Summary of 2023 Annual Report of Muyuan Foods Co., Ltd.
Stock Code: 002714 Stock Abbreviation: Muyuan Foods Announcement No.: 2024-024
Bond Code: 127045 Bond Abbreviation: Muyuan
Convertible Bond
Summary of 2023 Annual Report of Muyuan Foods Co., Ltd.
I．Important Notes
This summary is abstracted from the 2023 Annual Report of Muyuan Foods Co., Ltd.. Investors
may refer to the full text of the report through the media designated by the China Securities
Regulatory Commission (CSRC) for further details of the business performance, financial situation
and future development plans of Muyuan Foods Co., Ltd. (hereinafter referred to as "the Company").
All directors attended the board meeting on which this report was reviewed.
Notes on non-standard audit opinion
Applicable Not Applicable
Preliminary plan for profit distribution or capitalization of reserves in the reporting period as
deliberated by the board
Applicable Not Applicable
The Company plans no cash dividend distribution, bonus issue, or converting capital reserve into
share capital.
II. Basic Information of the Company
1. Company Profile
Stock abbreviation Muyuan Foods Stock code 002714
Stock Exchange for stock listing Shenzhen Stock Exchange
Stock abbreviation before change (if any) None
Securities Affairs
Contact information Secretary of the Board
Representative
Name Qin Jun Cao Fang
Longsheng Industrial Park, Longsheng Industrial Park,
Office Address Wolong District, Nanyang City, Wolong District, Nanyang
Henan Province, China City, Henan Province, China
Fax 0377-66100053 0377-66100053
Telephone 0377-65239559 0377-65239559
E-Mail myzqb@muyuanfoods.com myzqb@muyuanfoods.com
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Summary of 2023 Annual Report of Muyuan Foods Co., Ltd.
2. Main Business or Products Introduction during the Reporting Period
(I) Summary of the Company’s Operation
In 2023, the Company sold 63.816 million pigs, including 62.267 million commercial pigs (of
which, 13.266 million were sold to the wholly-owned subsidiary Muyuan Meat Co., Ltd. and its
subsidiaries), 1.367 million piglets, and 181 thousand breeding pigs. And totally, 13.260 million pigs
were slaughtered and 1.405 million tons of fresh and frozen pork products were sold in 2023.
As a result, the Company achieved an operating revenue of RMB 110.86 billion yuan in 2023,
showing a YOY decrease of 11.19%. Among the total revenue, the revenue attributable to slaughter
and meat processing is RMB 21.86 billion yuan, representing a YOY increase of 48.54%. The net
profit was RMB -4.17 billion yuan, representing a YOY decrease of 127.91%.
In 2023, the Company made continuous efforts in refined management to enhance pig health
and production management and improved pig farming results. In 2023, the Company improved its
major production indicators, and the annual average full cost of raising a commercial pig was around
15 yuan per kilogram. In the coming years, the Company will continue to make smooth the technical
path and optimize production management. With better herd health level, various production
indicators are expected to be further improved.
In 2023, the Company made continuous efforts in improving the efficiency of slaughterhouses
that are in operation, expanding meat sales markets and channels, optimizing client structure and
improving operating results. As a results, the capacity utilization rate of the slaughtering and meat
processing division increased to 46% in 2023 from the 25% in 2022 and the loss per pig reduced
significantly. In 2024, the slaughtering and meat processing division will strive to make more progress
in the development of markets, channels, and customer demands, and make better internal production
management to enhance its comprehensive operational capability and profitability, so as to supply
high-quality pork products to customers across the country.
The year 2023 witnessed the Company’s further transformation from a high-speed development
to a high-quality and stable development. The Company continuously promoted the construction of
supporting facilities for planned pig farms, improved the biosecurity infrastructures, and strengthened
the cost-control ability of pig farming. It also expanded to the upstream and downstream of the
industrial chain. A subsidiary of grain trading was established to lower purchase costs. And slaughter
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Summary of 2023 Annual Report of Muyuan Foods Co., Ltd.
business was distributed to match the existing pig production capacity to provide more high-quality
pork foods to the public. As of the end of 2023, the Company had 308 wholly-owned and holding
subsidiaries in 25 provincial-level administrative regions across China.
