Wellhope Foods Co., Ltd. 2023 Annual Report
Stock Trading Symbol: 603609 Stock Abbreviation (English): Wellhope
Bond Trading Symbol: 113647 Bond Abbreviation (English): Wellhope bond
Wellhope Foods Co., Ltd.
2023 Annual Report
March 2024
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Wellhope Foods Co., Ltd. 2023 Annual Report
Important Statements
I. The Board of Directors, Supervisory Board, directors, supervisors and senior management of the
Company hereby warrant that the contents of this annual report do not contain any false or
misstatements or material omissions and are individually and collectively responsible for the
truthfulness, accuracy and completeness of its contents.
II. All Directors were present at the Board Meeting.
III. SuyaJincheng CPA LLP has issued an audit report with unmodified opinion.
IV. Mr. Jin Weidong, the person in charge of the Company, Mr. Chen Yu, the person in charge of the
accounting work and the person in charge of the accounting department( head of accounting), declare
that they guarantee the truthfulness, accuracy, and completeness of the financial report in the annual
report.
V. Dividend payment proposal for the reporting period approved by the Board of Directors
In view of the negative net profit attributable to equity shareholders of the Company, which did not
meet the conditions for cash dividends set out in the Articles of Association of the Company, and taking
into account the long-term development plan and capital requirements, and in order to ensure the
sustainable and healthy development of the Company and to provide investors with more stable and
long-term returns, the Board of Directors of the Company, after careful deliberation, has decided that
no profit distribution and no capitalization of additional paid-in capital will be made for FY2023. This
proposal is pending to be submitted to the Annual General Meeting.
VI. Risk statement on forward-looking statements
The forward-looking statements contained in this report such as business plans, development strategies
and other information, should not be regarded as a commitment by the Company to investors. Please
beware of the investment risks.
VII. There has been no occurrence of the Company's non-business capital being appropriated by the
controlling shareholder and his related parties.
VIII. There have been no instances where the Company has breached its decision making process when
providing external guarantees.
IX. There have been no incidents where more than half of the directors can’t guarantee the authenticity,
accuracy and completeness of the annual report published by the Company.
X. Material Risk Warning
The Company has described in detail the relevant risks that may exist in this report, please refer to
"Potential Risks" in "Section III Business Operations Analysis".
XI. This annual report has been published in both Chinese and English versions. In the event of any
discrepancy or inconsistency between the English and Chinese versions, the Chinese version shall
prevail. The Chinese version of 2023 Annual Report is available at www.sse.com.cn.
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Wellhope Foods Co., Ltd. 2023 Annual Report
Contents
Section I Glossary ............................................................................................................................... 4
Section II Company Profile and Key Financial Information ................................................................. 5
Section III Business Operation Analysis................................................................................................ 9
Section IV Corporate Governance ......................................................................................................47
Section V Environment and Social Responsibility .............................................................................61
Section VI Important Disclosures .......................................................................................................77
Section VII Changes in Common Shares and Shareholder Information ..............................................87
Section VIII Preference Share ...............................................................................................................91
Section IX Corporate Bond .................................................................................................................92
Section X Financial Statements .........................................................................................................95
Reference file Financial statements signed and sealed by the legal representative, the person in
directory charge of the accounts and the person in charge of the accounting department.
Reference file The original copy of the audit report with the seal of the accounting firm and the
directory signature and seal of the CPAs.
Reference file During the reporting period, all the original documents and original announcements of
directory the Company published on the websites designated by the CSRC.
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Wellhope Foods Co., Ltd. 2023 Annual Report
Section I Glossary
I.Glossary
CSRC refers to China Securities Regulatory Commission
SSE refers to Shanghai Stock Exchange
Wellhope, refers to Wellhope Foods Co., Ltd.
the Company
Reporting period, refers to January 1, 2023-December 31, 2023
period under review
The end of the refers to
reporting period December 31, 2023
Koninklijke De Heus B.V., the parent company of De Heus
Royal De Heus refers to Mauritius Ltd., the biggest privately-owned feed company in
the Netherlands
Articles of Association refers to Articles of Association of Wellhope Foods Co., Ltd.
General Meeting refers to The General Meeting of Wellhope Foods Co., Ltd.
Board of Directors refers to The Board of Directors of Wellhope Foods Co., Ltd.
Supervisory Board refers to The Supervisory Board of Wellhope Foods Co., Ltd.
Corporate Law refers to The Corporate Law of the People's Republic of China
Securities Law refers to The Securities Law of the People's Republic of China
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Wellhope Foods Co., Ltd. 2023 Annual Report
Section II Company Profile and Key Financial Information
I.Company Information
Company name (English) Wellhope Foods Co., Ltd.
