Guangdong Haid Group Co., Limited
2022 Annual Report
April 2023
Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Section I. Important Notes, Table of Contents and Definitions
The board of directors (the "Board"), the supervisory committee, the directors,
the supervisors and the senior management of Guangdong Haid Group Co.,
Limited (the "Company") hereby warrant the truthfulness, accuracy and
completeness of the information presented in this report, guarantee that there are
no misrepresentations, misleading statements or material omissions contained in
this annual report, and are individually and collectively responsible for the
authenticity, accuracy and completeness of the information contained in this
report.
Mr. Hua Xue, head of the Company, and Mr. Shaolin Yang, head in charge of
accounting work and head of the accounting department (Accounting Officer),
declare that they warrant the truthfulness, accuracy and completeness of the
financial statements in the annual report.
All directors were present in person at the Board meeting to consider and approve
this annual report.
1. Periodical Fluctuations of Feed Industry due to Abnormal Weather Changes
The feed industry is mainly served for the downstream animal industry. The
abnormal changes including extreme high or low temperature, storm, typhoons et
al during the breeding production, and even large-scale outbreaks of diseases
which may lead to fluctuations of the inventory of livestock or aquatic products.
For example, the continuous high temperature weather in this year was followed
by the rise of water temperature to exceed the appropriate growth temperature of
aquatic products, leading to the decrease of dissolved oxygen saturation in the
water, and the reduced intake of aquatic animals and passively reduced feeding.
Some aquatic products cannot adapt to the rise of temperature or even die,
therefore affecting short-term feed demand and there are adverse effects on the
production and operation of feed enterprises.
Risk control methods include two aspects: (1) The company is currently fully
deploying manufacturers and local markets in major areas in Southern China,
Central China, Eastern China and Northern China and overseas markets in
Southeast Asia. The expansion of regional distribution can effectively decrease the
risk of weather anomalies and natural disasters in local areas. (2) Continuously
improving the supports to farmers through the joint empowerment of feed,
seedlings, and animal healthcare, providing scientific breeding plans and
individual services from company’s technical personnel to enhance the risk
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resistance and competitiveness of farmers and reduce the adverse effects of
abnormal weather.
2. Risks of company's production and operation due to the outbreak of epidemic
diseases
With the environmental changes and the development of large-scale breeding,
animal epidemic diseases also occur from time to time, for instance, African swine
fever had broken out across China since August 2018 and PRRSV-mediated pig
diseases, shrimp-relevant EMS epidemic diseases and poultry-relevant “H7N9”
diseases occurred cross country in recent years. The scale of animal production
shrinks because of the outbreak of animal epidemic diseases, following the
reduced demand for feed in the short term. The prevalence of major animal
diseases can also easily affect consumers’ purchase intention, and then reduce the
demand of end-consumers, leading to the downturn of the aquaculture and feed
industry, giving rise to adverse effects on the production and operation of feed
enterprises.
Risk control methods include two aspects: (1) The feed products cover the feeds
of pig, chicken, duck, goose, fish, shrimp and other livestock and aquatic feeds.
The variety of products and the well-balanced structure can effectively mitigate
the risk of single species disease with strong comprehensive risk-relieve capability.
(2) The company has established the strict epidemic prevention and control
system in the production of feed products, utilizing the disease prevention and
control from the source with technological advantages and professional
capabilities.
3. Risk of Drastic Price Fluctuations of Major Ingredient Materials
The feed ingredients consist of staple agricultural products including corn and
soybeans (soybean meal) et al. In recent years, the domestic and international
markets of agricultural product have been closely connected. There were great
fluctuations in prices of agricultural products due to the change of the size in the
planting area and the harvest amount in these major grain-producing countries,
the purchasing and storage and subsidy policies, the import and export policies,
the political conflicts between countries, the international trade relations, the
fluctuations in logistics capacity and conditions of shipping and the exchange rates,
bringing certain impact on the cost of feed and animal industry. With the
strengthening of the international trade of agricultural products, the factors
affecting the prices of agricultural products have become more complicated, and
the price fluctuations therefore increased. Failing to understand the changes in
the trade of feed raw materials in time and promptly implement strategic
management, the company may face the risk of rising procurement costs.
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Risk control methods include three aspects: (1) The materials were divided into
different categories including centralized purchasing staple category and local
procurement of regional varieties category. It not only guarantees the advantages
of large-scale raw material procurement, but also makes best use of localization
advantages from rapid response in respect of regional procurement. (2) The raw
material procurement research system was continuously invested and constructed.
The members of team are professional and familiar with raw material
information. It can effectively control the procurement risk through real-time
tracking, investigating, and judging the market trend in domestic and foreign
bulk raw material, and manage the position risk of bulk raw materials through
futures hedging, raw materials trade and other tools. (3) The company has strong
research and development (R&D) team composed of nearly 2,000 employees with
extensive experience in research on animal nutrition and feed formulation. A large
amount of fund was invested on research and development each year, focusing on
animal nutrition requirements, feed formulation technology, animal farming and
genetic improvement, comprehensive investigation on healthy breeding strategies,
and other research areas. The formula can be quickly adjusted to guarantee feed
nutrient level and control the costs in copying with material price fluctuations
based on the profound understanding of animal nutritional requirements and the
expertise in making best use of raw materials.
4. Risk of Environmental Protection Laws and Policies on the Scale and Structural
Adjustment in Animal Industry
In recent years, our government has introduced a series of environmental
protection laws and policies such as the new Environmental Protection Law, the
Regulations on Prevention and Control of Pollution from Large-Scale Livestock
and Poultry Industry, the Plan for Prevention and Treatment of Contaminated
Water, the Guiding Opinions on Adjusting the Layout of Pig Production in the
Southern Water Network Region et al. These anti-pollution regulations stipulate
the pollution prevention in animal industry, and especially limit the production
scale in the regions of key water sources and their surrounding areas. According
to the regulations and policies of the central government, the banned areas and
restricted areas have been highlighted throughout the country, and pig farms in
the prohibited areas are gradually relocated in the southern water-network area.
The implementation of environmental protection policies not only further speeds
up the withdrawal of individual pig farms to reduce the backward production
model with unqualified environmental protection, but also expand the production
capacity of large-scale farm with better breeding structure. In addition, the
establishment of banned areas and restricted areas will enforce the adjustments
of pig production capacity across the country. The adjustments of the scale
composition of pig production and the relocation of pig production area will
certainly have a profound impact on the existing capacity layout, market share,
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pricing, and business model of feed industry. The impact of environmental
protection policies on the pig industry and feed industry induces existing
competitive enterprises at the risk of reshuffle.
Risk control measures included four aspects: (1) The company continually
improves its service capability to farmers. In addition to feed products, the
company is also engaged in the industrial fields of animal healthcare, vaccines,
and finance, and connects closely with large-scale farmers. (2) The feed products
of the company cover the field of livestock, poultry, and aquatic animals with
abundant product lines. The producing lines for pig feed, chicken feed, duck feed
and pelleted fish feed can be shared and switched. The company can rapidly shift
the production layout according to the changes in the market through adjusting
the production capacity in the manufacturers. (3) The company adopts multiple
models to speed up the production layout in areas with abundant resources and
permitted environment, and to obtain more market share in new animal farming
areas. (4) The company continues to increase R&D investment, and the key
technologies on microbial fermented feed and antibiotic alternatives have been
effectively applied to foster the progress and development of the industry.
5. Risk of Exchange Rate Fluctuations
The global procurement of feed raw materials has become the norm. The scale of
overseas investment and operations of the company is also rapidly expanded. The
scale of cross-border fund settlement and the stock of overseas assets have grown
substantially, involved in various currency types of different countries. The
currency exchange rate fluctuations are subject to different influence factors. The
exchange rate fluctuations in any currency put certain impact on the settlement
cost and asset value of the regions.
Risk control methods include two aspects: (1) the company strictly controls the
exchange rate risks, carefully selects settlement currencies to achieve relatively
balanced regional fund inflow and outflow through structural arrangements of
financing sources and financing types according to the scale, the model, and
settlement characteristics of business in different regions and countries. (2) The
expansion of two-way fluctuations in RMB exchange rate has become the new
norm. The company increases its awareness of foreign exchange risk and arranges
settlement models according to the procurement and sales strategies and the cycle
characteristics of import and export operations, and flexibly used financial
instruments such as forward foreign exchange settlement and sale, swaps, foreign
exchange options and others to lock in exchange rate, control procurement and
sales costs and the possible risks caused by exchange rate fluctuations.
The statements involving the company's future plans in this report do not
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constitute substantial commitment of the company to any investors or related
parties. Investors are kindly advised to aware investment risks.
The proposed profit distribution plan of the Company was considered and passed
by the Board: on the basis of the total number of shares on the date of record
minus the repurchased shares when the plan is implemented in the future, the
Company will distribute cash dividend of RMB 4.50 (tax inclusive) and 0 bonus
share (tax inclusive) for every 10 existing shares held by all shareholders without
capitalization of capital reserve.
In this report, certain total numbers may not be exactly equal to the summation
of their sub-item numbers as a result of roundoff.
This report has been prepared in both Chinese and English. Should there be any
discrepancies or misunderstandings between the two versions, the Chinese version
shall prevail. The complete published Chinese 2022 Annual Report is available at
the media designated for information disclosure.
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Table of Contents
Section I. Important Notes, Table of Contents and Definitions .................................... 1
Section II. Company Profile and Key Financial Indicators .......................................... 9
Section III. Management Discussion and Analysis ..................................................... 15
Section IV. Corporate Governance .............................................................................. 57
Section V. Environmental and Social Responsibility .................................................. 90
Section VI. Material Matters ....................................................................................... 97
Section VII. Share Changes and Shareholder Information ....................................... 115
Section VIII. Preferred Shares................................................................................... 122
Section IX. Bonds...................................................................................................... 123
Section X. Financial Statements ................................................................................ 124
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Documents Available for Reference
1. The financial statements signed and sealed by the head of the Company, the head in charge of
accounting work and the head of the accounting department (Accounting Officer).
2. The original copy of the Independent Auditor’s Report signed and sealed by the CPAs, as well as
sealed by the CPA firm.
3. The originals of all the Company’s announcements and documents which were disclosed during
the Reporting Period.
4. The annual report disclosed on other securities markets.
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Definitions
Item Definition
Company, Group, Haid Group Guangdong Haid Group Co., Limited
Board the board of directors of Guangdong Haid Group Co., Limited
Supervisory Committee the supervisory committee of Guangdong Haid Group Co., Limited
General Meeting of Shareholders the general meeting of shareholders of Guangdong Haid Group Co., Limited
Company Law the Company Law of the People’s Republic of China
Securities Law the Securities Law of the People’s Republic of China
Articles of Association the Articles of Association of Guangdong Haid Group Co., Limited
RMB Renminbi
reporting period, the period, the year the period from 1 January 2022 to 31 December 2022
last year, the same period of last year the period from 1 January 2021 to 31 December 2021
the end of the period 31 December 2022
the beginning of the period or the year 1 January 2022
CSRC China Securities Regulatory Commission
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Section II. Company Profile and Key Financial Indicators
I. Company profile
Stock name Haid Group Stock code 002311
Previous stock name (if any) N/A
Stock exchanges on which the
Shenzhen Stock Exchange
shares are listed
Chinese name of the Company 广东海大集团股份有限公司
Chinese abbreviation of the
海大集团
Company
English name of the Company
Guangdong Haid Group Co., Limited
(if any)
English abbreviation of the
HAID GROUP
Company (If any)
Legal representative of the
Hua Xue
Company
Room 701, Building 2, Haid Mansion, No. 42, Road 4, Wangbo, Nancun Town, Panyu Dist,
Registered address
Guangzhou, China
Postal code of registered
511445
address
Past changes of registered
The registered address remained unchanged during the reporting period.
address
Room 701, Building 2, Haid Mansion, No. 42, Road 4, Wangbo, Nancun Town, Panyu Dist,
Office address
Guangzhou, China
Postal code of office address 511445
Website of the Company www.haid.com.cn
Email address zqbgs@haid.com.cn
II. Contact persons and contact methods
Board Secretary Securities Affairs Representative
Name Zhijian Huang Jiewen Lu and Huafang Yang
Room 701, Building 2, Haid Mansion, No. Room 701, Building 2, Haid Mansion, No.
Correspondence address 42, Road 4, Wangbo, Nancun Town, Panyu 42, Road 4, Wangbo, Nancun Town, Panyu
Dist, Guangzhou, China Dist, Guangzhou, China
Telephone 8620-39388960 8620-39388960
Facsimile 8620-39388958 8620-39388958
Email address zqbgs@haid.com.cn zqbgs@haid.com.cn
III. Information disclosure and places for inspection
Stock exchange website where the Annual Report is Securities Times, China Securities Journal, Securities Daily, Shanghai
disclosed Securities News
Media and website where the Annual Report is
www.cninfo.com.cn
disclosed
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Places for inspection of the Company’s
Securities Department of the Company
Annual Report
IV. Change in registration
Unified social credit code No change
Change of principal activities since its
No change
listing (if any)
Change of the controlling shareholder (if
No change
any)
V. Other relevant information
CPA firm engaged by the Company
Name of the CPA firm Grant Thornton China (Special General Partnership)
CPA firm’s address 5th Floor, Scitech Palace 22 Jianguomen Wai Avenue, Chaoyang District, Beijing
Name of the signing certified
Wenyuan Guan and Shuxia Zhang
public accountants
Sponsors engaged by the Company to continuously perform its supervisory function during the reporting period
Applicable □ Not applicable
Name Office address Representative Period of supervision
The statutory period of
supervision for the listed
111 Fuhua First Road, Futian company was from April 2020
China Merchants Securities Co., Ziqiang Kang and Xiaoliang
Street, Futian District, to December 2021, and the
Ltd. Shen
Shenzhen period of supervision for the
raised funds was from January
2022 to July 2022
GF Securities Tower, 26 The period of supervision for
GF Securities Co., Ltd. Machang Road, Tianhe District, Jian Liu and Yuqing Zhang the raised funds is from July
Guangzhou 2022
Financial Advisors engaged by the Company to continuously perform its supervisory function during the reporting
period
□ Applicable Not applicable
VI. Major accounting data and financial indicators
Retrospective adjustment to or restatement of the accounting data for prior years by the Company
Yes □ No
Reasons for retrospective adjustment or restatement
Change of accounting policy
Increase/d
2022 2021 2020
ecrease
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for the
year as
compared
to the
prior year
Before Restated Restated Before Restated
Operating income 104,715,417,485. 85,998,559,748.7 86,091,961,539.1 60,323,862,405.9 60,323,862,405.9
21.63%
(RMB) 92 8 3 4 4
Net profit for the
year attributable to
shareholders of the 2,954,142,403.34 1,596,046,173.08 1,636,237,735.85 80.54% 2,522,730,419.35 2,522,730,419.35
parent company
(RMB)
Net profit for the
year attributable to
shareholders of the
parent company 2,880,122,890.31 1,519,412,737.99 1,559,604,300.76 84.67% 2,459,587,964.11 2,459,587,964.11
after deducting the
non-recurring gain
or loss (RMB)
Net cash flows from
operating activities 6,817,894,250.91 3,137,948,250.69 3,137,948,250.69 117.27% 485,259,232.03 485,259,232.03
(RMB)
Basic earnings per
share (RMB per 1.79 0.96 0.98 82.65% 1.60 1.60
share)
Diluted earnings per
share (RMB per 1.79 0.96 0.98 82.65% 1.60 1.60
share)
Rate of return on
equity on weighted 18.46% 11.46% 11.74% 6.72% 23.87% 23.87%
average basis
Increase/d
ecrease
as at the
end of
the year
As at the As at the end of 2021 As at the end of 2020
compared
end of 2022 to the end
of
the prior
year
Before Restated Restated Before Restated
44,237,781,732.3 35,648,579,800.0 35,695,097,401.9 27,526,958,371.1 27,526,958,371.1
Total assets (RMB) 23.93%
1 9 6 9 9
Total equity
attributable to
17,824,906,815.8 14,461,135,509.3 14,501,327,072.0 13,972,788,864.4 13,972,788,864.4
shareholders of the 22.92%
parent company 7 2 9 1 1
(RMB)
Reasons for change of accounting policy and correction of accounting error
In December 2021, the Ministry of Finance issued the Interpretation No. 15 for the Accounting Standards for
Business Enterprises (《 企 业 会 计 准 则 解 释 第 15 号 》) (CK [2021] No. 35) (hereinafter referred to as
“Interpretation No. 15”), which stipulates that where an enterprise sells products or by-products produced before
a fixed asset is ready for its intended use or in the course of research and development (hereinafter collectively
referred to as “Trial Sales”), it shall adopt the accounting treatments as stated in the Accounting Standard No. 14
for Business Enterprises—Revenue (《企业会计准则第 14 号——收入》) and the Accounting Standard No. 1
for Business Enterprises—Inventories (《企业会计准则第 1 号——存货》). These provisions are effective as
of 1 January 2022. The Company has made retrospective adjustments for the impact of the accounting treatments
for the aforementioned trial sales. For further information, see “III 38. Significant Changes in Accounting Policies
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and Accounting Estimates” in “Section X. Financial Statements”.
Whether the lower of the net profit for the year attributable to shareholders of the parent company before and after
deducting the non-recurring gain or loss was negative for the last three accounting years, and the latest independent
auditor’s report indicated that there was uncertainty about the Company’s ability to continue as a going concern
□ Yes No
Whether the lower of the net profit for the year attributable to shareholders of the parent company before and after
deducting the non-recurring gain or loss was negative
□ Yes No
VII. Differences in accounting data under domestic and overseas accounting standards
1. Differences between the net profit and net assets disclosed in accordance with international accounting standards
and China accounting standards in the financial report
□ Applicable Not applicable
There was no difference between the net profit and net assets disclosed in accordance with international accounting
standards and China accounting standards in the financial report during the reporting period.
2. Differences between the net profit and net assets disclosed in accordance with overseas accounting standards
and China accounting standards in the financial report
□ Applicable Not applicable
There was no difference between the net profit and net assets disclosed in accordance with overseas accounting
standards and China accounting standards in the financial report during the reporting period.
VIII. Key Financial Indicators by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating income 19,953,219,403.77 26,372,292,309.49 32,629,430,328.87 25,760,475,443.79
Net profit for the year
attributable to shareholders 200,704,938.91 717,825,968.76 1,183,217,063.14 852,394,432.53
of the parent company
Net profit for the year
attributable to shareholders
of the parent company after 184,262,785.31 720,846,597.66 1,175,028,164.93 799,985,342.41
deducting the non-recurring
gain or loss
Net cash flows from
-1,046,616,499.85 3,425,171,993.80 3,859,876,073.32 579,462,683.64
operating activities
Whether the above indicators or their aggregated amounts have any material difference with the respective
amounts as disclosed in the quarterly report or interim report
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□ Yes No
IX. Items and Amounts of Non-recurring Gains or Losses
Applicable □ Not applicable
Unit: RMB
Item Amount for 2022 Amount for 2021 Amount for 2020 Explanation
Gain or loss on disposal of non-
-45,840,354.94 -21,381,178.37 -8,506,037.63
current assets
Government grants charged to
current profit or loss (excluding
government grants consistently
given in the Company’s ordinary 125,600,697.83 91,417,497.06 123,628,058.53
course of business at fixed quotas
or amounts as per government’s
policies or standards)
Investment costs for acquisition of
subsidiaries, associates and joint
venture less than gains from the fair 812,610.97 40,510.51 1,749,131.53
value of identifiable net assets of
the investees
Except for the effective hedging
activities related to the Company's
ordinary activities, profit or loss
arising from changes in fair value
of financial assets held for trading
and financial liabilities held for 39,455,335.15 292.58
trading, and investment income
from disposal of financial assets
held for trading, financial liabilities
held for trading, and financial assets
available for sale
Reversal of provision for bad and
doubtful debt where accounts
6,167,665.26 11,769,732.86 3,118,886.26
receivable are individually tested
for impairment
Profits or losses from external
530,942.74 18,750.00
entrusted loans
Other non-operating incomes and
-34,643,762.69 12,478,800.92 -43,325,417.81
expenses, except for the above
Other gain or loss satisfied the
definition of non-recurring gain or 5,936,636.84 3,713,581.31
loss
Less: impact of Income tax 17,625,340.80 15,798,527.34 9,094,660.10
Less: impact of non-controlling
6,374,917.33 5,606,981.86 4,446,548.12
interests (net of tax)
Total 74,019,513.03 76,633,435.09 63,142,455.24 --
Particulars about other gain or loss that satisfied the definition of non-recurring gain or loss
□ Applicable Not applicable
The Company had no other gain or loss that satisfied the definition of non-recurring gain or loss.
Notes for the Company’s non-recurring gain or loss items as illustrated in the Explanatory Announcement on
Information Disclosure for Companies Offering Their Securities to the Public No.1 - Non-recurring Gain or Loss
(《公开发行证券的公司信息披露解释性公告第 1 号——非经常性损益》) defined as its recurring gain or
loss items
□ Applicable Not applicable
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No non-recurring gain or loss items as illustrated in the Explanatory Announcement on Information Disclosure
for Companies Offering Their Securities to the Public No.1 - Non-recurring Gain or Loss (《公开发行证券的公
司信息披露解释性公告第 1 号——非经常性损益》) were defined by the Company as its recurring gain or loss
items during the reporting period.
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Section III. Management Discussion and Analysis
I. Industry Situation during the reporting period
1. Basic situation and development stage of the industry
The breeding industry is related to the national economy and citizen livelihood. It is the pillar industry of the
agricultural and rural economy, the strategic industry that ensures food safety and quality of life for citizen, and
the key industry to comprehensively promote rural revitalization and accelerate agricultural and rural
modernization. As the core of animal husbandry, the breeding industry plays a role in linking the planting industry
and the food industry. With the promotion of consumption upgrading, more strict environmental protection, green
and high-quality and technological innovation, the trend of large-scale, intensive, and intelligent development of
livestock and poultry breeding has accelerated, and the agglomeration effect of technology, talent and other factor
resources has further been highlighted. At the same time, with the deepening of breeding scale-up and the
improvement of technology, as well as the improvement of the demand for food safety, green and quality, the
importance of upstream businesses around breeding industry including feed, seedling, animal healthcare et al are
becoming increasingly prominent. The competition in the industry is accelerating, the integration continues to
accelerate, and the degree of centralization is increasing.
2. The situation of the industry in 2022
In 2022, the feed industry and breeding industry experienced one bottoming pick-up process. In the first half of
the year, there was significant price rise of raw materials, leading to an increase production costs in breeding and
feed industry. At the same time, the weak consumption intensified the losses of breeding industry, forming the
situation of squeezing each other among the upstream, midstream, and downstream of feed industry. In the second
half of the year, breeding stock stopped cutting capacity , and the prices of products have started to rise, and the
profit of breeding industry improved to varying degrees, and the financial pressure of farmers has decreased. The
confidence in farmers have recovered with the increasing breeding stock and the enthusiasm for feeding. Both the
breeding industry and the feed industry have gradually recovered due to significantly less suppression of the
demand and the prices for feed products. However, due to the steep decline in consumer demand during the Spring
Festival, the circulation of farming products was broken, disrupting the pace of farmers' fish production, especially
for aquaculture which was supposed to be the peak period of fish production before the Spring Festival, and the
overall storage volume was relatively high.
More details as followings,
1. In terms of raw materials for bulk agricultural products, the prices fluctuated sharply due to the international
situation, abnormal weather, and other factors, resulting in overall high-cost performance. According to the data
from the Ministry of Agriculture and Rural Affairs, the annual average domestic price of corn is about 2,900
yuan/ton, maintaining the historical high. The annual domestic average price of wheat exceeds 3,300 yuan/ton,
which is the highest in the past three years. The price of domestic soybean meal has experienced twice rapid
increases throughout the year, rising from the peak of 3,700 yuan/ton at the beginning of the year to over 5,500
yuan/ton. The prices of rice, fish meal and other meal types increased in varying degrees. It was challenged to
inform in time and effectively to downstream farming industry under circumstance of rapid, significant, and
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widespread price increases in raw materials.
2. In terms of breeding industry: ① the profitability of poultry industry dropped in the first half of the year and
was recovered in the second half of the year. The African swine fever virus resulted in the shortage of pig
production, the poultry industry increased sharply driven by the substitution effect of poultry meat and price
dividend. From the second half of 2020 to the first half of 2022, there had been a long period of loss in the poultry
industry owing to the less impact of African swine fever virus, the high cost of poultry farming along with weak
end-consumption of poultry, as a result, and the production capacity was decreased in all links. In the second half
of the year, as production capacity decreased and end-consumption increased, the business of poultry farming
chain became profitable, and the cash-flow of farmers was repaired. However, due to high prices of seedling and
feed, and transportation concerns of policy, farmers were initially cautious about increasing their livestock stock.
The pace of poultry breeding and restocking is gradually accelerating with the increasing of the supply of poultry
seedlings in the later stage, as well as the enhancement of logistics certainty and other favorable factors. ② the
pig production had further recovered, and its price had fluctuated sharply. Throughout the year of 2022, 699.95
million pigs were sold, an increase of 28.67 million or 4.3% compared to the previous year. The annual pork
production was 55.41 million tons, an increase of 2.46 million tons or 4.6% compared to the previous year. At the
end of the year, there were 452.56 million pigs, an increase of 0.7% year-on-year. Among them, 43.9 million sows
can be bred, an increase of 1.4% year-on-year. The price of live pigs dropped first, and then went up from 12.29
yuan/kg in March to 27.09 yuan/kg in October with an average profit of over a thousand yuan per head, and
quickly back to 20.01 yuan/kg at the end of the year. Although the market fluctuates sharply, farmers still kept
good profit throughout the year owing to cost advantages, stable business, and high efficiency of production. ③
the trend of special aquaculture transformation in the aquaculture industry was promising, and the development
of aquatic products in household consumption went well. The consumption upgrading and rising costs have led to
the transformation from low gross profit species such as the four domestic fishes to special aquatic products such
as snakehead, California perch, white-leg shrimp and monodon shrimp. The breeding model has also been
explored and developed in the direction of specialization and high efficiency. Throughout the year, the prices of
grass carp, carp, crucian carp, and tilapia were low, and the enthusiasm of farmers dropped to the bottom. The
cultivation of grass carp and tilapia in Guangdong decreased by more than 30%. In terms of special aquaculture
products, the demand for most species such as grouper and yellow catfish was sluggish throughout the year due
to its highly depending on catering channels and circulation. Special aquatic products for household consumption,
such as South American white shrimp, snakehead, crayfish, etc., had high enthusiasm among farmers and
increased breeding capacity. However, the demand of fish at the end of the year suddenly decreased, resulting in
the short-term pressure of low price due to excessive storage, slowing down the overall pace of aquaculture. Until
later, when the fish consumption returned to normal, especially with the rapid rising demand of special fish, the
prices came back the norm.
3. The feed industry had also experienced a bottoming pick-up process, many small and medium-sized feed
enterprises faced further tightened cash-flow, worse debt ratio, and the catalyzing liquidation of production
capacity. In the first half of the year, the rapid increasing in raw material costs, huge losses in the breeding industry,
and the decreasing in market capacity led to exceptionally fierce industry competition. In the second half of the
year, the pressure has been reduced with the recovered cash-flow in the breeding industry, but small and medium-
sized feed manufacturers still faced enormous pressure. The domestic feed production increased slightly year-on-
year throughout 2022. According to the China Feed Industry Association, the total industrial feed production in
China was 302.234 million tons, a year-on-year increase of 3.7%, the significant decrease in growth compared to
2021. Among them, the total feed production in the first half of 2022 decreased by 4.3% year-on-year, with the
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increase mainly in the second half of the year. Due to continuous losses and financial problem in the first half of
the year in the livestock and poultry industry, farmers behaved more concerned about external factors such as feed
prices and sell on credit quotas. In the face of the rapidly deteriorating external environment, most feed enterprises
had reduced profitability to varying degrees, aiming to maintain market share and slow down the increase of feed
products. In the first half of the year, the weighted average price of national formula feed products increased by
6.9% year-on-year, far lower than the increase in main raw materials such as corn, wheat, and soybean meal. In
the second half of the year, with the recovery of profits in the aquaculture sector and the repair of cash-flow, the
profits of feed enterprises showed signs of improvement. Until November 2022, the weighted average price of
formula feed nationwide has increased by 13% year-on-year.
II. Main businesses of the company during the reporting period
The company laid out the industrial chain with the aim of providing overall services to animal farming. It has
formed a relatively complete aquatic product industrial chain, and the livestock and poultry industrial chain has
also gradually been constructed. The main products include high-quality animal seedlings, feed, animal healthcare
and pig breeding. The business operation has covered all business links such as R & D, designing, producing, sales
and service of various products. Specifically, the company's products include feeds for chickens, ducks, geese,
pigs, fish, shrimps, and crabs, breeding varieties such as pigs, shrimps, fish fry and chickens, as well as biological
products, veterinary medicine, vaccines, and other products required for producing livestock, poultry, and
aquaculture.
1. Main business and products
(1) The business of feed seedling and animal healthcare were interacted to form Gold Tringle
Feed business is the core foundation of the company. Based on fully understanding the needs of farmers, the
company has developed aquatic seedlings and animal healthcare products as supplements to facilitate the growth
of the feed business over ten years relentless efforts. After more than 20 years of development, the company's feed
business has accumulated a wide range of customer resources. Through providing customers with high-quality
valuable seedlings and cost-effective feed products in the market, relying on breeding services to drive the
development of vaccines, veterinary medicines, biological products and other animal healthcare products, the
company can better support customers to achieve breeding success through the full set of services, and help
customers realize that healthy farming at the same time, resulting in better controlling the breeding cost and
obtaining the competitive advantage in respect of end products.
(2) the patient development of breeding industry under the premise of stability
Based on the healthy development of feed, seedling and animal healthcare business, the company has formed the
core competitiveness in breeding industry, therefore in recent years, the company has begun the cultivate breeding
and food processing business. In terms of livestock and poultry, the company mainly focuses on pig breeding, and
promotes team capacities in poultry section. In terms of aquaculture, the company has started the cultivation and
processing of special aquatic products such as raw fish and shrimp by using its own high-quality seedlings, feed
and animal protection products. With the company's investment in aquatic product research and development and
the presentation of achievements, the company will gradually expand the cultivation of other high-quality fish and
shrimp products.
