Securities Code: 002001 Securities Abbr.: NHU
Zhejiang NHU Company Ltd. Annual Report 2020（Abstract）
Ⅰ. Important Notes
This Abstract is extracted from 2020 Annual Report of Zhejiang NHU Company., Ltd. (“the
Company). In order to have a full understanding of the operating results, financial status and
future development planning of the Company, investors are suggested to read the full report
carefully on the media designated by the China Securities Regulatory Commission (the “CSRC”).
The Company’s 2020 Annual Report is prepared and published in Chinese version, and the
English version is for reference only. Should there be any inconsistency between the Chinese
version and English version, the Chinese version shall prevail.
All directors attended the Board Meeting for reviewing of this Report.
Indicate by check mark if independent auditor issues non-standard unqualified opinion
□Applicable √Not applicable
Indicate by check mark if there is a pre-arranged plan of profit distribution or transferring capital
reserve into common stock for the report period which has been reviewed and approved by the
Board of Directors
√Applicable □Not applicable
Indicate by check mark if transferring capital reserve into common stock
√Applicable □Not applicable
The common stock profit distribution plan of the Company was considered and passed by the
Board of Directors as follows: with 2,148,662,300 shares as the base, distribute 7 Yuan cash
dividends per 10 common stocks (tax inclusive), send bonus of 0 share (tax inclusive), and 2 stock
dividend per 10 common stocks through capital reserve to all shareholders.
Indicate by check mark if preplan for preferred stocks profit distribution to shareholders for the
report period which has been reviewed and approved by the Board of Directors
□Applicable √Not applicable
Securities Code: 002001 Securities Abbr.: NHU
Ⅱ. Company Profile
1. Stock profile
Stock abbr. NHU Stock code 002001
Stock exchange Shenzhen Stock Exchange
Contract information Board Secretary Securities Representative
Name Guanqun Shi Shuying Zeng
No.418 Xinchang Dadao West Road, No.418 Xinchang Dadao West Road,
Office add.
Xinchang, Zhejiang , P.R.China Xinchang, Zhejiang , P.R.China
Tel. (0575)86017157 (0575)86017157
E-mail sgq@cnhu.com 002001@cnhu.com
2. Brief introduction to main business or products in report period
NHU is a national high-tech enterprise that mainly engaged in the production and sales of
nutritional products, aroma chemicals, new polymer materials. NHU focuses on the fine chemicals,
adheres to the concept of customer orientation, creates value for customers. NHU is providing
solutions for customers in more than 100 countries and regions, continuously improving the
quality of human life with high-quality, health and green products, and creating sustainable value
through win-win development. With leading technology, scientific management and creditable
service, NHU is now one of the four largest vitamin manufacturers in the world, a large national
aroma chemicals manufacturer and a well-known special engineering plastic manufacturer.
Nutrition: As a messenger of nutrition health, NHU has successfully developed a variety of
healthy and efficient feed and food additives. It not only improves animal nutrition health and
breeding profits, but also promotes the development of human health care. In addition, thanks to
the continuous nutrition research, applied technology research and technical services, we are able
to provide improved products and solutions in the field of nutrition. Vitamin, the main business of
NHU, has a high market share, a prominent industrial position and an obvious brand advantage
over others, making NHU in a leading stage in China and also a well-known position worldwide.
The main products include Vitamin E, Vitamin A, Vitamin C, DL-Methionine, Vitamin D3,
D-Biotin, Coenzyme Q10, Carotenoids, etc. NHU actively implements the serialization and
differentiation development of nutritional products, at the same time promotes a significant
increase in product competitiveness by optimizing process routes and tackling key projects. In
addition, NHU is fully open to internal linkage and external cooperation, actively deploys
cutting-edge biotechnology, and builds a "bio＋" platform. During the reporting period, the first
phase of DL-Methionine with capacity 50,000 tons achieved full capacity operation, significantly
reduced the annual cost and effectively enhanced the competitiveness of the product. In the project
of second phase with capacity 250,000 tons per year, among which the 100,000 tons have been put
Securities Code: 002001 Securities Abbr.: NHU
into use as scheduled and are running normally, and the last 150,000 tons were designed as
planned, the overall process was controllable; the biological fermentation project (phase I)
successfully completed the acceptance of production and realized full load production.
Aroma chemicals: As a global aroma chemicals enterprise, relying on the two technology
platforms of chemical synthesis and biological fermentation, NHU continuously enriches the
varieties of fragrances to meet the ever-changing market needs. The main products include
Linalool series, Citral series, Leaf Alcohol series, Methyl Dihydro Jasmonate, Raspberry Ketone,
Ligustral, etc., covering various fields such as daily chemicals, food and medicine. At present, the
main aroma chemicals are targeting the global market with strong product competitiveness and
high market share, the market pattern is relatively stable. During the reporting period, NHU
continuously improved the competitiveness of existing products, accelerated the research,
development and industrialization of new products through internal potential exploration. In the
future, the endogenous potential of our products will continue to grow steadily.