Abbreviation (English) Wellhope
Company name (Chinese) 禾丰食品股份有限公司
Abbreviation (Chinese) 禾丰股份
Legal representative Jin Weidong
II.Contact Person
Secretary of the Board Representative of Securities Affairs
Chen Yu (Acting as the Secretary of the
Name Zhao Changqing, Ren Kunsong
Board of Directors)
No. 169, Huishan Street, Shenbei New No. 169, Huishan Street, Shenbei New
Address District, Shenyang, Liaoning Province, District, Shenyang, Liaoning Province,
China China
Tel 024-88081409 024-88081409
Fax 024-88082333 024-88082333
Email hfmy@wellhope.co hfmy@wellhope.co
III.Basic Information of the Company
No. 169, Huishan Street, Shenbei New District, Shenyang,
Registered address
Liaoning Province, China
On December 6, 2016, the registered address of the
Company was changed from "No. 67, Hunnan
Development Zone, Shenyang " to "No. 169, Huishan
Change of the Company's registered
Street, Shenbei New District, Shenyang, Liaoning
address
Province". Please refer to the announcement No.
2016-045 published by the Company on the website of
Shanghai Stock Exchange
No. 169, Huishan Street, Shenbei New District, Shenyang,
Office address
Liaoning Province, China
Postal code 110164
Company website www.wellhope-ag.com
Email hfmy@wellhope.co
IV.Place where the Annual Report is Prepared
Media designated by the Company for the China Securities Journal, Shanghai Securities News,
disclosure of information Securities Times
Website designated by the CSRC for the
www.sse.com.cn
publication of the annual report
Place where the Company prepares its
Securities Department
annual report
V.Stock Information
Stock information
Stock type Stock exchange for IPO Stock abbreviation Stock trading symbol
Shanghai Stock
A share Wellhope(禾丰股份) 603609
Exchange
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VI.Other Information
Name SuyaJincheng CPA LLP
14th-16th F, Central International Plaza, No. 159
Accounting firm (local) Office address
Taishan Road, Nanjing, Jiangsu Province, China
Name of signatory Zhou Qiong, Wang Lei
Name China Galaxy Securities Co., Ltd.
Broker with ongoing
Office address Qinghai financial building, Fengtai district, Beijing
supervisory
Name of signatory Zhang Peng, Qiao Na
responsibilities during
Period of ongoing
the reporting period August 23, 2021-December 31, 2023
supervision
VII.Key Accounting Data and Financial Performance Indicators for the Latest Three Years
1.Key accounting data
CNY
Fluctuation
Item 2023 2022 2021
YoY(%)
Revenue 35,970,261,909.41 32,811,758,209.54 9.63 29,468,925,899.60
Revenue less unrelated
business income and
35,924,050,473.57 32,779,235,244.83 9.59 29,452,990,772.26
income without
commercial nature
Net profit attributable to
equity shareholders of -457,037,550.28 512,797,304.59 -189.13 118,530,518.15
the Company
Net profit attributable to
equity shareholders of
-503,050,322.71 518,898,468.37 -196.95 134,826,072.01
the Company less
extraordinary items
Net cash flow from
956,152,750.32 196,266,510.34 387.17 299,160,222.36
operating activities
As at the As at the Fluctuation As at the
end of 2023 end of 2022 YoY(%) end of 2021
Net assets attributable
to equity shareholders 6,659,295,008.79 7,235,715,361.79 -7.97 6,464,358,869.77
of the Company
Total assets 14,937,114,834.54 15,427,594,029.54 -3.18 12,971,506,159.72
2.Key financial performance indicators
Fluctuation
Item 2023 2022 2021
YoY(%)
Basic earnings per share (CNY per share) -0.50 0.58 -186.21 0.13
Diluted earnings per share (CNY per share) -0.50 0.55 -190.91 0.13
Basic earnings per share less extraordinary
-0.55 0.58 -194.83 0.15
items (CNY per share)
Decreased 14.06
Weighted average return on equity (%) -6.58 7.48 1.80
percentage points
Weighted average return on equity less Decreased 14.81
-7.24 7.57 2.05
extraordinary items (%) percentage points
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VIII.Key Financial Figures by Quarters in 2023
CNY
Item Q1 Q2 Q3 Q4
Revenue 7,843,617,840.18 8,864,354,942.04 10,184,577,327.79 9,077,711,799.40
Net profit attributable to
equity shareholders of 19,434,574.57 -44,798,021.88 64,898,140.78 -496,572,243.75
the Company
Net profit attributable to
equity shareholders of
-30,439,130.62 -61,391,968.48 69,945,538.70 -481,164,762.31
the Company less
extraordinary items
Net cash flow from
-288,366,567.32 538,934,539.38 -123,779,013.66 829,363,791.92
operating activities
IX.Extraordinary Items
CNY
Item 2023 2022 2021
Gains or losses on disposal of non-current
assets, including reversal of provision for 17,370,417.70 -4,023,922.69 -13,978,382.83
impairment of assets
Government grants recognized in profit or
loss for the current period, except for those
government grants that are closely related to
the ordinary course of business, in line with 83,115,983.41 43,999,785.07 40,412,773.97
national policies and in accordance with
defined criteria, and that have a sustained
impact on the Company's profit or loss
Gains or losses from changes in the fair value
of financial assets and liabilities held by
non-financial corporations and gains or losses
-1,205,993.28 -6,371,590.35 2,552,441.74
on the disposal of financial assets and
liabilities, except for effective hedges in the
ordinary course of business
