | 61.00% |
| Poultry feed | 69.36 | 50.04 | 38.61% |
| Ruminant feed | 26.11 | 20.82 | 25.41% |
| Aquatic feed | 6.22 | 5.78 | 7.61% |
| Other feed | 1.17 | 0.93 | 25.81% |
| Total | 164.09 | 115.59 | 41.96% |
b. Implement precision marketing and innovate customer service systemThe Company has always paid close attention to customers and markets, implementedprecision marketing strategies to constantly meet customers' personalized demands onproducts and services, which have enhanced its service and brand influence andsignificantly strengthened customer stickiness. For example, through in-depth cooperationwith hog farms, bio-tech companies, insurance companies and other third parties, theCompany provided customers with "one-stop" services, also timely adjusted theorganizational structure of sales system, upgraded terminal service and marketing systemto center on the key market and large-scale customers, as well as increased the promotionof new products and high-margin products......In addition to precision marketing, theCompany constantly innovated its customer service by strengthening online marketing andcustomer service, actively promoted marketing and service via live streaming, short video,WeChat and other tools. In the meantime, the Company has built online service platforms,which guided farmers by launching market analysis, management skills and solutions toepidemic prevention as well as online Q&A. Furthermore, its experts’ team also organizedonline trainings for end customers, which have gained good recognitions.c. Guarantee production and supply and capture market opportunitiesAfter the outbreak of COVID-19, although facing the pressures in terms of labor shortage,panic buying of feed, dramatic increase in orders and traffic control, etc., the Company’sfeed plants resumed work quickly and all staff were dedicated to guaranteeing productmanufacture and supply. In terms of purchasing, the Company gave full play to itsadvantages of large-scale purchasing and strategic partnership with suppliers, overcamedifficulties to retain stable supply of raw materials while obtaining more competitivepurchasing costs.d. Enlarge production capacity and quicken market layoutTo seize market opportunities to improve market reach and further expand feed business,the Company has vigorously upgraded feed manufacture equipment and warehouses toenlarge production capacity, also launched some new feed projects distributed in theprovinces of Hainan, Shanxi, Shandong, Jiangxi, Hunan and other regions through self-built,mergers and acquisitions, leasing and OEM to speed up production capacity and marketdistribution, which has laid foundation for the rapid expansion of feed business.
B. Broiler integration businessCOVID-19 caused a sluggish domestic consumer demand that blocked sales channels,which greatly hit white feather broiler market. In respond to this, on the premise ofensuring the safety of employees, the Company resumed work quickly, steadily boostedbusiness development. Although the operation performance of broiler integrationbusiness declined in the short term, it has been still one of the big contributors towardsthe Company’s final profit, meanwhile, the core competence of broiler integrationbusiness has been constantly enhancing.a. Accurately grasp market direction, scientifically and reasonably adjust productioncapacityIn the first half year, the production capacity of breeders was expanded rapidly, whichmade the inventories of grandparent and parent stocks rise to high levels. In view of this,the Company moderately slowed down the construction progress of breeder farms, whilststrengthened existing farms’ inside operation and improved growth performance ofbreeders to ensure the quality of day old chicks. For commercial broiler raising andslaughtering businesses, the Company chased short-term profit and long-term planning,steadily expanded production capacity in the provinces of Henan, Hebei and Shandong,etc. For food processing business, it rapidly developed new products to increase the salesvolume, whilst vigorously explored domestic and foreign markets to unswervingly expandproduction and supply. From January to June 2020, the Company's holding and associatedentities raised 257 million broilers with a year-on-year growth rate of 35%, totallyslaughtered 265 million broilers, increased by 18%; produced 0.71 million tons of broilerparts products and 7,659 tons of prepared and cooked food, respectively rose by 26% and28%.b. Continue to deepen lean management, focus on strengthening team buildingIn the context of the downturn of white feather broiler industry, the Companycontinuously deepened lean management in its broiler integration business, rationallyreduced expenses and maintained efficient and smooth operation of each sector in theindustrial chain. In terms of broiler raising, the Company took measures in certain aspectsin terms of day old chick, feed production, animal health product and equipment toconstantly improve the growth performance of commercial broiler and further heighten
automation. In terms of slaughtering, the Company continued to pay close attention toproduction efficiency to reduce operating costs and strengthen management quality,whilst it made efforts to improve the production capability of new projects to achieveprofitability as soon as possible. In terms of finance, it strictly managed accountsreceivable, reasonably arranged capital expenditure and quickened the inventory turnoverto ensure enough cash flow. While strengthening internal management, the Company gavefull play to its brand influence to actively absorb talents, optimized selection and trainingsystem, broadened talents reserve and echeloned talents team. As a result, the corporateculture has become increasingly rooted in staff’s behaviors with continuously enhancedteam cohesion.c. Actively optimize marketing strategy, firmly promote food strategyAfter the COVID-19 outbreak, domestic consumption was suppressed, whilst chickendemand fell. The Company responded quickly and courageously by vigorously expandingnew sales channels to further explore domestic market, constantly optimizing product mix,developing new cost-effective product portfolio and persisting in cultivating excellentdealers and continuously improving their loyalty. At the same time, it continued tounswervingly promote food business strategy. Relying on the advantage of raw materials,utilizing multi-brand business model to rapidly develop domestic and foreign saleschannels, expand sales volume and strive to improve the percentage of prepared food andhigh-value products as well as the export business, thus further improving the ecologicalniche. Influenced by the pandemic, foreign cooked food market also suffered great losses,the Company insisted on strict product quality, speeded up exploring foreign newcustomers and rapidly researched on new products according to new needs. Meanwhile, itdynamically adjusted production capacity and rapidly entered new channels to seizemarket share. From January to June 2020, the Company exported 1,442 tons of cookedfood with a year-on-year growth rate of 83%.C. Hog raising businessDuring the reporting period, each unit of the Company's hog raising business furtherstrengthened prevention of ASF and COVID-19, seized market opportunities on thepremise of ensuring safe production, took certain measures to constantly form the corecompetitiveness of hog raising business, including quickening business distribution,
attracting talents and heightening operation, etc.a. Speed up hog raising strategy, all projects move forward togetherIn line with hog raising strategy, the Company, overcame many difficulties and capturedmarket opportunities in terms of tight hog supply and higher hog prices to vigorouslypromote the increase of new production capacity contributed by existing hog projects,also strengthened internal operation to lower costs and increase efficiency. Meanwhilethrough constantly improved swinery structure and raising technology, some of itsperformance indicators, such as fattening period and feed-weight ratio, have reachedadvanced level nationwide. Meanwhile, the Company also made efforts to boost businessin Central, East and North China, some newly-built projects located in the cities of Linzhou,Luoyang, Tongxu and Anhui province, etc., have been put into operation. Moreover, itquickened to increase production capacity by asset-light strategy in terms of cooperation,leasing and synchronizing breeder raising with farm construction. For the projects inNortheast China, the first phase of Fushun Shangnian breeder farm has been fullyoperated, its related production indexes have reached the first-class level in China; FushunGuanmenshan breeder farm will sell piglets in August; Jilin Wellhope breeder base wasrated as a Demonstration Farm of Jilin Modern Hog Industry by Jilin Animal HusbandryBureau in March and began to sell piglets in July. In the first half year, hogs delivered bythe Company’s holding and associated entities amounted to 212,500 heads, including63,200 heads of finisher, 114,900 heads of piglet (68,300 head sold inside the Company,46,600 heads sold to the market) and 34,400 heads of breeders, increased by more than30% over a year earlier. Benefiting from higher hog prices, hog raising businesscontributed a big part to the Company’s profit.Furthermore, the Company launched or planned breeder farms and finisher farms withdifferent scales in Hebei, Henan, Southern Anhui, etc., also continuously developedsuitable areas for hog raising during the reporting period. By doing this, the Company aimsto rapidly increase the production capacity of breeders and enhance independentfattening. Besides, it also vigorously promoted the progress of new projects in NortheastChina. Liaoning Lingyuan breeder farm began to construct in April, expected to becompleted by the end of the year. New farms with different scales in Jilin province areexpected to be put into use in the second half year. Hog integration project cooperated
with Aohan Banner people's government that will deliver 500,000 heads of hogs per yearis expected to build in August this year. By the end of June, the Company’s inventories ofsow reached 54,000 heads, over 5 times increase compared with the same period of prioryear, and it is expected to stock more than 60,000 heads of sows by the end of the year(holding and associated companies included).b. Strictly prevent epidemics to ensure production safetyAlong with doing good job of preventing epidemics, the Company increased input inbio-safety control, continuously upgraded equipment and facilities to further safeguardfarms. All the farms optimized bio-safety control system and operation procedures as wellas carried out all-round supervision through cameras, patrol inspection and other means.At the same time, the farm’s decontamination centers strictly set up a three-level systemto comprehensively clean vehicles and materials close to the farm, whilst the professionaltesting center conducted defensive tests inside and outside the farm to ensure productionsafety. The Company has also continuously improved its support for contract farms aboutepidemic prevention, provided them comprehensive guidance and services, such asequipment optimizing, safe material supply, herd management, feeding program, ASFmonitoring and professional support teams, to support farmers raise hogs safely in closedenvironment.c. Enter hog slaughtering and further processing to complete the value chainChifeng Wellhope Fuxinyuan Slaughtering Company, a holding entity of the Company,actively expanded distribution channels, its hog parts products have been mainly sold todifferent channels, universities, enterprises and first-tier cities, etc. Meanwhile, thiscompany also has been storing national reserved meat. In addition, the Company hascontinuously broadened its value chain. It is going to build a hog slaughtering and furtherprocessing project in Anhui province, which is expected to start construction in August.Through entering slaughtering and food processing, the Company's hog integration chainwill be further improved to heighten risk resistance and stabilize profit contribution.d. Strengthen expertise improvement and talents reserve to promote the sustainabledevelopmentThe Company further strengthened professional knowledge trainings in the field ofbio-safety, breeding system and feeding program by video conference and external
exchanges. Meanwhile, based on breeder farms located in different areas, the Companycultivated talents to its hog farms also reserved excellent talents via internal selection andexternal recruitments, etc. In terms of talent incentive, it continued to optimize theperformance appraisal mechanism and tried to innovate the incentive model of hogintegration to attract and retain talents rapidly under the favorable situation of hogbusiness.D. Feed raw material tradeBenefited from market quotation and IT application, the Company's trade businessachieved a substantial growth. Feed raw materials presented a short supply in the first halfof this year caused by certain factors, such as, those raw material producers resumed workslowly, feed producers expanded production capacity, whilst imported raw materialsrepresented by fish meal were lack of supply, etc. Together these reasons drove up theprices of raw materials. The Company seized these market opportunities and achieved asignificant growth in feed raw materials trade business. In terms of animal health product,the Company, as the agent of top brand animal health products both domestic andoverseas, realized a year-on-year growth rate of over 30% in this business supported by ahigh prosperous market of high-end animal health products in the first half year. Whileenjoying the favorable market, the Company leveraged the advantages of IT applicationplatform to timely and accurately analyze data and research on market, conductforward-looking analysis and accurate marketing management, which has made theoperation of the Company's trading business safer and more efficient and furtheramplified the profitability.
3. Technology Innovation
In the first half of 2020, regardless of the pressures from market demands andcompetitions, such as the sporadic outbreak of ASF and ban of antibiotics in feed, theCompany’s R&D team has further enhanced the competitiveness of products and on-sitefarming technology by selecting new raw materials, applying new technologies andoptimizing formulation. Meanwhile, the Company has proactively established a newantibiotic-free system and popularized the application of antibiotic-free achievements tostrengthen marketing and create values.
A. Well prepared to step into the new era of antibiotic free confidentlyFeed industry has been in the new era of antibiotic free since July 2020. By adhering to themission of "protecting environment, providing food security and benefiting the society”,the Company has been preparing and researching on antibiotic-free feed for a long timeand carried out more than 100 experiments from 2013 and 2019 based on owntechnology accumulation and practices of the partner Royal De Heus.Feeds for layers in laying period, ruminants, duck and aquaculture have been alreadyantibiotic free for a time and feed for white feather broiler has realized antibiotic free forthree years. Whilst in the past two years, the Company has done a lot of trials in order toguarantee the effectiveness of antibiotic-free feed for swine. For this purpose, it paidattention to the selectiveness of feedstuffs, feed formulation design, feed processingtechnology and evaluation of feed additives. In the first half of 2020, the R&D teamactively transformed the achievements of ABF into the field of swine feed, established theWellhope's technical system of "antibiotic-free nutrition", and made multiple technicalschemes for cost-effective antibiotic-free feed formulation. The Company also appliedrelated products in the trial farms and some regional markets, which have been proved toreach the goal of balanced nutrition, stability, easy digestibility, healthy animal bodies,strong immunity and anti-stress capacity, thus the Company has successfully achieved ABFfor all series of swine feed products. By the end of June 2020, Wellhope has ungraded allproducts to ABF, which have realized constant growth performance and good customerfeedback.B. Dedicate to heightening R&D to improve products competitivenessa. Swine feed: The Company strengthened those targeted products, such as fast-growingfeed and extra-large swine feed (over 120kg), to meet the needs of customers quickly. Atthe same time, the new antibiotic-free products such as bio-fermented feed have beendeveloped to facilitate the successfully transition of antibiotic-free feed on the farm andenhanced the health of herds; Meanwhile, the Company has established the nutritionstandards and feeding strategies for swine with different strains and optimized the mix andquality of high value products, which boosted the significant growth of the sales volume ofpiglet feed in the nursery phase.b. Broiler feed: The Company continued to increase the input in the researches on
broiler diet and nutrition selection, also boosted the application of feeding model aspellet-powder-pellet, focused on improving broiler’s growth performance and slaughteringquality, which maintained the technical advantages of broiler feed.c. Layer feed: The Company constantly improved the manufacturing technique andperformance of fermented feed to further improve the economic benefits of farmers, alsoenlarged the development of fermented feed for quail and goose. Meanwhile, theCompany has been dedicated to creating organic Wellhope brand eggs, at present, it haslaunched lutein eggs, selenium-enriched eggs, DHA eggs and other functional eggs, whichlaid a foundation for developing layer integration business.d. Ruminant feed: The Company designed anti-stress solutions for lamb during thetransition period, which helped the lambs more easily adapt to the mode of being fed adlibitum. This technology obviously prevented the occurrence of diarrhea and decreasedthe mortality and thus increased the profit of finishing lamb in general. Meanwhile thecompound feeds for lambs and calves were also developed with the aim to better theperformance of young animals. The occurrence of kidney stone in lamb finishing has beendecreased to be lower than 1% by improving the compound through animal feedingexperiments on farm. This was very helpful to gain more profit for lamb finishing. For dairyfeed, the new compound was designed for the fresh cows according to the starch plussugar concept, which was proved to increase the daily milk production by 1 to 2 kg andhelp to stabilize the rumen pH value by lower starch content and to improve the health ofcows and as a result to longer the duration of lactation peak and milk production as well asheight body health.e. Aquatic feed: The Company developed high-quality fingerling fish feed and designedthe programs of animal health products to improve the livability of fry and the economicbenefits of aquaculture. At the same time, utilizing own technical advantages andapplications in the fermented feed, the Company launched fermented aquatic feed toimprove the intestinal health of animals and the water quality of the pond; it alsoupgraded special aquatic feeds continuously and determined the nutrition standard andformula model for different varieties under different farming modes, meanwhile, with theupgrading of equipment and technology, the difficulties in the growth, stimulating feedingand processing of special aquatic feeds have been solved.
C. Constantly upgrade raising techniques to strengthen the competitiveness of theCompanya. Broiler raising techniquesIn the broiler farms, the Company continued to improve the nutrition programs forbreeders and the bio-safety to comprehensively enhance the performance of commercialday old chicks. Through continuously improved on-site raising management and scientificfeeding mode, feed conversion ratio and animal growth potentiality have effectivelyincreased with reduced mortality and culling rate. Meanwhile, the Company has madedramatic breakthroughs in raising broilers via cage. The automatic micro-environmentalcontrol technology and the broiler growth performance have reached national top level;the original ventilation mode and solar energy technology reduced air pollution. Inaddition, the Company cooperated with numerous universities and research institutes. Bymeans of the necropsy, laboratory diagnosis and drug sensitivity test, veterinarians candetect and treat diseases in time. Relying on the guideline of the complete bio-safetysystem, company-owned farms and contract farms have fulfilled strict measures in termsof disinfection, vaccination, quarantine, etc., to guarantee that the broilers can have agood performance.b. Hog raising techniquesThe Company has established a high-efficiency and dynamic management system for thewhole process of hog raising, which integrated the dynamic formula nutrition technology,large-scale feeding technology and full-system database of hog raising. At present, it hascreated a "3-stage" gilt feeding mode and a "5430" high-efficient and grain-saving feedingmode for the sows and piglet, and "7-stage" feeding mode for growing-finishing hog, andcontinuously provided company-owned farms and contract farms with systematicallynutritional management programs through data collection and analysis, effect tracking, etc.By far, the Company has established a database platform for fattening hogs, formed morethan 20 standard documents, rules and regulations, management plans, etc., andformulated 3 corporate standards, 1 set of feed product manuals, 1 set of new processingtechnology and 2 sets of new feeding modes, launched a new product specialized forextra-large pigs (over 120kg), applied for 1 invention patent, 1 scientific research projectand published 10 papers.
D. Attract and reserve technical talents via multiple ways to improve the overallcompetitiveness of the technical teamThe Company has continued to strengthen the attraction and reserve of key technicaltalents through a variety of methods. In the first half of the year, it recruited nearly 20doctors and masters through various channels, meanwhile, it further strengthenedtrainings for R&D team through internal training, external communication andhigh-frequency technical communication with Royal De Heus, which enabled the Companyto always keep eyes on the world's latest technological trends, research results andmaintain its leading position of know how. In addition, the Company held "Wellhope Cup"postgraduate research paper competition to discover talents and excellent researchdirections and ideas, also to build a bridge between theoretical research and practice,promoting technological innovation and breakthroughs in the agriculture and animalhusbandry industries.II. Analysis of primary business
1. Analysis of related items in the financial statements
RMB
| Item | January-June, 2020 | January-June, 2019 | Change % |
| Operating revenue | 9,848,379,852.28 | 7,727,400,004.75 | 27.45 |
| Operating costs | 8,806,688,412.71 | 6,985,820,614.94 | 26.07 |
| Sales expenses | 212,669,710.62 | 239,990,725.07 | -11.38 |
| Administrative expenses | 134,081,626.60 | 126,915,965.17 | 5.65 |
| Financial expenses | 31,065,360.72 | 39,721,751.73 | -21.79 |
| R&D expenses | 30,944,918.31 | 30,021,345.87 | 3.08 |
| Net cash flow from operating activities | 451,396,027.78 | 299,291,784.62 | 50.82 |
| Net cash flow from investing activities | -611,726,432.66 | -378,785,068.92 | not applicable |
| Net cash flow from financing activities | 261,794,505.53 | 679,776,007.24 | -61.49 |
Explanation for the change of operating revenue: feed product sales revenue grew.Explanation for the change of operating cost: feed product sales cost grew.Explanation for the change of sales expenses: due to implement the new revenuestandards, freight expenses of related products were adjusted to operating cost.Explanation for the change of administrative expenses: the remuneration for managersgrew.Explanation for the change of financial expenses: interest on deposit increased andinterest on borrowing decreased.Explanation for the change of R&D expenses: expenses for R&D materials and instrumentsincreased.Explanation for the change of net cash flow from operating activities: cash received fromsales of products increased compared to the same period of prior year.Explanation for the change of net cash flow from investing activities: cash paid forinvestment and for acquiring and building fixed assets, intangible assets and otherlong-lived assets increased.Explanation for the change of net cash flow from financing activities: cash paid for debtincreased.
2. Assets and liabilities
RMB
| Item | June 30, 2020 | Percentage of total assets % | June 30, 2019 | Percentage of total assets % | Year-on-year change % | Explanation |
| Trading financial assets | 100,000,000.00 | 0.96 | 0.00 | 0.00 | not applicable | purchases of structural deposits increased |
| Derivative financial assets | 9,100,936.30 | 0.09 | 4,765,331.00 | 0.06 | 90.98 | position of derivative financial assets increased |
| Long-term equity investment | 2,214,383,039.93 | 21.20 | 1,540,743,547.03 | 18.52 | 43.72 | investment for associated companies increase and the investment that calculated by equity method increased |
| Other equity instrument investment | 12,949,647.74 | 0.12 | 4,547,809.52 | 0.05 | 184.74 | Newly-increased other equity instrument investment in current period |
| Construction in progress | 353,897,369.68 | 3.39 | 85,569,862.73 | 1.03 | 313.58 | investment for swine and broiler houses increased |
| Biological assets | 181,047,726.38 | 1.73 | 56,033,181.19 | 0.67 | 223.11 | breeding swine increased |
| Other non-current assets | 455,359,431.84 | 4.36 | 326,934,235.00 | 3.93 | 39.28 | prepayment for long-lived assets and feeding fees of farmers increased |
| Payroll | 57,573,512.62 | 0.55 | 39,828,932.27 | 0.48 | 44.55 | employees’ salary increased |
| Tax payable | 58,151,031.99 | 0.56 | 30,041,321.29 | 0.36 | 93.57 | corporate income tax payable increased |
| Non-current liabilities due within one year | 93,200,042.05 | 0.89 | 56,374,186.31 | 0.68 | 65.32 | long-term borrowings due within one year increased |
| Long-term borrowings | 353,830,000.00 | 3.39 | 42,500,000.00 | 0.51 | 732.54 | long-term borrowings increased |
| Long-term payables | 66,953,833.28 | 0.64 | 16,845,833.40 | 0.20 | 297.45 | finance lease increased |
| Deferred income | 38,699,498.00 | 0.37 | 18,915,195.31 | 0.23 | 104.59 | government grants related to assets increased |
| Deferred income tax liabilities | 353,052.07 | 0.00 | 115,017.00 | 0.00 | 206.96 | deferred income tax liabilities recognized on the basis of taxable temporary differences increased |
3. Investment analysis
A. As at June 30, 2020, the balance of the Company's long-term equity investmentrecorded RMB 2.21 billion, increased by 6.97% compared with the end of prior year.B. Financial assets measured at fair valueDuring the reporting period, the Company has financial assets that were measured at fairvalue and its changes recorded into current gains or losses. The income from the changesin fair value recorded RMB -1,265,439.00.
4. Main holding and associated companies
RMB 10k
| Company | Core business | Registered capital | Total assets | Net assets | Net profit |
| Shenyang Wellhope Ruminant Feed | Feed manufacture and selling | 550.00 | 15,281.14 | 13,254.96 | 1,068.24 |
| Beijing Sanyuan Wellhope Agri-Tech | Feed manufacture and selling | 1,000.00 | 24,377.85 | 21,194.27 | 1,324.85 |
| Dalian Heyuan Agri-Tech | Feed, breeding broiler, day old chick, broiler raising and slaughtering | 10,000.00 | 144,444.39 | 83,682.88 | 5,546.01 |
| Zhang Jiakou Jiahe Animal Husbandry | Hog raising, purchasing and selling | 7,692.00 | 30,360.09 | 26,440.81 | 9,333.37 |
| Anshan Jiuguhe Food | Broiler slaughtering, processing and selling | 4,320.00 | 63,580.12 | 38,391.38 | 9,704.00 |
| Beipiao Hongfa Food | Feed, breeding broiler, day old chick, broiler raising and slaughtering | 3,000.00 | 176,942.95 | 139,549.12 | 13,222.08 |
III. Other Disclosures
1. Possible risks
A. Risks of fluctuations in raw material pricesMost costs of the feed business come from raw materials. Factors in terms of productionchanges in producing areas, import policies, purchasing and storage and grants, exchangerate fluctuations, logistics costs, etc., may trigger fluctuations in the raw material market,which will affect the Company's feed business costs and gross profit margins. Withdeepened globalization of the trade of agricultural products in recent years, thesupply-demand relationship and trading price of raw materials have been affected bymarket conditions such as spot and futures at home and abroad, and the price trend hasbecome more complex followed by increasingly fierce fluctuations, which furtherincreases the difficulties of the Company’s cost management. In addition, the fluctuationsof COVID-19, Sino-US trade relations, international political and economic environmentand other factors have also made the purchase price of raw materials more variable.Solutions:
a. The Company has established strategic partnerships with many top domestic andforeign raw material suppliers, and strategically reduced purchasing costs throughthree-level purchasing mode in terms of head office centralized purchasing, regions’ pricecompare purchasing and local departments’ purchasing of different varieties.b. IT combines its raw material trading business with purchasing management, i.e., theprofessional and practical raw materials’ purchasing team conducts targetedforward-looking researches and real-time tracking on the market, makes great efforts toreduce the purchasing price, such as uniformly managing different varieties, adopting spotpurchasing and futures together.c. The purchasing team works closely with the R&D team to further optimize thepurchasing cost by way of re-formulating the feeds i.e., changing the composition of thefeed to use cheaper alternative raw materials while achieving the same results, which canfurther optimize purchasing costs.d. The Company and Royal De Heus have set up an information sharing channel, whichenables the two sides to timely share the market trends of raw materials and additives, etc.In addition, the two sides may carry out joint purchasing cooperation in the future, which
will greatly enhance the overall bargaining power.B. Risks of fluctuations in livestock and poultry pricesAnimal husbandry industry is a typical cyclical industry and the hysteretic adjustment ofsupply causes the prices fluctuating periodically. At present, China's animal husbandryindustry is still dominated by back yard farms and small-scale farms, these farm ownersshow the character of non-rational decision-making with an obvious “herd effect”, whichfurther aggravates the cyclical fluctuations in the market price.Solutions:
a. In terms of strategy, while steadily developing feed and feed raw materials tradebusinesses, the Company has increased its input in broiler integration business andquickened the expanding of hog raising business to create an operating model powered bybroiler and hog integration businesses, which can effectively reduce the risks brought bythe cyclic fluctuations in the industries.b. In terms of business, the Company's broiler integration business has established anindustrial chain, whilst in 2019 it also extended hog raising business to the downstreamindustries, now the slaughtering business has been operated well. The continuouslyimproved industrial chain structure enables the price fluctuation of each sector to be fullyhedged, to maximize the price fluctuation of the whole industrial chain.c. In terms of management, the Company has always been committed to improving theproduction standard and operation model of each business sector, reducing overalloperating costs by optimizing the production indicators and improving per capita efficiency.Costs advantage can mitigate the negative impacts of downward industry on the Companywhile improve the overall profitability when facing a booming market.C. Risks of serious animal diseaseFeed and animal raising are the Company's two core businesses. Disease outbreak is oneof the main risks faced by animal raising companies. Once a disease happens, it will causepanic in the market, which will reduce the demands, then lessen the production andincomes as well as increase costs. The feed industry mainly serves downstream animalraising industry; thus, the downstream market will directly affect the performance of feedbusiness. As an unpredictable emergency, an explosive disease will undoubtedly have astrong impact on the Company's operations.
Solutions:
a. The Company attaches great importance to regional distribution and business
structure, which is the most direct way to divert the risk of epidemic.b. It continues to improve the prevention technology of major epidemics, completes theearly warning system and strives to control epidemics effectively before spreading.c. When the epidemic comes, the speed of response is particularly critical, the faster toresponse, the less to loss. The Company has set an emergency command system for majorepidemics to minimize losses when they occur.d. The Company has constantly strengthened the analysis and research capabilities formajor epidemics, enhance animal’s immunity from the perspective of animal nutrition andveterinary services.e. For ASF, the Company has formed a relatively complete prevention system fromproduct researches to farm management. Specific prevention measures detailed in SectionIV hereof-Hog Raising Business.D. Risks of the industrial pattern adjustment caused by environmental protectionpoliciesChina has put forward some environmental protection regulations in recent years, such as
Environmental Protection Tax Law, etc., which show the government's determination toincrease supervision on environmental protection in animal husbandry industry, whilst thelocal governments have also issued certain new regulations. It can be seen that thecontinuously strengthened environmental protection is the trend of the industry also aninevitable reality, which will further weed out unqualified players and reshuffle theindustry.Solutions:
During the start-up period, the Company had input "Save Resources, Committed toEnvironmental Protection" as part of its Vision. During the past 25 years, the Company hasalways considered saving resources and protecting the environment as its importantmission, taken strict compliance with laws and regulations and implementation ofenvironmental protection requirements as key performance appraisal indicators formanagers.a. Regarding to raising and slaughtering, in the face of increasingly strict environmental
protection requirements, the Company have comprehensively identified environmentalrisk points and formulated emergency plan for environmental emergencies so as tomaintain the stable operation. For the key pollutant discharge plants, the Company hasdeveloped a complete self-monitoring program, which can find problems to repair,eliminate hidden dangers in a timely manner. Meanwhile, it also deploys more resourcesand manpower to ensure these plants always complying with national standards.b. Regarding to feed production, the Company has always implemented nationalenvironmental protection standards with the most rigorous attitude, established completecontrol measures for waste gas, noise, wastewater, solid waste and other pollutiongenerated during the production process. Moreover, it uses eco-friendly raw materials andadditives in feed formulations and continuously develops safe diet to reduce the emissionsof heavy metals, nitrogen and phosphorus.E. Risks of exchange rate fluctuationsThe Company's international business started early and developed rapidly, the exchangerate fluctuations have released great influence on raw material purchasing, product exportand overseas investment, presenting as follows: Firstly, international development hasmade the global purchasing of raw materials becoming normally, therefore, the risks ofexchange rate fluctuations are particularly evident in the raw materials that are based onoversea supply. Secondly, the Company’s export business of broiler parts products isgrowing rapidly with customers from many countries and regions across the world, andthe exchange rate fluctuations are inevitably caused by the settlements of multiplecurrencies. Finally, due to the large overseas investment and overseas operations, thecross-border capital transactions and settlements will also be affected by exchange ratefluctuations.Solutions:
a. The Company closely focus on the dynamic international foreign exchange market,whilst enhances the awareness of foreign exchange risk and improves the researching andforecasting capabilities of the foreign exchange market.b. The Company continues to improve the bargaining power in foreign trade transaction byenhancing the competitiveness of products and using RMB for settlement, reduce theexchange rate risks by adding insured value clause and the exchange rate risk allocation
clause in the contract.c. By making full use of foreign exchange forwards, swaps and options (combination) andother instruments to maintain the exchange rate for foreign exchange exposure.d. According to specific conditions of different countries, based on the principle of "usingforeign currencies in foreign trade", the Company reasonably matches the income anddebts to control the exchange rate risks.F. Risks of food safetyIn recent years, there have been some food safety incidents in China, which affectedconsumers' confidence in food safety. China has continuously improved the legislation onfood safety and food sources, conducted forceful measures on handling food violations.Once the food safety incident happens, it will directly damage the interests of consumersand cause panic, which may greatly impact the downstream demand and affect the brandand performance of the enterprises.Solutions:
a. Regarding to feed business, the Company has established a three-level qualitymanagement mechanism and testing system, which consists of headquarters, regions andlocal departments, adopted ISO 9001, ISO 22000, ISO-IEC 17025 and other internationalstandards, thoroughly implemented a series of quality standards to realize the wholeprocess control of products and established the traceability system. The Company workshard to popularize near-infrared detection technology to improve detection efficiency andshare data in time, by doing this, it can quickly realize risk warning and monitor heavymetals, harmful microorganisms and mycotoxins, providing an important guarantee forfeed products. In addition, by drawing on the experiences of European antibiotic-free feed,and basing on current situation in China, the Company has realized significant progressesin antibiotic alternatives, at present, all the Company’s feed products have stepped intoantibiotic free.b. Regarding to broiler integration business, the integrated operation can ensure theample supply of raw materials and strictly control the whole process from feed production,broiler rearing, slaughtering, raw meat and food processing. Through standardizedmanagement and streamline operation, it can integrate bio-safety, drug residue controland in-process hygiene to achieve food safety traceability.
