Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Stock Code: 603609 Stock Abbreviation (English): Wellhope
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd.
2019 Semi-Annual Report
August 2019
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Important Statements
I. The Board of Directors, Supervisory Board, Directors, Supervisors and Senior
Management of Liaoning Wellhope hereby warrant that there are no false representations,
misleading statements or material omissions in this semi-annual report, jointly and
severally accept full responsibility for the truthfulness, accuracy and completeness of the
contents of this report.
II. All the Board Directors attended the board meeting.
III. This semi-annual report is unaudited.
IV. The Company's Chairman Jin Weidong and the Director of internal audit Zhang
Wenliang warrant the truthfulness, accuracy and completeness of the information
presented in the financial statements in this report.
V. In the reporting period, there has been no plan for profit distribution or capital
reserve converted into share capital.
VI. Risk Statement of Forward-looking Statements
The forward-looking descriptions in this report in terms of plans, development strategies
and other information cannot be deemed the Company's commitment to investors. Please
beware of the investment risks.
VII. There has been no occurrence of the Company's non-business capital being occupied
by controlling shareholders and their related parties.
VIII. There has been no occurrence of the Company violating its decision-making
procedure while providing external guarantees.
IX. Material Risk Warning
The Company describes possible risks in detail in this report. Please refer to "Possible
Risks" in Section IV "Business Operations Analysis".
X. This semi-annual report has been issued in both Chinese and English versions. In case
there is any discrepancy or inconsistency between the two versions, the Chinese version
shall prevail. The disclosed Chinese version of 2019 Semi-annual Report can be obtained at:
www.sse.com.cn.
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Contents
Section I Glossary ............................................................................................................. 4
Section II Company Profile and Key Financial Information ............................................... 5
Section III Business Overview ............................................................................................ 8
Section IV Business Operations Analysis .......................................................................... 23
Section V Important Disclosures ..................................................................................... 42
Section VI Changes in Common Shares and Shareholder Information ............................ 55
Section VII Preference Share ............................................................................................. 59
Section VIII Directors, Supervisors and Senior Management ............................................ 60
Section IX Corporate Bond ............................................................................................... 61
Section X Financial Statements ....................................................................................... 62
Section XI Reference ........................................................................................................ 78
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Section I Glossary
CSRC refers to China Securities Regulatory Commission
SSE refers to Shanghai Stock Exchange
Wellhope,
Liaoning
refers to Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd.
Wellhope,
the Company
Reporting
refers to January 1st, 2019-June 30th, 2019
Period
De Heus Mauritius Ltd., established in Port Louis, Mauritius,
De Heus refers to
one of the shareholders of Wellhope
Koninklijke De Heus B.V., the parent company of De Heus
Royal De Heus refers to
Mauritius Ltd., the biggest feed company in the Netherlands
Shenyang Wellhope Heli Investment Ltd., one of the
Heli Investment refers to
shareholders of Wellhope
Company The Constitution of Liaoning Wellhope Agri-Tech Joint Stock
refers to
Constitution Co., Ltd.
Shareholders' The Shareholders' Meeting of Liaoning Wellhope Agri-Tech
refers to
Meeting Joint Stock Co., Ltd.
Board of The Board of Directors of Liaoning Wellhope Agri-Tech Joint
refers to
Directors Stock Co., Ltd.
Supervisory The Supervisory Board of Liaoning Wellhope Agri-Tech Joint
refers to
Board Stock Co., Ltd.
Also known as additive premix, it is a well-proportioned
mixture prepared by two or more than two kinds of feed
Premix refers to additives and carrier or diluents according to appropriate
proportion. It is a general name for compound premix,
microelement premix and vitamin premix.
It is a well-proportioned mixture consisted of protein feed,
Concentrate mineral feed and feed additives according to appropriate
refers to
Feed proportion, it can be made into compound feed by mixing
with energy feed in a specified proportion.
Based on the nutritional needs of animals, more feed raw
Compound materials and feed additives are industrially processed
refers to
Feed according to feed formula, it can be directly used for
feeding animals.
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Section II Company Profile and Key Financial Information
I. 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
II. Contact Person
Secretary of the Board Representative of Securities Affairs
Name Zhao Xin Yang Guolai
No. 169, Huishan Street, Shenbei No. 169, Huishan Street, Shenbei New
Address New District, Shenyang, Liaoning, District, Shenyang, Liaoning,
P. R. of China P. R. of China
Tel 024-88081409 024-88081409
Fax 024-88082333 024-88082333
Email hfmy@wellhope.co hfmy@wellhope.co
III. Basic Information of the Company
No. 169, Huishan Street, Shenbei New District,
Registered Address
Shenyang, Liaoning, P. R. of China
Postal Code 110164
No. 169, Huishan Street, Shenbei New District,
Office Address
Shenyang, Liaoning, P. R. of China
Postal Code 110164
Company Website www.wellhope-ag.com
Email hfmy@wellhope.co
IV. Place where the Semi-Annual Report is Prepared
Media Designated by the Company for China Securities Journal, Shanghai Securities
Disclosing Information News, Securities Times
Website Designated by the CSRC for
www.sse.com.cn
Publishing the Annual Report
Place where the Company Prepares its
Securities Department of the Company
Semi-annual Report
V. Stock Information
Stock Exchange for
Stock Type Stock Abbreviation Stock Code
Listing
Shanghai Stock
A Share Wellhope(禾丰牧业) 603609
Exchange
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
VI. Other Information
Not applicable
VII. Key Accounting Data and Financial Performance Indicators
1. Key Accounting Data
Unit: yuan Currency: RMB
Year-on-year
Item January-June, 2019 January-June, 2018
change %
Operating revenue 7,727,400,004.75 6,850,215,702.49 12.81
Net profit attributable to the
359,008,639.18 164,359,110.71 118.43
shareholders of the Company
Net profit attributable to the
shareholders of the Company
358,296,799.48 157,546,972.69 127.42
deducting non-recurring gains
and losses
Net cash flow from operating
296,568,981.22 290,259,024.18 2.17
activities
Change compared
June 30th, 2019 December 31st, 2018 with the end of
prior year %
Net assets attributable to the
4,839,986,271.06 3,851,915,758.64 25.65
shareholders of the Company
Total assets 8,317,280,762.53 6,930,694,562.43 20.01
2. Key Financial Performance Indicators
January-June, January-June, Year-on-year
Item
2019 2018 change %
Basic earnings per share (yuan per share) 0.41 0.20 105.00
Diluted earnings per share (yuan per share) 0.41 0.20 105.00
Basic earnings per share deducting
0.41 0.19 115.79
non-recurring gains and losses (yuan per share)
Increased 3.6
Weighted average return on equity (%) 8.37 4.77
percentage points
Weighted average return on equity deducting Increased 3.78
8.36 4.58
non-recurring gains and losses (%) percentage points
VIII. Non-Recurring Gains and Losses
Unit: yuan Currency: RMB
Item Amount
Gains or losses on disposal of non-current assets -4,131,816.55
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
16,245,640.41
constantly at fixed quotas or amounts as per certain standards based on the state
polices)
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
-484,195.89
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
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
that arise in the Company's ordinary course of business)
Non-operating income and expense other than those described above -12,473,989.60
Non-controlling interests effects 4,271,396.05
Income tax effects -2,715,194.72
Total 711,839.70
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Section III Business Overview
I. Principal Business, Operation Model and Current Situation of the Industry in the
Reporting Period
Principal business of Wellhope (hereinafter referred to as "the Company") primarily
consists of feed production and sale, feed raw materials trade, integrated broiler business,
pig raising business and related business. All the operating segments run under the overall
strategy, and carry out operation activities in their respective business areas in an orderly
manner.
1. Feed business and feed raw materials trade business
A. Snapshot of the industry
African swine fever is reshaping China’s feed and pig raising industries. In the first half of
2019, pig inventories continuously decreased due to swine fever. The statistics showed
that the inventories of reproductive sow and pig in the end of June 2019 respectively
declined 26.61% and 28.79% compared with the same period of prior year, and the
deliveries of pig from January to June in 2019 fell 11.47% on a year-on-year basis. African
swine fever has brought a huge impact on the entire industry, the consumption of pig feed
has dropped significantly, feed companies lowered feed price to seize their market share,
making competitions among feed players fierce. Meanwhile, feed product portfolios have
been significant changed. On one hand, African swine fever boosted the development of
broiler, layer and ruminant raising industries, which stimulated the consumption of poultry
feed, ruminant and aquatic feed. On the other hand, some pig feed players increased the
production of poultry, aquatic and ruminant feed to ensure operating rate, which
indirectly promoted the growing output of poultry, aquatic and ruminant feed.
According to public statistics, China's total feed production in the first half of 2019 reached
93.06 million tonnes, dropped 0.5% compared with the same period of prior year, pig feed
of which recorded 36.3 million tonnes, decreased 14%, layer feed realized 13.03 million
tonnes, increased 10.5%, broiler feed reached 32.79 million tonnes, rose 12.4%, ruminant
feed realized 4.42 million tonnes, grew 4.9%. In January 2019, pig feed and poultry feed
respectively accounted for 46% and 30.9% of total feed production, while in June,
accounted for 34.9% and 35.3% respectively.
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Moreover, in accordance with the newly revised regulations, starting from July 2019, feed
manufacturers should use new production license instead of original inspection certificate.
In the meantime, higher requirements have been put forward in terms of processing
equipment and quality inspection, etc., market access for feed players has been stricter.
Furthermore, from July 1st, 2020, feed manufacturers have to stop producing commercial
feed that contains additives of growth-promoting drugs (except traditional Chinese
medicine), previously produced commercial feed can be used until December 31st, 2020.
B. Business profile
The Company manufactures and sells animal feed for swine, poultry, ruminant, aquatic
and fur-farmed animals, which are categorized into premix, concentrate and compound
feed. Driven by the principle of “constantly working on new products, never following the
beaten path”, it always designs tailor-made products for animals in different growth stages.
Since 2006, the Company has entered a strategic cooperation with Royal De Heus, a Dutch
company also a global player in animal nutrition, which is active in over 75 countries.
Supported by De Heus' worldwide resources, advanced know-how and centurial business
practices, whilst relying on self-owned data-based nutrition evaluation system that derives
from years of researches on nutrition and raw materials, the Company is committed to
supplying feed products centered on the needs of local markets and customers, to offering
farmers integrated services in terms of animal raising, disease prevention and control as
well as operation management, helping them to achieve the best economic benefits.
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 sales
agents of animal health products such as vaccines and veterinary medicine produced by
global strategic suppliers.
Based on tremendous strengths in technology, research and development (hereinafter
referred to as "R&D"), seasoned talents and brand influence, the Company has created an
operation model of integrating science and technology, manufacture and trade for feed
and feed raw materials trade businesses, serving customers and local markets through
resources sharing, synergetic development and combined action. At present, the
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Company's feed products cover the markets in 29 provinces and regions across China, it
has also built feed plants in Nepal, Indonesia and the Philippines, etc. Meanwhile, its trade
business distributes in Northeast China, Northern China, Eastern China, Southwest China,
Guangdong Province and other regions, feed products and raw materials have also been
exported to Nepal, Mongolia and other countries.
2. Integrated broiler business
A. Snapshot of the industry
In regard of supply, supported by prosperous broiler market, the amount of new
replacement of grandparent stock increased in the first half of 2019, 15 local companies
replaced their grandparent stock. The production of day old chick of parent stock was
lower in the first quarter, but showed a rapid growth in the second quarter. In the
meantime, the inventories of parent breeders and enforced molting breeders grew. The
statistics indicated that in the first half of 2019, the production of day old chick of parent
stock in China increased 16% compared with the same period of prior year, commercial
day old chick grew 11%. However, the production performance of breeders was relatively
lower, whilst the overall consumption needs were positive, so the situation of tight supply
of white feather broiler did not change substantially.
In regard of demand, the statistics showed that in the first half of 2019, the price of
domestic chicken products rose 7.5% compared with prior month and grew 25.1% on a
year-on-year basis. From January to May, chicken price increased in fluctuations and
reached the highest in May (12,800-13,000 yuan per tonnes), which was the second
highest price since 2011, but downstream inventories and other factors pushed chicken
price back down in June. In regard of consumption, the demand for chicken products rose
significantly. Benefiting from the characteristics of high protein, low fat and low sterol,
people's preference for chicken has been increased constantly, in addition, at present
influenced by severe African swine fever, as the alternative, the price of chicken products
was rising driven by the soaring price of pork.
In general, in the first half of 2019, the supply and demand of white feather broiler
industry were flourishing with good expectations, and the overall profit level of the
industry realized historic high.
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B. Business profile
The Company's broiler integrated chain covers more than 30 holding and associated
companies, which are mainly located in the provinces of Liaoning, Hebei, Henan, Jilin and
Shandong, etc. It has established three business units in terms of broiler raising, raw meat
processing and further processing, which contains breeding, hatching, feed producing,
commercial broiler raising, slaughtering and processing of raw meat, further processing of
prepared and cooked food. The integrated operation can effectively ensure the production
and supply of all operating segments, and facilitate the Company to control food safety
across the entire chain. Meanwhile, through standardized management and streamline
operation, the Company consolidates the controls of bio-safety, drug residue and
in-process hygiene to achieve traceable food safety. The Company's integrated broiler
business has been becoming one of the main white feather broiler suppliers in China.
Wellhope
Broiler raising unit: This unit covers breeder raising, day old chick hatching and
commercial broiler rearing. The Company formulates scientific and reasonable feeding
programs, light programs and disease prevention system to provide qualified eggs for the
hatching farms; meanwhile, it has established thorough management system in the
hatching process, introduced intelligent facilities that are available for hatching in batches,
also equipped high-efficient and energy-saving hatcher and environment control system
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for supplying healthy day old chicks. Entering commercial broiler sector, the Company
mainly raises broiler by self-owned farms and contract(out-sourcing) farms under the
pattern of unifying nine aspects, including unified site selection and planning, unified
construction standards, unified day old chicks supply, unified disease prevention, unified
feed supply, unified medicine supply, unified technological guidance, unified testing and
unified slaughtering and processing. Guided by scientific raising standards, all the farms
apply three tiers cage system, and automate all the processes from feed intake, water
temperature to moisture control, etc., meanwhile, the farms combine crop planting with
animal raising to reduce manure pollution and to promote resource recycling. The delivery
body weight of commercial broiler can reach over 2.8 kg, and the European production
index (shortened as EPI in the following parts) can realize 380, which receive wide
recognition from the cooperative farms.