Gains arising from the Company's acquisition
of subsidiaries, associates and joint ventures
where the cost of the investment paid by the 14,299,036.35 58.82
Company is less than its share of the fair value
of the investee's identifiable net assets
Write-back of impairment provision for
9,122,730.49
individually assessed impaired receivables
Non-operating income and expense other
-49,135,731.60 -36,876,323.54 -42,725,463.13
than those listed above
Other items that meet the definition of
-10,565,822.12 154,001.44 184,353.40
extraordinary items
less: Income tax effects 21,574,736.43 4,291,726.21 2,557,348.61
Non-controlling interests’ effects
-4,586,887.91 -1,308,553.68 183,928.40
(after-tax)
Total 46,012,772.43 -6,101,163.78 -16,295,553.86
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X.Item Measured at Fair Value
CNY
Effects on current
Item Opening balance Closing balance Fluctuation
profit
Derivative financial
4,050,071.80 4,296,668.60 246,596.80 -1,205,993.28
assets
Total 4,050,071.80 4,296,668.60 246,596.80 -1,205,993.28
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Wellhope Foods Co., Ltd. 2023 Annual Report
Section III Business Operation Analysis
I.Business Operation Analysis
In FY2023, the Company’s revenue amounted to CNY 35.97 billion, an increase of 9.63% over the
previous year, the net profit attributable to equity shareholders recorded CNY -457 million, a decrease
of 189.13% compared with a year earlier, and the net profit attributable to equity shareholders less
extraordinary items amounted to CNY -503 million, a decrease of 196.95% over the previous year. Since
the completion of the IPO in 2014, the Company's revenue has continued to grow at a compound
annual growth rate of 16.44%.
The progresses of the Company’s primary businesses are as blow.
1.Feed business
In FY2023, the consolidated subsidiaries sold 4.31 million tons of feed with a year-on-year growth of
7.88%, of which, premixes increased by 23.54%, concentrate feed decreased by 1.41%, and compound
feed increased by 7.86%.
Variety 2023 (10k tons) Fluctuation(YOY) Percentage of total
Pig feed 155.65 -0.10% 36.15%
Poultry feed 184.95 22.70% 42.96%
Ruminant feed 74.21 0.87% 17.24%
Other feed 15.70 -17.28% 3.65%
Total 430.52 7.88% 100.00%
A.Paying close attention to operations management, reducing costs and improving quality by
working synergistically
In FY2023, the feed material market was complicated and volatile, the downstream farming industry
was in sluggish, and the margins of domestic feed companies reminded under pressure. In order to
cope with challenges in all aspects, the Company has strengthened operations management, with
many departments actively cooperating to strictly control product quality and reduce costs as well as
increase efficiency. In terms of technology, the Company's diversified formulation system has become
increasingly mature, and effective progress has been made in reducing formulation costs by improving
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the accuracy of raw material dosage through continuous comparison of various formulation solutions.
In terms of procurement, the Company continued to recruit key personnel to make up for the shortage
of some raw materials, and internal experts cooperated with external brains to strengthen research
and evaluation of raw material prices. On the production side, the Company intensified its efforts in
production inspection, cost analysis and inventory management, continued to upgrade and reconstruct
equipment, and optimized the whole process of the pelleting system. As a result, indicators such as
production loss, energy consumption, efficiency and stability have all steadily improved. At present,
each business area of the feed business has been vigorously strengthening its cross-sector links and
collaboration, significantly improving the responsiveness to market changes and strengthening core
competitiveness.
B.Focusing on key directions and accelerating business transformation
In FY2023, the Company continued to pursue the transition of its business model from "dealer-led" to
"equal emphasis on dealer and large farm direct sales". To this end, each region of the feed business
division set up independent large farm marketing service team. The training center of the head office,
the marketing center and the business units in each region jointly developed 12 standard courses,
carried out 15 training sessions on professional skills of marketing and service of large farms, and the
Company's internal benchmark teams shared their experiences via live streaming, with more than
2,000 sales staff completing all the above courses. In terms of business progress, in the northeast
region, the Company relied on its regional advantages to integrate resources to support large-scale pig
farm customers, while outside the northeast region, the Company set up the "large-scale pig farm
value service club", actively introduced technical service experts to improve its technical service for
large-scale customers. In 2023, the Company's sales of bulk feed for large-scale farms increased by
more than 30% year on year, and the share of large-scale farms was significantly increased.