Section V Important DisclosuresI. Shareholders' Meeting Convened during the Reporting Period
| Meeting | Date | Website designated for disclosing the resolution | Resolution disclosing date |
| 2019 Annual Shareholders' Meeting | April 20, 2020 | www.sse.com.cn | April 21, 2020 |
| Whether distribute dividend or convert capital reserve into share capital | No |
| Dividend per 10 shares (yuan, tax included) | 0 |
III. Execution of Commitment
| Background of making commitment | Type of commitment | Commitment party | Content | Date of making commitment and validity | Whether there is a time limit | Whether performs strictly |
| Commitment relating to IPO | Handling horizontal competition | Nature person shareholders holding more than 5% of the shares | I warrant and commit that I will not directly or indirectly develop, operate or assist in the operation or participate in or engage in any activity that is competitive with the business of Liaoning Wellhope, if Liaoning Wellhope will increase any business scope after the date of signing this commitment, I promise to give up the business. | March 2, 2011, long-term valid | yes | yes |
| Handling related party transaction | Legal person shareholders holding more than 5% of the shares-Heli Investment | Our company warrants and commits that our company will not directly or indirectly develop, operate or assist in the operation or participate in or engage in any activity that is competitive with the business of Liaoning Wellhope, if Liaoning Wellhope will increase any business scope after the date of signing this commitment, our company promises to give up the business. | March 2, 2011, long-term valid | yes | yes | |
| Other | Jin Weidong, Wang Fengjiu, Shao Caimei, Wang Zhongtao, Ding Yunfeng | The controlling shareholder Jin Weidong and persons acting in concert with him undertake that there are no false records, misleading statements or material omissions in the prospectus of IPO and its abstract, and shall bear individual and joint legal liabilities for its authenticity, accuracy and completeness. | Long-term valid | yes | yes | |
| Other | Liaoning Wellhope | The Company undertakes that there are no false records, misleading statements or material omissions in the prospectus of IPO and its abstract, and it shall bear individual and joint legal liabilities for its authenticity, accuracy and completeness. | Long-term valid | yes | yes | |
| Commitment relating to re-Financing | Dividend | Liaoning Wellhope | Liaoning Wellhope Three-Year’s Shareholder Dividend Plan (2017-2019) | December 15, 2017, three years | yes | yes |
IV. Accounting Firm Engaged by the CompanyThe Company did not change the accounting firm during the reporting period.SuyaJincheng CPA LLP undertakes the Company's auditing in 2020.V. Major Litigation and Arbitration Matters
NonVI. Statement of the Integrity of the Company, its Controlling Shareholder and Actual
Controller during the Reporting Period
During the reporting period, there has been no occurrence of the Company and its
controlling shareholder and actual controller failing to perform the effective judgment of
the court, needing to pay a large amount of unliquidated debt due.VII. Employee’s Equity Incentive Plan, Stock Ownership Plan or other Incentive
Measures and Related Impacts
| Overview | Query URLs |
| On March 27, 2020, the board meeting approved the proposals of unlocking restricted common shares after achieving the performance objective disclosed in 2018 Restricted Stock Incentive Plan, adjusting the repurchase price of restricted shares and repurchasing and writing off part of locked restricted shares. A. In this year, 367 managers can totally unlock 4.233 million restricted shares. B. As the Company's dividend plan for 2018 had been implemented in June 13, 2019. According to 2018 Restricted Stock Incentive Plan, the Board adjusted the repurchase price of restricted shares as RMB 4.67 per share. C. Due to 5 individuals left the Company and 31 individuals’ performance appraisal did not meet the standards to unlock all the restricted shares held by them, which had been disclosed in the 2018 Restricted Stock Incentive Plan, 244,500 shares held by these 36 individuals would be repurchased and written off by the Company. | See announcements disclosed on March 31, 2020 at www.sse.com.cn and designated media. |
| On April 3, 2020, the Company disclosed the announcement that 4.233 million restricted shares in the first lock-up period have been unlocked and can be traded in the capital market on April 9, 2020. | See announcements disclosed on March April 3, 2020 at www.sse.com.cn and designated media. |
| On May 15, 2020, the Company disclosed the announcement that it will repurchase and write off 244,500 shares held by 36 individuals on May 19, 2020. | See announcements disclosed on May 15, 2020 at www.sse.com.cn and designated media. |
VIII. Significant Related Party TransactionRelated party transactions in regard of day-to-day operations
RMB
| Related party | Relationship | Transaction type | Transaction content | Pricing principle | Transaction amount | Settlement mode |
| Nepal Wellhope Agri-tech Pvt. Ltd. | Joint venture | Selling | Feed | Comparable uncontrolled price | 11,852.89 | Bank transfer |
| Linghai Jiuguhe Feed | Associated company | Selling | Broiler feed and raw materials | Comparable uncontrolled price | 22,500,000.44 | Bank transfer |
| Tai’an Jiuguhe Agriculture | Associated company | Selling | Broiler feed and raw materials | Comparable uncontrolled price | 44,087,063.31 | Bank transfer |
| Anshan Jiuguhe Food | Associated company | Selling | Broiler | Comparable uncontrolled price | 55,674,764.24 | Bank transfer |
| Qingdao Shenfeng Agri-Tech | Associated company | Selling | Swine feed, feed raw materials | Comparable uncontrolled price | 22,166,911.48 | Bank transfer |
| Huludao Jiuguhe Food | Associated company | Selling | Broiler parts product | Comparable uncontrolled price | 591,354.13 | Bank transfer |
| Dadong Chengsan Animal Husbandry | Associated company | Selling | Feed raw materials and feed | Comparable uncontrolled price | 2,303,424.77 | Bank transfer |
| Guangzhou Yikun Trading | Associated company | Selling | Feed raw materials | Comparable uncontrolled price | 2,846,401.98 | Bank transfer |
| Schippers(Beijing) | Associated company | Selling | Other | Comparable uncontrolled price | 703,164.60 | Bank transfer |
| Anshan Fengsheng Food | Associated company | Selling | Broiler | Comparable uncontrolled price | 91,615,790.14 | Bank transfer |
| Dalian Chengsan Animal Husbandry | Associated company | Selling | Feed raw materials | Comparable uncontrolled price | 2,883,926.12 | Bank transfer |
| Dalian Sida Food | Associated company | Selling | Broiler | Comparable uncontrolled price | 90,753,520.15 | Bank transfer |
| Anshan Jiuguhe Food | Associated company | Purchasing | Broiler parts product | Comparable uncontrolled price | 19,601,413.70 | Bank transfer |
| Huludao Jiuguhe Food | Associated company | Purchasing | Broiler parts product | Comparable uncontrolled price | 255,807.60 | Bank transfer |
| Guangzhou Yikun Trading | Associated company | Purchasing | Feed raw materials | Comparable uncontrolled price | 1,089,320.00 | Bank transfer |
| Jinzhou Jiufeng Food | Associated company | Purchasing | Broiler parts product | Comparable uncontrolled price | 10,835,045.50 | Bank transfer | |
| Schippers(Beijing) | Associated company | Purchasing | Other | Comparable uncontrolled price | 951,415.87 | Bank transfer | |
| Tai’an Jiuguhe Agriculture | Associated company | Purchasing | Feed | Comparable uncontrolled price | 95,407,968.34 | Bank transfer | |
| Qingdao Shenfeng Agri-Tech | Associated company | Purchasing | Feed | Comparable uncontrolled price | 12,456,335.41 | Bank transfer | |
| Dalian Chengsan Animal Husbandry | Associated company | Purchasing | Broiler | Comparable uncontrolled price | 83,688,371.22 | Bank transfer | |
| Linghai Jiuguhe Feed | Associated company | Purchasing | Other | Comparable uncontrolled price | 5,181,269.36 | Bank transfer | |
| Shenyang Zhongwenjie Bio-Tech | Associated company | Purchasing | Animal medicine and vaccine | Comparable uncontrolled price | 15,000.00 | Bank transfer | |
| Total | / | 565,620,121.25 | / | ||||
| Large amount sales return | non | ||||||
| Explanation of related party transaction | The Company and its associated companies know each other better and have maintained long-term cooperation relationships, which can strengthen the trust of products produced by partners, reduce transaction cost, improve working efficiency and avoid trading disputes. Meanwhile, purchasing raw materials from related parties can ensure the quality. Moreover, by participating in the management and exerting influence on related companies can help them to maintain a long-term and stable supply, also help them reduce the marketing pressure. The purpose of conducting related party transactions is to satisfy the needs of the Company's production and operation, the purchasing or selling price is determined according to the market price of similar products. Such transactions do not violate relevant laws, Company Constitution, etc., and do not damage the rights and interests of shareholders. | ||||||
IX. Anti-poverty Project of the Company
1. Targeted poverty alleviation
The 19th National Congress of the Communist Party of China has put forward totake targeted poverty alleviation as one of the three major challenges that must be foughtto secure a decisive victory in building a moderately prosperous society in allrespects. The year 2020 will be a decisive year to win the battle against poverty andto finish building a moderately prosperous society in all respects. Driving by theprinciple of contributing to the society, the Company positively responded to the call andrequirements of the Party Central Committee and the government at all levels tovigorously contribute to targeted poverty alleviation.
2. Overview of targeted poverty alleviation
In response to the call of Lankao County Party Committee and county government, LankaoDuck Company, one of the Company’s associated companies, launched a duck integrationproject targeted poverty alleviation in Lankao County, which implements the operatingmodel of rearing ducks by company and contract farms. In line with the principle of mutualbenefit, Lankao Duck signs contracts with farmers and adopts unified supply of ducklings,feed, medicine, technical service and repurchasing, farmers are not required to prepareworking capital. In the first half of 2020, Lankao Duck offered 784 contracts to localfarmers and repurchased 8.57 million ducks with direct expenditure of RMB 5.11 million.
3. Figures of targeted poverty alleviation
RMB 10k
| Index | Details |
| 1. Overall | |
| including: funds for poverty alleviation | 12.75 |
| A. In details | |
| Targeted poverty alleviation | 12.75 |
5. Follow-up targeted poverty alleviation
On June 16th, 2019, the Company signed a strategic cooperation agreement with Tai'qianCounty People's Government of Henan Province, one of the nationally designated poorcounties. The two parties will build high-level production base of white feather broilerintegration, the Company will also help farmers to relieve financial pressure and increaseincome according to local targeted poverty alleviation policies.The Company will continue to focus on agriculture-related poverty alleviation projects,assist in cultivating talents, providing job opportunities and increasing income of farmers.Meanwhile, it will give full play to its advantages to integrate resources and contribute tothe goal of building a moderately prosperous society in all respects.X. Environmental Protection Policy
1. Information of pollution discharge
Puyang Wellhope Food Co., Ltd. (hereinafter referred to as "Puyang Wellhope"), one of thesubsidiaries of the Company, has been listed as a company with sewage & gas wasteemission of Puyang City, Dalian Zhongjia Wellhope Food Co., Ltd. (hereinafter referred toas "Zhongjia Food") and Dalian Huakang Xinxin Food Co., Ltd. (hereinafter referred to as"Huakang Food"), subsidiaries of the Company, have been listed as an entity with sewage& gas waste emission of Dalian City, Kaifeng Wellhope Meat Food Co., Ltd. (hereinafterreferred to as "Kaifeng Wellhope"), one of the subsidiaries of the Company, has been listedas an entity with sewage waste emission of Kaifeng City. Shenyang Huakang Broiler Co., Ltd.(hereinafter referred to as "Shenyang Huakang"), one of the subsidiaries of the Company,has been listed as an entity with sewage waste emission of Shenyang City, PingyuanWellhope Food Processing Co., Ltd. (hereinafter referred to as "Pingyuan Wellhope"), oneof the subsidiaries of the Company, has been listed as an entity with sewage & gas wasteemission of Handan City, Changchun Wellhope Food Co., Ltd. (hereinafter referred to as"Changchun Wellhope"), one of the subsidiaries of the Company, has been listed as anentity with sewage & gas waste emission of Changchun City; Chifeng Wellhope FuxinyuanCo., Ltd. (hereinafter referred to as "Chifeng Wellhope"), one of the subsidiaries of theCompany, has been listed as an entity with sewage & gas waste emission of Chifeng City.Details are presented as follows:
Puyang Wellhope: The main pollutants include waste gas and waste water, among which
waste water mainly contains COD, ammonia nitrogen, total phosphorus, pH, suspendedsolids, biochemical oxygen requirement, animal and plant oil, total coliform and totalnitrogen. The waste gas mainly contains SO2, nitric oxide and particulate matter. Emissionmethod: 1 waste water emission outlet for sewage treatment located in the southeastcorner of the sewage monitoring station, 1 waste gas exhaust outlet distributed in theboiler room in the northeast corner of the plant. Puyang Wellhope strictly implements theDischarge Standard of Water Pollutants for Meat Processing Industry (GB 13457-1992)with the emission permit (9141092367412881xt001p) and the indirect emission limit inthe water inflow agreement of Nanle County Sewage Treatment Co., Ltd, as well as followsthe requirements of Boiler Air Pollutant Emission Standard and emission permit(9141092367412881xt001p). During the reporting period, the discharged pollutantsamounted to 2.1756 tons of COD and 0.11254 tons of ammonia nitrogen controlled withinthe permitted scope, and the "three wastes" treatment met the requirements withoutexceeding the standards.Kaifeng Wellhope: The main pollutant is waste water, which mainly contains COD,ammonia nitrogen, total phosphorus, pH, suspended solids, biochemical oxygenrequirements, animal and plant oil, total coliform and total nitrogen. Emission method: 1waste water emission outlet for sewage treatment located in the east corner of the plant.Kaifeng Wellhope strictly implements Level 2 standard of Discharge Standard of WaterPollutants for Meat Processing Industry (GB 13457-1992) with the emission permit(91410212MA4057G88A001R) and the sewage emission limit of No. 2501 EnvironmentalEvaluation Criteria. During the reporting period, the discharged pollutants amounted to
3.52 tons of COD and 0.72 tons of ammonia nitrogen controlled within the permittedscope, and the "three wastes" treatment met the requirements without exceeding thestandards.Zhongjia Food: The main pollutants include waste gas and waste water, among whichwaste water mainly contains COD, ammonia nitrogen, total phosphorus, pH, suspendedsolids and total nitrogen. The waste gas mainly contains SO2, nitric oxide and particulatematter. Emission method: 1 waste water emission outlet for sewage treatment located inthe west side of the new sewage treatment workshop, 1 waste gas exhaust outletdistributed on the roof of the boiler room. Zhongjia Food strictly implements the local
level of Integrated Wastewater Discharge Standard of Liaoning Province, DB 21.1627-2008and follows the Boiler Air Pollutant Emission Standard for waste gas emission (GB13271-2014). During the reporting period, the discharged pollutants were controlledwithin the permitted scope, the government did not require the total amount of pollutantdischarge of Zhongjia, its "three wastes" treatment met the requirements withoutexceeding the standards.Shenyang Huakang: The main pollutant is waste water, which mainly contains COD,ammonia nitrogen, pH, suspended solids, total phosphorus and total nitrogen. Emissionmethod: 1 waste water emission outlet for sewage treatment located in the northeast ofthe sewage treatment station. Shenyang Huakang strictly implements level 3 standard ofIntegrated Wastewater Discharge Standard of Liaoning Province and the gas emissionfollows Boiler Air Pollutant Emission Standard (GB13271-2014). During the reportingperiod, the "three wastes" treatment met the requirements without exceeding thestandards.Huakang Food: The main pollutants include waste gas and waste water, among whichwaste water mainly contains COD, ammonia nitrogen, total phosphorus, pH, suspendedsolids and total nitrogen, water gas mainly includes SO2, nitric oxide and particulate matter.Emission method: 1 waste water emission outlet for sewage treatment located in thesoutheast corner of sewage treatment workshop and 1 waste gas exhaust outletdistributed on the roof of the boiler room. Huakang Food strictly implements the locallevel of Integrated Wastewater Discharge Standard of Liaoning Province, DB 21.1627-2008and follows the Boiler Air Pollutant Emission Standard for waste gas emission (GB13271-2014). During the reporting period, the discharged pollutants were controlledwithin the permitted scope, and the "three wastes" treatment met the requirementswithout exceeding the standard.Pingyuan Wellhope: The main pollutants include waste gas and waste water, among which,the waste water mainly contains COD, ammonia nitrogen, suspended solids, BOD
andanimal and plant oil, the waste gas mainly contains SO
, nitrogen oxide and smoke.Emission method: 1 wastewater discharge outlet for sewage treatment distributed at theentrance of sewage monitoring station in the northeast corner of the plant, 3 waste gasexhaust outlets distributed in the east side of the boiler room. Pingyuan Wellhope strictly
implements the wastewater discharge standard of Meat Processing Industry (GB13457-1992) and Level 2 Discharge Standard of Livestock and Poultry Slaughtering andProcessing (emission permit 91130423MA07LFUD6B001Q) and inlet water qualityrequirements of Linzhang County. Exhaust gas emission implements the Boiler AirPollutant Emission Standard (GB 13271-2014) with the emission permit(91130423MA07LFUD6B001Q). During the reporting period, the discharged pollutantswere controlled within the permitted scope without exceeding the standards.Changchun Wellhope: The main pollutant is waste water, mainly containing COD, ammonianitrogen, total phosphorus, pH, suspended solids, biochemical oxygen demand, animaland plant oil, total coliform, total nitrogen. Emission method: 1 waste water dischargeoutlet for sewage treatment located at Xiajiadian Street, Dehui City. Changchun Wellhopestrictly implements Level 2 standard of Pollution Discharge Standard of Meat ProcessingIndustry (GB 13457-1992) with the emission permit (91220183MA13WF2K34001Y). Duringthe reporting period, the discharged pollutants amounted to 3.52 tons of COD and 0.72tons of ammonia nitrogen, both of which were controlled within the permitted scope andthe treatment of "three wastes" met the requirements without exceeding the standards.Chifeng Wellhope: The main pollutants include waste gas and waste water, among whichwaste water mainly contains COD, ammonia nitrogen, total phosphorus, pH, suspendedsolids, biochemical oxygen demand, animal and plant oil, total coliform group and totalnitrogen. Emission method: equipped with wastewater outfalls located in the south of thecompany’s sewage monitoring station. Chifeng Wellhope strictly implements the DischargeStandard of Water Pollutants for Meat Processing Industry (GB13457-1992). It also built awaste gas discharge outlet located in the harmless treatment workshop, which adopts theair pollutant emission standard GB16297-1996 and the odor pollutant emission standardGB14554-93. During the reporting period, the discharged pollutants amounted to0.92 tonsof COD emissions and 0.034 tons of ammonia nitrogen, both of which were controlledwithin the permitted range.
2. Circumstance of building and operating pollution control facilitiesPuyang Wellhope:
a. Sewage treatment: Puyang Wellhope has a 2000-tons-per-day sewage treatment station,which adopts the treatment process of "pretreatment-oil separation-A2O -disinfection" to
treat the wastewater. Its environmental protection facilities are running normally, and thepollutant emission indexes all meet the required standards.b. Waste gas treatment: Gas generated by the waste water pool of the sewage treatmentstation is collected and purified by activated carbon adsorption and then dischargedthrough the 15-meters-high chimney in accordance with related standard; the traditionalcoal-fired boilers are replaced by gas-fired boilers, and all kinds of pollutants meet theemission standards.Kaifeng Wellhope:
Sewage treatment: Kaifeng Wellhope has a 1500-tons-per-day sewage treatment station,which adopts the treatment process of "air floatation-A2O" to treat the wastewater. Itsenvironmental protection facilities are running normally, and the pollutant emissionindexes all meet required standards.Dalian Zhongjia:
a. Sewage treatment: Zhongjia Food has a 1200-tons-per-day sewage treatment station,which adopts the treatment process of "mechanical barrier-oil separator-regulationpool-hydrolysis pool- catalytic oxidation pool-sedimentation pool-sand filter" to treat thewastewater.b. Waste gas treatment: Dedusting smoke and dust by wet method and conductingdesulfurization by magnesium oxide. Discharging gas by a 25-meters-high chimney to haseffectively met related standards.Shenyang Huakang:
Sewage treatment: Shenyang Huakang has a 2220-tons-per-day sewage treatment station,which adopts the treatment process of "pretreatment- oil separation-A2O-disinfection" totreat wastewater. Its environmental protection facilities are running normally, and thepollutant emission indexes have reached all required standards.Huakang Food:
a. Sewage treatment: Huakang Food has 900-tons-per-day and 300-tons-per-day sewagetreatment stations that adopt the treatment process of "mechanical barrier-oilseparator-regulation pool-air flotation- hydrolysis pool-A2O-sedimentation pool-advancedtreatment -sand filter-clean water pool", which can achieve required standards.b. Waste gas treatment: Dedusting the smoke and dust by wet method and conducting
desulfurization by magnesium oxide. Gas emission meet all required standards.Pingyuan Wellhope:
a. Sewage treatment: Pingyuan Wellhope has a 1000-tons-per-day sewage treatmentstation, which adopts AO treatment process to dispose wastewater. Its environmentalprotection facilities are running normally, and the pollutant emission indexes have reachedall required standards.b. Waste gas treatment: Gas generated by the waste water pool of the sewage treatmentstation is collected and purified by activated carbon adsorption and then dischargedthrough the 15-meters-high chimney in accordance with related standard; the traditionalcoal-fired boilers are replaced by gas-fired boilers with low carbon, all kinds of pollutantsmeet the emission standards.Changchun Wellhope:
Sewage treatment: Changchun Wellhope has a 1000-tons-per-day sewage treatmentstation, which adopts AO treatment process to dispose wastewater. Its environmentalprotection facilities are running normally, and the pollutant emission indexes have reachedall required standards.Chifeng Wellhope:
a. Wastewater treatment: At present, Chifeng Wellhope has invested RMB 20 million tobuild a sewage treatment plant that can treat 2,400 tons of wastewater per day, andinvested RMB 34 million to construct biogas project with a daily output of 8000 m?, whichcan ferment waste water and manure, etc., produced biogas can be used for boilerproduction, biogas residue and slurry used as fertilizer to grain.b. Waste gas treatment: Chifeng Wellhope has taken certain measures to lessen thewaste gas, such as, stop feeding hogs and broilers when enter the plant and slaughter theanimals on the same day, wash the houses in time, build closed waiting houses and installfan exhaust to enhance ventilation.
3. Environmental impact assessment of construction projects and other administrativepermits for environmental protectionDuring the reporting period, all the construction projects of the Company met therequirements of environmental impact assessment and other environmental protection
administrative licenses. The Company has strictly implemented related environmentalprotection requirements.
4. Emergency plan for environmental incident
According to the requirements of environmental protection authorities and relevant lawsand regulations, each plant of the Company has identified the site with potentialenvironmental risk and formulated the emergency plans for environmental incident;meanwhile, related companies conducted emergency exercises to improve self-helpcapability and continued to identify the hidden danger to ensure normal operations.
5. Self-monitoring program for environment
In accordance with requirements of self-monitoring environment and informationdisclosure, the pollutant discharging entities of the Company have formulatedself-monitoring programs to monitor environment and disclose information as scheduled.