Raw meat processing unit: The Company has 15 holding and associated slaughtering
entities, which are equipped with state-of-the-art production lines with an annual
slaughtering capacity of 550 million broilers. Driven by all-in and all-out inspection and
quarantine, every single entity has established a total quality guarantee system and
traceability system to monitor all the processes. Meanwhile, the Company constantly
strengthens and improves slaughtering and processing techniques by ways of systematic
pre-job training and skill promotion training as well as conducting "6S" management (i.e.,
Seiri, Seiton, Seiketsu, Shitsuke, Standard, Safety), making the killing-out percentage stand
out among the companies with similar scale. The Company mainly supplies fresh and
cold-storage broiler parts products, which are sold to meat processing companies,
supermarkets and chain fast-food stores, major clients include Shineway Group, Jinluo
Group, Yurun Group, RT-MART, McDonalds, KFC, Yoshinoya, Wallace, Dili Fresh Food,
catering companies and other local fresh food markets, etc., as well as sold to other
regions such as Hong Kong and Macao, and countries in terms of Mongolia and Bahrain.
Further processing unit: The Company uses high-quality chicken supplied by self-owned
slaughtering entities as raw materials, at present it supplies over 100 kinds of products,
which are sold to supermarkets and cooked food shops. Under the backdrop of continuous
expansion of consumer demand, the Company expands its exporting business of cooked
food to the markets of Japan and Korea.
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3. Pig raising business
A. Snapshot of the industry
In terms of supply, affected by African swine fever, the inventories of breeding sow
declined sharply in the first half of 2019 in China, making the supply of piglets tightened,
the deliveries of pig were far below consumer demand. The statistics indicated that, the
inventories of breeding sow and pig in the end of June 2019 respectively declined 26.61%
and 28.79% compared with the same period of prior year. From January to June, the
supply of piglets decreased 29.27%, the deliveries of pig declined 11.47%, and the pork
production decreased 10.31% compared with the same period of prior year, the short
supply spurred a rapid rise in pig price. In June, pig prices in the provinces of Liaoning,
Guangdong and other places broke 20 yuan per kg, pig raising industry made up deficits
and got surpluses.
In terms of demand, the consumer demand of pork decreased to some extent dragged
down by African swine fever. However, at present, China still has a huge shortfall of pork
and the demand of pig exceeds supply. The statistics showed that in the first half of 2019,
the domestic pig price soared from 11 yuan per kg to 17 yuan. From the perspective of
meat consumption, transporting live pigs was restricted to some extent, making circulating
with cold-chain gradually increase, and the release of frozen meat inventories in 2018
alleviated the consumption pressure of pork. Under the backdrop of a severe shortage of
pork, the consumptions of alternative chicken, beef, mutton and eggs have been gradually
increased. Chicken, in particular, has become more and more popular among consumers
due to its good characteristics, and has gradually become the preferred alternative for
pork.
To conclude, in the first half of this year, the supply of pig showed the tight trend, and pig
price started to rise. The pig raising industry turned from deficit to profit. At the same time,
the substitution effect of other protein foods on pork gradually increased.
B. Business profile
The Company has entered pig raising business by self-built farms and co-invested farms
that are primarily located in the provinces of Liaoning, Henan, Hebei, Heilongjiang and
Anhui. In 2019, the first stage of 500,000 heads' pig project located in Fushun city of
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Liaoning Province was completed and came into operation in April, the pig project located
in Guanmen mountain of Fushun city will finish construction in the end of September, and
the construction of pig project in Gongzhuling city will be completed in the end of October.
The Company raises breeder by self-owned farms, and rears finisher by self-owned farms
together with contract(out-sourcing) family farms, following the pattern of "unifying five
aspects" in terms of unified pig house standard, unified piglet supply, unified feed supply,
unified feeding management and unified repurchase of commercial piglet. Among the
Company's pig projects, Lingyuan breeder farm is a designated trial farm of the national
pig industry system, and the pig project located in Henan Province, raises sows by its own
farms, also buys piglets for contract farms, which provides effective supports for pig feed
business of regional companies.
In compliance with the principle of moderate scale for every single farm along with the
site planning of multi-point layout, the Company strictly controls bio-safety and adheres to
the concept of environmental-friendly animal husbandry to protect environment by
disposing manure in the natural method. Fushun pig project was jointly designed by
famous pig raising experts and Architectural Design and Research Institute of Tsinghua
University CO. LTD., setting its sights on becoming a first-rate modern pig breeding farm.
This farm adopts high-level technique and first-class facilities, and has specially designed
bio-safety program. By introducing high-quality Landrace and Yorkshire to ensure the gene
of grandparent stock, it is committed to supplying pure parent stock with clear family tree
and providing better commercial piglet and finisher. Meanwhile, the Company helps
farmers in surrounding areas to increase their incomes by offering them contracts to
fatten pig, contributing to the economy development of local rural areas, whilst basing on
scientific environmental protection technology, the farms combine crop planting with
animal husbandry to achieve eco-friendly and recyclable agriculture.
◇Explanation: Above statistics data come from the Ministry of Agriculture and Rural
Affairs of China and www.boyar.cn.
II. Core Competitiveness Analysis within the Reporting Period
Core competitiveness of the Company lies in a highly educated, experienced, loyal and
stable management team, rationally planned and steady-development based corporate
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
strategy, increasingly matured and competitive integrated operation model, systematic,
scientific and continuously innovative technology system, development-driven and
strongly rooted corporate culture.
1. Highly educated, experienced, loyal and stable management team
The highly educated senior managers of the Company have professional background of
over 20-year's experiences in feed and animal husbandry industries as well as business
management. They are pioneers and developers of the Company, who are committed to
insisting entrepreneurship, acquiring new knowledge and keeping pace with the era over
the years. The seven founders of the Company always hold together and fight together,
they are praised as "seven noble partners” in the industry, the high solidarity of the
start-up shareholders has become the Company's most significant core competitiveness,
whilst “Unity is Power” is also one part of the core culture. Almost all the middle and
senior managers are internally selected and cultivated by the Company, they have deep
understanding and recognition of the corporate culture and operation model, they have
strong sense of ownership, full sense of mission and responsibility, devoting themselves to
the sustainable development of the Company. Within over 20 years, the management
team has maintained high stability, almost no chief director or above level manager leaves
the Company, in regard of over 100 general managers, besides those who are adjusted due
to substandard performance, also few of them quit the job. Meanwhile, newly promoted
members born in the 1980s and 1990s are selected from key talents' cultivation programs,
such as “Seedling Plan” and “Sunflower Program”, they love the Company, highly recognize
the corporate culture, become the backbone force of the management team. As a reward,
the Company offers core members equity incentive policies in different ways, moreover, it
also pays high attention to continuous learning and ability improvement of these
managers, provides them with different training programs, including Executive
Development Program, Leadership Training Camp, etc., which are conducted strict training
and appraisal rules. Whilst it also organizes those managers to study from some leading
companies at home and abroad to broaden their horizons and make further progress. The
main reason that causes the failure of some domestic companies is attributable to
“unstable and disunited management team”, in contrast, the highly educated, loyal and
stable management team is one of the core competitiveness of Wellhope, making the
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Company having faith in future and moving forward.
2. Rationally planned and steady-development based corporate strategy
Based on comprehensive understanding of domestic and overseas political, economic and
industrial trends, the Company always pays attention to its sustainable development and
risk control, and focuses on its operation quality and the investment return of new
projects. Driven by a stable and conscientious investment attitude, the Company always
rationalizes its business distribution, develops step by step instead of investing and
expanding businesses recklessly, always maintains the rationality and safety of industrial
structures and avoids all kinds of risks regarding business operation.
Rationally planned and steady-development-based corporate strategy reflects in the
following aspects:
The Company has primarily formed an industrial chain with high competitiveness and
capability of risk prevention and control in the fields of raw material trade, feed
manufacturing and selling, animal raising, slaughtering and further processing, which can
improve its competitiveness, enable all business divisions to connect closely, reduce the
cost of intermediate links, improve profit margin and greatly mitigate the risks of single
operation.
Instead of rapidly covering nationwide markets supported by the success of feed business
in Northeast regions and integrated broiler business, the Company, with rich experiences
in market expanding, insists on exploring new markets basing on overall analysis and
investigations, step by step entering the markets in Northeast, Northern China, Henan,
Shandong and other areas. It moves forward steadily and purses asset-light operation,
always focuses on overall operation quality and returns on investment, following the
principle of “making existing businesses stronger, accumulating business practices, laying a
solid foundation, seeking for the dominate position gradually”.
The sales volume and growth rate of all feed categories in terms of pig, poultry, ruminant
and aquatic products are relatively balanced and each has its advantages. While constantly
promoting integrated broiler business, the Company has entered pig raising business, and
plans to take 5 to 8 years to craft an operation model driven by two complementary
engines in terms of integrated broiler and integrated pig businesses. Such business layout,
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
with high risk resistance, will not lead the Company to a rather high fluctuation due to a
big blow or a downturn suffered by one of the business.
In 2018, the Company conducted "SWOT” analysis regarding itself on a scientific and
prudent basis, finally confirmed its development goals for recent three years and next ten
years, and formed a development strategy from 2019 to 2021, i.e.: "To steadily improve
existing core businesses, to vigorously develop emerging strategic businesses and actively
cultivate potential businesses. In the following three years, to further echelon the talents
team, to unremittingly innovate technology and marketing pattern, information resources,
investment and financing platform, to deeply expand international business centered on
Southeast Asia, forming an operation model with "leading-edge quality and efficiency"
that can create synergies and reduce costs among all business divisions and provide
customers and related parties (shareholders, employees, suppliers, society) products and
services with brand influence, to become an enterprise with leading-edge quality and
efficiency across agriculture, animal husbandry and food industries as well as a supplier of
relevant services". The Company will proactively carry out all the work under overall
strategies with unity and cohesion, so as to achieve the goals.
3. Increasingly matured and competitive integrated operation model
Animal husbandry industry and feed industry are experiencing big transformations and
changes, feed producers gradually withdraw the leadership in the industrial chain, whilst
farms and large-scale integrated groups will take the dominated position in the future. On
one hand, following the trends of markets and changes of customers, the Company has
implemented significant measures to improve its feed market share and overall
profitability, including constantly developing new products, adjusting marketing strategy
and consolidating administrative departments. On the other hand, as early as 10 years ago,
the Company had planned to move into integrated broiler business, nowadays this
business has developed from small to large scale, from joint venture to individual sole
proprietorship, from fragmented parts to closely connected integration, which make the
Company have explored a relatively matured and competitive integrated operation model.
Relatively complete integrated chain: The Company is responsible for breeding, feed R&D
as well as production, providing instructions of environment and small climate in the
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house, and monitoring all the processes relating to broiler raising. Meanwhile, the
Company repurchases commercial broilers for its slaughterhouses and processes raw meat,
prepared and cooked food, making all the processes of the integrated chain controllable.
Modern model of self-owned farms together with large contract farms: The Company
has changed its broiler raising model from “self-owned farms and family farms” to
“self-owned farms together with large contact farms”, wining the priority by strategic
layouts and judgments of the industry. Relying on the strength of R&D, the Company's
feed conversion ratio ranks at the first class in the industry, whilst benefiting from high
standard of farm building and application of three tiers cage system, the design of
ventilation and environment control also reaches higher level, hence, the Company has
realized efficiency and cost leadership supported by high-standard raising and fine
management conducted in the slaughtering process.
Fine management conducted in the integrated chain: Driven by the principle of saving
energy, reducing emission, protecting environment and providing healthy products, the
Company has established stringent production access standards for the integrated chain.
And now, it is forging a data sharing and collaboration platform for green manufacturing of
white feather broiler chain, aiming at consolidating logistics, information flow and capital
flow. Meanwhile, the Company is committed to promoting the fine management in the
integrated chain, also conducting strict benchmarking management and tracing feedback
by monthly meeting, field inspection and big data sharing. Over ten years' dedicated
researches and consecutive improvements enable the Company to achieve significant
progress in the operation efficiency and cost control regarding broiler raising, feed
production and slaughtering, etc., thus the competitive integrated operation model has
become one of the core competitiveness of the Company. By summarizing and extracting
the practices related to the chain, standards can be formed and will be easy to be copied
and promoted elsewhere.
Integrated operation shows a new development direction for enterprises in agriculture
and animal husbandry industry, at present many of them are searching their own
experiences in this field. Wellhope has operated broiler integration over ten years, rich
operation practices and the management team composed of dedicated experts serves as
the core competitiveness of integrated broiler business.
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4. Systematic, scientific and continuously innovative R&D system
As a technology and innovation driven corporation, the Company strictly follows its
mission described as "Using advanced technology, excellent service, and outstanding
products to promote the development of China’s animal husbandry industry, save
resources, protect the environment, provide food security and benefit the society", its
R&D team, driven by market-oriented and customer-oriented principles and the goals of
“safe product, stable quality, tailor-made nutrition and powering business performance”,
has always been dedicated to constantly innovating know-how and working on new
products.
The Company's R&D system applies vertical management in regard of nutritionist, product
manager, formulator, field technician, quality controller, laboratory technician and other
related positions. Guiding by over 100 highly educated and seasoned experts, it has
created a management system of R&D and results' application, which starts from studying
on demands of customers, trends of industry, to research and development of products,
analysis of production demands, to transformation of achievements. Regarding technology,
the Company has received certain awards and recognitions from national and local level,
such as National-Recognized Enterprise Technology Center, National and Local Joint
Engineering Research Center for Researching and Developing New Biological Feed and Its
Application, Wellhope Feed Engineering Technology Research Center of Liaoning Province,
etc. Moreover, by combining De Heus’ global resources, leading-edge technology and
centurial business practices with the Company’s more than 20 years of researches on
nutrition and raw materials, it has built a precisely data-based nutrition evaluation system,
and also constantly improved its product lines, innovated databases application and
animal growth model to continuously maintain and strengthen its product competence.
Among the progresses, the Company has made pioneering explorations and
breakthroughs in feed technology regarding "safety and high quality", "tailor-made
nutrition and high efficiency", "antibiotic-free and environmental protection”, etc.
Furthermore, the Company's well-equipped testing center is one of the national key
laboratories certified by CNAS (China National Accreditation Service for Conformity
Assessment). By virtue of up-to-date equipment and facilities, the testing center has been
capable of detecting melamine and other banned additives very early, and at present its
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test results can be recognized by 60 countries. The Company is dedicated to guaranteeing
the quality of products from micro to macro, putting the concept of safe production into
every step, and it has established self-owned raw material database and also shares data
resources of the Dutch partner, meanwhile, it uses raw material data that calculates
energy dynamics by regression equation, formulates precise nutrition in accordance with
production performance and feed intake, so as to get lowest cost price of feed formula to
achieve best price quality ratio.
