Summary of 2021 Annual Report of Muyuan Foods Co., Ltd.
Stock Code: 002714 Stock Abbreviation: Muyuan Foods Announcement No.: 2022-068
Preferred Stock Code: 140006 Preferred Stock Abbreviation: Muyuan Preferred 01
Bond Code: 127045 Bond Abbreviation: Muyuan Convertible Bond
Summary of 2021 Annual Report of Muyuan Foods Co., Ltd.
I．Important Notes
This summary is abstracted from the 2021 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").
This summary has been prepared in both Chinese and English. Should there be any
discrepancies or misunderstandings between the two versions, the Chinese versions shall prevail.
Notes of non-standard audit opinions
□ Applicable √ Not Applicable
Preliminary plan for profit distribution of common shares or capitalization of reserves in the
reporting period as deliberated by the board of directors
√ Applicable □ Not Applicable
Capitalization of reserves or not
□ Yes √ No
The preliminary plan for profit distribution of common shares, as considered and approved by
the Company’s board of directors, is to distribute a cash dividend of RMB 2.48 (tax included) for
every 10 shares to all shareholders, on the basis of the total share capital on the record date for the
distribution, with 0 bonus shares (tax included) and no capitalization of capital reserves.
Profit distribution plan of preferred shares during the reporting period as approved through the
resolution of the board of directors
√ Applicable □ Not Applicable
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Summary of 2021 Annual Report of Muyuan Foods Co., Ltd.
Distribution
Involved in the
Distribution conditions and Dividend
Dividend allocation of
Dividend Rate Amount (yuan) relevant accumulated or
Distribution date payment method residual profits or
(tax included) procedures not
not
satisfied or not
December 27,
6.8% 168,363,240.00 Yes Cash No No
2021
II. Basic Information of the Company
1. Company Profile
Stock abbreviation Muyuan Foods Stock code 002714
Stock Exchange for stock listing Shenzhen Stock Exchange
Contact information Secretary of the Board Securities Affairs Representative
Name Qin Jun Cao Fang
Longsheng Industrial Park, Wolong District, Longsheng Industrial Park, Wolong District,
Office Address
Nanyang City, Henan Province, China Nanyang City, Henan Province, China
Fax 0377-66100053 0377-66100053
Telephone 0377-65239559 0377-65239559
E-mail myzqb@muyuanfoods.com myzqb@muyuanfoods.com
2. Main Business or Products Introduction during the Reporting Period
2.1 Main business, products and their uses
The main business of the Company is the farming and sale of live pigs and pig slaughtering.
During the reporting period, the Company sold 40.263 million live pigs, including 36.887 million
commercial pigs (2.899 million sold to the wholly-owned subsidiary Muyuan Meat Co., Ltd. and its
subsidiaries), 3.095 million piglets and 281,000 breeding pigs, which had achieved an operating
income of 78.89 billion yuan with a YOY increase of 40.18%. In 2021, a total of 2.899 million pigs
were slaughtered, with a revenue of 5.42 billion yuan from the slaughtering and meat business. As
of the end of 2021, the Company had six slaughtering subsidiaries in operation, with a total
slaughtering capacity of 16 million pigs per year.
2.2 Business model
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Summary of 2021 Annual Report of Muyuan Foods Co., Ltd.
The Company adopts the business model of fully independent farming, whole-industry-chain
covering, and applying intelligence in production. After 30 years of development, it has formed an
industrial chain integrating feed processing, pig breeding, breeding stock multiplication,
commercial pig farming, slaughtering and meat production.
The Company builds its own feed mills, develops nutritional formulas and produces feeds to
meet the demand of pigs at each production stage. Guided by the market demand, it establishes the
value-oriented breeding system with quality priority, and continuously selects fine breeds. Muyuan
has built a breeding system that involves nucleus herds, multiplier herds, and commercial herds for
breeding excellent breeding pigs and producing commercial pigs. To improve herd health
management, Muyuan has independently developed the fresh air filtration system, separate
ventilation system, smart environmental control system, intelligent feeding system, etc. By
integrating technologies such as the Internet of Things, Big Data and Artificial Intelligence, the
Company has achieved collaborative operation of smart devices and intelligent management
throughout its whole industry chain, which has enhanced production efficiency, lowered costs and
facilitated the sustainable development of the Company.