In 2023, the Company explored the potential of nutrition technology and developed and applied
low-soybean diets to continuously reduce the proportion of soybean usage. In 2022, the proportion
of soybean meal in the Company’s feed consumption was only 7.3%, which is about half of the
industry average level 14.5%. In 2023, the proportion was further decreased to 5.7%. In recent years,
the Ministry of Agriculture and Rural Affairs (MARA) of the People’s Republic of China vigorously
promoted the reduction and substitution of soybean consumption in animal feeds. These actions were
aimed to improve feed efficiency while reducing soybean consumption and broaden sources of
alternative ingredients for soybean, where efforts had been made in the demand end to reduce soybean
usage and in the supply end to supply more alternative resources. In response, the Company actively
shared its core technology with the industry to promote low-soybean diets. As a result, soybean meal
usage in feed formulas in China reduced to 13% in 2023, a YOY reduction of 1.5 percentage points.
In 2023, the Company worked with the Westlake University in the field of synthetic biology and
carried out R&D in related cutting-edge science and technology. It also cooperated with Mint BioTech
(Hangzhou) Co., Ltd (元素驱动（杭州）生物科技有限公司) to establish the Henan Muyuan
Anliang Synthetic Biology Technology Co., Ltd （河南牧元安粮合成生物技术有限公司）for the
consumption reduction and substitution of soybean meal and the development of other bio-based
products. The Company will continue to use advanced synthetic biology technologies to explore the
low-soybean diet technology.
Changzhou Qianhong Biopharma Co., Ltd (常州千红生化制药股份有限公司) boasts its
professional manufacture technologies of and quality management experiences in crude products,
bulk drugs, and preparations of heparin sodium. In 2023, the Company co-established the Henan
Qianmu Biopharma Co., Ltd (河南千牧生物制药有限公司) with Changzhou Qianhong to build a
world-class biopharmaceutical base with leading traceability for producing heparin sodium crude
products, heparin sodium, low molecular heparin sodium and other related products from pig by-
products such as small intestines, leveraging the Company’s resource advantages in pig farming and
slaughtering. Joint venture projects related to this are expected to further expand the Company’s
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Summary of 2023 Annual Report of Muyuan Foods Co., Ltd.
industrial chain and enhance its comprehensive profitability. These projects are currently under
construction and are expected to begin trial production by the end of 2024.
In 2023, the Company took active actions such as reducing fossil energy consumption and
developing new energies like solar photovoltaic (PV) power to promote energy structure
transformation and achieve peak carbon and neutrality goals. In the reporting period, the Company
established unified management for affairs related to new energy. New energy companies were
established as project construction and operation entities in counties where PV projects were proposed
to be launched. On the premise of not affecting the main business and not causing biosafety
management risks, internal teams planned and designed to utilize the roofs of farms and
slaughterhouses to construct distributed PV facilities. Where the power demand of each farm or
slaughterhouse was satisfied, the extra power was supplied to the grid. Through the development and
utilization of green energy, the production cost was reduced. In 2023, the Company’s PV facilities
generated 36.88 million kWh. Later, the Company will determine the feasibility of modes such as
roof renting and cooperation with electric power companies, further optimize its energy structure,
increase the usage of green power, and achieve low-carbon production and sustainable development.
In 2023, the Company optimized its organizational management structure. Three business
divisions (feed, pig production, and pig slaughtering) and eight functional platforms were set up to
improve operation and management efficiency and reduce management costs. To build a talent team
that is younger, more international, and more professional, the HR Department of the Company
carried out various activities to attract college graduates and launched several overseas special
recruitment activities to engage international students. It established well an assessment mechanism
to select and position talents and a cultivation mechanism for talents in the pool to empower them
precisely and improve their professional competence and qualities continuously. Through enhanced
performance management, the salary and remuneration mechanism was optimized to give outstanding
employees higher rewards and motivate employees to be more proactive. Through the personnel
administration mechanism, employees were made clear about their promotion channels. By doing so,
talents were matched with suitable positions and have given full play on their role while the talent
needs of the Company’s high-quality development were met.
(II) Main business, products, and their uses
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Summary of 2023 Annual Report of Muyuan Foods Co., Ltd.
The Company’s main business is the farming, sales, and slaughter of pigs. Its main products
include commercial pigs, piglets, and breeding pigs, as well as pork products such as pork carcasses
and finely cut pork. As of the end of 2023, the Company's annual pig farming capacity was about 80
million heads, and 10 slaughterhouses were put into operation, with an annual pig slaughter capacity
of 29 million heads.
(III) Business model
The Company adopts a vertically integrated business model and has formed an pork industrial
chain, integrating feed processing, pig breeding, pig raising, pig slaughtering, and meat processing,
that covers the whole pig industrial value chain. The vertically integrated business model has enabled
the Company to carry out stricter control of costs and quality and ensure business results in an all-
round way.