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2. Major business model
The company started its development from the feed business. Due to the abundant customer resources, based on
deeply understanding and excavating the needs of customers, the company continuously enriched and provided
customers with products and services. From feed to seedling breeding, veterinary medicine and vaccine product
R & D and manufacturing with higher technical and economic added value, the production and marketing scale
of high value-added products gradually expanded, and the proportion of income structure also increased year by
year. In recent years, through the extension of the industrial chain, the company has begun to gradually go further
into the industrial links such as breeding and food processing. The business model has been orderly developed and
extended with various industrial sectors supporting and developing each other.
(1) Feeds, seedlings and animal healthcare products business
With the increasing scale of feed business, the business management is mainly carried out with the business model
of centralized procurement of raw materials, distribution of production layout, sales of products accompanied with
technical services. The adoption of the centralized procurement model composed of group plus regional center is
combined with hedging and other methods for agricultural products and other bulk raw materials to achieve better
procurement cost advantages and risk control. In terms of production, owing to being closer to the market,
convenient in logistics and rich in resources, the company currently has feed factories distributed in nearly 100
cities in China and Southeast Asia. Distribution together with direct sales is the company's main sales model.
Focusing on localized marketing, the company has fully established distribution channels to efficiently solve
farmers' capital and transportation needs. Through service stations established in main production areas, the
technical service teams directly visit farmers to provide professional services for farming and have achieved
functional complementation and collaboration with sales organization and management teams in terms of sales
and service as well as channel and farmers. High-quality animal seedlings, biological Products, veterinary drugs
and vaccines become indispensable and constitute a package of integrated products and tools to provide services
for farmers.
The business models for seedlings and animal healthcare products reflect the distinctive features of research and
development with technology as the guide, differentiated products as the carrier, and technical support as the main
promotion strategy. Seedlings and animal healthcare products demand a long period of investment in research and
development. Technology accumulation needs better predictability and market insight, and strong originality of
products. To provide better service support, it is necessary to invest in long term and to build service teams with
advanced technology, knowledge, and experience. Therefore, a multi-level R&D system has been selected in the
business management model, supplemented by a production and process base with a higher starting point for
investment and more aggressive marketing strategy.
(2) Animal breeding business mode
The company's pig farming segment adopts both the "self-breeding plus farming community" model and
"company plus family farm" model. The "self-breeding plus farming community" model means that seedlings are
introduced and bred to create a farming system of grandparent - parent - commercial pig, under which reproduction
is separated from breeding to ensure that the farming process is safe and controllable. The "company plus family
farms" model means that the company provides family farmers with products for farming including seedlings,
feeds, and vaccines, and provides major technical supports for farming, in turn the farmers are responsible for
animal raising and transfer the end- products back to the company for sales.
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The aquatic animal farming and processing business has just started, and the primary aquatic products are fishes,
prawns and other specialty products. With its strengths in high-quality seedlings, feeds, animal healthcare and
technical advantages, the company carries out standardized and industrialized aquaculture, supplying sustainable,
healthy, traceable aquatic products (processed products) to large catering enterprises and fresh food platforms.
The company has set up professional functional departments including research institute, procurement center,
financial center, operation and development center, marketing center, process and information management center,
human resource center and Haid College at its headquarters, and set up multiple regional/business divisions
according to regions or business categories. Each professional center aims at acquiring technical and management
leadership in its field and provides technical and management standards as well as integrated and professional
management and service support for large regions/business divisions and various branches and subsidiaries. All
regional/business divisions build management platforms, give full play to four in one collaboration mechanism of
R&D, procurement, production and management, strengthen the ability to swiftly respond to the market, fully
explore market potential, and enhance refined management efficiency of all business sectors.
III. Analysis of Core Competitiveness
The products and services are centered on the needs of the animal production industry. Its core competitiveness is
represented by the capability of creating values for customers while carrying out the mission of changing rural
China. The comprehensive performance includes the rich and complete product configuration and industrial chain
layout, outstanding single product power, leading R & D ability, comprehensive breeding technology service
ability, fine management ability and perfect talent training and incentive growth system.
1. Diverse and complete product configurations with strong anti-risk capacity to provide
farmers with complete products and solutions covering the whole production process
The company possesses a relatively abundant and complete product configuration after years of technical
investment, the transformation of R & D achievements, product accumulation and production layout around the
breeding chain, basically covering the needs of the whole process of breeding from feed, functional feed, seedlings,
medicines, vaccines and biological products, and is still developing. Among feed products, the company is one of
the few domestic enterprises that can produce and distribute fish, shrimp, pig, table poultry, egg poultry feed
products at the same time. Its product line is complete with all kinds of highly competitive products and a high
market share in key markets. Product configuration capability requires strong customer demand insight ability, R
& D organization ability, achievement transformation ability, production base investment and construction ability,
processing organization ability, marketing promotion ability and technical service ability.
The technical content of various feed varieties is different, the gross profit rate, the market characteristics and
operation risks are also different. The company's product structure combination enables the company a higher
gross profit than the general level of the industry, and better controls the market operation risks from animal
diseases and imbalance between supply and demand, hence, the sales revenue of feed products of the company is
stable and maintains a rapid growth rate far higher than the growth rate of the industry.
Over the years, the company has orderly arranged high-quality aquatic animal seedlings, aquatic animal protection
products, livestock and poultry vaccines, veterinary drugs, livestock and poultry animal protection products, pig
breeding, aquatic animal farming and other businesses. The core technology in the industrial chain have gradually
obtained the advantages of technology, industrial layout and industrial synergy, cultivating more new business
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growth and profit growth points for the company, and further amplifying the multiplier effect of the industrial
chain and laying good foundation for building comparative competitive advantage.
2. Distinct and excellent product power is the most important competitive advantage of the
company
All series of products of the company are committed to building product power significantly ahead of competitors
and put great efforts to strengthen the explicit expression of product power. High-quality products with high
pricing have obvious advantages of ultimately better animal survival rate, growth effect and growth efficiency,
and the brand effect is prominent. Based on then leading production efficiency, the pricing of terminal products is
close to the pricing of competitors' products, pursuing outstanding product cost performance. With the support of
farmers, the overall benefits of the company are significantly higher than those of similar products. In the case of
the declining aquaculture benefits， the whole industry is at a loss, however, our customers only loss less or even
no loss.
The embodiment of product power needs the support of professional abilities within the company including the
R&D ability of animal nutrition and raw material utilization, the formula technology ability of products, the value
procurement ability of raw materials, efficient internal operation ability and other professional abilities
indispensable, for example, the support of value purchasing capacity. The company's procurement team has
outstanding professional capacity. The team is young and specialized. The division of labor is carried out according
to the classification of raw materials. The industry perspective is broad, and the amount of information collection
and analysis is large. It can track, study and judge the market trend of large raw materials at home and abroad in
real- time, and use futures tools to hedge bulk raw materials, and effectively control the price risk and financial
risk of procurement. The team finds out many purchasing opportunities of raw materials with their outstanding
purchasing capacity, making the cost advantage of feed products and raw material trade possible. The company is
the first enterprise in the industry to successfully set up centralized procurement, with obvious advantages in scale
procurement. Due to its rich experience in the application of spot, futures, options and other procurement tools,
the application method is also relatively flexible. Long term value procurement and risk position management are
also conducive to the company's acquisition of procurement cost advantages.
Another part is the company's efficient operation ability. By promoting the implementation of management
software such as SAP, EPS and business sharing system, the company has a strong information system, and its
internal operation is process oriented, standardized and data based. The function of digitization is to find out
efficient and energy-saving operation methods by comparing the big data of each subsidiary company. The
function of process and standardization is to greatly improve the internal replicability. The middle office
management mechanism enables the production, R&D, procurement and manpower to respond to the market
quickly and match the needs of the market and customers in a more flexible, fast and efficient way. Efficient
operation capability has become an important support for effectively organizing the professional production of
various products.
3. Technology R&D is the professional support of product creation, the foundation and
driving force of the company's development, and the core advantage of the company
At the beginning of its establishment, the company established the research center to build an industry-leading
R&D system of the whole industry chain including breeding, nutrition, health, breeding and food. With the
increasing of investment in application technology, the company has focused on strengthening the technical
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platform construction of each business module in the industrial chain, forming a three-level R&D system from
platform technology research to application technology development to system solution application. The company
promotes the rapid transformation and application demonstration of scientific and technological achievements
through the effective connection of the three-level R&D system and the operation mechanism of "Research
Institute plus subsidiary company". The company carries out research on basic, forward-looking and key common
problems in seven R&D directions: animal genetics and breeding, animal nutrition and feed, animal medicine and
biopharmaceutical, microbial engineering, biochemical industry, protein engineering and healthy breeding,
constantly improves the three-level R&D system, and comprehensively and effectively supports, drives and serves
the needs of the rapid development of the whole industrial chain of the group.
The company has rich technical research reserves, has the R&D team of more than 3,300 people, and put huge
investment in R&D every year. The R&D personnel include talents from animal nutrition, veterinary, breeding,
breeding mode, bioengineering, biochemistry, machinery and other disciplines. The transformation speed of R&D
results is fast, the investment supporting strategy can be implemented clearly and quickly, and the product
allocation ability of the company is strong.
For example, for feed formula technology, through more than 20 years of continuous research and development,
the company has established a huge animal nutrition demand database and stored a variety of raw material formula
technology. Every year, thousands of groups of comparative experimental results are added to the animal core
nutrition demand and raw material utilization database, to transform the technology into productivity. Therefore,
the company has strong ability to organize and continuously optimize the product formula and strong adaptability.
It can quickly adjust the formula when the price of raw materials fluctuates, so as to obtain cost competitive
advantage.
The company's technical service marketing team, who knows the technology and is familiar with the products,
can go into pond and farm to understand the breeding situation in real- time. Therefore, the company has detailed
data sources for end-consumption habits, feed breeding effect, disease prevention, breeding mode and breeding
demand, can accurately fulfill the needs of farmers and put forward clear technical requirements for product design,
Support the company's technical resources to fully focus on the core needs of customers.
By providing farmers with complete breeding services such as seedling, breeding technology, disease prevention,
breeding mode, health and environmental protection, it provides a strong support for the development of the
company's core business products of seedling, feed and animal protection. At the same time, the development of
business provides a deeper foundation for R&D and technological innovation and lays a more solid foundation for
the further development of the industry.
4. The comprehensive breeding technology service system is an important starting point for
the company to coordinate the product chain, create value for customers, continuously obtain
new customers and improve customer viscosity
In 2006, the company took the lead in providing comprehensive technical services to farmers in the industry and
established the company as a service-oriented enterprise and an enterprise providing overall breeding services to
farmers. The company provides farmers with products and technical service support in the whole breeding process,
such as seedling stocking mode - environmental control - epidemic prevention and control - feed - market
information - financial support, to ensure that farmers can use the most advanced breeding technology to guarantee
the success and profitability of farmers. The company has more than 9000 experienced and passionate technical
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service teams in the industry; And accumulate a variety of advanced breeding modes in combination with local
characteristics; There are hundreds of highly efficient service stations in intensive breeding areas across the
country, which can provide technical services for tens of thousands of farmers at the same time. The company's
relatively complete service system in the industry can give full play to the advantages of product power and
provide the whole process technical service of breeding, which can effectively enlarge the income of customers
and increase the loyalty of customers.
The company's farming technical service started from aquaculture service. After more than ten years of talent team
and platform construction, the process and concept of aquaculture technical service system have penetrated into
all links of products, technology, R & D, market and operation, driving the development of the company's aquatic
feed and animal protection business, highlighting the effect, and the process and idea have been gradually
promoted to poultry breeding and pig breeding, In recent years, the company has achieved remarkable results in
promoting the development of livestock and poultry business by setting up livestock and poultry service stations.
Comprehensive breeding technology service has become an important brand label of the company and an
important starting point for the company to create value for customers, obtain and keep customers.
5. Continue to build an excellent operation and management team, fine management ability
and promote the sustainable development of the company
The company has the team with consistent faith, diligent and professional management. Most of the team members
graduated from agricultural colleges and universities and have strong professional background. The management
has the deep and comprehensive understanding of the feed industry and has accumulated rich practical experience.
They have a grand and unified vision and goal, strong industry insight, leadership and execution, can adapt to the
rapid change of feed industry and the company's higher and higher management requirements from their
educational background, knowledge structure industry experience and age.
In recent years, the industry is in an era of drastic changes. Great changes have taken place in the development of
the industry, the scale of farmers and the needs of customers. Emerging industries such as rural finance and Internet
plus also continue to impact the industry, promote the reform and innovation of the industry, and create a corporate
mechanism and culture that can quickly respond to changes, that is, the collective learning ability that enables the
company to continuously create value for customers, which is the foundation of the company to keep a sustainable
competitive advantage.
The company has developed from aquatic premix to various aquatic compound feeds such as freshwater fish,
marine fish and shrimp, from the core advantages of aquatic feed to the advantages of livestock and poultry feed,
from simple feed management to comprehensive service capabilities such as providing breeding, animal protection
and breeding technical services for farmers, and has experienced many expansion from South China to central
China, East China, North China, Southeast Asia and South America, The process of becoming stronger and bigger
and leading the industry depends on the collective learning ability of the company's management and all employees.
This ability and culture keep the company in learning progress and growing in learning.
6.The perfect talent training system and effective incentive mechanism have laid the
foundation for the sustainable and stable development of the company
The company continues to promote the establishment of an organizational atmosphere for talent training. Through
Haida college and the human resources center, the company has built a three-way training system covering the
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whole career of employees, the whole business of the company and the whole post of business, built a learning
ecosystem combining universal education and elite training, matched with standardized skill training at all levels,
and realized a standardized rapid endogenous talent training and output mechanism. With the continuous
development of the company's business and the deep extension of the industrial layout, a number of young,
enthusiastic, energetic young cadres with new ideas and new era labels have become the mainstay of the company's
middle-level management and core technical backbone. Through the establishment of school enterprise
cooperation and the integration of industry and education, the company attracts a large number of excellent college
students to join the company every year, and establishs a reserve talent team to support the sustainable
development of the company. Through the establishment of China Modern Fishery Vocational Education Group
and the establishment of Rural Revitalization college, a large number of new farmers are attracted to participate
in the construction of technical and industrial talents. The establishment of internal and external talent system has
realized the talent system pattern of internal talent training and external industry empowerment and driven the
overall progress of the industry.
Since its listing, the company has launched multi-stage equity incentive plan and employee stock ownership plan
for core managers and technical members at different levels, established a unified incentive mechanism of long-
term and short-term incentives and constraints consistent with the interests of all shareholders, and ensured the
implementation of the company's development strategy and business objectives by setting performance objectives
and incentives, ensuring the sustainable and stable development of the company.
IV. Main business analysis
1.Overview
The company has sufficient understanding and judgment on the changes in the future industry, and has always
been prepared for strategic layout, competitive differentiation, and internal capacity building. Throughout 2022,
even though there were adverse factors such as the uncertainty of the macro environment and the phased deep
losses in downstream breeding have brought enormous pressure to the entire feed industry, the company has
responded promptly with significant changes in its situations and pursued more stable and high-quality
development in an uncertain environment. While waiting for marginal improvement signals from the macro
environment, downstream bredding, and end-consumption, the company strengthens core competitive advantages
and team development, enhance organizational management capabilities and internal efficiency, and the
innovation to create differentiated competitive advantages.
During the reporting period, the company achieved the revenue of 104.715 billion yuan, a year-on-year increase
of 21.63%. The net profit to shareholders of the listed company was 2.954 billion yuan, an increase of 80.54%
year-on-year.
Business Overview
1. Feed sales have increased against the adverse trend, further increasing its market share
During the reporting period, the company achieved feed sales of 21.65 million tons (including 1.41 million tons
of internal aquaculture consumption), a year-on-year increase of 10%, and further increased its market share. ①
Aquatic feed achieved external sales of 5.12 million tons, a year-on-year increase of 10%, ranking first in the
world in terms of sales volume. Among them, special aquatic feed sales (shrimp, crab, and high-end fish feed)
increased by 23% year-on-year, mainly due to the excellent product strength of the company's aquatic feed,
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comprehensive aquaculture solutions, customer-oriented service system, and dual empowerment of seedlings and
animal protection. The sales of common fish remained flat, mainly due to the sluggish market of ordinary fish
during the reporting period and the low interest of farmers to feed ordinary fish. ② Poultry feed exceeded the sales
threshold of 10 million tons, achieving an external sales volume of 10.02 million tons, a year-on-year increase of
6%, and achieving a counter trend growth. The company subdivides the breeding varieties of poultry, seeking
technological breakthroughs for each variety, creating differentiated products, and improving internal efficiency
to expand market share with more competitive, stable, and reliable products. Simultaneously, the company carried
out cooperation with large-scale breeding factories and one-stop breeding companies through various flexible
cooperation methods. ③ Pig feed achieved an external sales volume of 4.94 million tons, a year-on-year increase
of 7%, and the national production capacity layout of pig feed has basically been achieved. With strong
technological research and development capabilities, pig feed research and development has made continuous
progress, and the products have good competitiveness. Based on its own pig farming business, the company has
started to build a service system and team for pig feed, providing technical support for farmers. ④ the company's
ruminant materials are steadily advancing according to the strategic plan, and the production capacity layout is
gradually implemented. In 2022, sales had achieved more than double growth.
2. The business of seedling and animal healthcare products continues to grow, and the company’s reputation
continues to improve
During the reporting period, the company's seedling business achieved the revenue of approximately 1.1 billion
yuan, especially shrimp seedling revenue increasing by 26% and gross profit margin approaching 60%. The
company has global leading technological advantages, resource reserves, and industrialization scale. The
independently developed aquatic seedlings include five new national varieties, including Fanna Litopenaeus
"Haixingnong 2" and "Changzhu Hybrid Mandarin Fish". The annual sales of shrimp and fish fry rank first in the
world with core technological advantages and outstanding market effects. The company has established high-level
breeding research team combining with Experts + Doctors + Masters + professional technical personnel,
possessing globally leading research and development technologies for shrimp and fish fry, and taking the lead in
building the commercial seedling industry system that integrates breeding and marketing.
In 2022, the company's animal healthcare products business achieved the revenue of 1.045 billion yuan, a year-
on-year increase of 17.05%. In terms of aquatic animal husbandry, the upgrading of aquaculture varieties, the
concept of prevention ahead treatment, and the increasing demand for green, environmentally friendly, and healthy
aquaculture products, the reasonable investment in animal husbandry can effectively improve aquaculture
efficiency and success rate. The demand for high-quality aquatic animal husbandry by farmers continues to
increase. The high-quality aquatic animal husbandry products can not only reduce the risk of diseases in
aquaculture products, at the same time, but also improve the extra value of health and safety of aquaculture
products. The company's aquatic animal healthcare products are led by distinctive technology and research and
development with a complete service system and mature breeding plans, and have strong market competitiveness
and excellent market reputation. In terms of livestock and poultry healthcare, the company has significantly
promoted the development of livestock and poultry business through the establishment of livestock and poultry
protection service stations in recent years, becoming an important platform to tightly connect with customers. A
number of livestock and poultry animal protection service stations has begun to take shape in 2022. After
accumulating certain experience, the company will summarize, optimize and improve the ability of the
management team, exploring the upgrading of the operating service system of livestock and poultry animal
protection service stations, and continuously improving their competitive advantages.
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3. Expanding downstream of aquaculture on the basis of specialization
Approximately 3.2 million pigs were sold throughout the year, a year-on-year increase of about 60%, benefiting
from the increase of pig prices in the second half of the year and achieving profitability throughout the year. The
company continues to focus on improving the capabilities of the pig breeding team and the breeding system. The
team's management and professional abilities have been further improved, and multiple indicators such as survival
rate and breeding efficiency are at leading position of the industry. At the same time, with the gradual formation
of its own breeding system, combined with the research of feed and the scale advantages, the breeding cost has
made significant progress. In the future, the company will continue to improve breeding expertise, optimize
aquaculture costs, create the competitive advantages over the industry, and take effective measures to reduce profit
volatility based on the actual operation of the pig market. With the continuous expansion of the competitive
advantage, the value of pig business is becoming increasingly apparent. In addition to support the efficient
operation of the business itself, it can also create technical service system for pig feed which provides breeding
solutions, and service personnel with high professional literacy and rich breeding experience. The advantages of
the aquatic industry in the company are obvious. Currently, the company mainly cultivates special aquatic products
such as raw fish and shrimp and achieved a revenue of approximately 1.1 billion yuan during the reporting period.
Among them, industrialized shrimp farming, through scientific design, circulating water system, biological feed
technology, and strict biological prevention and control, has advantages such as safety, controllability, and stable
quality compared to traditional farming models. In the future, the company will continue to focus on aquatic
species with advantages and less breeding risks. With high-quality feed, seedling, and animal healthcare three
body empowerment, refined management, and professional operation, the scale of breeding will be appropriately
expanded based on the developing professional team.
4. Professional procurement capability driving the development of trade business
During the reporting period, the company showed significant advantages in large-scale procurement, and the
procurement team had outstanding professional capabilities. They used various procurement tools such as trade,
futures, and options for inventory management and risk management to reduce procurement risks.
Building modern agricultural industry system and enhancing own competitiveness
1.Technology driving the development, talent and R&D fulfiling high-tech agriculture and animal husbandry
enterprises
The company is the high-tech agricultural and animal husbandry enterprise with technology as its core
competitiveness. In the fields of feed nutrition and aquatic breeding, the company's research and development
system, innovative achievements, and technological reserves are all in the leading position in the world.
Throughout 2022, the company invested 711 million yuan in research and development, a year-on-year increase
of 17.56%. The company has established three-level R&D system, first level R&D system aimed at the future
development, solving potential problems, and reserving sustainable development and innovation capabilities. The
secondary R&D system is market-oriented, reduces product costs, and closely follows market demand. The third
level R&D system directly faces end-consumers, improving their efficiency and creating value for them. The
company has laid out seven research directions, including animal genetics and breeding, animal nutrition and feed,
animal medicine and biopharmaceuticals, microbial engineering, biochemistry, protein engineering, and healthy
aquaculture. The company focuses on the revision and improvement of animal nutrition and feed formula
databases, the development and application of feed resources, especially protein resources, the treatment
technology of raw material toxins, the development and application of precise nutrition, green environmental
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protection, non-antibiotic feed, functional feed and feed additives et al. The focus of the breeding is to explore a
healthy breeding model for livestock and poultry which is suitable for small-scale intensive breeding. In terms of
breeding, we focus on the development of prawn, tilapia, bream, mandarin fish, raw fish et al. In terms of biological
products, the focus is on disease prevention and control technologies for livestock, poultry, and aquatic animals,
as well as the development of vaccines, testing kits, and disinfectant products.
2. Focusing on informatization, automation, and intelligence construction to improve production efficiency
Enhancing internal production and operation capabilities and creating an automated and intelligent production
system was to cooperate with the company's market development and production capacity supply. As a strong part
of the agricultural husbandry industry chain, the feed industry is developing towards mechanical automation
production and intelligent manufacturing. With the rapid development of the company's scale, the production
entities of the company have increased, the production areas have expanded synchronously, the feed varieties are
fully covered, and the product series are numerous. The operational efficiency of each production entity has put
forward higher requirements for the company's process technology, equipment management, and production
operation efficiency. In addition, in recent years, the market development in the same region by different market
teams have directly led to short-term expansion of the company's production capacity and the decrease in capacity
utilization. During the reporting period, the company focused on the construction of a smart supply chain,
continuously optimizing all aspects of the supply chain to gradually achieve standardization, streamline, lean,
informatization, automation, and intelligence of the supply chain, solving the main contradictions of low-capacity
utilization rate and tight market supply, different market team in the same market and the waste of production
capacity in some existing production entities. The company utilizes modern mechanical equipment and
technological means to pilot unmanned raw material supply, rationalized inventory, automated and flexible
product production, and precise and informatization of customer demands. The company will validate existing
methodologies, solidify, and optimize technical means, and continuously improve the management level and
operational efficiency of various production entities in different product types and regions to enhance internal
production and operation capabilities and improve capacity utilization to meet the company's market expansion
supply and improve asset operation efficiency.
When the fierce competition comes, it will inevitably accelerate the elimination of backward production capacity,
and the industry's concentration pace will rapidly increase. The company is confident in achieving the strategic
goal of 40- million-ton feed in the future and will fully leverage the advantages of the entire industry to forge
ahead on the path of accelerating the construction of an agricultural power.
2. Revenue and cost
(1) Components of operating income
Unit: RMB
2022 2021
% of % of Increase/decrease
Amount operating Amount operating
income income
Total operating
104,715,417,485.92 100% 86,091,961,539.13 100% 21.63%
income
By industry
Feed industry 92,259,788,044.27 88.11% 77,369,298,601.07 89.87% 19.25%
Farming industry 12,455,629,441.65 11.89% 8,722,662,938.06 10.13% 42.80%
26
Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
2022 2021
% of % of Increase/decrease
Amount operating Amount operating
income income
By product
Feed 84,892,419,774.07 81.07% 69,825,872,761.95 81.11% 21.58%
Animal healthcare
1,044,659,775.65 1.00% 892,463,422.53 1.04% 17.05%
products
Agricultural
12,455,629,441.65 11.89% 8,722,662,938.06 10.13% 42.80%
products
Trade business 6,167,203,348.23 5.89% 6,389,973,548.31 7.42% -3.49%
Other businesses 155,505,146.32 0.15% 260,988,868.28 0.30% -40.42%
By region
Southern China 63,200,713,601.52 60.35% 55,241,351,415.93 64.17% 14.41%
Eastern China 14,161,170,693.21 13.52% 10,648,037,268.13 12.37% 32.99%
Northern China 32,620,746,322.29 31.15% 26,902,001,964.34 31.25% 21.26%
Central China 28,901,065,227.88 27.60% 20,310,973,692.55 23.59% 42.29%
Overseas 8,578,402,746.94 8.19% 7,058,846,596.73 8.20% 21.53%
Combined offset -42,746,681,105.92 -40.82% -34,069,249,398.55 -39.57% 25.47%
(2) Industries, products, regions or sales models accounting for over 10% of operating income or operating
profit of the Company
Applicable □ Not applicable
Unit: RMB
Increase/dec
Increase/dec
rease of Increase/decre
rease of
operating ase
gross profit
income as of operating
margin as
Gross compared to costs
compared to
Operating income Operating costs profit the as compared
the
margin correspondi to the
correspondi
ng corresponding
ng period of
period of period of the
the prior
the prior prior year
year
year
By industry
Feed industry 92,259,788,044.27 84,648,668,711.60 8.25% 19.25% 20.69% -1.10%
Farming industry 12,455,629,441.65 10,354,911,388.63 16.87% 42.80% 19.65% 16.08%
By product
Feed 84,892,419,774.07 78,060,758,981.95 8.05% 21.58% 22.96% -1.03%
Animal healthcare
1,044,659,775.65 535,805,808.94 48.71% 17.05% 22.15% -2.14%
products
Agricultural
12,455,629,441.65 10,354,911,388.63 16.87% 42.80% 19.65% 16.08%
products
Trade business 6,167,203,348.23 6,023,530,323.85 2.33% -3.49% -1.75% -1.72%
By region
Southern China 63,200,713,601.52 57,350,267,529.78 9.26% 14.41% 13.14% 1.02%
Eastern China 14,161,170,693.21 13,330,756,976.41 5.86% 32.99% 34.25% -0.88%
Northern China 32,620,746,322.29 31,523,115,524.69 3.36% 21.26% 21.89% -0.50%
Central China 28,901,065,227.88 27,301,990,389.82 5.53% 42.29% 39.22% 2.08%
Under the circumstances that the statistics specification for the Company’s principal operations data experienced
adjustment in the reporting period, the principal operations data upon adjustment of the statistics specification at
27
Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
the end of the reporting period in the latest year
□ Applicable Not applicable
(3) Whether revenue from sales in kind is higher than revenue from services
Yes □ No
Increase/
By industry Item Unit 2022 2021
decrease
Sales volume (including internal 10,000
2,165.11 1,963.01 10.29%
farming volume) tons
Feed 10,000
Production output 2,179.47 1,968.72 10.70%
industry tons
10,000t
Inventories 38.70 24.34 58.99%
ons
Explanation on why the related data varied by more than 30%
Applicable □ Not applicable
The Company’s inventories increased 58.99% during the reporting period compared with last year, primarily
driven by the expansion of the Company's operating scale.