In 2021, the Company continued to implement the national policy of shifting from transporting
live pigs to transporting pork, accelerated the building of slaughtering capacity in the main breeding
areas of the Company, and made the whole production process transparent, controllable and
traceable through the business model of independent pig farming and slaughtering, so as to ensure
food quality and safety and provide consumers with more high-quality pork products.
By the end of 2021, the Company had set up 22 slaughtering subsidiaries across China, with
all slaughtered pigs from its own farms. The Company further expanded its fresh pork sales network
in China. Besides, the Company had set up 78 service stations in 22 provinces across the country as
of the end of 2021 to expand its slaughtering business, covering more than 5,000 clients from
agricultural product wholesalers, supermarket chains, chain catering, food processing companies
and new retail companies.
2.3 Industry development
1. China is the world's largest pork production and consumption market
Data from the National Bureau of Statistics of China (NBSC) shows that 671.28 million pigs
were marketed in China in 2021, an increase of 27.4% over the previous year. As of the end of 2021,
the inventory of live pigs was 449.22 million, an increase of 10.51% over the previous year. Data
from the Ministry of Agriculture and Rural Affairs (MARA) shows that there were 43.29 million
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Summary of 2021 Annual Report of Muyuan Foods Co., Ltd.
reproductive sows in the inventory nationwide by the end of 2021, an increase of 4% over the
previous year.
China has the world’s largest pork production market. According to data released by the U.S.
Department of Agriculture (USDA), China's pork production in 2021 accounted for 44.09% of
global production, ranking first in the world.
(Data source: USDA)
China has the world's largest pork consumption market as well. According to data released by
the Organization for Economic Cooperation and Development (OECD) and USDA, China's pork
consumption accounts for about 46% of the world's pork consumption, and China's per capita pork
consumption is about twice the world's.
Pork is the most important source of animal protein for Chinese people, and has long been
dominant in meat consumption in China. According to data from the NBSC, China's pork
production in 2021 was 52.96 million tons, accounting for 59.59% of the main livestock and poultry
meat production.
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Summary of 2021 Annual Report of Muyuan Foods Co., Ltd.
(Data source: NBSC)
2. The industry has obvious cyclical characteristics
China's pig farming industry is characterized by its significant cyclicity, with distinct periodic
fluctuations in pig prices and each cycle of 3-4 years in general. According to our observation, the
national pig farming industry has experienced the following fluctuation cycles since 2000: 2002 ~
2006, 2006 ~ 2010, 2010 ~ 2014, and 2014 ~ 2018, each as a complete cycle. There are also several
small cycles within the big ones. In 2019, due to the superimposed effects of factors such as the pig
cycle and the African Swine Fever epidemic, the number of live pigs for market dropped, and the
price of live pigs showed a bottom-up trend. The annual average price increased significantly YOY.
In 2020, the industry's production capacity showed a gradual recovery trend, but due to the large
reduction in the early stage, live pigs were still in short supply, and the price of live pigs was
generally maintained at a high level. In 2021, the industry's production capacity basically recovered,
the market supply rebounded significantly, and the price of live pigs showed a downward trend.
(Data source: MARA, China)
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Summary of 2021 Annual Report of Muyuan Foods Co., Ltd.
3. The industry scale has increased, but remains at a low level
China’s pig farming industry has long been dominated by scatter feeding production, with a
low industry concentration. There are a large number of backyard households and small- and
medium-sized farms. According to the statistics of the China Animal Husbandry and Veterinary
Yearbook, there were 373 farms with an annual production of more than 50,000 live pigs for market
in 2019, accounting for only 0.0016% of the total number of farms (households), which is a very
low proportion.