The Company has its own feed mills to independently develop nutrition formulas and produce
feeds to meet the needs of pigs of all stages, where feed formulas can be adjusted timely in accordance
with the changes in the raw grain market. Low-soybean diet technology has been applied to reduce
the usage of soybean meals to control the feeding costs.
The Company adopts the two-breed rotational crossbreeding system to select continuously and
independently and build its own nucleus herds, which is helpful to reduce the production costs and
disease risks. At the same time, the Company’s breeding pigs can satisfy both breeding needs and
production needs, in terms of reproductive performance, growth rate, lean meat percentage, and
carcass quality, laying a foundation for the rapid development of the Company.
The Company attaches great importance to R&D innovations and the application of smart
equipment. It has independently developed a fresh air filtration system, independent ventilation
system, intelligent environment control system, intelligent feeding system, etc. A series of intelligent
equipment operate in a collaborative manner. It aims to improve pig farming efficiency, lower pig
farming costs, and promote the transformation and upgrading of the industry through technology-led
and innovation-driven development.
In 2023, the Company stuck to the business model of independent pig farming and slaughter.
The whole production process was made transparent, controllable and traceable, food quality and
safety was ensured, and more high-quality pork products were provided to customers.
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Summary of 2023 Annual Report of Muyuan Foods Co., Ltd.
By the end of 2023, the Company had set up 26 slaughtering subsidiaries across China, with all
slaughtered pigs supplied from its own farms. The Company has been expanding its pork sales
network in China. By the end of 2023, more than 60 service stations in 20 provincial-level
administrative regions across China had been set up for the Company’s slaughtering and meat
business.
(IV) Industry development
1. China as the world's largest pork production and consumption country
Data from the National Bureau of Statistics of China (NBSC) shows that 726.62 million pigs
were marketed in China in 2023, an increase of 3.8% over the previous year. As of the end of 2023,
the national inventory of reproductive sows and live pigs were 41.42 million and 434.22 million, an
decrease of 5.7% and 4.1% over the previous year, respectively.
(Data source: NBSC)
China currently is the largest pork producer in the world. According to data released by the U.S.
Department of Agriculture (USDA), China's pork production in 2023 accounted for 49.39% of global
production, ranking first in the world.
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Summary of 2023 Annual Report of Muyuan Foods Co., Ltd.
(Data source: USDA)
China is also the largest pork consumption country in the world. Pork is the most important
source of animal protein for Chinese people, and has long been dominant in meat consumption in
China. According to NBSC, China's pork production in 2023 was 57.94 million tons, accounting for
60.10% of the meat production of main livestock and poultry.
(Data source: NBSC)
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Summary of 2023 Annual Report of Muyuan Foods Co., Ltd.
2. Pig price trend
China’s pig market is characterized by significant cyclicity. The fluctuation of pig supply is the
main factor affecting pig price. Data from the NBSC shows that 726.62 million pigs were marketed
in China in 2023, an increase of 3.8% over the previous year. Pork output saw a YOY increase of
4.6%, standing at its highest-recorded volume since 2015, at 57.94 million tons. Large pig output and
obviously increased pork output are the main reasons behind the low pig price in 2023. Live pig prices
started to decrease in December 2022. In 2023, pig prices generally remained low, with only a
temporary rebound in Q3.
(Data source: MARA)
3. Continuously improved pig farming scale
In China, small-scale pig farming has long been the main pattern in the pig industry, leading to
a low industry concentration. There is a large number of backyard farming households and small- to
medium-sized farms. In recent years, intensive pig farming and the industry concentration ratio in
China have been in the rise. The industry is moving towards high-quality development to better satisfy
people’s increasing demands for high-quality pork. According to statistics from the Ministry of
Agriculture and Rural Affairs (MARA) of the People’s Republic of China, the proportion of intensive
pig farming by the end of 2023 was estimated to reach about 68%, an increase of around 3 percentage
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Summary of 2023 Annual Report of Muyuan Foods Co., Ltd.
points over 2022. According to public data, China’s top 10 listed pig farming companies sold about
149.15 million heads of pigs in total in 2023, accounting for 20.53% of the total national output,
showing an increase over 2022.