(4) Performance of material sales contracts and material procurement contracts of the Company during
the reporting period
□ Applicable Not applicable
(5) Composition of operating costs
Unit: RMB
2022 2021
By industry Item % of total % of total Increase/decrease
Amount operating Amount operating
costs costs
Feed
Material costs 81,348,581,533.59 96.10% 66,949,873,406.58 95.45% 21.51%
industry
Feed
Labor costs 901,705,904.44 1.07% 811,822,422.69 1.16% 11.07%
industry
Feed Manufacturing
2,205,869,130.50 2.61% 2,125,642,816.64 3.03% 3.77%
industry expenses
Contract
Feed
performance 163,938,546.21 0.19% 168,291,264.44 0.24% -2.59%
industry
costs
Feed
Others 28,573,596.86 0.03% 83,020,525.57 0.12% -65.58%
industry
Total of feed industry 84,648,668,711.60 100.00% 70,138,650,435.92 100.00% 20.69%
Farming
Material costs 8,602,722,539.07 83.08% 7,392,664,891.74 85.42% 16.37%
industry
Farming
Labor costs 1,094,517,161.31 10.57% 790,248,820.86 9.13% 38.50%
industry
Farming Manufacturing
629,048,626.34 6.07% 448,867,372.92 5.19% 40.14%
industry expenses
Contract
Farming
performance 28,623,061.91 0.28% 22,438,815.33 0.26% 27.56%
industry
costs
28
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Total of farming industry 10,354,911,388.63 100.00% 8,654,219,900.85 100.00% 19.65%
Unit: RMB
2022 2021
% of total % of total Increase/dec
By product Item
Amount operating Amount operating rease
costs costs
Feed Material costs 74,869,360,421.56 95.91% 60,455,275,979.29 95.23% 23.84%
Feed Labor costs 874,421,190.94 1.12% 785,254,553.85 1.24% 11.36%
Manufacturing
Feed 2,172,776,439.83 2.78% 2,093,425,159.76 3.30% 3.79%
expenses
Contract
Feed 144,200,929.62 0.18% 151,888,871.26 0.24% -5.06%
performance costs
Total feed 78,060,758,981.95 100.00% 63,485,844,564.16 100.00% 22.96%
Animal
healthcare Material costs 455,690,788.17 85.05% 363,472,970.68 82.86% 25.37%
products
Animal
healthcare Labor costs 27,284,713.51 5.09% 26,567,868.84 6.06% 2.70%
products
Animal
Manufacturing
healthcare 33,092,690.67 6.18% 32,217,656.88 7.34% 2.72%
expenses
products
Animal
Contract
healthcare 19,737,616.59 3.68% 16,402,393.18 3.74% 20.33%
performance costs
products
Total animal healthcare products 535,805,808.94 100.00% 438,660,889.58 100.00% 22.15%
Agricultural
Material costs 8,602,722,539.07 83.08% 7,392,664,891.74 85.42% 16.37%
products
Agricultural
Labor costs 1,094,517,161.31 10.57% 790,248,820.86 9.13% 38.50%
products
Agricultural Manufacturing
629,048,626.34 6.07% 448,867,372.92 5.19% 40.14%
products expenses
Agricultural Contract
28,623,061.91 0.28% 22,438,815.33 0.26% 27.56%
products performance costs
Total agricultural products 10,354,911,388.63 100.00% 8,654,219,900.85 100.00% 19.65%
Trade
Sales costs 6,023,530,323.85 100.00% 6,131,124,456.61 100.00% -1.75%
business
Other
Sales costs 28,573,596.86 100.00% 83,020,525.57 100.00% -65.58%
businesses
Notes
None
(6) Change of scope of consolidation during the reporting period
Yes □ No
During the year, the scope of consolidation included 528 subsidiaries, increasing by 50 and reducing by 20 as
compared with the last year. For details, please refer to the Note "VI. Change in Consolidation Scope" and the
Note "VII. Interests in Other Entities" in Section X “Financial Statements".
29
Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
(7) Significant change in or adjustment of the businesses, products or services of the Company during the
reporting period
□ Applicable Not applicable
(8) Sales to major customers and major suppliers
Sales to major customers of the Company
Total sales to top 5 customers (RMB) 1,810,005,058.86
Total sales to top 5 customers as a percentage of the total sales
1.73%
for the year
Sales to top 5 customers who are related parties as a percentage
0.00%
of the total sales for the year
Information on top 5 customers of the Company
As a percentage
No. Name of customer Sales (RMB) of the total sales
for the year (%)
1 No. 1 421,365,186.02 0.40%
2 No. 2 404,227,525.25 0.39%
3 No. 3 343,221,269.73 0.33%
4 No. 4 323,669,974.81 0.31%
5 No. 5 317,521,103.05 0.30%
Total -- 1,810,005,058.86 1.73%
Other explanation of major customers
Applicable □ Not applicable
The top five customers of the Company are mainly customers of raw materials and poultry feed. The top five
customers have no related relationship with the Company. The Company’s directors, supervisors, senior
management, core technical personnel, shareholders holding more than 5% of shares, actual controller and other
related parties do not have direct or indirect interest in the major customers. The top five customers accounted for
1.73% of total annual sales. The Company’s sales revenue does not depend on single or top five customers.
Major suppliers of the Company
Total purchases from top 5 suppliers (RMB) 10,179,148,619.52
Total purchases from top 5 suppliers as a percentage of the total
10.97%
purchases for the year
Total purchases from top 5 suppliers who are related parties as
0.00%
a percentage of the total purchases for the year
Information on top 5 suppliers of the Company
As a percentage of
No. Name of supplier Purchases (RMB) the total purchases
for the year (%)
1 No. 1 3,254,719,697.03 3.51%
2 No. 2 2,221,057,408.99 2.39%
3 No. 3 1,625,131,068.88 1.75%
4 No. 4 1,564,252,054.49 1.68%
5 No. 5 1,513,988,390.13 1.63%
Total -- 10,179,148,619.52 10.97%
30
Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Other explanation of major suppliers
Applicable □ Not applicable
The top five suppliers of the Company have no related relationship with the Company. The Company’s directors,
supervisors, senior management, core technical personnel, shareholders holding more than 5% of shares, actual
controller and other related parties do not have direct or indirect interest in the major suppliers. The top five
suppliers accounted for 10.97% of total annual purchases. The Company’s purchases do not depend on single or
top five suppliers.
3. Expenses
Unit: RMB
Increase/
2022 2021 Reasons for material changes
decrease
Mainly due to the expansion of the
Selling and Company's operating scale, and the
1,980,987,068.23 1,808,249,264.31 9.55%
distribution expenses increase in personnel and their
remunerations
Mainly due to the expansion of the
General and Company's operating scale, the
administrative 2,583,815,226.76 2,228,521,838.59 15.94% increase in personnel and their
expenses remunerations, and the increase in
office expenses
Mainly due to the expansion of the
Company's operating scale, and the
Financial expenses 596,764,082.61 402,888,653.32 48.12%
increased interest on acceptance notes
issued for raw material suppliers
Research and Mainly due to the increase in R&D
711,235,490.13 605,020,192.04 17.56%
development expenses personnel and their remunerations
4. Research and development investments
Applicable □ Not applicable
Name of major R&D Expected impact on the
Purpose Progress Specific objectives
project Company
The verification test for To develop functional
To drive the
the effectiveness of mixed animal feeds for
advancement of the
dozens of formulas in white-leg shrimp that
animal husbandry
The development of the simulated market can be commercially
industry by the
the specified animal winter shed animal promoted to address
The development of optimization of animal
feed for white-leg husbandry conditions the shortcomings of
functional animal feeds feed products and raise
shrimp for wintering has been carried out. In slow growth and longer
the influence of the
period addition, the pilot test animal husbandry
Company's products on
has been conducted on period of white-leg
the industrial
the terminal market of shrimp for wintering
improvement
animal husbandry. period
The consumption of
The appropriate
fish meals can be
additive amounts of
reduced. The raw
new protein sources To significantly reduce
The effectiveness materials for animal
have been determined. the costs of animal
appraisal and feeds can be more
With the use of feeds and achieve
application and diversified and
The development of crystalline amino acids, better growth
promotion for the environmentally
new protein sources taurine, performance, stronger
replacement of fish friendly. Meanwhile,
immunopotentiator, immunity and
meal with new protein the operation costs of
and enzymic resistance to stress for
sources the Company can be
preparations, the shrimps
significantly decreased,
results have been
thus increasing the
improved.
competitiveness of
31
Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Name of major R&D Expected impact on the
Purpose Progress Specific objectives
project Company
shrimp feed products
and creating additional
value for customers.
The accurate nutrition To ensure more The costs of the animal
demand for shrimps in accurate nutrition of feeds can be
multiple animal shrimps, save costs of significantly reduced
husbandry modes animal feeds, avoid and the animal
(higher-place pond, wastes of animal feeds, husbandry costs for
The establishment and earth dike, shed, and protect the farmers can be
maintenance of the industrial animal environment, guarantee magnificently
Targeted nutrition
targeted nutrition husbandry) at different the more complete decreased. The growth
database for shrimps phases (white water, digestion and performance for
winter shed, etc.) and absorption of animal shrimps can be higher,
under different animal feeds for shrimps, and thus driving the green
husbandry significantly improve development of the
environments (salinity, the growth shrimp farming
temperature, etc.) performance industry.
To choose raw
materials that are easier
to digest and absorb so
that the gastrointestinal
tract of piglets can
better shred and digest.
As a result, the piglets
The research on the
can be healthier and of
nutrition value
higher survival rate due The good quality of
The establishment of evaluation of different
to the all-around and creep feeds and nursing
the nutrition system of raw materials, nutrition
Targeted nutrition balanced nutrition. In feeds can be created,
the creep feeds and demand, feeding
addition, the piglets thus making it the
nursing feeds modes, and feed
can have better industrial benchmark.
processing has been
intestinal development
completed.
and less diarrhea. The
animal feeds can be
better chewed to make
the nutrition absorption
better and more
balanced to make the
piglets grow faster.
In terms of the
common diseases for
piglets and breeding
pigs, the Centering on the core
The immunopotentiator immunopotentiator can concept of creating
The establishment of The development of has been developed to effectively improve the values for customers,
the disease-resistant functional animal feeds improve the resistance disease resistance of the animal husbandry
nutrition system for the and functional to bacterial and viral the swine herd, thus efficiency can be raised
swine herd additives diseases in the swine providing a stronger and brand
herd. guarantee for the competitiveness can be
healthy and effective given play.
production of the
animal husbandry of
the swine herd.
Research and development personnel of the Company
2022 2021 Percentage change
Research and development
3,382 3,049 10.92%
headcount
Ratio of research and
9.39% 9.09% 0.30%
development personnel
Educational background of research and development personnel
Bachelor’s degree 827 736 12.36%
Master’s degree 763 636 19.97%
32
Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Doctoral degree 113 111 1.80%
Age structure of research and development personnel
Below 30 1,844 1,701 8.41%
30~40 1,026 938 9.38%
40~50 330 266 24.06%
Over 50 182 144 26.39%
Research and development investments of the Company
2022 2021 Percentage change
Research and development
711,235,490.13 605,020,192.04 17.56%
investments (RMB)
Research and development
0.68% 0.70% -0.02%
investments as % of operating income
Capitalized amount of research and
5,081,480.58 14,561,385.46 -65.10%
development investments (RMB)
Capitalized research and development
investments as % of total research and 0.71% 2.41% -1.70%
development investments
Note: The 2021 data in the table above have been retrospectively adjusted upon audit.
Reasons for significant change in the composition of research and development personnel and the impact
□ Applicable Not applicable
Reasons for significant change in total research and development investments as % of operating income
□ Applicable Not applicable
Reasons for significant change in capitalization rate of research and development investments and explanations
thereon
□ Applicable Not applicable
5. Cash flows
Unit: RMB
Increase/
Item 2022 2021
decrease
Sub-total of cash inflows
106,959,926,011.77 88,764,663,792.04 20.50%
from operating activities
Sub-total of cash outflows for
100,142,031,760.86 85,626,715,541.35 16.95%
operating activities
Net cash flows from operating
6,817,894,250.91 3,137,948,250.69 117.27%
activities
Sub-total of cash inflows
8,817,852,475.04 4,131,496,813.28 113.43%
from investing activities
Sub-total of cash outflows for
14,263,337,049.36 8,354,711,112.76 70.72%
investing activities
Net cash flows from investing
-5,445,484,574.32 -4,223,214,299.48 -28.94%
activities
Sub-total of cash inflows
14,012,643,640.87 17,465,010,784.87 -19.77%
from financing activities
Sub-total of cash outflows for
14,942,687,770.42 16,686,344,678.54 -10.45%
financing activities
Net cash flows from financing
-930,044,129.55 778,666,106.33 -219.44%
activities
Net increase in cash and cash
441,039,279.27 -329,778,050.36 233.74%
equivalents
33
Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Explanation on main effects of material changes
Applicable □ Not applicable
1. Net cash flows from operating activities increased by 117.27% as compared to the corresponding period of the
prior year mainly due to the increased cash received from sales of goods in the period.
2. Net cash flows from investing activities decreased by 28.94% as compared to the corresponding period of the
prior year mainly due to the increased production capacity investment, cash management with idle own funds and
hedges.
3. Net cash flows from financing activities decreased by 219.44% as compared to the corresponding period of the
prior year mainly because bank loans increased considerably in the prior year while the balance of bank loans was
almost flat in the period.
Explanation on main reasons leading to the material difference between net cash flows from operating activities
during the reporting period and net profit for the year
□ Applicable Not applicable
V. Analysis of Non-Principal Operations
□ Applicable Not applicable
VI. Analysis of Assets and Liabilities
1. Material changes of asset items
Unit: RMB
As at the end of 2022 As at the beginning of 2022
As % As % Percenta
of of ge Description of major changes
Amount Amount change
total total
assets assets
At the end of the period, the
percentage in total assets
increased by 0.24 percentage
point; and the balance increased
Cash at bank by 29.94% from the beginning
2,260,586,666.69 5.11% 1,739,655,125.14 4.87% 0.24%
and on hand of the period, which was mainly
due to the increased cash from
operating activities as a result of
the expansion of the Company's
business scale.
At the end of the period, the
percentage in total assets
increased by 0.79 percentage
point; and the balance increased
by 50.93% from the beginning
of the period, which was mainly
Accounts
1,952,007,881.05 4.41% 1,293,328,829.38 3.62% 0.79% due to the expansion of the
receivable
Company's operating scale, and
the slower pace of fish sales and
payment by farmers in the
November-December period as
a result of transportation
disruptions and weak
34
Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
consumption.
Contract assets 0.00 0.00% 0.00 0.00% 0.00% N/A
At the end of the period, the
percentage in total assets
increased by 3.41 percentage
points; and the balance
28.54 25.13 increased by 40.74% from the
Inventories 12,625,081,651.36 8,970,187,858.27 3.41%
% % beginning of the period, which
was mainly due to the
expansion of the Company's
business scale and the general
increase in raw material prices.
At the end of the period, the
percentage in total assets
decreased by 0.02 percentage
Investment point; and the balance
26,856,587.98 0.06% 26,941,013.33 0.08% -0.02%
properties decreased by 0.31% from the
beginning of the period, almost
flat with the beginning of the
period.
At the end of the period, the
percentage in total assets
decreased by 0.13 percentage
Long-term
point; and the balance increased
equity 315,182,888.17 0.71% 301,076,512.33 0.84% -0.13%
by 4.69% from the beginning of
investments
the period, which was mainly
due to the increased investment
income from associates.
At the end of the period, the
percentage in total assets
increased by 2.18 percentage
points; and the balance
increased by 32.48% from the
beginning of the period, which
33.76 11,271,964,642.0 31.58 was mainly because the
Fixed assets 14,933,452,189.00 2.18%
% 7 % Company’s projects under
construction were transferred to
fixed assets after completion
and being put into production in
the year, as well as due to the
increase in purchase and
construction of fixed assets.
At the end of the period, the
percentage in total assets
decreased by 1.18 percentage
points; and the balance
decreased by 10.06% from the
Construction in beginning of the period, which
1,377,352,318.21 3.11% 1,531,493,842.31 4.29% -1.18%
progress was mainly because the
Company’s projects under
construction were transferred to
fixed assets after completion
and being put into production in
the year.
At the end of the period, the
percentage in total assets
decreased by 1.17 percentage
points; and the balance
Right-of-use increased by 1.73% from the
2,371,772,104.05 5.36% 2,331,346,912.43 6.53% -1.17%
assets beginning of the period, which
was mainly due to the new
business of leases conducted by
the Company in a bid to expand
its operating scale.
Short-term 10.60 At the end of the period, the
2,910,809,252.56 6.58% 3,782,336,144.35 -4.02%
loans % percentage in total assets
35
Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
decreased by 4.02 percentage
points; and the balance
decreased by 23.04% from the
beginning of the period, which
was mainly due to the decreased
loans as a result of the increased
settlements with notes in the
procurement of raw materials,
and the adjustments to the debt
structure.
At the end of the period, the
percentage in total assets
decreased by 1.46 percentage
points; and the balance
decreased by 9.84% from the
Contract
1,720,519,173.21 3.89% 1,908,259,980.27 5.35% -1.46% beginning of the period, which
liabilities
was mainly due to the slower
pace of fish sales and
prepayment by farmers in the
November-December period as
a result of weak consumption.
At the end of the period, the
percentage in total assets
decreased by 0.91 percentage
point; and the balance increased
Long-term 11.45 12.36
5,066,407,199.42 4,411,107,883.25 -0.91% by 14.86% from the beginning
loans % %
of the period, which was mainly
due to the adjustments to the
short- and long-term loan
structure.
At the end of the period, the
percentage in total assets
decreased by 0.78 percentage
Lease liabilities 1,610,426,421.30 3.64% 1,578,746,388.19 4.42% -0.78% point; and the balance increased
by 2.01% from the beginning of
the period, almost flat with the
beginning of the period.
At the end of the period, the
percentage in total assets
increased by 1.57 percentage
points; and the balance
Held-for- increased by 27,810.78% from
trading 699,942,009.75 1.58% 2,507,784.13 0.01% 1.57% the beginning of the period,
financial assets which was mainly due to the
increased hedges for raw
materials and pigs, as well as
the increased cash management
with idle funds.
At the end of the period, the
percentage in total assets
increased by 0.80 percentage
point; and the balance increased
Other by 69.61% from the beginning
1,322,999,051.80 2.99% 780,025,770.40 2.19% 0.80%
receivables of the period, which was mainly
due to the increased futures
margins and security deposits
paid in the procurement of raw
materials.
At the end of the period, the
percentage in total assets
decreased by 0.82 percentage
Other non- point; and the balance
193,070,520.82 0.44% 450,825,044.08 1.26% -0.82%
current assets decreased by 57.17% from the
beginning of the period, which
was mainly due to the decreased
prepayments for equipment.
Notes payable 3,502,208,518.33 7.92% 407,090,978.58 1.14% 6.78% At the end of the period, the
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
percentage in total assets
increased by 6.78 percentage
points; and the balance
increased by 760.30% from the
beginning of the period, which
was mainly due to the increased
settlements with notes in the
procurement of raw materials.
At the end of the period, the
percentage in total assets
increased by 0.72 percentage
Accounts 12.07 11.35 point; and the balance increased
5,341,179,436.25 4,051,704,338.04 0.72%
payable % % by 31.83% from the beginning
of the period, which was mainly
due to the increased
procurement of raw materials.
At the end of the period, the
percentage in total assets
increased by 1.26 percentage
Non-current points; and the balance
liabilities due 1,258,497,814.94 2.84% 563,923,844.74 1.58% 1.26% increased by 123.17% from the
within one year beginning of the period, which
was mainly due to the increase
in long-term loans due within
one year.
At the end of the period, the
percentage in total assets
increased by 0.15 percentage
point; and the balance increased
Other current by 40.37% from the beginning
559,698,472.24 1.27% 398,722,254.96 1.12% 0.15%
liabilities of the period, which was mainly
due to the increase in utilities
and commissioned farming
expenses payable as a result of
business development.
Overseas assets account for a larger proportion in total assets
□ Applicable Not applicable
2. Assets and liabilities measured at fair value
Applicable □ Not applicable
Unit: RMB
Impair
Cumulative ment
Gain or loss
fair value provid Purchases Disposal Other
Opening from changes in
Item changes ed during the during chang Closing balance
balance fair value during
recognized in during period the period es
the period
equity the
period
Financial assets
1. Held-for-
trading
financial
assets
2,507,784.13 10,921,635.79 343,105,696.10 439,630,197.91
(exclusive
of derivative
financial
assets)
Sub-total of
343,105,696.1
financial 2,507,784.13 10,921,635.79 439,630,197.91
0
assets
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Others 286,569,300.5 1,961,200,0 1,723,552,
-4,425,454.46 527,256,565.96
(note) 5 00.00 490.79
Total of the 289,077,084.6 343,105,696.1 1,961,200,0 1,723,552,
6,496,181.33 966,886,763.87
above 8 0 00.00 490.79
Financial
44,174,431.17 -32,445,293.88 46,533,780.00
liabilities
Note: Others include bank’s wealth management products and non-current financial assets measured at fair value.
Contents of other changes
None
Whether there were any material changes on the measurement attributes of major assets of the Company during
the reporting period
□ Yes No
3. Restriction on asset rights as at the end of the reporting period
As at the end of the reporting period, the Company still had restricted assets of RMB 173,324,350.79, which were
mainly land reclamation deposits, letter of credit deposits, guarantee deposits, deposits for bank guarantees, and
futures margins.
VII. Analysis of Investments
1. Overview
Applicable □ Not applicable
Investments during
Investments during the
the corresponding period of Change
reporting period (RMB)
prior year (RMB)
5,001,931,119.51 4,659,257,785.73 7.35%
2. Material equity investments during the reporting period
□ Applicable Not applicable
3. Material non-equity investments during the reporting period
□ Applicable Not applicable
4. Financial investments
(1) Securities investments
□ Applicable Not applicable
The Company did not make any securities investment in the reporting period.
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
(2) Derivatives investments
Applicable □ Not applicable
1) Derivatives investments for hedging purposes in the reporting period
Applicable □ Not applicable
Unit: RMB’0,000
Closing
Gain or loss
Cumulative investment
from changes
Type of Initial fair value Closing amount as %
in Purchased in Sold in the
derivative investmen changes investment of the
fair value the period period
investment t amount recognized in amount Company’s
during
equity closing net
the period
assets
Futures
9,869.97 -2,829.53 36,234.61 720,576.36 677,602.19 48,631.02 2.51%
company
Commercial
677.16 -1,924.04
bank
Total 9,869.97 -2,152.37 34,310.57 720,576.36 677,602.19 48,631.02 2.51%
Explanation of
significant
changes in
accounting The Company conducted accounting processing of hedging business in accordance with the stipulations in the
policies and Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments
specific (《企业会计准则第 22 号——金融工具确认和计量》), the Accounting Standards for Business Enterprises
accounting No. 23 - Transfer of Financial Assets (《企业会计准则第 23 号——金融资产转移》), the Accounting
measurement Standards for Business Enterprises No. 24 - Hedging Accounting (《企业会计准则第 24 号——套期会计》)
principles in and the Accounting Standards for Business Enterprises No. 37 - Presentation of Financial Instruments (《企业
respect of the 会计准则第 37 号——金融工具列报》) as well as their guidelines. In 2022, no significant changes occurred
hedges for the to the accounting policies and measurements in respect of the hedges for the reporting period as compared to
reporting period the previous reporting period.
as compared to
the previous
reporting period
The Company conducts commodity futures hedges in order to hedge against fluctuations in the market prices of
Explanation of raw materials such as corn and meal, as well as the risk of fluctuations in expected future cash flows arising
the actual gains from the expected sales of pigs; and foreign exchange hedges in order to hedge against the operational risks
and losses in the posed to the Company by fluctuations in foreign exchange rates. During the reporting period, the Company's
reporting period commodity and foreign exchange hedges were reflected in two financial statement line items, namely investment
income and gains and losses from changes in fair value at a total amount of RMB 180 million.
The Company engaged in commodity futures hedges mainly for corn, meal and other raw materials related to
production and operation as well as the sales of pigs. The risk of changes in the value of the hedged items was
Explanation of effectively hedged through changes in the value of the hedging instruments, with the expected risk management
the effect of objectives basically achieved. The Company's foreign exchange hedges were carried out because the Company's
hedges overseas bank loans and procurement were exposed to the risk of exchange rate fluctuations. By carrying out
forward foreign exchange settlement and sale, currency swaps, etc., the Company was able to lock in the
exchange rate costs and effectively hedge the uncertainty risk arising from exchange rate fluctuations.
Funding source Self-funded
Risk analysis of 1. The hedging business was compatible with the production and operation of the Company. The Company
positions held in strictly controlled the positions of futures and options, conducted foreign exchange hedging transactions in strict
derivatives accordance with its projected collection period, payment period and amount, and reasonably made use of futures,
during the options, portfolios of the aforementioned products, foreign exchange hedging and other instruments to have a
reporting period lock on the Company's costs and expenses of raw materials of animal feeds and other related products.
and explanation 2. Relevant departments and personnel strictly controlled the scale of hedging funds, reasonably planned and
of control used the margin, and gave operation instructions in strict accordance with the Company's futures trading
measures management policies. No operation could be carried out unless it had been approved in light of related
(Including but regulations. The Company will reasonably allocate funds for its hedging business.
not limited to 3. In accordance with the Guidelines No. 1 of the Shenzhen Stock Exchange for the Self-regulation of Listed
market risk, Companies—the Standard Operation of Main Board Listed Companies (《深圳证券交易所上市公司自律监
liquidity risk, 管指引第 1 号--主板上市公司规范运作》), the Futures Management Policy (《期货管理制度》), the
credit risk, Measures for Futures Management (《期货管理办法》), and the Management Measures for the Operation of
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
operational risk, Pig Futures (《生猪期货业务操作管理办法》) have been formulated, which clearly stipulate the approval
legal risk, etc.) authority, internal review process and risk handling procedures for hedging business. The Company has
established a special team for commodity hedging operation and a monitoring team for commodity hedging
operation, and developed corresponding business procedures. Relevant business and activities were controlled
through the implementation of authorization, position restraint, internal audit and other measures.
4. The Company has formulated the Policy for the Management of Foreign Exchange Hedging Business (《外
汇套期保值业务管理制度》), which clearly stipulates the limit of foreign exchange hedging business, the
scope of varieties, approval authority, internal review procedures, responsible departments and persons,
information isolation measures, internal risk reporting policies and risk handling procedures. The Policy is in
conformity with the relevant requirements of regulatory authorities, meets the needs of actual operation, and
contains effective risk control measures.
5. The Securities Department of the Company conducted regular and irregular inspections of the hedging
transaction business, and supervised the implementation of risk management policies and risk management
procedures by the personnel taking charge of the hedging transaction business, to timely prevent operational
risks in the business.
Changes in
market prices or
fair value of
derivative
products during
the reporting Since the Company's varieties of commodity hedging transactions were traded at futures exchanges, with
period, specific transparent markets and active transactions, the transaction price and the settlement unit price of the day could
methods used fully reflect the fair value of the derivatives. The varieties of foreign exchange hedging transactions were
and relevant measured at the fair value on the date of contract signing between the Company and commercial banks, and their
assumption and fair value was subsequently measured based on the valuation notices issued by each commercial bank at the end
parameter of the period.
settings shall be
disclosed for
analysis of fair
value of
derivatives
Legal matters
involved (if N/A
applicable )
Disclosure date
of the
announcement
about the
board’s consent 12 April 2022
for the
derivative
investment (if
any)
Disclosure date
of the
announcement
about the
board’s consent 28 October 2022
for the
derivative
investment (if
any)
Disclosure date
of the
announcement
about the
shareholders’
general 10 May 2022
meeting’s
consent for the
derivative
investment (if
any)
Disclosure date
of the 8 November 2022
announcement
40
Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
about the
shareholders’
general
meeting’s
consent for the
derivative
investment (if
any)
1. The commodity hedging business of the Company was carried out in strict accordance with relevant policies.
Therefore, the Company effectively controlled the cost of raw materials related to production and trade as well
as related products, and effectively prevented and mitigated risks. The relevant approval procedures for the
Company to use its own funds to carry out hedging business in commodity futures and options markets were in
compliance with relevant national laws and regulations as well as provisions in the Articles of Association (《公
Special opinions 司 章 程 》 ). The Company has established a sound organizational structure and developed the Futures
expressed by Management Policy (《期货管理制度》) for commodity hedging. There is no circumstance where the interest
independent of the Company and its entire shareholders has been damaged.
directors 2. The decision-making procedures of the Company for foreign exchange hedging business were in compliance
concerning the with relevant national laws and regulations as well as provisions in the Articles of Association. The Company
Company's made use of foreign exchange hedging instruments to reduce exchange rate risks and financial expenses and
derivatives control operational risks on the basis of normal production and operation. There is no circumstance where the
investment and interest of the Company, its entire shareholders and especially, its minority shareholders has been damaged. At
risk control the same time, the Company has formulated the Policy for the Management of Foreign Exchange Hedging
Business ( 《外汇套期保值业务管理制度》). By strengthening internal control and implementing risk
prevention measures, specific operation standards have been developed for the Company's foreign exchange
hedging business.
In summary, it is approved that the Company and its majority-owned subsidiaries carry out commodity hedging
business and foreign exchange hedging business within the limit approved by the Board of Directors.
2) Derivatives investments for speculative purposes in the reporting period
□ Applicable Not applicable
The Company did not make any derivatives investment for speculative purposes in the reporting period.
5. Use of raised funds
Applicable □ Not applicable
(1) Overall use of raised funds
Applicable □ Not applicable
Unit: RMB’0,000
Proporti Raised
Total
on of funds
raised
Total total that
Total raised funds Total Total
raised accumul Use and have
Year funds that with accumulativ raised
Method Total funds that ative ownership been
for have been altered e raised funds that
of fund- raised have been raised change of left
fund- used purposes funds with have not
raising funds used in funds unused unuse
raising accumulativ during altered been used
the current with raised funds d for
ely the purposes yet
period altered over
reportin
purpose two
g period
s years
Public In addition
offering to
of temporary
2020 converti 283,000 48,142.55 235,526.09 42,267 73,744.24 26.06% 47,379.98 replenishme 0
ble nt of
corporat working
e bonds capital and
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
cash
managemen
t, the unused
amount of
raised funds
was
deposited in
the special
bank
account for
fund-raising
projects.
Total -- 283,000 48,142.55 235,526.09 42,267 73,744.24 26.06% 47,379.98 -- 0
Explanation of the overall use of raised funds
Upon the approval of the CSRC through the issuance of the Approval on the Public Offering of Convertible Corporate Bonds by Guangdong
Haid Group Co., Limited (《关于核准广东海大集团股份有限公司公开发行可转换公司债券的批复》) (Zheng Jian Xu Ke [2020] No.
205), the Company was allowed to issue convertible corporate bonds with a total face value of RMB 2,830 million to the public. Actually,
the Company issued 28.30 million convertible corporate bonds with a face value of RMB 100 each to the public, and raised RMB
2,830,000,000.00 of funds in total. After deducting the fees related to the issuance, the actual net raised funds was RMB 2,810,854,230.16.
The availability of the above-mentioned raised funds has been verified by Grant Thornton China (Special General Partnership), which issued
the Capital Verification Report (《验资报告》) (Grant Thornton Yan Zi [2020] No. 440ZC0065) on 26 March 2020.
As at 31 December 2022, the Company used RMB 2,355.2609 million of raised funds, accrued RMB 18.2065 million of interest income
(with banks' handling fees deducted), and temporarily replenished the working capital with RMB 447.8581 million of idle raised funds. The
balance of its special account for raised fund deposit was RMB 25.9417 million.