In recent years, affected by factors such as the tightening of environmental protection policies,
scarcity of pig farming land, frequent outbreaks of African Swine Fever and other epidemics,
drastic fluctuations in pig prices, and accelerated improvement of food safety, the backyard
households have withdrawn significantly, further accelerating the process of standardization, scale
and modernization of pig farming in China. According to the disclosed information, in 2021, the top
five pig farming companies (Muyuan Foods, Zhengbang Technology, Wens Foodstuff, Twins Group
and New Hope) sold a total of 90.04 million pigs, accounting for 13.41 % of the total output in
China. The concentration of China's pig farming industry has shown an upward trend in recent
years, but large-scale production remains at a low level compared with other countries with more
mature industrial development.
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 2021 End of 2020 YOY change End of 2019
Total assets 177,265,759,187.58 122,627,256,969.07 44.56% 52,886,586,120.19
Net assets attributable to
54,351,768,519.36 50,406,879,150.81 7.83% 23,107,735,222.70
shareholders of the Company
2021 2020 YOY change 2019
Operating revenue 78,889,870,566.40 56,277,065,607.85 40.18% 20,221,332,525.64
Net profits attributable to
6,903,777,691.92 27,451,421,940.73 -74.85% 6,114,363,662.85
shareholders of the Company
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Summary of 2021 Annual Report of Muyuan Foods Co., Ltd.
Net profits attributable to
shareholders of the Company after
6,785,021,475.69 27,326,977,374.14 -75.17% 5,937,528,173.28
deduction of non-recurring profit or
loss
Net cash flow from operations 16,295,026,813.82 23,185,751,195.99 -29.72% 9,988,895,350.91
Basic EPS (yuan / share) 1.28 5.33 -75.98% 1.19
Diluted EPS (yuan / share) 1.28 5.28 -75.76% 1.19
61.52 percentage
Weighted average ROE 12.91% 74.43% 35.28%
points down
(2) Main accounting data by quarter
Unit: yuan
First quarter Second quarter Third quarter Fourth quarter
Operating revenue 20,152,096,045.72 21,385,869,465.66 14,743,838,256.90 22,608,066,798.12
Net profits attributable to
6,963,072,000.64 2,562,908,557.43 -821,714,334.22 -1,800,488,531.93
shareholders of the Company
Net profits attributable to
shareholders of the Company after
6,952,812,743.70 2,482,806,444.55 -785,421,494.30 -1,865,176,218.26
deduction of non-recurring profit or
loss
Net cash flow from operations 4,755,828,247.31 8,442,190,319.19 95,146,925.34 3,001,861,321.98
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 number Total number of Total number Total number of
of common common of preferred preferred
shareholders at shareholders at shareholders shareholders with
277,062 198,545 0 0
the end of the the end of the with resumed resumed voting
reporting month before the voting rights rights at the end of
period disclosure date of at the end of the month before the
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Summary of 2021 Annual Report of Muyuan Foods Co., Ltd.
the annual report the reporting disclosure date of the
period annual report
Shareholding of the top 10 shareholders
Pledged, marked or frozen
Shareholder Shareholder Shareholding Number of shares Number of restricted shares
shares
name nature percentage held held
Share status Quantity
Domestic natural
Qin Yinglin 39.65% 2,086,287,906 1,564,715,930 Pledged 327,110,000
person
Muyuan Domestic
Industrial Group non-state-owned 13.01% 684,812,822 Pledged 188,377,400
Co., Ltd. corporation
Hong Kong
Securities
Overseas
Clearing 2.82% 148,235,378
corporation
Company Ltd.
(HKSCC)
Muyuan Foods
Co., Ltd. –
Other
Phase II 1.92% 100,910,000
Employee Stock
Ownership Plan
Domestic
Qian Ying 1.22% 64,445,240 48,333,929
natural person
Domestic
Qian Yunpeng 1.03% 54,184,477
natural person
Domestic
Sun Huigang 0.95% 50,121,246
natural person
Hainan
Domestic
Hongbao
non-state-owned 0.87% 46,025,260
Investment Co.,
corporation
Ltd.