Section VI Changes in Common Shares and Shareholder InformationI. Changes in Common Shares
1. Changes in shares
Unit: share
| Before changing | Increase/decrease in the reporting period | After changing | ||||
| Shares | Percentage % | Other | Subtotal | Shares | Percentage % | |
| 1. Restricted shares | 91,127,927 | 9.88 | -73,375,136 | -73,375,136 | 17,752,791 | 1.93 |
| A. Shares held by the state | ||||||
| B. Shares held by state-owned corporations | ||||||
| C. Shares held by other domestic investors | 88,831,340 | 9.63 | -73,375,136 | -73,375,136 | 15,456,204 | 1.68 |
| including: Shares held by domestic non-state-owned corporations | 54,133,857 | 5.87 | -54,133,857 | -54,133,857 | 0 | |
| Shares held by domestic natural persons | 34,697,483 | 3.76 | -19,241,279 | -19,241,279 | 15,456,204 | 1.68 |
| D. Shares held by foreign investors | 2,296,587 | 0.25 | 2,296,587 | 0.25 | ||
| including: shares held by foreign corporations | 2,296,587 | 0.25 | 2,296,587 | 0.25 | ||
| Shares held by foreign natural persons | ||||||
| 2. Non-restricted shares | 831,176,469 | 90.12 | 73,130,636 | 73,130,636 | 904,307,105 | 98.07 |
| A. RMB common shares | 831,176,469 | 90.12 | 73,130,636 | 73,130,636 | 904,307,105 | 98.07 |
| 3. Total shares | 922,304,396 | 100.00 | -244,500 | -244,500 | 922,059,896 | 100.00 |
3. Changes in restricted shares
Unit: share
| Name of shareholder | Opening restricted shares | Number of unlocking shares in the reporting period | Increase of restricted shares in the reporting period | Restricted shares in the end of the reporting period | Reason for restriction | Date of removing restriction |
| Sinosafe Assets Management- Industrial and Commercial Bank of China- Stably Increasing Profit No. 12 Collective Asset Management Product | 29,527,559 | 29,527,559 | 0 | non-public issuing stock | April, 24, 2020 | |
| Shenzhen Galaxy Investment Co., Ltd. | 4,921,259 | 4,921,259 | 0 | non-public issuing stock | April, 24, 2020 | |
| Zhongyi Asset Management- China Minsheng Banking Corp- Zhongyi Asset-Non-public Offering Selection No. 103 Asset Management Product | 19,685,039 | 19,685,039 | 0 | non-public issuing stock | April, 24, 2020 | |
| Wu Ying | 14,763,779 | 14,763,779 | 0 | non-public issuing stock | April, 24, 2020 | |
| Employees who were granted restricted shares(totalling) | 14,575,000 | 4,233,000 | 244,500 | 10,097,500 | equity incentive | Within 12, 24, 36 months after completing restricted stock registration |
| Jin Weidong | 3,062,117 | 3,062,117 | non-public issuing stock | April, 25, 2022 | ||
| DE HEUS MAURITIUS | 2,296,587 | 2,296,587 | non-public issuing stock | April, 25, 2022 | ||
| Ding Yunfeng | 1,531,058 | 1,531,058 | non-public issuing stock | April, 25, 2022 | ||
| Wang Zhongtao | 765,529 | 765,529 | non-public issuing stock | April, 25, 2022 | ||
| Total | 91,127,927 | 73,130,636 | 244,500 | 17,752,791 | / | / |
| Total number of common shareholders as at June 30, 2020 | 25,102 |
2. Top ten shareholders and top ten shareholders holding unrestricted shares as at theend of the reporting period
Unit: share
| Shareholding of top ten shareholders | |||||||||
| Name of shareholder | Changes | Total shares held at the period-end | % | Restricted shares held | Pledged or Frozen | Nature of shareholder | |||
| Status | Shares | ||||||||
| Jin Weidong | 149,549,498 | 16.22 | 3,062,117 | Pledged | 59,470,000 | Domestic natural person | |||
| DE HEUS MAURITIUS | 82,303,939 | 8.93 | 2,296,587 | 0 | Foreign corporation | ||||
| Ding Yunfeng | 81,929,558 | 8.89 | 1,531,058 | Pledged | 47,620,000 | Domestic natural person | |||
| Shao Caimei | 49,773,878 | 5.40 | 0 | Domestic natural person | |||||
| Zhang Tiesheng | 48,360,000 | 5.24 | Pledged | 6,600,000 | Domestic natural person | ||||
| Wulian Heli Equity Investment Partnership (LP) | 48,360,000 | 5.24 | 0 | ||||||
| Wang Fengjiu | -1,181,600 | 47,964,602 | 5.20 | Pledged | 5,190,000 | Domestic natural person | |||
| Wang Zhongtao | 46,625,229 | 5.06 | 765,529 | 0 | Domestic natural person | ||||
| Sinosafe Assets Management- Industrial and Commercial Bank of China- Stably Increasing Profit No. 12 Collective Asset Management Product | -221,900 | 29,305,659 | 3.18 | Unknown | 0 | Other | |||
| Zhongyi Asset Management- China Minsheng Banking Corp- Zhongyi Asset-Non-public Offering Selection No. 103 Asset Management Product | 19,685,039 | 2.13 | Unknown | 0 | Other | ||||
| Top ten shareholders holding unrestricted shares | |||||||||
| Name of shareholder | Unrestricted shares held | Shares by type | |||||||
| Type | Shares | ||||||||
| Jin Weidong | 146,487,381 | RMB common stock | 146,487,381 | ||||||
| Ding Yunfeng | 80,398,500 | RMB common stock | 80,398,500 | ||||||
| DE HEUS MAURITIUS | 80,007,352 | RMB common stock | 80,007,352 | ||||||
| Shao Caimei | 49,773,878 | RMB common stock | 49,773,878 | ||||||
| Zhang Tiesheng | 48,360,000 | RMB common stock | 48,360,000 |
| Wulian Heli Equity Investment Partnership (LP) | 48,360,000 | RMB common stock | 48,360,000 |
| Wang Fengjiu | 47,964,602 | RMB common stock | 47,964,602 |
| Wang Zhongtao | 45,859,700 | RMB common stock | 45,859,700 |
| Sinosafe Assets Management- Industrial and Commercial Bank of China- Stably Increasing Profit No. 12 Collective Asset Management Product | 29,305,659 | RMB common stock | 29,305,659 |
| Zhongyi Asset Management- China Minsheng Banking Corp- Zhongyi Asset-Non-public Offering Selection No. 103 Asset Management Product | 19,685,039 | RMB common stock | 19,685,039 |
| Relationship of above shareholders or statement made by the parties acting in concert | 1. Jin Weidong, Ding Yunfeng, Wang Fengjiu, Shao Caimei and Wang Zhongtao act in concert. 2. Jin Weidong is the actual controller of Wulian Heli Equity Investment Partnership. 3. No relation or concerted action is found among other shareholders. | ||
| No. | Name of shareholder | Restricted shares held | Restricted shares available for transaction | Restriction condition | |
| Date available for transaction | Newly increased shares available for transaction | ||||
| 1 | Jin Weidong | 3,062,117 | April, 25, 2022 | Restricted period- 36 months | |
| 2 | DE HEUS MAURITIUS | 2,296,587 | April, 25, 2022 | Restricted period- 36 months | |
| 3 | Ding Yunfeng | 1,531,058 | April, 25, 2022 | Restricted period- 36 months | |
| 4 | Wang Zhongtao | 765,529 | April, 25, 2022 | Restricted period- 36 months | |
| Relationship of above shareholders or statement made by the parties acting in concert | 1. Jin Weidong, Ding Yunfeng and Wang Zhongtao act in concert; 2. No relation or concerted action is found among other shareholders. | ||||
Section VII Preference ShareNot Applicable
Section VIII Directors, Supervisors and Senior ManagementI. Changes in Shareholdings
1. Changes in shareholdings of incumbent and outgoing directors, supervisors andsenior management during the reporting period
Unit: share
| Name | Office title | Opening shareholding (shares) | Closing shareholding (shares) | Changes in shareholding (shares) | Reason of Changing |
| Jin Weidong | Director | 149,549,498 | 149,549,498 | ||
| Ding Yunfeng | Director | 81,929,558 | 81,929,558 | ||
| Wang Fengjiu | Senior management | 49,146,202 | 47,964,602 | -1,181,600 | Selling in the secondary market |
| Shao Caimei | Director | 49,773,878 | 49,773,878 | ||
| Wang Zhongtao | Supervisor | 46,625,229 | 46,625,229 | ||
| Wang Zhenyong | Senior management | 9,800,000 | 9,800,000 | ||
| Zhang Wenliang | Director | 8,565,100 | 8,565,100 | ||
| Zhao Xin | Director | 4,470,160 | 4,470,160 | ||
| Qiu Jiahui | Senior management | ||||
| Hu Jianmin | Independent director | ||||
| Liu Huan | Independent director | ||||
| Wang Zhe | Independent director | ||||
| Jacobus Johannes de Heus | Director | ||||
| Marcus Leonardus van der Kwaak | Supervisor | ||||
| Yuan Minger | Supervisor | ||||
| Li Jun | Supervisor | ||||
| Ren Bingxin | Supervisor | 5,429,500 | 5,429,500 |
Section IX Corporate BondNot applicable
Section X Financial StatementsI. Auditing Report
Not applicableII. Financial Statements
Consolidated Balance Sheet
June 30, 2020
RMB
| Item | June 30, 2020 | December 31, 2019 |
| Current assets: | ||
| Monetary capital | 1,622,191,216.53 | 1,554,781,324.13 |
| Trading financial assets | 100,000,000.00 | 40,000,000.00 |
| Derivative financial assets | 9,100,936.30 | 3,912,584.30 |
| Notes receivable | 2,205,961.50 | 3,696,180.25 |
| Accounts receivable | 576,179,529.39 | 362,060,802.38 |
| Prepayments | 263,956,886.28 | 222,064,368.55 |
| Other receivables | 107,578,908.70 | 85,600,811.75 |
| including: dividends receivable | 25,353,722.11 | 25,353,722.11 |
| Inventory | 1,734,856,819.92 | 1,568,373,133.15 |
| Other current assets | 105,151,422.67 | 121,711,175.93 |
| Total current assets | 4,521,221,681.29 | 3,962,200,380.44 |
| Non-current assets: | ||
| Long-term equity investment | 2,214,383,039.93 | 2,070,047,882.51 |
| Other equity instrument investment | 12,949,647.74 | 5,760,839.23 |
| Fixed assets | 2,269,553,170.07 | 2,023,113,939.02 |
| Construction in progress | 353,897,369.68 | 240,012,874.86 |
| Biological assets | 181,047,726.38 | 94,826,312.88 |
| Intangible assets | 263,272,625.33 | 245,564,167.39 |
| Goodwill | 290,425.67 | 290,425.67 |
| Long-term prepaid expenses | 137,261,597.32 | 134,504,217.80 |
| Deferred income tax assets | 38,405,345.82 | 35,987,736.49 |
| Other non-current assets | 455,359,431.84 | 337,463,267.56 |
| Total non-current assets | 5,926,420,379.78 | 5,187,571,663.41 |
| Total assets | 10,447,642,061.07 | 9,149,772,043.85 |
| Consolidated Balance Sheet(continue) | ||
| June 30, 2020 RMB | ||
| Item | June 30, 2020 | December 31, 2019 |
| Current liabilities: | ||
| Short-term borrowing | 1,223,388,823.53 | 1,050,878,205.81 |
| Accounts payable | 788,384,791.99 | 659,216,483.84 |
| Advance receipt | 209,529,248.68 | |
| Contract liability | 324,131,304.96 | |
| Payroll | 57,573,512.62 | 62,549,364.12 |
| Tax payable | 58,151,031.99 | 37,680,953.84 |
| Other payables | 370,743,746.63 | 342,239,361.28 |
| including: interest payable | 1,347,819.06 | 1,528,201.39 |
| dividends payable | 17,135,207.06 | 1,434,027.14 |
| Non-current liabilities due within one year | 93,200,042.05 | 70,593,717.62 |
| Total current liabilities | 2,915,573,253.77 | 2,432,687,335.19 |
| Non-current liabilities: | ||
| Long-term borrowings | 353,830,000.00 | 174,330,000.00 |
| Long-term payables | 66,953,833.28 | 11,025,000.09 |
| Deferred income | 38,699,498.00 | 31,841,250.00 |
| Deferred income tax liabilities | 353,052.07 | 396,995.58 |
| Total non-current liabilities | 459,836,383.35 | 217,593,245.67 |
| Total liabilities | 3,375,409,637.12 | 2,650,280,580.86 |
| Owners' equity (or shareholders' equity): | ||
| Paid-up capital (or share capital) | 922,059,896.00 | 922,304,396.00 |
| Capital reserve | 883,434,543.97 | 882,723,066.29 |
| deduct: treasury stock | 45,695,815.00 | 70,688,750.00 |
| Other comprehensive income | 8,707,287.90 | 6,122,835.30 |
| Surplus reserves | 352,059,456.90 | 352,059,456.90 |
| Undistributed profits | 4,008,825,121.94 | 3,605,618,553.05 |
| Total equity attributable to the owners of parent company | 6,129,390,491.71 | 5,698,139,557.54 |
| Non-controlling interests | 942,841,932.24 | 801,351,905.45 |
| Total owners' equity | 7,072,232,423.95 | 6,499,491,462.99 |
| Total liabilities and owners' equity | 10,447,642,061.07 | 9,149,772,043.85 |
Consolidated Balance Sheet of Parent Company
June 30, 2020
RMB
| Item | June 30, 2020 | December 31, 2019 |
| Current assets: | ||
| Monetary capital | 1,284,747,992.64 | 1,039,575,222.99 |
| Trading financial assets | 100,000,000.00 | 40,000,000.00 |
| Derivative financial assets | 7,659,412.30 | 2,285,934.30 |
| Accounts receivable | 18,004,373.55 | 13,631,690.45 |
| Prepayments | 7,950,249.17 | 7,560,408.95 |
| Other receivables | 1,721,536,665.32 | 1,020,785,676.46 |
| including: dividends receivable | 33,977,209.35 | 33,977,209.35 |
| Inventory | 39,307,180.63 | 49,839,754.57 |
| Total current assets | 3,179,205,873.61 | 2,173,678,687.72 |
| Non-current assets: | ||
| Long-term equity investment | 4,446,649,155.04 | 4,117,315,830.10 |
| Other equity instrument investment | 12,651,707.44 | 5,539,369.92 |
| Fixed assets | 130,448,074.15 | 132,106,337.38 |
| Construction in progress | 7,231,022.16 | 5,163,075.76 |
| Intangible assets | 14,991,204.37 | 15,425,425.33 |
| Long-term prepaid expenses | 1,377,004.80 | 797,929.30 |
| Deferred income tax assets | 11,215,144.37 | 10,699,738.59 |
| Total non-current assets | 4,624,563,312.33 | 4,287,047,706.38 |
| Total assets | 7,803,769,185.94 | 6,460,726,394.10 |
| Current liabilities: | ||
| Short-term borrowings | 850,000,000.00 | 770,000,000.00 |
| Accounts payable | 29,022,790.01 | 34,960,859.00 |
| Advance receipt | 5,019,752.33 | |
| Contract liability | 4,309,395.93 | |
| Payroll | 2,487,557.30 | 4,611,910.56 |
| Tax payable | 6,336,402.83 | 4,624,045.02 |
| Other payables | 2,109,225,807.91 | 1,109,464,926.75 |
| including: Interest payable | 1,250,350.00 | 1,261,159.72 |
| Dividends payable | ||
| Non-current liabilities due within one year | 74,000,000.00 | 52,000,000.00 |
| Total current liabilities | 3,075,381,953.98 | 1,980,681,493.66 |
| Non-current liabilities: | ||
| Long-term borrowings | 333,500,000.00 | 174,000,000.00 |
| Deferred income | 22,398,248.00 | 21,520,000.00 |
| Deferred income tax liabilities | 8,972.25 | |
| Total non-current liabilities | 355,898,248.00 | 195,528,972.25 |
| Total liabilities | 3,431,280,201.98 | 2,176,210,465.91 |
| Owners' equity(or shareholders' equity): | ||
| Paid-up capital (or share capital) | 922,059,896.00 | 922,304,396.00 |
| Capital reserves | 880,087,855.55 | 875,861,339.55 |
| deduct: treasury stock | 45,695,815.00 | 70,688,750.00 |
| Other comprehensive income | 8,999,487.92 | 5,621,991.32 |
| Surplus reserves | 352,059,456.90 | 352,059,456.90 |
| Undistributed profits | 2,254,978,102.59 | 2,199,357,494.42 |
| Total owners' equity | 4,372,488,983.96 | 4,284,515,928.19 |
| Total liabilities and owners' equity (or shareholders' equity) | 7,803,769,185.94 | 6,460,726,394.10 |
Consolidated Income Statement
January-June, 2020
| RMB | ||
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| 1. Total operating revenue | 9,848,379,852.28 | 7,727,400,004.75 |
| including: Operating revenue | 9,848,379,852.28 | 7,727,400,004.75 |
| 2. Total operating costs | 9,229,270,624.14 | 7,435,169,130.12 |
| including: Operating costs | 8,806,688,412.71 | 6,985,820,614.94 |
| Taxes and surtaxes | 13,820,595.18 | 12,698,727.34 |
| Selling expenses | 212,669,710.62 | 239,990,725.07 |
| Administrative expenses | 134,081,626.60 | 126,915,965.17 |
| R&D expenses | 30,944,918.31 | 30,021,345.87 |
| Financial expenses | 31,065,360.72 | 39,721,751.73 |
| including: Interest expenses | 37,905,838.10 | 40,211,708.70 |
| Interest income | 8,451,668.98 | 2,641,228.16 |
| add: Other income | 5,942,599.70 | 2,192,950.10 |
| Income from investment | 172,589,751.04 | 188,067,031.15 |
| including: Income from investments in associated companies and joint ventures | 171,299,774.34 | 186,195,941.85 |
| Gain or loss from changes in fair value | -1,265,439.00 | -169,200.00 |
| Credit impairment loss | -24,175,313.93 | -18,534,402.05 |
| Assets impairment loss | -11,612,155.42 | -269,072.43 |
| Gain or loss from assets disposal | 1,547,289.40 | -45,359.23 |
| 3. Operating profit | 762,135,959.93 | 463,472,822.17 |
| add: Non-operating income | 8,405,544.70 | 15,814,929.98 |
| deduct: Non-operating expenditure | 8,797,374.58 | 18,322,686.59 |
| 4. Pretax profit | 761,744,130.05 | 460,965,065.56 |
| deduct: Income tax expense | 80,417,791.15 | 31,218,522.69 |
| 5. Net profit | 681,326,338.90 | 429,746,542.87 |
| Net profit from continuing operations | 681,326,338.90 | 429,746,542.87 |
| Net profit attributable to the shareholders of parent company | 606,015,736.01 | 359,008,639.18 |
| Non-controlling interests income | 75,310,602.89 | 70,737,903.69 |
| 6. Other comprehensive income, net of tax | 1,941,159.95 | 4,661,958.82 |
| Attributable to owners of parent company | 2,584,452.60 | 3,945,084.57 |
| a. Other comprehensive income that cannot be reclassified into gains or losses | 1,151,337.72 | |
| ? (a) Remeasure changes in the defined benefit plan | 1,151,337.72 | |
| b. Other comprehensive income that will be reclassified into the gains or losses | 1,433,114.88 | 3,945,084.57 |
| (a) Other comprehensive income that can be transferred in gains or losses under the equity method | 2,265,159.08 | 3,068,904.93 |
| (b) Exchange differences on translation of foreign currency financial statements | -832,044.20 | 876,179.64 |
| Attributable to non-controlling interests | -643,292.65 | 716,874.25 |
| 7. Total comprehensive income | 683,267,498.85 | 434,408,501.69 |
| Attributable to the owners of parent company | 608,600,188.61 | 362,953,723.75 |
| Attributable to non-controlling interests | 74,667,310.24 | 71,454,777.94 |
| 8. EPS | ||
| a. Basic earnings per share (yuan per share) | 0.66 | 0.41 |
| b. Diluted earnings per share (yuan per share) | 0.66 | 0.41 |
Consolidated Income Statement of Parent Company
January-June, 2020
RMB
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| 1. Total operating revenue | 403,204,253.52 | 261,739,621.75 |
| Deduct: Operating costs | 284,216,147.10 | 174,051,955.80 |
| Taxes and surtaxes | 729,054.51 | 812,810.61 |
| Selling expenses | 7,007,016.91 | 7,251,239.85 |
| Administrative expenses | 13,711,867.99 | 16,505,456.93 |
| R&D expenses | 9,208,354.47 | 10,304,335.79 |
| Financial expenses | 9,638,501.76 | 14,964,973.60 |
| including: Interest expenses | 27,518,014.88 | 29,112,564.27 |
| Interest income | 18,057,715.35 | 14,292,833.82 |
| add: Other income | 3,173,127.63 | 123,750.00 |
| Income from investment | 191,028,157.67 | 202,720,334.91 |
| including: Income from investments in associated companies and joint ventures | 164,877,586.86 | 185,679,010.80 |
| Gain or loss from changes in fair value | -1,257,795.00 | 766,780.00 |
| Credit impairment loss | -1,620,607.54 | -3,382,369.90 |
| Assets impairment loss | ||
| Gain or loss from assets disposal | -30,999.44 | |
| 2. Operating profit | 270,016,193.54 | 238,046,344.74 |
| add: Non-operating income | 21,550.00 | 10,628,520.00 |
| deduct: Non-operating expenditure | 899,558.51 | 1,326,100.00 |
| 3. Pretax profit | 269,138,185.03 | 247,348,764.74 |
| deduct: Income tax expense | 10,708,409.74 | 4,335,646.14 |
| 4. Net profit | 258,429,775.29 | 243,013,118.60 |
| Net profit from continuing operations | 258,429,775.29 | 243,013,118.60 |
| 5. Other comprehensive income, net of tax | 3,377,496.60 | 3,068,904.93 |
| a. Other comprehensive income that cannot be reclassified into gains or losses | ||
| b. Other comprehensive income that will be reclassified into gains or losses | 3,377,496.60 | 3,068,904.93 |
| (a) Other comprehensive income that can be transferred in gains or losses under the equity method | 3,377,496.60 | 3,068,904.93 |
| 6. Total comprehensive income | 261,807,271.89 | 246,082,023.53 |
Consolidated Statement of Cash Flow
January-June, 2020RMB
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| 1. Cash flow from operating activities | ||
| Cash received by selling commodities, providing labor services | 9,791,553,393.03 | 7,948,606,132.70 |
| Tax refunds | 12,949,141.60 | 13,871,955.08 |
| Cash received from other activities related to operating | 34,403,326.39 | 38,922,770.34 |
| Sub-total of cash inflow of operating activities | 9,838,905,861.02 | 8,001,400,858.12 |
| Cash paid for purchasing commodities and receiving labor services | 8,596,311,820.04 | 6,996,689,336.06 |
| Cash paid to and for employee | 357,223,172.66 | 307,874,894.10 |
| Tax payments | 91,560,326.32 | 60,790,924.96 |
| Cash paid to other activities related to operating | 342,414,514.22 | 336,753,918.38 |
| Sub-total of cash outflow of operating activities | 9,387,509,833.24 | 7,702,109,073.50 |
| Net cash flow from operating activities | 451,396,027.78 | 299,291,784.62 |
| 2. Cash flow from investing activities | ||
| Cash received from disinvestment | 200,000,000.00 | 1,050,000.00 |
| Cash received from return on investment | 67,526,506.25 | 20,246,504.29 |
| Net cash received from disposal of fixed assets, intangible assets and other long-lived assets | 2,127,566.33 | 1,235,466.00 |
| Cash received from other activities related to investment | 31,847,479.40 | 2,377,932.15 |
| Sub-total of cash inflow of investing activities | 301,501,551.98 | 24,909,902.44 |
| Cash paid for acquiring and building fixed assets, intangible assets and other long-lived assets | 506,939,660.64 | 211,754,778.24 |
| Cash paid for investments | 366,288,324.00 | 39,435,378.79 |
| Net cash paid for acquiring subsidiaries and other business units | 40,000,000.00 | 113,573,868.96 |
| Cash paid to other activities related to investment | 38,930,945.37 | |
| Sub-total of cash outflow of investing activities | 913,227,984.64 | 403,694,971.36 |
| Net cash flow from investing activities | -611,726,432.66 | -378,785,068.92 |
| 3. Cash flow from financing activities | ||
| Cash received by absorbing investments | 79,540,000.00 | 836,980,430.50 |
| including: Capital contributed by non-controlling interests to subsidiaries | 79,540,000.00 | 67,202,692.00 |
| Cash received from borrowings | 1,507,367,311.32 | 857,207,911.79 |
| Cash received from other activities related to financing | 640,000.00 | |
| Sub-total of cash inflow of financing activities | 1,586,907,311.32 | 1,694,828,342.29 |
| Repayments of borrowings | 1,080,307,060.21 | 814,501,307.93 |
| Cash paid for distributing dividends, profits, or paid for interests | 243,619,920.58 | 194,694,461.11 |
| including: Dividends or profits paid by subsidiaries to non-controlling interests | 23,713,213.00 | 4,420,306.88 |
| Cash paid to other activities related to financing activities | 1,185,825.00 | 5,856,566.01 |
| Sub-total of cash outflow of financing activities | 1,325,112,805.79 | 1,015,052,335.05 |
| Net cash flow from financing activities | 261,794,505.53 | 679,776,007.24 |
| 4. Effect of foreign exchange rate fluctuations on cash and cash equivalents | 10,149.73 | -556,725.86 |
| 5. Net increase in cash and cash equivalents | 101,474,250.38 | 599,725,997.08 |
| add: Opening balance of cash and cash equivalents | 1,508,390,481.68 | 889,204,873.97 |
| 6. Closing balance of cash and cash equivalents | 1,609,864,732.06 | 1,488,930,871.05 |
Consolidated Statement of Cash Flow of Parent Company
January-June, 2020
RMB
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| 1. Cash flow from operating activities | ||
| Cash received by selling commodities, providing labor services | 396,352,393.51 | 254,250,757.39 |
| Cash received from other activities related to operating | 131,580,659.38 | 201,186,908.54 |
| Sub-total of cash inflow of operating activities | 527,933,052.89 | 455,437,665.93 |
| Cash paid for purchasing commodities and receiving labor services | 276,419,081.91 | 155,902,826.52 |
| Cash paid to and for employee | 17,700,375.42 | 14,666,109.28 |
| Tax payments | 14,382,745.46 | 10,249,972.23 |
| Cash paid to other activities related to operating | 48,180,266.50 | 359,094,296.54 |
| Sub-total of cash outflow of operating activities | 356,682,469.29 | 539,913,204.57 |
| Net cash flow from operating activities | 171,250,583.60 | -84,475,538.64 |
| 2. Cash flow from investing activities | ||
| Cash received from disinvestment | 200,000,000.00 | 1,050,000.00 |
| Cash received from return on investment | 91,481,906.25 | 38,866,504.29 |
| Net cash received from disposal of fixed assets, intangible assets and other long-lived assets | 34,000.00 | |
| Net cash received from disposal of subsidiaries and other business units | 4,000,000.00 | |
| Cash received from other activities related to investment | 6,650,208.44 | |
| Sub-total of cash inflow of investing activities | 298,132,114.69 | 43,950,504.29 |
| Cash paid for acquiring and building fixed assets, intangible assets and other long-lived assets | 4,040,756.40 | 7,169,414.68 |
| Cash paid for investments | 541,488,324.00 | 84,338,378.79 |
| Cash paid to other activities related to investment | 95,513,096.37 | 3,118,104.11 |
| Sub-total of cash outflow of investing activities | 641,042,176.77 | 94,625,897.58 |
| Net cash flow from investing activities | -342,910,062.08 | -50,675,393.29 |
| 3. Cash flow from financing activities | ||
| Cash received by absorbing investments | 769,777,738.50 | |
| Cash received from borrowings | 1,100,000,000.00 | 695,000,000.00 |
| Cash received from other activities related to financing | 373,924,534.25 | |
| Sub-total of cash inflow of financing activities | 1,473,924,534.25 | 1,464,777,738.50 |
| Repayments of borrowings | 838,500,000.00 | 692,000,000.00 |
| Cash paid for distributing dividends, profits, or paid for interests | 210,756,346.10 | 180,476,138.26 |
| Cash paid to other activities related to financing activities | 1,185,825.00 | |
| Sub-total of cash outflow of financing activities | 1,050,442,171.10 | 872,476,138.26 |
| Net cash flow from financing activities | 423,482,363.15 | 592,301,600.24 |
| 4. Effect of foreign exchange rate fluctuations on cash and cash equivalents | 93.42 | 6.56 |
| 5. Net increase in cash and cash equivalents | 251,822,978.09 | 457,150,674.87 |
| add: Opening balance of cash and cash equivalents | 1,023,685,161.19 | 740,891,873.25 |
| 6. Closing balance of cash and cash equivalents | 1,275,508,139.28 | 1,198,042,548.12 |
Change Statement of Owner's Equity
January-June, 2020
RMB
| Item | January-June, 2020 | ||||||||
| Equity attributable to the owners of parent company | Non-controlling interests | Total owners' equity | |||||||
| Share capital | Capital reserve | Deduct: Treasury stock | Other comprehensive income | Surplus reserve | Undistributed profits | Subtotal | |||
| 1. Balance on Dec. 31, 2019 | 922,304,396.00 | 882,723,066.29 | 70,688,750.00 | 6,122,835.30 | 352,059,456.90 | 3,605,618,553.05 | 5,698,139,557.54 | 801,351,905.45 | 6,499,491,462.99 |
| add: changes in accounting policies | |||||||||
| 2. Opening balance of current period | 922,304,396.00 | 882,723,066.29 | 70,688,750.00 | 6,122,835.30 | 352,059,456.90 | 3,605,618,553.05 | 5,698,139,557.54 | 801,351,905.45 | 6,499,491,462.99 |
| 3. Changes in current period | -244,500.00 | 711,477.68 | -24,992,935.00 | 2,584,452.60 | 403,206,568.89 | 431,250,934.17 | 141,490,026.79 | 572,740,960.96 | |
| A. Total comprehensive income | 2,584,452.60 | 606,015,736.01 | 608,600,188.61 | 75,310,602.89 | 683,910,791.50 | ||||
| B. Capital contributed and reduced by owners | -244,500.00 | 711,477.68 | -24,992,935.00 | 25,459,912.68 | 87,440,000.00 | 112,899,912.68 | |||
| a. Common stock invested by owners | 87,440,000.00 | 87,440,000.00 | |||||||
| b. Capital contributed by other equity instrument holders | |||||||||
| c. Amount of share-based | -244,500.00 | 711,477.68 | -24,992,935.00 | 25,459,912.68 | 25,459,912.68 | ||||
| payment included in the owner's equity | |||||||||
| d. Other | |||||||||
| C. Dividend distribution | -202,809,167.12 | -202,809,167.12 | -21,260,576.10 | -224,069,743.22 | |||||
| a. Appropriation of surplus reserves | |||||||||
| b. Extraction of general risk provisions | |||||||||
| c. Dividend to owners (or shareholders) | -202,809,167.12 | -202,809,167.12 | -23,713,213.00 | -226,522,380.12 | |||||
| 4. Closing balance of current period | 922,059,896.00 | 883,434,543.97 | 45,695,815.00 | 8,707,287.90 | 352,059,456.90 | 4,008,825,121.94 | 6,129,390,491.71 | 942,841,932.24 | 7,072,232,423.95 |
| Item | January-June, 2019 | ||||||||
| Equity attributable to the owners of parent company | Non-controlling interests | Total owners' equity | |||||||
| Share capital | Capital reserve | Deduct: Treasury Stock | Other comprehensive income | Surplus reserve | Undistributed profits | Subtotal | |||
| 1. Balance on Dec. 31, 2018 | 845,751,469.00 | 153,824,536.37 | 70,688,750.00 | -1,316,942.00 | 272,882,920.19 | 2,651,462,525.08 | 3,851,915,758.64 | 414,072,220.38 | 4,265,987,979.02 |
| add: changes in accounting policies | -481,544.75 | -481,544.75 | -645.73 | -482,190.48 | |||||
| Other | -91,554.12 | 91,554.12 | |||||||
| 2. Opening balance of current period | 845,751,469.00 | 153,824,536.37 | 70,688,750.00 | -1,798,486.75 | 272,791,366.07 | 2,651,554,079.20 | 3,851,434,213.89 | 414,071,574.65 | 4,265,505,788.54 |
| 3. Changes in current period | 76,552,927.00 | 715,060,197.70 | 3,945,084.57 | 192,993,847.90 | 988,552,057.17 | 110,921,464.17 | 1,099,473,521.34 | ||
| A. Total comprehensive | 3,945,084.57 | 359,008,639.18 | 362,953,723.75 | 70,737,903.69 | 433,691,627.44 | ||||
| income | |||||||||
| B. Capital contributed and reduced by owners | 76,552,927.00 | 715,060,197.70 | 791,613,124.70 | 791,613,124.70 | |||||
| a. Common stock invested by owners | 76,552,927.00 | 708,730,862.57 | 785,283,789.57 | 785,283,789.57 | |||||
| b. Capital contributed by other equity instrument holders | |||||||||
| c. Amount of share-based payment included in the owner's equity | 10,013,022.10 | 10,013,022.10 | 10,013,022.10 | ||||||
| d. Other | -3,683,686.97 | -3,683,686.97 | -3,683,686.97 | ||||||
| C. Dividend distribution | -166,014,791.28 | -166,014,791.28 | -7,655,875.72 | -173,670,667.00 | |||||
| a. Appropriation of surplus reserves | |||||||||
| b. Extraction of general risk provisions | |||||||||
| c. Dividend to owners (or shareholders) | -166,014,791.28 | -166,014,791.28 | -7,655,875.72 | -173,670,667.00 | |||||
| d．Other | |||||||||
| D. Internal carryover in the owner's equity | 47,839,436.20 | 47,839,436.20 | |||||||
| a. Other | 47,839,436.20 | 47,839,436.20 | |||||||
| 4. Closing balance of current period | 922,304,396.00 | 868,884,734.07 | 70,688,750.00 | 2,146,597.82 | 272,791,366.07 | 2,844,547,927.10 | 4,839,986,271.06 | 524,993,038.82 | 5,364,979,309.88 |
Change Statement of Owner's Equity of Parent Company
January-June, 2020
RMB
| Item | January-June, 2020 | ||||||
| Share capital | Capital reserve | Deduct: Treasury stock | Other comprehensive income | Surplus reserve | Undistributed profits | Total owners' equity | |
| 1. Balance on Dec. 31, 2019 | 922,304,396.00 | 875,861,339.55 | 70,688,750.00 | 5,621,991.32 | 352,059,456.90 | 2,199,357,494.42 | 4,284,515,928.19 |
| add: changes in accounting policies | |||||||
| 2. Opening balance of current period | 922,304,396.00 | 875,861,339.55 | 70,688,750.00 | 5,621,991.32 | 352,059,456.90 | 2,199,357,494.42 | 4,284,515,928.19 |
| 3. Changes in current period | -244,500.00 | 4,226,516.00 | -24,992,935.00 | 3,377,496.60 | 55,620,608.17 | 87,973,055.77 | |
| A. Total comprehensive income | 3,377,496.60 | 258,429,775.29 | 261,807,271.89 | ||||
| B. Capital contributed and reduced by owners | -244,500.00 | 4,226,516.00 | -24,992,935.00 | 28,974,951.00 | |||
| a. Common stock invested by owners | |||||||
| b. Capital contributed by other equity instrument holders | |||||||
| c. Amount of share-based payment included in the owner's equity | -244,500.00 | 4,226,516.00 | -24,992,935.00 | 28,974,951.00 | |||
| d. Other | |||||||
| C. Dividend distribution | -202,809,167.12 | -202,809,167.12 | |||||
| a. Appropriation of surplus reserves | |||||||
| b. Dividend to owners (or shareholders) | |||||||
| c. Other | -202,809,167.12 | -202,809,167.12 | |||||
| 4. Closing balance of current period | 922,059,896.00 | 880,087,855.55 | 45,695,815.00 | 8,999,487.92 | 352,059,456.90 | 2,254,978,102.59 | 4,372,488,983.96 |
| Item | January-June, 2019 | ||||||
| Share capital | Capital reserve | Deduct: Treasury stock | Other comprehensive income | Surplus reserve | Undistributed profits | Total owners' equity | |
| 1. Balance on Dec. 31, 2018 | 845,751,469.00 | 160,705,065.92 | 70,688,750.00 | -1,305,935.62 | 272,882,920.19 | 1,656,011,455.34 | 2,863,356,224.83 |
| add: changes in accounting policies | -310,630.08 | -310,630.08 | |||||
| 2. Opening balance of current period | 845,751,469.00 | 160,705,065.92 | 70,688,750.00 | -1,616,565.70 | 272,882,920.19 | 1,656,011,455.34 | 2,863,045,594.75 |
| 3. Changes of current period | 76,552,927.00 | 703,847,427.77 | 3,068,904.93 | 76,998,327.32 | 860,467,587.02 | ||
| A. Total comprehensive income | 3,068,904.93 | 243,013,118.60 | 246,082,023.53 | ||||
| B. Capital contributed and reduced by owners | 76,552,927.00 | 703,847,427.77 | 780,400,354.77 | ||||
| a. Common stock invested by owners | 76,552,927.00 | 692,373,258.57 | 768,926,185.57 | ||||
| b. Capital contributed by other equity instrument holders | |||||||
| c. Amount of share-based payment included in the owner's equity | 11,474,169.20 | 11,474,169.20 | |||||
| d. Other | |||||||
| C. Dividend distribution | -166,014,791.28 | -166,014,791.28 | |||||
| a. Appropriation of surplus reserves | |||||||
| b. Dividend to owners (or shareholders) | |||||||
| c. Other | -166,014,791.28 | -166,014,791.28 | |||||
| 4. Closing balance of current period | 922,304,396.00 | 864,552,493.69 | 70,688,750.00 | 1,452,339.23 | 272,882,920.19 | 1,733,009,782.66 | 3,723,513,181.77 |
III.Basic Information of the Company
1. Overview of the Company
Approved by the People's Government of Liaoning Province, Liaoning Wellhope Agri-TechJoint Stock Co., Ltd. (hereinafter referred to as the Company) is a limited liability companyfounded by 23 natural persons, including Jin Weidong, Ding Yunfeng, etc., which wasregistered in Liaoning Province Administrative Bureau of Industry and Commerce onMarch 27th, 2003. The head office of the Company locates Shenyang, currently it holdsthe business license with the number of 9121000074712989XU and the registered capitalof RMB 922.06 million, registered address (headquarters address): No. 169, HuishanStreet, Shenbei New District, Shenyang, Liaoning Province. Jin Weidong is the legalrepresentative.The Company's business scope covers feed and feed raw material trade, broilerintegration, hog raising, etc. The parent company covers feed and feed additivesprocessing, marketing; grain purchase (self-use); sales of feed raw materials; poultry andlivestock raising, seawater and freshwater aquaculture; agricultural and sideline productsprocessing; enterprise management service; supply chain management; informationservices (internet information services only), ordinary road freight (the business activitieswhich need to be approved by the law, shall receive the approval of relevant authorities).The financial statements have been approved to be disclosed by the 17th board meetingof the 6th Session of Board of Directors on August 5, 2020.