C.Controlling the risk of bad debts with a focus on strengthening receivables management
In FY2023, consumption remained weak, the livestock and broiler farming markets were in the
doldrums, some farms were in the red for long periods with very tight cash flow, and feed companies
faced greater challenges in controlling bad debt risk. While vigorously expanding market, the Company
has placed increasing emphasis on the accounts receivable, and the departments such as marketing,
finance, legal, information technology and human resources cooperated with each other in an effort to
reduce the risk of bad debts. In terms of marketing, the Company has strengthened its market research
and data analysis to improve the selection of high-quality customers and focused its sales efforts on
these customers. On the financial side, the Company has strengthened the analysis and monitoring of
accounts receivable, continuously improved customer risk assessment and expanded the third-party
financing channels. On the legal side, it has improved the management regulations of accounts
receivable, enhanced inspections and actively promoted the progress of default litigation. In terms of
information technology, the Company has improved the comprehensive data analysis system and
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strengthened data penetration to assist the head office in real-time supervision. In terms of human
resources, it has adhered to the performance appraisal principle of focusing on the trinity of "sales
volume, net profit and accounts receivable" at the same time for basic-level managers, to promote the
business to realize "virtuous growth with speed and quality".
2.Broiler integration
In the year under review, broiler breeder prices were running at a high level, and the recovery speed of
consumer demand was not as fast as expected, coupled with the fact that pig prices were still at a low
level and chicken prices were also weak, the profit of the industrial chain was concentrated in the
breeder side. In FY2023, under the sustained driving force of ensuring safety, controlling expansion
pace, adjusting industrial structure, advancing business ecosystem, compressing costs, improving
efficiency and increasing profit, the Company steadily expanded its production scale, constantly
improved the operations management, which has enhanced the core competencies.
A. Steadily expanding market share and promoting capacity layout
In FY2023, the Company’s broiler business promoted production layout in an orderly manner in
accordance with the strategic plan, reasonably controlled the expansion pace of each sector, and
further expanded market share. In terms of breeding, it continued to expand the size of the parent
stock, rationalized the breeding plan, and aimed for rapid full-load production in new plants. On the
farming side, the commercial broiler farming, like slaughtering, has always maintained a steady pace of
expansion to provide slaughterhouses with a stable, sufficient and high-quality supply of market ready
broilers. On the slaughtering side, the production and sales scale of slaughtering and processing
business continued to expand, with operating levels and profitability well above the industry average.
In the first quarter, a new plant in Hebei was successfully put into operation, bringing the Company’s
annual slaughtering capacity (including associates) to over 1.1 billion broilers. During the period under
review, the Company's holding and associated companies slaughtered a total of 810 million broilers,
representing a year-on-year growth of 13%, and produced and sold 2.12 million tons of parts products
with a year-on-year growth of 14%.
Broilers slaughtered since the IPO in 2014:
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B. Investing in strengthening operation management and steady improving production performance
In FY2023, the broiler integration business, adhering to the development path of lean management,
continuously optimized production indexes, improved operational efficiency and strictly controlled
product quality, while reasonably compressing costs. On the breeding side, as the quality of domestic
breeders declined, the Company paid more and more attention to the quality of breeders, insisted on
long-term strategic cooperation with suppliers of excellent breeders, and continuously improved the
purification process of chick source and strengthened bio-security system to maximize the protection
of the quality of commercial day-old chicks. In terms of farming, the Company has always been
committed to building a strict and standard farming management process, and this year set up an
inspection department to further strengthen supervision, which has steadily improved production
performance, for example, the feed-to-meat ratio dropped to 1. 55 and the European production index
rose to 415. On the slaughtering side, the Company continued to pay close attention to production
efficiency, reduce operating costs, strengthen quality management and rapidly expand economies of
scale after commissioning new projects to make money as soon as possible. On the financial side, the
Company strictly managed accounts receivable and rationalized capital expenditure to ensure sufficient
cash flow.
C. Actively developing end markets to maintain food business growth
In FY2023, the recovery of consumer demand was slow, the growth rate of group consumption and
outdoor consumption was significantly lower than expected, and the low price of pork also inhibited
the growth of chicken consumption to some extent. In the face of market pressure, the Company
further strengthened the quality of chicken products, significantly increased the proportion of fresh
products, continued to develop the sales channels for broiler parts products through the "multi-brand
strategy", promptly adjusted the product structure according to the fluctuations in market demand and
market conditions, optimized the customer structure, and endeavored to increase the proportion of
high value-added products. In addition, in the unfavorable environment of generally high inventory in
the broiler slaughtering industry, the Company’s slaughtering entities have always maintained a high
inventory turnover rate and maximized the capacity utilization based on the production and sales
balance. As for the food business, the scale of production and sales of new projects has expanded
rapidly and the operating capacity has been further consolidated, while the old projects have
continuously strengthened product advantages and gradually improved the quality of customers. At
present, the Company has reached cooperation agreements with several convenience store chains,
such as Lawson, Family Mart and 7-11. During the reporting period, the Company's holding and
associated companies produced and sold a total of 32,000 tons of prepared and cooked food,
representing a year-on-year increase of 19%.