New polymer materials: Based on the high-performance resin polymerization technology, the
downstream application research and development, NHU provides more comfortable, more
environmentally friendly and healthier materials for human life through high-efficiency, stable,
energy-saving, and environmentally-friendly professional production. New polymer materials is
one of the seven national strategic emerging industries and its future development will be
supported by national policies, economic environment and market environment, etc. In particular,
new polymer materials and special engineering materials have broad development prospects.
During the reporting period, NHU timely resumed work and production while preventing and
controlling the COVID-19. The annual operating rate was close to 100%. After the market demand
picked up in the second half of the year, the sales recovered quickly.
3. Selected Financial Data
(1) Key accounting data and financial ratios for the past three years
Indicate by check mark if there is any retrospectively restated accounting data of previous years.
√Yes □No
Reasons for retrospective adjustment or restatement
Merger of Enterprises under Common Control
Unit:Yuan
Increase/decrease
2019 of current year 2018
2020 over prior year
Before After After Before After
Adjustment Adjustment Adjustment Adjustment Adjustment
Operating 10,314,084,354.21 7,620,982,935.87 7,660,412,519.26 34.64% 8,683,381,746.84 8,731,706,336.53
Securities Code: 002001 Securities Abbr.: NHU
income
Net profit
attributable
3,563,759,939.48 2,168,616,205.89 2,165,282,489.11 64.59% 3,078,884,552.84 3,075,141,222.50
to
shareholders
Net profit
attributable
to
shareholders
3,410,367,513.01 1,934,679,280.23 1,934,679,280.23 76.28% 2,889,118,351.12 2,889,118,351.12
excluding
non-recurring
gains and
losses
Net cash
flows from
3,122,807,363.21 2,102,315,194.76 2,106,765,618.26 48.23% 3,660,322,312.11 3,657,708,623.87
operating
activities
Basic EPS
(RMB Yuan / 1.66 1.01 1.01 64.36% 1.43 1.43
share)
Diluted EPS
(RMB Yuan / 1.66 1.01 1.01 64.36% 1.43 1.43
share)
Weighted Increase by 6.43
19.63% 13.24% 13.20% 20.54% 20.48%
average ROE pts
Increase/decrease
As of Dec.31, 2019 of current year As of Dec.31, 2018
As of Dec.31,
over prior year
2020
Before After After Before After
Adjustment Adjustment Adjustment Adjustment Adjustment
Total assets 30,897,007,799.54 28,501,522,704.89 28,723,817,186.44 7.57% 21,934,888,570.86 22,044,674,253.85
Net assets
attributable
19,336,254,922.95 16,848,122,324.18 17,010,913,336.77 13.67% 16,170,396,082.67 16,194,814,428.04
to
shareholders
Notes: Zhejiang NHU Special Materials Co., Ltd, a subsidiary, has acquired the equity of
Shaoxing Qinjin New Material Co., Ltd. and Shaoxing Rossence material technology Co., Ltd.;
Shandong NHU Holding Co., Ltd., a subsidiary, has acquired equity of Weifang Jinhe Real Estate
Co., Ltd.. The Company made retrospective adjustment to relevant financial statement data.
(2) Key accounting data by quarter
Securities Code: 002001 Securities Abbr.: NHU
Unit:Yuan
Q1 Q2 Q3 Q4
Operating income 2,624,605,161.78 2,678,560,340.47 2,170,163,165.68 2,840,755,686.28
Net profit attributable to
899,742,390.12 1,309,187,887.08 726,592,641.58 628,237,020.70
shareholders
Net profit attributable to
shareholders excluding 879,433,307.00 1,235,403,798.23 686,225,513.80 609,304,893.98
non-recurring gains and losses
Net cash flows from operating
258,196,301.24 869,363,918.87 917,120,965.75 1,078,126,177.35
activities
Indicate by check mark if any material difference between the above financial indicators or their
summations and those which have been disclosed in the Company’s Quarterly or Interim report.