In the first half of 2019, the Company led and participated in more than 10 projects at
national, provincial and municipal level. Among them, Wellhope, as the first organizer,
coordinated the major science and technology project of Liaoning Province--"Feed Quality
and Safety Control and Low-protein Feed". The project "Creation Technology for New-type
Amino Acid and Low-Protein Pig Feed", co-operated with China Agricultural University, has
entered the second prize list of National Technology Invention Awards and passed the
publicity period. The project "Development and Promotion of Energy-saving and
Environment-friendly Livestock and Poultry Feed" passed the preliminary selection of the
second prize of Liaoning Province Science and Technology Progress Awards. As a
representative of enterprises in the feed industry, the Company participated in formulating
group standard for fermented feed production, and participated in formulating the
standard for "Question Bank for Formulators of China's feed industry" and compiling
relevant questions. Meanwhile, in the first half of 2019, the Company successfully
screened two sets of cost-effective antibiotic-free feed formula solutions, and developed
"Wellhope immune nutrition" products, which improved animal's immune response ability
and disease resistance by enhancing daily intake of amino acids, etc., to help to realize the
withdrawal of antibiotics in feed and efficient and healthy animal raising. Furthermore, in
the first half of 2019, the Company was granted with 3 invention patents, and had
submitted 6 invention patents that were formally accepted.
Based on continuous improvement of feed technology and raising programs, the Company
has constantly improved its technology relating to integrated broiler business, the delivery
body weight of broiler can reach over 2.8kg with a livability of 95% and European
production index of over 380. Those indexes, which directly show slaughtering technology
and management ability, such as per capita daily slaughtering numbers and killing-out
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percentage, have stepped to the first-class level in the industry.
5. Development-driven and strongly rooted corporate culture
After years of development, the Company has created corporate values featured by
leading its business development and being understood and recognized by all employees.
In 2018, while conducting SWOT analysis during Performance Excellence Management
project, the Company's corporate culture was put forward as the firstly important
advantage by all staff. The core culture, represented by Wellhope Vision, which is mainly
described as "Always put customers’ needs first and constantly work on new products,
never follow the beaten path, always conduct business honestly, always aim to provide
value to our society and to maintain sustained growth through technology, innovation, and
creative work”, and by Wellhope Mission, which is primarily described as "Save resources,
protect the environment, provide food security and benefit the society", plays the role of
driven principles for management and the source power for ensuring the Company's
sustainable development. Whilst the subculture, originated from the core culture, is the
specific concept and strategy which guides management and business operation, including
Technology Strategy, i.e. --No Technology, No Success, only producing reasonable and
high-quality product, Marketing Strategy, i.e. --The best way to expand our business is
supporting our customers growing business, providing customers not only products, but
also solutions to problems, Quality Principle, i.e.--Never use unqualified raw material,
Never use non-standard equipment, Never allow substandard operation, Never produce
unqualified products, Never ignore unsatisfied customers, Never tolerate imperfect service,
HR Policy, i.e.--Providing a fair, just, and merit-based environment for rewarding
employees, continuously searching for talents and creating development space for
employees, always being dedicated to employee’s professional growth and helping them
build a blessed life, Code of Conduct for Managers, i.e.--Exercising strict self-discipline,
acting with integrity & honest; separating personal and corporate business, sharing
achievement, showing kindness to everyone. These cultures have been constantly
improved, publicized and practiced over the years, also promoted by the managers via
leading by example themselves, together they make the corporate culture root in
employees' behaviors. In 2018, along with deeper reforms and for adapting to the changes
of internal and external business environments, the Company further summarized and
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refined its corporate culture, confirmed the core values as “Integrity, Responsibility and
Win-win” and the management culture as “Innovation, High-efficiency and Self-discipline”.
In the first half of 2019, the Company continually took different ways to enhance its
culture incorporating into daily practice, for instance, holding live broadcast in which
senior executives shared stories relating to the company culture, making employees could
understand the connotation of the culture and answer their questions. The first time of
live broadcast attracted over 80,000 online viewers. Meanwhile, the Company improved
publicity materials and collected stories regarding to its corporate culture, and started to
work on the code of conduct for employees to constantly guide the thoughts and to show
the desired behaviors for all staff, hence, promoting its corporate culture to play a greater
role in pushing forward the Company's development.
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Section IV Business Operations Analysis
I. Overview
In the first half of 2019, the global economic growth slowed down. Sino-US trade frictions
have affected the imports of major agricultural products and the original structure of
agricultural supply chain, which increased uncertainties. In the meantime, African swine
fever has changed pig raising industry, becoming a time-phased normalstate. The
agriculture and animal husbandry industries witnessed intensified competitions. 2019 is
the first year for the Company to conduct strategic reform and transformation, and the
starting year for its three-year's goal relating to stock incentive. According to the strategy
and business plan, the Company has steadily promoted each business division, all the
staffs have been highly motivated with clear goals, and the Company has always
maintained a healthy and rapid development, main operating indicators realized rapid
growth.
1. Business highlight
During the reporting period, total operating revenue of the Company realized RMB 7.727
billion yuan with a year-on-year growth rate of 12.81%, total profit reached RMB 461
million yuan with a year-on-year growth rate of 104.34%, the net profit attributable to the
shareholders recorded RMB 359 million yuan, increased by 118.43% compared with the
same period of prior year, and the net profit attributable to the shareholders deducting
non-recurring gains and losses reached RMB 358 million yuan, achieving a year-on-year
growth rate of 127.42%.
From January to June in the recent three years (2017-2019), the growth of operating
revenue, net profit attributable to the shareholders, return on equity and net profit
margin on sales are listed as follows:
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2. Driving factors of performance growth
Feed business and integrated broiler business are the two largest contributors towards
the Company's overall business performance.
In the reporting period, supported by the blooming market, the Company further
accelerated the layout of broiler integration, improved internal operations and
profitability. In the meantime, during the reporting period, the Company's income from
investment realized RMB 188.067 million yuan with a year-on-year growth rate of
102.79%, which mainly came from the joint-stock companies that belong to integrated
broiler business division.
The Company's feed business division, another contributor, constantly stepped up
research and development, market expanding and customer service, as well as further
tightened fine management to reduce cost and improve efficiency, its feed sales volume
realized steady progress, which increased 9.15% compared with the same period of prior
year, poultry feed, ruminant feed and aquatic feed of which rose 21.19%, 11.58% and
16.30% respectively. African swine fever hit the pig raising industry, facing difficulties and
crisis, the Company further increased its market share by developing new products,
upgrading services, implementing brand marketing and other measures to effectively
control the decline of pig feed. During the reporting period, the sales volume of the
Company's pig feed fell 5.87% compared with the same period of prior year, much lower
than the industry average decline level of 14% (data from the Ministry of Agriculture and
Rural Affairs of China).
3. Business review
Feed business
In the first half of 2019, the Company continued to deepen internal reform, separate sales
system and administrative system, as well as conduct benchmarking analysis, by doing this,
it further activated staff team, strengthened marketing, reduced cost and improved
operating efficiency. Meanwhile, based on its core competitiveness, the Company gave
full play to its strengths of technology and brand, innovated its service model to attract
new customers and retain old customers, to continuously increase its market share.
In the reporting period, under the unfavorable situation of African swine fever, both the
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Company's feed sales volume and gross profit rate achieved growth, its feed business
realized the sales revenue of RMB 3.381 billion yuan, increase 3.58% compared with the
same period of prior year; its holding and associated companies totally manufactured 2.23
million tonnes feed with a year-on-year growth rate of 15%; the companies included in
the consolidated financial statements sold 1.16 million tonnes feed, increased 9.15%, and
the gross profit rate of feed reached 13.50%, up 0.96 percentage points.
Detailed information for feed presented in categories list as follows:
January-June, 2019 January-June, 2018
Item Sales volume Sales volume Year-on-Year Change
(10,000 tonnes) (10,000 tonnes)
Pig feed 38.03 40.40 -5.87%
Poultry feed 50.04 41.29 21.19%
Ruminant feed 20.82 18.66 11.58%
Aquatic feed 5.78 4.97 16.30%
Other feed 0.93 0.58 60.34%
Total 115.59 105.90 9.15%
Pig feed: The Company continuously developed market-oriented pig feed products,
increased the sales volume of high-value products and constantly innovated customer
service systems to mitigate the impact of African swine fever. In the reporting period, the
sales volume of pig feed recorded 380,300 tonnes, decreased 5.87%, which was far less
than the decreasing level of the inventories and deliveries of pig in China. In response to
African swine fever, the Company researched on preventing and controlling programs, also
conducted on-line counseling to help customers to tide over difficulties; meanwhile, the
technical team promptly developed Wellhope immune nutrition pig products to improve
animal's immunity and high yield.
Ruminant feed: On the basis of holding dairy cattle feed stable, the Company devoted
great efforts to the markets of beef cattle and mutton sheep, it has launched high efficient
feeding programs and supporting products, which gained the leading position in the
market. During the reporting period, the sales volume of ruminant feed recorded 208,200
tonnes, growing 11.58%, among which beef cattle feed increased 20%, mutton sheep feed
rose 38%.
Poultry feed: The Company continued to explore large-scale customers and enhance
farm service. While stabilizing layer and broiler feed markets, it vigorously expanded the
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markets of duck, goose and quail feed, making poultry feed achieve a historic
breakthrough. During the reporting period, the sales volume of poultry feed recorded
500,400 tonnes with a year-on-year growth rate of 21.19%.
Aquatic feed: The Company constantly optimized product portfolios, increased the
proportion of shrimp and crab feed as well as expanded feed, and has gradually formed
regional advantages, brand effect and market reputation. During the reporting period, the
sales volume of aquatic feed reached 57,800 tonnes with a year-on-year growth rate of
16.30%, among which shrimp and crab feed increased 113%.
Integrated broiler business
In the first half of 2019, China's white feather broiler market ushered in a historically
strong cycle, overall profit level of this industry realized relatively historic high. Under this
favorable opportunity, the Company promoted its organic growth and expanded external
investment, achieving a substantial increase in profits.
Externally, the Company accelerated the pace of business expansion and rapidly expanded
its production scale. On June 16th, 2019, the Company signed a strategic cooperation
agreement with Tai'qian County People's Government of Henan Province, one of the
nationally designated poor counties. The two parties will build high-level manufacturing
base for white feather broiler integration chain, carry out in-depth and systematic
cooperation in broiler raising, eco-agriculture, feed production, meat processing and
retailing, etc. The total investment of the project will be about RMB 1.7 billion yuan,
mainly including broiler raising project, slaughterhouse, feed plant with an annual capacity
of 500,000 tonnes, cooked food project with an annual capacity of 20,000 tonnes and
commercial hatching project that can provide 100 million day old chicks per year. This
cooperation will further improve the Company's layout in broiler industrial chain, further
enhance its comprehensive strength and overall competitiveness, and promote its
sustainable development.
Internally, the Company has always adhered to refined management, continuously
lowered operating costs and heightened efficiency, the structure of its business units has
been increasingly optimized. Regarding broiler raising unit, it focused on improving
production safety and efficiency, and increasing the capacity of broiler raising business to
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enhance the synergies. Regarding raw meat processing unit, it constantly automated its
slaughterhouses and increased slaughtering capacity, as well as continued to optimize
product quality and structure to make products more competitive. Regarding further
processing unit, it has made great efforts to boost business scale, enhance product safety
and added value, meanwhile, it vigorously promoted raw meat processing and cooked
food businesses.
In the reporting period, the Company's holding and associated companies totally raised
191 million broilers with a year-on-year growth rate of 26%, slaughtered 224 million
broilers with a year-on-year growth rate of 16%, totally produced 560,000 tonnes of meat
products with a year-on-year growth rate of 17%. In the first half of 2019, 85% of the
slaughtered broilers were raised by the Company's self-owned farms and contract farms,
its internal supply of broiler has been gradually approaching the demand of slaughtering,
which has further beefed up the synergies among the whole chain.
Feed raw material trade business
In the reporting period, influenced by African swine fever and Sino-US trade frictions, the
Company's raw material trade business realized the operating revenue of RMB 1.265
billion yuan, declined 7.72% compared with the same period of prior year. Most products
of the Company's trade business are raw materials and additives used in pig feed. In the
first half of 2019, China's pig feed production decreased by 14%, which affected the sales
volume and profit of the Company's raw material trade. Meanwhile, the uncertainties of
Sino-US trade frictions also affected the Company's soybean meal trade. In response to
these factors, the Company's trade companies continued to strengthen internal operation
and IT application, strictly controlled non-strategic costs and actively explored oversea
new products to upgrade product line, and expanded the markets in the South China.
Benefiting from the blooming broiler market, the revenue of its animal health products
achieved good growth. Based on steady operation and talents team, its pet clinic business
has been one of the fastest growing and largest pet chain institutions in the Northeast
China.
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Pig raising business
In the first half of 2019, African swine fever continued. During the reporting period, the
Company focused on building and upgrading the bio-safety prevention and control system
for its pig farms, implemented comprehensive measures from product R&D to farms. The
“Anti-African swine fever” supervision team of the Company's head office designed and
guided the preventing and controlling programs, the pig farms' bio-safety supervision
department and the engineering department were responsible for monitoring, inspection,
testing, prevention and control as well as other work to comprehensively guarantee safety
production. At the same time, the Company constantly optimized pig farms' internal
management systems and heightened operation through certain measures, such as
benchmarking management, it also vigorously built professional talents team for pig
raising, cultivated outstanding talents through training camp to reserve specialized talents
for pig raising business.
During the reporting period, while running the existing pig raising projects well, the
Company promoted related new projects in an orderly manner. The pig project in Fushun
city with a planning of providing 500,000 heads of pig has been operated in April 2019, the
pig project in Guanmen mountain of Fushun city will finish construction in September
2019, and the construction of pig project in Gongzhuling city will be completed in the end
of October 2019. Along with carrying forward newly built projects, the capacity of pig
raising will be gradually released.
Currently, the Company's pig raising projects are mainly concentrated in the three
Northeastern provinces (Liaoning, Heilongjiang, Jilin), Hebei Province, Henan Province, etc.
These places, with four distinct seasons and dry climate, are suitable for pig raising.
Meanwhile, the Company has rich practices in operating integrated business and has
formed coordinated development of related businesses, which can provide effective
supporting for pig raising business. In addition, the Company has accumulated more
experiences in pig feed technology. Its application research of high-yield sows, such as
Denmark series, is at the domestic leading level, the advantages of feed and nutrition will
provide a strong guarantee for pig raising. Relying on above advantages and the
exploration and practices in the previous two years, whilst basing on the opportunities
brought by African swine fever, Wellhope has firm confidence in entering pig raising
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business, and will further speed up this business, actively seek for cooperation and
acquisition opportunities regarding pig raising and slaughtering, taking 5 to 8 years to craft
an operation model driven by two complementary engines in terms of integrated broiler
and pig businesses, focusing on achieving the management strength of "leading-edge
quality and efficiency" that creates synergies and reduces costs among all business.