3.Pig farming business
In FY2023, domestic pig prices continued to fluctuate at a low level, the speed of capacity reduction
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and consumption recovery was slower than expected, and the trend of eliminating uncompetitive
companies in the industry intensified. Under the guidance of newly revised development strategy of
pig business, the Company strictly controlled the scale of pig farming business, continuously optimized
investment portfolios, strengthened the management of pig farms and made every effort to promote
the process performance management system. During the year, the Company's holding and associated
companies sold a total of 1.16 million heads of pig, of which 910,000 were finishers, 210,000 were
piglets and 40,000 were breeders.
A. Maintaining stable operation to strictly control scale, enhancing development pillars and
optimizing structure
In FY2023, under the environment of heavy losses in the pig farming industry and increased capital
pressure on most companies, the Company’s pig farming business took scale control and structure
adjustment as the main development strategy, strictly controlled the production scale, endeavored to
reduce debts and ensure cash flow, making efforts to steadily overcome the industry downturn. In
addition, the Company continued to adjust business portfolios, gradually focusing its resources on
high-quality projects and regions suitable for pig farming, increasing the capacity utilization and equity
share of competitive projects, while reasonably improving the performance appraisal standards of
farms and resolutely eliminating backward production capacity, including poorly performing sows,
substandard breeding farms and contract farms. Although losses have been incurred in the short term,
the overall asset quality of pig business division has been significantly improved, with positive
implications for continuous cost reduction and efficiency improvement.
B. Continuously strengthening breeding management and making every effort to ensure bio-security
In FY2023, the Company made great efforts to optimize the core breeding stock, to continuously
improve the breeding system. In the northeast region, the nutrition, veterinary medicine and
production departments worked together to refine the genetic selection program and further expand
the breeding scale, striving to build "the largest high-quality French genetic breeding base in the
northeast". Outside the northeast region, the Company steadily promoted the production capacity of
the two main breeds of the French and Danish lines and implemented the dynamic selection and
grading management program for breeders, timely eliminating the sows with low reproductive
performance, and gradually forming the core herds through external introduction and internal
selection. In addition, the Company has always attached great importance to bio-security. This year,
health management centers have been set up in each region and professional veterinarians have been
introduced, establishing an epidemic monitoring and early warning system to provide sufficient data
support for epidemic prevention and early warning. At the same time, the reward and punishment
mechanism has been further improved to ensure that team members could always maintain a high
degree of responsibility and vigilance.
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C. Striving to build core competencies, deepening talent team management
In FY2023, the Company continued to implement the process performance management system in its
pig farming business, and held monthly business analysis meetings at three levels involving the head
office, regions and local farms. Through learning from the competitors and copying from internal
benchmarks, the Company constantly identified the core and key issues of each pig farm, established
task lists and effectively implemented improvement plans. Under this management mode, the
Company’s fattening business has made great strides in its production performance this year. In terms
of team building, the Company accelerated the introduction of young technical and management
backbones, continuously strengthened the training of basic and middle-level managers, and focused on
helping young farm managers to grow rapidly through tracking and training with targeted support. At
the same time, the Company conducted regular talent analysis, strengthened the performance
appraisal of basic and middle-level farm managers to dynamically optimize the talent team, while
complementing this with scientific and reasonable salary incentive programs, the initiative of the farm
managers has been significantly enhanced.
4.Major awards received by the Company in 2023
II.Industry in which the Company operated during the reporting period
1.Feed industry
In FY2023, the prices of raw materials such as corn and soybean meal were volatile, the downstream
farming industry was relatively sluggish, and the upstream feed industry continued to be affected by
the dual impact of weak demand and rising costs, with market competition intensifying and overall
margins remaining under pressure. The trend towards survival of the fittest in the feed industry has
become increasingly evident. Leading feed companies have clear advantages such as technology,
sourcing, operation, service and branding, their market shares have further expanded, and industry
consolidation has continued to improve.
On the supply side, the total feed production reached a new high in 2023, with total output reaching
321.627 million tons, up 6.6% year-on-year. From the perspective of major varieties, pig feed amounted
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to 149.752 million tons, up 10.1% year-on-year, layer feed amounted to 32.744 million tons, up 2.0%
year-on-year, broiler feed amounted to 95.108 million tons, up 6.6% year-on-year, ruminant feed
amounted to 16.715 million tons, up 3.4% year-on-year, and aquatic feed amounted to 23.444 million
tons, down 4.9% year-on-year. From the perspective of sales model, the national bulk feed totaled
130.502 million tons, up 21.9% year-on-year, accounting for 43.7% of the total output of compound
feed, 5.4 percentage points higher than the previous year. From the perspective of consolidation, there
were 33 large feed groups with annual output of more than one million tons this year, whose feed
output together accounted for 56.1% of the national feed output.