2. Scope of the Consolidated Financial Statements
The scope of the Company's consolidated financial statements is determined on the basisof control, all the controlled subsidiaries are included in the consolidated financialstatements.The changes in the scope of consolidated financial statements are shown in the tablebelow:
A. The subsidiaries which are newly included in the consolidation scope in the reportingperiod
| Company | Way of acquiring |
| Yangling Wellhope Agriculture and Animal Husbandry | Combined under different control |
| Luoyang Wellhope Agriculture and Animal Husbandry | Investment |
| Chifeng Wellhope Fuxinyuan Food | Investment |
| Shenyang Xiangmai E-commerce | Investment |
| Hebei Taihang Wellhope Food | Investment |
| Anyang Wellhope Agriculture and Animal Husbandry | Investment |
| Hebei Taihang Wellhope Agri-Tech | Investment |
| Dalian Hongtu Agri-Tech | Investment |
| Shandong Heyuan Agri-Tech | Investment |
| Tongxu Wellhope Agriculture and Animal Husbandry | Investment |
| Anhui Wellhope Haoxiang Hog Breeding | Investment |
| Gongzhuling Wellhope Hog Raising | Investment |
| Lishu Wellhope Ecological Hog Raising | Investment |
and other relevant information during the reporting period.
2. Accounting period
The Financial Year of the Company starts from January 1 and ends on December 31 of theGregorian calendar.
3. Operating cycle
The Company takes a 12-month operating cycle.
4. Bookkeeping base currency
RMB
5. Changes of important accounting policies and estimates
Important accounting policies
| Content and reason for the changes of accounting policies | Approval procedure | Note |
| On July 5, 2017, the Ministry of Finance issued the Accounting Standard for Business Enterprises No. 14 -- Revenue (2017 Revision), which required companies listed in China to implement the new revenue guidelines from January 1, 2020. | Board of Director | See below |
| Item | December 31, 2019 | January 1, 2020 | Adjustment |
| Current Assets: | |||
| Monetary capital | 1,554,781,324.13 | 1,554,781,324.13 | |
| Trading financial assets | 40,000,000.00 | 40,000,000.00 | |
| Derivative financial assets | 3,912,584.30 | 3,912,584.30 | |
| Notes receivable | 3,696,180.25 | 3,696,180.25 | |
| Accounts receivable | 362,060,802.38 | 362,060,802.38 | |
| Prepayments | 222,064,368.55 | 222,064,368.55 | |
| Other receivables | 85,600,811.75 | 85,600,811.75 | |
| including: Interest receivable | |||
| Dividends receivable | 25,353,722.11 | 25,353,722.11 | |
| Inventory | 1,568,373,133.15 | 1,568,373,133.15 | |
| Other current assets | 121,711,175.93 | 121,711,175.93 | |
| Total current assets | 3,962,200,380.44 | 3,962,200,380.44 | |
| Non-current assets: | |||
| Long-term equity investment | 2,070,047,882.51 | 2,070,047,882.51 |
| Other equity instruments investment | 5,760,839.23 | 5,760,839.23 | |
| Fixed assets | 2,023,113,939.02 | 2,023,113,939.02 | |
| Construction in progress | 240,012,874.86 | 240,012,874.86 | |
| Biological assets | 94,826,312.88 | 94,826,312.88 | |
| Intangible assets | 245,564,167.39 | 245,564,167.39 | |
| Goodwill | 290,425.67 | 290,425.67 | |
| Long-term prepaid expenses | 134,504,217.80 | 134,504,217.80 | |
| Deferred income tax assets | 35,987,736.49 | 35,987,736.49 | |
| Other non-current assets | 337,463,267.56 | 337,463,267.56 | |
| Total non-current assets | 5,187,571,663.41 | 5,187,571,663.41 | |
| Total Assets | 9,149,772,043.85 | 9,149,772,043.85 | |
| Current liabilities: | |||
| Short-term borrowings | 1,050,878,205.81 | 1,050,878,205.81 | |
| Accounts payable | 659,216,483.84 | 659,216,483.84 | |
| Advance receipt | 209,529,248.68 | 0 | -209,529,248.68 |
| Contract liabilities | 0 | 209,529,248.68 | 209,529,248.68 |
| Payroll | 62,549,364.12 | 62,549,364.12 | |
| Taxes and surcharges payable | 37,680,953.84 | 37,680,953.84 | |
| Other payables | 342,239,361.28 | 342,239,361.28 | |
| including: Interest payable | 1,528,201.39 | 1,528,201.39 | |
| Dividends payable | 1,434,027.14 | 1,434,027.14 | |
| Non-current liabilities due within one year | 70,593,717.62 | 70,593,717.62 | |
| Total current liabilities | 2,432,687,335.19 | 2,432,687,335.19 | |
| Non-current Liabilities: | |||
| Long-term borrowings | 174,330,000.00 | 174,330,000.00 | |
| Long-term payable | 11,025,000.09 | 11,025,000.09 | |
| Deferred income | 31,841,250.00 | 31,841,250.00 | |
| Deferred income tax liabilities | 396,995.58 | 396,995.58 | |
| Total Non-current liabilities | 217,593,245.67 | 217,593,245.67 | |
| Total Liabilities | 2,650,280,580.86 | 2,650,280,580.86 | |
| Owners' equity (or shareholders' equity): | |||
| Paid-up capital (or share capital) | 922,304,396.00 | 922,304,396.00 |
| Capital reserves | 882,723,066.29 | 882,723,066.29 | |
| deduct: Treasury stock | 70,688,750.00 | 70,688,750.00 | |
| Other comprehensive income | 6,122,835.30 | 6,122,835.30 | |
| Surplus reserves | 352,059,456.90 | 352,059,456.90 | |
| Undistributed profits | 3,605,618,553.05 | 3,605,618,553.05 | |
| Total Equity attributable to the owners of parent company | 5,698,139,557.54 | 5,698,139,557.54 | |
| Non-controlling interests | 801,351,905.45 | 801,351,905.45 | |
| Total owners' equity (or shareholders' equity) | 6,499,491,462.99 | 6,499,491,462.99 | |
| Total liabilities and owners' equity (or shareholders' equity) | 9,149,772,043.85 | 9,149,772,043.85 |
| Item | December 31, 2019 | January 1, 2020 | Adjustment |
| Current Assets: | |||
| Monetary capital | 1,039,575,222.99 | 1,039,575,222.99 | |
| Trading financial assets | 40,000,000.00 | 40,000,000.00 | |
| Derivative financial assets | 2,285,934.30 | 2,285,934.30 | |
| Accounts receivable | 13,631,690.45 | 13,631,690.45 | |
| Prepayments | 7,560,408.95 | 7,560,408.95 | |
| Other receivables | 1,020,785,676.46 | 1,020,785,676.46 | |
| including: Interest receivable | |||
| Dividends receivable | 33,977,209.35 | 33,977,209.35 | |
| Inventory | 49,839,754.57 | 49,839,754.57 | |
| Total current assets | 2,173,678,687.72 | 2,173,678,687.72 | |
| Non-current assets: | |||
| Long-term equity investment | 4,117,315,830.10 | 4,117,315,830.10 | |
| Other equity instruments investment | 5,539,369.92 | 5,539,369.92 | |
| Fixed assets | 132,106,337.38 | 132,106,337.38 | |
| Construction in progress | 5,163,075.76 | 5,163,075.76 | |
| Intangible assets | 15,425,425.33 | 15,425,425.33 | |
| Long-term prepaid expenses | 797,929.30 | 797,929.30 | |
| Deferred income tax assets | 10,699,738.59 | 10,699,738.59 |
| Total non-current assets | 4,287,047,706.38 | 4,287,047,706.38 | |
| Total Assets | 6,460,726,394.10 | 6,460,726,394.10 | |
| Current liabilities: | |||
| Short-term borrowings | 770,000,000.00 | 770,000,000.00 | |
| Accounts payable | 34,960,859.00 | 34,960,859.00 | |
| Advance receipt | 5,019,752.33 | -5,019,752.33 | |
| Contract liabilities | 5,019,752.33 | 5,019,752.33 | |
| Payroll | 4,611,910.56 | 4,611,910.56 | |
| Taxes and surcharges payable | 4,624,045.02 | 4,624,045.02 | |
| Other payables | 1,109,464,926.75 | 1,109,464,926.75 | |
| including: Interest payable | 1,261,159.72 | 1,261,159.72 | |
| Dividends payable | |||
| Non-current liabilities due within one year | 52,000,000.00 | 52,000,000.00 | |
| Total current liabilities | 1,980,681,493.66 | 1,980,681,493.66 | |
| Non-current Liabilities: | |||
| Long-term borrowings | 174,000,000.00 | 174,000,000.00 | |
| Deferred income | 21,520,000.00 | 21,520,000.00 | |
| Deferred income tax liabilities | 8,972.25 | 8,972.25 | |
| Total Non-current liabilities | 195,528,972.25 | 195,528,972.25 | |
| Total Liabilities | 2,176,210,465.91 | 2,176,210,465.91 | |
| Owners' equity (or shareholders' equity): | |||
| Paid-up capital (or share capital) | 922,304,396.00 | 922,304,396.00 | |
| Capital reserves | 875,861,339.55 | 875,861,339.55 | |
| deduct: Treasury stock | 70,688,750.00 | 70,688,750.00 | |
| Other comprehensive income | 5,621,991.32 | 5,621,991.32 | |
| Surplus reserves | 352,059,456.90 | 352,059,456.90 | |
| Undistributed profits | 2,199,357,494.42 | 2,199,357,494.42 | |
| Total owners' equity (or shareholders' equity) | 4,284,515,928.19 | 4,284,515,928.19 | |
| Total liabilities and owners' equity (or shareholders' equity) | 6,460,726,394.10 | 6,460,726,394.10 |
VI.Tax
1. Categories of taxes and tax rate
| Categories | Taxation basis | Tax rate |
| Value-added tax | Output VAT--deductable input VAT | 1%,3%,6%,9%,10%,11%,13% (VAT on sales) |
| Urban maintenance and construction tax | Turnover tax payable | 1%,5%,7% |
| Corporate income tax | Income tax payable | 15%,20%,25% |
| Extra charges of education funds | Turnover tax payable | 3% |
| Extra charges of local education funds | Turnover tax payable | 2% |
| Item | Closing balance | Opening balance |
| Cash on hand | 1,578,403.58 | 693,912.75 |
| Cash at bank | 1,608,286,328.48 | 1,507,696,568.93 |
| Other monetary capital | 12,326,484.47 | 46,390,842.45 |
| Total | 1,622,191,216.53 | 1,554,781,324.13 |
| including: total amount of funds deposited abroad | 2,912,302.09 | 719,833.99 |
| Item | Closing balance | Opening balance |
| Measured at fair value and whose changes are booked into current profits and losses | 100,000,000.00 | 40,000,000.00 |
| Wealth management products | 100,000,000.00 | 40,000,000.00 |
| Total | 100,000,000.00 | 40,000,000.00 |
with an expected annualized yield of 3.70%.
3. Derivative financial assets
RMB
| Item | Closing balance | Opening balance |
| Futures | 9,100,936.30 | 3,912,584.30 |
| Total | 9,100,936.30 | 3,912,584.30 |
| Item | Closing balance | Opening balance |
| Bank's acceptance bill | 2,095,361.50 | 3,696,180.25 |
| Commercial acceptance bill | 110,600.00 | |
| Total | 2,205,961.50 | 3,696,180.25 |
| Aging | Closing book balance |
| Within 1 year | 544,360,705.93 |
| 1-2 years | 46,602,913.58 |
| 2-3 years | 28,502,809.76 |
| Over 3 years | 88,368,393.12 |
| Total | 707,834,822.39 |
B. Categorized by bad debt accrual method
RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Percentage % | Amount | Accruing percentage % | Amount | Percentage % | Amount | Accruing percentage % | |||
| Accruing bad debt provision individually | 38,203,607.52 | 5.40 | 36,437,855.70 | 95.38 | 1,765,751.82 | 38,365,146.19 | 8.12 | 35,941,019.04 | 93.68 | 2,424,127.15 |
| Accruing bad debt provision by grouping | 669,631,214.87 | 94.60 | 95,217,437.30 | 14.24 | 574,413,777.57 | 434,053,298.76 | 91.88 | 74,416,623.53 | 17.14 | 359,636,675.23 |
| Aging | 669,631,214.87 | 94.60 | 95,217,437.30 | 14.24 | 574,413,777.57 | 434,053,298.76 | 91.88 | 74,416,623.53 | 17.14 | 359,636,675.23 |
| Total | 707,834,822.39 | / | 131,655,293.00 | / | 576,179,529.39 | 472,418,444.95 | / | 110,357,642.57 | / | 362,060,802.38 |
? Accruing bad debt provision individually
RMB
| Name | Closing balance | |||
| Book balance | Bad debt provision | Accruing percentage % | Reason | |
| Customer 1 | 4,734,285.00 | 4,734,285.00 | 100.00 | Expected to be uncollectable |
| Customer 2 | 655,702.49 | 655,702.49 | 100.00 | Expected to be uncollectable |
| Customer 3 | 807,150.00 | 807,150.00 | 100.00 | Expected to be uncollectable |
| Customer 4 | 691,950.00 | 691,950.00 | 100.00 | Expected to be uncollectable |
| Customer 5 | 434,825.00 | 434,825.00 | 100.00 | Expected to be uncollectable |
| Customer 6 | 337,150.00 | 337,150.00 | 100.00 | Expected to be uncollectable |
| Customer 7 | 219,425.00 | 219,425.00 | 100.00 | Expected to be uncollectable |
| Customer 8 | 189,425.00 | 189,425.00 | 100.00 | Expected to be uncollectable |
| Customer 9 | 157,125.00 | 157,125.00 | 100.00 | Expected to be uncollectable |
| Customer 10 | 90,783.00 | 90,783.00 | 100.00 | Expected to be uncollectable |
| Customer 11 | 106,384.00 | 106,384.00 | 100.00 | Expected to be uncollectable |
| Customer 12 | 642,738.60 | 642,738.60 | 100.00 | Expected to be uncollectable |
| Customer 13 | 56,000.00 | 56,000.00 | 100.00 | Expected to be uncollectable |
| Customer 14 | 109,700.00 | 109,700.00 | 100.00 | Expected to be uncollectable |
| Customer 15 | 256,166.38 | 256,166.38 | 100.00 | Expected to be uncollectable |
| Customer 16 | 927,022.22 | 927,022.22 | 100.00 | Expected to be uncollectable |
| Customer 17 | 2,942,919.70 | 1,177,167.88 | 40.00 | Accrued according to expected loss |
| Customer 18 | 23,998,355.83 | 23,998,355.83 | 100.00 | Expected to be uncollectable |
| Customer 19 | 183,899.57 | 183,899.57 | 100.00 | Expected to be uncollectable |
| Customer 20 | 458,366.00 | 458,366.00 | 100.00 | Expected to be uncollectable |
| Customer 21 | 52,102.80 | 52,102.80 | 100.00 | Expected to be uncollectable |
| Customer 22 | 23,220.00 | 23,220.00 | 100.00 | Expected to be uncollectable |
| Customer 23 | 54,180.60 | 54,180.60 | 100.00 | Expected to be uncollectable |
| Customer 24 | 62,744.21 | 62,744.21 | 100.00 | Expected to be uncollectable |
| Customer 25 | 11,987.12 | 11,987.12 | 100.00 | Expected to be uncollectable |
| Total | 38,203,607.52 | 36,437,855.70 | 95.38 | / |
? Accruing bad debt provision according to aging
RMB
| Aging | Closing balance | ||
| Account receivable | Bad debt provision | Accruing percentage % | |
| Within 1 year | 544,360,705.93 | 27,225,484.73 | 5.00 |
| 1-2 years | 46,602,913.58 | 4,660,291.35 | 10.00 |
| 2-3 years | 25,559,890.06 | 10,223,956.02 | 40.00 |
| Over 3 years | 53,107,705.30 | 53,107,705.20 | 100.00 |
| Total | 669,631,214.87 | 95,217,437.30 | / |
| Category | Opening balance | Changes in current period | Closing balance | ||
| Accruing | Charge off or write-off | Other change | |||
| Accounts receivable | 110,357,642.57 | 22,313,507.73 | 1,015,857.30 | 131,655,293.00 | |
| Total | 110,357,642.57 | 22,313,507.73 | 1,015,857.30 | 131,655,293.00 | |
| Item | Write-off amount |
| Actual write-off of accounts receivable | 1,015,857.30 |
| Name | Nature | Write-off amount | Reason | Whether generated by related party transactions |
| Customer 1 | Payment for products | 360,000.00 | Uncollectable after prosecuting | No |
| Total | / | 360,000.00 | / | / |
| Debtor | Closing balance | Percentage of the closing balance of total accounts receivable % | Bad debt provision |
| 1 | 35,500,811.17 | 5.02 | 1,775,040.56 |
| 2 | 24,735,281.28 | 3.49 | 1,236,764.06 |
| 3 | 23,998,355.83 | 3.39 | 23,998,355.83 |
| 4 | 12,700,780.87 | 1.79 | 635,039.04 |
| 5 | 8,990,205.35 | 1.27 | 449,510.27 |
| Total | 105,925,434.50 | 14.96 | 28,094,709.76 |
6. Prepayments
A. Presenting by aging
RMB
| Aging | Closing balance | Opening balance | ||
| Amount | Percentage % | Amount | Percentage % | |
| Within 1 year | 261,927,528.27 | 99.23 | 217,146,116.15 | 97.79 |
| Over 1 year | 2,029,358.01 | 0.77 | 4,918,252.40 | 2.21 |
| Total | 263,956,886.28 | 100.00 | 222,064,368.55 | 100.00 |
| Company | Closing balance | Percentage of the closing balance of total prepayments % |
| 1 | 21,023,227.59 | 7.96 |
| 2 | 15,451,022.73 | 5.85 |
| 3 | 10,373,818.85 | 3.93 |
| 4 | 8,885,020.46 | 3.37 |
| 5 | 8,663,040.81 | 3.28 |
| Total | 64,396,130.44 | 24.40 |
| Item | Closing balance | Opening balance |
| Interest receivable | ||
| Dividends receivable | 25,353,722.11 | 25,353,722.11 |
| Other receivables | 82,225,186.59 | 60,247,089.64 |
| Total | 107,578,908.70 | 85,600,811.75 |
| Item | Closing balance | Opening balance |
| Dividends from long-term investment under the equity method | 25,353,722.11 | 25,353,722.11 |
| Total | 25,353,722.11 | 25,353,722.11 |
B. Other receivablesa. Presenting by aging
RMB
| Aging | Closing book balance |
| Within 1 year | 48,205,868.22 |
| 1-2 years | 2,176,107.20 |
| 2-3 years | 57,453,830.50 |
| Over 3 years | 7,698,087.60 |
| Total | 115,533,893.52 |
| Nature | Closing book balance | Opening book balance |
| General operating receivables | 66,991,402.22 | 48,549,112.40 |
| Deposit and security | 19,551,743.55 | 14,096,016.42 |
| Export rebates receivable | 518,947.75 | 37,833.46 |
| Receivable from disposal of investment | 28,471,800.00 | 28,471,800.00 |
| Total | 115,533,893.52 | 91,154,762.28 |
| Bad debt provision | First stage | Second stage | Third stage | Total |
| Expected credit losses over the next 12 months | Expected credit loss for the entire duration (no credit impairment) | Expected credit loss for the entire duration (credit impairment occurred) | ||
| Balance on January 1, 2020 | 26,950,938.36 | 3,956,734.28 | 30,907,672.64 | |
| Accruing in the reporting period | 1,861,806.20 | 1,861,806.20 | ||
| Reversing back in the reporting period | ||||
| Other change | 539,228.09 | 539,228.09 | ||
| Balance on June 30, 2020 | 28,812,744.56 | 4,495,962.37 | 33,308,706.93 |
d. Bad debt provision
RMB
| Category | Opening balance | Changes in current period | Closing balance | |||
| Accruing | Collected or reversed | Charge off or write-off | Other change | |||
| Other receivables | 30,907,672.64 | 1,861,806.20 | 539,228.09 | 33,308,706.93 | ||
| total | 30,907,672.64 | 1,861,806.20 | 539,228.09 | 33,308,706.93 | ||
| Company | Nature | Closing balance | Aging | Percentage of closing balance of total other receivables % | Closing balance of bad debt provision |
| 1 | Receivables arising from disposal of investment | 28,471,800.00 | 2-3 years | 24.64 | 11,388,720.00 |
| 2 | Temporary debit | 27,611,673.00 | 2-3 years | 23.90 | 11,044,669.20 |
| 3 | Security deposit | 4,400,000.00 | Within 1 year | 3.81 | 220,000.00 |
| 4 | Security deposit | 3,900,000.00 | Within 1 year | 3.38 | 195,000.00 |
| 5 | Commercial LC | 3,426,860.90 | Within 1 year | 2.97 | 171,343.05 |
| Total | / | 67,810,333.90 | / | 58.70 | 23,019,732.25 |
| Item | Closing balance | Opening balance | ||||
| Book balance | Falling price reserve | Book value | Book balance | Falling price reserve | Book value | |
| Raw material | 683,645,657.84 | 2,774,564.29 | 680,811,727.92 | 651,999,952.04 | 2,852,699.42 | 649,147,252.62 |
| Product in process | 44,176,237.73 | 653,313.59 | 43,342,580.48 | 55,837,226.60 | 653,313.59 | 55,183,913.01 |
| Finished product | 585,184,153.78 | 6,391,166.19 | 579,033,776.88 | 585,118,896.60 | 2,650,729.76 | 582,468,166.84 |
| Consumptive biological assets | 427,885,766.09 | 26,054,133.72 | 401,831,632.37 | 274,774,516.57 | 26,670,559.74 | 248,103,956.83 |
| Low priced and easily worn articles | 14,818,723.46 | 14,817,643.46 | 13,182,022.60 | 13,182,022.60 | ||
| Wrappage | 8,868,837.53 | 8,868,837.53 | 15,557,821.25 | 15,557,821.25 | ||
| Engineering construction | 6,150,621.28 | 6,150,621.28 | 4,730,000.00 | 4,730,000.00 | ||
| Total | 1,770,729,997.71 | 35,873,177.79 | 1,734,856,819.92 | 1,601,200,435.66 | 32,827,302.51 | 1,568,373,133.15 |
B. Falling price reserves
RMB
| Item | Opening balance | Increased amount | Reduced amount | Closing balance | ||
| Accruing | Other | Reversing back or charging off | Other | |||
| Raw material | 2,852,699.42 | 78,135.13 | 2,774,564.29 | |||
| Product in process | 653,313.59 | 653,313.59 | ||||
| Finished product | 2,650,729.76 | 11,612,155.42 | 7,871,718.99 | 6,391,166.19 | ||
| Consumptive biological assets | 26,670,559.74 | 616,426.02 | 26,054,133.72 | |||
| Total | 32,827,302.51 | 11,612,155.42 | 8,566,280.14 | 35,873,177.79 | ||
| Item | Closing balance | Opening balance |
| Available for deducting VAT and prepaid tax | 105,151,422.67 | 121,711,175.93 |
| total | 105,151,422.67 | 121,711,175.93 |
10. Long-term equity investment
RMB
| Investee | Opening balance | Changes in the current period | Closing balance | Closing balance of impairment provision | ||||
| Additional investment | Decreased investment | Gains or losses on investments recognized under the equity method | Adjustment of other comprehensive income | Dividends or profits declared | ||||
| Unphung Joint Venture Company | 4,167,616.44 | 4,167,616.44 | ||||||
| Nepal Wellhope Agri-tech Pvt. Ltd. | 7,501,575.10 | 7,501,575.10 | ||||||
| NEXUS WELL-HOPE AGRITECH INTERNATIONAL LIMITED | 17,900,000.00 | 17,900,000.00 | 17,900,000.00 | |||||
| subtotal | 29,569,191.54 | 29,569,191.54 | 17,900,000.00 | |||||
| Qingdao Shenfeng | 13,573,648.97 | 748,458.85 | 14,322,107.82 | |||||
| Anshan Jiuguhe Food | 152,438,428.77 | 40,248,068.41 | 33,242,400.00 | 159,444,097.18 | ||||
| Tai’an Jiuguhe Agriculture | 111,292,888.94 | -24,036,930.68 | 87,255,958.26 | |||||
| Linghai Jiuguhe Feed | 62,403,210.81 | -8,542,203.13 | 53,861,007.68 | |||||
| Huludao Jiuguhe Food | 70,721,671.34 | 17,004,977.98 | 13,300,000.00 | 74,426,649.32 | ||||
| Dandong Wellhope Chengsan Food | 52,614,814.23 | 10,083,391.76 | 2,000,000.00 | 60,698,205.99 | ||||
| Dandong Wellhope Chengsan Agri-Tech | 112,253,275.58 | -293,948.88 | 2,000,000.00 | 109,959,326.70 | ||||
| Haicheng New Hongzunda Agri-Tech | 12,850,037.83 | 1,375,229.55 | 1,470,000.00 | 12,755,267.38 | ||||
| Beipiao Hongfa Food | 442,144,638.08 | 46,277,265.92 | 488,421,904.00 | |||||
| Beijing Dahong Hengfeng | 20,087,982.12 | 456,127.14 | 20,544,109.26 | |||||
| Tai'an Jiufeng Agri-Tech | 5,951,804.50 | 182,624.00 | -1,153,694.01 | 4,980,734.49 | ||||
| Schipper(Beijing) | 1,270,877.77 | 212,349.05 | 1,483,226.82 | |||||
| Shenyang Wenjie Bio-Tech | 12,442,904.99 | 141,560.82 | 12,584,465.81 | |||||
| Huludao Jiuguhe Feed | 42,015,223.35 | -10,077,547.46 | 13,300,000.00 | 18,637,675.89 | ||||
| Jinzhou Jiufeng Food | 48,476,492.49 | 19,329,815.40 | 67,806,307.89 | |||||
| Zhangjiakou Jiahe Agriculture and Animal Husbandry | 68,145,308.99 | 32,666,799.59 | 100,812,108.58 | |||||
| Tai'an Fengjiu Agri-Tech | 37,837,537.89 | -476,164.49 | 37,361,373.40 | |||||
| Anshan Fengsheng Food | 30,430,304.76 | 13,159,004.46 | 43,589,309.22 | |||||
| Dalian Chengsan Animal Husbandry | 353,954,231.89 | 6,101,236.52 | 360,055,468.41 | |||||
| Tailai Jiahe Agriculture and Animal Husbandry | 27,134,553.62 | 17,849,560.97 | 44,984,114.59 | |||||
| Gongzhuling Corn Purchasing and Storing | 61,494,603.43 | -1,526,619.80 | 59,967,983.63 | |||||
| Lankao Skyland Duck | 49,841,895.84 | -6,112,003.85 | 43,729,891.99 | |||||
| Hainan Nongken Wenfeng Wenchang Chicken | 1,071,542.40 | 4,900,000.00 | -165,429.32 | 5,806,113.08 | ||||
| Dunhua Wellhope Agri-Tech | 4,178,671.25 | 385,403.69 | 4,564,074.94 | |||||
| Dunhua Fengda Agriculture and Animal Husbandry | 2,986,597.14 | 4,994,971.77 | 7,981,568.91 | |||||
| PT KARKA NUTRI INDUSTRI. | 38,998,739.72 | 647,315.58 | -57,328.83 | 39,588,726.47 | ||||
| GOLDEN HARVESTA INC. | 104,931,225.82 | 1,680,750.70 | 2,945,569.11 | 109,557,545.63 | ||||
| Guangrong Xinchuang | 47,617,462.51 | 946,503.02 | -623,081.20 | 47,940,884.33 | ||||
| Shenyang Zhongwenjie Bio-Tech | 4,060,534.77 | 533,672.62 | 4,594,207.39 |
| Shulan Fengtai Organic Fertilizer | 1,500,000.00 | 1,500,000.00 | ||||||
| Weifang Wellhope Xinhesheng Feed | 5,337,855.68 | 163,974.97 | 5,501,830.65 | |||||
| Liaoning Mubang Animal Husbandry Equipment Manufacturing | 1,791,476.38 | 2,626,742.47 | 4,418,218.85 | |||||
| Anshan Yufeng Feed | -193,154.81 | -314,363.36 | -507,518.17 | |||||
| Dalian Wellhope Fish Meal | 5,724,448.41 | 704,167.72 | 6,428,616.13 | |||||
| Liaoning Petmate Bio-Tech | 5,576,080.92 | -289,321.86 | 5,286,759.06 | |||||
| Guangzhou Yikun Trading | 108,257.73 | 1,189,819.53 | 1,298,077.26 | |||||
| Jilin Hengfeng Animal Health Products | 1,832,880.70 | 456,443.00 | 2,289,323.70 | |||||
| Shenyang Wanlitian Agriculture and Animal Husbandry | 2,247,702.24 | 610,988.76 | 2,858,691.00 | |||||
| Daqing Supply and Marketing Wellhope Agri-Tech | 3,527,190.48 | 508,337.18 | 4,035,527.66 | |||||
| Heilongjiang Zhongyi Pasture Information Technology Service | 442,305.46 | -171,896.45 | 270,409.01 | |||||
| Indonesia Max Livestock Technology | 1,460,475.96 | 1,460,475.96 | ||||||
| Dalian Sida Food | 35,802,062.02 | 5,328,523.40 | 41,130,585.42 | |||||
| Shandong Fengkang Food | 25,000,000.00 | -1,914,873.80 | 23,085,126.20 | |||||
| Dunhua Fengda Breeding Broiler | 6,000,000.00 | -56,689.40 | 5,943,310.60 | |||||
| Subtotal | 2,058,378,690.97 | 36,082,624.00 | 171,299,774.34 | 2,265,159.08 | 65,312,400.00 | 2,202,713,848.39 | ||
| Total | 2,087,947,882.51 | 36,082,624.00 | 171,299,774.34 | 2,265,159.08 | 65,312,400.00 | 2,232,283,039.93 | 17,900,000.00 |
11. Other equity instruments Investment
A. Other equity instruments Investment
RMB
| Item | Closing balance | Opening balance |
| China-Russia Friendship Association of Liaoning Province | 10,000.00 | 10,000.00 |
| Hengshui Hejia Agriculture and Animal Husbandry | 1,454,281.94 | 1,454,281.94 |
| Xi'an Micro Monkey E-commerce | 175,087.98 | |
| Jiayou Agriculture and Animal Husbandry in Xinji City | 900,000.00 | 900,000.00 |