4. Technology Innovation
In the first half of 2019, enterprises needed to directly deal with many market changes
brought by Sino-US trade friction, African swine fever and non-use plan of antibiotic in
feed. The technical team has been actively upgrading products and conducting innovations
to help the Company achieve its business objectives.
Feed products for pig:
During the reporting period, the Company has constantly improved its customer service
system, for instance, providing technical services and on-site guidance for customers via
live broadcast and WeChat and other new media. Furthermore, the Company
strengthened the development of market-oriented pig feed to reduce the impact of
African swine fever.
a. Developing Wellhope immune nutrition products: Through enhancing the daily intake
of amino acids, etc., improve animal's immune response and resistance to disease,
supplement and partially replace traditional techniques that rely on antibiotics to improve
resistance to disease and production performance, help to achieve non-use of antibiotics
in feed and efficient and healthy raising.
b. Developing plasma-free starter feed: As African swine fever spreads, homologous raw
materials must not be used in pig feed to ensure bio-safety of feed products, thereby
ensure the safety of pig farm.
c. Upgrading feed for piglet and fattener: The Company has developed and updated the
second generation of creep feed that are suitable for large-scale pig farms; the “Aifeng”
series of piglet products, have been further optimized to adapt to the market demand for
low-protein feed and high price of pig. Meanwhile, it has developed feed products for
extra big finishers to response to the market demands, such as increased delivery weight
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of pig.
d. Optimizing feed for high-production sow: Based on the needs of pig farms under
current special situation, the Company re-adjusted the level of crude fiber in sow feed, in
the meantime, it provided technical guidance to the farms, the application results of
related products have been verified in partners' pig farms and large farms, which
consolidated the market position of the Company's hyperprolific sow feed.
e. Preparing antibiotic alternatives: In the past two years, the Company has designed 41
combinations of formula programs relating to antibiotic alternatives. In the first half of
2019, the Company has made pleasing progress, 2 sets of cost-effective antibiotic-free
feed programs have been successfully screened, which laid a foundation for future
non-use of antibiotics in piglet feed.
Feed products for broiler:
a. Strengthening pre-production experiment for feed products: The Company's
standardized raising bases for white feather broiler have been operated successively, the
business area has been expanding from Liaoning to Hebei, Shandong and Henan provinces,
etc. According to the environmental climate and raising model of different regions, the
Company has established relevant R&D bases for conducting pre-production experiment.
In the first half of 2019, it has completed five verification tests. Relying on a series of
research and development, the growth performance and slaughter performance of
broilers have been further improved, so as to maximize the value of per broiler.
b. The technology of antibiotic-free formula becoming more and more mature: The
Company has always been stricter with drug use management in feed than the national
requirements. By adjusting feed formula and veterinaries’ early monitoring and warning,
the Company has been promoting antibiotic-free feed and reducing the use of antibiotic in
farms step by step.
Feed products for layer:
a. The Company's subsidiaries jointly developing series of 10% premix feed products for
layer: Through improving nutritional programs, the effects of premix feed products on
eggshell color and fecal formability have been improved, which avoid homogenization
competition with 5% premix feed products, and expand the Company's sales volume and
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market share of premix feed products.
b. Adjusting and upgrading feed products for laying duck, breeding geese, etc.: The
Company has continued to seek improvement in feed product processing technology,
product quality and appearance to meet market demands.
c. Research on fermented feed products for layer have been carried out in an orderly
manner: Fermented feed products have improved layer's resistance to disease, reduced
heat stress and lowered ammonia concentration in houses, which have great market
potential. The Company has been promoting the products in many regions.
Feed products for ruminants:
a. Technical program for calf early raising: Combining farm data and practices of feeding
management, the technical program for early calf raising that accords with the
characteristics of Wellhope has been put forward. The weaning weight of calf can exceed
the feeding standard requirement.
b. Product research and comprehensive solutions for dairy cattle under heat stress: The
Company specifically launched heat stress product, and launched solutions for product
and diet under heat stress, which obviously relieved heat stress under the existing feeding
conditions. Furthermore, it optimized and adjusted products for dry milk and perinatal
periods, also designed health care programs for prenatal and postnatal periods, which
solved the problem of postpartum metabolic disease and improved milk production.
c. As for beef cattle and mutton sheep products, the Company actively promoted the
application of new products and on-site demonstration work, and specifically designed
products for breeding period, which improved the production performance of breeding
cows.
Aquatic feed products and others:
a. Developing functional compound feed products: The Company has set its sights on
developing functional and environment-friendly feed with precision nutrition, and
developing functional compound feed that can improve immunity to strengthen fish
health and production performance. Meanwhile, it also developed and applied
environment-friendly feed for factory-like South American white shrimp, which effectively
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reduced nitrogen and phosphorus in factory-like farming to achieve closed farming and to
decline water demand and farming costs.
b. Developing key stage products for special fish feed: The Company developed and
applied functional starter feed for special fish and hatchling to solve the palatability of
feed at the fry stage and to effectively improve growth performance and liveability.
c. Improving feed products and feeding program for fur animals: The Company
continued to improve feed products for fur animal and launched test bases to strengthen
the advantages of fur animal feed, steadily improved fur animal feed products.
5. Awards received in 2019
China's Top 100 Valuable Corporations in the Main-Board Market. The Company
has received this award for three consecutive years.
China's Top 100 Corporations in the Light Industry, ranking the 40th. The Company
has received this award for three consecutive years.
China's Top 100 Sci-tech Corporations in the Light Industry, ranking the 21st.
China's Top 50 Corporations in the Light and Food Industry, ranking the 12nd.
Entering Top 5 Corporations in Agricultural Industry by Brand Value.
Entering China's Pioneer Listed Corporations by High-quality Development.
6. Analysis of primary business
a. Analysis of related items in the financial statements
Unit: yuan Currency: RMB
Item January-June, 2019 January-June, 2018 Change %
Operating revenue 7,727,400,004.75 6,850,215,702.49 12.81
Operating costs 6,985,820,614.94 6,297,480,308.08 10.93
Sales expenses 239,990,725.07 210,701,513.67 13.90
Administrative expenses 126,915,965.17 103,605,422.49 22.50
Financial expenses 39,721,751.73 33,085,461.73 20.06
R&D expenses 30,021,345.87 29,771,840.08 0.84
Net cash flow from operating
296,568,981.22 290,259,024.18 2.17
activities
Net cash flow from investing
-376,062,265.52 -227,373,483.03 not applicable
activities
Net cash flow from financing
679,776,007.24 -53,464,658.10 not applicable
activities
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Explanation for the change of operating revenue: mainly due to the revenue from broiler
processing and raising businesses increased.
Explanation for the change of operating cost: mainly due to the costs of broiler processing
and raising businesses increased.
Explanation for the change of sales expenses: mainly due to the expenses of staff
remuneration and restricted stock increased compared with the same period of prior year.
Explanation for the change of administrative expenses: mainly due to the expenses of staff
remuneration and restricted stock increased compared with the same period of prior year.
Explanation for the change of financial expenses: mainly due to the interests on bank
borrowings increased.
Explanation for the change of net cash flow from operating activities: mainly due to cash
received from selling products increased compared with the same period of prior year.
Explanation for the change of net cash flow from investing activities: mainly due to cash
paid for overall assets acquisition increased.
Explanation for the change of net cash flow from financing activities: mainly due to cash
received from non-public issuing stock.
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7. Assets and liabilities
Unit: yuan Currency: RMB
Percentage of Percentage of Year-on-year
Item June 30th, 2019 June 30th, 2018 Explanation
total assets % total assets % change %
Monetary funds 1,573,431,869.60 18.92 928,902,753.06 13.40 69.39 Due to cash received from non-public issuing stock
Derivative financial
4,765,331.00 0.06 2,042,527.60 0.03 133.31 The position of derivative financial assets increased
assets
Notes receivable 3,086,026.50 0.04 13,611,778.44 0.20 -77.33 Honor of notes and letter of credit decreased
Newly increased accounts receivable during the settlement
Accounts receivable 547,067,503.01 6.58 397,891,678.23 5.74 37.49
period
Dividends paid by associated companies, general operating
Other receivable 132,822,976.91 1.60 98,997,213.04 1.43 34.17 receivables and receivables from disposal of subsidiaries'
shareholding increased
Other equity
Newly increased other equity instrument investment in the
instrument 4,547,809.52 0.05 3,197,809.52 0.05 42.22
current period
investment
Construction in Completed construction that transferred to fixed assets
85,569,862.73 1.03 255,719,188.30 3.69 -66.54
progress decreased
Productive biological
56,033,181.19 0.67 30,484,794.88 0.44 83.81 Breeding broilers and pigs increased
assets
Other non-current Advance payment of long-term assets and fees to farms
326,934,235.00 3.93 197,497,688.18 2.85 65.54
assets increased
Advance receipts 256,304,585.35 3.08 161,173,916.67 2.33 59.02 Advance payment of sales increased
Non-current liabilities Long-term borrowings and long-term payables due within one
56,374,186.31 0.68 32,999,999.96 0.48 70.83
due within one year year increased
Long-term borrowings 42,500,000.00 0.51 118,500,000.00 1.71 -64.14 Long-term borrowings from bank decreased
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8. Investment analysis
As at June 30th, 2019, the balance of the Company's long-term equity investment reached
RMB 1.54 billion yuan, increased by 13.72% compared with the end of prior year.
Financial assets measured at fair value
During the reporting period, the Company has financial assets that were measured at fair
value and its changes recorded into current profit and loss. The income from the changes
in fair value reached RMB -169,200 yuan.
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9. Main holding and associated companies
RMB 10,000 yuan
Shareholding
Registered
Company Core business of the Total assets Net assets Net profit
capital
Company
Shenyang Wellhope Ruminant Feed Feed manufacturing and selling 550.00 100% 13,063.98 11,323.25 1,120.33
Beijing Sanyuan Wellhope Agri-Tech Feed manufacturing and selling 1,000.00 70% 21,213.91 18,961.56 310.69
Shenyang Wellhope Agri-Tech Feed manufacturing and selling 8,210.00 100% 14,116.63 12,002.98 564.39
Xi’an Wellhope Feed Sci-Tech Feed manufacturing and selling 500.00 85% 13,319.70 11,410.18 1,546.39
Liaoning Expert Trading Feed raw materials selling 2,000.00 100% 38,039.66 21,777.77 602.21
Broiler slaughtering, processing
Anshan Jiuguhe Food 4,100.00 41.55% 53,595.97 27,588.23 4,563.28
and selling
The effect of the net profit of subsidiary or the investment income from associated company on the Company's net profit reaching 10% or
above:
RMB 10,000 yuan
Shareholding
Registered Total Operating Operating Net
Company Core business of the Net assets
capital assets revenue profit profit
Company
Dalian Heyuan
Broiler raising and selling 10,000.00 51% 86,807.10 43,984.26 92,851.09 13,604.20 13,482.90
Agri-Tech
Dalian Chengsan
Broiler raising and selling 1,008.61 20% 140,797.95 102,659.65 136,979.86 24,053.31 23,950.45
Animal Husbandry
Broiler raising, slaughtering, processing
Beipiao Hongfa Food 3,000.00 35% 122,322.28 96,409.99 160,437.64 23,794.02 23,599.18
and selling
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II. Other Disclosures
Possible risks
A. Risks of fluctuations in raw material prices
Most costs of the feed business come from raw materials. The production changes in
producing areas, import policies, storage and subsidies, exchange rate fluctuations,
logistics costs and other factors may trigger fluctuations in the raw material market, which
will affect the Company's feed business costs and gross profit margins. With deepened
internationalization of the trade of agricultural products in recent years, the
supply-demand relationship and trading price of raw materials have been affected by
market conditions such as spot and futures at home and abroad, and the price trend has
become more complex followed by increasingly fierce fluctuations, which further
increases the difficulties of the Company’s cost management. In addition, the changes in
China-US trade relations, international political and economic environment and 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 and
foreign raw material suppliers, and strategically reduced purchasing costs through
three-level purchasing mode in terms of headquarters’ centralized purchasing, regions’
price compare purchasing and local departments’ purchasing of different varieties.
(b) The Company combines its raw material trading business with purchasing management,
i.e., the professional and practical raw materials’ purchasing team conducts targeted
forward-looking researches and real-time tracking on the market, makes great efforts to
reduce the purchasing price, such as uniformly managing different varieties, adopting spot
purchasing and futures together.
(c) The purchasing team works closely with the R&D team to complement each other's
advantages, further optimize the purchasing cost by way of re-formulating the feeds i.e.,
changing the composition of the feed to use cheaper alternative raw materials while
achieving the same results, which can further optimize purchasing costs.
(d) The Company and Royal De Heus have set up an information sharing channel, which
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makes the two sides can timely share the market trends, such as raw materials, 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 prices
Animal husbandry industry is a typical cyclical industry, and the hysteretic nature of the
adjustment of supply causes the prices fluctuating periodically. At present, China's animal
husbandry industry is still dominated by back yard farms and small-scale farms, these farm
owners show the character of non-rational decision-making, especially an obvious “herd
effect”, which further aggravates the cyclical fluctuations in the market price.
Solutions:
(a) The Company's integrated broiler business has established an industrial chain, which
can make the price fluctuations of all businesses can be fully counteracted, and then
reduce the risks of price fluctuations of the whole chain.
(b) Since launching the integrated broiler business, the Company has always been
committed to improving the production standards and management of each sector,
reducing overall operating costs by optimizing the production and operation indicators and
improving per capita efficiency. The advantage of its operating costs can mitigate the
negative impacts on the Company when the industry is downward, and improve the
overall profitability when the industry is booming.
C. Risks of serious animal disease
Feed and animal raising are the Company's two main businesses. Disease outbreak is one
of the main risks faced by animal raising companies. Once a disease happens, it will cause
panic in the market, which will reduce the demands, then lessen the production of the
companies, decrease incomes and increase costs. Whilst, the feed industry mainly serves
downstream animal raising industry, the downstream market will directly affect the
performance of feed business. As an unpredictable emergency, an explosive disease will
undoubtedly have a strong impact on the Company's operations.
Solutions:
(a) Rationally optimize the industrial distribution and structural layout, disperse possible
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risks by the simplest and direct way.
(b) Improve the prevention and control technology of major epidemics, complete the early
warning system and strive to control epidemics effectively before spreading.
(c) Set an emergency command system for major epidemics to minimize losses when they
occur.
(d) Strengthen analysis and research capabilities for major epidemics, enhance animal’s
immunity from the perspective of animal nutrition and veterinary services.