Domestic
Li Yanyan 0.64% 33,756,630
natural person
Domestic
Cai Min 0.57% 29,965,293 8,015,941
natural person
Mr. Qin Yinglin and Mrs. Qian Ying are the actual controllers of the Company. Mr. Qin Yinglin
Description of affiliated relations
and Mrs. Qian Ying jointly hold 100% equity of Muyuan Group and hold 53.88% equity of the
or concerted actions among the
Company directly and indirectly. Qian Yunpeng is the elder brother of Qian Ying.
above shareholders
It is unknown whether other shareholders have affiliated relations or act in concert.
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Summary of 2021 Annual Report of Muyuan Foods Co., Ltd.
Hainan Hongbao Investment Co., Ltd. holds 14,000,000 shares of the Company through its
common securities account and 32,025,260 shares through its collateral securities account for
margin trading, representing a total holding of 46,025,260 shares.
Description of shareholders
Li Yanyan holds 5,249,890 shares of the Company through her common securities account, and
participating in Securities Margin
28,506,740 shares through her collateral securities account for margin trading, representing a
Trading (if any)
total holding of 33,756,630 shares.
Cai Min holds 2,066,000 shares of the Company through her common securities account, and
27,899,293 shares through her collateral securities account for margin trading, representing a
total holding of 29,965,293 shares.
(2) Total number of preferred shareholders and shareholding condition of the top 10
preferred shareholders of the Company
√ Applicable □ Not Applicable
Unit: share
Total number of preferred
Total number of preferred
shareholders at the end of the
shareholders at the end of the 6 6
month before the disclosure
reporting period
date of the annual report
Shareholding of the top 10 preferred shareholders
Pledged, marked or frozen
Shareholder Shareholder Shareholding Number of shares Number of preferred
shares
name nature percentage held shares held
Share status Quantity
Hua Life Insurance Co.,
Others 28.07% 6,950,000 6,950,000
Ltd. – Universal Product
Taiping Asset
Management Co., Ltd. -
China Merchants Bank -
Others 20.19% 5,000,000 5,000,000
Taiping Assets 2020
Phase II Entrusted
Special Account
Huabao Trust Co., Ltd. -
Huabao Trust -
Others 19.22% 4,759,300 4,759,300
Investment No. [39]
Single Fund Trust
Domestic
Shanghai Qinbing
non-state-owned 12.32% 3,050,000 3,050,000
Investment Co., Ltd.
legal person
Zhongyuan Bank Co.,
Others 12.12% 3,000,000 3,000,000
Ltd. - Financial
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Summary of 2021 Annual Report of Muyuan Foods Co., Ltd.
Products of Dingsheng
Wealth Qianjing Series
Guotai Jun’an Futures -
Shanghai Pudong
Development Bank -
Junhe Yuanqi No. 1 Others 8.08% 2,000,000 2,000,000
Collection Asset
Management Plan of
Guotai Jun’an Futures
Description of affiliated relations or It is unknown whether there are affiliated relations or concerted actions among the
concerted actions among the above above preferred shareholders or between the above preferred shareholders and the top
shareholders 10 common shareholders.
(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
(1) Basic information of bonds
Bond Bond Balance
Bond Name Bond Code Issue Date Due Date Interest Rate
Abbreviation (10,000 yuan)
Muyuan
20MY-MTN001 102000771 April 20, 2020 April 22, 2023 50,000 4.11%
Foods Co.,
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Summary of 2021 Annual Report of Muyuan Foods Co., Ltd.
Ltd. 2020
MTN phase I
Muyuan
Foods Co.,
20MY-MTN002 102001087 May 26, 2020 May 28, 2023 30,000 4.50%
Ltd. 2020
MTN phase II
Interest payment and cashing of
20MY-MTN001 and 20MY-MTN002 paid interest of 20.55 million yuan and 13.5 million yuan
corporate bonds during the
respectively on April 22, 2021 and May 28, 2021.
reporting period
(2) Latest tracking bond ratings and changes
During the reporting period, China Chengxin International Credit Rating Co., Ltd. (CCXI)
issued the Announcement of CCXI on Adjusting the Rating Outlook of Muyuan Foods Co., Ltd. to
Negative (CCXI Credit Rating Committee Announcement [2021] No. 932) on December 15, 2021.