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
(2) Committed projects of raised funds
Applicable □ Not applicable
Unit: RMB’0,000
Accumulati Investment
Whether
The ve Whether Whether
projects Total progress as Benefits
Adjusted investmen investment Date when the the there are
Committed investment projects have been committed at the end of recorded
total t amount amount as the projects are estimated material
and investment of excessive raised altered investment during the
investment during the at the end of reporting ready for their benefits changes in
funds (including with raised reporting
amount (1) reporting the intended use are the project
partial funds period (3)＝ period
period reporting reached feasibility
alternation) (2)/(1)
period (2)
Committed investment projects
1. Animal feed project of Nantong
Haid with an annual output of
No 7,144.21 7,144.21 0 7,200.25 100.78% October 2021 427.33 No No
240,000 tons (hereinafter referred
to as the "Nantong Haid project")
2. Animal feed project of
Qingyuan Haid with an annual
output of 240,000 tons (hereinafter No 6,493.11 6,493.11 0 6,504.38 100.17% September 2021 1,200.4 No No
referred to as the "Qingyuan Haid
project")
3. Animal feed project of Huai'an
Hailong with an annual output of
200,000 tons (hereinafter referred Yes 16,123.49 11,177.39 1,455.23 11,081.21 99.14% December 2022 441.38 No No
to as the "Huai'an Hailong
project")
4. Animal feed project of Nanning
Haid with an annual output of
No 23,589.07 23,589.07 4,007.16 22,846.56 96.85% October 2022 1,451.32 No No
480,000 tons (hereinafter referred
to as the "Nanning Haid project")
5. Animal feed project of Zhaoqing
Gaoyao with an annual output of
240,000 tons (hereinafter referred No 4,679.43 4,679.43 0 4,679.43 100.00% April 2020 1,019.45 No No
to as the "Zhaoqing Gaoyao
project")
6. Animal feed project of Fuzhou
Haid with an annual output of
Yes 29,075.05 20,429.86 5,509.5 20,528.88 100.48% December 2022 -1,753.55 No No
180,000 tons (hereinafter referred
to as the "Fuzhou Haid project")
7. Animal feed project of Change of
Yes 15,053.58 2,176.01 0 2,176.01 100.00% December 2022 0 No
Qingyuan Haibei with an annual project
43
Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
output of 30,000 tons (hereinafter completed
referred to as the "Qingyuan
Haibei project")
8. Animal feed project of
Shaoguan Haid with an annual
output of 400,000 tons (hereinafter No 13,964.32 13,964.32 0.06 14,036.65 100.52% December 2021 1,861.76 Yes No
referred to as the "Shaoguan Haid
project")
9. Animal feed project of
Qingyuan Hailong with an annual
output of 720,000 tons (hereinafter No 36,955.3 36,955.3 6,436.23 35,683.64 96.56% December 2022 1,764.37 No No
referred to as the "Qingyuan
Hailong project")
10. Animal feed project of Yicheng
Haid with an annual output of
Yes 16,509.88 10,389.94 1,177.07 10,173.44 97.92% December 2022 320.03 No No
380,000 tons (hereinafter referred
to as the "Yicheng Haid project")
11. Animal feed project of Hexian
Haid with an annual output of
No 21,344.95 21,344.95 2,120.82 20,217.98 94.72% June 2022 -306.82 No No
300,000 tons (hereinafter referred
to as the "Hexian Haid project")
12. Animal feed project of Kaifeng
Haid with an annual output of
Yes 17,069.03 12,693.22 1,793.86 12,594.43 99.22% December 2022 1,189.06 Yes No
300,000 tons (hereinafter referred
to as the "Kaifeng Haid project")
13. Animal feed project of
Zhanjiang Haid with an annual Change of
output of 200,000 tons (hereinafter Yes 20,380.33 0 0 0 0.00% December 2022 0 project No
referred to as the "Zhanjiang Haid completed
project")
14. Animal feed project of Yulin
Haid with an annual output of
Yes 31,186.61 17,483.66 6,456 17,562.16 100.45% December 2022 75.41 No No
450,000 tons (hereinafter referred
to as the "Yulin Haid project")
15. Animal feed project of Sichuan
Rongchuan with an annual output
of 200,000 tons (hereinafter Yes 23,431.64 18,954.64 8,655.88 18,694.03 98.63% December 2022 -724.45 No No
referred to as the "Sichuan
Rongchuan project")
16. Animal feed project of
Jiangmen Rongchuan with an
annual output of 270,000 tons No 0 22,000 9,878.93 22,066.47 100.30% December 2022 -1,109.88 No No
(hereinafter referred to as the
"Jiangmen Rongchuan project")
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
17. Biological compound feed
project of Huainan Haid with an
annual output of 300,000 tons No 0 9,477.24 651.84 9,480.6 100.04% July 2021 -657.7 No No
(hereinafter referred to as the
"Huainan Haid project")
18. Biological feed project of
Yancheng Rongchuan
Biotechnology Co., Ltd. with an
No 0 10,500 0 0 0.00% December 2023 0 N/A No
annual output of 300,000 tons
(hereinafter referred to as the "
Yancheng Rongchuan project")
19. Biological compound feed
project of Pingnan Haid Feed Co.,
Ltd. with an annual output of No 0 5,767 0 0 0.00% June 2023 0 N/A No
300,000 tons (hereinafter referred
to as the "Pingnan Haid project")
20. High-end aquatic feed project
of Hexian Haid Biotechnology
Co., Ltd. with an annual output of
No 0 12,500 0 0 0.00% June 2024 0 N/A No
150,000 tons (hereinafter referred
to as the "Hexian High-end
Aquatic Feed project")
21. Biological compound feed
project of Enshi Haid
Biotechnology Co., Ltd. with an
No 0 8,900 0 0 0.00% December 2023 0 N/A No
annual output of 350,000 tons
(hereinafter referred to as the
"Enshi Haid project")
22. Feed mill construction project
of Xingtai Haid Biotechnology
No 0 4,600 0 0 0.00% December 2023 0 N/A No
Co., Ltd. (hereinafter referred to as
the "Xingtai Haid project")
Subtotal of committed investment
-- 283,000 281,219.35 48,142.55 235,526.09 -- -- 5,198.11 -- --
projects
Investment of excessive raised funds
None
Total -- 283,000 281,219.35 48,142.55 235,526.09 -- -- 5,198.11 -- --
Explain project by project the 1. Mainly due to the rising prices of raw materials, the impact of the economic downturn on consumption, etc., the Nantong Haid project, the Qingyuan
reasons for failing to reach the Haid project, the Zhaoqing Gaoyao project and the Huainan Haid project failed to meet the objectives with respect to output and sales volume. As such,
planned progress or predicted these projects failed to reach the predicted returns.
returns (including the reasons for 2. The Huai’an Hailong project, the Fuzhou Haid project, the Yicheng Haid project, the Yulin Haid project and the Sichuan Rongchuan project have been
inputting “N/A” for “Whether the partly put into production but not yet entirely completed. As such, these projects failed to reach the predicted returns. In view of the overall business and
estimated benefits are reached”) market layout priorities of the Company, the remaining raised funds have been reallocated to other projects.
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
3. The Qingyuan Hailong project was partly put into production in 2020 and entirely put into production in the second half of 2022. The Nanning Haid
project, the Hexian Haid project and the Jiangmen Rongchuan project were entirely completed and put into production in the second half of 2022,
indicating a short-term of operation. As such, these projects failed to reach the predicted returns.
4. The Yancheng Rongchuan project, the Pingnan Haid project, the Hexian High-end Aquatic Feed project, the Enshi Haid project and the Xingtai Haid
project are still under construction and not ready for production.
Explanations of the material
N/A
changes in the project feasibility
Amount, use, and use progress of
N/A
excessive raised funds
Applicable
Occurred during the reporting period
1. As reviewed at the 14th Meeting of the Fifth Board of Directors and the First Extraordinary General Meeting of Shareholders in 2021, it was approved
to change the implementation entities and locations of the “Qingyuan Haibei project” and the “Zhanjiang Haid project”. To be specific, the implementation
entities of “Qingyuan Haibei Biotechnology Co., Ltd.” and “Zhanjiang Haid Feed Co., Ltd.” were changed to “Jiangmen Rongchuan Feed Co., Ltd.” and
“Huainan Haid Biological Feed Co., Ltd.” respectively, and the implementation locations of “Qingyuan City, Guangdong Province” and “Zhanjiang City,
Guangdong Province” to “Duanfen Town, Taishan City, Guangdong Province” and “Shouxian County, Huainan City, Anhui Province” respectively.
Changes of implementation 2. As reviewed at the Fifth Meeting of the Sixth Board of Directors and the Fifth Extraordinary General Meeting of Shareholders in 2022, it was approved
locations of the investment to change the implementation entities and locations of the “Huai’an Hailong project”, the “Fuzhou Haid project”, the “Yicheng Haid project”, the “Kaifeng
projects with the raised funds Haid project”, the “Yulin Haid project”, and the “Sichuan Rongchuan project”. To be specific, the implementation entities of “Huai’an Hailong Feed Co.,
Ltd.”, “Fuzhou Haid Feed Co., Ltd.”, “Yicheng Haid Biotechnology Co., Ltd.”, “Kaifeng Haid Feed Co., Ltd.”, “Yulin Haid Feed Co., Ltd.”, and “Sichuan
Rongchuan Feed Co., Ltd.” were changed to “Yancheng Rongchuan Biotechnology Co., Ltd.”, “Pingnan Haid Feed Co., Ltd.”, “Hexian Haid
Biotechnology Co., Ltd.”, “Enshi Haid Biotechnology Co., Ltd.”, and “Xingtai Haid Biotechnology Co., Ltd.” respectively, and the implementation
locations of “Huai’an City, Jiangsu Province”, “Fuzhou City, Fujian Province”, “Yicheng City, Hubei Province”, “Tongxu County, Kaifeng City, Henan
Province”, “Yulin City, Guangxi Zhuang Autonomous Region”, and “Meishan City, Sichuan Province” to “east of Zhubao and west of Hengyiming,
Sheyang Port, Yancheng City, Jiangsu Province”, “Linjiang Industrial Park, Pingnan County, Guangxi Zhuang Autonomous Region”, “Taiwan Farmers'
Entrepreneurship Park in Hexian County, Anhui Province”, “Tukan Village, Changliang Town, Jianshi County, Hubei Province”, and “Nanhe District,
Xingtai City, Hebei Province” respectively.
Adjustments to the implementation
methods of the investment projects N/A
with the raised funds
Applicable
On 9 April 2020, Grant Thornton China issued the Verification Report on the Early Investment of Self-raised Funds in the Investment Projects with Raised
Funds by Guangdong Haid Group Co., Limited (《关于广东海大集团股份有限公司以自筹资金预先投入募集资金投资项目的鉴证报告》) (Grant
Early investment and replacement
concerning the investment projects Thornton Zhuan Zi (2020) No. 440ZA4433). The Company invested RMB 393,920,200 of self-raised funds in the raised fund projects in the preliminary
with the raised funds stage. On 18 April 2020, the Proposal on Replacing Self-raised Funds That Has Been Invested in Fund-raising Investment Projects with the Raised Funds
(《关于以募集资金置换预先已投入募集资金投资项目的自筹资金的议案》) on the Ninth Meeting of the Fifth Board of Directors. The Company
replaced the self-raised funds that had been invested with the raised funds of RMB 393,920,200. The interval between this replacement with raised funds
and the arrival of raised funds is shorter than six months.
Applicable
Temporary replenishment of The Proposal on Temporary Replenishment of Working Capital with Partial Idle Raised Funds (《关于使用部分闲置募集资金暂时补充流动资金的议
working capital with the idle 案》) was reviewed and approved on the Fifth Meeting of the Sixth Board of Directors on 12 December 2022. It was approved that the Company could
raised funds temporarily replenish working capital with no more than RMB 450 million of idle raised funds. The use term should be less than 12 months upon the
approval of the Board of Directors. As at 31 December 2022, the balance of the idle raised funds for temporary replenishment of working capital was
46
Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
RMB 447.8581 million.
Surplus raised funds for project
implementation and reasons for the N/A
surplus
Use and ownership change of In addition to temporary replenishment of working capital and cash management, the unused amount of raised funds was deposited in the special bank
unused raised funds account for fund-raising projects.
Problems in the use of raised funds
N/A
and disclosure, or other cases
(3) Altered projects of raised funds
Applicable □ Not applicable
Unit: RMB’0,000
Total The Accumulative Whether there
Benefits
investment investment investment Investment progress Date when the Whether the are material
recorded
Project after amount for amount amount as at the as at the end of the projects are estimated changes in the
Previous project reporting period (3) during the
alteration the project during the end of the ready for their benefits are feasibility of
reporting
after reporting reporting period ＝(2)/(1) intended use reached the project after
period
alteration (1) period (2) alteration
Jiangmen Qingyuan Haibei
22,000 9,878.93 22,066.47 100.30% December 2022 -1,109.88 No No
Rongchuan project project and
Huainan Haid Zhanjang Haid
9,477.24 651.84 9,480.6 100.04% July 2021 -657.7 No No
project project
Yancheng Huai’an Hailong
10,500 0 0 0.00% December 2023 0 N/A No
Rongchuan project project, Fuzhou
Pingnan Haid Haid project,
5,767 0 0 0.00% June 2023 0 N/A No
project Yicheng Haid
Hexian Haid High- project, Kaifeng
end Aquatic Feed Haid project, 12,500 0 0 0.00% June 2024 0 N/A No
project Yulin Haid
Enshi Haid project project and 8,900 0 0 0.00% December 2023 0 N/A No
Sichuan
Xingtai Haid Rongchuan 4,600 0 0 0.00% December 2023 0 N/A No
project project
Total -- 73,744.24 10,530.77 31,547.07 -- -- -1,767.58 -- --
1. The Jiangmen Rongchuan project and the Huainan Haid project:
(1) Decision-making procedure executed for the changes:
Reasons for the changes, decision-making procedure According to the Proposal on the Changes to Certain Raised Funds Investment Projects (《关于变更部分募集资金投资项目的
executed and information disclosed (by specific projects) 议案》) approved at the First Extraordinary General Meeting of Shareholders in 2021 on 3 February 2021, it has been agreed to
transfer the raised funds for the Qingyuan Haibei project and the Zhanjiang Haid project and the cash management income with
the Guangzhou branch of HSBC Bank (China) Company Limited to the Jiangmen Rongchuan project and the Huainan Haid
47
Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
project.
(2) Reasons for the changes:
A. Previously, the Qingyuan Haibei project intended to build an annual capacity of 30,000 tons of aquatic premix with an
investment of RMB 216.0009 million. Due to reasons such as the adjustments to the industry’s farming scale and structure and
production areas as well as the Company’s constant refinement of its product portfolio, the Company changed the Qingyuan Haibei
project to other feed projects so as to better meet market needs and further refine the existing production capacity structure.
B. Previously, the Zhanjiang Haid project intended to build an annual capacity of 200,000 tons of aquatic compound feed with an
investment of RMB 220.9288 million to increase its supply to West Guangdong Province and East Guangxi Province. However,
the feed factory of Wuzhou Haid in East Guangxi Province has been completed, and construction accelerated for the raised funds
investment project of Nanning Haid with an annual output of 480,000 tons of feed, which will help ease the supply pressure in the
region to some degree. In view of the priority levels of the projects and the Company’s capacity portfolio needs, the Company
changed the Zhanjiang Haid project to other feed projects.
To sum up, in view of market needs and the Company’s capacity portfolio needs, and in order for better use of the raised funds,
the Company has changed the construction arrangements for the Qingyuan Haibei project and the Zhanjiang Haid project and has
decided to use the remaining raised funds for advance investment in the construction of the Jiangmen Rongchuan project and the
Huainan Haid project.
(3) Information disclosure:
For further information, see the Announcement on the Changes to Certain Raised Funds Investment Projects (《关于变更部分募
集资金投资项目的公告》) (Announcement No. 2021-008), which has been disclosed on the media designated for information
disclosure, namely, the Securities Times (《证券时报》), China Securities Journal (《中国证券报》), Shanghai Securities News
(《上海证券报》), Securities Daily (《证券日报》), and http://www.cninfo.com.cn.
2. The Yancheng Rongchuan project, the Pingnan Haid project, the Hexian Haid High-end Aquatic Feed project, the Enshi Haid
project, and the Xingtai Haid project:
(1) Decision-making procedure executed for the changes: According to the Proposal on the Changes to Certain Raised Funds
Investment Projects (《关于变更部分募集资金投资项目的议案》) approved at the Fifth Extraordinary General Meeting of
Shareholders in 2022 on 28 December 2022, it has been agreed to transfer part of the raised funds for the Huai’an Hailong project,
the Fuzhou Haid project, the Yicheng Haid project, the Kaifeng Haid project, the Yulin Haid project and the Sichuan Rongchuan
project to the Yancheng Rongchuan project, the Pingnan Haid project, the Hexian Haid High-end Aquatic Feed project, the Enshi
Haid project, and the Xingtai Haid project.
(2) Reasons for the changes: A. Previously, the Huai’an Hailong project intended to build an annual capacity of 200,000 tons of
aquatic compound feed with an investment of RMB 271.0012 million. In order to quickly relieve the supply pressure around
Huai'an City, the Company has purchased and immediately put into production an aquatic feed production base with an annual
capacity of 200,000 tons through its majority-owned subsidiary, Jiangsu Haiwei Feed Co., Ltd. In view of its capacity portfolio
needs, the Company reallocated the remaining raised funds of the Huai’an Hailong project to other feed projects. B. Previously,
the Fuzhou Haid project intended to build an annual capacity of 180,000 tons of aquatic compound feed with an investment of
RMB 345.4454 million. In the construction of the project, Fuzhou Haid adjusted the production capacity allocation standard to
enhance the capacity utilization rate; at the same time, based on the Company's market strategy adjustments, the central Fujian
market previously covered by Fuzhou Haid was shifted to Sanming Haid Feed Co., Ltd., making Fuzhou Haid basically able to
meet the demand of the market with its existing production capacity. In view of the priority levels of the projects and the Company’s
capacity portfolio needs, the Company reallocated the remaining raised funds of the Fuzhou Haid project to other feed projects.
C. Previously, the Yicheng Haid project intended to build an annual capacity of 380,000 tons of pig feed with an investment of
RMB 170.0014 million. The Yicheng Haid project mainly serves the Company's local farming business and the export market
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
within its radius. In recent years, the Company has improved the overall capacity utilization rate through regional capacity
integration, special line technical reform of specialization and standardization and other measures; and the new construction and
technical reform project of Anlu Haid in the peripheral market of the region has been put into operation, which has eased the
supply pressure of the peripheral pig feed market. In view of the priority levels of the projects and the purpose to increase the
utilization efficiency of raised funds, the Company reallocated the remaining raised funds of the Yicheng Haid project to other
feed projects. D. Previously, the Kaifeng Haid project intended to build an annual capacity of 300,000 tons of animal, poultry and
aquatic compound feed with an investment of RMB 180.0025 million. In order to quickly relieve the supply pressure, the
Company's subsidiaries, Henan Haiding and Henan Mugaole, have added approximately 300,000 tons of feed production capacity
in Kaifeng City and the surrounding areas through leasing and renovation and expansion of their own feed production lines
respectively. In view of its capacity portfolio needs, the Company reallocated the remaining raised funds of the Kaifeng Haid
project to other feed projects. E. Previously, the Yulin Haid project intended to build an annual capacity of 450,000 tons of animal,
poultry and aquatic compound feed with an investment of RMB 311.8661 million, which fills the gap in the market from western
Guangdong to eastern Guangxi, southern Guangxi and western Guangdong and can effectively relieve the Company's tight supply
in the region. Given that the Company's feed mills built or acquired in the areas adjacent to Yulin, such as Nanning and Qinzhou,
have been gradually put into operation, the tight supply in the target project area has been alleviated. In view of its capacity
portfolio needs and the purpose to increase the utilization efficiency of raised funds, the Company reallocated the remaining raised
funds of the Yulin Haid project to other feed projects. F. With the implementation location being in Meishan City, Sichuan Province,
the Sichuan Rongchuan project previously intended to build an annual capacity of 200,000 tons of aquatic compound feed with an
investment of RMB 234.3164 million to increase the aquatic feed supply capacity in the southwest region. Given that the
Company’s expanded and new feed projects have been gradually put into operation in the areas around Meishan such as
Chongqing, Chengdu and Deyang, effectively supplementing the supply capacity in the southwest region and the central Sichuan
region. In view of its capacity portfolio needs and the purpose to increase the utilization efficiency of raised funds, the Company
reallocated the remaining raised funds of the Sichuan Rongchuan project to other feed projects. To sum up, in view of market
needs and the Company’s capacity portfolio needs, and in order for better use of the raised funds, the Company has changed the
construction arrangements for the Huai’an Hailong project, the Fuzhou Haid project, the Yicheng Haid project, the Kaifeng Haid
project, the Yulin Haid project and the Sichuan Rongchuan project, and has decided to use the remaining raised funds for advance
investment in the construction of the Yancheng Rongchuan project, the Pingnan Haid project, the Hexian Haid High-end Aquatic
Feed project, the Enshi Haid project, and the Xingtai Haid project.
(3) Information disclosure:
For further information, see the Announcement on the Changes to Certain Raised Funds Investment Projects (《关于变更部分募
集资金投资项目的公告》) (Announcement No. 2022-099), which has been disclosed on the media designated for information
disclosure, namely, the Securities Times (《证券时报》), China Securities Journal (《中国证券报》), Shanghai Securities News
(《上海证券报》), Securities Daily (《证券日报》), and http://www.cninfo.com.cn.
1. The Jiangmen Rongchuan project was entirely completed and put into production in the second half of 2022, indicating a short-
term of operation. As such, this project failed to reach the predicted returns.
2. Mainly due to the rising prices of raw materials, the impact of the economic downturn on consumption, etc., the Huainan Haid
Cases and reasons for failing to reach the planned
project failed to meet the objectives with respect to output and sales volume. As such, this project failed to reach the predicted
progress or predicted returns (by specific projects)
returns.
3. The Yancheng Rongchuan project, the Pingnan Haid project, the Hexian High-end Aquatic Feed project, the Enshi Haid project
and the Xingtai Haid project are still under construction and not ready for production.
Explanation of material changes in the feasibility of
N/A
projects after alteration
49
Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
VIII. Disposal of Material Assets and Equity Interest
1. Disposal of material assets
□ Applicable Not applicable
The Company did not dispose of any material asset in the reporting period.
2. Disposal of material equity investments
□ Applicable Not applicable
IX. Analysis of major subsidiaries and investees
Applicable □ Not applicable
Major subsidiaries and investees accounting for over 10% of the net income of the Company
Unit: RMB’0,000
Type of Registere
Name of Principal Operating Operating
compan d Total assets Net assets Net profit
company activities income profit
y capital
Production and
Qingyuan
sales of feed
Haibei
Subsidi premix,
Biotechnol 1,000.00 153,309.37 120,972.54 89,400.36 24,914.84 21,550.81
ary additives and
ogy Co.,
veterinary
Ltd.
medicines
Acquisition and disposal of subsidiaries during the reporting period
Applicable □ Not applicable
Methods to acquire and
Impact on overall production and
Name of companies dispose of subsidiaries
operation and results
during the reporting period
Suixi Haihe Veterinary Medicine Co., Business combination not under No material effects on the results of the
Ltd. common control period
Yangchun Haihe Veterinary Medicine Business combination not under No material effects on the results of the
Co., Ltd. common control period
Luoding Haihe Veterinary Medicine Co., Business combination not under No material effects on the results of the
Ltd. common control period
Bobai Haihe Veterinary Medicine Co., Business combination not under No material effects on the results of the
Ltd. common control period
Changde Haide Veterinary Medicine Business combination not under No material effects on the results of the
Operation Co., Ltd. common control period
Shouguang Haihe Agriculture and No material effects on the results of the
Newly established
Animal Husbandry Technology Co., Ltd. period
Qingdao Zhizhuxia Experimental No material effects on the results of the
Newly established
Technology Co., Ltd. period
Qianjiang Hailong Biotechnology Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Haid Egypt Aquatic Co., Ltd. Newly established
period
No material effects on the results of the
Guangzhou Hairong Food Co., Ltd. Newly established
period
Pingjiang Bairuilai Biotechnology Co., No material effects on the results of the
Newly established
Ltd. period
Guangdong Baishengyuan Aquatic Seed No material effects on the results of the
Newly established
Co., Ltd. period
Guangzhou Nansha Haishengyuan No material effects on the results of the
Newly established
Aquaculture Technology Co., Ltd. period
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Guangzhou Nansha Haid Technology No material effects on the results of the
Newly established
Co., Ltd. period
No material effects on the results of the
Pt Haida Biotechnology Indonesia Newly established
period
Zhuhai Chenzhe Private Fund No material effects on the results of the
Newly established
Management Co., Ltd. period
No material effects on the results of the
Meizhou Yitun Pig Breeding Co., Ltd. Newly established
period
Tacheng Xiyu Haisheng Agricultural No material effects on the results of the
Newly established
Development Co., Ltd. period
Guiyang Haiyue Feed Technology Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Guangzhou Haiyi Investment Co., Ltd. Newly established
period
Dongying Haishengyuan Aquaculture No material effects on the results of the
Newly established
Co., Ltd. period
Leizhou Yuexiu Haishengyuan Shrimp No material effects on the results of the
Newly established
Culture Technology Co., Ltd. period
Guangzhou Haifeng Breeding Service No material effects on the results of the
Newly established
Co., Ltd. period
Haixin Biological (Beijing) Technology No material effects on the results of the
Newly established
Co., Ltd. period
No material effects on the results of the
Nantong Fengmu Trade Co., Ltd. Newly established
period
No material effects on the results of the
Dalian Haixin Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Sichuan Haimufeng Agriculture Co., Ltd. Newly established
period
No material effects on the results of the
Inner Mongolia Haishan Feed Co., Ltd. Newly established
period
Guangxi Haijingzhou Marine No material effects on the results of the
Newly established
Biotechnology Co., Ltd. period
Heyuan Yifu Agricultural Development No material effects on the results of the
Newly established
Co., Ltd. period
No material effects on the results of the
Foshan Rongda Aquatic Seed Co., Ltd. Newly established
period
No material effects on the results of the
Weifang Haixin Biotechnology Co., Ltd. Newly established
period
Yangling Haiqi Agricultural Technology No material effects on the results of the
Newly established
Co., Ltd. period
Yangling Huashite Testing Technology No material effects on the results of the
Newly established
Co., Ltd. period
Yangjiang Peiqi Breeding Service Co., No material effects on the results of the
Newly established
Ltd. period
Tangshan Haijingzhou Biotechnology No material effects on the results of the
Newly established
Co., Ltd. period
Guangzhou Ronghai Seed Technology No material effects on the results of the
Newly established
Co., Ltd. period
Guangze Haisheng Biotechnology Co., No material effects on the results of the
Newly established
Ltd. period
Guangzhou Hualaike Testing Technology No material effects on the results of the
Newly established
Co., Ltd. period
Weifang Yitun Ecological Agriculture No material effects on the results of the
Newly established
Co., Ltd. period
Qingdao Dinghao Fengying International No material effects on the results of the
Newly established
Trade Co., Ltd. period
No material effects on the results of the
Dachuan Biotechnology Co., Ltd. Newly established
period
Shenzhen Haixin Biotechnology Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Huaibei Haid Bio-Feed Co., Ltd. Newly established
period
Wudi Haishengyuan Aquaculture Co., No material effects on the results of the
Newly established
Ltd. period
Sheng Long Biotech (Hai Duong) No material effects on the results of the
Newly established
International Co., Ltd. period
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
No material effects on the results of the
Pt Hisenor Genetics Indonesia Newly established
period
Hengyang Yunyi Biotechnology Co., No material effects on the results of the
Obtained in other ways
Ltd. period
Guangzhou Mingersi Biotechnology Co., No material effects on the results of the
Obtained in other ways
Ltd. period
Huizhou Haid Biotechnology Co., Ltd.
No material effects on the results of the
(formerly known as “Boluo Changshun Obtained in other ways
period
Feed Co., Ltd.”)
Lianzhou Yitun Ecological Agriculture No material effects on the results of the
De-registered
Co., Ltd. period
Jiaozuo Jinhuilong Biotechnology Co., No material effects on the results of the
De-registered
Ltd. period
Wengyuan Haifeng Ecological No material effects on the results of the
De-registered
Agriculture Co., Ltd. period
No material effects on the results of the
Qingyuan Haichuan Food Co., Ltd. De-registered
period
Yingde Haifeng Ecological Agriculture No material effects on the results of the
De-registered
Co., Ltd. period
No material effects on the results of the
Yangjiang Haihe Feed Co., Ltd. De-registered
period
Henan Haihe Houyi Agriculture and No material effects on the results of the
De-registered
Animal Husbandry Technology Co., Ltd. period
Chengnan Development Zone Hairong
No material effects on the results of the
Livestock Farming Service Specialized De-registered
period
Cooperative
No material effects on the results of the
Dancl Limited De-registered
period
No material effects on the results of the
Foshan Debao Feed Co., Ltd. De-registered
period
Qingdao Zhizhuxia Pig Raising Service No material effects on the results of the
De-registered
Co., Ltd. period
Zhangzhou Longwen Hairong Farming No material effects on the results of the
De-registered
Service Specialized Cooperative period
No material effects on the results of the
Jiyuan Haihe Jinyu Feed Co., Ltd. De-registered
period
No material effects on the results of the
Huai’an Haichang Feed Co., Ltd. De-registered
period
Qingyuan Hainong Agriculture and No material effects on the results of the
De-registered
Animal Husbandry Co., Ltd. period
Hisenor Viet Nam No material effects on the results of the
De-registered
Aquatic Breeding Co., Ltd. period
No material effects on the results of the
Sheng Long Bio-Tech Co., Ltd. (Taiwan) De-registered
period
Xinxing Haifeng Agriculture and Animal No material effects on the results of the
De-registered
Husbandry Co., Ltd. period
Huaihua Hailong Biotechnology Co., No material effects on the results of the
De-registered
Ltd. period
Coreseed Aquaculture (Guam) No material effects on the results of the
Exited
Corporation period
Description of major subsidiaries and investees
Qingyuan Haibei Biotechnology Co., Ltd. is mainly engaged in feed premix, feed additives and veterinary medicines,
and its products are mainly sold to internal companies, farmers and dealers. The gross margin level of Qingyuan
Haibei's products is higher than that of the Company's compound feed products, and it achieved a net profit of RMB
216 million (including internal and external sales) during the reporting period.