D. Risks of the industrial pattern adjustment caused by environmental protection
policies
China has put forward some environmental protection regulations in recent years, such as
Environmental Protection Tax Law, etc., which show the government's determination to
increase environmental protection supervision in animal husbandry industry, whilst the
local governments have also issued certain new regulations. It can be seen that the
continuously strengthening environmental protection is the trend of the industry also an
unavoidable reality, which will further weed out unqualified players and make the industry
facing the situation of re-shuffling.
Solutions:
During the start-up period, the Company had input "Save Resources, Committed to
Environmental Protection" as part of its Vision. For more than 20 years, the Company has
always taken saving resources and protecting the environment as its important missions.
(a) Regarding to raising and slaughtering, in the face of increasingly strict environmental
protection requirements, the Company have comprehensively identified environmental
risk points, and formulated emergency plan for environmental emergencies so as to
maintain the stable operation. For the key pollutant discharge plants, the Company has
developed a complete self-monitoring program, which can find problems to repair,
eliminate hidden dangers in a timely manner, it also continuously increases investment in
environmental protection, such as personnel and funds, to ensure these plants always
complying with national standards.
(b) Regarding to feed production, the Company has always implemented national
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environmental protection standards with the most rigorous attitude, established complete
prevention and control measures for waste gas, noise, wastewater, solid waste and other
pollution generated during the production process. It uses environmental-friendly raw
materials and additives in feed formulations and also continuously develops safe and
environment-friendly daily ration to reduce the emissions of heavy metals, nitrogen and
phosphorus.
E. Risks of exchange rate fluctuations
The Company's international business started early and developed rapidly. The exchange
rate fluctuations have released great influence on raw material purchasing, product export
and overseas investment, presenting as follows: First, international development has made
the global purchasing of raw materials becoming normally, therefore, the risks of exchange
rate fluctuations are particularly evident in the raw materials which are based on oversea
supply. Secondly, the Company’s export business of broiler products is growing rapidly
with customers from many countries and regions around the world, and the exchange rate
fluctuations are inevitably caused by the settlements of multiple currencies. Finally, due to
the large overseas investment and overseas operations, the cross-border capital
transactions and settlements will also be affected by exchange rate fluctuations.
Solutions:
(a) Closely focus and study on the dynamic international foreign exchange market,
enhance the awareness of preventing foreign exchange risk, and improve the research and
forecasting capabilities of the foreign exchange market.
(b) Improve the bargaining power in foreign trade transaction by enhancing the
competitiveness of products, and use RMB for settlement, reduce the exchange rate risks
by adding insured value clause and the exchange rate risk allocation clause in the contract.
(c) Make full use of foreign exchange forwards, swaps and options (combination) and
other instruments to maintain the exchange rate for foreign exchange exposure.
(d) According to specific conditions of different countries, based on the principle of "using
foreign currencies in foreign trade", reasonably match the income and debts to control the
exchange rate risks.
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F. Risks of food safety
In recent years, there have been some food safety incidents in China, which affected
consumers' confidence in food safety. China has continuously improved the legislation on
food safety and food sources, conducted forceful measures on handling food violations.
Once the food safety incident is triggered by poor quality supervision, it will directly
damage the interests of consumers and cause panic, which may greatly impact the
downstream demand and affect the brand and performance of the enterprises.
Solutions:
(a) Regarding to feed business, the Company has established a three-level quality
management mechanism and testing system which consists of headquarters, regions and
local departments, adopted ISO 9001, ISO 22000, ISO-IEC 17025 and other international
standards, thoroughly implemented a series of quality standards to realize the whole
process control of the products and established the traceability system. The Company
works hard to popularize near-infrared detection technology, improves detection
efficiency and shares data in time. By doing this, it can quickly realize risk warning and
monitor heavy metals, harmful microorganisms and mycotoxins, providing an important
guarantee for the feed products. In addition, by drawing on the experiences of European
antibiotic-free feed, and basing on current situation in China, the Company has realized
some progresses in antibiotic alternatives, at present, the feed products for finisher, sow,
layer at laying period, broiler, ruminant and aquatic can realize antibiotic-free technology.
(b) Regarding to integrated broiler business, its industrial chain can fully control the
forefront part of the supply of "material, medicine, day old chick" and production and
sales process. Through unified operation model, standardized management and
streamline operation, it can integrate bio-safety, drug residue control and hygiene
management during the whole production processing to achieve food safety traceability.
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Section V Important Disclosures
I. Shareholders' Meeting Convened during the Reporting Period
Website designated
Resolution
Meeting Date for disclosing the
disclosing date
resolution
2018 Annual
Shareholders' May 20th, 2019 www.sse.com.cn May 21st, 2019
Meeting
II. Plan of Profit Distribution or Capital Reserve Converted into Share Capital in the
First Half Year
Whether distribute profit or convert capital
No
reserve into share capital
Dividend per 10 shares (yuan, tax included) 0
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
III. Execution of Commitment
Background Date of making Whether Whether
Type of Commitment
of making Content commitment and there is a performs
commitment party
commitment validity time limit strictly
Nature person I warrant and commit that I will not directly or indirectly develop, operate or
Handling shareholders assist in the operation or participate in or engage in any activity that is
March 2nd, 2011,
horizontal holding more competitive with the business of Liaoning Wellhope, if Liaoning Wellhope will yes yes
long-term valid
competition than 5% of the increase any business scope after the date of signing this commitment, I promise
shares to give up the business.
Legal person
shareholders Our company warrants and commits that our company will not directly or
Handling holding more indirectly develop, operate or assist in the operation or participate in or engage in
March 2nd, 2011,
related party than 5% of the any activity that is competitive with the business of Liaoning Wellhope, if Liaoning yes yes
long-term valid
transaction shares-Heli Wellhope will increase any business scope after the date of signing this
Investment commitment, our company promises to give up the business.
When selling shares within two years after the expiration of the lock-up period,
the selling price shall not be lower than the offering price. After going public, if
Commitment the closing price of the Company's stock of 20 consecutive trading days within 6
April 2nd, 2014,
relating to IPO Jin Weidong, months is lower than the offering price, or the closing price in the end of 6
within two years
Wang Fengjiu, months later is lower than the offering price, the above lock-up period shall be
after the expiration
Restriction of Shao Caimei, automatically extended for 6 months. (if the Company conducts ex-right, yes yes
of the lock-up
selling shares Wang Zhongtao, ex-dividend for reasons of distributing cash dividend, capital reserve converted
period
Ding Yunfeng into share capital, issuing new shares, etc., the price of selling stock and closing
price shall be conducted ex-right and ex-dividend in accordance with relevant
provisions of China Securities Regulatory Commission and Shanghai Stock
Exchange.)
After IPO, if I plan to selling shares after the expiration of the lock-up period, I will
April 2nd, 2014,
Jin Weidong, announce the selling plan prior to 3 trading days before selling shares. Specific
within two years
Wang Fengjiu, arrangement will be as follows: 1. the number of selling shares: if selling shares
Restriction of after the expiration
Shao Caimei, within 2 years after the expiration of the lock-up, the number of selling shares will yes yes
selling shares of the lock-up
Wang Zhongtao, be no more than 5 million shares, if the Company will conduct placing, capital
period
Ding Yunfeng reserve converted into share capital, etc., which will change the share capital, the
number of selling shares shall make corresponding adjustment; 2. Way of selling
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
shares: the shares shall be sold through the centralized bidding trading system
and block trading system of Shanghai Stock Exchange. If the total number of
unrestricted shares planned to be sold within the next month is expected to
exceed 1% of the total number of shares, the shares shall be transferred through
the blocking trading system. 3. Selling price: if selling shares within 2 years after
the expiration of the lock-up, the selling price shall be not lower than the IPO
price (if the Company conducts ex-right, ex-dividend for reasons of distributing
cash dividend, capital reserve converted into share capital, issuing new shares,
etc., the price of selling stock or buying stock shall be conducted ex-right and
ex-dividend in accordance with relevant provisions of China Securities Regulatory
Commission and Shanghai Stock Exchange)
4. Time limit of selling shares: the time limit of selling shares shall be within six
months from the date of announcing the selling plan. After the expiration of time
limit, if intending to continue to sell shares, shall perform the announcement of
selling shares again in accordance with the above arrangement.
If above commitments cannot be fulfilled, the proceeds from selling shares shall
belong to the Company and shall be paid to the designated account of the
Company within 5 days of receiving such income.
Jin Weidong,
The controlling shareholder Jin Weidong and persons acting in concert with him
Wang Fengjiu,
undertake that there are no false records, misleading statements or material
Other Shao Caimei, long-term valid yes yes
omissions in the prospectus of IPO and its summary, and shall bear individual and
Wang Zhongtao,
joint legal liabilities for its authenticity, accuracy and completeness.
Ding Yunfeng
The Company undertakes that there are no false records, misleading statements
Liaoning
Other or material omissions in the prospectus of IPO and its abstract, and it shall bear long-term valid yes yes
Wellhope
individual and joint legal liabilities for its authenticity, accuracy and completeness.
Commitment
Liaoning December 15th,
relating to Dividend Liaoning Wellhope Three-Year’s Shareholder Dividend Return Plan (2017-2019) yes yes
Wellhope 2017, three years
re-Financing
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IV. Accounting Firm Engaged by the Company
The Company did not change the accounting firm during the reporting period.
Jiangsu SuyaJincheng CPA LLP is the Company's auditing institution in 2019.
V. Major Litigation and Arbitration Matters
Non
VI. 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 November 21st, 2018, the Company For details, please refer to "The
held the 7th meeting of the 6th Session of Announcement of Granting Result of
Board of Directors, deliberating and Liaoning Wellhope 2018 Restricted Stock
approving 2018 Restricted Stock Incentive Incentive Plan" issued by the Company on
Plan (draft) and its Summary, and on the website of Shanghai Stock Exchange
January 9th, 2019, the Company finished "www.sse.com.cn" on January 11st, 2019.
the registration of restricted stock. (Announcement No. 2019-001)
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VIII. Significant Related Party Transaction
Related transactions in regard of day-to-day operations
RMB 10,000 yuan
Transaction Transaction Transaction
Related party Relationship Pricing principle Settlement mode
type content amount
Associated Purchasing Comparable uncontrolled
Anshan Jiuguhe Food Broiler product 451.58 Transfer of account
company commodity price
Associated Purchasing Comparable uncontrolled
Huludao Jiuguhe Food Broiler product 224.62 Transfer of account
company commodity price
Associated Purchasing Feed raw Comparable uncontrolled
Guangzhou Yikun Trading 71.16 Transfer of account
company commodity materials price
Associated Purchasing Feed raw Comparable uncontrolled
Jinzhou Jiufeng Food 78.13 Transfer of account
company commodity materials price
Zhangjiakou Jiahe Agriculture and Associated Purchasing Comparable uncontrolled
Piglet 371.45 Transfer of account
Animal Husbandry company commodity price
Associated Purchasing Comparable uncontrolled
Schippers(Beijing) Other 50.34 Transfer of account
company commodity price
Associated Purchasing Comparable uncontrolled
Tai’an Jiuguhe Agriculture Feed 975.47 Transfer of account
company commodity price
Associated Purchasing Comparable uncontrolled
Qingdao Shenfeng Agri-Tech Feed 9.21 Transfer of account
company commodity price
Associated Purchasing Comparable uncontrolled
Dalian Chengsan Animal Husbandry Delivery broiler 7,510.00 Transfer of account
company commodity price
Associated Selling Poultry feed, feed Comparable uncontrolled
Linghai Jiuguhe Feed 2,268.33 Transfer of account
company commodity raw materials price
Associated Selling Poultry feed, feed Comparable uncontrolled
Tai’an Jiuguhe Agriculture 4,009.11 Transfer of account
company commodity raw materials price
Associated Selling Comparable uncontrolled
Anshan Jiuguhe Food Broiler product 11,452.05 Transfer of account
company commodity price
Associated Selling Pig feed, feed raw Comparable uncontrolled
Qingdao Shenfeng Agri-Tech 879.43 Transfer of account
company commodity materials price
Associated Selling Comparable uncontrolled
Huludao Jiuguhe Food Feed 48.13 Transfer of account
company commodity price
Dandong Wellhope Chengsan Associated Selling Feed, feed raw Comparable uncontrolled
118.55 Transfer of account
Agri-Tech company commodity materials price
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Associated Selling Feed raw Comparable uncontrolled
Guangzhou Yikun Trading 6,706.73 Transfer of account
company commodity materials price
Associated Selling Feed raw Comparable uncontrolled
Beipiao Hongfa Food 270.67 Transfer of account
company commodity materials price
Zhangjiakou Jiahe Agriculture and Associated Selling Comparable uncontrolled
Feed 1,324.35 Transfer of account
Animal Husbandry company commodity price
Associated Selling Comparable uncontrolled
Schippers(Beijing) Other 19.90 Transfer of account
company commodity price
Associated Selling Comparable uncontrolled
Jinzhou Jiufeng Food Delivery broiler 300.20 Transfer of account
company commodity price
Associated Selling Comparable uncontrolled
Anshan Fengsheng Food Delivery broiler 8,492.19 Transfer of account
company commodity price
Associated Selling Comparable uncontrolled
Dalian Chengsan Animal Husbandry Additives, lysine 239.93 Transfer of account
company commodity price
Tailai Jiahe Agriculture and Animal Associated Selling Comparable uncontrolled
Feed 1,063.81 Transfer of account
Husbandry company commodity price
Total / 46,935.34 /
Large amount sales return non
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
Explanation of related party transaction 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.
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IX. Anti-poverty Project of the Company
1. Targeted poverty alleviation
The Company actively responds to the planning and requirements of the Party Central
Committee and governments at all levels for targeted poverty alleviation. Driving by the
principle of the Company’s Mission—"Providing Service to the Society", and taking
"targeted poverty alleviation" as anti-poverty strategy, it has made poverty alleviation
programs and work plans regarding to reducing poverty through industrial development to
facilitate targeted poverty alleviation. At the same time, the Company also actively assists
to education and public welfare establishments to expand the scope of poverty alleviation.
2. Overview of targeted poverty alleviation
Lankao meat duck integration project was invested by the Company as the targeted
poverty alleviation project in response to the call of Lankao County Party Committee and
county government. Since 2014, the Company has built a total of 1,053 duck houses in
Lankao County, including 58 duck farms and other back yard houses, which used unified
management in terms of unified supply of day old duckling, feed, medicine, technical
service and repurchasing to ensure food safety. The farmers do not need to prepare
working capital. The Company also provides farmers with unified veterinary drug subsidy
of RMB 0.5 yuan per duck.
In the first half of 2019, the Company offered 1,052 contracts to 352 farmers, and
repurchased 11.14 million meat ducks, providing total subsidy of RMB 5.87 million yuan.