| Jiahe Agriculture and Animal Husbandry in Shenze County | 3,020,978.16 | 1,500,000.00 |
| Dalian Xuelong Heniu Import and Export | 7,266,447.34 | 1,500,000.00 |
| Henan Shanghui Feed Development | 127,230.32 | 127,230.32 |
| Shenyang Bononveit Animal Health | 138,167.76 | 61,696.77 |
| Beijing Haobang Swine Artificial Insemination Service | 32,542.22 | 32,542.22 |
| Total | 12,949,647.74 | 5,760,839.23 |
| Item | Dividend income recognized in the current period | Cumulative gains | Cumulative losses |
| China-Russia Friendship Association of Liaoning Province | |||
| Hengshui Hejia Agriculture and Animal Husbandry | 145,718.06 | ||
| Xi'an Micro Monkey E-commerce | 340,000.00 | ||
| Jiayou Agriculture and Animal Husbandry in Xinji City | |||
| Jiahe Agriculture and Animal Husbandry in Shenze County | 1,520,978.16 | ||
| Dalian Xuelong Heniu Import and Export | 233,552.66 | ||
| Henan Shanghui Feed Development | 372,769.68 | ||
| Shenyang Bononveit Animal Health | 58,167.76 | ||
| Beijing Haobang Swine Artificial Insemination Service | 67,457.78 | ||
| Total | 1,579,145.92 | 1,159,498.18 |
| Item | Closing balance | Opening balance |
| Fixed assets | 2,269,553,170.07 | 2,023,113,939.02 |
| Disposal of fixed assets | ||
| Total | 2,269,553,170.07 | 2,023,113,939.02 |
A. Circumstance of fixed assets
RMB
| Item | Buildings and structures | Machinery equipment | Transportation vehicle | Other equipment | Total |
| 1. Original value | |||||
| A. Opening balance | 1,717,146,763.14 | 1,231,747,402.79 | 107,927,235.19 | 73,745,481.56 | 3,130,566,882.68 |
| B. Increased amount | 203,046,790.27 | 199,349,729.48 | 10,220,858.32 | 7,267,408.85 | 419,884,786.92 |
| a. Purchased | 130,763,904.52 | 135,368,662.39 | 10,011,926.97 | 6,616,038.95 | 282,760,532.83 |
| b. Construction in progress transferred in | 34,213,999.67 | 44,851,669.65 | 53,097.35 | 276,169.00 | 79,394,935.67 |
| c. Increased by business combination | 38,068,886.08 | 19,129,397.44 | 155,834.00 | 375,200.90 | 57,729,318.42 |
| C. Decreased amount | 12,802,100.85 | 2,190,199.48 | 2,086,024.44 | 201,072.90 | 17,279,397.67 |
| a. Disposed or scrapped | 866,926.85 | 2,231,935.66 | 2,067,524.44 | 201,072.90 | 5,367,459.85 |
| b. Other | 11,935,174.00 | -41,736.18 | 18,500.00 | 11,911,937.82 | |
| D. Closing balance | 1,907,391,452.56 | 1,428,906,932.79 | 116,062,069.07 | 80,811,817.51 | 3,533,172,271.93 |
| 2. Accumulated depreciation | |||||
| A. Opening balance | 370,740,456.95 | 501,199,843.43 | 80,296,331.86 | 51,738,432.70 | 1,003,975,064.94 |
| B. Increased amount | 62,385,081.12 | 86,899,462.05 | 6,011,863.30 | 5,360,944.51 | 160,657,350.98 |
| a. Accruing | 49,894,857.38 | 74,592,683.24 | 5,906,675.29 | 4,996,142.13 | 135,390,358.04 |
| b. Other | 12,490,223.74 | 12,306,778.81 | 105,188.01 | 364,802.38 | 25,266,992.94 |
| C. Decreased amount | 1,960,023.20 | 550,646.52 | 1,805,101.86 | 168,096.25 | 4,483,867.83 |
| a. Disposed or scrapped | 1,885,298.88 | 550,646.52 | 1,795,381.76 | 168,096.25 | 4,399,423.41 |
| b. Other | 74,724.32 | 9,720.10 | 84,444.42 | ||
| D. Closing balance | 431,165,514.87 | 587,548,658.96 | 84,503,093.30 | 56,931,280.96 | 1,160,148,548.09 |
| 3. Impairment provision | |||||
| A. Opening balance | 59,961,322.75 | 42,904,539.70 | 204,388.73 | 407,627.54 | 103,477,878.72 |
| B. Increased amount | |||||
| a. Accruing | |||||
| C. Decreased amount | 6,093.60 | 1,218.00 | 13.35 | 7,324.95 | |
| a. Disposed or scrapped | 6,093.60 | 1,218.00 | 13.35 | 7,324.95 | |
| D. Closing balance | 59,961,322.75 | 42,898,446.10 | 203,170.73 | 407,614.19 | 103,470,553.77 |
| 4. Book value | |||||
| A. Closing book value | 1,416,264,614.94 | 798,459,827.73 | 31,355,805.04 | 23,472,922.36 | 2,269,553,170.07 |
| B. Opening book value | 1,286,444,983.44 | 687,643,019.66 | 27,426,514.60 | 21,599,421.32 | 2,023,113,939.02 |
B. Fixed assets rented through finance lease
RMB
| Item | Original book value | Accumulated depreciation | Opening balance |
| Manufacture equipment | 92,352,635.00 | 8,838,713.00 | 83,513,922.00 |
| Item | Closing balance of book value |
| Buildings and structures | 18,221,668.31 |
| Item | Closing balance | Opening balance |
| Construction in progress | 353,897,369.68 | 240,012,874.86 |
| Total | 353,897,369.68 | 240,012,874.86 |
| Item | Closing balance | Opening balance | ||
| Book balance | Book value | Book balance | Book value | |
| Jilin Wellhope- sewage treatment and organic fertilizer | 5,566,842.71 | 5,566,842.71 | 4,607,316.99 | 4,607,316.99 |
| Dalian Zhongjia -workshop renovation | 2,267,944.57 | 2,267,944.57 | 2,226,208.39 | 2,226,208.39 |
| Shulan Fengtai-poultry house | 32,559,390.57 | 32,559,390.57 | 55,672,411.04 | 55,672,411.04 |
| Fushun Agriculture and Animal Husbandry-first phase of Shangnian pig farm | 8,471,002.32 | 8,471,002.32 | 5,421,572.65 | 5,421,572.65 |
| Fushun Agriculture and Animal Husbandry-Fushun Guanshan pig farm | 109,687,007.48 | 109,687,007.48 | 76,160,733.62 | 76,160,733.62 |
| Puyang Wellhope-broiler house | 12,230.00 | 12,230.00 | 6,345,004.05 | 6,345,004.05 |
| Shenyang Huakang- workshop renovation | 1,936,318.45 | 1,936,318.45 | 8,929,925.91 | 8,929,925.91 |
| Lankao Wellhope-premix project | 11,029,778.36 | 11,029,778.36 | 8,510,622.36 | 8,510,622.36 |
| Hainan Wellhope-feed production line with 200,000 tons per year | 37,787,565.37 | 37,787,565.37 | 13,326,858.52 | 13,326,858.52 |
| Pingyuan Food-second production line | 3,329,853.44 | 3,329,853.44 | 1,723,490.95 | 1,723,490.95 |
| Huakang Xinxin Food- refrigerated warehouse | 185,891.50 | 185,891.50 | 3,660,000.00 | 3,660,000.00 |
| Liaoning Wellhope-operation center | 3,447,131.26 | 3,447,131.26 | 2,319,079.26 | 2,319,079.26 |
| Gansu Wellhope-bulk feed workshop renovation | 2,132,421.08 | 2,132,421.08 | ||
| Anhui Wellhope-finished products workshop construction | 2,004,000.00 | 2,004,000.00 | 2,004,000.00 | 2,004,000.00 |
| Shenyang Wellhope-creep feed production line | 1,119,600.00 | 1,119,600.00 | 1,119,600.00 | 1,119,600.00 |
| Daqing Wellhope-livestock raising equipment | 1,324,452.00 | 1,324,452.00 | ||
| Liaoning Wellhope-office building decoration | 2,768,656.50 | 2,768,656.50 | 2,518,656.50 | 2,518,656.50 |
| Dalian Heyuan-Dayao hatching farm | 43,947,768.53 | 43,947,768.53 | 28,067,787.50 | 28,067,787.50 |
| Suizhong Renhe Fishery-fish meal production line | 2,605,016.00 | 2,605,016.00 | ||
| Dalian Zhongjia-second phase project construction | 4,597,303.01 | 4,597,303.01 | ||
| Dalian Zhongjia-workshop | 632,004.94 | 632,004.94 | ||
| Shandong Heyuan Food- refrigeration and distribution room | 25,855,457.44 | 25,855,457.44 | ||
| Changchun Wellhope-apartment building | 31,509.43 | 31,509.43 | 31,509.43 | 31,509.43 |
| Changchun Wellhope-refrigeration storage | 14,264.15 | 14,264.15 | ||
| Anhui Haoxiang-sow farm equipment construction | 3,230,000.00 | 3,230,000.00 | ||
| Nongda Wellhope-reconstructing pelleting line | 2,423,330.00 | 2,423,330.00 |
| Tai’an Wellhope-small renovation projects | 3,243,743.00 | 3,243,743.00 | ||
| Lingyuan Wellhope-pig farm | 8,909,715.82 | 8,909,715.82 | 2,119,531.03 | 2,119,531.03 |
| Lingyuan Wellhope-Lijiayingzi pig farm | 9,901,000.00 | 9,901,000.00 | ||
| Hebei Taihang-main construction of workshop | 1,848,779.99 | 1,848,779.99 | ||
| Other constructions | 24,484,264.84 | 24,484,264.84 | 11,791,693.58 | 11,791,693.58 |
| Total | 353,897,369.68 | 353,897,369.68 | 240,012,874.86 | 240,012,874.86 |
B. Important constructions in progress
RMB
| Project | Budget | Opening balance | Increased amount | Amount transferred in fixed assets | Other decreased amount | Closing balance | Percentage of accumulated input accounting for budget % | Construction progress % | Source of funds |
| Jilin Wellhope- sewage treatment and organic fertilizer | 6,000,000.00 | 4,607,316.99 | 959,525.72 | 5,566,842.71 | 92.78 | 95.00% | Raised funds | ||
| Dalian Zhongjia -workshop | 40,000,000.00 | 2,226,208.39 | 41,736.18 | 2,267,944.57 | 96.46 | 97.00% | Own funds | ||
| Shulan Fengtai-poultry house | 67,256,185.00 | 55,672,411.04 | 3,706,882.86 | 26,819,903.33 | 32,559,390.57 | 88.00 | 75.00% | Own funds | |
| Fushun Agriculture and Animal Husbandry-first phase of Shangnian pig farm | 160,000,000.00 | 5,421,572.65 | 6,156,706.77 | 3,107,277.10 | 8,471,002.32 | 108.57 | 100.00% | Raised funds | |
| Fushun Agriculture and Animal Husbandry-Fushun Guanshan pig farm | 140,300,000.00 | 76,160,733.62 | 33,526,273.86 | 109,687,007.48 | 78.18 | 80.00% | Raised funds | ||
| Puyang Wellhope-broiler house | 28,762,478.67 | 6,345,004.05 | 126,792.00 | 6,459,566.05 | 12,230.00 | 99.23 | 99.00% | Own funds | |
| Shenyang Huakang- workshop renovation | 12,741,491.00 | 8,929,925.91 | 5,071,392.03 | 12,064,999.49 | 1,936,318.45 | 109.89 | 94.00% | Own funds | |
| Lankao Wellhope-premix project | 23,800,000.00 | 8,510,622.36 | 2,519,156.00 | 11,029,778.36 | 46.34 | 70.00% | Own funds |
| Hainan Wellhope-feed production line with 200,000 tons per year | 60,000,000.00 | 13,326,858.52 | 24,460,706.85 | 37,787,565.37 | 62.98 | 80.00% | Own funds | ||
| Pingyuan Food-second production line | 4,000,000.00 | 1,723,490.95 | 1,606,362.49 | 3,329,853.44 | 83.25 | 85.00% | Own funds | ||
| Huakang Xinxin Food- refrigerated warehouse | 4,300,000.00 | 3,660,000.00 | 500,000.00 | 3,913,343.05 | 60,765.45 | 185,891.50 | 100.00 | 96.00% | Own funds |
| Liaoning Wellhope-operation center | 6,000,000.00 | 2,319,079.26 | 1,128,052.00 | 3,447,131.26 | 56.00 | 60.00% | Own funds | ||
| Gansu Wellhope-bulk feed workshop renovation | 3,000,000.00 | 2,132,421.08 | 527,600.00 | 2,660,021.08 | 88.67 | 100.00% | Own funds | ||
| Anhui Wellhope-finished products workshop construction | 2,800,000.00 | 2,004,000.00 | 2,004,000.00 | 71.57 | 72.00% | Own funds | |||
| Shenyang Wellhope-creep feed production line | 1,399,500.00 | 1,119,600.00 | 1,119,600.00 | 80.00 | 80.00% | Own funds | |||
| Daqing Wellhope-livestock raising equipment | 1,620,000.00 | 1,324,452.00 | 229,500.00 | 1,553,952.00 | 100.00 | 100.00% | Own funds | ||
| Liaoning Wellhope-office building decoration | 3,100,000.00 | 2,518,656.50 | 250,000.00 | 2,768,656.50 | 89.31 | 90.00% | Own funds | ||
| Dalian Heyuan-Dayao hatching farm | 60,000,000.00 | 28,067,787.50 | 27,409,981.03 | 11,530,000.00 | 43,947,768.53 | 70.00 | 80.00% | Own funds | |
| Suizhong Renhe Fishery-fish meal production line | 2,700,000.00 | 2,605,016.00 | 2,605,016.00 | 96.00 | 95.00% | Own funds | |||
| Dalian Zhongjia-second phase project construction | 200,000,000.00 | 4,597,303.01 | 4,597,303.01 | 2.30 | 10.00% | Own funds | |||
| Dalian Zhongjia-workshop | 15,000,000.00 | 632,004.94 | 632,004.94 | 4.20 | 20.00% | Own funds |
| Shandong Heyuan Food- refrigeration and distribution room | 42,000,000.00 | 26,612,881.44 | 757,424.00 | 25,855,457.44 | 63.36 | 70.00% | Own funds | ||
| Changchun Wellhope-apartment building | 5,200,000.00 | 31,509.43 | 31,509.43 | 0.61 | Own funds | ||||
| Changchun Wellhope-refrigeration storage | 9,000,000.00 | 14,264.15 | 14,264.15 | 0.16 | Own funds | ||||
| Anhui Haoxiang-sow farm equipment construction | 3,250,000.00 | 3,230,000.00 | 3,230,000.00 | 99.38 | 99.00% | Own funds | |||
| Nongda Wellhope-reconstructing pelleting line | 3,000,000.00 | 2,423,330.00 | 2,423,330.00 | 80.78 | 80.00% | Own funds | |||
| Tai’an Wellhope-small renovation projects | 4,000,000.00 | 3,768,690.00 | 524,947.00 | 3,243,743.00 | 94.22 | 95.00% | Own funds | ||
| Lingyuan Wellhope- pig farm | 20,000,000.00 | 2,119,531.03 | 6,790,184.79 | 8,909,715.82 | 45.00 | 50.00% | Own funds | ||
| Lingyuan Wellhope-Lijiayingzi pig farm | 50,000,000.00 | 9,901,000.00 | 9,901,000.00 | 19.80 | 25.00% | Raised funds | |||
| Hebei Taihang-main construction of workshop | 50,000,000.00 | 1,848,779.99 | 1,848,779.99 | 26.00 | 30.00% | Own funds | |||
| Total | 1,029,229,654.67 | 228,221,181.28 | 170,644,122.11 | 68,634,009.10 | 818,189.45 | 329,413,104.84 | / | / | / |
14. Biological asset
Productive biological assets using cost measurement model
RMB
| Item | Animal husbandry | Total | |
| Breeder (broiler) | Breeder (swine) | ||
| 1. Original value | |||
| A. Opening balance | 52,264,742.77 | 67,953,454.22 | 120,218,196.99 |
| B. Increased amount | 49,353,239.87 | 146,143,687.88 | 195,496,927.75 |
| a. Externally purchased | 12,625,800.00 | 18,689,931.63 | 31,315,731.63 |
| b. Raised by own farm | 36,727,439.87 | 127,453,756.25 | 164,181,196.12 |
| C. Decreased amount | 42,491,398.30 | 68,962,388.34 | 111,453,786.64 |
| a. Disposed | 42,491,398.30 | 68,962,388.34 | 111,453,786.64 |
| D. Closing balance | 59,126,584.34 | 145,134,753.76 | 204,261,338.10 |
| 2. Accumulated depreciation | |||
| A. Opening balance | 22,090,264.89 | 3,301,619.22 | 25,391,884.11 |
| B. Increased amount | 15,986,768.66 | 6,816,304.86 | 22,803,073.52 |
| a. Accruing | 15,986,768.66 | 6,816,304.86 | 22,803,073.52 |
| C. Decreased amount | 23,730,681.96 | 1,250,663.95 | 24,981,345.91 |
| a. Disposed | 23,730,681.96 | 1,250,663.95 | 24,981,345.91 |
| D. Closing balance | 14,346,351.59 | 8,867,260.13 | 23,213,611.72 |
| 3. Impairment provision | |||
| 4. Book value | |||
| A. Closing book value | 44,780,232.75 | 136,267,493.63 | 181,047,726.38 |
| B. Opening book value | 30,174,477.88 | 64,651,835.00 | 94,826,312.88 |
| Item | Land use rights | Computer software and other | Total |
| 1. Original value | |||
| A. Opening balance | 283,885,270.01 | 12,795,928.14 | 296,681,198.15 |
| B. Increased amount | 23,489,314.73 | 114,116.81 | 23,603,431.54 |
| a. Purchased | 12,874,127.02 | 114,116.81 | 12,988,243.83 |
| b. Increased by business combination | 10,615,187.71 | 10,615,187.71 | |
| C. Decreased amount | |||
| a. Disposed | |||
| b. Decreased by business combination | |||
| D. Closing balance | 307,374,584.74 | 12,910,044.95 | 320,284,629.69 |
| 2. Accumulated amortization | |||
| A. Opening balance | 45,817,866.76 | 5,299,164.00 | 51,117,030.76 |
| B. Increased amount | 5,172,504.75 | 722,468.85 | 5,894,973.60 |
| a. Accruing | 4,094,991.56 | 722,468.85 | 4,817,460.41 |
| b. Increased by business combination | 1,077,513.19 | 1,077,513.19 | |
| C. Decreased amount | |||
| a. Disposed | |||
| b. Decreased by business combination |
| D. Closing balance | 50,990,371.51 | 6,021,632.85 | 57,012,004.36 |
| 3. Impairment provision | |||
| 4. Book value | |||
| A. Closing book value | 256,384,213.23 | 6,888,412.10 | 263,272,625.33 |
| B. Opening book value | 238,067,403.25 | 7,496,764.14 | 245,564,167.39 |
| Invested entity or matters forming goodwill | Opening balance | Increased amount | Decreased amount | Closing balance |
| Formed by business combination | Disposal | |||
| Dalian Zhongjia Food Co., Ltd. | 290,425.67 | 290,425.67 | ||
| Total | 290,425.67 | 290,425.67 |
| Item | Opening balance | Increased amount | Amortized amount | Closing balance |
| Broiler cages | 82,161,315.11 | 2,790,526.00 | 12,006,436.91 | 72,945,404.20 |
| Land lease fee | 30,526,112.57 | 11,839,355.85 | 4,479,187.83 | 37,886,280.59 |
| Fixed assets improvement | 16,377,506.34 | 4,196,616.75 | 2,059,599.29 | 18,514,523.80 |
| Other | 5,439,283.78 | 5,684,341.00 | 3,208,236.05 | 7,915,388.73 |
| Total | 134,504,217.80 | 24,510,839.60 | 21,753,460.08 | 137,261,597.32 |
| Item | Closing balance | Opening balance | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Provision for the impairment of assets | 166,517,761.35 | 32,490,192.58 | 156,147,402.07 | 30,646,841.04 |
| Equity incentive expense | 8,407,491.98 | 1,291,179.03 | 3,243,114.20 | 508,474.55 |
| Changes in fair value | 1,276,045.00 | 188,091.24 | 112,115.92 | 28,028.98 |
| Unrealized profit of internal transaction | 19,048,556.19 | 4,435,882.97 | 23,895,127.90 | 4,804,391.92 |
| Total | 195,249,854.52 | 38,405,345.82 | 183,397,760.09 | 35,987,736.49 |
b. Deferred income tax liabilities that are not offset
RMB
| Item | Closing balance | Opening balance | ||
| Taxable temporary differences | Deferred income tax liabilities | Taxable temporary differences | Deferred income tax liabilities | |
| Book value of asset greater than the tax base | 1,412,208.28 | 353,052.07 | 1,611,908.32 | 396,995.58 |
| Total | 1,412,208.28 | 353,052.07 | 1,611,908.32 | 396,995.58 |
| Item | Closing balance | Opening balance |
| Deductible temporary difference | 43,738,446.96 | 51,189,855.72 |
| Deductible losses | 276,881,574.34 | 234,143,729.40 |
| Total | 320,620,021.30 | 285,333,585.12 |
| Year | Closing balance | Opening balance | Note |
| 2020 | 32,419,997.44 | 26,306,707.29 | |
| 2021 | 32,093,129.73 | 37,833,545.02 | |
| 2022 | 47,622,896.40 | 38,752,564.40 | |
| 2023 | 48,973,249.20 | 40,585,903.64 | |
| 2024 | 75,245,555.11 | 77,825,369.67 | |
| 2025 | 21,775,079.73 | ||
| 2026 | 611,959.34 | ||
| 2027 | 4,420,084.90 | 2,082,969.89 | |
| 2028 | 8,255,571.42 | 6,715,140.33 | |
| 2029 | 4,278,584.71 | 4,041,529.16 | |
| 2030 | 1,185,466.36 | ||
| Total | 276,881,574.34 | 234,143,729.40 |
| Item | Closing balance | Opening balance | ||
| Book balance | Book value | Book balance | Book value | |
| Prepayments of long-lived assets | 102,051,715.00 | 102,051,715.00 | 44,490,695.92 | 44,490,695.92 |
| Prepayments of fees to contract farms | 333,064,114.08 | 333,064,114.08 | 277,650,038.27 | 277,650,038.27 |
| Prepayments of house rent | 20,243,602.76 | 20,243,602.76 | 15,322,533.37 | 15,322,533.37 |
| Total | 455,359,431.84 | 455,359,431.84 | 337,463,267.56 | 337,463,267.56 |
20. Short-term borrowing
RMB
| Item | Closing balance | Opening balance |
| Guaranteed loan | 126,926,364.65 | 109,638,205.81 |
| Credit loan | 1,096,462,458.88 | 941,240,000.00 |
| Total | 1,223,388,823.53 | 1,050,878,205.81 |
| Item | Closing balance | Opening balance |
| Accounts payable related to purchasing and expenses | 743,649,377.04 | 613,009,029.34 |
| Accounts payable related to long-lived assets | 44,735,414.95 | 46,207,454.50 |
| Total | 788,384,791.99 | 659,216,483.84 |
| Item | Closing balance | Opening balance |
| Sales proceeds | 324,131,304.96 | 209,529,248.68 |
| Total | 324,131,304.96 | 209,529,248.68 |
| Item | Opening balance | Increased amount | Decreased amount | Closing balance |
| 1. Short-term benefits | 61,001,277.97 | 324,661,345.87 | 328,444,438.03 | 57,218,185.81 |
| 2. Post-employeement benefits- defined contribution plan | 1,548,086.15 | 6,902,120.74 | 8,094,880.08 | 355,326.81 |
| 3. Termination benefits | 124,580.05 | 124,580.05 | ||
| 4. Other benefits due within one year | ||||
| Total | 62,549,364.12 | 331,688,046.66 | 336,663,898.16 | 57,573,512.62 |
| Item | Opening balance | Increased amount | Decreased amount | Closing balance |
| 1. Wages, bonuses, allowances and subsidies | 59,658,147.63 | 286,870,724.12 | 291,907,928.94 | 54,620,942.81 |
| 2. Staff benefits expenses | 22,449,300.36 | 21,506,977.87 | 942,322.49 | |
| 3. Social insurance charges | 454,499.01 | 9,058,334.48 | 9,005,720.86 | 507,112.63 |
| including: Medical | 375,466.19 | 8,171,521.96 | 8,075,902.93 | 471,085.22 |
| insurance premiums | ||||
| Occupational injury insurance premium | 52,072.13 | 346,234.04 | 385,668.69 | 12,637.48 |
| Birth insurance premium | 26,960.69 | 540,578.48 | 544,149.24 | 23,389.93 |
| 4. Housing provident fund | 139,516.00 | 4,403,097.20 | 4,338,622.78 | 203,990.42 |
| 5. Employee labor union dues, employee education expense | 749,115.33 | 1,879,889.71 | 1,685,187.58 | 943,817.46 |
| 6. Short-term paid absences | ||||
| 7. Short-term profit sharing plan | ||||
| Total | 61,001,277.97 | 324,661,345.87 | 328,444,438.03 | 57,218,185.81 |
| Item | Opening balance | Increased amount | Decreased amount | Closing balance |
| Basic endowment insurance | 1,499,516.44 | 6,681,964.04 | 7,834,902.03 | 346,578.45 |
| Unemployment insurance expense | 48,569.71 | 220,156.70 | 259,978.05 | 8,748.36 |
| Enterprise annuity | ||||
| Total | 1,548,086.15 | 6,902,120.74 | 8,094,880.08 | 355,326.81 |
| Item | Closing balance | Opening balance |
| Value-added tax | 1,505,188.31 | 1,351,995.42 |
| Corporate income tax | 51,416,303.18 | 32,731,646.44 |
| Individual income tax | 2,267,040.68 | 729,362.56 |
| City maintenance and construction tax | 105,778.15 | 109,286.49 |
| Extra charges of education funds | 68,326.62 | 74,513.94 |
| House property tax | 814,900.85 | 697,937.54 |
| City and town land use tax | 1,261,482.82 | 1,343,282.00 |
| Stamp tax | 354,685.67 | 462,741.13 |
| Resource tax | 117,698.60 | |
| Other | 239,627.11 | 180,188.32 |
| Total | 58,151,031.99 | 37,680,953.84 |
| Item | Closing balance | Opening balance |
| Interest payable | 1,347,819.06 | 1,528,201.39 |
| Dividends payable | 17,135,207.06 | 1,434,027.14 |
| Other payables | 352,260,720.51 | 339,277,132.75 |
| Total | 370,743,746.63 | 342,239,361.28 |
A. Interest payable
RMB
| Item | Closing balance | Opening balance |
| Interests of long-term loan that are paid periodically and repaid the principal due at maturity | 514,237.02 | 237,583.33 |
| Interest payable of short-term borrowing | 833,582.04 | 1,290,618.06 |
| Total | 1,347,819.06 | 1,528,201.39 |
| Item | Closing balance | Opening balance |
| Common stock dividends | 17,135,207.06 | 1,434,027.14 |
| Total | 17,135,207.06 | 1,434,027.14 |
| Item | Closing balance | Opening balance |
| Operating payables related to expenses and transactions | 304,564,905.51 | 204,082,682.75 |
| Payables related to investment | 2,000,000.00 | 64,505,700.00 |
| Obligation of repurchasing non-restricted stock | 45,695,815.00 | 70,688,750.00 |
| Total | 352,260,720.51 | 339,277,132.75 |
| Item | Closing balance | Opening balance |
| Long-term borrowings due within 1 year | 74,000,000.00 | 52,000,000.00 |
| Long-term payables due within 1 year | 19,200,042.05 | 18,593,717.62 |
| Total | 93,200,042.05 | 70,593,717.62 |
| Item | Closing balance | Opening balance |
| Credit loan | 353,830,000.00 | 174,330,000.00 |
| Total | 353,830,000.00 | 174,330,000.00 |
| Bank | Due date | Annual interest rate | Closing balance |
| Shenyang Heping Branch of Agricultural Bank of China | Oct. 28, 2022 | 4.80% | 72,000,000.00 |
| Shenyang Heping Branch of Agricultural Bank of China | Dec. 20, 2021 | 4.99% | 14,000,000.00 |
| Shenyang Hunnan Branch of China Construction Bank | Nov. 20, 2022 | 4.75% | 50,000,000.00 |
| Shenyang Lianhe Road Branch of China Minsheng Bank | Jan. 17, 2023 | 4.75% | 148,500,000.00 |
| Shenyang Lianhe Road Branch of China Minsheng Bank | Mar. 23, 2023 | 4.75% | 49,000,000.00 |
| Chongqing Rural Commercial Bank | Oct. 24, 2021 | Interest-free | 330,000.00 |
| Linzhang Branch of Handan Bank | Apr. 20, 2023 | 4.75% | 10,000,000.00 |
| Handan Bank | Apr. 27, 2023 | 4.75% | 10,000,000.00 |
| Total | 353,830,000.00 |
| Item | Closing balance | Opening balance |
| long-term payable | 66,953,833.28 | 11,025,000.09 |
| Total | 66,953,833.28 | 11,025,000.09 |
| Item | Opening balance | Closing balance |
| Financial lease outlay | 66,953,833.28 | 11,025,000.09 |
| Total | 66,953,833.28 | 11,025,000.09 |
| Item | Opening balance | Increased amount | Decreased amount | Closing balance | Reason |
| Government grant | 31,841,250.00 | 10,020,000.00 | 3,161,752.00 | 38,699,498.00 | |
| Total | 31,841,250.00 | 10,020,000.00 | 3,161,752.00 | 38,699,498.00 |
| Liability item | Opening balance | Amount of newly increased grant | Amount included in non-operating income | Amount included in other income | Closing balance | Related to assets/ related to income |
| 2019 provincial sic-tech major special project funds | 2,180,000.00 | 3,220,000.00 | 1,350,000.00 | 4,050,000.00 | Assets | |
| Shenyang city central industrial transformation and upgrading funds | 8,651,250.00 | 641,250.00 | 8,010,000.00 | Assets | ||
| 2020 Central Government’s funds for high-quality development of manufacturing industry (green manufacturing) | 8,100,000.00 | 2,700,000.00 | 405,000.00 | 10,395,000.00 | Assets |
| Project funds related to benefit farming policy | 4,310,000.00 | 215,502.00 | 4,094,498.00 | Assets | ||
| Lingyuan Wellhope 50,000 tons of organic fertilizer project | 2,700,000.00 | 150,000.00 | 2,550,000.00 | Assets | ||
| Lingyuan Wellhope 100,000 tons of ruminant feed project | 3,500,000.00 | 250,000.00 | 3,250,000.00 | Assets | ||
| Lingyuan Wellhope corn purchasing and storage barn | 2,400,000.00 | 150,000.00 | 2,250,000.00 | Assets | ||
| Lingyuan Wellhope pig farm | 4,100,000.00 | 4,100,000.00 | Assets | |||
| Total | 31,841,250.00 | 10,020,000.00 | 550,000.00 | 2,611,752.00 | 38,699,498.00 | / |