X. Structured Entities Controlled by the Company
□ Applicable Not applicable
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
XI.Prospects for the development of the company
1.Industry landscape and trends
The 14th Five Year Plan (2021-2025) is the first five years to embark on the new journey of comprehensively
building a socialist modernized country. The Central Committee of the Communist Party of China and the State
Council's Opinions on Comprehensively Promoting Rural Revitalization and Accelerating Agricultural and Rural
Modernization (hereinafter referred to as the Rural Revitalization Opinions) was proposed to enhance the supply
guarantee capacity of grain and important agricultural products and to accelerate the construction of a modern
aquaculture system. The aquaculture industry will develop towards standardization, industrialization and scaled.
With the acceleration of intelligent, the feed industry will enter the stage of high-speed integration, and the
advantages and position of the industry leaders are increasingly prominent.
1. Structural Development of the Feed Industry
The feed industry is expected to grow steadily, but the growth rate will decrease and there will be differences in the
growth structure of different varieties. With the continuous growth of per capita disposable income, upgrading of
consumption, improvement of urbanization level, and the transformation of consumption concepts, the demand for
high-quality, distinctive, and high-standard meat products will increase, the consumption of special aquatic products
and beef and mutton meat will increase significantly, and the consumption of meat and poultry/egg poultry will be
stable. The consumption of pork will decrease, and various feed varieties will also show structural adjustments.
2. Further intensification of industry integration and increasing international competitiveness
The total growth of feed has slowed down, and the industry has entered the stock game stage with more intense
competition among feed companies. Due to various factors such as overcapacity, meager profits, significant
fluctuations in raw material prices, strict environmental regulations, and improved biological prevention and control
safety in the feed industry, a large number of small and medium-sized feed enterprises will have to withdraw. For
large enterprises with strong comprehensive strength, outstanding industrial chain product strength, and advantages
in scale, management, technology, talent and other aspects, there will be more opportunities for integrating the
market. At the same time, regional expansion and extension will become important development strategies. The
leading enterprises will use their scale and technological advantages to rapidly expand into emerging markets such
as Southeast Asia, Northeast Asia, and Africa, increasing their international competitiveness.
3. Technology driving industry progress is more evident
The differentiation and integrated development of the feed industry have made the role of technology increasingly
important in industry competition. The global correlation of agricultural products is becoming increasingly close,
and some regions' weather conditions and uncertainty in international trade relations can cause significant
fluctuations in agricultural product prices. Animal nutrition demand, feed formula adjustment, and raw material
substitution technology are all core areas of feed technology competition. The optimization and alternation of
downstream aquaculture models, as well as the richness and diversity of aquaculture varieties, have put forward
higher requirements for the adaptability of feed products. Technological research and development drive feed
products in respond to the needs of farmers in a timely manner, becoming an important competitive point. At the
same time, the innovation and development of feed products will also lead the upgrading of downstream aquaculture.
For example, the flourishing development of biological feed technology, the increasing variety of feed
microorganisms, enzyme preparations and other products, as well as the continuous expansion of functions, will
show great potential in promoting the replacement of feed antibiotics and the efficient utilization of feed resources,
which will become new competitive barriers in the industry.
4. The seedling and animal protection industries will grow rapidly over a long period of time due to the technological
progress and the upgrading of aquaculture
The Ministry of Agriculture and Rural Affairs of China has proposed to deepen the implementation of the seed
industry revitalization action, solidly promote the protection and utilization of germplasm resources and the
innovation in the seed industry, upgrade the seed industry base, support seed industry enterprises, and purify the
seed industry market, and accelerate the promotion of seed industry technology self-reliance and the controllability
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
of seed sources. High quality animal seedlings will have a huge demand for the development in the long term, and
factors such as resources, technology, and talent will gather in key seed source advantage enterprises. With the
upgrading of the aquaculture industry, the enhancement of farmers' discrimination ability, and the implementation
of national aquatic seedling inspection and quarantine access, the seedlings will enter the process of industry
integration and reshuffle. The demand for nationally recognized high-quality brand seedlings will rapidly increase,
and the value of aquatic seedlings in the aquaculture industry chain will also become increasingly apparent,
including production/disease resistance/aquaculture and other production and profit links. With the acceleration of
the trend of large-scale and centralized aquaculture, corresponding to higher biological epidemic prevention costs,
the space for animal healthcare industry is expanding upwards. At the same time, the industry implements the new
version of GMP requirements, and large enterprises with advantages such as scale, technology, and talent will
benefit from it, gradually gathering market share to top enterprises.
5. The aquaculture industry will accelerate towards scale, efficiency, and intelligence
Due to factors such as land constraints, food safety, industrial technological progress, and increasingly young
employees, the aquaculture industry will rapidly develop towards industrialization, scale, and intelligence. At
present, the large-scale of poultry farming has been formed, and the threshold for the scale is constantly increasing.
Pig farming is rapidly completing its large-scale process due to the impact of African swine fever. The scale of
aquaculture is relatively slow due to difficulties in concentrating water resources. The overall funding of the
aquaculture industry is short, and excellent listed companies in the industry are increasing their industrial expansion.
Large real-estate and technology companies are also using their own advantages to enter the aquaculture field.
Excellent enterprises are empowering automation, digitization, and intelligence in the process of bringing manpower,
technology, and management to the aquaculture industry. Meanwhile, various funds have rushed into the
aquaculture industry in recent years, leading to the sharp increase in aquaculture production capacity. The key points
of competition have shifted to management, cost, and efficiency advantages during the aquaculture process.
6. More comprehensive and in-depth development of the industrial chain
The demand for green and safe food will promote the construction of food traceability system and agricultural
standardization system. Large and excellent enterprises with technology, talent, and financial advantages will
gradually improve their industrial chain layout in connecting the industrial chain and have the ability to control full
business processes, including seedlings, breeding, feed, animal protection, transportation, food processing et al,
which will further reversely promote more efficient and in-depth industrial chain layout of large and excellent
enterprises. Food safety also forces large-scale enterprises in the industry's production process to engage in
professional docking, ensuring that every production process is safe, controllable and traceable, promoting more
aggregation of industry chain business, and accelerating industry integration.
2.Future development prospects of the company
1. The company's development strategy is to become the leading and sustainable high-tech agricultural and animal
husbandry company in China. The foundation of company development is based on "creating value for customers".
The company focuses on the upstream and downstream of aquaculture, seedling, animal healthcare, feed,
aquaculture, slaughtering, food processing and other links, building the leading industry to provide comprehensive
solutions for farmers including feed, seedling, animal healthcare, and aquaculture technology services, as well as
other needs of farmers and distributors, effectively improving the profitability of the company's farmers and
distributors, and realizing the win-win development mode between the company and customers.
2. The basic strategy for the development of the company's industrial chain is to scale up based on specialization
and extend the industrial chain based on core competitiveness. The company will focus on feed products as its core
business, while actively developing businesses such as seedling, animal protection, aquaculture, circulation, and
food processing to cultivate the company's professional capabilities throughout the entire industrial chain and build
a comprehensive core competitiveness in the industrial chain.
3. The company's business development plan. The future development focus of the company will still revolve
around the needs of the aquaculture sector, providing overall solutions for farmers, and further expanding the sales
scale and profitability of the company's feed, seedlings, and animal healthcare products. At the same time, the
company maintains an appropriate scale of pig and aquatic farming, and resolutely strengthens the professional
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
capacity of farming business.
(1) The feed business is the company's core business, and the company's feed sales target for the next few years is
40 million tons. In 2021, the company formulated an equity incentive plan that includes more than 4000 employees.
The annual feed sales growth target is no less than 3.2 million tons and increases year by year, with the compound
growth rate of about 20%, which is much higher than the growth rate of the feed industry and peer listed companies
in the industry in recent years, and also significantly higher than the growth rate of the company in previous years.
If the company's feed sales target can be successfully achieved, the company's market share will significantly
increase, and the product competitive advantage will become more obvious. The company will have sustained and
strong competitive advantages.
(2) Providing overall solutions for farmers must rely on seedlings and animal healthcare. At present, the company
has become the leader in the industry of aquatic seedlings and aquatic healthcare, with sales scale and product effects
leading the industry. Especially in recent years, the products of South American white shrimp seedlings have
consistently performed well and have been widely recognized by farmers. This not only allows farmers to
significantly increase their breeding profits, but also drives the growth of the company's feed sales. The company
will continue to increase research and the development of seedlings and business cooperation, gradually expanding
the advantages of seedlings to fish and pig varieties. In terms of animal healthcare business, the company will
continue to upgrade and iterate the service model of existing animal healthcare service stations, providing not only
high-quality animal healthcare products for farmers, but also comprehensive breeding technology services, and the
actual needs of farmers with additional value-added products and services to create unique technology hosting
platform.
(3) The aquaculture business adheres to scale based on specialization. Developing aquaculture business can deepen
the company and team's understanding of aquaculture needs and provide a large number of high-quality service
talents for feed, seedling, and animal healthcare businesses. At the same time, the aquaculture business is also
required link for the company to further expand and develop the downstream of the industrial chain in the future,
such as food processing business. In the future, the company hopes to provide healthy and traceable ingredients for
the people. The professional abilities in the breeding process must be established, and the size can be controlled at
an appropriate scale. The aquaculture business includes live pigs and aquatic products and will focus on aquaculture
where the company has established system advantages, such as factory shrimp farming. The development of
aquaculture business must adhere to scale based on specialization with mainly building the professional capabilities
of the team.
XII. Reception of research investigations, communications and interviews during the reporting
period
Applicable □ Not applicable
Main
Type of discussions
Reception Communicati Index to basic information on
Date Place communic and
method on party communication
ation party information
provided
For details, please refer to the
Table of Investor Relations
The Activity Records (2022-001)
Bosera Funds,
Company Company’s
GF Securities, (《投资者关系活动记录表
12 April 2022 Conference By phone Institution annual
Harvest Fund, （2022-001）》) published on
Room operating
etc. the website of
results
www.cninfo.com.cn on 14 April
2022
The investors For details, please refer to the
The
participating Table of Investor Relations
Company Company’s
in the Activity Records (2022-002)
20 April 2022 Conference Other Other operations and
interaction of
Room development (《投资者关系活动记录表
"Panorama
strategy （2022-002）》) published on
Road Show"
55
Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
the website of
www.cninfo.com.cn on 21 April
2022
For details, please refer to the
Table of Investor Relations
Palace Asset The Activity Records (2022-003)
Company Management, Company’s
(《投资者关系活动记录表
27 May 2022 Conference Other Institution New Top- operations and
Room Founder, development （2022-003）》) published on
Fidelity, etc. strategy the website of
www.cninfo.com.cn on 30 May
2022
For details, please refer to the
UBS SDIC Table of Investor Relations
Fund, The Activity Records (2022-004)
Company Shanghai Company’s
(《投资者关系活动记录表
30 August 2022 Conference By phone Institution Orient interim
Room Securities, operating （2022-004）》) published on
CITIC results the website of
Securities, etc. www.cninfo.com.cn on 31
August 2022
For details, please refer to the
Conference Table of Investor Relations
Room of IDG Capital, The Activity Records (2022-005)
Qingyuan Red Gate Company’s
6 September Field (《投资者关系活动记录表
Ronghai Institution Asset operations and
2022 research （2022-005）》) published on
Breeding Management, development
Technology UBS, etc. strategy the website of
Co., Ltd. www.cninfo.com.cn on 7
September 2022
For details, please refer to the
The investors Table of Investor Relations
The Activity Records (2022-006)
participating
Company Company’s
22 September in the (《投资者关系活动记录表
Conference Other Other operations and
2022 interaction of （2022-006）》) published on
Room development
"Panorama the website of
strategy
Road Show" www.cninfo.com.cn on 23
September 2022
Guotai Junan
Securities,
Guangzhou
Ruimin For details, please refer to the
Private Table of Investor Relations
Securities The Activity Records (2022-007)
Company Investment Company’s
22 September (《投资者关系活动记录表
Conference Other Other Fund, operations and
2022 （2022-007）》) published on
Room Shenzhen development
Qianhai strategy the website of
Jiuchuang www.cninfo.com.cn on 26
United Private September 2022
Securities
Investment
Fund, etc.
For details, please refer to the
GF Securities, Table of Investor Relations
CITIC The Activity Records (2022-008)
Company
21 October Securities, Company’s (《投资者关系活动记录表
Conference By phone Institution
2022 Shanghai Q3 operating （2022-008）》) published on
Room
Orient results the website of
Securities, etc. www.cninfo.com.cn on 25
October 2022
56
Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Section IV. Corporate Governance
I Overview
1. The Establishment of the Company System
From the listing of the Company to the end of the Reporting Period, the Company strictly complied with the
Company Law (《公司法》), the Securities Law (《证券法》), the Stock Listing Rules of Shenzhen Stock
Exchange (《深圳证券交易所股票上市规则》), the Guidelines No. 1 of the Shenzhen Stock Exchange for the
Self-regulation of Listed Companies—the Standard Operation of Main Board Listed Companies (《深圳证券交易
所上市公司自律监管指引第 1 号--主板上市公司规范运作》), and the laws and regulations and normative
documents and the Articles of Association, continued to improve the Company's internal corporate governance
structure, refine internal control environment, improve internal management policies, standardize corporate
operation, and strive to improve the Company's capability of governance. The actual situation of the corporate
governance conformed to the requirements of relevant normative documents issued by the China Securities
Regulatory Commission (CSRC) and Shenzhen Stock Exchange on the governance of listed companies.
2. Shareholders and General Meeting of Shareholders
During the reporting period, the Company strictly adhered to applicable laws and regulations such as the Company
Law (《公司法》), the Articles of Association (《公司章程》), and the Rules of Procedure of the General Meeting
of Shareholders (《股东大会议事规则》), as well as the Company’s internal control rules, and standardized the
convening, holding and voting procedures of the General Meeting of Shareholders to ensure that all shareholders
could be equal, and fully exercise their rights. In addition, as witnessed by the hired lawyers, the legitimacy of the
meeting’s convening, holding and voting procedures could be guaranteed, and relevant legitimate rights and
interests of the Company and its shareholders could be secured as well. In 2022, six general meetings of shareholders
were convened and held by the Board in total; the convening, holding and voting procedures of such meetings were
witnessed by the lawyers and all were legal and valid.
3. Directors and the Board of Directors
Strictly in accordance with the Company Law (《公司法》), the Articles of Association (《公司章程》), the Rules
of Procedure of the Board of Directors (《董事会议事规则》) and the Independent Director System (《独立董事
制度》), the Company has elected and appointed various directors, and such election and appointment procedures
are open, fair and just. Besides, the composition and number of directors meet relevant legal and regulatory
requirements. The members for the Company’s Sixth Board of Directors are all nominated, approved and elected
by the Board of Directors by means of the cumulative voting system. Currently, there are 7 directors, including 3
independent directors. Independent directors occupy more than one third of all directors and their qualifications are
in accordance with the Rules for Independent Directors of Listed Companies (《上市公司独立董事规则》).
All directors of the Company have performed their duties in strict compliance with relevant laws, regulations, and
regulatory documents, attended all board meetings and carried out related works in a serious and responsible manner,
and firmly conformed to any statement and commitment made by directors. However, independent directors have
full right to know about the Company’s major issues and can issue independent opinions on major issues without
being influenced.
The Board of Directors has established the Audit Committee, the Remuneration and Appraisal committee, the
Strategy Committee and the Nomination Committee. Each committee can exercise its functions in accordance with
its work rules and make due contributions to the standardization of corporate governance. In the meantime, the
Board of Directors is able to carry out its work in strict accordance with relevant laws and regulations. All directors
of the Company are honest and trustworthy, diligent and responsible, attend corresponding board meetings and
shareholders’ general meetings with a serious attitude, actively participate in relevant training, and are familiar with
relevant laws and regulations.
4. Supervisors and the Supervisory Committee
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
The Company has strictly observed the Company Law (《公司法》), the Articles of Association (《公司章程》),
and other relevant regulations to appoint supervisors. The Sixth Supervisory Committee consists of three supervisors,
including two shareholder supervisors and one employee supervisor. The number and composition of the
Supervisory Committee meet relevant requirements stipulated in applicable laws and regulations. However, the
shareholder representative supervisors are elected by adopting the cumulative voting system, and the employee
supervisors are elected and appointed by means of the employees’ assembly in the form of secret ballot. The number
of supervisors that served as directors or senior management personnel of the Company in recent two years does
not exceed one half of the total number of supervisors of the Company, and the number of supervisors nominated
by a single shareholder does not exceed one half of the total number of supervisors of the Company.
The Company’s supervisors can earnestly fulfill their responsibilities in accordance with the Rules of Procedure of
the Supervisory Committee (《监事会议事规则》), effectively supervise and inspect the Company’s major issues,
related party transactions, the legality and compliance of duties performed by the Company’s directors and senior
management, and maintain legitimate rights and interests of the Company and its shareholders.
5. Internal Audit System
The Company has established the complete internal audit system and set up the internal audit department in charge
of the effective internal supervision of the Company’s daily operations.
6. Stakeholders
The Company fully respects and safeguards legitimate rights and interests of relevant stakeholders, realizes the
coordinated balance of interests of the society, shareholders, the Company, and employees etc., sincerely treats
suppliers and customers, earnestly cultivates every employee, develops the mutual benefit and win-win cooperation
with relevant stakeholders, and jointly promotes the Company’s sustained, healthy and rapid development.
7. Information Disclosure and Transparency
Pursuant to relevant laws and regulations, as well as the Company’s Information Disclosure System (《信息披露
制度》) and Investor Relations Management System (《投资者关系管理制度》), the Company has disclosed
corresponding information in a true, accurate, complete and timely manner to ensure that all shareholders have equal
access to such information.
The Chairman of the Board accepts primary responsibility for the management of information disclosure affairs.
The Company has designated the Board Secretary in charge of the Company’s information disclosure and investor
relations management, and the Securities Department serves as the executive department for information disclosure
and investor relations management. The Company pays special attention to communicate with investors and will
strengthen communication with investors by various means such as telephone, e-mail, and investor relations
interactive platform etc.
8. Investor Relations Management
The Company has always attached great importance to the management of investor relations, carried out related
works in accordance with the Investor Relations Management System (《投资者关系管理制度》) and other
systems, implemented the investor relations management by various means such as Shenzhen Stock Exchange
investor relations interactive platform, investor hot-lines, and reception of investors etc., strengthened the
communication with investors, and fully guaranteed the investors’ right to know.
The corporate governance is a systematic and long-term project that requires continuous improvement. After the
Company is successfully listed, it is willing to accept supervisions from all parties, adhere to the scientific outlook
on development, constantly improve the corporate governance system, and strengthen the implementation of various
laws and regulations to promote the healthy development of the Company and enhance the overall competitiveness.
9. Insider Information Management
According to the Company Law (《公司法》), the Securities Law (《证券法》), the Stock Listing Rules of
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Shenzhen Stock Exchange (《深圳证券交易所股票上市规则》), the Guidelines No. 5 of the Shenzhen Stock
Exchange for the Self-regulation of Listed Companies—Management of Information Disclosure Affairs (《深圳证
券交易所上市公司自律监管指引第 5 号——信息披露事务管理》), the Guidelines No. 1 of the Shenzhen Stock
Exchange for the Self-regulation of Listed Companies—the Standard Operation of Main Board Listed Companies
(《深圳证券交易所上市公司自律监管指引第 1 号--主板上市公司规范运作》), the Guidelines No. 5 for the
Regulation of Listed Companies—Establishment of Insiders Registration and Management System by Listed
Companies (《上市公司监管指引第 5 号——上市公司内幕信息知情人登记管理制度》) and other relevant
laws, regulations, and the Articles of Association (《公司章程》), the Company has established the Management
System for Information Insider Registration (《内幕信息知情人登记管理制度》). The Company properly carried
out corresponding information insider registration and reporting works strictly according to relevant requirements
and systems, and recorded and disclosed the list of all information insiders and material matter progress
memorandums in all the links of reporting, transmitting, preparation, resolution-making and disclosure before any
information was disclosed. During the Reporting Period, the Company notified all directors, supervisors, senior
management and relevant information insiders that they were not allowed to buy and sell the Company’s shares
within the window period by means of SMS and e-mail 30 days before the disclosure of annual and interim reports
and 10 days before the disclosure of quarterly reports, earnings forecast announcements and preliminary earnings
estimate announcements, and conducted an internal audit on the buying and selling of the Company’s shares by
directors, supervisors, senior management and relevant information insiders. During the reporting period, no
information insider was ever involved in the illegal buying and selling of the Company’s shares, and no relevant
personnel was suspected of being involved in insider trading and was imposed some supervision measures and
administrative penalties by competent regulatory departments.
Indicate whether there is any material incompliance with the applicable laws, administrative regulations and
regulations issued by the CSRC governing the governance of listed companies
□ Yes No
No such incompliance.
II. The Company’s Independence from the Controlling Shareholder and the Actual Controller
in Asset, Personnel, Financial Affairs, Organizational Structure and Business
The Company has independent and complete businesses and independent management capabilities. It is completely
independent from the controlling shareholder in terms of asset, personnel, financial affairs, organizational structure
and business.
1. Asset: The property rights relationship between the Company and the controlling shareholder is clear. The
Company has independent land use rights and housing property. The Company's assets are independently registered,
set up in accounting, accounted for, and managed so as to avoid the controlling shareholder's occupation for non-
operating purposes and allocation of the Company's assets or the intervention of the operation and management of
such assets.
2. Personnel: The Company has established an independent human resources system. The controlling shareholder
exercises its rights and assumes corresponding obligations in accordance with the law, and does not affect the
personnel appointment or dismissal of the listed Company, nor restricted the duty fulfillment of the directors,
supervisors, senior management or other personnel of the listed Company by means other than exercising
shareholder's rights specified in laws and regulations.
3. Financial affairs: The Company has set up a complete and independent financial institution with sufficient full-
time personnel, established an independent accounting system and financial management system, set up independent
bank accounts, independently paid taxes, allocated funds, and made financial decisions. As a result, the controlling
shareholder cannot intervene in the Company's financial management;
4. Organizational structure: The Company's Board of Directors, Supervisory Committee, and internal functional
departments can independently operate. There is no leader-member relation between the controlling shareholder
and internal institutions. The controlling shareholder did not directly or indirectly intervene in the Company's
59
Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
decision-making and business activities without the General Meeting of Shareholders.
5. Business: The business structure of the Company is independent and complete, which is of the business capability
of independent market orientation and management. There is no competition in terms of the Company's business
cope, business nature, customer objects, and product replaceability. In addition, the controlling shareholder cannot
harness its controlling position to the Company to try to gain the Company's business opportunities. Moreover, the
controlling shareholder cannot substitute the General Meeting of Shareholders and the Board of Directors to directly
make major decisions for the listed company and intervene in the normal decision-making process of the listed
company.
III. Horizontal Competition
□ Applicable Not applicable
IV. Annual and Extraordinary General Meetings of Shareholders Convened during the
Reporting Period
1. General Meetings of Shareholders Convened during the Reporting Period
Investor
Date of the
Meeting Type participati Disclosure date Resolutions
meeting
on ratio
For details, see the Announcement on
Resolutions of 2021 Annual General
Meeting of Shareholders (《2021 年年度
2021 Annual
General Meeting Annual 64.32% 9 May 2022 10 May 2022 股东大会决议公告》) (No. 2022-027)
of Shareholders disclosed on Securities Times, China
Securities Journal, Shanghai Securities
News, Securities Daily and
www.cninfo.com.cn
For details, see the Announcement on
Resolutions of First Extraordinary
First Extraordinary General Meeting of Shareholders of 2022
General Meeting Extraordi (《2022 年第一次临时股东大会决议公
73.18% 16 May 2022 17 May 2022
of Shareholders of nary 告》) (No. 2022-030) disclosed on
2022 Securities Times, China Securities
Journal, Shanghai Securities News,
Securities Daily and www.cninfo.com.cn
For details, see the Announcement on
Resolutions of Second Extraordinary
Second General Meeting of Shareholders of 2022
Extraordinary
Extraordi (《2022 年第二次临时股东大会决议公
General Meeting 65.00% 2 June 2022 3 June 2022
nary 告》) (No. 2022-041) disclosed on
of Shareholders of
2022 Securities Times, China Securities
Journal, Shanghai Securities News,
Securities Daily and www.cninfo.com.cn
For details, see the Announcement on
Resolutions of Third Extraordinary
Third General Meeting of Shareholders of 2022
Extraordinary
Extraordi 19 August (《2022 年第三次临时股东大会决议公
General Meeting 61.96% 20 August 2022
nary 2022 告》) (No. 2022-063) disclosed on
of Shareholders of
2022 Securities Times, China Securities
Journal, Shanghai Securities News,
Securities Daily and www.cninfo.com.cn
For details, see the Announcement on
Fourth Resolutions of Fourth Extraordinary
Extraordinary General Meeting of Shareholders of 2022
Extraordi 7 November
General Meeting 64.27% 8 November 2022
nary 2022 (《2022 年第四次临时股东大会决议公
of Shareholders of
2022 告》) (No. 2022-092) disclosed on
Securities Times, China Securities
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Journal, Shanghai Securities News,
Securities Daily and www.cninfo.com.cn
For details, see the Announcement on
Resolutions of Fifth Extraordinary
Fifth General Meeting of Shareholders of 2022
Extraordinary
Extraordi 28 December 29 December (《2022 年第五次临时股东大会决议公
General Meeting 63.56%
nary 2022 2022 告》) (No. 2022-107) disclosed on
of Shareholders of
2022 Securities Times, China Securities
Journal, Shanghai Securities News,
Securities Daily and www.cninfo.com.cn
2. Extraordinary General Meetings of Shareholders Convened at Request of Preferred
Shareholders with Resumed Voting Rights
□ Applicable Not applicable
V. Directors, Supervisors and Senior Management
1. General Information
Increa
Openi Decrea Other
se in
Incu ng se in increa Closing Reasons
Ge Report
Office mbent Starting date Ending date shareh Report se/dec sharehol for
Name nd Age ing
title /Form of tenure of tenure olding ing rease ding share
er Period
er (share Period (share (share) changes
(share
) (share) )
)
Chair
Hua man Incu Ma 18 August
53 6 June 2007
Xue of the mbent le 2025
Board
Hua Presid Incu Ma 25 May 18 August
53
Xue ent mbent le 2010 2025
Vice
Chair
Yingzhu Incu Ma 18 August
man 55 6 June 2007
o Xu mbent le 2025
of the
Board
Personal
Qi Direct Incu Ma 16 July 18 August 70,00
43 17,500 52,500 financial
Cheng or mbent le 2019 2025 0
needs
Execu
tive
Qi Incu Ma 16 July 18 August
Vice 43
Cheng mbent le 2019 2025
Presid
ent
Xueqiao Direct Incu Ma 3 February 18 August 255,7
56 255,700
Qian or mbent le 2021 2025 00
Vice
Xueqiao Incu Ma 16 July 18 August
Presid 56
Qian mbent le 2019 2025
ent
Chief
Xueqiao Incu Ma 18 August
Engin 56 6 June 2007
Qian mbent le 2025
eer
Indepe
Jianfang ndent Incu Ma 16 July 18 August
67
Gui Direct mbent le 2019 2025
or
Indepe
Jianguo ndent Incu Ma 16 July 18 August
61
He Direct mbent le 2019 2025
or
Yunguo Indepe Incu Ma 16 July 18 August
57
Liu ndent mbent le 2019 2025
61
Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Direct
or
Zhenxio Super Incu Ma 18 August
53 6 June 2007
ng Qi visor mbent le 2025
16
Hua Super Incu Ma 18 August
36 November
Wang visor mbent le 2025
2020
Fe 16
Yongfan Super Incu 18 August
ma 34 November
g Mu visor mbent 2025
le 2020
Vice Personal
Guoxian Incu Ma 16 July 18 August 202,6
Presid 54 50,600 152,070 financial
g Liu mbent le 2019 2025 70
ent needs
Vice
Shaolin Incu Ma 16 July 18 August 330,9
Presid 49 330,900
Yang mbent le 2019 2025 00
ent
Chief
Financ
Shaolin Incu Ma 22 October 18 August
ial 49
Yang mbent le 2012 2025
Office
r
Vice Personal
Xiewu Incu Ma 16 July 18 August 66,78
Presid 55 16,600 50,180 financial
Jiang mbent le 2019 2025 0
ent needs
Vice Personal
Guoche Incu Ma 16 July 18 August 242,8
Presid 51 60,700 182,100 financial
ng Mi mbent le 2019 2025 00
ent needs
Vice Personal
Zhongz Incu Ma 16 July 18 August 188,6
Presid 53 47,100 141,570 financial
hu Chen mbent le 2019 2025 70
ent needs
Mingzh Vice
Incu Ma 18 August
ong Presid 58 6 June 2007
mbent le 2025
Chen ent
Vice
Jiantao Incu Ma 19 August 18 August
Presid 54
Yang mbent le 2022 2025
ent
Vice Fe
Jing Incu 19 August 18 August
Presid ma 44 8,700 8,700
Wang mbent 2022 2025
ent le
Vice
Zhijian Incu Ma 26 July 18 August 412,2
Presid 45 412,244
Huang mbent le 2012 2025 44
ent
Board
Zhijian Incu Ma 26 July 18 August
Secret 45
Huang mbent le 2012 2025
ary
1,778, 192,50 1,585,96
Total -- -- -- -- -- -- 0 0 --
464 0 4
Note: The opening shareholdings of Mr. Jiantao Yang and Ms. Jing Wang both refer to their shareholdings on 19
August 2022 when they were appointed as the sixth senior management of the Company.