On the demand side, although pig prices were low in the first half of the year, demand for pig feed was
supported by the high pig stock and the slowdown in the culling of breeding sows. In the second half of
the year, pig prices weakened further, pig farming continued to loss money, companies and farms in the
industry were still facing financial pressure, which accelerated the cutting of pig production capacity
and reduced the demand for pig feed. In the poultry feed sector, layer production was profitable, but
external sales from the north-eastern production areas declined, egg production dropped significantly,
and the demand for layer feed decreased. White-feathered broiler stock remained high, driving up
demand for broiler feed. As for ruminant feed, beef and mutton prices continued to fall, ruminant
stocks were adjusted downwards, thus, feed demand weakened significantly.
Overall, under the dual pressure of downstream industry losses and upstream price shocks,
competition in feed industry remained fierce in FY2023, with inefficient production capacity being
continuously eliminated and market share gradually centralized among outstanding leading enterprises.
Note: The above data was sourced from the China Feed Industry Association Statistical Report and Boyar Industry
Analysis Report.
2.Broiler industry
In FY2023, broiler prices showed a trend of high before and low after. In the first half of the year, the
prices of products in each link of the industrial chain dropped after a sharp rise, but the prices were
more sluggish in the second half of the year. The difference in the profits made by each link in the chain
became more obvious, with the profits mainly concentrated in the breeding sector and the losses in the
farming and slaughtering sector getting ever greater.
On the supply side, the supply of chicks continued to decline in the first quarter of 2023, due to factors
such as the extensive molting of parent stock at the end of the previous year, leading to a decline in the
supply of broilers, followed by a sustained increase in the prices of market ready broilers and chicken.
After the second quarter, the supply of chicks continued to increase, and the supply of broilers
increased with the reproduction of molted parent stock. Affected by high temperatures, the increase in
market ready broilers was not obvious in July, but from August to the fourth quarter, market ready
broilers increased significantly, broiler and chicken prices fell sharply, thus broiler farming suffered
serious losses. For the whole year, the number of market ready broilers in China increased by 10.5%
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year-on-year, broiler parts products increased by 9.7% year-on-year, with the supply of broilers rising
sharply, putting great pressure on the supply side.
On the demand side, demands for catering, group meals and travel gradually increased as social
activities and consumption scenarios resumed in 2023, but the overall recovery in final consumption
was not as fast as expected. On the alternative consumption side, the low price of pork hampered the
consumption demand for chicken. Due to the lack of confidence, merchants' expectations for holiday
stocking weakened and they adopted a low-stock sales strategy, which led to the slow movement of
chicken products, and pushed the cooperates’ inventory rates to a high level. For the whole year, the
comprehensive sales price of broiler part products rose sharply in the first quarter, fell rapidly in the
second quarter, weakened again after a slight rebound in the third quarter, and fell to a low level in the
fourth quarter, with the average price of CNY 9,270 per ton in December, down 18.0% year-on-year, and
significantly lower than the average price of CNY 10,760 per ton for the whole year. Due to the sluggish
development of chicken consumption, the broiler slaughtering industry as a whole was in the red, but
the profitability level of different enterprises varied greatly due to differences in operation
management and production efficiency.
Overall, the broiler market in 2023 showed a trend of strong supply and weak demand, due to lower
than expected downstream consumer demand and barriers to the top-down transmission of costs and
prices, profits within the industry were unbalanced, with profits mainly concentrated in breeder
companies, and losses in the downstream farming and slaughtering segments.
Note: The above data was sourced from Boyar Industry Analysis Report.
3.Pig farming industry
In 2023, the national hog prices were always in the bottoming out phase, during which there was a
brief upturn, but the overall market supply and demand pattern was weak and pig farming sector
suffered heavy losses throughout the year, which greatly increased the cash flow pressure on the
relevant companies.
On the supply side, the high stock of breeding sows and slow capacity culling in the first three quarters
of 2023 were partly due to increased industry consolidation and the growing ability of large companies
to withstand short-term losses and risks, and partly due to the improving pig production performance.
In addition, the prolonged round of price recovery and lucrative profits in the pig market in 2022 forced
the interruption of capacity cuts, leading to high supply of pig in 2023. Entering the fourth quarter,
piglet prices fell below the break-even cost line due to the weakening of restocking sentiment, losses in
the farming business led to increased cash pressure in the industry chain, with large-scale companies
tending to have tighter cash flows and rising asset-liability ratio. Meanwhile, under the influence of
frequent epidemics, the industry passively accelerated the culling of sows, prematurely eliminated
low-weight pigs and accelerated the elimination of underperforming capacity. On balance, the supply
side of pig market was under pressure in 2023, with the annual number of market ready pigs up 3.8%
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year-on-year and pork production up 4.6% year-on-year. Influenced by low pig prices and epidemics,
the industry's losses widened further, and capacity reductions accelerated in the fourth quarter.