□Yes √No
4. Capital and Shareholders
(1) Top 10 shareholders of common stock and preferred stock with resumed voting rights
Unit: Share
Total number of
Total number of Total number of shareholders of
Total number of
shareholders of shareholders of preferred stock
shareholders of
common stocks at preferred stock with with resumed
common stocks at 61,126 56,951 0 0
previous month-end resumed voting right at voting rights at
the end of the
of this report’s the end of the reporting previous
reporting period
disclosure period month-end of this
report’s disclosure
Top 10 shareholders
Quantity of
Quantity of Pledged or frozen stocks
Name Nature Ownership restricted
stocks
stocks held
Status Quantity
Domestic
NHU Holding Group Co.,
non-state-owned 48.55% 1,043,253,037 0
Ltd.
corporate
Hong Kong Securities
Foreign corporate 2.68% 57,551,815 0
Clearing
Shanghai Chongyang
Strategic Investment Co.,
Other 1.61% 34,579,938 0
Ltd.- Chongyang Strategic
Huizhi Fund
Beijing Panfeng Investment Other 0.88% 18,989,821 0
Securities Code: 002001 Securities Abbr.: NHU
Management Partnership
(Limited Partnership)
-Panpeng Value Private
Securities Investment Fund
Domestic
NSSF 503 Portfolio state-owned 0.79% 17,000,014 0
corporate
Industrial Fund - Industrial
Bank - Organic Growth
Other 0.73% 15,680,349 0
No.1 Special Multi-client
Asset Management Plan
Domestic
Central Huijin Ltd. state-owned 0.59% 12,680,980 0
corporate
Domestic
NSSF 112 Portfolio state-owned 0.47% 10,189,099 0
corporate
Domestic natural
Baishan Hu 0.47% 10,136,062 7,602,046
person
Domestic
Chongyang Group Co., Ltd. non-state-owned 0.45% 9,695,966 0
corporate
Among the above-mentioned shareholders, Baishan Hu is a director of
NHU Holding Group Co., Ltd.. The Company is not made aware
Explanation on the above-mentioned shareholders’
whether there is any affiliated relationship between the other
affiliated relationship or concerted action
shareholders or whether they are persons acting in concert as defined
in Administrative Measures for the Acquisition of Listed Companies.
Shanghai Chongyang Strategic Investment Co., Ltd. -Chongyang
Strategic Huizhi Fund holds 34,579,838 shares through the client credit
transaction guarantee securities account of Guotai Junan Securities Co.,
Ltd.; Beijing Panfeng Investment Management Partnership (Limited
Explanation on the above-mentioned shareholders
Partnership) -Panfeng Value Private Securities Investment Fund holds
that are engaged in margin trading business
2,649,097 shares through the client credit transaction guarantee securities
account of Huatai Securities Co., Ltd.; Chongyang Group Co., Ltd. holds
9,695,796 shares through the client credit transaction guarantee
securities account of China Merchants Securities Co., Ltd..
(2) Total number of and top 10 shareholders of preferred stocks
□Applicable √Not applicable
No shareholders holding preferred stocks noted in the reporting period.
Securities Code: 002001 Securities Abbr.: NHU
(3) The ownership and controlling relationship between the Company and its actual
controller in form of diagram
5. Bonds
Does the Company have any corporate bond that is publicly issued and listed on the stock
exchange and that are immature or not fully redeemed as of the approved issuance date of the
Annual Report?
None
Securities Code: 002001 Securities Abbr.: NHU
III. Management Discussion and Analysis
1. Business review for the reporting period
In 2020, NHU comprehensively implemented epidemic prevention and control measures, and
made every effort to implement the “13th Five-Year Strategic Plan” by focusing on the operating
guiding ideology of “strategic breakthrough, consolidate management, implement the plan, and
improve quality and efficiency”. All employees strengthened the problem consciousness and
adhered to bottom-line thinking. The company effectively responded to changes in the external
environment, coordinated the promotion of epidemic prevention and control and business
development, and also accurately grasped market opportunities. During the reporting period, NHU
achieved operating income of 10,314.08 million, a year-on-year increase of 34.64%; the total
profits was 4,109.89 million, a year-on-year increase of 60.21%; net profit attributable to
shareholders was 3,563.76 million, a year-on-year increase of 64.59%.
During the reporting period, the Company's main operations are as follows:
(1) NHU adhered to the overall planning of epidemic prevention and control and business
development. We made every effort to ensure the resumption of work and production while doing
a good job in epidemic prevention and control. We strengthened production and sales linkage
management, actively met customer needs, optimized production plans, and coordinated
transportation resources actively. The annual operating indicators achieved steady growth and the
performance reached a record high. The market share of DL-Methionine and other major products
have increased significantly, the market for Vitamin C has been developed smoothly, and the
production and sales scale of Leaf Alcohol series products has been further released. In order to
make the sales of new products increasing steadily, we established a “many-to-one” customer
service model for R&D, production, application, and quality assurance to enhance customer
stickiness and satisfaction, and also enriched the sales model.
(2) NHU pursued both independent research and development and open cooperation, promoted the
implementation of innovative achievements. Guided by demand, we focused on key technologies
and successfully built a molecular biology platform. The company continued to increase its
investment in innovative R&D and more than 5% of operating income was invested for R&D for
seven consecutive years. NHU obtained 102 authorized patents throughout the year.