Indicate whether any director, supervisor or senior management resigned before the expiry of their tenures during
the reporting period
□ Yes No
Change in directors, supervisors and senior management
Applicable □ Not applicable
Name Office title Type of change Date Reason
Appointed by the
Jiantao Yang Vice President Appointed 18 August 2022
Board of Directors
Appointed by the
Jing Wang Vice President Appointed 18 August 2022
Board of Directors
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
2. Brief Biographies
Professional backgrounds, main working experience and current responsibilities in the Company of the incumbent
directors, supervisors and senior management:
(1) Directors
Mr. Hua Xue, born in 1970, holds a master’s degree and is an engineer. He graduated from College of Fisheries of
Huazhong Agricultural University in 1992 with a major in special aquaculture; in 1995, he obtained the master’s
degree in zoology from School of Life Sciences of Sun Yat-Sen University. He was/is the Chairman of China
Vocational Education Group of Modern Fishery, Vice Chairman of China Association of Young Rural
Entrepreneurial Leaders (CAYREL), Chairman of Guangdong Hi-tech Enterprise Association (GDHTEA), Vice
President of Guangdong Feed Industry Association, Vice Chairman of Guangdong Antibiotic-Free Feed Industry
Alliance, the NPC Member of the 16th National Congress of the Communist Party of Guangzhou, a member of the
11th Chinese People’s Political Consultation Conference Guangzhou Committee, Vice Chairman of the 15th
Executive Committee of Guangzhou Federation of Industry and Commerce, and Honorary Chairman of Guangzhou
Feed Profession Association (GZFPA). Meanwhile, he is recognized as “Leading Entrepreneur in China’s Feed
Industry” by the Ministry of Agriculture, and “Top 30 Excellent Entrepreneurs in China” by China Feed Industry
Association (CFIA). As one of the founders of the Company, he now serves as the Chairman of the Board and
President (General Manager) of the Company, as well as an Executive Director of the Company’s controlling
shareholder Guangzhou Haihao Investment Co., Ltd. Mr. Hua Xue holds 39.75% equity interests in the Company's
controlling shareholder Guangzhou Haihao Investment Co., Ltd. and is the actual controller of the Company.
Mr. Yingzhuo Xu, born in 1968, is a livestock specialist. He graduated from South China Agricultural University
in 1991 with a bachelor's degree in animal husbandry, and then received a master’s degree in business administration
from HEC Paris. As one of the founders of the Company, he now serves as the Company’s Vice Chairman of the
Board, as well as the General Manager of the Company’s controlling shareholder Guangzhou Haihao Investment
Co., Ltd.
Mr. Qi Cheng, born in 1980, holds a master’s degree. He graduated from the major of Automation of Huazhong
University of Science and Technology in 2002; studied the major of World Economy in Sun Yat-sen University
from 2005 to 2008 and obtained the Master’s degree; studied EMBA in CEIBS from 2013 to 2015 and obtained
MBA. From 2002 to 2010, he served as Process Engineer, Operation Manager, Supply Chain Manager and Director
of Technology in Guangzhou Procter & Gamble Co., Ltd.; from 2010 to 2017, he served as Operation Director of
East Asia-Pacific Region and Global Supply Chain Director in Essel Propack Co., Ltd. Joining the Company in
March 2017, he currently serves as a Director, an Executive Vice President (Deputy General Manager) (assisting
the President/General Manager in the overall operations of the Company), as well as the General Manager of the
South China Region of the Company.
Dr. Xueqiao Qian, born in 1967, holds a doctorate degree. He successively presided over or participated in the Hubei
Provincial Natural Science Fund Project -- Development and Utilization of Feather Proteins in Fishery Feeds, the
development projects of the State Key Laboratory of Freshwater Ecology and Biotechnology -- Effects of Nutrition
Levels and Nutritional History on Fish’s Growth and Activities, Research on the Feeding Behavior and Chemical
Sensation of Allogynogenetic Crucian Carp, and Studies on the Utilization of Plant Protein by Main Cultured
Freshwater Fish, the NSFC Project -- Studies on the Comparative Nutritional Energetics of Feed Protein
Requirements of Carnivorous Fish and Omnivorous Fish, and the MOA’s 948 project -- Artificial Propagation and
Large-scale Aquaculture of Paddlefish etc.. Further, he has published more than 20 papers, of which, three papers
were published in international publications and included in SCI. He joined the Company in 2004 and is mainly
engaged in the aquatic animal nutrition and feed research and the development of new feed additives. Now, he is a
Director, Deputy General Manager (Vice President) (responsible for technology research and development and the
animal healthcare business), as well as the Chief Engineer of the Company. He is also a Supervisor in the Company’s
controlling shareholder Guangzhou Haihao Investment Co., Ltd.
Dr. Jianfang Gui, born in 1956, holds a doctorate degree. He is a doctoral supervisor as well as an academician of
the Chinese Academy of Sciences and of The World Academy of Sciences. He graduated from the major of
Cytobiology of Wuhan University and obtained the Bachelor’s degree in January 1982; obtained the Master’s degree
in Genetics from Wuhan University in December 1984 and joined in Institute of Hydrobiology, Chinese Academy
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
of Sciences in the same year and has since worked there. In 1995, he obtained the Doctor’s degree of science from
Institute of Hydrobiology, Chinese Academy of Sciences. From 1991 to 1994, he paid work visits and conducted
postdoctoral research in Medical College of Ohio and US San Diego. From 1995, he served as Researcher and
Doctoral Supervisor in Institute of Hydrobiology, Chinese Academy of Sciences. He served as Executive Deputy
Director and Director of Hydrobiology from 1999 to 2007, Director of
State Key Laboratory of Freshwater Ecology and Biotechnology from 2001 to 2011, and Independent Director of
the 1st and 2nd sessions of the Board of the Company from 2007 to 2013. Currently he serves as a research fellow
of the Institute of Hydrabiology, Chinese Academy of Sciences, and a Vice President of China Society of Fisheries.
He is an Independent Director of the Company.
Dr. Jianguo He, born in 1962, holds a doctorate degree. He is a professor, winner of “The National Science Fund
for Distinguished Young Scholars” and Chief Scientist of the State Shrimp and Crab Industry Technology System.
He graduated from the major of Zoology of Sun Yat-sen University and obtained the Doctor’s degree of science in
1990. He has been working in Sun Yat-sen University since 1991. He served as Deputy Director of College of Life
Sciences, Sun Yat-sen University from 2000 to 2008, and Director of College of Marine Science, Sun Yat-sen
University from 2008 to 2018. His current positions include Professor of Sun Yat-sen University, Director of State
Key Laboratory of Aquatic Animal Disease Prevention and Control and Healthy Farming, Director of China-
ASEAN Mariculture Technology “Belt and Road” Joint Laboratory, Deputy Director of Aquacultural Disease
Control Expert Commission of MARA, and Vice President of the Crustacean Branch of China Zoological Society.
He is an Independent Director of the Company.
Dr. Yunguo Liu, born in 1966, holds a doctorate degree in accounting from Xiamen University. He is a visiting
scholar at the University of Houston in the U.S., a National Baosteel Outstanding Teacher and a Guangdong
Province (Undergraduate) Teaching Master. His current positions and titles include Professor of Accounting and
Doctoral Supervisor in Sun Yat-sen Business School (SYSBS), Director of School of Accountancy in Guangzhou
Xinhua University (a private university), Senior Research Fellow of China Enterprise Reform and Development
Society, Member of Management Accounting Professional Committee of Chinese Accounting Society, Executive
Director of Cost Research Society of China, a management, accounting and consultancy expert of the Ministry of
Finance, Member of CGMA North Asian 100 Think Tank Leaders, Member of IMA Academic Consultation
Commission, Vice Chairman of the Advisory Branch of the China Association of Chief Financial Officers, Vice
Chairman of Guangdong Association of Management Accountants, Editorial Board Member of China Management
Accounting Studies, and Editorial Board Member of China Management Accounting Review. He has been selected
for the Accounting Masters Development Program (2019) of the Ministry of Finance, the Third Batch for the Special
Support Program of the Ministry of Finance, and the Leading Accounting Talent Program (Phase I) of the Ministry
of Finance. He is also an Independent Director of Guangzhou Haige Communications Group Incorporated Company.
He is an Independent Director of the Company.
(2) Supervisors
Dr. Zhenxiong Qi, born in 1970, is a senior engineer. He successively participated in a key program of National
Natural Science Foundation of China, the National Key Technologies R & D Program of China during the 8th Five-
Year Plan Period, National Climb—B Plan, and programs of the Shandong and Guangdong Provincial Natural
Science Funds. Meanwhile, he has also published many research papers, applied for multiple invention patents and
been granted a State Technological Invention Award (Second Prize). Since he joined the Company in 2004, he has
been mainly engaged in researches on animal nutrition and feed, aquatic farming and disease control. He is now the
Chief Engineer for the Company’s Functional Ingredients Development Platform Product Line, and the Chairman
of the Company’s Supervisory Committee.
Mr. Hua Wang, born in 1987, holds a master’s degree and is an economist. He majored in politics and administration
and graduated from Southwest Jiaotong University in 2009. He obtained a professional master's degree in political
theory from Wuhan University in 2011. Hua Wang worked for China Tunnel Construction Co. Ltd. Guangdong
from July 2011 to March 2017, and worked for Guangdong Cinda Real Estate Co., Ltd. from June 2017 to March
2019. He joined the Company in April 2019, and currently serves as the Assistant to the Head of the Group's
Secretary Office, as well as a Supervisor of the Company.
Ms. Yongfang Mu, born in 1989, holds a bachelor’s degree and is an intermediate accountant. Yongfang Mu
graduated from Henan University of Economics and Law in June 2012, majoring in accounting. Joining the
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Company in July 2012, she used to hold positions related to cost accounting, budget management and financial
management for the Company. She currently serves as the Financial Manager and a Supervisor of the Company.
(3) Senior Management
Mr. Guoxiang Liu, born in 1969, holds a bachelor’s degree and is a Vice Chairman of Hubei Province Feed Industry
Association. He graduated from the Aquaculture Department of Huazhong Agricultural University in 1992,
majoring in special aquaculture professionalism. Joining the Company in 2004, he is now a Vice President (Deputy
General Manager) (responsible for the investment, construction and operation of the Company’s investment
projects), as well as the Central China General Manager of the Company.
Mr. Shaolin Yang, born in 1974, holds a master’s degree and is a senior accountant, certified public accountant, and
certified tax accountant. He graduated from Sun Yat-sen University with a major in Business Administration. From
2008 to 2012, he served as Executive Director, CFO and Joint Secretary of KEE Holdings Company Limited
(HK.02011). He has been selected for the high-tech enterprise review expert pool of the Department of Science and
Technology of Guangdong Province, and is a Vice Chairman of Guangdong Association of Management
Accountants. Since June 2016, he has acted as an extramural tutor for master’s degree students in accounting of Sun
Yat-sen Business School. Since 2021, he has been a tutor for master’s degree students in accounting of Guangdong
University of Foreign Studies. In 2012, he joined the Company and is currently the Company’s Vice President
(Deputy General Manager) (responsible for the Company’s finance, business finance and risk control) and CFO.
Mr. Xiewu Jiang, born in 1968, holds a bachelor’s degree and is an aquacultural engineer. He graduated from the
major of Special Aquaculture of College of Fisheries, Huazhong Agricultural University in 1992. He is Vice
Chairman of China Fisheries Association, Executive Chairman of the First Board of Directors of the Aquatic Seed
Branch of China Fisheries Association, Vice Chairman of Guangdong Ocean Association, Vice Chairman of the
Marine Animal Branch of Guangdong Ocean Association, and Honorary Chairman of Weifang Fisheries
Association. Currently, he serves as a Vice President (Deputy General Manager) (responsible for the aquatic seed
and aquaculture business) and General Manager of the Premix Division of the Company.
Mr. Guocheng Mi, born in 1972, holds a bachelor’s degree. He graduated from the major of Freshwater Fishery of
Southwest Agricultural University. He joined the Company in 2010 and currently serves as a Vice President (Deputy
General Manager) (responsible for the pig farming business) and the General Manager of the Pig Farming Division
of the Company.
Mr. Zhongzhu Chen, born in 1970, holds a master’s degree. He joined the Company in 2004 and currently serves
as a Vice President (Deputy General Manager) (responsible for the aquaculture business) and the General Manager
of the Shrimp Feed Division of the Company.
Mr. Mingzhong Chen, born in 1965, holds a master’s degree. His current social titles include Vice President of
Guangzhou Municipal Agricultural Leading Enterprises Association, Vice President of the Standing Committee of
Panyu District Federation of Industry and Commerce of Guangzhou, Vice President of the three federations of
Guangzhou (including Guangzhou Industrial Economy Federation) and Executive Vice President of Nancun
General Chamber of Commerce of Panyu District, Guangzhou. He has won a number of honors and titles, such as
“Excellent Entrepreneur for Caring for Employees in Panyu District, Guangzhou”. He joined the Company in 2004
and currently serves as a Vice President (Deputy General Manager) of the Company, who is responsible for public
relations, brand image and promotion.
Mr. Jiantao Yang, born in 1969, holds an MBA degree from Hong Kong Baptist University. He joined the Company
in 2004 and currently serves as a Vice President (Deputy General Manager) of the Company, who is responsible for
raw material processing, sourcing & trading and supply chain management.
Ms. Jing Wang, born in 1979, graduated from the University of Science and Technology of China in 2001 with a
degree in Management Science and studied for an MBA at Cheung Kong Graduate School of Business from 2006
to 2008. From 2001 to 2006, she worked at Iflytek Co., Ltd., Shenzhen Bohua Consulting Co., Ltd., and Tencent
Technology Co., Ltd. From early 2008 to 2010, she worked as a consultant for IBM China. She joined the Company
in February 2012 and currently serves as a Vice President (Deputy General Manager) of the Company, who is
responsible for human resource management.
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Mr. Zhijian Huang, born in 1978, is an accountant and holds a bachelor’s degree. He joined the Company in 2004
and is now a Vice President (Deputy General Manager) (responsible for securities affairs, investment and financing
and M&As), as well as the Board Secretary of the Company.
Posts concurrently held in shareholding entities
Applicable □ Not applicable
Remuneration
or allowance
Shareholding Post held in Starting date of
Name Ending date of tenure from
entity shareholding entity tenure
shareholding
entity
Guangzhou
Hua Xue Haihao Investment Executive director 27 September 2006 No
Co., Ltd.
Guangzhou
Yingzhuo Xu Haihao Investment General Manager 1 December 2021 Yes
Co., Ltd.
Guangzhou
Xueqiao Qian Haihao Investment Supervisor 1 December 2021 No
Co., Ltd.
Note N/A
Posts held concurrently in other entities
Applicable □ Not applicable
Remuneration
Post held in other Starting date of or allowance
Name Other entity Ending date of tenure
entity tenure from the
entity
Guangdong
Hua Xue Aerocity Holding Director 21 January 2015 No
Co., Ltd.
Guangzhou
Huading
Hua Xue Supervisor 19 May 2022 No
Investment
Holding Co., Ltd.
Guangzhou Huayu
Hua Xue Investment Co., Executive Director 14 December 2021 No
Ltd.
Zhuhai Fuheyan
Enterprise
Hua Xue Supervisor 3 August 2022 No
Management Co.,
Ltd.
Zhuhai Haihao
Industrial Chairman of the
Yingzhuo Xu 22 July 2020 No
Investment Co., Board
Ltd.
Guangdong
Haihaowan
Yingzhuo Xu Executive Director 22 April 2020 No
Development Co.,
Ltd.
Guangzhou
Haihao
Yingzhuo Xu Executive Director 29 April 2020 No
Biotechnology
Co., Ltd.
Guangzhou
Haoyue
Yingzhuo Xu Biotechnology Executive Director 29 May 2020 No
Development Co.,
Ltd.
Guangzhou
Zhuoling Executive Director
Yingzhuo Xu 2 June 2021 No
Investment and Manager
Development Co.,
66
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Ltd.
Guangzhou
Zhuoyi Investment
Yingzhuo Xu Supervisor 4 June 2021 No
Development Co.,
Ltd.
Guangzhou
Zhuosheng Executive Director
Yingzhuo Xu 8 June 2021 No
Investment and Manager
Holding Co., Ltd.
Guangzhou Huayu
Yingzhuo Xu Investment Co., Manager 14 December 2021 No
Ltd.
Guangzhou
Haihaowan
Yingzhuo Xu Business Executive Director 27 July 2022 No
Management Co.,
Ltd.
Guangzhou Huayu
Xueqiao Qian Investment Co., Supervisor 14 December 2021 No
Ltd.
Guangzhou
Qingyuan
Xueqiao Qian Executive Director 25 February 2022 No
Investment Co.,
Ltd.
Institute of
Hydrobiology,
Jianfang Gui Research fellow 1 August 1995 Yes
Chinese Academy
of Sciences
Sun Yat-Sen
Jianguo He Professor 1 December 1994 Yes
University
Bainong
Guochuang
Jianguo He (Beijing) Director 23 July 2019 Yes
Technology Co.,
Ltd.
Sun Yat-Sen
Yunguo Liu Professor 1 December 1999 Yes
University
Guangzhou Haige
Communications
Independent
Yunguo Liu Group 1 December 2022 Yes
Director
Incorporated
Company
Guangzhou
Qingyuan
Guoxiang Liu Supervisor 25 February 2022 No
Investment Co.,
Ltd.
Extramural Tutor
Sun Yat-Sen
Shaolin Yang for master’s degree 5 June 2016 5 June 2028 Yes
University
students
Guangdong
Tutor for master’s
Shaolin Yang University of 1 January 2021 1 January 2025 Yes
degree students
Foreign Studies
Guangdong
Association of
Shaolin Yang Vice Chairman 1 October 2021 1 October 2027 No
Management
Accountants
Guangzhou
Haishengyuan
Xiewu Jiang Executive Director 27 January 2022 No
Investment Co.,
Ltd.
Wujiaqu Tycoon
Jiantao Yang Plant Protein Co., Director 19 October 2020 No
Ltd.
Alaer Ruiliheng
Jiantao Yang Biological Protein Director 26 October 2016 No
Co., Ltd.
67
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Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors
and senior management as well as those who left in the Reporting Period
□ Applicable Not applicable
3. Remuneration of Directors, Supervisors and Senior Management
Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors and
senior management
The Company has formulated the Remuneration and Appraisal Management System for Directors, Supervisors and
Senior Management (《董事、监事和高级管理人员薪酬与考核管理制度》) in accordance with national laws
and regulations and taking into account its actual situation. The general meeting of shareholders, as the highest
authority of the Company, is responsible for considering and approving the implementation, changes and
termination of the remuneration and appraisal system.
The Company has formulated the Remuneration Plan for Directors and Senior Management (《公司董事和高级
管理人员薪酬方案》) and the Allowance Plan for Supervisors (《公司监事津贴方案》): non-independent
directors do not receive director's allowance in the Company; independent directors adopt an annual allowance
system with an allowance of RMB 180,000/year; senior management remuneration consists of basic remuneration,
floating annual performance bonuses and other incentives, and senior management who also serve as directors are
remunerated in accordance with the senior management remuneration standards; supervisor’s allowance is RMB
60,000/year, and supervisors who also serve in other positions in the Company are remunerated by a combination
of post remuneration and supervisor’s allowance.
Remuneration of directors, supervisors and senior management in the Reporting Period
Unit: RMB’0,000
Total before-tax
Remuneration
Incumbent/For remuneration
Name Office title Gender Age from related
mer from the
party
Company
Chairman of the Board and General
Hua Xue Male 53 Incumbent 292.04 No
Manager
Yingzhuo
Vice Chairman of the Board Male 55 Incumbent - Yes
Xu
Director and Executive Vice President
Qi Cheng Male 43 Incumbent 203.12 No
(Deputy General Manager)
Xueqiao Director, Vice President (Deputy
Male 56 Incumbent 209.88 No
Qian General Manager) and Chief Engineer
Jianfang
Independent Director Male 67 Incumbent 18 No
Gui
Jianguo
Independent Director Male 61 Incumbent 18 No
He
Yunguo
Independent Director Male 57 Incumbent 18 No
Liu
Zhenxiong
Supervisor Male 53 Incumbent 106.68 No
Qi
Hua Wang Supervisor Male 36 Incumbent 52.21 No
Yongfang
Supervisor Female 34 Incumbent 63.99 No
Mu
Guoxiang Vice President (Deputy General
Male 54 Incumbent 212.23 No
Liu Manager)
Shaolin Vice President (Deputy General
Male 49 Incumbent 199.11 No
Yang Manager) and Chief Financial Officer
Xiewu Vice President (Deputy General
Male 55 Incumbent 192.8 No
Jiang Manager)
Guocheng Vice President (Deputy General
Male 51 Incumbent 200.65 No
Mi Manager)
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Zhongzhu Vice President (Deputy General
Male 53 Incumbent 156.14 No
Chen Manager)
Mingzhon Vice President (Deputy General
Male 58 Incumbent 65.67 No
g Chen Manager)
Jiantao Vice President (Deputy General
Male 54 Incumbent 88.99 No
Yang Manager)
Vice President (Deputy General
Jing Wang Female 44 Incumbent 95.58 No
Manager)
Zhijian Vice President (Deputy General
Male 45 Incumbent 147.28 No
Huang Manager) and Board Secretary
Total -- -- -- -- 2,340.37 --
Notes: 1. Yingzhuo Xu, Vice Chairman of the Board of the Company, has acted as General Manager of the
Company’s controlling shareholder Guangzhou Haihao Investment Co., Ltd. (hereinafter referred to as “Haihao
Investment”) since December 2021, and has been paid by Haihao Investment since 1 December 2021. He was not
remunerated by the Company in 2022.
2. The table above is exclusive of a total of RMB 32.8397 million of share of the operating profit of the last three
years and special bonuses that were granted in 2022 to Deputy General Managers Qi Cheng, Xueqiao Qian,
Guoxiang Liu, Shaolin Yang, Xiewu Jiang, Guocheng Mi, Zhongzhu Chen, Mingzhong Chen, Jiantao Yang, Jing
Wang and Zhijian Huang. The aforesaid amounts have been given to their personal accounts after deducting the
individual income tax as required.
VI. Performance of Duties by Directors in the Reporting Period
1. Board Meetings Convened in the Reporting Period
Date of
Disclosure
Meeting the Resolutions
date
meeting
The following proposals were approved: 1. The Proposal on the 'Report on the Work
of the Board of Directors for 2021' (《关于<公司 2021 年度董事会工作报告>的议
案》); 2. The Proposal on the 'Report on the Work of the General Manager of the
Company for the Year 2021' (《关于<公司 2021 年度总经理工作报告>的议案》);
3. The Proposal on the 'Annual Report of the Company for 2021' and its Abstract (《关
于<公司 2021 年年度报告>及其摘要的议案》); 4. The Proposal on the 'Financial
Final Report for 2021 of the Company' (《关于<公司 2021 年度财务决算报告>的
议案》); 5. The Proposal on the Profit Appropriation Plan in 2021 (《关于 2021 年
度利润分配预案的议案》); 6. The Proposal on the 'Internal Control Self-assessment
Report of the Company in 2021' (《关于<公司 2021 年度内部控制自我评价报告>
的议案》); 7. The Proposal on the 'Special Report on Deposit and Usage of Raised
Funds of the Company in 2021' (《关于<公司 2021 年年度募集资金存放与使用情
况的专项报告>的议案》); 8. The Proposal on the 'Corporate Social Responsibility
Report 2021 of the Company' (《关于<公司 2021 年社会责任报告>的议案》); 9.
The 25th The Proposal on Routine Related-party Transactions in 2022 (《关于 2022 年日常关
Meeting of the 10 April 12 April
联交易的议案》); 10. The Proposal on the External Guarantee (《关于对外提供担
Fifth Board of 2022 2022
Directors 保的议案》); 11. The Proposal on the Application for Comprehensive Credit Line
from Banks in 2022 (《关于 2022 年向银行申请综合授信额度的议案》); 12. The
Proposal on Conducting Hedging Business in 2022 (《关于 2022 年开展套期保值
业务的议案》); 13. The Proposal on the Cash Management of Part of Idle Funds
Raised and Self-owned Funds (《关于使用部分闲置募集资金及自有资金进行现
金 管 理 的 议 案 》); 14. The Proposal on Capital Increase to Majority-owned
Subsidiary & the Related-party Transaction (《关于向控股子公司增资暨关联交易
的议案》); 15. The Proposal on the Lease of Office Space & the Related-party
Transaction (《关于租赁办公场地暨关联交易的议案》); 16. The Proposal on the
Adjustment to Independent Director’s Allowance (《关于调整独立董事津贴的议
案》); 17. The Proposal on the 'Dividend Distribution Plan of Guangdong Haid Group
Co., Limited for the Next Three Years (2022-2024)' (《关于<广东海大集团股份有
限公司未来三年（2022-2024 年）分红回报规划>的议案》); 18. The Proposal on
the 'First Quarter Report for 2022 of the Company' (《关于<公司 2022 年第一季度
报告>的议案》); and 19. The Proposal on Convening the 2021 Annual General
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Meeting of Shareholders (《关于召开 2021 年年度股东大会的议案》).
The following proposals were approved: 1. The Proposal on the Company being
Eligible for Private Placement of Shares (《关于公司符合非公开发行股票条件的
议案》); 2. The Proposal on the Plan for Private Placement of A-stock Shares in 2022
(《关于公司 2022 年度非公开发行 A 股股票方案的议案》); 3. The Proposal on
the 'Preliminary Plan of Guangdong Haid Group Co., Limited for Private Placement
of A-stock Shares in 2022' (《关于<广东海大集团股份有限公司 2022 年度非公开
发行 A 股股票预案>的议案》); 4. The Proposal on the Company and Certain Entity
Signing a 'Conditional Share Subscription Agreement' & the Related-party
Transaction (《关于公司与特定对象签署<附条件生效的股份认购协议>暨关联
交易的议案》); 5. The Proposal on the 'Feasibility Analysis Report on the Use of
Funds Raised in the Private Placement of A-stock Shares in 2022 of Guangdong Haid
The 26th Group Co., Limited' (《关于<广东海大集团股份有限公司 2022 年度非公开发行
Meeting of the 19 April 20 April A 股股票募集资金使用可行性分析报告>的议案》); 6. The Proposal on the 'Report
Fifth Board of 2022 2022 on the Use of the Previously Raised Funds of Guangdong Haid Group Co., Limited'
Directors (《关于<广东海大集团股份有限公司前次募集资金使用情况报告>的议案》); 7.
The Proposal on the Impact of the Dilution of Immediate Returns as a Result of the
Private Placement of A-stock Shares in 2022 on the Company’s Key Financial
Indicators and the Compensation Measures and the Undertakings of the Relevant
Entities (《关于公司 2022 年度非公开发行 A 股股票摊薄即期回报对公司主要财
务指标的影响与填补措施以及相关主体承诺的议案》); 8. The Proposal on
Requesting the General Meeting of Shareholders to Authorize the Board of Directors
to Handle Matters Relating to the Company's Private Placement of A-stock Shares in
2022 on a Discretionary Basis (《关于提请股东大会授权董事会全权办理公司
2022 年度非公开发行 A 股股票相关事宜的议案》); and 9. The Proposal on
Convening the First Extraordinary General Meeting of Shareholders in 2022 (《关于
召开 2022 年第一次临时股东大会的议案》).
The following proposals were approved: 1. The Proposal on the External Guarantee
(《 关 于 对 外 提 供 担 保 的 议 案 》); 2. The Proposal on Changes to Accounting
Policies and Estimates (《 关 于 会 计 政 策 及 会 计 估 计 变 更 的 议 案 》); 3. The
Proposal on the Adjustment to the Exercise Price for the 2021 Share Option Incentive
Plan (《关于调整公司 2021 年股票期权激励计划行权价格的议案》); 4. The
The 27th Proposal on Matters in Relation to the Grant of Reserved Share Options under the
Meeting of the 16 May 18 May 2021 Share Option Incentive Plan (《关于公司 2021 年股票期权激励计划预留股
Fifth Board of 2022 2022 票期权授予相关事项的议案》); 5. The Proposal on Applying for the Filing of an
Directors Open Debt Financing Plan (《关于申请备案挂牌债权融资计划的议案》); 6. The
Proposal on Amendments to the 'Articles of Association' (《关于修订<公司章程>的
议案》); 7. The Proposal on Amendments to the 'Rules of Procedure for General
Meeting of Shareholders' (《关于修订<股东大会议事规则>的议案》); and 8. The
Proposal on Convening the Second Extraordinary General Meeting of Shareholders
in 2022 (《关于召开 2022 年第二次临时股东大会的议案》).
The following proposals were approved: 1. The Proposal on the Re-election of the
Board of Directors (《 关 于 董 事 会 换 届 选 举 的 议 案 》); 2. The Proposal on
Adjustments to the Plan for the Private Placement of A-stock Shares in 2022 (《关于
调整公司 2022 年度非公开发行 A 股股票方案的议案》); 3. The Proposal on the
'Preliminary Plan (Revised) of Guangdong Haid Group Co., Limited for Private
Placement of A-stock Shares in 2022' (《关于<广东海大集团股份有限公司 2022
年度非公开发行 A 股股票预案（修订稿）>的议案》); 4. The Proposal on the
The 28th Company and Certain Entity Signing a 'Supplementary Agreement to the Conditional
3
Meeting of the 4 August
August Share Subscription Agreement' & the Related-party Transaction (《关于公司与特定
Fifth Board of 2022
2022 对象签署<附条件生效的股份认购协议之补充协议>暨关联交易的议案》); 5.
Directors
The Proposal on the Impact of the Dilution of Immediate Returns as a Result of the
Private Placement of A-stock Shares in 2022 on the Company’s Key Financial
Indicators and the Compensation Measures (Revised) (《关于公司 2022 年度非公
开发行 A 股股票摊薄即期回报对公司主要财务指标的影响与填补措施（修订
稿）的议案》); and 6. The Proposal on Convening the Third Extraordinary General
Meeting of Shareholders in 2022 (《关于召开 2022 年第三次临时股东大会的议
案》).