3. Main accounting data and financial indicators
(1) Main accounting data and financial indicators in the past three years
Whether the Company needs to make retroactive adjustments or restate the accounting data of
previous years or not
Yes No
Unit: yuan
End of 2023 End of 2022 YOY change End of 2021
Total assets 195,404,553,902.24 192,947,611,799.00 1.27% 177,265,759,187.58
Net assets
attributable to
62,828,051,373.10 71,783,350,329.31 -12.48% 54,351,768,519.36
shareholders of the
Company
2023 2022 YOY change 2021
Operating revenue 110,860,727,714.40 124,826,212,177.74 -11.19% 78,889,870,566.40
Net profits
attributable to
-4,263,280,820.31 13,266,156,512.39 -132.14% 6,903,777,691.92
shareholders of the
Company
Net profits
attributable to
shareholders of the
Company after -4,026,262,919.48 13,029,323,049.56 -130.90% 6,785,021,475.69
deduction of non-
recurring profit or
loss
Net cash flow from
9,892,816,863.72 23,010,550,801.93 -57.01% 16,295,026,813.82
operations
Basic EPS (yuan /
-0.79 2.49 -131.73% 1.28
share)
Diluted EPS (yuan /
-0.79 2.45 -132.24% 1.28
share)
Weighted average Declined by 27.39
-6.38% 21.01% 12.91%
ROE percentage points
(2) Main accounting data by quarter
Unit: yuan
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Summary of 2023 Annual Report of Muyuan Foods Co., Ltd.
First quarter Second quarter Third quarter Fourth quarter
Operating revenue 24,198,301,291.41 27,670,673,174.68 31,099,681,034.63 27,892,072,213.68
Net profits
attributable to
-1,198,054,174.39 -1,581,163,482.85 936,888,334.97 -2,420,951,498.04
shareholders of the
Company
Net profits
attributable to
shareholders of the
Company after -1,252,147,469.20 -1,533,995,805.80 1,070,560,056.56 -2,310,679,701.04
deduction of non-
recurring profit or
loss
Net cash flow from
-3,853,793,609.91 2,809,751,622.26 7,732,067,647.65 3,204,791,203.72
operations
Whether the above financial indicators or their total amount are significantly different from the
related financial indicators disclosed in the Company's quarterly or semi-annual reports.
Yes No
4. Share Capital and Shareholders
(1) The number of common shareholders and preferred shareholders with resumed voting
rights and the shareholding of the top 10 shareholders
Unit: share
Total
numbe
r of
Total preferr
number of ed
common shareh Total number of
Total number shareholde olders preferred
of common rs at the with shareholders with
shareholders at end of the resume resumed voting
261,828 233,988 0 0
the end of the month d rights at the end of
reporting before the voting the month before
period disclosure rights the disclosure date
date of the at the of the annual report
annual end of
report the
reporti
ng
period
Shareholding of the top 10 shareholders (excluding shares lent through refinancing)
Pledged, marked or
Shareholdi Number of frozen shares
Shareholder Sharehold Number of shares
ng restricted shares
name er nature held Share
percentage held Quantity
status
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Summary of 2023 Annual Report of Muyuan Foods Co., Ltd.
Domestic
Pledge
Qin Yinglin natural 38.17% 2,086,287,906 1,564,715,929 293,940,000
d
person
Domestic
Muyuan non-state-
Pledge
Industrial owned 15.28% 834,925,406 150,112,584 270,039,400
d
Group Co., Ltd. corporatio
n
Hong Kong
Securities Overseas Not
Clearing corporatio 2.66% 145,301,988 0 Applic 0
Company Ltd. n able
(HKSCC)
Domestic Not
Sun Huigang natural 1.57% 85,683,509 0 Applic 0
person able
Domestic Not
Qian Ying natural 1.18% 64,445,240 48,333,929 Applic 0
person able
Muyuan Foods
Co., Ltd. –
Phase II Not
Employee Others 1.03% 56,443,800 0 Applic 0
Stock able
Ownership
Plan
Domestic
China non-state- Not
Securities Co., owned 0.70% 38,222,432 0 Applic 0
Ltd. corporatio able
n
Domestic Not
Cai Min natural 0.54% 29,352,500 0 Applic 0
person able
Domestic Not
Qian Yunpeng natural 0.43% 23,573,397 0 Applic 0
person able
Industrial and
Commercial
Bank of China
Limited --
Huatai-
Not
Pinebridge CSI
Others 0.37% 20,408,581 0 Applic 0
300 Exchange
able
Traded Open-
End Index
Securities
Investment
Fund
Mr. Qin Yinglin and Mrs. Qian Ying are the actual controllers of the Company.
Description of affiliated Mr. Qin Yinglin and Mrs. Qian Ying jointly hold 100% equity of Muyuan
relations or concerted actions Group and hold 54.63% equity of the Company directly and indirectly. Qian
among the above Yunpeng is the elder brother of Qian Ying.
shareholders It is unknown whether other shareholders have affiliated relations or act in
concert.
Description of shareholders Sun Huigang holds 6,000,000 shares of the Company through his common
participating in Securities securities account, and 79,683,509 shares through his collateral securities
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Summary of 2023 Annual Report of Muyuan Foods Co., Ltd.