3. Figures of targeted poverty alleviation
RMB 10,000 yuan
Index Details
1. Overall
including: funds for poverty alleviation 587
2. In details
Poverty alleviation for agricultural
Type of targeted poverty alleviation industry
a. The number of targeted poverty alleviation 1
project
b. Investment amount 587
4. Progress of targeted poverty alleviation
In the first half of 2019, the farmers realized good benefits, the average profit of them
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
reached about RMB 2 yuan per duck. The Company will constantly strengthen technical
service and the trainings for farmers to improve their technology level, so as to ensure the
success of farming, achieve a win-win situation.
5. Follow-up targeted poverty alleviation
On June 16th, 2019, the Company signed a strategic cooperation agreement with Tai'qian
County People's Government of Henan Province, one of the nationally designated poor
counties. The two parties will build high-level manufacturing base for white feather broiler
integrated chain, the Company will also help farmers to relieve financial pressure and
increase income 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 in the industry, integrate resources,
continuously deepen the effect of poverty alleviation, and contribute to the 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"), a holding
subsidiary of the Company, has been listed as key sewage & gas waste emission company
of Puyang City. Dalian Zhongjia Wellhope Food Co., Ltd. (hereinafter referred to as
"Zhongjia Food"), and Dalian Huakang Xinxin Food Co., Ltd. (hereinafter referred to as
"Huakang Food"), holding subsidiaries of the Company, have been listed as key sewage &
gas waste emission company of Dalian City. Kaifeng Wellhope Meat Food Co., Ltd.
(hereinafter referred to as "Kaifeng Wellhope"), a holding subsidiary of the Company, has
been listed as key sewage waste emission company of Kaifeng City. Shenyang Huakang
Broiler Co., Ltd. (hereinafter referred to as "Shenyang Huakang"), a holding subsidiary of
the Company, has been listed as key sewage waste emission company of Shenyang City.
Details are presented as follows:
Puyang Wellhope: the main pollutants include gas waste and water waste, among which
water waste mainly contains COD, ammonia nitrogen, total phosphorus, pH, suspended
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
solids, biochemical oxygen requirement, animal and vegetable oil, total coliform group and
total nitrogen. The gas waste mainly contains SO2, nitric oxide and particulate matter.
Emission method: 1 waste water emission outlet for sewage treatment, distributed in the
southeast corner of the building of the sewage monitoring base station; 1 exhaust
emission outlet, distributed in the boiler room in the northeast corner of the plant site.
Puyang Wellhope strictly implements emission standards for industrial "three wastes". The
emission of waste water is subject to the three-level standards in the Discharge Standard
of Water Pollutants for Meat Packing Industry (GB 13457-1992), emission permit
(9141092367412881xt001p), and the indirect emission limit value in the water inflow
agreement of Nanle County sewage treatment Co., Ltd. (COD≤400mg/L, NH3-N≤35mg/L,
total phosphorus≤2.5mg/L, BOD≤180mg/L, suspended solids≤220mg/L, total
nitrogen≤40mg/L, pH value of 6-9). The gas waste emission is subject to the concentration
limit of Emission Standard of Air Pollutants for Coal-Burning Oil-Burning Gas-Fired Boiler
(GB 13271-2014) and emission permit (9141092367412881xt001p) requirements, that is,
the emission concentration of SO2 shall be ≤50mg/Nm3, the emission concentration of
particulate shall be ≤20mg/Nm3 and emission concentration of NOX shall be ≤150mg /
Nm. Total emission of main pollutants under the pollutant emission permit is as follows:
COD 15.58 tons per year and ammonia nitrogen 2.95 tons per year. During the reporting
period, the total emission of Puyang Wellhope was controlled within the permitted scope,
and the "three wastes" treatment met the requirements, did not exceed the standard.
Kaifeng Wellhope: the main pollutant is water waste, which mainly contains COD,
ammonia nitrogen, total phosphorus, pH, suspended solids, biochemical oxygen
requirements, animal and vegetable oil, total coliform group and total nitrogen. Emission
method: 1 waste water emission outlet for sewage treatment, distributed in the southeast
of the factory. Kaifeng Wellhope strictly implements emission standards for industrial
"three wastes". The emission of waste water is subject to the second-level standard in the
Discharge Standard of Water Pollutants for Meat Processing Industry (GB 13457-1992),
emission permit (91410212MA4057G88A001R) and the sewage emission limit in the GHPY
ZI No. 2501 Environmental evaluation criteria (COD≤100mg/L, NH3-N≤20mg/L, BOD≤40/L,
suspended solids≤100mg/L, pH value of 6-8.5, coliform numbers≤10000). Total emission of
main pollutants under the pollutant emission permit: COD 3.60 tons per year, ammonia
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
nitrogen 0.79 tons per year. During the reporting period, the total emission of Kaifeng
Wellhope was controlled within the permitted scope, and the "three wastes" treatment
met the requirements, did not exceed the standard.
Zhongjia Food: the main pollutants include gas waste and water waste, among which
water waste mainly contains COD, ammonia nitrogen, total phosphorus, pH, suspended
solids and total nitrogen. The gas waste mainly contains SO2, nitric oxide and particulate
matter. Emission method: 1 waste water emission outlet for sewage treatment, distributed
in the west of the southern end of the new sewage treatment workshop; 1 exhaust
emission outlet, distributed on the roof of the boiler room. Zhongjia Food strictly
implements emission standards for industrial "three wastes", DB 21/1627-2008 Liaoning
Provincial Standard-Comprehensive Sewage Emission Standard (COD≤50mg/L,
NH3-N≤8mg/L, total phosphorus≤0.5mg/L, suspended solids≤20mg/L, total
nitrogen≤15mg/L, pH value of 6-9). The gas waste emission is subject to gas boiler
emission concentration limit of Emission Standard of Air Pollutants for Coal-Burning
Oil-Burning Gas-Fired Boiler (GB 13271-2014). During the reporting period, the total
emission of Zhongjia Food was controlled within the permitted scope, and the "three
wastes" treatment met the requirements, did not exceed the standard.
Huakang Food: the main pollutants include gas waste and water waste, among which
water waste mainly contains COD, ammonia nitrogen, total phosphorus, pH, suspended
solids and total nitrogen. Emission method: 1 waste water emission outlet for sewage
treatment, distributed in the west of the southern end of the new sewage treatment
workshop; 1 gas waste exhaust outlet, distributed in the southeast corner of the sewage
treatment workshop; 1 exhaust emission outlet, distributed on the roof of the boiler room.
Huakang Food strictly implements emission standards for "three wastes", DB
21.1627-2008 Liaoning Provincial Standard-Comprehensive Sewage Emission Standard
(COD≤50mg/L, NH3-N≤8mg/L, total phosphorus≤0.5mg/L, suspended solids≤20mg/L, total
nitrogen≤15mg/L, pH value of 6-9). The gas waste emission is subject to gas boiler
emission concentration limit (GB 13271-2014). During the reporting period, the total
emission of Huakang Food was controlled within the permitted scope, and the "three
wastes" treatment met the requirements, did not exceed the standard.
Shenyang Huakang: the main pollutant is water waste, which mainly contains COD,
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
ammonia nitrogen, pH and suspended solids. Emission method: 1 waste water emission
outlet for sewage treatment, distributed in then northeast of the sewage treatment
station. Shenyang Huakang strictly implements the emission standards for industrial "three
wastes". The emission of waste water is subject to the first-level standard in the Discharge
Standard of Water Pollutants for Meat Processing Industry (GB 13457-1992), emission
permit DB 21/1627-2008 Liaoning Provincial Standard-Comprehensive Sewage Emission
Standard (COD≤50mg/L, NH3-N≤8mg/L, total phosphorus≤0.5mg/L, suspended
solids≤20mg/L, pH value of 6-9). The gas waste emission is subject to gas boiler emission
concentration limit of Emission Standard of Air Pollutants for Coal-Burning Oil-Burning
Gas-Fired Boiler (GB 13271-2014) (SO2 emission concentration ≤200mg/Nm3, particulate
matter concentration ≤20mg/Nm3, NOX emission concentration ≤200mg/Nm3). During
the reporting period, the total emission of Shenyang Huakang was controlled within the
permitted scope, and the "three wastes" treatment met the requirements, did not exceed
the standard.
2. Circumstance of building and operating pollution control facilities
Puyang Wellhope:
a. Sewage treatment: Puyang Wellhope has 2000T/D sewage treatment station, which
adopts the treatment process of "pretreatment plus oil separation plus A2O plus
disinfection" to treat the wastewater. Its environmental protection facilities are running
normally, and the pollutant emission indexes all meet the third-level standards in the
Discharge Standard of Water Pollutants for Meat Processing Industry (GB 13457-1992), the
emission permit (YHXKNo. 2015-001 of Puyang City) and the indirect emission limit value
in the water inflow agreement of Nanle County sewage treatment Co., Ltd.
b. Waste gas treatment: the gas generated by the waste water pool of the sewage
treatment station is collected and purified by activated carbon adsorption and then
discharged through the 15m-high chimney in accordance with related standard; the
traditional coal-fired boilers are replaced by gas-fired boilers, and all kinds of pollutants
meet the gas boiler emission concentration limit of the Emission Standard of Air Pollutants
for Coal-Burning Oil-Burning Gas-Fired Boiler(GB 13271-2014)and emission permit(YHXK
No. 2015-001 of Puyang City) requirements with the 8-meter high chimney for reaching
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
the emission standard, which has been fundamentally effectively treated.
Kaifeng Wellhope:
Sewage treatment: Kaifeng Wellhope has 1700T/D sewage treatment station, which
adopts the treatment process of "air floatation plus A2O" to treat the wastewater. Its
environmental protection facilities are running normally, and the pollutant emission
indexes all meet the second-level standards in the Discharge Standard of Water Pollutants
for Meat Packing Industry (GB 13457-1992), the emission permit (Certificate
No.:91410212MA4057G88A001R) and the sewage emission limit in the GHPY ZI No. 2501
Environmental evaluation criteria.
Zhongjia Food:
a. Sewage treatment: Zhongjia Food has a 1200T/D sewage treatment station, which
adopts the treatment process of "mechanical barrier - oil separator - regulation pool -
hydrolysis pool - contact oxidation pool - sedimentation pool - sand filter" to treat the
wastewater and achieve DB 21/1627-2008 Liaoning Provincial Standard - Comprehensive
Sewage Emission Standard.
b. Waste gas treatment: the smoke and dust generated by 4T coal-fired boilers used for
production is de-dusted by wet method and de-sulphurized by magnesium oxide. All kinds
of pollutants meet the gas boiler emission concentration limit of the Emission Standard of
Air Pollutants for Coal-Burning Oil-Burning Gas-Fired Boiler (GB 13271-2014).
Huakang Food:
a. Sewage treatment: Huakang Food has a 900T/D and 300T/D sewage treatment station
that adopt the treatment process of "mechanical barrier - oil separator - regulation pool -
air flotation - hydrolysis pool - A2O - sedimentation pool - advanced treatment - sand filter
- clean water pool", which can achieve DB 21/1627-2008 Liaoning Provincial Standard -
Comprehensive Sewage Emission Standard.
b. Waste gas treatment: the smoke and dust generated by 4T coal-fired boilers used for
production is de-dusted by wet method and de-sulphurized by magnesium oxide. All kinds
of pollutants meet the gas boiler emission concentration limit GB 13271-2014. It also has a
16m-high chimney, realize fundamentally effective control.
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Shenyang Huakang:
Sewage treatment: Shenyang Huakang has a 720T/D sewage treatment station, which
adopts the treatment process of "pretreatment plus oil separation plus A2O plus
disinfection" to treat the wastewater. Its environmental protection facilities are running
normally, and the pollutant emission indexes have reached the first-level standard in the
Discharge Standard of Water Pollutants for Meat Packing Industry (GB 13457-1992).
3. Environmental impact assessment of construction projects and other administrative
permits for environmental protection
During the reporting period, all the construction projects of the Company met the
requirements of environmental impact assessment and other environmental protection
administrative licenses. The Company has strictly implemented the "three simultaneous"
environmental protection system.
4. Emergency plan for environmental accidents
According to the requirements of environmental protection authorities and relevant laws
and regulations, each production unit of the Company has identified the site with
potential environmental risk and formulated the emergent plans of environmental
pollution accident; meanwhile, related companies conducted emergency exercises to
improve self-help capability, and continued to identify the hidden danger to ensure normal
operations.
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Section VI Changes in Common Shares and Shareholder Information
I. Changes in Common Shares
A. Changes in shares
Unit: share
Increase/decrease in the reporting
Before changing After changing
period
Percentage Percentage
Shares Issuing new shares Subtotal Shares
% %
1. Restricted
91,127,927 91,127,927 91,127,927 9.88
shares
A. Shares held by
the state
B. Shares held by
state-owned 54,133,857 54,133,857 54,133,857 5.87
corporations
C. Shares held by
other domestic 34,697,483 34,697,483 34,697,483 3.76
investors
including:
Shares held by
domestic
corporations
Shares held by
domestic natural 34,697,483 34,697,483 34,697,483 3.76
persons
D. Shares held by
2,296,587 2,296,587 2,296,587 0.25
foreign investors
including: shares
held by foreign 2,296,587 2,296,587 2,296,587 0.25
corporations
Shares held by
foreign natural
persons
2. Non-restricted
831,176,469 100.00 831,176,469 90.12
shares
A. RMB common
831,176,469 100.00 831,176,469 90.12
shares
3. Total shares 831,176,469 100.00 91,127,927 91,127,927 922,304,396 100.00
B. Explanation of changes in shares
On November 21st and December 7th, 2018, the Company respectively held a Board
Meeting and Shareholder's Meeting to approve the resolution--Liaoning Wellhope 2018
Restricted Stock Incentive Plan and Its Summary (draft). On January 9th, 2019, the
Company completed the registration of restricted stock, and issued 14.575 million
restricted shares to 372 employees, the total number of shares of the Company increased
from 831,176,469 shares to 845,751,469 shares.
On November 9th, 2018, in accordance with the approval of the CSRC, the Company
non-public issued 76,552,927 A-shares to 8 investors, and completed the registration of
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
new shares on April 24th, 2019. The total number of shares of the Company increased
from 845,751,469 shares to 922,304,396 shares.