The First The following proposals were approved: 1. The Proposal on the Election of the
19
Meeting of the 20 August
August Chairman and Vice Chairman for the Sixth Board of Directors (《关于选举公司第
Sixth Board of 2022
2022 六届董事会董事长及副董事长的议案》); 2. The Proposal on the Election of
Directors
70
Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Members for the Specialized Committees under the Sixth Board of Directors (《关于
选 举 公 司 第 六 届 董 事 会 专 门 委 员 会 委 员 的 议 案 》); 3. The Proposal on the
Appointment of Senior Management (《关于聘任公司高级管理人员的议案》); 4.
The Proposal on the Appointment of Securities Affairs Representative (《关于聘任
公司证券事务代表的议案》); and 5. The Proposal on the Appointment of Head for
Internal Audit (《关于聘任公司内审负责人的议案》).
The following proposals were approved: 1. The Proposal on the 'Semi-Annual Report
of the Company for 2022' and its Abstract (《关于<公司 2022 年半年度报告>及其
The Second 摘要的议案》); 2. The Proposal on the 'Special Report on Deposit and Usage of
26
Meeting of the 30 August
August Raised Funds of the Company in the First Half of 2022' (《关于<公司 2022 年半年
Sixth Board of 2022
2022 度募集资金存放与使用情况的专项报告>的议案》); and 3. The Proposal on
Directors
Amendments to the Company’s Certain Rules (《关于修订公司部分制度的议
案》).
The following proposals were approved: 1. The Proposal on the 'Third Quarter Report
for 2022 of the Company' (《关于<公司 2022 年第三季度报告>的议案》); 2. The
The Third Proposal on the Renewal of Appointment of Grant Thornton China (LLP) as the Audit
19 21 Institution for 2022 of the Company (《关于续聘致同会计师事务所（特殊普通合
Meeting of the
October October
Sixth Board of 伙）为公司 2022 年度审计机构的议案》); 3. The Proposal on the Routine Related-
2022 2022
Directors party Transactions (《 关 于 日 常 关 联 交 易 的 议 案 》); and 4. The Proposal on
Convening the Fourth Extraordinary General Meeting of Shareholders in 2022 (《关
于召开 2022 年第四次临时股东大会的议案》).
The Fourth
27 28
Meeting of the The following proposal was approved: 1. The Proposal on Adjusting the Foreign
October October
Sixth Board of Exchange Hedging Business (《关于调整外汇套期保值业务的议案》).
2022 2022
Directors
The following proposals were approved: 1. The Proposal on Temporary
Replenishment of Working Capital with Partial Idle Raised Funds (《关于使用部分
闲置募集资金暂时补充流动资金的议案》); 2. The Proposal on the Changes to
Certain Raised Funds Investment Projects (《关于变更部分募集资金投资项目的
议案》); 3. The Proposal on the Provision of Guarantee for Subsidiary (《关于为子
The Fifth 公司提供担保的议案》); 4. The Proposal on the External Guarantee (《关于对外
12 13
Meeting of the
Decemb December 提供担保的议案》); 5. The Proposal on the Application for Comprehensive Credit
Sixth Board of
er 2022 2022 Line from Financial Institutions in 2023 (《关于 2023 年向金融机构申请综合授信
Directors
额度的议案》); 6. The Proposal on the Formulation of the 'Rules for the Management
of the Remunerations of Directors, Supervisors and Senior Management' (《关于制
定<董事、监事和高级管理人员薪酬管理制度>的议案》); and 7. The Proposal on
Convening the Fifth Extraordinary General Meeting of Shareholders in 2022 (《关于
召开 2022 年第五次临时股东大会的议案》).
2. Attendances of Directors at Board Meetings and General Meetings
Attendances of directors at board meetings and general meetings
Due Not attending
Attendances Attendances
attendances Attendances board
at board at board Absences at Attendances
at board at board meetings in
Director meetings by meetings board at general
meetings in meetings on person for
telecommuni through a meetings meetings
Reporting site twice in a
cation proxy
Period row
Hua Xue 9 9 0 0 0 No 6
Yingzhuo Xu 9 8 1 0 0 No 2
Xueqiao
9 9 0 0 0 No 2
Qian
Qi Cheng 9 9 0 0 0 No 2
Jianfang Gui 9 1 8 0 0 No 1
Jianguo He 9 6 3 0 0 No 2
Yunguo Liu 9 5 4 0 0 No 3
Explanation for any independent director not attending board meetings in person for twice in a row
None of the directors failed to attend board meetings in person for twice in a row in the reporting period.
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
3. Objections Raised by Directors on Matters of the Company
Indicate by tick mark whether any director raised any objection on any matter of the Company
□ Yes No
No such cases in the reporting period.
4. Other Information about Performance of Duties by Directors
Indicate by tick mark whether any suggestions from directors were adopted by the Company
Yes □ No
Suggestions of directors adopted or not adopted by the Company
During the reporting period, all the directors of the Company carried out their work diligently and conscientiously
in strict accordance with the Company Law (《公司法》), the Stock Listing Rules of the Shenzhen Stock Exchange
(《深圳证券交易所股票上市规则》), the Articles of Association (《公司章程》), the Rules of Procedure for
General Meetings of Shareholders (《股东大会议事规则》), and the Rules of Procedure of the Board of Directors
(《董事会议事规则》). Based on the Company's reality, they put forward relevant opinions on the Company's
major governance and operation decisions and reached consensuses through full communication and discussion.
They resolutely supervised and promoted the implementation of the resolutions of the Board of Directors to ensure
scientific, timely, and efficient decision-making and safeguard the legitimate rights and interests of the Company
and all of its shareholders.
VII. Performance of Duties by Specialized Committees under the Board of Directors in the
Reporting Period
Meeti
Substantial opinion Other Details of
ngs Date of the
Committee Members Topics of the meeting and recommendations activitie objections
conve meeting
put forward s (if any)
ned
Discussed audit
Communicated about procedures carried
the first draft of the out in the 2021
10 April 2022 None None
2021 Independent annual audit and the
Auditor’s Report identification of key
audit matters
The financial
statements and the
10 April 2022 None None None
internal audit report
for Q1 2022
Discussed the
reasonableness,
Yunguo
compliance and
Liu, Changes to accounting
11 May 2022 necessity of the None None
The Audit Jianguo policies and estimates
7 changes to
Committee He and
accounting policies
Jianfang
and estimates
Gui
The financial
statements and the
Agreed to the
internal audit report
16 August appointment of Mr.
for Q2 2022, and None None
2022 Wei Zeng as the Head
nominated Mr. Wei
for Internal Audit
Zeng as the Head for
Internal Audit
Agreed to re-appoint
Appointed Grant Thornton
13 October
Independent Auditor China as the None None
2022
for 2022 Independent Auditor
for 2022
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
The financial
13 October statements and the
None None None
2022 internal audit report
for Q3 2022
Discussed the
changes to the
accounting treatments
for the sales of
products or by-
products produced in
the course of research
14 December Changes to accounting and development as None None
2022 policies stated in the
Interpretation No. 15
for the Accounting
Standards for
Business Enterprises
(《企业会计准则解
释第 15 号》)
Nominated members
18 July 2022 for the Sixth Board of None None None
Jianguo
Directors
The He,
13 August Reviewed the sixth
Nomination Yunguo 3 None None None
2022 senior management
Committee Liu and
Nominated core/key
Qi Cheng 31 August
members of the None None None
2022
Company
The post system and
the remuneration
31 March system and plans, and
None None None
2022 adjusted the
Yunguo
independent director’s
Liu,
allowance
Jianguo
2 Discussed the
He and Discussed the
adjustment to the price
Yingzhuo legitimacy and
of the 2021 Share
Xu eligibility of
11 May 2022 Option Incentive Plan None None
awardees for the
and the grant of
reserved share
The reserved share options
options
Remuneratio to awardees
n and Formulated the Rules
Appraisal for the Management of
Committee the Remunerations of Discussed the
Directors, Supervisors reasonableness of the
7 December and Senior
Yunguo remuneration system None None
2022 Management (《董
Liu, for directors and
Jianguo 事、监事和高级管理 supervisors
2
He and 人员薪酬管理制
Xueqiao 度》)
Qian Confirmed the second
vesting under the
30 December
Fourth Employee None None None
2022
Stock Ownership Plan
for Core Team
Discussed the plan for Focused on the
31 March hedges in 2022 and feasibility and risks
None None
2022 factory-based of derivative
aquaculture investments
Hua Xue,
Focused on the
Yingzhuo
The Strategy legitimacy and
Xu and 3 Discussed the private
Committee necessity of the
Xueqiao 10 April 2022 placement of shares to None None
private placement of
Qian specific parties
shares to specific
parties
Discussed the
11 May 2022 None None None
application for the
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
filing of an open debt
financing plan
Hua Xue, Focused on the
Yingzhuo Discussed adjustments necessity of
22 October
Xu and 1 to the plan for hedges adjustments to the None None
2022
Jianfang in 2022 limit of derivatives
Gui investment
VIII. Performance of Duties by the Supervisory Committee
Indicate by tick mark whether the Supervisory Committee found any risk to the Company during its supervision in
the reporting period
□ Yes No
The Supervisory Committee raised no objections in the reporting period.
IX Employees
1. Numbers, Functions and Educational Backgrounds of Employees
Number of in-service employees of Parent Company (Haid
2,355
Group exclusive of subsidiaries) at the end of the period
Number of in-service employees of major subsidiaries at the
33,663
end of the period
Total number of in-service employees at the end of the period 36,018
Total number of paid employees in Reporting Period 36,018
Number of retirees to whom Parent Company or its major
0
subsidiaries need to pay retirement pension
Functions
Function Employees
Production 16,912
Sales 9,619
Technical 3,382
Financial 1,826
Administrative 3,403
Procurement 876
Total 36,018
Educational backgrounds
Educational background Employees
Doctoral degree 133
Master’s degree 1,615
Bachelor’s degree 7,426
Junior college 7,124
Senior high school, technical secondary school and below 19,720
Total 36,018
2. Employee Remuneration Policy
While strictly abiding by the Labor Law of the People’s Republic of China (《中华人民共和国劳动法》), the
Labor Contract Law of the People’s Republic of China (《中华人民共和国劳动合同法》) and other national and
local related laws, regulations, department rules and regulatory documents, the Company implements the following
principles according to the characteristics of the industry and the Company’s operations: persist in the principle of
labor-based distribution combining duties, power and interests; implement the principle of linking income levels
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
with the Company’s performance and work goals; implement the principle of integrating individual remuneration
with the Company’s long-term interests to ensure sustained and sound growth in main business, prevent short-term
behaviors and promote the Company’s sustained operations and development; stick to the principle of linking
remuneration with performance appraisal with equal emphasis on incentive and restraint; give comprehensive
consideration to market changes and market remuneration levels. The Company has established a reasonable post
and remuneration system to provide employees with competitive salaries in the industry, link performance with
remuneration, align employees’ and the Company’s interests, enhance staff awareness for team work and give full
play to every employee’s enthusiasm and creativity.
3. Employee Training Plans
The Company always emphasizes the development of human resources and talents with a firm belief that staff
development is an important power and resource for the Company’s continuous development. Haid College, the
Company’s functional department for talent development, has always closely followed the Group's strategies and
the guidelines of the Group's business at the heart of talent development. It remains committed to the values of "All
for your growth" and follows the principle of elite training and inclusive education to solve key problems for the
development of the organization. Through the combination of online and offline working methods, it has kept
exploring new modes for talent development.
In 2022, Haid College created a learning organization centering on creating value for customers. It continued to
carry out the EDP Future Pilot Program, the IDP Core Executive Development Program, and the CFO Class. It has
focused on its efforts to cultivate a team of managerial staff with cultural strategies, business operation, and
leadership. Moreover, it has continuously strengthened and standardized cultural education for recruits from
universities and society.
With increasing learning resources, the Company's platform for online learning, namely, "Haiwei", has accelerated
the formation of the learning ecosystem. It has more than 8,000 online course resources, with approximately 30,000
online learners and a total of nearly 1,000,000 learning hours in the year.
The Company sees a lively atmosphere of talent development. It has put in place a resource system for talent
development, and gradually improved the learning roadmaps of professional centers. The training systems for
professional lines and divisions have gradually taken shape, which have become the performance highlights of HR
and business managers. Executive development is in full swing and learning resources are increasing, creating a
sound ecosystem of learning in Haid.
4. Labor Outsourcing
□ Applicable Not applicable
X. Profit Distribution and Capitalization of Capital Reserve
Formulation, implementation or adjustment of profit distribution policy, especially the cash dividend during the
reporting period
Applicable □ Not applicable
According to the Proposal on the Preliminary Plan for the 2021 Profit Distribution (《关于2021年度利润分配预
案的议案》) as approved at the 2021 Annual General Meeting of Shareholders convened on 9 May 2022, the
distribution plan is as follows: The Company proposed to distribute RMB 1.50 (tax inclusive) per 10 shares based
on "the total number of shares exclusive of the repurchased shares (the number of shares eligible for profit
distribution) on the date of record when the plan is implemented in the future". The proposed total amount of
dividend shall not exceed the profit of the company (parent company) available for distribution to shareholders as
at 31 December 2021. The retained earnings will be carried forward to the following year. On 7 July 2022, the equity
distribution was completed.
During the reporting period, the Company has formulated the Dividend Distribution Plan of the Company for the
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Next Three Years (2022-2024) (《未来三年（2022-2024年）分红回报规划》) in accordance with the Guidelines
No. 3 for the Regulation of Listed Companies—Cash Dividend of Listed Companies (《上市公司监管指引3号—
上市公司现金分红》) and the Articles of Association (《公司章程》), among others.
The Company’s profit distribution policy, dividend distribution policy, dividend standards, and dividend ratios are
well-defined and clear. Independent directors have duly performed their duties and functions. Minority shareholders
have the opportunity to fully express their views and concern, which is in line with the Articles of Association (《公
司章程》) and the requirements of the consideration procedures. The conditions and procedures for the adjustment
or change of the profit distribution policy are compliant and transparent, and the legal rights and interests of small
and medium investors are fully protected.
Particulars of Cash Dividend Policy
Whether the policy is in compliance with the requirements of the
Articles of Association or the resolutions passed at the general Yes
meeting:
Whether the basis and ratio of the distribution of dividends are
Yes
well-defined and clear:
Whether the relevant decision making procedure and system are
Yes
sound:
Whether the independent directors have duly performed their
Yes
duties and functions:
Whether there are enough opportunities for minority
shareholders to express their views and concerns, and whether Yes
their legal interests are sufficiently protected, etc:
Whether the conditions and procedures are legal and transparent
N/A
in respect of cash dividend policy with adjustments and changes:
The Company made a profit and had positive retained profit available for ordinary shareholders of parent company
during the reporting period without cash dividend being proposed
□ Applicable Not applicable
Proposals on profit distribution and capitalization of capital reserve during the reporting period
Applicable □ Not applicable
Number of bonus share per 10 shares (share(s)) 0
Dividend distribution per 10 shares (RMB) (tax inclusive) 4.50
Total number of shares exclusive of the repurchased shares on
Share base of the distribution proposal (shares)
the registration date when the plan is implemented in the future
Amount of cash dividend (RMB) (tax inclusive) 744,064,416.90
Amount of cash dividend distribution through other means
0.00
(such as share repurchase) (RMB)
Total amount of cash dividends (including other means) (RMB) 744,064,416.90
Distributable profits (RMB ) 4,008,324,416.01
Total amount of cash dividends (including other means) as %
100%
of total profit distribution
Cash dividend policy
For profit distribution of companies which are in the growth period with significant capital expenditure arrangement, the percentage
for cash dividend shall represent at least 20% of the profits distribution for the current year
Particulars of profit distribution and capitalization of capital reserves
According to the audit report issued by Grant Thornton China (Special General Partnership), the Company (parent company)
achieved a net profit of RMB 1,344,935,081.43 and made provision for statutory surplus reserves of RMB 84,149,723.65 as required
by the Company Law (《公司法》), without allocation to discretionary revenue reserve in 2022. As at 31 December 2022, the
profit available for distribution to shareholders amounted to RMB 4,008,324,416.01.
Based on the operating results of the Company in 2022, as well as the Company's business scale and future growth, the legitimate
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
demands of investors and continuous return to shareholders, the Company formulated the 2022 annual profit distribution plan as
follows: The Company proposed to distribute RMB 4.50 (tax inclusive) per 10 shares based on "the total number of shares exclusive
of the repurchased shares (the number of shares eligible for profit distribution) on the date of record when the plan is implemented
in the future". The proposed total amount of dividend shall not exceed the profit of the Company (parent company) available for
distribution to shareholders as at 31 December 2022. The retained earnings will be carried forward to the following year.
Where any change occurs to the Company’s total share capital during the period from the disclosure of the distribution plan to its
implementation due to reasons such as conversion of convertible corporate bonds to shares, share repurchases, exercise of equity
incentives, and new offering of shares for re-financing, the dividend per 10 shares shall remain the same while the total amount of
dividend shall be adjusted accordingly.
In order to look after the shareholders’ immediate and long-term interests in a better way on the premise of guaranteeing the
Company's normal operations and long-term development, the Company put forward the above-mentioned profit distribution plan.
The preparation of the above-mentioned profit distribution plan is in line with the Company Law (《公司法》) and the Articles of
Association (《公司章程》), and the Dividend Distribution Plan of the Company for the Next Three Years (2022-2024) (《未来
三年（2022-2024年）分红回报规划》). The distribution plan is legal, compliant and reasonable and in line with the Company's
distribution policy.
The independent directors of the Company expressed their independent opinions that the Company's 2022 profit distribution plan
gives full consideration to the returns to investors and is in line with the actual situation of the company without any prejudice to
the interests of shareholders, in particular minority shareholders. Therefore, they agreed to the 2022 profit distribution plan.
This proposal will be submitted to a general meeting of shareholders for final approval.
XI. Implementation of the Equity Incentive Plan, Employee Stock Ownership Plan or Other
Employee Incentive Measures of the Company
Applicable □ Not applicable
1. Equity Incentives
● Decision-making procedures and approval
On 6 April 2021, the Company convened the 17th Meeting of the Fifth Board of Directors to consider and approve
the Proposal on the 2021 Share Option Incentive Plan (Draft) of Guangdong Haid Group Co., Limited and Its
Summary (《关于<广东海大集团股份有限公司2021年股票期权激励计划(草案)>及其摘要的议案》), the
Proposal on the Management Methods for the Implementation and Appraisal for the 2021 Share Option Incentive
Plan of Guangdong Haid Group Co., Limited (《关于<广东海大集团股份有限公司2021年股票期权激励计划
实施考核管理办法>的议案》), and the Proposal on Authorisation of the Board of Directors at the General Meeting
to Handle Matters Related to the 2021 Share Option Incentive Plan (《关于提请股东大会授权董事会办理公司
2021年股票期权激励计划有关事项的议案》). On the same day, the Company convened the 13th Meeting of the
Fifth Supervisory Committee to consider and approve the Proposal on the 2021 Share Option Incentive Plan (Draft)
and Its Summary (《关于<公司2021年股票期权激励计划(草案)>及其摘要的议案》), the Proposal on the
Management Methods for the Implementation and Appraisal for the 2021 Share Option Incentive Plan of
Guangdong Haid Group Co., Limited (《关于<广东海大集团股份有限公司2021年股票期权激励计划实施考
核管理办法>的议案》), and the Proposal on the Examination of the List of Awardees for the 2021 Share Option
Incentive Plan (Draft) (《关于核查公司2021年股票期权激励计划（草案）激励对象名单的议案》).
On 29 April 2021, the Company convened the 19th Meeting of the Fifth Board of Directors to consider and approve
the Proposal on the 2021 Share Option Incentive Plan (Revised Draft) of Guangdong Haid Group Co., Limited and
Its Summary (《关于<广东海大集团股份有限公司2021年股票期权激励计划（草案修订稿）>及其摘要的议
案》), and the Proposal on Authorisation of the Board of Directors at the General Meeting to Handle Matters Related
to the 2021 Share Option Incentive Plan (《关于提请股东大会授权董事会办理公司2021年股票期权激励计划
有关事项的议案》). On the same day, the Company convened the 15th Meeting of the Fifth Supervisory Committee
to consider and approve the Proposal on the 2021 Share Option Incentive Plan (Revised Draft) of Guangdong Haid
Group Co., Limited and Its Summary (《关于<广东海大集团股份有限公司2021年股票期权激励计划（草案修
订稿）>及其摘要的议案》), and the Proposal on the Examination of the List of Awardees for the 2021 Share
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Option Incentive Plan (Revised Draft) (《关于核查公司2021年股票期权激励计划（草案修订稿）激励对象名
单的议案》).
On 7 April 2021 and 30 April 2021, the Company disclosed the List of Awardees for the First Grant under the 2021
Share Option Incentive Plan (Draft) (《2021年股票期权激励计划（草案）首次授予激励对象名单》) and the
List of Awardees for the First Grant under the 2021 Share Option Incentive Plan (Revised Draft) (《2021年股票期
权激励计划（草案修订稿）首次授予激励对象名单》) respectively on the website designated by China
Securities Regulatory Commission (CSRC) for information disclosure. The Company publicized internally the
names and positions of the awardees on the Company website for the period from 30 April 2021 to 13 May 2021,
during which the Supervisory Committee received no objections regarding the publicized information. On 14 May
2021, the Company disclosed the Statement of the Supervisory Committee on the Examination and Publication
Results of the List of Awardees for the 2021 Share Option Incentive Plan (《监事会关于2021年股票期权激励计
划激励名单核查及公示情况的说明》). The Supervisory Committee was of the opinion that the awardees for the
first grant under the incentive plan were all eligible, legitimate and valid according to the applicable laws,
regulations and regulatory documents, as well as the awardee scope and conditions of the incentive plan.
On 20 May 2021, the Company convened the 2020 Annual General Meeting to consider and approve the 2021 Share
Option Incentive Plan (Revised) (《2021年股票期权激励计划（修订稿）》), the Management Methods for the
Implementation and Appraisal for the 2021 Share Option Incentive Plan (《2021年股票期权激励计划实施考核
管理办法》) (hereinafter referred to as the “Appraisal and Management Methods” (《公司考核管理办法》)), and
the Proposal on Authorisation of the Board of Directors at the General Meeting to Handle Matters Related to the
2021 Share Option Incentive Plan (《关于提请股东大会授权董事会办理公司2021年股票期权激励计划有关
事项的议案》).
On 10 June 2021, the Company convened the 20th Meeting of the Fifth Board of Directors and the 16th Meeting of
the Fifth Supervisory Committee to consider and approve the Proposal on Adjustments to the List of Awardees and
the Numbers of Equities to Be Granted to Them in the First Grant under the 2021 Share Option Incentive Plan (《关
于调整公司2021年股票期权激励计划首次授予激励对象名单及授予权益数量的议案》), and the Proposal on
the Grant of Share Options to the Awardees for the First Grant under the 2021 Share Option Incentive Plan (《关
于向公司2021年股票期权激励计划首次授予激励对象授予股票期权的议案》). As such, the list of awardees
for the first grant under the incentive plan and the numbers of equities to be granted to them were adjusted.
Meanwhile, it was decided that a total of 47,953,200 share options were to be granted to 4,003 eligible awardees on
10 June 2021 in the first grant under the incentive plan. The registration formalities with respect to the first grant
under the 2021 Share Option Incentive Plan were completed on 28 June 2021.
Upon the completion of the 2020 annual equity distribution on 8 July 2021, the exercise price for the first grant and
the reserve grant under the 2021 Share Option Incentive Plan would be adjusted from RMB 59.68/share to RMB
59.36/share, and the said adjustment is subject to final approval by the Board of Directors.
On 16 May 2022, the Company convened the 27th Meeting of the Fifth Board of Directors and the 23th Meeting of
the Fifth Supervisory Committee to consider and approve the Proposal on the Adjustment to the Exercise Price for
the 2021 Share Option Incentive Plan (《关于调整公司2021年股票期权激励计划行权价格的议案》) and the
Proposal on Matters in Relation to the Grant of Reserved Share Options under the 2021 Share Option Incentive Plan
(《 关 于 公 司2021年 股 票 期 权 激 励 计 划 预 留 股 票 期 权 授 予 相 关 事 项 的 议 案 》). As such, due to the
implementation of the 2020 annual equity distribution, the exercise price for the first grant and the reserve grant
under the 2021 Share Option Incentive Plan was adjusted from RMB 59.68/share to RMB 59.36/share; and it was
agreed that a total of 6.8251 million reserved share options should be granted to 1,044 eligible awardees at the
exercise price of RMB 59.36/share on 16 May 2022 under the 2021 Share Option Incentive Plan. The registration
formalities with respect to the grant of reserved share options under the 2021 Share Option Incentive Plan were
completed on 24 June 2022.
● Implementation during the reporting period
During the reporting period, due to the implementation of the 2020 annual equity distribution, the exercise price for
the first grant and the reserve grant under the 2021 Share Option Incentive Plan was adjusted from RMB 59.68/share
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
to RMB 59.36/share; and a total of 6.8251 million reserved share options were granted to 1,044 eligible awardees
at the exercise price of RMB 59.36/share on 16 May 2022. The registration formalities with respect to the grant of
reserved share options under the 2021 Share Option Incentive Plan were completed on 24 June 2022.
● Accounting treatment method for option incentive and effects of equity incentive cost on the results of the
Company
According to relevant provisions under the Accounting Standards for Business Enterprises No. 11 - Share-based
Payments (《企业会计准则第11号——股份支付》), the Company will, on each balance sheet date in the vesting
period, amend the number of share options that are expected to be exercisable according to the latest available
information of changes in the number of awardees allowed to exercise share options, completion of performance
indicators and other follow-up information and include the services obtained in the current period in the relevant
costs or expenses and capital reserve at fair value of the share options on the grant date.
The implementation of the above equity incentive plan will not have a significant impact on the Company's financial
position and operating results during the reporting period and in the future.
Equity incentives for directors and senior management
Applicable □ Not applicable
Unit: share
Exerci
se
price
Marke Restri Restri
Exerc for Restri
Exerci Share t price cted cted
Share isable exerci Share cted
Share sed option at the shares share Grant
options share sed s shares
options share s held end of held s price of
held at optio share unloc held at
granted option at the the at the grant the
the ns for option ked in the
Name Office title in the s in end of report begin ed in restricte
beginnin the s in the end of
reporti the the ing ning the d shares
g of the report the report the
ng reporti report period of the report (RMB/s
reportin ing report ing reporti
period ng ing (RMB report ing hare)
g period perio ing period ng
period period / ing perio
d period period
share) period d
(RMB
/
share)
Director
and
Qi 100,000. 100,0
Executive 61.73
Cheng 00 00.00
Vice
President
Director,
Xueqi Vice
90,000.0 90,00
ao President 61.73
Qian and Chief 0 0.00
Engineer
Guoxi
Vice 80,000.0 80,00
ang 61.73
President 0 0.00
Liu
Shaoli Vice
90,000.0 90,00
n President 61.73
Yang and CFO 0 0.00
Xiew
Vice 80,000.0 80,00
u 61.73
President 0 0.00
Jiang
Guoc
Vice 80,000.0 80,00
heng 61.73
President 0 0.00
Mi
Zhong
Vice 100,000. 100,0
zhu 61.73
President 00 00.00
Chen
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Jing Vice 70,000.0 70,00
61.73
Wang President 0 0.00
Zhijia Vice
n President 90,000.0 90,00
61.73
Huan and Board 0 0.00
g Secretary
780,000. 780,0
Total -- 0 0 0 -- -- 0 0 0 -- 0
00 00.00
The share options held at the beginning and the end of the reporting period by the directors and senior management
Notes (if any) in the table above were all granted under the 2021 Share Option Incentive Plan for which the exercise conditions were
unmet as of the end of the reporting period.
Appraisal mechanism and incentives for senior management
The Company has put in place a senior management selection, appraisal, incentive and restrictive system. All
appointed by and being responsible to the Board of Directors, senior management shoulders the operating indicators
set by the Board of Directors. The Remuneration and Appraisal Committee under the Board is responsible for a
year-end appraisal of senior management’s service ability, performance of duties and fulfillment of objectives,
among others. And then the committee formulates a remuneration plan for the Board’s review. During the reporting
period, the Company duly restricted its senior management as per the applicable laws and regulations by
strengthening the connection between performance appraisal and remuneration and incentives, aligning
remuneration with appraisal results, and achieving differentiation in remuneration and incentives.
2. Employee stock ownership plans
Applicable □ Not applicable
Outstanding employee stock ownership plans during the reporting period
As a percentage of
Number of
Scope of employees Total shares held Change the Company’s Funding source
employees
total share capital
The awardees for the Third
Employee Stock Ownership The special fund
Plan are key personnel that play established by the
No more
a significant role in the 888,500.00 None 0.05% Company for the
than 30
Company’s operating employee stock
performance and mid- and long- ownership plan
term development.
The awardees for the Fourth
Employee Stock Ownership The special fund
Plan are key personnel that play established by the
No more
a significant role in the 1,194,582.00 None 0.07% Company for the
than 30
Company’s operating employee stock
performance and mid- and long- ownership plan
term development.
Shares held by directors, supervisors and senior management under employee stock ownership plans during the
reporting period
Shares held at
Shares held at the As a percentage
the beginning of
Name Office title end of the of the Company’s
the reporting
reporting period total share capital
period
Director and Executive Vice President (Deputy
Qi Cheng
General Manager)
Director, Vice President (Deputy General
Xueqiao Qian
Manager) and Chief Engineer 1,428,500.00 800,000.00 0.05%
Guoxiang Liu Vice President (Deputy General Manager)
Vice President (Deputy General Manager) and
Shaolin Yang
CFO
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Xiewu Jiang Vice President (Deputy General Manager)
Guocheng Mi Vice President (Deputy General Manager)
Zhongzhu Chen Vice President (Deputy General Manager)
Jing Wang Vice President (Deputy General Manager)
Vice President (Deputy General Manager) and
Zhijian Huang
Board Secretary
Change of asset management organizations during the reporting period
□ Applicable Not applicable
Equity changes incurred by disposal of shares by holders, etc. during the reporting period
Applicable □ Not applicable
As of 29 December 2022, all the shares held under the Third Employee Stock Ownership Plan (888,500 shares,
accounting for 0.05% of the Company’s total share capital at the end of the reporting period) had been sold on the
open market. For further information, see the Announcement on the Sale of the Shares under the Third Employee
Stock Ownership Plan for Core Team & the Early Termination of the Plan (《关于核心团队员工持股计划之三期
计划出售完毕暨提前终止的公告》) (Announcement No. 2022-109), which has been disclosed on the media
designated for information disclosure, namely, the Securities Times (《证券时报》), China Securities Journal
(《 中 国 证 券 报 》), Shanghai Securities News (《 上 海 证 券 报 》), Securities Daily (《 证 券 日 报 》), and
http://www.cninfo.com.cn dated 31 December 2022.