Margin Trading (if any) account for margin trading, representing a total holding of 85,683,509 shares.
Cai Min holds 3,602,500 shares of the Company through her common
securities account, and 25,750,000 shares through her collateral securities
account for margin trading, representing a total holding of 29,352,500 shares.
Participation of top 10 shareholders in share lending for refinancing
Applicable Not Applicable
Unit: share
Participation of top 10 shareholders in share lending for refinancing
Shares held through Shares lent for
Share held through Shares lent for
common accounts refinancing but not yet
common accounts and refinancing but not
and credit accounts returned at the
credit accounts at the yet returned at the
at the beginning of beginning of the
Shareholder end of the period end of the period
the period period
name (full
name) Propor Proporti Proporti
Proportio
tion to on to on to
n to total
Total total Total Total total Total total
share
share share share
capital
capital capital capital
Industrial
and
Commercial
Bank of
China
Limited --
Huatai-
Pinebridge
9,814,181 0.18% 1,091,000 0.02% 20,408,581 0.37% 14,200 0.00%
CSI 300
Exchange
Traded
Open-End
Index
Securities
Investment
Fund
Changes in top 10 shareholders compared to the previous period
Applicable Not Applicable
Unit: share
Changes in top 10 shareholders compared to the end of the previous period
Joined/ Shares held through common
Shares lent for refinancing but not
exited accounts and credit accounts & lent
Shareholder name yet returned at the end of the
during this for refinancing but not yet returned
(full name) period
reporting at the end of the period
period Total Proportion to Total Proportion to
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Summary of 2023 Annual Report of Muyuan Foods Co., Ltd.
total share total share
capital capital
Qian Yunpeng Joined 0 0.00% 23,573,397 0.43%
Industrial and
Commercial Bank of
China Limited --
Huatai-Pinebridge
Joined 14,200 0.00% 20,422,781 0.37%
CSI 300 Exchange
Traded Open-End
Index Securities
Investment Fund
Hainan Hongbao
Exited 0 0.00% 14,600,000 0.27%
Investment Co., Ltd.
Li Yanyan Exited 0 0.00% 6,321,610 0.12%
(2) Total number of preferred shareholders and the shareholdings of the top 10 preferred
shareholders of the Company
Applicable Not Applicable
There were no preferred shareholders holding shares of the Company during the reporting period.
(3) Ownership and control relations between the Company and the actual controllers
5. Bonds in existence as of the approval date of the annual report
Applicable Not Applicable
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Summary of 2023 Annual Report of Muyuan Foods Co., Ltd.
(1) Basic information of bonds
Bond
Bond Balance
Bond Name Bond Code Issue Date Due Date Interest Rate
Abbreviation (10,000
yuan)
1st year: 0.20%;
Convertible 2nd year: 0.40%;
Bond of Muyuan 3rd year: 0.80%;
August 16, August 15,
Muyuan Convertible 127045 954,355.49 4th year: 1.20%;
2021 2027
Foods Co., Bond 5th year: 1.50%;
Ltd. and 6th year:
2.00%.
Muyuan Convertible Bond paid the 2nd-year interest at par on August 16, 2023
Interest payment and cashing
for the period from August 16, 2022 to August 15, 2023, with a coupon rate of
of corporate bonds during the
0.40% and the interest was RMB 4 (including tax) for every 10 Muyuan
reporting period
Convertible Bonds (par value RMB 1,000).
(2) Latest tracking bond ratings and changes
During the reporting period, China Chengxin International Credit Rating Co., Ltd. (CCXI)
issued the 2023 Tracking and Rating Report on Muyuan Foods Co., Ltd. on June 27, 2023. It
maintained the Company's main credit rating as AA+, adjusted the rating outlook to Stable from
Negative, and maintained the credit rating of "Muyuan Convertible Bond" as AA+. For more
details, please see www.cninfo.com.cn.
(3) Main accounting data and financial indicators in the past two years as of the end of the
reporting period
Unit: 10,000 yuan
Item 2023 2022 YOY change
Liabilities to assets ratio 62.11% 54.36% 7.75%
Net profit after deduction
of non-recurring profit or -402,626.29 1,302,932.30 -130.90%
loss
EBITDA/Total Debt ratio 15.02% 44.02% -29.00%
Interest coverage ratio -0.29 6.12 -104.74%
III. Significant Matters
None
Qin Yinglin, Chairman
Muyuan Foods Co., Ltd
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Summary of 2023 Annual Report of Muyuan Foods Co., Ltd.
April 25, 2024
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