| Opening balance | Changes(increase/decrease) | Closing balance | ||
| Other | Subtotal | |||
| Total shares | 922,304,396.00 | -244,500.00 | -244,500.00 | 922,059,896.00 |
| Item | Opening balance | Increased amount | Decreased amount | Closing balance |
| Capital premium (share capital premium) | 853,610,605.56 | 853,610,605.56 | ||
| Other capital reserves | 29,112,460.73 | 711,477.68 | 29,823,938.41 | |
| Total | 882,723,066.29 | 711,477.68 | 883,434,543.97 |
| Item | Opening balance | Increased amount | Decreased amount | Closing balance |
| Repurchase of restricted stock | 70,688,750.00 | 24,992,935.00 | 45,695,815.00 | |
| Total | 70,688,750.00 | 24,992,935.00 | 45,695,815.00 |
33. Other comprehensive income
RMB
| Item | Opening balance | Amount in current period | Closing balance | ||
| Pre-tax | After-tax, attributable to parent company | After-tax, attributable to non-controlling interest | |||
| 1. Other comprehensive income that cannot be reclassified into gains or losses | -760,192.18 | 1,188,808.51 | 1,151,337.72 | 37,470.79 | 391,145.54 |
| Changes in the fair value of other equity instruments | -760,192.18 | 1,188,808.51 | 1,151,337.72 | 37,470.79 | 391,145.54 |
| 2. Other comprehensive income that will be reclassified into gains or losses | 6,883,027.48 | 752,351.44 | 1,433,114.88 | -680,763.44 | 8,316,142.36 |
| including: other comprehensive income that can be transferred in gains or losses under the equity method | 5,932,621.40 | 2,265,159.08 | 2,265,159.08 | 8,197,780.48 | |
| Translation balance of foreign currency financial statements | 950,406.08 | -1,512,807.64 | -832,044.20 | -680,763.44 | 118,361.88 |
| Total other comprehensive income | 6,122,835.30 | 1,941,159.95 | 2,584,452.60 | -643,292.65 | 8,707,287.90 |
| Item | Opening balance | Increased amount | Dcreased amount | Closing balance |
| Statutory surplus reserve | 352,059,456.90 | 352,059,456.90 | ||
| Total | 352,059,456.90 | 352,059,456.90 |
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| Undistributed profit at the end of prior period before adjustment | 3,605,618,553.05 | 2,651,462,525.08 |
| Adjusting total undistributed profit at the beginning of current period | 91,554.12 |
| Undistributed profit at the beginning of current period after adjustment | 3,605,618,553.05 | 2,651,554,079.20 |
| add: Net profit attributable to the owners of parent company in current period | 606,015,736.01 | 1,199,347,355.96 |
| deduct: Extraction of statutory surplus reserve | 79,268,090.83 | |
| Extraction of discretionary surplus reserve | ||
| Extraction of general risk provisions | ||
| Common stock dividends payable | 202,809,167.12 | 166,014,791.28 |
| Dividends of common stock transferred to share capital | ||
| Undistributed profit at the end of current period | 4,008,825,121.94 | 3,605,618,553.05 |
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 | ||
| Revenue | Cost | Revenue | Cost | |
| Principal businesses | 9,837,251,514.81 | 8,800,742,627.80 | 7,724,785,191.98 | 6,984,517,888.26 |
| Other businesses | 11,128,337.47 | 5,945,784.91 | 2,614,812.77 | 1,302,726.68 |
| Total | 9,848,379,852.28 | 8,806,688,412.71 | 7,727,400,004.75 | 6,985,820,614.94 |
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| City maintenance and construction tax | 491,979.35 | 546,650.44 |
| Extra charges of education funds | 354,066.13 | 391,249.47 |
| Resources tax | 219,195.48 | 232,741.90 |
| House property tax | 3,820,104.55 | 3,310,388.93 |
| Land use tax | 5,365,489.57 | 5,444,248.95 |
| Vehicle and vessel use tax | 29,187.49 | 61,315.46 |
| Stamp tax | 3,329,519.70 | 2,468,193.10 |
| Other tax | 211,052.91 | 243,939.09 |
| Total | 13,820,595.18 | 12,698,727.34 |
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| Payroll | 100,686,134.89 | 94,456,490.48 |
| Travel expense | 49,642,745.40 | 53,709,554.31 |
| Transportation and handling expenses | 36,866,924.68 | |
| Handling expenses | 2,373,443.63 | |
| Business entertainment expenses | 7,218,443.69 | 9,754,397.99 |
| Business advertising expenses | 16,289,097.01 | 12,600,876.75 |
| Labor costs | 8,155,988.35 | 7,946,172.09 |
| Sales and service fees | 3,699,097.44 | 2,327,406.82 |
| Lease fee | 4,868,178.14 | 3,495,494.43 |
| Advertising expenses | 478,345.34 | 259,264.00 |
| Office and communication fee | 2,811,315.18 | 1,790,211.67 |
| Vehicle costs | 2,782,992.72 | 2,662,500.16 |
| Exhibition expenses | 256,885.00 | 573,200.00 |
| Meeting expenses | 1,533,498.19 | 1,793,004.34 |
| Stock incentive expenses | 1,607,223.03 | 3,837,843.75 |
| Subtotal of other items | 10,266,322.61 | 7,917,383.60 |
| Total | 212,669,710.62 | 239,990,725.07 |
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| Payroll | 59,171,860.04 | 53,449,462.39 |
| Depreciation | 18,071,449.61 | 17,177,155.17 |
| Office and communication fee | 7,453,531.76 | 8,711,252.45 |
| Travel expense | 2,981,958.65 | 3,803,513.17 |
| Repair charge | 5,499,715.95 | 5,583,562.37 |
| Lease fee | 2,883,040.89 | 2,445,422.20 |
| Heating fee | 2,853,446.34 | 2,461,972.73 |
| Vehicle costs | 2,531,301.60 | 2,771,604.14 |
| Amortization of intangible assets | 4,109,442.11 | 3,309,384.57 |
| Business entertainment expense | 3,055,375.68 | 2,933,395.99 |
| Water and electricity | 2,328,956.48 | 1,996,702.31 |
| Labor costs | 7,360,317.40 | 4,241,165.89 |
| Stock incentive expenses | 3,197,302.35 | 6,498,748.75 |
| Subtotal of other items | 12,583,927.74 | 11,532,623.04 |
| Total | 134,081,626.60 | 126,915,965.17 |
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| Payroll | 9,952,417.43 | 12,633,422.19 |
| Design and testing fee | 12,542,467.62 | 9,813,339.68 |
| Cost of materials and appliances | 5,359,577.21 | 1,389,033.03 |
| Travel expense | 725,181.16 | 1,478,480.57 |
| Depreciation and amortization charge | 1,467,979.79 | 1,947,348.78 |
| Stock incentive expenses | 457,955.51 | 1,462,706.47 |
| Subtotal of other items | 439,339.59 | 1,297,015.15 |
| Total | 30,944,918.31 | 30,021,345.87 |
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| Interest expenditure | 37,905,838.10 | 40,211,708.70 |
| deduct: Interest income | -8,451,668.98 | -2,641,228.16 |
| add: Exchange loss (deduct income) | 132,321.39 | 428,228.68 |
| Service charge | 1,477,985.62 | 1,482,551.47 |
| Other | 884.59 | 240,491.04 |
| Total | 31,065,360.72 | 39,721,751.73 |
42. Other income
RMB
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| Government grant | 5,942,599.70 | 2,192,950.10 |
| Total | 5,942,599.70 | 2,192,950.10 |
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| Income from long-term equity investment measured by the equity method | 171,299,774.34 | 186,195,941.85 |
| Income from disposal of long-term equity investment | 1,986,085.19 | |
| Income from disposal of financial assets that are measured at fair value and the changes included in current gains or losses | -634,557.55 | -314,995.89 |
| Investment income from holding the trading financial asset | 1,924,534.25 | |
| Dividend income from holding other equity instrument investment | 100,000.00 | |
| Income from disposal of trading financial asset | ||
| Income from disposal of other equity instrument investment | 100,000.00 | |
| Total | 172,589,751.04 | 188,067,031.15 |
| Source of income that generates changes in fair value | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| Trading financial asset | -1,265,439.00 | -169,200.00 |
| Including: Income from fair value changes generated by derivative financial instruments | -1,265,439.00 | -169,200.00 |
| Total | -1,265,439.00 | -169,200.00 |
| Source of income from changes in fair value | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| Bad debt loss of account receivables | -22,313,507.73 | -16,610,388.27 |
| Bad debt loss of other receivables | -1,861,806.20 | -1,924,013.78 |
| Total | -24,175,313.93 | -18,534,402.05 |
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| loss on inventory valuation and impairment loss of contract performance cost | -11,612,155.42 | -269,072.43 |
| Total | -11,612,155.42 | -269,072.43 |
47. Income from assets disposal
RMB
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| Gains or losses from disposal of fixed assets | 875,330.03 | 1,104,606.81 |
| Gains or losses from disposal of biological asset | 671,959.37 | -1,149,966.04 |
| Total | 1,547,289.40 | -45,359.23 |
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 | Amount recorded in current non-recurring items |
| Total gains or losses from disposal of non-current assets | 605,704.68 | 172,530.64 | 605,704.68 |
| including: Gains or losses from disposal of fixed assets | 328,904.68 | 172,530.64 | 328,904.68 |
| Gains from scrapped biological assets | 276,800.00 | 276,800.00 | |
| Government grants | 6,682,599.37 | 14,052,690.31 | 6,682,599.37 |
| Other | 1,117,240.65 | 1,589,709.03 | 1,117,240.65 |
| Total | 8,405,544.70 | 15,814,929.98 | 8,405,544.70 |
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 | Related to assets/related to income |
| Livestock and poultry manure and waste treatment and resource utilization project | 2,000,000.00 | income | |
| Fixed assets investment projects | 1,430,000.00 | income | |
| Award for production increment | 500,000.00 | income | |
| Deferred income transferred | 550,000.00 | 550,000.00 | asset |
| Subtotal for other projects under RMB 500,000 | 2,202,599.37 | 2,149,390.31 | income |
| 2018 special fund for the development of Shenyang foreign trade and economic cooperation | 3,884,800.00 | income | |
| Funds provided by Bureau of Finance of Shenyang city to benefit agricultural projects | 4,310,000.00 | income | |
| Incentive fund for China's top 500 private enterprises | 2,000,000.00 | income | |
| Special fund for air control and gas boiler | 1,158,500.00 | income | |
| Total | 6,682,599.37 | 14,052,690.31 | / |
49. Non-operating expenditure
RMB
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 | Amount included in current non-recurring items |
| Total losses from disposal of non-current assets | 2,720,080.23 | 4,258,987.96 | 2,720,080.23 |
| including: Losses from disposal of fixed assets | 318,214.63 | 628,617.75 | 318,214.63 |
| Losses from scrapped biological assets | 2,401,865.60 | 3,630,370.21 | 2,401,865.60 |
| Penalties and late fees | 519,619.48 | 487,260.00 | 519,619.48 |
| External donations | 2,515,826.50 | 1,614,600.00 | 2,515,826.50 |
| Extraordinary loss | 2,953,879.98 | 11,864,684.29 | 2,953,879.98 |
| Other | 87,968.39 | 97,154.34 | 87,968.39 |
| Total | 8,797,374.58 | 18,322,686.59 | 8,797,374.58 |
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| Income tax expense | 82,879,343.99 | 34,938,647.84 |
| Deferred income tax expense | -2,461,552.84 | -3,720,125.15 |
| Total | 80,417,791.15 | 31,218,522.69 |
| Item | Jan.-Jun. 2020 |
| Total profit | 761,744,130.05 |
| Income tax expenses calculated at statutory or applicable tax rates | 114,261,619.51 |
| Effects of subsidiaries that are subject to different tax rates | -8,146,777.21 |
| Effects of adjusting the income tax on previous periods | 506,781.40 |
| Effects of non-taxable income | -30,930,496.89 |
| Effects of non-deductible costs, expenses and losses | 4,252,755.40 |
| Effects of using deductible losses of unrecognized deferred income tax assets of prior period | -3,559,697.88 |
| Effects of deductible temporary difference or deductible losses of unrecognized deferred income tax assets of current period | 5,069,546.70 |
| Calculation and deduction of R&D expenditure | -1,035,939.88 |
| Income tax expense | 80,417,791.15 |
52. Items in cash flow statement
A. Cash received from other activities related to operating
RMB
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| Government grants | 19,483,447.07 | 14,907,868.31 |
| Interest income | 8,451,668.98 | 2,641,228.16 |
| Subtotal of transactions and other | 6,468,210.34 | 21,373,673.87 |
| Total | 34,403,326.39 | 38,922,770.34 |
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| Travelling expense | 52,624,704.05 | 57,513,067.48 |
| Transportation and handling expense | 36,866,924.68 | |
| R&D expenditure | 19,066,565.58 | 15,440,574.90 |
| Business entertainment expense | 10,273,819.37 | 12,687,793.98 |
| Office and communication fee | 10,264,846.94 | 10,511,548.03 |
| Labor cost | 15,516,305.75 | 12,187,337.98 |
| Other operating expenses | 54,566,380.26 | 68,747,525.48 |
| Transactions and other | 180,101,892.27 | 122,799,145.85 |
| Total | 342,414,514.22 | 336,753,918.38 |
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| Futures margin | 31,847,479.40 | |
| Net cash received from the acquiring the shares of Suizhong Renhe Fishery | 2,131,060.28 | |
| Net cash received from acquiring the shares of Harbin Baoweikang Bio-Technology | 246,871.87 | |
| Total | 31,847,479.40 | 2,377,932.15 |
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| Futures margin | 32,803,000.71 | |
| Net increase in financial assets held for trading purposes | 2,722,803.40 | |
| Net cash from disposal of the shares of Weifang Wellhope Xinhesheng Feed | 3,405,141.26 | |
| Total | 38,930,945.37 |
E. Cash received from other activities related to financing
RMB
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| Cash received from disposal of shares of subsidiaries | 640,000.00 | |
| Total | 640,000.00 |
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| Cash paid for buying non-controlling interests of the subsidiaries | 5,856,566.01 | |
| Repurchasing non-restricted shares | 1,185,825.00 | |
| Total | 1,185,825.00 | 5,856,566.01 |
| Further information | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| 1. Adjusting net profit to cash flow from operating activities | ||
| Net profit | 681,326,338.90 | 429,746,542.87 |
| add: Assets impairment provision | 35,787,469.35 | 18,803,474.48 |
| Depreciation of fixed assets, depletion of oil and gas assets, depreciation of biological assets | 158,193,431.56 | 95,565,429.32 |
| Amortization of intangible assets | 4,817,460.41 | 3,243,055.48 |
| Amortization of long-term prepaid expenses | 21,753,460.08 | 23,316,678.76 |
| Losses on disposal of fixed assets, intangible assets and other long-lived assets | -1,547,289.40 | -45,359.23 |
| Losses on retirement of fixed assets | 2,114,375.55 | 4,086,457.32 |
| Losses due to changes in fair value | 1,265,439.00 | 169,200.00 |
| Financial expense | 38,038,159.49 | 40,742,726.29 |
| Investment losses | -172,589,751.04 | -188,067,031.15 |
| Decrease of deferred income tax assets | -2,417,609.33 | -3,835,142.15 |
| Increase of deferred income tax liabilities | -43,943.51 | 115,017.00 |
| Decrease of inventory | -122,846,851.71 | 22,960,735.22 |
| Decrease of operating receivables | -329,377,056.30 | -328,421,823.92 |
| Increase of operating payables | 136,922,394.73 | 180,911,824.33 |
| Other | ||
| Net cash flow from operating activities | 451,396,027.78 | 299,291,784.62 |
| 2. Net changes in cash and cash equivalents | ||
| Closing balance of cash | 1,609,864,732.06 | 1,488,930,871.05 |
| deduct: opening balance of cash | 1,508,390,481.68 | 889,204,873.97 |
| add: Closing balance of cash equivalent | ||
| deduct: Opening balance of cash equivalent | ||
| Net increase in cash and cash equivalents | 101,474,250.38 | 599,725,997.08 |
B. Cash paid for acquiring subsidiaries
RMB
| Amount | |
| Cash or cash equivalents paid for business combinations occurred in current period | 40,000,000.00 |
| including: Yangling Wellhope Agriculture and Animal Husbandry | 40,000,000.00 |
| Net cash paid for acquiring subsidiaries | 40,000,000.00 |
| Item | Closing balance | Opening balance |
| 1. Cash | 1,609,864,732.06 | 1,508,390,481.68 |
| including: Cash on hand | 1,578,403.58 | 693,912.75 |
| Bank deposits available for payment at any time | 1,608,286,328.48 | 1,507,696,568.93 |
| 2. Closing balance of cash and cash equivalent | 1,609,864,732.06 | 1,508,390,481.68 |
| Item | Closing book value | Reason for restriction |
| Monetary capital | 1,141.97 | L/C guarantee deposit |
| Monetary capital | 12,325,342.50 | Futures margin |
| Total | 12,326,484.47 | / |
| Item | Closing balance of foreign currency | Translating exchange rate | Closing balance translated into RMB |
| Monetary capital | - | - | 13,946,709.94 |
| including: US dollar | 96,708.36 | 7.07950 | 684,646.83 |
| Euro | 82.90 | 7.96100 | 659.97 |
| Hong Kong dollar | 11,380,356.85 | 0.91344 | 10,395,273.16 |
| Ruble | 28,405,648.96 | 0.10090 | 2,866,129.98 |
| Account receivable | - | - | 18,116,295.79 |
| including: US dollar | 1,773,461.74 | 7.07950 | 12,555,222.37 |
| Hong Kong dollar | 6,088,055.50 | 0.91344 | 5,561,073.42 |
| Accounts payable | - | - | 1,970,919.89 |
| including: Ruble | 19,533,398.32 | 0.10090 | 1,970,919.89 |
| Prepayment | - | - | 973,590.81 |
| including: Ruble | 9,649,066.50 | 0.10090 | 973,590.81 |
| Contract liability | - | - | 104,165.65 |
| including: Ruble | 1,032,365.21 | 0.10090 | 104,165.65 |
| Short-term borrowing | - | - | 27,926,364.65 |
| including: US dollar | 3,944,680.37 | 7.07950 | 27,926,364.65 |
B. Explanation of overseas business entity
| Name of overseas business entity | Business place abroad | Recording currency | Currency selection basis |
| Russia Wellhope Agri-Tech | Russia | Ruble | Local currency |
| Category | Amount | Present item | Amount recorded in current gains or losses |
| Award for green manufacturing demonstration | 500,000.00 | Other income | 500,000.00 |
| Livestock and poultry manure and waste treatment and resource utilization project | 2,000,000.00 | Non-operating income | 2,000,000.00 |
| Fixed assets investment projects | 1,430,000.00 | Non-operating income | 1,430,000.00 |
| Award for production increment | 500,000.00 | Non-operating income | 500,000.00 |
| Deferred income transferred | 2,611,752.00 | Other income | 2,611,752.00 |
| Deferred income transferred | 550,000.00 | Non-operating income | 550,000.00 |
| Subtotal for other projects under RMB 500,000 | 2,830,847.70 | Other income | 2,830,847.70 |
| Subtotal for other projects under RMB 500,000 | 2,202,599.37 | Non-operating income | 2,202,599.37 |
| Total | 12,625,199.07 | / | 12,625,199.07 |
| Investee | Time point of acquiring | Acquisition cost | Shareholding % | Way of acquisition | Acquisition date | Basis for determining acquisition date | Investee's income from acquisition date to the period end | Investee's net profit from acquisition date to the period end |
| Yangling Wellhope Agriculture and Animal Husbandry | May 12, 2020 | 42,000,000 | 100 | Cash investment | May 12, 2020 | Control transfer | 0.00 | -199,657.94 |
| Combined cost | Yangling Wellhope Agriculture and Animal Husbandry |
| Cash | 42,000,000.00 |
| Total combined costs | 42,000,000.00 |
| deduct: Fair value share of identifiable net assets obtained | 42,000,000.00 |
| Goodwill or combined cost is less than the amount of the fair value share of the identifiable net assets obtained |
C. Identifiable assets and liabilities of the investee on the acquisition date
RMB
| Yangling Wellhope Agriculture and Animal Husbandry | ||
| Fair value on acquisition date | Book value on acquisition date | |
| Assets: | 42,000,000.00 | 37,055,937.27 |
| Fixed assets | 32,462,325.48 | 32,462,325.48 |
| Intangible assets | 9,537,674.52 | 4,593,611.79 |
| Liabilities: | ||
| Accounts payable | ||
| Net assets | 42,000,000.00 | 37,055,937.27 |
| deduct: Non-controlling interests | ||
| Net assets acquired | 42,000,000.00 | 37,055,937.27 |
IX.Equity in other entities
1. Equity in subsidiaries
A. Composition of the Company
| Subsidiary | Business site | Registered site | Business type | Shareholding % | Mode of acquisition | |
| Direct | Indirect | |||||
| Haicheng Xinzhongxin Wellhope Feed | Haicheng city | Haicheng city | production | 51.00 | investment | |
| Dalian Huakang Xinxin Food | Dalian city | Dalian city | production | 65.00 | investment | |
| Changchun Hengfeng Agriculture and Animal Husbandry | Changchun city | Changchun city | trading | 51.00 | investment | |
| Jinan Xinweita Trading | Jinan city | Jinan city | trading | 76.00 | investment | |
| Henan Wellhope Agri-Tech | Kaifeng city | Kaifeng city | production | 100.00 | investment | |
| Zhengzhou Wellhope Agri-Tech | Zhengzhou city | Zhengzhou city | production | 70.00 | investment | |
| Zhumadian Wellhope Agri-Tech | Zhumadian city | Zhumadian city | production | 90.00 | investment | |
| Jiaozuo Wellhope Feed | Jiaozuo city | Jiaozuo city | production | 98.30 | investment | |
| Nanyang Wellhope Feed | Nanyang city | Nanyang city | production | 70.00 | investment | |
| Zhangwu Wellhope Agriculture Development | Zhangwu county | Zhangwu county | production | 60.00 | investment | |
| Xifeng Qianyue Planting | Xifeng county | Xifeng county | production | 100.00 | investment | |
| Sanjiang Wellhope Agri-Tech | Jixian county | Jixian county | production | 100.00 | investment | |
| Jixian Expert Trading | Jixian county | Jixian county | trading | 65.00 | investment | |
| Gongzhuling Wellhope Agri-Tech | Gongzhuling city | Gongzhuling city | production | 100.00 | investment | |
| Shenyang Expert Trading | Shenyang city | Shenyang city | trading | 100.00 | investment | |
| Liaoning Skyland Livestock Equipment | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Shenyang Wellhope Ruminant Feed | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Shenyang Wellhope Extruded Feed | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Shenyang Wellhope Aquatic Feed | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Shenyang Jiahe Tianfeng Commerce and Trade | Shenyang city | Shenyang city | trading | 100.00 | investment | |
| Liaoning Wellhope Food | Beipiao city | Beipiao city | production | 60.00 | investment | |
| Haicheng Wellhope Agri-Tech | Haicheng city | Haicheng city | production | 100.00 | investment | |
| Tai'an Wellhope Feed | Tai'an county | Tai'an county | production | 100.00 | investment | |
| Lingyuan Wellhope | Lingyuan | Lingyuan | production | 90.50 | investment | |
| Agri-Tech | city | city | ||||
| Beijing Helai Sci-Tech | Beijing city | Beijing city | production | 100.00 | investment | |
| Beijing Wellhope Agri-Tech | Beijing city | Beijing city | trading | 100.00 | investment | |
| Beijing Sanyuan Wellhope Agri-Tech | Beijing city | Beijing city | production | 70.00 | investment | |
| Jilin Wellhope Agri-Tech | Jilin city | Jilin city | production | 100.00 | investment | |
| Jilin Hefeng Hog Breeding | Gongzhuling city | Gongzhuling city | production | 100.00 | investment | |
| Harbin Weierhao Trading | Harbin city | Harbin city | trading | 51.00 | investment | |
| Daqing Wellhope Bayi Nongda Animal Sci-Tech | Daqing city | Daqing city | production | 70.00 | investment | |
| Mudanjiang Wellhope Agri-Tech | Mudanjiang city | Mudanjiang city | production | 100.00 | investment | |
| Jinzhou Wellhope Agri-Tech | Jinzhou city | Jinzhou city | production | 100.00 | investment | |
| Gongzhuling Wellhope Ruminant Feed | Gongzhuling city | Gongzhuling city | production | 100.00 | investment | |
| Heilongjiang Wellhope Agri-Tech | Harbin city | Harbin city | production | 100.00 | investment | |
| Tangshan Wellhope Feed | Tangshan city | Tangshan city | production | 85.00 | investment | |
| Cangzhou Helai Sci-Tech | Cangzhou city | Cangzhou city | production | 70.00 | investment | |
| Xi'an Wellhope Feed Sci-Tech | Xi'an city | Xi'an city | production | 85.00 | investment | |
| Gansu Wellhope Agri-Tech | Wuwei city | Wuwei city | production | 100.00 | investment | |
| Jining Wellhope Agri-Tech | Jining city | Jining city | production | 70.00 | investment | |
| Shanghai Wellhope Feed | Shanghai city | Shanghai city | production | 65.00 | investment | |
| Shanghai Hehong Trading | Shanghai city | Shanghai city | trading | 32.00 | 42.00 | investment |
| Zhejiang Pinghu Wellhope Agri-Tech | Pinghu city | Pinghu city | production | 85.00 | investment | |
| Huai'an Wellhope Feed | Huai'an city | Huai'an city | production | 100.00 | investment | |
| Qingdao Wellhope Agri-Tech | Pingdu city | Pingdu city | trading | 95.00 | investment | |
| Guangzhou Xiangshun Livestock Equipment | Guangzhou city | Guangzhou city | production | 56.00 | investment | |
| Hainan Wellhope Agri-Tech | Chengmai county | Chengmai county | production | 60.00 | investment | |
| Fuyu Wellhope Agri-Tech | Fuyu city | Fuyu city | production | 97.00 | investment | |