On the demand side, the rebound in consumption has led to significant growth in food and drink
industry revenues in 2023 compared with last year. Pork consumption continued to grow, but the
growth rate of pork demand was weaker than that of supply, the imbalance between supply and
demand has persisted, and consumption recovery was less than expected. Factors such as the domestic
population gradually peaking and a shift in the meat consumption structure towards diversification
have resulted in insufficient growth momentum and space for pork in final consumption. In 2023, the
pig-to-pork ratio was at a historically low level, and warm winter temperatures weakened curing
consumption demand, market sentiment was poor, the storage rate of frozen products was at a
historically high level, the funds of slaughter plants were tightened, further restricting the operating
rates of slaughter plants and improving the number of broilers slaughtered. Under the background of a
weak recovery in consumption, the pig market performed poorly throughout the year, with insufficient
consumer demand.
Overall, in 2023, the pig market supply exceeded demand with low and weak pig prices, the industry
entered a long loss cycle, the pressure on company survival has increased significantly, pushing the
process of cutting capacity to accelerate, and large companies competed to reduce costs, improve
quality and efficiency, further aggravating the survival of the fittest.
Note: The above data was sourced from the official website of the National Bureau of Statistics and Boyar Industry
Analysis Report.
III.Circumstance of Primary Businesses in the Reporting Period
Wellhope is one of the well-known large-scale enterprises in the domestic agriculture and animal
husbandry industry, whose primary businesses include animal feed, feed raw material trading, broiler
integration and pig farming, and also engages in veterinary medicine, farming equipment
manufacturing and pet clinic. In 2018, Wellhope identified food business as a strategic business, which
is now being implemented on a tight schedule. Since its establishment, Wellhope has always been
adhering to the corporate mission, which is, "Through advanced technology, professional service, and
high-quality products, Wellhope is dedicated to the development of China’s animal husbandry industry,
resource conservation, environmental protection, and food security for the benefit of people", and all
Wellhope employees are united in striving to realize the objective of becoming one of the world's
leading enterprises in agriculture, animal husbandry, and food industries.
During the period under review, the primary businesses of Wellhope have not changed significantly.
Primary business Primary products Operation model
Sales model-dealer, direct sales
Pig, poultry, ruminant, aquatic
Feed Operation model-R&D, purchasing, production,
feed
marketing, service
Broiler Market ready broiler, broiler Industrial chain-covering broiler breeder raising,
integration parts products day old chick hatching, feed processing, commercial
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broiler farming, slaughtering and processing, further
processing of prepared food and cooked food
Raising model of commercial broiler-the Company
together with contract farms(outsourcing)
Industrial chain-covering a complete pig breeding
system, including great grandparent, grandparent
Pig farming Finisher, piglet, pig breeders and parent stock, piglet, and commercial swine
Finisher farming -contract farms(outsourcing), a
small number of own farms
1.Animal feed, feed raw materials trade businesses
Wellhope produces and sells feeds for pig, poultry, ruminants, aquatic and fur-farmed animals, which
are marketed in 29 provinces and regions across China. It has also built feed mills in Nepal, Indonesia
and the Philippines, etc. Driven by the philosophy of "constantly pushing the boundaries, not taking the
unusual path", Wellhope always insists on customizing products for animals at different stages, and is
committed to providing farmers with integrated services such as animal raising, disease prevention and
farm management, helping them to achieve ideal economic returns.
The trading subsidiaries trade mainly deal with feed raw materials such as fishmeal, soybean meal and
corn by-products, as well as feed additives such as amino acids, antioxidants, fungicides and vitamins.
In addition, these trading companies distribute animal health products such as vaccines and veterinary
medicines produced by global strategic suppliers. The trading business now operates in the regions of
northeast, north, east, south, and southwest regions of China, and some products have been exported
to countries such as Nepal and Mongolia.
2.Broiler integration business
The entities of Wellhope’s broiler integration business are mainly located in the provinces of Liaoning,
Jilin, Heilongjiang, Hebei, Henan and Shandong, and the business is divided into three business sectors,
namely, farming, processing and further processing, with a one-stop industrial chain covering parent
stock breeding, day-old chick hatching, feed production, commercial broiler rearing, slaughtering and
raw meat processing, as well as value-added processing of prepared and cooked food. The integrated
operation model ensures sufficient supply of raw materials in each link, and strictly controls the whole
process of feed production, broiler farming, slaughtering and meat food processing from the source,
and organically integrates bio-security, drug residue control and in-process hygiene through standard
management and process operation, ultimately realizing the traceability of food safety. Wellhope’s
broiler business has developed rapidly in recent years, with rapidly increasing capacity and overall scale,
making it a key leader in the domestic broiler industry.