Exercise of shareholder rights during the reporting period
During the reporting period, the awardees under the Third and Fourth Employee Stock Ownership Plans attended
the First Extraordinary General Meeting of Shareholders in 2022 and exercised their rights as shareholders through
online voting. All of them voted in favour of the proposals considered at the meeting.
Other information about employee stock ownership plans during the reporting period
□ Applicable Not applicable
Changes in members of the management committees for employee stock ownership plans
□ Applicable Not applicable
Financial impact of employee stock ownership plans on the Company during the reporting period and the relevant
accounting treatments
Applicable □ Not applicable
According to relevant provisions under the Accounting Standards for Business Enterprises No. 11 - Share-based
Payments (《企业会计准则第 11 号——股份支付》), for equity-settled share-based payments in exchange for
employee services that are exercisable upon completion of the service within the vesting period or upon achievement
of prescribed performance conditions, the services acquired during the period should be charged to the relevant cost
or expense and capital reserve at each balance sheet date within the vesting period, based on the best estimate of the
number of exercisable equity instruments and at the fair value of the equity instruments at the date of grant. The
amortisation of expenses for the employee stock ownership plan implemented by the Company in 2022 stood at
RMB 28.8805 million and was charged to the relevant expense account and capital reserve.
Termination of employee stock ownership plans during the reporting period
Applicable □ Not applicable
During the reporting period, all the shares held under the Third Employee Stock Ownership Plan were sold. As per
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the CSRC’s Guiding Opinions on the Pilot Implementation of Employee Stock Ownership Plans in Listed
Companies (《关于上市公司实施员工持股计划试点的指导意见》), the Guidelines No. 1 of the Shenzhen Stock
Exchange for the Self-regulation of Listed Companies—the Standard Operation of Main Board Listed Companies
(《深圳证券交易所上市公司自律监管指引第 1 号——主板上市公司规范运作》), and the Company’s Third
Employee Stock Ownership Plan for Core Team (《核心团队员工持股计划之三期计划》), the Company
convened a meeting of the holders under the Third Employee Stock Ownership Plan on 9 February 2023, at which
the Proposal on the Liquidation Report for the Third Employee Stock Ownership Plan for Core Team (《关于〈核
心团队员工持股计划三期计划清算报告〉的议案》), and the Proposal on the Termination of the Third
Employee Stock Ownership Plan (《关于终止三期持股计划的议案》). As such, the early termination of the
Third Employee Stock Ownership Plan was approved upon the completion of the implementation of the plan.
Other information
None.
3. Other Employee Incentive Measures
□ Applicable Not applicable
XII. Establishment and Implementation of the Internal Control System during the Reporting
Period
1. Establishment and Implementation of the Internal Control System
(I) Control environment
The Company has set up a favorable governance structure and organization structure and relevant control systems.
It attaches great importance to the favorable corporate culture and has formed a relatively complete internal control
system in terms of business management, capital management, accounting information system management, human
resources and compensation management, information communication, and disclosure management.
(1) Governance structure
According to the requirements of relevant laws, regulations, and the Articles of Association (《公司章程》), the
Company has set up the General Meeting of Shareholders, the Board of Directors, the Supervisory Committee
(hereinafter referred to as the "Three Meetings") and the Senior Management. Furthermore, it has specified their
rights and obligations in the Articles of Association and formulated the rules of procedure to ensure the explicit
division of labor and the fulfillment of their duties and responsibilities.
The General Meeting of Shareholders is the high authority of the Company, which enjoys the legal rights stipulated
by laws and regulations and the Articles of Association. It shall, strictly by the law, exercise its right to vote for
major events such as the management principle of the Company, fund-raising, investment, and profit appropriation.
During the Reporting Period, the Company can hold "Three Meetings" on schedule according to the provisions of
relevant laws, regulations, and the Articles of Association. The documents for "Three Meetings" are complete and
filed. The decision-making process for major investment and financing has fulfilled the rules of procedure of the
Articles of Association and relevant rules. All the directors have attended the meetings with a diligent and
responsible attitude and practically fulfilled their obligations. The Supervisory Committee has played its role by
adopting certain ways of supervision. The Strategy Committee, the Audit Committee, the Remuneration and
Appraisal Committee and the Nomination Committee of the Board of Directors have driven the Board of Directors
to make scientific and efficient decisions. Moreover, the resolutions of "Three Meetings" are well implemented. The
General Manager regularly organized and held manager meetings, conducted production and business operations,
instructed, coordinated, managed, and supervised the Company's functional departments and holding subsidiaries,
ensuring the normal business operation of the Company.
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(2) Organizational structure
Based on the demand of principal business and management, the Company set up the President's Room,
Procurement Center, Haid College, Haid Research Institute, Marketing Center, Human Resource Center, Financial
Center, Operation and Development Center, Process and Information Management Center, Securities Department,
the President's Office, Party Working Committee Office, Project Management Office, Audit Center and other
functional departments. Each functional department has its specific division of labor. They fulfill their duties and
responsibilities while they mutually counterbalance and supervise. Based on the Company's business progress, the
Company continues to fully research and improve the core and key work tasks of each functional department so as
to improve the efficiency of the organization and refine the management and control mechanism.
(3) Development strategy
The Strategy Committee of the Board of Directors is responsible for the formulation of the Company's development
strategies to instruct the Company's long-term and robust development. The Strategy Committee held meetings
regularly or irregularly to deliberate major strategic plans for the Company's development and adjust the Company's
development objectives properly. The Company's business management team will formulate corresponding
objectives according to the strategic plans determined by the Strategy Committee and the divisions, branches, and
subsidiaries will formulate their development objectives accordingly.
(4) Corporate culture
The Company attaches great importance to the development of corporate culture. It fosters positive values and a
sense of social responsibility, advocates honesty, trustworthiness, dedication, and innovation, highlights customer
value, and focuses on employee growth and the spirit of teamwork. It adopts many approaches, such as regular
internal meetings, internal newspapers and publications, the Company's website, forum, the campaign of
rationalization proposal, and employee training, to penetrate the Company's values into the Company. In addition,
it has proactively arranged various themed activities to enhance employees' cohesion and team spirit, thus promoting
the development of corporate culture. Corporate culture has gradually become the value guidance for the Company's
operating and management activities.
(5) Procedures and systems
The Company formulates tailored systematic systems and procedures for the professional work of specialized
departments, implements them throughout the Company, and improves the Company's duplicating and controlling
capability of management. For instance, the Company has developed and continued to improve policies, such as
talent recruitment, talent development, talent promotion, appraisal, remuneration, and incentive. In terms of internal
control, it has set up and refined the capital plan management system, comprehensive budget management system,
accounts receivable management system, fixed asset management system, expense management system, contract
management system, future foreign exchange settlement management system, and internal audit system, etc. The
management systems are annually reviewed, discussed, and upgraded by the Company so as to make them more
adaptable to the Company's business and play the role in guiding and restraining the Company's business.
(6) Internal supervision
Under the leadership of the Board of Directors and the Audit Committee, the Company sets up the Audit Center,
which is independent of other departments of the Company. The Audit Center conducts internal audits of the internal
control and financial situation of the Company and its holding subsidiaries through a combination of continuous
and special supervision and inspections. The internal audits can inspect and supervise the establishment and
implementation of the Company's internal control systems, the authenticity and integrity of financial information,
and the efficiency and effectiveness of operating activities.
(7) Information communication
The Company has set up an information and communication system to clarify the procedures for collecting,
processing, and transmitting relevant information of internal control so as to ensure the timely communication of
such information, thus promoting the effective operation of internal control.
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A. The unblocked information collection channels. Internal information can be accessed by the Company through
many channels, including financial and accounting data, operation management data, investigation reports, special
information, internal publications, EPS, ERP/SAP, and financial sharing system. In addition, the Company can
access external information through trade associations and organizations, social intermediary organizations,
customers and suppliers, market surveys, letters and visits, network media, and relevant regulatory authorities.
B. The timely information transmission procedures. The Company can communicate and feedback relevant
information on internal control among internal management hierarchies, responsible departments, business links,
internal and external investors, creditors, customers, suppliers, intermediary agencies, and regulatory authorities
promptly. In case of any problems identified from the course of information communication, the Company can
timely report and solve such problems. Important information can be reported timely to the Board of Directors, the
Supervisory Committee, and the Management.
C. The safe operation of information systems. The Company has set up control systems related to the development
and maintenance, access and change, data input and output, document storage, and cyber security of information
systems so as to ensure the safe and stable operation of such systems. The Company also monitors and reviews the
logistics and capital flow of branches and subsidiaries through the information system. All data of branches and
subsidiaries are dually duplicated. The Process and Information Management Center will cross-examine the data of
the Group, branches, and subsidiaries regularly and irregularly. In addition, the Financial Center has assigned
dedicated personnel to conduct random inspections for data of information systems of branches and subsidiaries in
real-time.
(8) Human resources management
In accordance with the provisions of the Labor Law (《劳动法》) and relevant laws and regulations, the Company
has established complete management systems in terms of the recruitment, allocation, compensation, training,
performance management, and promotion of human resources. The Company adheres to the people-oriented
principle and signs labor contracts with all employees. The employees' sense of belonging and sense of mission has
been enhanced through the implementation of the performance appraisal system, motivating their enthusiasm for
work. The stable growth of the Company's operating results and employees' income has been achieved, laying a
foundation for the Company's sustainable development.
(II) Risk assessment
(1) Risk identification and analysis
The Company has a strong sense of risk prevention. It attaches great importance to the identification of risks in
advance. It solicits extensive opinions of relevant parties on all major business decisions. Furthermore, the Company
conducts comprehensive assessments of operating, financial, industrial, and market risks through legal assessment
and contract review, and joint signature. It also develops corresponding risk management measures, thus forming a
relatively refined risk management mechanism.
Meanwhile, the Company continues to collect information related to risk change based on the market situation and
business expansion for risk identification and analysis so as to adjust risk response strategies in time.
(2) Risk control
The Company has developed relatively complete provisions of risk control management to carry out the pre-event
assessment, in-event supervision, and post-event appraisal for the determination of the Company's financial
structure, the arrangement of financing structure, the estimation of financing cost, and the repayment plan for
financing. Feasible research must be conducted for all kinds of investments and the approval authority is determined
according to the project size and the amount required. Contingency plans are formulated to cope with any negative
factors that might occur in the course of investment. The early warning system of financial risks and management
system of business contracts have been established to enhance the assessment and control over credit risks and
contract risks.
(III) Control activities
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
In order to reasonably guarantee the realization of all objectives, the Company has set up relevant control policies
and procedures, which mainly include: The approval control of transaction authorization, separate control of
incompatible duties, voucher and record control, property preservation control, independent inspection control,
electronic information system control, complete budgetary control, external guarantee control, information
disclosure control, and the monitoring of control.
(1) The approval control of transaction authorization
It has specified the scope, authority, procedures, responsibilities, and other relevant contents of the authorized
approval. All internal Management levels of the Company must exercise their functional authorities within their
authorized scope and the handling personnel must handle businesses with their authorities as well.
Based on the amount and nature of transactions, the Company has categorized the transaction authorization into two
levels, which are, general authorization and special authorization. In terms of general transactions, such as purchase
and sale and the reimbursement of routine expenses, the Company adopts the hierarchical approval system involving
the responsible accountant, department head, financial manager, general manager, and chairman so as to ensure that
all businesses are approved according to procedures. In terms of non-conventional transactions, such as related party
transactions, major acquisitions, significant capital expenditure, stock issuance, bond issuance, and other major
transactions, must be approved by the Board of Directors or the General Meeting of Shareholders. The hierarchal
authorization has been conducted for transactions in different natures, thus effectively controlling risks.
(2) The separate control of incompatible duties
It has set up the system of assigning responsibility by position and internal check system and formulated the position
responsibilities of each constituent department and its personnel through the division of authorities and
responsibilities, thus avoiding mistakes and corrupt practices. Based on reasonable labor of division and scientific
division of responsibilities and authorities, the incompatible duties can be separated and each person can
automatically check the work of the other person or multiple persons, thus taking shape of the mechanism of mutual
check and balance. The incompatible duties mainly include: Authorized approval, business handling, accounting
record, property preservation, supervision, and inspections.
(3) Voucher and record control
The Company strictly reviews original vouchers and reasonably formulates the transfer procedures of vouchers.
Vouchers of transactions must be formulated and submitted to the accounting department for recording in time. The
registered vouchers must be filed orderly.
(4) Property preservation control
Unauthorized personnel is strictly restrained from direct access to properties. Measures, such as periodic inventory,
property record, reconciliation of book balance and actual amount, and property insurance, are adopted to ensure
the security and integrity of various properties.
(5) Independent inspection control
A dedicated internal audit institution has been set up. The responsibilities and authorities of the internal supervision
for the internal audit institution and other internal institutions have been clarified. Meanwhile, the procedures,
methods, and requirements of internal supervision and the scope and frequency of daily supervision and special
supervision have been specified. The nature and cause of deficiencies in internal control identified from supervision
can be analyzed in time. Furthermore, remediation plans can be put forward in time. Such deficiencies and
corresponding remediation plans can be promptly reported to the Board of Directors, the Supervisory Committee,
or the Management in proper form.
(6) Electronic information system control
The Company has developed stricter policies for electronic information system control. Greater efforts have been
made in terms of the development and maintenance of electronic information systems, data input and output, and
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document storage.
(7) Complete budgetary control
The Company has carried out the complete budgetary management to strictly control the off-budget capital
expenditure. The financial sharing system and dedicated personnel will supervise, analyze, and appraise the
implementation of the budget. All divisions/branches and subsidiaries/business departments will formulate
budgetary plans annually, which will be regularly analyzed by the financial department so as to restrain such budget.
(8) External guarantee control
The Company controls the external guarantee in accordance with the law-based, prudent, mutually beneficial, and
safe principle so as to strictly prevent risks caused by the guarantee. The Company has formulated relevant
management systems to reasonably ensure the authenticity and integrity of guarantee business and the legitimacy
and compliance of review procedures.
(9) Information disclosure control
The Company has developed the Information Disclosure System (《信息披露制度》), the Internal Reporting
System of Material Information (《重大信息内部报告制度》), and the Accountability Policy for Material Errors
in Information Disclosure of the Annual Report (《年报信息披露重大差错责任追究制度》). The systems have
specified the responsible person, principle, and main contents of information disclosure, the disclosure, working
procedure, management, and accountability mechanism of major events, and the measures to deal with employees
violating rules.
The Company has strictly fulfilled the information disclosure obligations according to relevant laws, regulations,
and rules to disclose information truthfully, accurately, completely, and timely, thus ensuring that all shareholders
have an equal opportunity to obtain information.
(10) The monitoring of control
The Company checks the implementation of internal control systems regularly and irregularly, which mainly
includes: The inspection of the Board of Directors of the Company, the inspection of the Audit Committee, and the
inspection of internal audit departments. All these inspections can ensure the effective operation of internal control
activities.
Through the inspection and supervision activities of internal control and the effective measures for the problems
identified from the inspection of regulatory authorities, the Company continues to supervise and inspect business
activities and the implementation of main internal control systems and continuously puts forward opinions and
suggestions on improvement. All these efforts have effectively prevented the risks of internal control and
safeguarded the normal operation of business management activities. It has played important roles in guiding and
driving the enhancement of standardized operation, refinement of corporate governance, and improvement of
management level.
2. Material Internal Control Deficiencies Identified for the Reporting Period
□ Yes No
XIII. The Company’s Management and Control of Subsidiaries during the Reporting Period
Problem
Solution
Consoli s arising Subseque
Solutions impleme
Company name Consolidation plan dation in nt
taken ntation
progress consolid solutions
progress
ation
Bobai Haihe As per the applicable regulations of the CSRC
Complet
Veterinary and the Shenzhen Stock Exchange, as well as N/A N/A N/A N/A
ed
Medicine Co., the Company’s Articles of Association, the
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Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
Ltd. Company provided compliance guidance for the
target company in organizational structure,
personnel adjustment, internal controls,
financial system, etc., and has included the
target company in the Company’s system for
unified management.
As per the applicable regulations of the CSRC
and the Shenzhen Stock Exchange, as well as
Changde Haide the Company’s Articles of Association, the
Veterinary Company provided compliance guidance for the
Complet
Medicine target company in organizational structure, N/A N/A N/A N/A
ed
Operation Co., personnel adjustment, internal controls,
Ltd. financial system, etc., and has included the
target company in the Company’s system for
unified management.
As per the applicable regulations of the CSRC
and the Shenzhen Stock Exchange, as well as
the Company’s Articles of Association, the
Suixi Haihe
Company provided compliance guidance for the
Veterinary Complet
target company in organizational structure, N/A N/A N/A N/A
Medicine Co., ed
personnel adjustment, internal controls,
Ltd.
financial system, etc., and has included the
target company in the Company’s system for
unified management.
As per the applicable regulations of the CSRC
and the Shenzhen Stock Exchange, as well as
Yangchun the Company’s Articles of Association, the
Haihe Company provided compliance guidance for the
Complet
Veterinary target company in organizational structure, N/A N/A N/A N/A
ed
Medicine Co., personnel adjustment, internal controls,
Ltd. financial system, etc., and has included the
target company in the Company’s system for
unified management.
As per the applicable regulations of the CSRC
and the Shenzhen Stock Exchange, as well as
the Company’s Articles of Association, the
Luoding Haihe
Company provided compliance guidance for the
Veterinary Complet
target company in organizational structure, N/A N/A N/A N/A
Medicine Co., ed
personnel adjustment, internal controls,
Ltd.
financial system, etc., and has included the
target company in the Company’s system for
unified management.
XIV. Self-Assessment Report or Independent Auditor’s Report on Internal Control
1. Internal Control Self-Assessment Report
Disclosure date of internal control self-
25 April 2023
assessment report
Index to disclosed internal control self-
www.cninfo.com.cn
assessment report
Assessed entities’ combined assets as a
100.00%
percentage of consolidated total assets
Assessed entities’ combined operating
income as a percentage of consolidated 100.00%
operating income
Internal control deficiency identification standards
Type Financial-reporting related Non-financial-reporting related
A material deficiency refers to a deficiency or Material deficiencies: (1) The internal
a deficiency group that consists of multiple control environment is invalid; (2) Any
Nature standard deficiencies that may cause a great deviation leak of insider information about any
from the control objective. It is considered a investment in external parties, asset
material financial-reporting internal control restructuring, etc. against regulations
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deficiency if any of the following cases causes any severe fluctuations in the
occurs: (1) Any of the Company’s directors, Company’s stock price or any materially
supervisors or senior management is involved adverse impact on the Company’s image;
in a serious fraud; (2) The Company corrects (3) The violation of the Company’s
its disclosed financial statements for multiple decision-making procedure in any
times; (3) certified public accountants significant event causes a significant
identifies a material misstatement in the economic loss to the Company; or (4) The
current financial statements which the independent auditor identifies any other
Company has failed to identify during its material deficiencies in the Company.
internal control process; or (4) The Serious deficiencies: (1) The Company
Company’s Audit Committee and internal provides any guarantee or conducts any
audit organ maintain invalid supervision over derivative financial instrument
internal control. transaction without due authorization or
A serious deficiency refers to a single performance of the corresponding
deficiency or a deficiency group including information disclosure duty; (2) A severe
other deficiencies that is less serious than a loss of key talent occurs; (3) The
material deficiency but may still cause a Company is punished or a materially
deviation from the control objective. It is adverse impact is made to its image due to
considered a serious financial-reporting deviation from governing policies,
internal control deficiency if any of the measurement errors, etc.; (4) The
following cases occurs: (1) The Company independent auditor identifies any other
does not select and adopt its accounting serious deficiencies in the Company.
policies as per the generally accepted An ordinary deficiency refers to any
accounting standards; (2) The Company does deficiency that is neither a material
not formulate anti-fraud procedures or control deficiency nor a serious deficiency.
measures; (3) The Company has no control
systems for the accounting treatment of non-
conventional or special transactions; or (4)
There are one or multiple deficiencies in
controls over the financial reporting process
and there is no reasonable assurance that the
financial statements prepared are truthful and
accurate.
An ordinary deficiency refers to any
deficiency that is neither a material deficiency
nor a serious deficiency.
Material deficiency: Direct loss caused to
Material deficiency: misstated amount > 3% the Company (hereinafter referred to as
of profit before income tax, misstated amount “loss amount”) > 3% of profit before
＞3% of net asset value. income tax, loss amount ＞3% of net asset
Serious deficiency: 1% of profit before value.
income tax＜misstated amount≤3% of profit Serious deficiency: 1% of profit before
Quantitative standard before income tax, 1% of net asset value < income tax＜loss amount≤3% of profit
misstated amount ≤ 3% of net asset value. before income tax, 1% of net asset value
Ordinary deficiency: misstated amount ≤1% < loss amount ≤ 3% of net asset value.
of profit before income tax, misstated amount Ordinary deficiency: loss amount ≤1%
≤1% of net asset value. of profit before income tax, loss amount
≤1% of net asset value.
Number of material financial-reporting
0
internal control deficiencies
Number of material non-financial-
0
reporting internal control deficiencies
Number of serious financial-reporting
0
internal control deficiencies
Number of serious non-financial-reporting
0
internal control deficiencies
2. Independent Auditor’s Report on Internal Control
Applicable □ Not applicable
Opinion paragraph
The Company maintained, in all material respects, effective internal control over financial reporting as of 31 December 2022, based
88
Full text of 2022 Annual Report of Guangdong Haid Group Co., Limited
on the Basic Rules on Enterprise Internal Control (《企业内部控制基本规范》) and other applicable regulations.
Report disclosed or not Disclosed
Disclosure date 25 April 2023
Index to the disclosed report http://www.cninfo.com.cn
Type of opinion Unmodified unqualified opinion
Material defects in internal control not related to financial
No
reporting
Indicate whether any modified opinion is expressed in the Independent Auditor’s Report on Internal Control
□ Yes No
Indicate whether the Independent Auditor’s Report on Internal Control is consistent with the internal control self-
assessment report issued by the Company’s Board of Directors
Yes □ No
XV. Remediation of Problems Identified by Self-inspection in the Special Action on the
Governance of Listed Companies
Not applicable.
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Section V. Environmental and Social Responsibility
I. Material Environmental Issues
Whether the Company and its subsidiaries are key pollutant discharging units as published by the environmental
protection authority
Yes □ No
Policies and industry standards on environmental protection
The Company has been in strict compliance with the applicable laws, regulations, policies and industry standards,
including the Law of the People's Republic of China on Environmental Protection (《中华人民共和国环境保护
法》), the Law of the People's Republic of China on Prevention and Control of Water Pollution (《中华人民共和
国水污染防治法》), the Law of the People's Republic of China on Prevention and Control of Air Pollution (《中
华人民共和国大气污染防治法》), the Law of the People's Republic of China on Prevention and Control of Noise
Pollution (《中华人民共和国噪声污染防治法》), the Law of the People's Republic of China on Prevention and
Control of Environmental Pollution by Solid Waste (《中华人民共和国固体废物污染环境防治法》), the
Emission Standard of Air Pollutants for Boilers (《锅炉大气污染物排放标准》), the Integrated Emission
Standard of Air Pollutants (《大气污染物综合排放标准》), the Emission Standards for Odor Pollutants (《恶臭
污染物排放标准》), the Standard for Fugitive Emission of Volatile Organic Compounds (挥发性有机物无组织
排放控制标准》), and the Discharge Standard of Water Pollutants for Meat Packing Industry (《肉类加工工业水
污染物排放标准》).
Administrative licenses of environmental protection
The Company and its subsidiaries prepared environmental impact reports before project implementation and
submitted to the environmental authority for review and approval in accordance with the requirements of
environmental laws and regulations. They commenced project construction after obtaining the approval and carried
out construction works strictly in accordance with the requirements of environmental impact assessment.
Furthermore, they went through the procedures for the acceptance of project completion for environmental impact
assessment in accordance with laws and obtained the pollutant discharge permit.
Industry discharge standards and discharge of pollutants in production and operation
Types of Names of
Name of major major The The
the pollutants pollutants number Distribution concentrat Pollutant Total Total Excess
Discharge
company and and of of discharge ion/intensi discharge dischar discharge dischar
method
or characteris characteris discharg outlets ty of the standards ge approved ge
subsidiary tic tic e outlets discharge
pollutants pollutants
Waste gas: Waste gas Particulate Emission SO2: SO2:
Particulate from matter: Standard of Air 0.118t/a 0.118t/a;
matter; boilers 20mg/m; Pollutants for ; NOx:
SO2; discharged SO2: Boilers NOx: 1.769t/a;
NOx; after being Boiler 35mg/m3; (Guangdong 1.769t/a Particulat
Mercury treated chimney; NOx: Province) (《锅 ; e matter:
and its with a Canteen 150mg/m3 炉大气污染物 Particul 0.393t/a
compound bagged chimney; ; 排放标准（广 ate COD:
Guangzho Waste
Waste gas; s; Flue gas pulse dust Workshop Mercury matter: 0.087 t/a ;
u Haiwei gas: 4; 东省）》) (DB-
Waste blackness collector, waste gas and its 0.393t/a BOD: None
Feed Co., Waste 44/765-2019);
water Waste production treatment compoun COD: 0.019 t/a;
Ltd. water: 1 Emission
water: odour gas plant outlet ds: 0.05 0.087 Suspende
BOD; through an Waste water: mg/m3; Standard of Air t/a ; d matter:
COD; odour External Flue gas Pollutants for BOD: 0.058 t/a;
Suspended treatment sewer blackness: Boilers (《锅炉 0.019 Ammonia
matter; system 1; 大气污染物排 t/a; nitrogen:
Ammonia (pre- BOD: 放标准》) (GB Suspen 0.010 t/a;
nitrogen; spraying + 20mg/L; 13271-2014); ded Animal
Animal biofilter + COD: Emission Limits matter: and
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and absorption 90mg/L; of Air Pollutants 0.058 vegetable
vegetable tower), Suspended (《大气污染物 t/a; oils:
oils kitchen matter: 60 排放值》) (DB- Ammon 0.010t/a
fumes mg/L; 44/27-2001); ia
treated by Ammonia Discharge nitroge
electrostati nitrogen: Limits of Water n: 0.010
c fume 15mg/L; Pollutants of t/a;
treatment PH: 6- Guangdong Animal
devices 9mg/L; Province (广东 and
and Animal vegetab
省水污染排放
discharged and le oils:
from the vegetable 限值) (DB- 0.010t/a
exhaust oils: 44/26-2001)
pipe 10mg/L
Waste
water:
discharged
into the
municipal
network
upon
meeting
the
standard
through
three
levels of
treatment
ponds
Waste gas
COD:
Waste from
3.14t/a;
water: boilers Particulate
Emission Suspen
Total discharged matter: COD:
Standard of Air ded
phosphoru after being 20mg/m; 3.14t/a;
Boiler Pollutants for matter:
s; Total treated SO2: Suspende
chimney; Boilers (《锅炉 1.82t/a;
nitrogen; with a 0.6mg/m3; d matter:
Waste gas 大气污染物排 Ammon
COD; bagged NOx: 1.82t/a;
treatment ia
Fujian Ammonia pulse dust 150mg/m3 放标准》) Ammonia
Waste gas; plant outlet nitroge
Haisheng nitrogen; collector, ; (GB13271- nitrogen:
Waste 3 in Workshop n: None
Feed Co., PH; production Mercury 2001); Emission 0.2t/a;
water 1; Waste gas 0.2t/a;
Ltd. Suspended odour gas and its Limits of Air Total
treatment Total
matter through compoun Pollutants (《大 nitrogen:
plant outlet nitroge
Waste gas: two odour ds: 0.05 气污染物排放 2.52t/a;
in Workshop n:
Particulate treatment mg/m3; 值》) Total
3 2.52t/a;
matter; systems Flue gas (GB13223- phosphoru
Total
SO2; (acid + blackness: 2011) s: 0.11t/a
phosph
NOx; Flue alkali 1
orus:
gas spray
0.11t/a
scrubbing)
Low Odour: Emission
nitrogen 131 Standards for
combustio (dimensio Odor Pollutants
n device; nless); GB14554-93
Waste gas: activated Ammonia/ (《恶臭污染物 NOx:
Odour carbon Ammonia 排放标准 0.0981t
concentrat adsorption gas: GB14554- /a;
ion; device; 0.52mg/m 93》); Emission SO2:
Ammonia/ low ; Standard of Air 0.096t/a NOx:
Ammonia nitrogen Hydrogen Pollutants for ; 0.0981t/a;
gas; combustio sulphide: Boilers for Smoke SO2:
Hydrogen n device; Boiler <0.01mg/ Chengdu and 0.096t/a;
sulphide; high outlets; m; DB51/2672- dust: Smoke
Sichuan SO2; efficiency animal SO2: <3; 2020 (《成都市 0.0576t and dust:
Hailinger Waste gas; Particulate + house Particulate /a; 0.0576t/a;
锅炉大气污染
Biopharm Waste matter; activated 5 outlets; matter: ＜ COD: COD: None
物排放标准
aceutical water NOx; carbon sewage 1.2mg/m; 0.51t/a; 9.06t/a;
Co., Ltd. Flue gas adsorption treatment DB51/2672- Ammon Ammonia
NOx:
blackness device station 28mg/m; 2020》); ia nitrogen:
Waste Waste outlets Flue gas Standard for nitroge 0.453t/a;T
water: PH; water blackness: Fugitive n: otal
Ammonia treatment