C. Changes in restricted shares
Unit:share
Number of Increase of Restricted
unrestricted restricted shares in
Opening Date of
shares in shares in the end of Reason for
Name of shareholder restricted removing
the the the restriction
shares restriction
reporting reporting reporting
period period period
Sinosafe Assets Management-
Industrial and Commercial
Bank of China-Sinosafe Assets non-public
April, 24th,
Management Stably 29,527,559 29,527,559 issuing
2020
Increasing Profit No. 12 stock
Collection Asset Management
Product
non-public
Shenzhen Galaxy Investment April, 24th,
4,921,259 4,921,259 issuing
Co., Ltd. 2020
stock
Generali China Asset
Management- China
Minsheng Banking Corp- non-public
April, 24th,
Generali China 19,685,039 19,685,039 issuing
2020
Asset-Non-public Offering stock
Selection No. 103 Asset
Management Product
non-public
April, 24th,
Wu Ying 14,763,779 14,763,779 issuing
2020
stock
Within 12,
24, 36
months
Employees who were granted equity after
14,575,000 14,575,000
restricted shares(totalling) incentive completing
restricted
stock
registration
non-public
April, 24th,
Jin Weidong 3,062,117 3,062,117 issuing
2022
stock
non-public
April, 24th,
DE HEUS MAURITIUS 2,296,587 2,296,587 issuing
2022
stock
non-public
April, 24th,
Ding Yunfeng 1,531,058 1,531,058 issuing
2022
stock
non-public
April, 24th,
Wang Zhongtao 765,529 765,529 issuing
2022
stock
Total 91,127,927 91,127,927 / /
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
II. Shareholders
A. The number of shareholders
Total number of common shareholder as at June
29,432
30th, 2019
B. Top ten shareholders and top ten shareholders holding unrestricted shares as at
the end of the reporting period
Unit: share
Shareholding of top ten shareholders
Total shares Pledged or Frozen
Restricted Nature of
Name of shareholder Changes held at the %
shares held Status Status shareholder
period-end
Domestic
Jin Weidong 3,062,117 149,549,498 16.21 3,062,117 Pledged 77,430,000 natural
person
Foreign
DE HEUS MAURITIUS 2,296,587 82,303,939 8.92 2,296,587
corporation
Domestic
Ding Yunfeng 1,531,058 81,929,558 8.88 1,531,058 Pledged 50,560,000 natural
person
Domestic
Shao Caimei 54,559,878 5.92 Pledged 16,900,000 natural
person
Domestic
Wang Fengjiu 50,084,602 5.43 Pledged 10,945,000 natural
person
Domestic
Zhang Tiesheng 48,360,000 5.24 Pledged 6,600,000 natural
person
Shenyang Wellhope
Domestic
Heli 48,360,000 5.24
corporation
Investment Co., Ltd.
Domestic
Wang Zhongtao 765,529 47,916,529 5.20 765,529 Pledged 8,140,000 natural
person
Sinosafe Assets
Management-
Industrial and
Commercial Bank of
China-Sinosafe Assets
29,527,559 29,527,559 3.20 29,527,559 Unknown Other
Management Stably
Increasing Profit
No. 12 Collection
Asset Management
Product
Generali China Asset
Management- China
Minsheng Banking
Corp- Generali China
19,685,039 19,685,039 2.13 19,685,039 Unknown Other
Asset-Non-public
Offering Selection No.
103 Asset
Management Product
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Top ten shareholders holding unrestricted shares
Shares by type
Name of shareholder Unrestricted shares held
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 54,559,878 RMB common stock 54,559,878
Wang Fengjiu 50,084,602 RMB common stock 50,084,602
Zhang Tiesheng 48,360,000 RMB common stock 48,360,000
Shenyang Wellhope Heli
48,360,000 RMB common stock 48,360,000
Investment Co., Ltd.
Wang Zhongtao 47,151,000 RMB common stock 47,151,000
National Council for Social
13,500,000 RMB common stock 13,500,000
Security Fund China 503 Portfolio
Gao Junsong 12,499,772 RMB common stock 12,499,772
1. Jin Weidong, Ding Yunfeng, Wang Fengjiu, Shao Caimei and Wang Zhongtao act in
Relationship of above
concert;
shareholders or statement made
2. Jin Weidong is the actual controller of Shenyang Heli Investment Co., Ltd.
by the parties acting in concert
3. No relation or concerted action is found among other shareholders.
Top ten shareholders holding restricted shares
Unit: share
Public trading of restricted
shares
Newly
Restricted Date increased Restriction
No. Name of shareholder
shares held available number of condition
for public share available
trading for public
trading
Sinosafe Assets Management- Industrial
and Commercial Bank of China-Sinosafe
April, 24th, Restricted period-
1 Assets Management Stably Increasing 29,527,559
2020 12 months
Profit No. 12 Collection Asset Management
Product
Generali China Asset Management- China
Minsheng Banking Corp- Generali China April, 24th, Restricted period-
2 19,685,039
Asset-Non-public Offering Selection 2020 12 months
No. 103 Asset Management Product
April, 24th, Restricted period-
3 Wu Ying 14,763,779
2020 12 months
April, 24th, Restricted period-
4 Shenzhen Galaxy Investment Co., Ltd. 4,921,259
2020 12 months
April, 24th, Restricted period-
5 Jin Weidong 3,062,117
2022 36 months
April, 24th, Restricted period-
6 DE HEUS MAURITIUS 2,296,587
2022 36 months
April, 24th, Restricted period-
7 Ding Yunfeng 1,531,058
2022 36 months
April, 24th, Restricted period-
8 Wang Zhongtao 765,529
2022 36 months
1. Jin Weidong, Ding Yunfeng and Wang Zhongtao act in concert;
Relationship of above shareholders or statement
2. No relation or concerted action is found among other
made by the parties acting in concert
shareholders.
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Section VII Preference Share
Not Applicable
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Section VIII Directors, Supervisors and Senior Management
I. Changes in Shareholdings
A. Changes in shareholdings of incumbent and outgoing directors, supervisors and
senior management during the reporting period
Unit: share
Opening Closing Changes in
Reason of
Name Office title shareholding shareholding shareholding
Changing
(shares) (shares) (shares)
Non-public
Jin Weidong Director 146,487,381 149,549,498 3,062,117
issuing stock
Non-public
Ding Yunfeng Director 80,398,500 81,929,558 1,531,058
issuing stock
Non-public
Wang Zhongtao Supervisor 47,151,000 47,916,529 765,529
issuing stock
Senior
Wang Fengjiu 50,084,602 50,084,602
management
Shao Caimei Director 54,559,878 54,559,878
Senior
Wang Zhenyong 9,800,000 9,800,000
management
Zhang Wenliang Director 8,565,100 8,565,100
Zhao Xin Director 4,470,160 4,470,160
Senior
Qiu Jiahui
management
Independent
Hu Jianmin
director
Independent
Liu Huan
director
Independent
Wang Zhe
director
Jacobus Johannes
Director
de Heus
Marcus Leonardus
Supervisor
van der Kwaak
Yuan Minger Supervisor
Li Jun Supervisor
Wei Yanjin Supervisor
Ren Bingxin Supervisor 5,429,500 5,429,500
II. Changes of Directors, Supervisors and Senior Management
Name Office title Change
Wei Yanjin Supervisor Outgoing
Ren Bingxin Supervisor New electing
Explanation:
On March 26th, 2019, Mr. Wei Yanjin resigned as the supervisor due to personal reasons.
The employees of the Company unanimously elected Mr. Ren Bingxin as the supervisor.
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Section IX Corporate Bond
Not applicable
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Section X Financial Statements
Consolidated Balance Sheet
June 30th, 2019
Liaoning Wellhope Unit: yuan
Item June 30th, 2019 December 31st, 2018
Current assets:
Monetary capital 1,573,431,869.60 928,902,753.06
Derivative financial assets 4,765,331.00 2,042,527.60
Notes receivable 3,086,026.50 13,611,778.44
Accounts receivable 547,067,503.01 397,891,678.23
Prepayments 229,990,149.66 185,899,348.53
Other receivables 132,822,976.91 98,997,213.04
including: dividends receivable 23,341,783.34 5,481,783.34
Inventory 1,434,517,398.92 1,410,869,192.26
Other current assets 125,981,956.68 118,636,045.77
Total current assets 4,051,663,212.28 3,156,850,536.93
Non-current assets:
Available-for-sale financial assets 3,680,000.00
Long-term equity investment 1,540,743,547.03 1,354,820,455.99
Other equity instrument investment 4,547,809.52
Fixed assets 1,844,448,325.69 1,516,702,438.29
Construction in progress 85,569,862.73 255,719,188.30
Productive biological assets 56,033,181.19 30,484,794.88
Intangible assets 214,591,851.10 206,387,940.29
Goodwill 290,425.67 290,425.67
Long-term deferred & prepaid 158,343,630.01 177,903,367.82
expenses
Deferred income tax assets 34,114,682.31 30,357,726.08
Other non-current assets 326,934,235.00 197,497,688.18
Total non-current assets 4,265,617,550.25 3,773,844,025.50
Total assets 8,317,280,762.53 6,930,694,562.43
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Consolidated Balance Sheet(continue)
June 30th, 2019
Unit: yuan
Item June 30th, 2019 December 31st, 2018
Current liabilities:
Short-term borrowing 1,449,522,585.98 1,347,690,168.49
Accounts payable 671,815,155.23 572,729,779.31
Advance receipt 256,304,585.35 161,173,916.67
Payroll 39,828,932.27 49,731,930.35
Tax payable 30,041,321.29 28,744,792.72
Other payables 370,038,640.51 309,537,195.12
including: interest payable 1,405,712.50 1,784,257.05
dividends payable 19,489,069.55 526,000.00
Non-current liabilities due within one 56,374,186.31 32,999,999.96
year
Total current liabilities 2,873,925,406.94 2,502,607,782.62
Non-current liabilities:
Long-term borrowings 42,500,000.00 118,500,000.00
Long-term payables 16,845,833.40 23,345,833.38
Deferred income 18,915,195.31 20,252,967.41
Deferred income tax liabilities 115,017.00
Total non-current liabilities 78,376,045.71 162,098,800.79
Total liabilities 2,952,301,452.65 2,664,706,583.41
Owners' equity(or shareholders'
equity):
Paid-up capital (or share capital) 922,304,396.00 845,751,469.00
Capital reserve 868,884,734.07 153,824,536.37
deduct: treasury stock 70,688,750.00 70,688,750.00
Other comprehensive income 2,146,597.82 -1,316,942.00
Surplus reserves 272,882,920.19 272,882,920.19
Undistributed profits 2,844,456,372.98 2,651,462,525.08
Total equity attributable to the 4,839,986,271.06 3,851,915,758.64
owners of parent company
Non-controlling interests 524,993,038.82 414,072,220.38
Total owners' equity 5,364,979,309.88 4,265,987,979.02
Total liabilities and owners' equity 8,317,280,762.53 6,930,694,562.43
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Consolidated Balance Sheet of Parent Company
June 30th, 2019
Unit: yuan
Item June 30th, 2019 December 31st, 2018
Current assets:
Monetary capital 1,210,527,716.67 750,589,871.09
Derivative financial assets 2,373,461.00 2,042,527.60
Accounts receivable 17,433,942.31 16,033,809.05
Prepayments 1,509,033.09 2,278,798.85
Other receivables 1,377,643,449.55 869,671,230.01
including: dividends receivable 31,965,270.58 15,225,270.58
Inventory 45,899,234.06 41,986,504.36
Total current assets 2,655,386,836.68 1,682,602,740.96
Non-current assets:
Available-for-sale financial assets 3,000,000.00
Long-term equity investment 3,531,839,774.87 3,285,783,087.96
Other equity instrument investment 4,039,369.92
Fixed assets 137,381,680.74 73,509,615.43
Construction in progress 25,000.00 56,425,656.79
Intangible assets 15,859,646.29 16,169,866.87
Long-term prepaid expenses 806,599.83 854,845.30
Deferred income tax assets 9,740,249.28 9,060,127.91
Total non-current assets 3,699,692,320.93 3,444,803,200.26
Total assets 6,355,079,157.61 5,127,405,941.22
Current liabilities:
Short-term borrowings 1,140,000,000.00 1,075,000,000.00
Accounts payable 27,661,444.90 7,636,692.77
Advance receipt 1,627,159.69 2,690,153.80
Payroll payable 1,720,064.09 2,749,116.65
Tax payable 1,966,877.56 4,166,334.74
Other payables 1,375,174,162.60 1,026,382,418.43
including: Interest payable 1,405,712.50 1,601,798.61
Dividends payable 13,333,238.12
Non-current liabilities due within one
34,000,000.00 20,000,000.00
year
Total current liabilities 2,582,149,708.84 2,138,624,716.39
Non-current liabilities:
Long-term borrowings 42,000,000.00 118,000,000.00
Deferred income 7,301,250.00 7,425,000.00
Deferred income tax liabilities 115,017.00
Total non-current liabilities 49,416,267.00 125,425,000.00
Total liabilities 2,631,565,975.84 2,264,049,716.39
Owners' equity(or shareholders'
equity):
64 / 78
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Paid-up capital (or share capital) 922,304,396.00 845,751,469.00
Capital reserves 864,552,493.69 160,705,065.92
deduct: treasury stock 70,688,750.00 70,688,750.00
Other Comprehensive income 1,452,339.23 -1,305,935.62
Surplus reserves 272,882,920.19 272,882,920.19
Undistributed profits 1,733,009,782.66 1,656,011,455.34
Total owners' equity 3,723,513,181.77 2,863,356,224.83
Total liabilities and owners' equity
6,355,079,157.61 5,127,405,941.22
(or shareholders' equity)
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Consolidated Income Statement
January-June, 2019
Liaoning Wellhope Unit: yuan
Item June 30th, 2019 June 30th, 2018
1. Total operating revenue 7,727,400,004.75 6,850,215,702.49
including: Operating revenue 7,727,400,004.75 6,850,215,702.49
2. Total operating costs 7,435,169,130.12 6,686,403,737.09
including: Operating costs 6,985,820,614.94 6,297,480,308.08
Taxes and surtaxes 12,698,727.34 11,759,191.04
Selling expenses 239,990,725.07 210,701,513.67
Administrative expenses 126,915,965.17 103,605,422.49
R&D expenses 30,021,345.87 29,771,840.08
Financial expenses 39,721,751.73 33,085,461.73
including: Interest expenses 40,211,708.70 36,549,414.58
Interest income -2,641,228.16 -2,901,860.10
add: Other income 2,192,950.10 485,300.00
Income from investment 188,067,031.15 92,740,166.39
including: Income from
investments in associated companies 186,195,941.85 89,150,595.32
and joint ventures
Gain from changes in fair value -169,200.00 835,460.00
Credit impairment loss -18,534,402.05 -25,031,735.81
Assets impairment loss -269,072.43 -10,691,401.07
Gain or loss from assets disposal -45,359.23 -838,995.13
3. Operating profit 463,472,822.17 221,310,759.78
add: Non-operating income 15,814,929.98 8,565,564.83
deduct: Non-operating expenditure 18,322,686.59 4,294,410.09
4. Pretax profit 460,965,065.56 225,581,914.52
deduct: Income tax expense 31,218,522.69 33,149,593.38
5. Net profit 429,746,542.87 192,432,321.14
Net profit from continuing operations 429,746,542.87 192,432,321.14
Net profit attributable to the
shareholders of parent company 359,008,639.18 164,359,110.71
Non-controlling interests income 70,737,903.69 28,073,210.43
6. Other comprehensive income, net
4,661,958.82 -4,245,572.81
of tax
Attributable to owners of parent
company 3,945,084.57 -4,245,572.81
a. Other comprehensive income that