| Fuyu Wellhope Taolaizhao Poultry Raising | Fuyu city | Fuyu city | production | 97.00 | investment | |
| Changchun Wellhope Feed | Nong'an county | Nong'an county | production | 98.00 | investment | |
| Changtu Wellhope Feed | Changtu county | Changtu county | production | 100.00 | investment | |
| Lankao Wellhope Agri-Tech | Lankao county | Lankao county | production | 100.00 | investment | |
| Tongliao Wellhope Tianyi | Tongliao city | Tongliao city | production | 51.00 | investment |
| Prataculture | ||||||
| Liaoning Wellhope Purchasing & Trading | Shenyang city | Shenyang city | trading | 100.00 | investment | |
| Shenyang Wellhope Agri-Tech | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Shenyang Fame Bio-Tech | Shenyang city | Shenyang city | production | 100.00 | combined under the same control | |
| Shenyang Pufeng Commerce and Trade | Shenyang city | Shenyang city | trading | 100.00 | combined under the same control | |
| Shenyang Huawei Pharmaceutical | Shenyang city | Shenyang city | production | 51.00 | combined under the same control | |
| Liaoning Wellhope Agriculture and Animal Husbandry Development | Shenyang city | Shenyang city | production | 100.00 | combined under different control | |
| Puyang Wellhope Food | Puyang city | Puyang city | production | 49.81 | combined under different control | |
| Jingzhou Wellhope Agricultural Sci-Tech | Jingzhou city | Jingzhou city | trading | 86.00 | investment | |
| Dalian Heyuan Wellhope Agri-Tech | Dalian city | Dalian city | production | 51.00 | investment | |
| Shenyang Nongda Wellhope Feed | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Dalian Wellhope Feed | Dalian city | Dalian city | production | 100.00 | investment | |
| Xingcheng Wellhope Feed | Xingcheng city | Xingcheng city | production | 100.00 | investment | |
| Yunnan Wellhope Feed | Kunming city | Kunming city | production | 97.00 | investment | |
| Liaoning Godaji E-commerce | Shenyang city | Shenyang city | trading | 100.00 | investment | |
| Anhui Wellhope Agri-Tech | Haozhou city | Haozhou city | production | 70.00 | investment | |
| Shanxi Wellhope Agri-Tech | Yuanping city | Yuanping city | production | 100.00 | investment | |
| Pingyuan Wellhope Food | Handan city | Handan city | production | 100.00 | investment | |
| Shenyang Huaweida Animal Health Product | Shenyang city | Shenyang city | trading | 100.00 | investment | |
| Dalian Zhongjia Food | Dalian city | Dalian city | production | 100.00 | combined under different control | |
| Wellhope Food(Shenyang) | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Changchun Wellhope | Changchun | Changchun | production | 85.00 | investment |
| Food | city | city | ||||
| Pingyuan Wellhope Agri-Tech | Handan city | Handan city | production | 100.00 | investment | |
| Puyang Wellhope Agri-Tech | Puyang city | Puyang city | production | 100.00 | investment | |
| Chongqing Dahong Agriculture and Animal Husbandry Equipment | Chongqing city | Chongqing city | production | 50.00 | combined under different control | |
| Beijing Brilliant Dragon Commerce and Trade | Beijing city | Beijing city | trading | 51.00 | investment | |
| Tangshan Hejia Agriculture and Animal Husbandry | Tangshan city | Tangshan city | production | 65.00 | investment | |
| Tangshan Wellhope Sci-Tech | Tangshan city | Tangshan city | production | 70.00 | combined under different control | |
| Shenyang Huakang Xinxin Food | Shenyang city | Shenyang city | production | 85.00 | investment | |
| Kaifeng Wellhope Food | Kaifeng city | Kaifeng city | production | 100.00 | investment | |
| Shenyang Huakang Broiler | Shenyang city | Shenyang city | production | 85.00 | investment | |
| Kaifeng Wellhope Agriculture and Animal Husbandry | Kaifeng city | Kaifeng city | production | 100.00 | investment | |
| Fushun Wellhope Agriculture and Animal Husbandry | Fushun city | Fushun city | production | 100.00 | investment | |
| Shenyang Wellhope Poultry | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Shenyang Huakang Agriculture and Animal Husbandry | Shenyang city y | Shenyang city y | production | 100.00 | investment | |
| Dehui Wellhope Agri-Tech | Dehui city | Dehui city | production | 100.00 | investment | |
| Shenyang Tianjingde Trading | Shenyang city | Shenyang city | trading | 100.00 | investment | |
| Chongqing Wellhope Agri-Tech | Chongqing city | production | 65.00 | investment | ||
| Dahong Agriculture and Animal Husbandry Technology Research Institute Chongqing Branch | Chongqing city | production | 100.00 | investment | ||
| Russia Wellhope Agri-Tech | production | 55.00 | investment | |||
| Suizhong Renhe Fishery | Suizhong county | Suizhong county | production | 95.00 | combined under different control | |
| Harbin Baoweikang Bio-Tech | Harbin city | Harbin city | production | 100.00 | combined under |
| different control | ||||||
| Shulan Fengtai Agriculture and Animal Husbandry | Shulan city | Shulan city | production | 60.00 | investment | |
| Shulan Fengtai Farming | Shulan city | Shulan city | production | 51.00 | investment | |
| Xi'an Linfeng Shengyi Trading | Xi’an city | Xi’an city | trading | 100.00 | investment | |
| Linxi Helai Agri-Tech | Linxi city | Linxi city | production | 100.00 | investment | |
| Nanchang Wellhope Agri-Tech | Nanchang city | Nanchang city | production | 65.00 | investment | |
| Hengyang Wellhope Agri-Sci-Tech | Hengyang city | Hengyang city | production | 78.50 | investment | |
| Anhui Wellhope Haoxiang Agricultural Development | Lixin county | Lixin county | production | 100.00 | investment | |
| Lixin Xiangfeng Agriculture and Animal Husbandry | Lixin county | Lixin county | production | 100.00 | investment | |
| Lixin Hongfeng Agriculture and Animal Husbandry | Lixin county | Lixin county | production | 100.00 | investment | |
| Guangzhou Dashang Trading | Guangzhou city | Guangzhou city | trading | 51.00 | investment | |
| Shandong Heyuan Food | Weihai city | Weihai city | production | 65.00 | investment | |
| Wafangdian Yifeng Agri-Tech | Wafangdian city | Wafangdian city | production | 51.00 | investment | |
| Hebei Deheng Farming | Handan city | Handan city | production | 100.00 | combined under different control | |
| Dahongda Chongqing Construction Engineering | Chongqing city | Chongqing city | production | 100.00 | investment | |
| Zhangwu Jiufeng Trading | Zhangwu city | Zhangwu city | trading | 100.00 | investment | |
| Shandong Heyuan Agri-Tech | Weihai city | Weihai city | production | 100.00 | investment | |
| Yangling Wellhope Agriculture and Animal Husbandry | Xianyang city | Xianyang city | production | 100.00 | combined under different control | |
| Anhui Wellhope Haoxiang Hog Breeding | Lixin county | Lixin county | production | 100.00 | investment | |
| Luoyang Wellhope Agriculture and Animal Husbandry | Mengjin county | Mengjin county | production | 100.00 | investment | |
| Dalian Hongtu Agri-Tech | Zhuanghe city | Zhuanghe city | production | 51.00 | investment | |
| Gongzhuling Wellhope Hog Raising | Gongzhuling city | Gongzhuling city | production | 65.00 | investment | |
| Anyang Wellhope Agriculture and Animal Husbandry | Anyang city | Anyang city | production | 100 | investment |
| Lishu Wellhope Ecological Raising | Siping city | Siping city | production | 65.00 | investment | |
| Tongxu Wellhope Agriculture and Animal Husbandry | Tongxu county | Tongxu county | production | 100.00 | investment | |
| Chifeng Wellhope Fuxinyuan Food | Chifeng city | Chifeng city | production | 70.00 | investment | |
| Shenyang Xiangmai E-Commerce | Shenyang city | Shenyang city | trading | 80.00 | investment | |
| Hebei Taihang Wellhope Food | Baoding city | Baoding city | production | 60.00 | investment | |
| Hebei Taihang Wellhope Agri-Tech | Baoding city | Baoding city | production | 62.00 | investment |
| Subsidiary | Shareholding of non-controlling interests % | Gain or losses attributable to non-controlling interests | Declared dividends to non-controlling interests | Closing balance of non-controlling interests |
| Dalian Heyuan Agri-Tech | 49.00 | 28,972,010.70 | 15,300,000.00 | 403,717,778.65 |
| Xi'an Wellhope Feed Sci-Tech | 15.00 | 3,990,273.80 | 24,388,917.10 | |
| Beijing Sanyuan Wellhope Agri-Tech | 30.00 | 3,974,554.72 | 63,582,801.89 | |
| Anhui Wellhope Agri-Tech | 30.00 | 14,082,671.99 | 60,848,973.82 |
C. Financial figures of important non-wholly owned subsidiary
RMB
| Subsidiary | Closing balance | Opening balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Dalian Heyuan Agri-Tech | 756,953,254.85 | 687,490,631.52 | 1,444,443,886.37 | 549,320,532.08 | 58,294,583.28 | 607,615,115.36 | 647,431,144.31 | 566,852,586.60 | 1,214,283,730.91 | 406,157,814.72 | 24,986,023.48 | 431,143,838.20 |
| Xi'an Wellhope Feed Sci-Tech | 110,453,709.28 | 81,539,735.41 | 191,993,444.69 | 29,400,664.00 | 29,400,664.00 | 120,990,215.88 | 40,503,567.21 | 161,493,783.09 | 25,655,577.75 | 25,655,577.75 | ||
| Beijing Sanyuan Wellhope Agri-Tech | 220,126,311.21 | 23,652,177.71 | 243,778,488.92 | 31,835,815.95 | 31,835,815.95 | 203,102,041.98 | 25,669,497.12 | 228,771,539.10 | 30,470,419.37 | 30,470,419.37 | ||
| Anhui Wellhope Agri-Tech | 254,118,681.23 | 157,584,312.79 | 411,702,994.02 | 208,873,081.26 | 208,873,081.26 | 231,529,237.37 | 127,328,236.82 | 358,857,474.19 | 262,977,525.56 | 262,977,525.56 | ||
| Subsidiary | Jan.-Jun. 2020 | Jan.-Jun. 2019 | ||||||
| Operation revenue | Net profit | Total comprehensive income | Cash flow from operating activities | Operation revenue | Net profit | Total comprehensive income | Cash flow from operating activities | |
| Dalian Heyuan Agri-Tech | 1,642,200,981.97 | 55,460,057.05 | 55,460,057.05 | 77,608,652.38 | 1,327,581,618.96 | 145,237,370.67 | 145,237,370.67 | 116,800,316.66 |
| Xi'an Wellhope Feed Sci-Tech | 322,102,441.12 | 26,601,825.36 | 26,601,825.36 | 326,690,752.66 | 196,827,616.01 | 15,463,928.29 | 15,463,928.29 | 25,075,637.85 |
| Beijing Sanyuan Wellhope Agri-Tech | 239,405,340.68 | 13,248,515.73 | 13,248,515.73 | 220,684,395.62 | 151,971,609.85 | 3,106,944.82 | 3,106,944.82 | 14,575,623.74 |
| Anhui Wellhope Agri-Tech | 166,956,108.19 | 46,942,239.95 | 46,942,239.95 | -30,522,617.73 | 70,174,789.94 | -23,646,624.05 | -23,646,624.05 | 73,822,452.16 |
2. Equity in joint ventures or associated companies
A. Important joint ventures or associated companies
RMB
| Company name | Business site | Registered site | Business type | Shareholding % | Accounting treatment methods | |
| Direct | Indirect | |||||
| Beipiao Hongfa Food | Beipiao city | Beipiao city | production | 35.00 | equity method | |
| Anshan Jiuguhe Food | Tai'an county | Tai'an county | production | 41.55 | equity method | |
| Tai'an Jiuguhe Agriculture | Tai'an county | Tai'an county | production | 41.55 | equity method | |
| Dalian Chengsan Animal Husbandry | Dalian city | Dalian city | production | 20.00 | equity method | |
| Jan.-Jun. 2020 | Jan.-Jun. 2019 | |||||||
| Beipiao Hongfa Food | Anshan Jiuguhe Food | Tai'an Jiuguhe Agriculture | Dalian Chengsan Animal Husbandry | Beipiao Hongfa Food | Anshan Jiuguhe Food | Tai'an Jiuguhe Agriculture | Dalian Chengsan Animal Husbandry | |
| Current assets | 1,147,405,469.42 | 530,758,988.89 | 211,652,137.16 | 1,596,129,746.15 | 808,320,727.52 | 433,236,440.94 | 225,516,906.39 | 1,467,906,023.75 |
| Non-current assets | 622,024,017.06 | 105,042,161.91 | 189,055,765.31 | 412,638,710.46 | 720,803,998.40 | 102,408,547.67 | 191,500,344.01 | 448,345,020.68 |
| Total assets | 1,769,429,486.48 | 635,801,150.80 | 400,707,902.47 | 2,008,768,456.61 | 1,529,124,725.92 | 535,644,988.61 | 417,017,250.40 | 1,916,251,044.43 |
| Current liabilities | 301,136,624.81 | 250,705,156.99 | 190,106,596.18 | 542,982,195.71 | 242,424,331.42 | 162,491,901.70 | 148,906,962.33 | 498,609,123.11 |
| Non-current liabilities | 72,801,707.40 | 1,182,232.98 | 599,000.00 | 2,032,614.19 | 23,430,000.00 | 2,313,480.78 | 256,500.00 | 5,851,807.11 |
| Total liabilities | 373,938,332.21 | 251,887,389.97 | 190,705,596.18 | 545,014,809.90 | 265,854,331.42 | 164,805,382.48 | 149,163,462.33 | 504,460,930.22 |
| Non-controlling interests | 246,321,862.76 | 224,864,512.85 | ||||||
| Equity attributable to shareholders of parent company | 1,395,491,154.27 | 383,913,760.83 | 210,002,306.29 | 1,217,431,783.95 | 1,263,270,394.50 | 370,839,606.13 | 267,853,788.07 | 1,186,925,601.36 |
| Share of net assets calculated by shareholdings | 488,421,904.00 | 159,516,167.63 | 87,255,958.26 | 243,486,356.79 | 442,144,638.08 | 154,083,856.35 | 111,293,248.94 | 237,385,120.27 |
| Adjustment | -72,070.45 | 116,569,111.62 | -1,645,427.58 | -360.00 | 116,569,111.62 | |||
| --Goodwill | 116,569,111.62 | 116,569,111.62 | ||||||
| --Unrealized profit of internal transaction | -72,070.45 | -1,645,427.58 | ||||||
| --Other | -360.00 | |||||||
| Book value of equity investment in joint venture | 488,421,904.00 | 159,444,097.18 | 87,255,958.26 | 360,055,468.41 | 442,144,638.08 | 152,438,428.77 | 111,292,888.94 | 353,954,231.89 |
| Operating revenue | 1,017,764,224.81 | 935,284,890.12 | 909,978,727.89 | 1,622,600,997.70 | 1,604,376,361.57 | 1,040,530,464.64 | 847,585,511.99 | 1,369,798,572.24 |
| Net profit | 132,220,759.76 | 97,040,045.38 | -57,850,615.35 | 46,425,641.86 | 235,991,846.09 | 45,632,783.22 | 29,077,153.72 | 239,504,463.51 |
| Total comprehensive income | 132,220,759.76 | 97,040,045.38 | -57,850,615.35 | 46,425,641.86 | 235,991,846.09 | 45,632,783.22 | 29,077,153.72 | 203,610,336.32 |
| Dividends received from associated companies | 33,242,400.00 | 4,986,360.00 | 4,986,360.00 |
C. Financial information of unimportant joint ventures and associated companies
RMB
| Jan.-Jun. 2020 | Jan.-Jun. 2019 | |
| Joint venture: | ||
| Book value of investment | 11,669,191.54 | 11,669,191.54 |
| Items calculated according to the shareholdings | ||
| --Net profit | 8,094,994.12 | 6,432,233.24 |
| --Other comprehensive income | -1,854,393.45 | 465,443.74 |
| --Total comprehensive income | 6,240,600.67 | 6,897,676.98 |
| Associated company: | ||
| Book value of investment | 1,107,536,420.55 | 998,548,503.29 |
| Items calculated according to the shareholdings | ||
| --Net profit | 102,710,134.18 | 31,834,749.66 |
| --Other comprehensive income | 2,265,159.08 | 3,068,904.93 |
| --Total comprehensive income | 104,975,293.26 | 34,903,654.59 |
export business, changes in exchange rate have little impact on the Company.
2. Credit risk
The maximum credit risk exposure that may cause financial losses to the Company mainlycomes from financial assets loss caused by the other party of contract failed to performduty.In order to reduce credit risk, the Company constantly strengthens the risk managementawareness of accounts receivable and only deals with confirmed and reputable thirdparties. In accordance with the Company's policies, it is necessary to conduct credit auditand approval, carefully confirm the credit limit, implement other monitoring proceduresand take necessary measures to recover overdue claims.
3. Liquidity risk
In regard of managing liquidity risk, the Company monitors cash and cash equivalents, tosatisfy its operation demand, and to reduce the influence caused by cash flow fluctuation.The management of the Company supervises the usage circumstances of bank loans andensures the Company complying with the agreement of loan.XI.Disclosure of fair value
1. Fair value of assets and liabilities in the end of period
RMB
| Item | Closing fair value | |||
| The first level of fair value measurement | The second level of fair value measurement | The third level of fair value measurement | Total | |
| Continuous fair value measurement | ||||
| 1. Trading financial assets | 100,000,000.00 | 100,000,000.00 | ||
| Financial assets measured at fair value and changes recorded into current gains or losses | 100,000,000.00 | 100,000,000.00 | ||
| 2. Other equity instrument investment | 12,949,647.74 | 12,949,647.74 | ||
| 3. Derivative financial assets | 9,100,936.30 | 9,100,936.30 | ||
| Total assets continuously measured at fair value | 9,100,936.30 | 112,949,647.74 | 122,050,584.04 | |
| Company | Relationship |
| Unphung Joint Venture Company | joint venture |
| Nepal Wellhope Agri-tech Pvt. Ltd. | joint venture |
| Anshan Fengsheng Food | associated company |
| Anshan Jiuguhe Food | associated company |
| Beipiao Hongfa Food | associated company |
| Dalian Chengsan Animal Husbandry | associated company |
| Dalian Wellhope Fish Meal | associated company |
| Daqing Supply and Marketing Wellhope Agri-Tech | associated company |
| Dandong Wellhope Chengsan Agri-Tech | associated company |
| Dunhua Wellhope Agri-Tech | associated company |
| Gongzhuling Corn Purchasing and Storing | associated company |
| Guangzhou Yikun Trading | associated company |
| Haicheng New Hongzunda Agri-Tech | associated company |
| Huluodao Jiuguhe Food | associated company |
| Huluodao Jiuguhe Feed | associated company |
| Jinzhou Jiufeng Food | associated company |
| Lankao Skyland Duck | associated company |
| Linghai Jiuguhe Feed | associated company |
| Qingdao Shenfeng Agri-Tech | associated company |
| Shenyang Wenjie Bio-Tech | associated company |
| Schipper(Beijing) | associated company |
| Tai'an Fengjiu Agri-Tech | associated company |
| Tai'an Jiufeng Agri-Tech | associated company |
| Tai'an Jiuguhe Agriculture Development | associated company |
| Tailai Jiahe Agriculture and Animal Husbandry | associated company |
| Zhangjiakou Jiahe Agriculture and Animal Husbandry | associated company |
| Beijing Dahong Hengfeng Agri-Tech | associated company |
| Shenyang Zhongwenjie Bio-Tech | associated company |
| Liaoning Mubang Animal Husbandry Equipment Manufacturing | associated company |
| Dunhua Fengda Agriculture and Animal Husbandry Development | associated company |
| Heilongjiang Zhongyi Pasture Information Technology Service | associated company |
| Dalian Sida Food | associated company |
| Dunhua Fengda Agriculture and Animal Husbandry | associated company |
| Weifang Wellhope Xinhesheng Feed | associated company |
| Related party | Relationship |
| Wulian Heli Equity Investment Partnership (Limited Partnership) | Other |
| DE HEUS MAURITIUS | Other |
| Jin Weidong | Other |
| Ding Yunfeng | Other |
| Shao Caimei | Other |
| Wang Fengjiu | Other |
| Wang Zhongtao | Other |
| Zhang Tiesheng | Other |
| Wang Zhenyong | Other |
| Zhang Wenliang | Other |
| Ren Bingxin | Other |
| Zhao Xin | Other |
| Qiu Jiahui | Other |
| Yuan Minger | Other |
| Li Jun | Other |
| Jacobus Johannes de Heus | Other |
| Marcus Leonardus van der Kwaak | Other |
| Hu Jianmin | Other |
| Liu Huan | Other |
| Wang Zhe | Other |
| Relate party | Transaction | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| Dalian Wellhope Fish Meal | feed raw materials | 11,796,237.45 | 12,756,733.30 |
| Anshan Jiuguhe Food | broiler parts product | 19,601,413.70 | 4,515,828.00 |
| Huludao Jiuguhe Food | broiler parts product | 255,807.60 | 2,246,232.09 |
| Guangzhou Yikun Trade | feed raw materials | 1,089,320.00 | 711,590.00 |
| Tai'an Jiufeng Agri-Tech | day old chick | 12,429,129.72 | 5,654,998.00 |
| Jinzhou Jiufeng Food | broiler parts product | 10,835,045.50 | 781,273.00 |
| Zhangjiakou Jiahe Agriculture and Animal Husbandry | piglet | 45,239,123.40 | 3,714,472.60 |
| Haicheng New Hongzunda Agri-Tech | feed | 379,075.00 | 658,306.00 |
| Schipper(Beijing) | other | 951,415.87 | 503,416.69 |
| Shenyang Wenjie Bio-Tech | animal medicine and vaccine | 4,908,387.91 | 5,605,041.28 |
| Daqing Supply and Marketing Wellhope Agri-Tech | feed raw materials | 22,752,377.16 | 5,739,474.44 |
| Tai’an Jiuguhe Agriculture Development | feed | 95,407,968.34 | 9,754,694.20 |
| Qingdao Shenfeng Agri-Tech | feed | 12,456,335.41 | 92,099.79 |
| Dalian Chengsan Animal Husbandry | broiler | 83,688,371.22 | 75,100,013.71 |
| Linghai Jiuguhe Feed | other | 5,181,269.36 | |
| Lankao Skyland Duck | feed | 56,935.50 | |
| Dunhua Wellhope Agri-Tech | feed | 9,284,127.90 | |
| Shenyang Zhongwenjie Bio-Tech | animal medicine and vaccine | 15,000.00 | |
| Total | 336,327,341.04 | 127,834,173.10 |
Selling products or providing labor service
RMB
| Relate party | Transaction | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| Nepal Wellhope Agri-tech Pvt. Ltd. | feed | 11,852.89 | |
| Linghai Jiuguhe Feed | boiler feed and feed raw materials | 22,500,000.44 | 22,683,324.09 |
| Tai’an Jiuguhe Agriculture Development | boiler feed and feed raw materials | 44,087,063.31 | 40,091,071.76 |
| Anshan Jiuguhe Food | broiler | 55,674,764.24 | 114,520,526.72 |
| Qingdao Shenfeng Agri-Tech | swine feed and feed raw materials | 22,166,911.48 | 8,794,272.38 |
| Huludao Jiuguhe Feed | feed and feed raw materials | 12,396,491.62 | 11,960,328.36 |
| Huludao Jiuguhe Food | broiler parts product | 591,354.13 | 481,301.83 |
| Haicheng New Hongzunda Agri-Tech | boiler feed and feed raw materials | 46,024,776.68 | 9,590,723.57 |
| Dandong Wellhope Chengsan Agri-Tech | feed and feed raw materials | 2,303,424.77 | 1,185,476.03 |
| Tai'an Jiufeng Agri-Tech | boiler feed and feed raw materials | 469,518.62 | |
| Guangzhou Yikun Trade | feed raw materials | 2,846,401.98 | 67,067,284.33 |
| Beipiao Hongfa Food | feed raw materials | 2,706,690.47 | |
| Zhangjiakou Jiahe Agriculture and Animal Husbandry | feed | 11,206,804.83 | 13,243,528.88 |
| Weifang Wellhope Xinhesheng Feed | feed raw materials | 270,959.95 | |
| Schipper(Beijing) | other | 703,164.60 | 199,007.12 |
| Jinzhou Jiufeng Food | broiler | 3,002,040.00 | |
| Anshan Fengsheng Food | broiler | 91,615,790.14 | 84,921,882.44 |
| Dalian Chengsan Animal Husbandry | feed raw materials | 2,883,926.12 | 2,399,275.86 |
| Tailai Jiahe Agriculture and Animal Husbandry | feed | 14,054,459.60 | 10,638,112.31 |
| Daqing Supply and Marketing Wellhope Agri-Tech | feed raw materials | 22,602,220.10 | 17,730,092.13 |
| Dunhua Wellhope Agri-Tech | feed | 4,308,633.39 | 1,943,276.42 |
| Dalian Wellhope Fish Meal | feed raw materials | 28,620.69 | |
| Tai'an Jiufeng Agri-Tech | feed raw materials | 714,618.19 | |
| Lankao Skyland Duck | feed raw materials | 16,800.00 | |
| Dunhua Fengda Agriculture and Animal Husbandry | broiler | 20,048,327.62 | |
| Dalian Sida Food | broiler | 90,753,520.15 | |
| Total | 467,511,306.28 | 413,927,313.96 |
| Guaranteed party | Amount of guarantee | Guarantee date | Guarantee maturity date | Whether the guarantee has been fulfilled |
| Lingyuan Wellhope Agri-Tech | 20,000,000.00 | Jun. 1, 2020 | May 25, 2021 | No |
| Puyang Wellhope Food | 49,000,000.00 | Mar. 21, 2020 | Mar. 21, 2021 | No |
| Kaifeng Wellhope Food | 30,000,000.00 | Mar. 24, 2020 | Mar. 24, 2021 | No |
| Liaoning Expert Trading | 17,362,496.97 | May 21, 2020 | May 20, 2021 | No |
| Liaoning Expert Trading | 6,549,036.78 | Feb. 24, 2020 | Feb. 21, 2021 | No |
| Liaoning Godaji E-Commerce | 4,014,830.90 | Mar. 23, 2020 | Jun. 30, 2021 | No |
C. Borrowings to related party
RMB
| Related party | Borrowings | Starting date | Due date | Note |
| Lankao Skyland Duck | 27,067,493.00 | After transferring part of the equity, it became an associated company of the Company |
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| Remuneration for key management | 241.48 | 231.57 |
| Item | Related party | Closing balance | Opening balance | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Accounts receivable | Dandong Wellhope Chengsan Agri-Tech | 842,830.00 | 42,141.50 | ||
| Accounts receivable | Anshan Jiuguhe Food | 24,735,281.28 | 1,236,764.06 | 21,356,822.76 | 1,067,841.14 |
| Accounts receivable | Zhangjiakou Jiahe Agriculture and Animal Husbandry | 3,459,809.60 | 172,990.48 | 3,618,629.61 | 180,931.48 |
| Accounts receivable | Guangzhou Yikun Trade | 2,549,120.90 | 127,456.05 | 24,042,357.79 | 1,202,117.89 |
| Accounts receivable | Anshan Fengsheng Food | 4,648,572.36 | 232,428.62 | 6,249,082.04 | 312,454.10 |
| Accounts receivable | Dalian Chengsan Animal Husbandry | 868,300.00 | 43,415.00 | 523,200.00 | 26,160.00 |
| Accounts receivable | Tailai Jiahe Agriculture and Animal Husbandry | 5,234,853.16 | 261,742.66 | 2,695,169.64 | 134,758.48 |
| Accounts receivable | Daqing Supply and Marketing Wellhope Agri-Tech | 2,177,415.54 | 108,870.78 | 525,195.44 | 26,259.77 |
| Accounts receivable | Haicheng New Hongzunda Agri-Tech | 3,188,793.54 | 159,439.68 | 234,200.00 | 11,710.00 |