It decided to maintain the Company's AA + main credit rating, adjust the rating outlook to negative,
and maintain the AA + credit rating of "19 Muyuan 01", "20MY-MTN001", "20MY-MTN002" and
"Muyuan Convertible Bond" based on following events and factors: Since 2021, with the
continuous downturn of pig prices, the rebound range of prices in the short term is limited; The
Company suffered an operating loss in the third quarter of 2021, weakening its profitability and
cash generation ability; In the past two years, the Company's investment scale was relatively large,
and its debt continued to rise; The Company’s overdue payment of commercial papers was taken
into consideration as well. The above announcement was made through CNINFO
(http://www.cninfo.com.cn) on December 15, 2021.
(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 2021 2020 YOY change
Liabilities to assets ratio 61.30% 46.09% 15.21%
Net profit after deduction of
678,495.8 2,732,697.74 -75.17%
non-recurring profit or loss
Total debt to EBITDA ratio 28.97% 99.22% -70.25%
Interest coverage ratio 4.37 33.31 -86.88%
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Summary of 2021 Annual Report of Muyuan Foods Co., Ltd.
III. Significant Events
(1) The Proposal on Medium Term Notes (MTN) was deliberated and approved during the 26th
Meeting of the Third Board of Directors held on April 24, 2020 and the 2019 Annual General
Meeting of Shareholders held on May 18, 2020. The Company was thereby agreed to register with
the National Association of Financial Market Institutional Investors (NAFMII) and issue MTN of
no more than 3 billion yuan (inclusive). The specific issuance scale would be subject to the amount
registered with NAFMII and the issuing interest rate should be determined according to the market
conditions.
On August 11, 2021, the Company issued the Announcement of Muyuan Foods Co., Ltd. on
the Registration Approval of Medium Term Notes. The Company had received the Notice of
Registration Application Acceptance (NAFMII Registration [2021] MTN 622) issued by NAFMII.
The Company’s MTN registration was accepted with the registered amount valid for 2 years from
the date of signing of the Notice of Registration Application Acceptance.
(2) During the 32nd Meeting of the Third Board of Directors held on December 8, 2020, the
Company deliberated and approved the Proposal on the Establishment of a Jointly Funded Financial
Company by Muyuan Foods Co., Ltd. and Muyuan Industrial Group Co., Ltd. and on Related-Party
Transactions. The Company and Muyuan Group plan to jointly fund a financial company. The
registered capital of the financial company is 1 billion yuan, which shall be funded in cash by
Muyuan Group and the Company as sponsors, with 450 million yuan from the Company.
As of the report release date, the matter is still under preparation and application.
(3) Proposals related to the non-public offering of A-shares in 2021 were deliberated and
approved during the Second Meeting of the Fourth Board of Directors held on October 18, 2021,
the Fourth Extraordinary General Meeting of Shareholders held on November 3, 2021, and the
Sixth Meeting of the Fourth Board of Directors held on February 25, 2022. The Company proposed
to issue A-shares to Muyuan Group via a non-public offering. The number of shares in this
non-public offering will not be less than 124,347,178 shares (inclusive) and not more than
149,216,612 shares (inclusive) and not more than 30% of the total share capital of the Company
before the offering. The issue price is 40.21 yuan / share, all of which will be subscribed by
Muyuan Industrial Group Co., Ltd. in cash, and the total amount of raised funds will not be less
than 5 billion yuan (inclusive) and not more than 6 billion yuan (inclusive), supplementing the
Company's working capital after the expenses on the offering are deducted.
As of the date of issuance of this report, the Company has received the Acceptance Form of the
Administrative License Application of CSRC (Acceptance No.: 220018) issued by CSRC. The
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Summary of 2021 Annual Report of Muyuan Foods Co., Ltd.
CSRC examined the application materials for the non-public offering of A-shares submitted by the
Company according to relevant laws. The CSRC considered the application materials are complete,
and decided to accept the application for the administrative license.
The Company's non-public offering of A-shares is subject to further review by the CSRC.
In addition to the above matters, the Company is not required to disclose other significant
matters.
Muyuan Foods Co., Ltd.
Chairman: Qin Yinglin
April 28, 2022
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