cannot be reclassified into gains or
losses
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
b. Other comprehensive income that
will be reclassified into the gains or 3,945,084.57 -4,245,572.81
losses
(a) Other comprehensive income that
can be transferred in gains or losses 3,068,904.93 -4,245,572.81
under the equity method
(b) Exchange differences on
translation of foreign currency financial 876,179.64
statements
Attributable to non-controlling
interests 716,874.25
7. Total comprehensive income 434,408,501.69 188,186,748.33
Attributable to the owners of parent
company 362,953,723.75 160,113,537.90
Attributable to non-controlling
interests 71,454,777.94 28,073,210.43
8. EPS
a. Basic earnings per share (yuan per
share) 0.41 0.20
b. Diluted earnings per share (yuan per
share) 0.41 0.20
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Consolidated Income Statement of Parent Company
January-June, 2019
Unit: yuan
Item June 30th, 2019 June 30th, 2018
1. Total operating revenue 261,739,621.75 307,735,900.71
Deduct: Operating costs 174,051,955.80 207,808,456.33
Taxes and surtaxes 812,810.61 765,497.03
Selling expenses 7,251,239.85 6,605,164.41
Administrative expenses 16,505,456.93 12,413,403.82
R&D expenses 10,304,335.79 10,992,419.66
Financial expenses 14,964,973.60 13,492,061.43
including: Interest expenses 29,112,564.27 27,818,889.08
Interest income -14,292,833.82 -14,418,091.31
add: Other income 123,750.00
Income from investment 202,720,334.91 91,680,421.66
including: Income from investments in
185,679,010.80 88,724,498.50
associated companies and joint ventures
Gain from changes in fair value 766,780.00 835,460.00
Credit impairment loss -3,382,369.90 -20,923,705.77
Assets impairment loss -6,150,602.09
Gain or loss from assets disposal -30,999.44
2. Operating profit 238,046,344.74 121,100,471.83
add: Non-operating income 10,628,520.00 2,772,106.50
deduct: Non-operating expenditure 1,326,100.00 58.28
3. Pretax profit 247,348,764.74 123,872,520.05
deduct: Income tax expense 4,335,646.14 4,238,890.05
4. Net profit 243,013,118.60 119,633,630.00
Net profit from continuing operations 243,013,118.60 119,633,630.00
5. Other comprehensive income, net of
3,068,904.93 -4,245,572.81
tax
a. Other comprehensive income that
cannot be reclassified into gains or losses
b. Other comprehensive income that
3,068,904.93 -4,245,572.81
will be reclassified into gains or losses
(a) Other comprehensive income that
can be transferred in gains or losses under 3,068,904.93 -4,245,572.81
the equity method
6. Total comprehensive income 246,082,023.53 115,388,057.19
68 / 78
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Consolidated Statement of Cash Flow
January-June, 2019
Liaoning Wellhope Unit: yuan
Item June 30th, 2019 June 30th, 2018
1. Cash flow from operating activities
Cash received by selling commodities, providing
7,948,606,132.70 7,049,632,638.50
labor services
Tax refunds 13,871,955.08 11,866,354.09
Cash received from other activities related to
38,922,770.34 43,313,298.58
operating
Sub-total of cash inflow of operating
8,001,400,858.12 7,104,812,291.17
activities
Cash paid for purchasing commodities and
6,996,689,336.06 6,187,546,380.34
receiving labor services
Net increase in financial assets held for trading
2,722,803.40
purposes
Cash paid to and for employee 307,874,894.10 262,865,195.89
Tax payments 60,790,924.96 76,359,662.02
Cash paid to other activities related to operating 336,753,918.38 287,782,028.74
Sub-total of cash outflow of operating
7,704,831,876.90 6,814,553,266.99
activities
Net cash flow from operating activities 296,568,981.22 290,259,024.18
2. Cash flow from investing activities
Cash received from disinvestment 1,050,000.00 187,516.32
Cash received from return on investment 20,246,504.29 6,074,468.26
Net cash received from disposal of fixed assets,
1,235,466.00 1,066,892.92
intangible assets and other long-lived assets
Net cash received from disposal of subsidiaries
510,233.92
and other business units
Cash received from other activities related to
2,377,932.15 1,360,556.14
investment
Sub-total of cash inflow of investing
24,909,902.44 9,199,667.56
activities
Cash paid for acquiring and building fixed assets,
211,754,778.24 197,883,903.65
intangible assets and other long-lived assets
Cash paid for investments 39,435,378.79 38,689,246.94
Net cash paid for acquiring subsidiaries and
113,573,868.96
other business units
Cash paid to other activities related to
36,208,141.97
investment
Sub-total of cash outflow of investing
400,972,167.96 236,573,150.59
activities
Net cash flow from investing activities -376,062,265.52 -227,373,483.03
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
3. Cash flow from financing activities
Cash received by absorbing investments 836,980,430.50 4,820,000.00
including: Capital contributed by non-controlling
67,202,692.00 4,820,000.00
interests to subsidiaries
Cash received from borrowings 857,207,911.79 940,990,000.00
Cash received from other activities related to
640,000.00
financing
Sub-total of cash inflow of financing
1,694,828,342.29 945,810,000.00
activities
Repayments of borrowings 814,501,307.93 880,300,000.00
Cash paid for distributing dividends, profits, or
194,694,461.11 118,974,658.10
paid for interests
including: Dividends or profits paid by
4,420,306.88
subsidiaries to non-controlling interests
Cash paid to other activities related to financing
5,856,566.01
activities
Sub-total of cash outflow of financing
1,015,052,335.05 999,274,658.10
activities
Net cash flow from financing activities 679,776,007.24 -53,464,658.10
4. Effect of foreign exchange rate fluctuations on
-556,725.86 -506,962.19
cash and cash equivalents
5. Net increase in cash and cash equivalents 599,725,997.08 8,913,920.86
add: Opening balance of cash and cash
889,204,873.97 740,680,891.81
equivalents
6. Closing balance of cash and cash equivalents 1,488,930,871.05 749,594,812.67
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Consolidated Statement of Cash Flow of Parent Company
January-June, 2019
Liaoning Wellhope Unit: yuan
Item June 30th, 2019 June 30th, 2018
1. Cash flow from operating activities
Cash received by selling commodities, providing
254,250,757.39 301,338,646.53
labor services
Cash received from other activities related to
201,186,908.54 279,378,312.84
operating
Sub-total of cash inflow of operating
455,437,665.93 580,716,959.37
activities
Cash paid for purchasing commodities and
155,902,826.52 185,194,550.69
receiving labor services
Net increase in financial assets held for trading
330,933.40
purposes
Cash paid to and for employee 14,666,109.28 12,080,061.08
Tax payments 10,249,972.23 12,988,277.37
Cash paid to other activities related to operating 359,094,296.54 216,289,255.03
Sub-total of cash outflow of operating
540,244,137.97 426,552,144.17
activities
Net cash flow from operating activities -84,806,472.04 154,164,815.20
2. Cash flow from investing activities
Cash received from disinvestment 1,050,000.00 800,000.00
Cash received from return on investment 38,866,504.29 13,119,072.37
Net cash received from disposal of fixed assets,
34,000.00
intangible assets and other long-lived assets
Net cash received from disposal of subsidiaries
4,000,000.00
and other business units
Cash received from other activities related to
1,360,556.14
investment
Sub-total of cash inflow of investing
43,950,504.29 15,279,628.51
activities
Cash paid for acquiring and building fixed assets,
7,169,414.68 7,885,402.10
intangible assets and other long-lived assets
Cash paid for investments 84,338,378.79 119,469,158.49
Cash paid to other activities related to
2,787,170.71
investment
Sub-total of cash outflow of investing
94,294,964.18 127,354,560.59
activities
Net cash flow from investing activities -50,344,459.89 -112,074,932.08
3. Cash flow from financing activities
Cash received by absorbing investments 769,777,738.50
Cash received from borrowings 695,000,000.00 920,000,000.00
Sub-total of cash inflow of financing 1,464,777,738.50 920,000,000.00
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
activities
Repayments of borrowings 692,000,000.00 860,000,000.00
Cash paid for distributing dividends, profits, or
180,476,138.26 112,145,959.59
paid for interests
Sub-total of cash outflow of financing
872,476,138.26 972,145,959.59
activities
Net cash flow from financing activities 592,301,600.24 -52,145,959.59
4. Effect of foreign exchange rate fluctuations on
6.56 52.39
cash and cash equivalents
5. Net increase in cash and cash equivalents 457,150,674.87 -10,056,024.08
add: Opening balance of cash and cash
740,891,873.25 525,941,409.05
equivalents
6. Closing balance of cash and cash equivalents 1,198,042,548.12 515,885,384.97
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Change Statement of Owner's Equity
January-June, 2019
Unit: yuan
January-June, 2019
Equity attributable to the owners of parent company
Item Non-controlling Total owners'
Deduct: Other interests equity
Surplus Undistributed
Share capital Capital reserve Treasury comprehensive Subtotal
reserve profits
stock income
1. Closing balance of prior
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
period
add: changes in accounting
-481,544.75 -481,544.75 -645.73 -482,190.48
policies
2. Opening balance of
845,751,469.00 153,824,536.37 70,688,750.00 -1,798,486.75 272,882,920.19 2,651,462,525.08 3,851,434,213.89 414,071,574.65 4,265,505,788.54
current period
3. Changes of current
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
period
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
76,552,927.00 715,060,197.70 791,613,124.70 791,613,124.70
reduced by owners
a. Common stock invested
76,552,927.00 708,730,862.57 785,283,789.57 785,283,789.57
by owners
b. Capital contributed
by other equity instrument
holders
c. Amount of share-based
payment included in the 10,013,022.10 10,013,022.10 10,013,022.10
owner's equity
d. Other -3,683,686.97 -3,683,686.97 -3,683,686.97
C. Profit 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
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
c. Profit distributed to
-166,014,791.28 -166,014,791.28 -7,655,875.72 -173,670,667.00
owners (or shareholders)
D. Internal carry forward
47,839,436.20 47,839,436.20
of owners' equity
a. Other 47,839,436.20 47,839,436.20
4. Closing balance of
922,304,396.00 868,884,734.07 70,688,750.00 2,146,597.82 272,882,920.19 2,844,456,372.98 4,839,986,271.06 524,993,038.82 5,364,979,309.88
current period
January-June, 2018
Equity attributable to the owners of parent company
Item Non-controlling Total owners'
Deduct: Other
Undistributed interests equity
Share capital Capital reserve Treasury comprehensive Surplus reserve Subtotal
profits
Stock income
1. Closing balance of prior
831,176,469.00 103,593,300.06 232,486,459.89 2,223,048,013.93 3,390,304,242.88 355,960,084.62 3,746,264,327.50
period
add: changes in
accounting policies
2. Opening balance of
831,176,469.00 103,593,300.06 232,486,459.89 2,223,048,013.93 3,390,304,242.88 355,960,084.62 3,746,264,327.50
current period
3. Changes of current
-3,364,732.80 -4,245,572.81 81,241,463.81 73,631,158.20 32,994,189.42 106,625,347.62
period
A. Total comprehensive
-4,245,572.81 164,359,110.71 160,113,537.90 28,073,210.43 188,186,748.33
income
B. Capital contributed and
-3,364,732.80 -3,364,732.80 -3,364,732.80
reduced by owners
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
d. Other -3,364,732.80 -3,364,732.80 -3,364,732.80
C. Profit distribution -83,117,646.90 -83,117,646.90 -83,117,646.90
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
a. Appropriation of
surplus reserves
b. Extraction of general
risk provisions
c. Profit distributed to
-83,117,646.90 -83,117,646.90 -83,117,646.90
owners (or shareholders)
d．Other
D. Internal carry forward
4,920,978.99 4,920,978.99
of owners' equity
a. Other 4,920,978.99 4,920,978.99
4. Closing balance of
831,176,469.00 100,228,567.26 -4,245,572.81 232,486,459.89 2,304,289,477.74 3,463,935,401.08 388,954,274.04 3,852,889,675.12
current period
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Change Statement of Owner's Equity of Parent Company
January-June, 2019
Unit: yuan
January-June, 2019
Item Other
Deduct: Treasury Undistributed
Share capital Capital reserve comprehensive Surplus reserve Total owners' equity
stock profits
income
1. Closing balance of prior period 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
11,474,169.20 11,474,169.20
the owner's equity
d. Other
C. Profit distribution -166,014,791.28 -166,014,791.28
a. Appropriation of surplus reserves
b. Profit distributed to owners (or
shareholders)
c. Other -166,014,791.28 -166,014,791.28
D. Internal carry forward of owners' equity
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
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
January-June, 2018
Item
Deduct: Treasury Other comprehensive Surplus Undistributed Total owners'
Share capital Capital reserve
stock income reserve profits equity
1. Closing balance of prior period 831,176,469.00 102,593,326.35 232,486,459.89 1,375,560,959.50 2,541,817,214.74
add: changes in accounting policies
2. Opening balance of current period 831,176,469.00 102,593,326.35 232,486,459.89 1,375,560,959.50 2,541,817,214.74
3. Changes of current period -4,245,572.81 0.00 36,515,983.10 32,270,410.29
A. Total comprehensive income -4,245,572.81 119,633,630.00 115,388,057.19
B. Capital contributed and reduced by owners
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
d. Other
C. Profit distribution -83,117,646.90 -83,117,646.90
a. Appropriation of surplus reserves
b. Profit distributed to owners (or shareholders) -83,117,646.90 -83,117,646.90
c. Other
D. Internal carry forward of owners' equity
4. Closing balance of current period 831,176,469.00 102,593,326.35 -4,245,572.81 232,486,459.89 1,412,076,942.60 2,574,087,625.03
77 / 78
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2019 Semi-Annual Report
Section XI Reference
Financial statements that contain the signature and seal of the legal
representative, the person in charge of the accounting work and the person
Reference in charge of the accounting department.
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.
Chairman of the Board of Directors: Jin Weidong
The submission date approved by the Board of Directors: August 15th, 2019
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