| Accounts receivable | Tai’an Jiufeng Agri-tech | 218,159.00 | 10,907.95 | ||
| Accounts receivable | Heilongjiang Zhongyi Pasture Information Technology Service | 43,174.50 | 2,158.73 | ||
| Accounts receivable | Nepal Wellhope Agri-tech Pvt. Ltd. | 90,802.75 | 4,540.14 | ||
| Accounts receivable | Linghai Jiuguhe Feed | 1,500,000.00 | 75,000.00 | ||
| Accounts receivable | Tai’an Jiuguhe Agriculture Development | 411,000.00 | 20,550.00 | ||
| Accounts receivable | Qingdao Shenfeng Agri-Tech | 48,000.00 | 2,400.00 | ||
| Accounts receivable | Huludao Jiuguhe Food | 644,576.00 | 32,228.80 | ||
| Accounts receivable | Schipper(Beijing) | 309,188.00 | 15,459.40 | ||
| Accounts receivable | Huludao Jiuguhe Feed | 1,500,000.00 | 75,000.00 | ||
| Accounts receivable | Lankao Skyland Duck | 16,800.00 | 840.00 | ||
| Accounts receivable | Dalian Sida Food | 7,867,453.46 | 393,372.67 | ||
| Other receivables | Lankao Skyland Duck | 27,611,673.00 | 11,044,669.20 | 27,067,493.00 | 10,826,997.20 |
| Other receivables | Weifeng Wellhope Xinhesheng | 3,035,880.00 | 151,794.00 | ||
| Prepayment | Dunhua Fengda Agriculture and Animal Husbandry | 5,000,000.00 | 5,000,000.00 | ||
| Prepayment | Dalian Wellhope Fish Meal | 914,705.00 | |||
| Prepayment | Gongzhuling Corn Purchasing and Storing | 738,630.00 | |||
| Prepayment | Liaoning Mubang Animal Husbandry Equipment Manufacturing | 514,333.00 | 7,624,669.60 | ||
| Prepayment | Guangzhou Yikun Trade | 4,997,400.00 | |||
| Prepayment | Tai’an Jiuguhe Agriculture Development | 10,373,818.85 | |||
| Dividends receivable | Linghai Jiuguhe Feed | 3,800,000.00 | |||
| Dividends receivable | Tai’an Jiuguhe Agriculture Development | 328,178.76 | |||
| Dividends receivable | Anshan Jiuguhe Food | 4,965,543.35 | |||
| Dividends receivable | Huludao Jiuguhe Food | 14,060,000.00 | |||
| Dividends receivable | Huludao Jiuguhe Feed | 2,200,000.00 |
| Item | Related party | Closing book balance | Opening book balance |
| Accounts payable | Dalian Wellhope Fish Meal | 2,716,351.95 | |
| Accounts payable | Anshan Jiuguhe Food | 2,369,800.00 | 1,049,646.00 |
| Accounts payable | Tai’an Jiuguhe Agriculture Development | 7,077,312.65 | |
| Accounts payable | Shenyang Wenjie Bio-Tech | 1,335,174.65 | 2,593,516.64 |
| Accounts payable | Dalian Chengsan Animal Husbandry | 4,749,094.21 | |
| Accounts payable | Tai’an Fengjiu Agri-Tech | 138,708.74 | |
| Accounts payable | Jingzhou Jiufeng Food | 3,850,650.00 | 1,617,740.00 |
| Accounts payable | Liaoning Mubang Animal Husbandry Equipment Manufacturing | 11,284,184.00 | |
| Accounts payable | Shenyang Zhongwenjie Bio-Tech | 18,000.00 | |
| Accounts payable | Daqing Supply and Marketing Wellhope Agri-Tech | 49,228.00 | 457,060.50 |
| Accounts payable | Qingdao Shenfeng Agri-Tech | 1,570,924.91 | |
| Accounts payable | Zhangjiakou Jiahe Agriculture and Animal Husbandry | 14,312,881.60 |
| Accounts payable | Dunhua Wellhope Agri-Tech | 60,164.96 | |
| Contract liability | Linghai Jiuguhe Feed | 7,860.00 | |
| Contract liability | Huludao Jiuguhe Feed | 564,892.50 | |
| Contract liability | Nepal Wellhope Agri-tech Pvt. Ltd. | 38,700.00 | 38,700.00 |
| Contract liability | Tai’an Jiuguhe Agriculture Development | 1,263,596.30 | 281,300.00 |
| Contract liability | Dunhua Wellhope Agri-Tech | 323,000.00 | |
| Contract liability | Qingdao Shenfeng Agri-Tech | 30,916.00 | |
| Contract liability | Haicheng New Hongzunda Agri-Tec | 442,525.00 | |
| Other payables | Nepal Wellhope Agri-tech Pvt. Ltd. | 2,999.41 | 2,999.41 |
| Other payables | Unphung Joint Venture Company | 71,682.43 | 71,682.43 |
| Other payables | Liaoning Mubang Animal Husbandry Equipment Manufacturing | 5,932,500.00 | |
| Other payables | Tai’an Jiufeng Agri-Tech | 688.00 |
| Total amount of equity instrument granted by the Company during current period | 0 |
| Total amount of exercised equity instruments | 4,233,000 |
| Total amount of all invalid equity instruments | 244,500 |
Arrangement of restricted shares:
| Arrangement of removing trading restrictions | Time of removing trading restrictions | Percentage of unrestricted shares |
| First unlocked period | The first trading day after 12 months from the date of finishing the registration of granted shares to the last trading day within 24 months from the date of finishing the registration of granted shares | 30.00% |
| Second unlocked period | The first trading day after 24 months from the date of finishing the registration of granted shares to the last trading day within 36 months from the date of finishing the registration of granted shares | 30.00% |
| Third unlocked period | The first trading day after 36 months from the date of finishing the registration of granted shares to the last trading day within 48 months from the date of finishing the registration of granted shares | 40.00% |
| Confirmation method of fair value of equity instrument at the grant date | Closing price at the grant date |
| Basis for determining the number of exercised equity instrument | It is expected that the conditions can be met and all the granted objects can exercise the equity |
| Accumulated amount of equity-settled share-based payment that recorded into capital reserve | 29,948,845.58 |
| Total expense recognized by equity-settled share-based payment | 5,167,841.00 |
XIV.Notes to major items of the parent company's financial statements
4. Account receivable
A. Categorized by aging
RMB
| Aging | Closing book balance |
| Within 1 year | 12,039,998.18 |
| 1-2 years | 4,924,493.48 |
| 2-3 years | 3,317,998.70 |
| Over 3 years | 28,985,790.90 |
| Total | 49,268,281.26 |
B. Categorized by bad debt provision method
RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Percentage% | Amount | Accruing % | Amount | Percentage% | Amount | Accruing % | |||
| Accruing bad debt provision by grouping | 49,268,281.26 | 100.00 | 31,263,907.71 | 63.46 | 18,004,373.55 | 43,173,647.52 | 100.00 | 29,541,957.07 | 68.43 | 13,631,690.45 |
| including: | ||||||||||
| Aging | 46,397,642.70 | 94.17 | 31,263,907.71 | 67.38 | 15,133,734.99 | 43,173,647.52 | 100.00 | 29,541,957.07 | 68.43 | 13,631,690.45 |
| Other | 2,870,638.56 | 5.83 | 2,870,638.56 | |||||||
| Total | 49,268,281.26 | / | 31,263,907.71 | / | 18,004,373.55 | 43,173,647.52 | / | 29,541,957.07 | / | 13,631,690.45 |
| Aging | Closing balance | ||
| Accounts receivable | Bad debt provision | Accruing percentage % | |
| Within 1 year | 9,169,359.62 | 458,467.98 | 5.00 |
| 1 -2 year | 4,924,493.48 | 492,449.35 | 10.00 |
| 2-3 years | 3,317,998.70 | 1,327,199.48 | 40.00 |
| Over 3 years | 28,985,790.90 | 28,985,790.90 | 100.00 |
| Total | 46,397,642.70 | 31,263,907.71 | / |
C. Bad debt provision
RMB
| Category | Opening balance | Changes in current period | Closing balance |
| Accruing | |||
| Aging | 29,541,957.07 | 1,721,950.64 | 31,263,907.71 |
| total | 29,541,957.07 | 1,721,950.64 | 31,263,907.71 |
| Debtor | Nature | Closing balance | Percentage of total accounts receivable % | Bad debt provision |
| 1 | Non related party | 8,293,237.00 | 16.83 | 7,197,379.00 |
| 2 | Non related party | 7,350,329.71 | 14.92 | 7,350,329.71 |
| 3 | Non related party | 7,053,335.00 | 14.32 | 7,053,335.00 |
| 4 | Non related party | 3,082,405.25 | 6.26 | 282,195.53 |
| 5 | Non related party | 2,997,425.00 | 6.08 | 982,385.63 |
| Total | / | 28,776,731.96 | 58.41 | 22,865,624.87 |
| Item | Closing balance | Opening balance |
| Interest receivable | ||
| Dividends receivable | 33,977,209.35 | 33,977,209.35 |
| Other receivables | 1,687,559,455.97 | 986,808,467.11 |
| Total | 1,721,536,665.32 | 1,020,785,676.46 |
| Item | Closing balance | Opening balance |
| Dividends from long-term investment under cost method | 8,623,487.24 | 8,623,487.24 |
| Dividends from long-term investment under equity method | 25,353,722.11 | 25,353,722.11 |
| Total | 33,977,209.35 | 33,977,209.35 |
B. Other receivablea. Categorized by aging
RMB
b. Categorized by nature
RMB
| Nature | Closing book balance | Opening book balance |
| Operating receivable | 1,052,303.66 | 665,830.66 |
| Cash pledge and guarantee deposit | 261,200.00 | 259,200.00 |
| Related party- fund transaction | 1,680,594,804.87 | 980,333,632.11 |
| Receivables from disposal of investment | 28,471,800.00 | 28,471,800.00 |
| Total | 1,710,380,108.53 | 1,009,730,462.77 |
| Bad debt provision | First stage | Second stage | Third stage | Total |
| Expected credit losses over the next 12 months | Expected credit loss for the entire duration (no credit impairment) | Expected credit loss for the entire duration (credit impairment occurred) | ||
| Balance on January 1, 2020 | 22,921,995.66 | 22,921,995.66 | ||
| Accruing in the reporting period | -101,343.10 | -101,343.10 | ||
| Balance on June 30, 2020 | 22,820,652.56 | 22,820,652.56 |
| Category | Opening balance | Changes in current period | Closing balance | ||
| Accruing | Collected or reversed | Charge off or write-off | |||
| Aging | 22,921,995.66 | -101,343.10 | 22,820,652.56 | ||
| total | 22,921,995.66 | -101,343.10 | 22,820,652.56 | ||
| Aging | Closing book balance |
| Within 1 year | |
| Subtotal | 1,653,840,572.87 |
| 1-2 years | 101,436.00 |
| 2-3 years | 56,178,845.00 |
| Over 3 years | 259,254.66 |
| Total | 1,710,380,108.53 |
e. Top 5 other receivables
RMB
| Company | Type | Closing balance | Aging | % of closing balance of total other receivables | Closing balance of bad debt provision |
| 1 | Subsidiary | 297,000,000.00 | Within 1 year | 10.34 | |
| 2 | Subsidiary | 97,507,148.20 | Within 1 year | 7.20 | |
| 3 | Subsidiary | 87,531,310.00 | Within 1 year | 7.13 | |
| 4 | Subsidiary | 83,591,501.52 | Within 1 year | 6.15 | |
| 5 | Subsidiary | 83,351,016.00 | Within 1 year | 5.80 | |
| Total | / | 648,980,975.72 | / | 36.62 |
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Investment in subsidiaries | 2,330,344,891.04 | 2,330,344,891.04 | 2,113,924,536.04 | 2,113,924,536.04 | ||
| Investment in associates and joint ventures | 2,134,204,264.00 | 17,900,000.00 | 2,116,304,264.00 | 2,021,291,294.06 | 17,900,000.00 | 2,003,391,294.06 |
| Total | 4,464,549,155.04 | 17,900,000.00 | 4,446,649,155.04 | 4,135,215,830.10 | 17,900,000.00 | 4,117,315,830.10 |
| Company | Opening balance | Increase in current period | Closing balance |
| Haicheng Wellhope Feed | 12,620,515.83 | 22,912.00 | 12,643,427.83 |
| Tai'an Wellhope Feed | 33,059,905.41 | 9,546.00 | 33,069,451.41 |
| Shenyang Wellhope Ruminant Feed | 6,050,115.42 | 120,292.00 | 6,170,407.42 |
| Liaoning Wellhope Agriculture and Animal Husbandry | 47,541,089.95 | 106,926.00 | 47,648,015.95 |
| Shenyang Nongda Wellhope Feed | 44,593,664.17 | 61,534.00 | 44,655,198.17 |
| Xingcheng Wellhope Feed | 82,799,527.09 | 66,828.00 | 82,866,355.09 |
| Dalian Wellhope Feed | 42,390,969.16 | 64,920.00 | 42,455,889.16 |
| Jinzhou Wellhope Agri-Tecj | 17,265,295.42 | 59,190.00 | 17,324,485.42 |
| Changtu Wellhope Feed | 3,000,000.00 | 3,000,000.00 | |
| Shenyang Wellhope Extruded Feed | 33,042,789.58 | 9,546.00 | 33,052,335.58 |
| Shenyang Wellhope Aquatic Feed | 15,290,969.17 | 64,918.00 | 15,355,887.17 |
| Shenyang Wellhope Agri-Tech | 83,036,592.50 | 206,214.00 | 83,242,806.50 |
| Shenyang Wellhope Poultry | 68,463.33 | 15,276.00 | 83,739.33 |
| Gongzhuling Wellhope Agri-Tech | 35,513,807.92 | 113,088.00 | 35,626,895.92 |
| Jilin Wellhope Agri-Tech | 16,248,947.92 | 28,446.00 | 16,277,393.92 |
| Gongzhuling Wellhope Ruminant Feed | 5,085,579.17 | 19,094.00 | 5,104,673.17 |
| Sanjiang Wellhope Agri-Tech | 21,214,420.81 | 3,190.00 | 21,217,610.81 |
| Mudanjiang Wellhope Agri-Tech | 23,286,612.96 | 7,638.00 | 23,294,250.96 |
| Heilongjiang Wellhope Agri-Tech | 120,876,334.58 | 194,758.00 | 121,071,092.58 |
| Beijing Helai Sci-Tech | 25,473,427.09 | 105,016.00 | 25,578,443.09 |
| Beijing Wellhope Agri-Tech | 5,094,470.00 | 5,094,470.00 | |
| Huai'an Wellhope Feed | 30,265,295.42 | 32,118.00 | 30,297,413.42 |
| Gansu Wellhope Agri-Tech | 40,117,754.58 | 26,732.00 | 40,144,486.58 |
| Henan Wellhope Agri-Tech | 52,849,621.66 | 77,658.00 | 52,927,279.66 |
| Lankao Wellhope Agri-Tech | 43,085,579.17 | 19,094.00 | 43,104,673.17 |
| Kaifeng Branch of Henan Wellhope Agri-Tech | 193,757.50 | 36,930.00 | 230,687.50 |
| Shenyang Huaweida Animal Health Product | 77,021.25 | -59,837.24 | 17,184.01 |
| Jilin Wellhope Hog Breeding | 15,000,000.00 | 15,000,000.00 | |
| Shenyang Expert Trading | 30,000,000.00 | 30,000,000.00 | |
| Shenyang Jiahe Tianfeng Commerce and Trade | 10,146,170.00 | 32,460.00 | 10,178,630.00 |
| Liaoning Expert Trading | 73,899,932.50 | 158,212.68 | 74,058,145.18 |
| Shenyang Pufeng Commerce and Trade | 15,499,788.72 | 15,499,788.72 | |
| Liaoning Wellhope Purchasing & Trading | 30,282,411.25 | 7,174.00 | 30,289,585.25 |
| Liaoning Skyland Livestock Equipment | 28,669,810.83 | 14,888.00 | 28,684,698.83 |
| Shenyang Fame Bio-Tech | 20,500,521.85 | 84,012.00 | 20,584,533.85 |
| Pingyuan Wellhope Food | 147,540,969.17 | 64,918.00 | 147,605,887.17 |
| Pingyuan Wellhope Agri-Tech | 273,853.33 | 61,100.00 | 334,953.33 |
| Kaifeng Wellhope Food | 100,000,000.00 | 100,000,000.00 | |
| Wellhope Food (Shenyang) | 5,160,191.67 | 5,160,191.67 | |
| Liaoning Godaji E-Commerce | 10,497,690.83 | 118,384.00 | 10,616,074.83 |
| Linxi Helai Agri-Tech | 9,023,617.50 | 1,021,004.00 | 10,044,621.50 |
| Xi'an Linfeng Shengyi Trading | 2,000,000.00 | 2,000,000.00 | |
| Luoyang Wellhope Agriculture and Animal Husbandry | 45,200,000.00 | 45,200,000.00 | |
| Lingyuan Wellhope Agri-Tech | 16,915,295.41 | 59,192.00 | 16,974,487.41 |
| Haicheng Xinzhongxin Feed | 6,004,151.48 | 24,822.00 | 6,028,973.48 |
| Fuyu Wellhope Agri-Tech | 46,602,789.58 | 9,546.00 | 46,612,335.58 |
| Changchun Wellhope Feed | 84,604,867.91 | 70,648.00 | 84,675,515.91 |
| Daqing Wellhope Bayi Nongda Animal Sci-Tech | 13,896,289.17 | 40,096.00 | 13,936,385.17 |
| Beijing Sanyuan Wellhope Agri-Tech | 8,808,814.58 | 393,037.51 | 9,201,852.09 |
| Tangshan Wellhope Feed | 43,441,837.54 | 32,062.30 | 43,473,899.84 |
| Cangzhou Helai Sci-Tech | 3,533,898.75 | 5,728.00 | 3,539,626.75 |
| Shanxi Wellhope Agri-Tech | 40,042,789.58 | 9,546.00 | 40,052,335.58 |
| Tangshan Hejia Agriculture and Animal Husbandry | 19,636,926.67 | 30,550.00 | 19,667,476.67 |
| Tangshan Wellhope Sci-Tech | 21,034,231.67 | 7,638.00 | 21,041,869.67 |
| Shanghai Wellhope Feed | 2,302,930.84 | 71,151.75 | 2,374,082.59 |
| Pinghu Wellhope Agri-Tech | 1,029,716.25 | 40,096.00 | 1,069,812.25 |
| Anhui Wellhope Agri-Tech | 70,165,675.08 | 42,022,912.00 | 112,188,587.08 |
| Anhui Wellhope Haoxiang Agriculture Development | 15,276.00 | 15,276.00 | |
| Xi'an Wellhope Feed | 4,962,363.33 | 152,750.00 | 5,115,113.33 |
| Zhengzhou Wellhope Agri-Tech | 4,044,926.67 | 28,012.00 | 4,072,938.67 |
| Zhumadian Wellhope Agri-Tech | 9,061,961.67 | 13,366.00 | 9,075,327.67 |
| Nanyang Wellhope Feed | 11,125,637.39 | 21,004.00 | 11,146,641.39 |
| Jiaozuo Wellhope Feed | 49,209,905.42 | 13,366.00 | 49,223,271.42 |
| Jingzhou Wellhope Agri-Sci-Tech | 21,443,959.42 | 58,802.00 | 21,502,761.42 |
| Qingdao Wellhope Agri-Tech | 28,893,664.16 | 87,832.00 | 28,981,496.16 |
| Jining Wellhope Agri-Tech | 19,751,300.83 | 19,094.00 | 19,770,394.83 |
| Yunnan Wellhope Feed | 24,284,231.67 | 13,366.00 | 24,297,597.67 |
| Fuyu Wellhope Taolaizhao Poultry Raising | 5,660,231.67 | 4,254.00 | 5,664,485.67 |
| Harbin Weierhao Trading | 3,970,817.50 | 29,292.00 | 4,000,109.50 |
| Changchun Hengfeng Agriculture and Animal Husbandry Equipment | 239,621.66 | 53,464.00 | 293,085.66 |
| Beijing Brilliant Dragon Commerce and Trade | 222,505.83 | 27,648.00 | 250,153.83 |
| Shanghai Hehong Trading | 1,191,063.75 | 13,482.00 | 1,204,545.75 |
| Jinan Xinweita Trading | 171,158.33 | 21,268.00 | 192,426.33 |
| Zhangwu Wellhope Agriculture | 1,800,000.00 | 1,800,000.00 | |
| Tongliao Wellhope Tianyi Prataculture | 10,200,000.00 | 10,200,000.00 | |
| Chongqing Dahong Agriculture and Animal Husbandry Equipment | 119,810.83 | 26,732.00 | 146,542.83 |
| Guangzhou Xiangshun Livestock Equipment | 3,001,347.50 | 11,456.00 | 3,012,803.50 |
| Dalian Huakang Xinxin Food | 11,709,361.25 | 292,134.00 | 12,001,495.25 |
| Dalian Heyuan Agri-Tech | 51,710,307.08 | 158,478.00 | 51,868,785.08 |
| Dalian Zhongjia Food | 196,832.08 | 43,916.00 | 240,748.08 |
| Shenyang Huakang Broiler | 2,152,531.67 | 126,018.00 | 2,278,549.67 |
| Shenyang Huakang Xinxin Food | 1,973,853.33 | 61,100.00 | 2,034,953.33 |
| Shenyang Huakang Agriculture and Animal Husbandry | 770,212.50 | 171,844.00 | 942,056.50 |
| Changchun Wellhope Food | 8,671,158.33 | 38,188.00 | 8,709,346.33 |
| Dehui Wellhope Agri-Tech | 51,347.50 | 11,456.00 | 62,803.50 |
| Puyang Wellhope Food | 20,213,947.92 | 47,734.00 | 20,261,681.92 |
| Puyang Wellhope Agri-Tech | 51,347.50 | 11,456.00 | 62,803.50 |
| Kaifeng Wellhope Agriculture and Animal Husbandry | 51,347.50 | 11,456.00 | 62,803.50 |
| Liaoning Wellhope Food | 30,045,198.33 | 45,826.00 | 30,091,024.33 |
| Chongqing Wellhope Agri-Tech | 1,500,000.00 | -14,286.00 | 1,485,714.00 |
| Nanchang Wellhope Agri-Tech | 3,250,000.00 | 3,250,000.00 | |
| Hengyang Wellhope Agri-Sci-Tech | 4,600,000.00 | 4,600,000.00 | |
| Shulan Fengtai Agriculture and Animal Husbandry | 6,000,000.00 | 13,366.00 | 6,013,366.00 |
| Shulan Fengtai Raising | 5,100,000.00 | 5,100,000.00 | |
| Hainan Wellhope Agri-Tech | 38,164,884.20 | 9,000,000.00 | 47,164,884.20 |
| Russia Wellhope Agri-Tech | 11,700,000.00 | 11,700,000.00 | |
| Chifeng Wellhope Fuxinyuan Food | 105,000,000.00 | 105,000,000.00 | |
| Shenyang Xiangmai E-Commerce | 800,000.00 | 800,000.00 | |
| Hebei Taihang Wellhope Food | 9,000,000.00 | 9,000,000.00 | |
| Total | 2,113,924,536.04 | 216,420,355.00 | 2,330,344,891.04 |
B. Investment in associates and joint ventures
RMB
| Company | Opening balance | Increase or decrease in current period | Closing balance | Closing balance of impairment provision | |||
| Additional investment | Gains or losses on investments recognized under equity method | Adjustment of other comprehensive income | Declaring of paying dividend or profit | ||||
| 1. Joint Venture | |||||||
| Unphung Joint Venture Company | 4,167,616.44 | 4,167,616.44 | |||||
| Nepal Wellhope Agri-tech Pvt. Ltd. | 7,501,575.10 | 7,501,575.10 | |||||
| NEXUS WELL-HOPE AGRITECH INTERNATIONAL LIMITED | 17,900,000.00 | 17,900,000.00 | 17,900,000.00 | ||||
| Subtotal | 29,569,191.54 | 29,569,191.54 | 17,900,000.00 | ||||
| 2. Associated Company | |||||||
| Dunhua Wellhope Agri-Tech | 4,178,671.25 | 385,403.69 | 4,564,074.94 | ||||
| Dunhua Fengda Agriculture and Animal Husbandry Development | 2,986,597.14 | 4,994,971.77 | 7,981,568.91 | ||||
| Qingdao Shenfeng | 13,573,648.97 | 748,458.85 | 14,322,107.82 | ||||
| Zhangjiakou Jiahe Agriculture and Animal Husbandry | 68,145,308.99 | 32,666,799.59 | 100,812,108.58 | ||||
| Tailai Jiahe Agriculture and Animal Husbandry | 27,134,553.62 | 17,849,560.97 | 44,984,114.59 | ||||
| Gongzhuling Corn Purchasing and Storing | 49,602,919.46 | -1,526,619.80 | 48,076,299.66 | ||||
| Beijing Dahong Hengfeng Agri-Tech | 20,087,982.12 | 456,127.14 | 20,544,109.26 | ||||
| Schipper(Beijing) | 1,270,877.77 | 212,349.05 | 1,483,226.82 | ||||
| GOLDEN HARVESTA INC. | 104,931,225.82 | 1,680,750.70 | 2,945,569.11 | 109,557,545.63 | |||
| PT KARKA NUTRI INDUSTRI. | 38,998,739.72 | 647,315.58 | -57,328.83 | 39,588,726.47 | |||
| Hainan Nongken Wenfeng Wenchang Chicken | 1,071,542.40 | 4,900,000.00 | -165,429.32 | 5,806,113.08 | |||
| Tai’an Jiuguhe Agriculture | 111,292,888.94 | -24,036,930.68 | 87,255,958.26 | ||||
| Linghai Jiuguhe Feed | 62,403,210.81 | -8,542,203.13 | 53,861,007.68 | ||||
| Dandong Wellhope Chengsan Food | 52,614,814.23 | 10,083,391.76 | 2,000,000.00 | 60,698,205.99 | |||
| Anshan Jiuguhe Food | 152,438,428.77 | 40,248,068.41 | 33,242,400.00 | 159,444,097.18 | |||
| Beipiao Hongfa Food | 442,144,638.08 | 46,277,265.92 | 488,421,904.00 | ||||
| Haicheng New Hongzunda Agri-Tech | 12,850,037.83 | 1,375,229.55 | 1,470,000.00 | 12,755,267.38 | |||
| Huludao Jiuguhe Food | 70,721,671.34 | 17,004,977.98 | 13,300,000.00 | 74,426,649.32 | |||
| Dandong Wellhope Chengsan Agri-Tech | 112,253,275.58 | -293,948.88 | 2,000,000.00 | 109,959,326.70 | |||
| Tai'an Jiufeng Agri-Tech | 5,951,804.50 | 182,624.00 | -1,153,694.01 | 4,980,734.49 | |||
| Shenyang Wenjie Bio-Tech | 12,442,904.99 | 141,560.82 | 12,584,465.81 | ||||
| Shenyang Zhongwenjie Bio-Tech | 4,060,534.77 | 533,672.62 | 4,594,207.39 | ||||
| Huluodao Jiuguhe Feed | 42,015,223.35 | -10,077,547.46 | 13,300,000.00 | 18,637,675.89 | |||
| Jinzhou Jiufeng Food | 48,476,492.49 | 19,329,815.40 | 67,806,307.89 | ||||
| Dalian Chengsan Animal Husbandry | 353,954,231.89 | 6,101,236.52 | 360,055,468.41 | ||||
| Tai'an Fengjiu Agri-Tech | 37,837,537.89 | -476,164.49 | 37,361,373.40 | ||||
| Anshan Fengsheng Food | 30,430,304.76 | 13,159,004.46 | 43,589,309.22 | ||||
| Lankao Skyland Duck | 52,618,773.55 | -6,112,003.85 | 46,506,769.70 | ||||
| Guangrong Xinchuang | 47,617,462.51 | 946,503.02 | -623,081.20 | 47,940,884.33 |
| Shulan Fengtai Organic Fertilizer | 1,500,000.00 | 1,500,000.00 | |||||
| Weifang Wellhope Xinhesheng Feed | 4,517,477.41 | 163,974.97 | 4,681,452.38 | ||||
| Liaoning Mubang Animal Husbandry Equipment Manufacturing | 1,791,476.38 | 2,626,742.47 | 4,418,218.85 | ||||
| Anshan Yufeng Feed | -193,154.81 | -314,363.36 | -507,518.17 | ||||
| Dunhua Fengda Broiler Breeding | 6,000,000.00 | -56,689.40 | 5,943,310.60 | ||||
| subtotal | 1,991,722,102.52 | 11,082,624.00 | 164,877,586.86 | 2,265,159.08 | 65,312,400.00 | 2,104,635,072.46 | |
| Total | 2,021,291,294.06 | 11,082,624.00 | 164,877,586.86 | 2,265,159.08 | 65,312,400.00 | 2,134,204,264.00 | 17,900,000.00 |
7. Operating revenue and cost
RMB
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 | ||
| Revenue | Cost | Revenue | Cost | |
| Revenue from principal businesses | 402,473,395.82 | 283,945,280.55 | 261,094,599.13 | 173,755,790.76 |
| Revenue from other businesses | 730,857.70 | 270,866.55 | 645,022.62 | 296,165.04 |
| Total | 403,204,253.52 | 284,216,147.10 | 261,739,621.75 | 174,051,955.80 |
| Item | Jan.-Jun. 2020 | Jan.-Jun. 2019 |
| Income from long-term equity investments under cost method | 24,244,972.00 | 17,600,000.00 |
| Income from long-term equity investments under equity method | 164,877,586.86 | 185,679,010.80 |
| Income from holding trading financial assets | 1,924,534.25 | |
| Income from disposal of other equity instrument investments | 100,000.00 | |
| Income from disposal of financial assets that are measured at fair value and its changes are recorded in current gains and losses | -18,935.44 | -658,675.89 |
| Total | 191,028,157.67 | 202,720,334.91 |
| Item | Amount | Note |
| Gains or losses from disposal of non-current assets | -567,086.15 | |
| Government grants charged to current gains or losses (excl. the government grants which are closely related to the Company's ordinary course of business and gained constantly at fixed quotas or amounts as per certain standards based on the state polices) | 12,625,199.07 | |
| Gains or losses on fair-value changes in trading financial assets and liabilities, derivative financial assets and liabilities, and the income from disposal of trading financial assets and liabilities, derivative financial assets and liabilities as well as other debt investment (excl. the effective portion of hedges that arise in the Company's ordinary course of business) | -1,899,996.55 | |
| Non-operating income and expense other than those described above | -4,960,053.70 | |
| Income tax effects | -1,176,176.26 | |
| Non-controlling interests effects | -596,370.19 | |
| Total | 3,425,516.22 |
2. Return on equity and earnings per share
| Profit in Jan.-Jun. 2020 | Weighted average ROE % | EPS | |
| Basic EPS | Diluted EPS | ||
| Net profit attributable to common shareholders of the Company | 10.16 | 0.66 | 0.66 |
| Net profit attributable to common shareholders of the Company deducting non-recurring items | 10.10 | 0.65 | 0.65 |
Section XI Reference
| Reference file directory | Financial statements with the signature and seal of the legal representative, the person in charge of the accounting work and the person in charge of the accounting department. |
| Reference file directory | During the reporting period, all the original documents and original announcements of the Company that have been publicly disclosed in the newspapers designated by the CSRC. |