"Development and Application of Nitrogen-doped Carbon Supported Hydrogenation Catalyst"
project won the only technical invention special award of 2020 China Petroleum and Chemical
Industry Federation, NHU also ranked the 16th among the top 100 innovative high-tech
enterprises in Zhejiang Province.
(3) NHU persisted in business development and project construction go hand in hand, and speeded
up the high-quality development pace. The company has always been guided by strategic goals to
promote transformation and upgrading and enhance core competitiveness. We continuously
improved the comprehensive competitiveness of old products by exploring the potential and
reforming, improving quality and efficiency; we also deployed new businesses and expanded the
product library. In the project of second phase with capacity 250,000 tons per year, among which
Securities Code: 002001 Securities Abbr.: NHU
the 100,000 tons have been put into use as scheduled and are running normally, and the last
150,000 tons were designed as planned, the progress was controllable; the biological fermentation
project (Phase I) was officially put into operation; other projects are proceeded as planned.
(4) NHU adhered to the concept of safety and green development first, and built a sustainable
development pattern. We always implement the "safety first" development concept, further
deepened the construction of the HSE management system. We also carried out special operations
for the investigation and management of equipment safety hazards, and formulated comprehensive
emergency plans. NHU always implement the "green development" business philosophy, carried
out a number of clean production projects, promoted the construction of an environmental
management system, and further promoted the utilization of hazardous waste resources. Therefore,
the energy consumption per 10,000 RMB of output value was reduced.
(5) NHU adhered to the two-pronged approach of system reform and cultural construction,
improved the efficiency of operation and management. We created a highland of talents by
introducing all kinds of talents, optimizing training and performance systems, and publishing a
customized work manual; we also improved the risk management and control system as well as
the legal work management mechanism, promoted the construction of a confidential system,
established a cash flow risk dynamic evaluation system, and introduced network security
management consulting to ensure the network and information security of the company;
meanwhile, the construction of the process information system was deepened, the company’s
overall plan for digital transformation was compiled, the digital transformation pilot was launched,
and the construction of the intelligent manufacturing system and the optimization of key processes
such as ISC was promoted. In the meantime, NHU took multiple measures to promote the
implementation of culture and improved the incorrupt management system.
2. Significant changes in main business in the reporting period
□Applicable √Not applicable
3. Products contributing to over 10% of the Company’s main business revenue or profit
√Applicable □Not applicable
Unit:Yuan
Profit:
Revenue: Gross profit
Gross profit +/-%
Product Operating income Profit +/-% over margin +/-%
margin(%) over last
last year over last year
year
Nutritional products 7,152,084,881.08 4,132,789,171.83 57.78% 51.93% 78.68% +8.65pts
Aroma chemicals 1,955,729,401.52 1,084,882,007.87 55.47% 9.06% 7.25% -0.94pts
4. Seasonal or periodic characteristics in operating performance that needs special attention
Securities Code: 002001 Securities Abbr.: NHU
□Applicable √Not applicable
5. Significant changes in revenues, costs and net profit attributable to shareholders with
common shares or their composition comparing to prior reporting period
□Applicable √Not applicable
6. Listing suspension or termination
□Applicable √Not applicable
7. Matters related to financial statements
(1) Explanation on changes in accounting policy, accounting estimations and accounting
methods comparing to prior year financial statement
√Applicable □Not applicable
On March 27, 2020, the Company implemented the Accounting Standards for Business
Enterprises No.14 – Revenue (C.K.[2017] No.22) (hereinafter referred to as the “New Revenue
Standards”) issued by the Ministry of Finance in July 2017. According to the provisions on the
connection between the old and new standards, the information during the comparative period
shall not be adjusted. Accumulated impact of the implementation of the new standards on the date
of first time adoption shall be retroactively adjusted the retained earnings and other relevant items
in the financial statements at the beginning of this reporting period. The details are set out in the
relevant announcement on March 27, 2020 of the Company (Announcement No.: 202-011).
(2) Explanation on retrospective restatement due to significant accounting error correction
in the reporting period
□Applicable √Not applicable
No correction of material accounting error required to be retrospectively restated in the
Company’s reporting period.
(3) Explanation on changes of consolidation scope comparing to prior year’s financial
statement
√Applicable □Not applicable
Increased scope of consolidation
Company Method of Acquisition
Shaoxing Rossence material technology Co.,Ltd takeover
Shaoxing Qinjin New Material Co.,Ltd takeover
Securities Code: 002001 Securities Abbr.: NHU
Weifang Jinhe Real Estate Co., Ltd. takeover
Zhejiang NHU Company Ltd.
March 31 2021