The flow chart of the broiler integration business process is as follows:
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◆ Broiler raising: This sector includes parent stock breeding, day-old chick hatching, commercial
broiler farming and feed processing. The Company provides high quality eggs for its hatcheries by
formulating scientific and reasonable feeding programs, light programs and comprehensive disease
prevention systems. Meanwhile, it has established thorough management systems in the hatching
process and purchased intelligent hatching facilities, which are also equipped with highly efficient and
energy-saving hatchers and micro-environment control systems to produce healthy day-old chicks. In
terms of commercial broiler, Wellhope mainly rears broilers through contract(out-sourcing) farms under
the pattern of standard management by unifying nine aspects. These farms all adopt three-tier cages
and automate all the processes from feed intake, water supply, temperature to humidity control. The
average weight of the Company’s commercial broilers has reached 2.9-3.0kg with a livability of over
96%, a feed-meat ratio of 1.55, and a European production index of over 415, which is widely
recognized by the cooperative farms.
◆Raw meat processing: Wellhope has established 20 holding and associated slaughtering plants
equipped with state-of-the-art local production lines with a capacity to slaughter 1.1 billion broilers per
year. Driven by strict all-in and all-out inspection and quarantine as well as drug residue detection, each
plant has established a total quality assurance system and traceability system to monitor all processes.
Meanwhile, Wellhope has continuously strengthened its slaughtering and processing technologies
through systematic pre- and in-service training, combined with the implementation of "6S"
management (i.e., Seiri, Seiton, Seiketsu, Shitsuke, Seiso, Safety), making its killing out percentage and
per capita slaughtering efficiency stand out among companies of the same size. At present, Wellhope’s
broiler parts products have entered the supply chain of Shineway Group, Jinluo Group, Yurun Group,
China’s McDonalds and KFC, Yoshinoya, Wallace, Dili Fresh Food, Yonghui Superstores, RT-MART, as well
as large regional catering companies, fresh markets and food processing factories. Meanwhile, broiler
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products have also been sold to the regions of Hong Kong and Macao, and exported to some countries
such as Mongolia and Bahrain.
◆Further processing: With the advantage of integration, Wellhope uses the high quality chicken from
its own slaughterhouses as raw material and installs energy efficient equipment to process the raw
meat. At present, it supplies over 100 kinds of further processed products, which are mainly sold offline
to central kitchens of restaurant chains, corporate and school canteens, supermarkets and convenience
stores. In addition, under the macro situation of increasing consumer demand, Wellhope has vigorously
expanded export business of cooked products, which have successfully penetrated the Japanese and
Korean markets.
3.Pig farming business
The Company started experimenting with the pig industry in 2016 and identified pig farming business
as a strategic business in 2018. It has established farms in Liaoning, Jilin, Heilongjiang, Henan, Hebei
and Anhui provinces through wholly-owned investment, joint venture and leasing. At present, the
Company's pig farming business mainly includes breeding and sales of pig breeders, sales of
commercial piglet and piglet fattening through contract farms and a small number of its own farms.
Through the establishment of comprehensive and strict bio-security systems, advanced breeding
systems and scientific feed management systems, Wellhope is committed to creating an integrated
chain that includes breeding, farming, slaughtering and processing.
A.Building farms to high standard
The Company adheres to the principle of building farms on a modest scale for individual farms, while
designing strict bio-security systems. The farms use advanced production processes and farming
equipment, as well as intelligent feeding systems, environmental control equipment and production
management software to improve production efficiency and create a comfortable environment for pig.
B.All-round system operation
a.In terms of gene selection and breeding. The Company introduces high-quality pig breeders with
French, American and Danish genes to match different business areas and provide pure-bred parent
stock with clear pedigree. Meanwhile, through the establishment of scientific breeding programs, the
Company continuously optimizes the breeding stock structures to ensure the source of excellent
breeders, and enhance its competence in the pig farming industry.
b.In terms of feeding management. The Company has established a dynamic feeding management
system, including feed nutrition and raw material database, feed processing and product quality
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database as well as production performance database, combined with dynamic formulation technology,
feeding management technology and bio-security prevention technology to provide systematic
nutrition solutions for pig farms. Meanwhile, through continuous measures such as data collection and
analysis as well as results tracking, Wellhope is able to accurately optimize nutrition solutions, refine
internal management and risk warning to improve feeding performance.
c.In terms of bio-security prevention. Wellhope has established a bio-security system consisting of small
group feeding, four-zone control, three-level disinfection, accurate detection and monitoring with alarm
system. For example, various levels of security systems, such as service centers and disinfection areas
have been set up outside the farms. Professional staff thoroughly disinfect people, vehicles and
materials step by step. Inside the farms, all the farms have been divided into zones with different
security levels based on quarantine and isolation measures, with AI identification and surveillance
cameras installed at key links and points of bio-security. Visualization management helps to ensure the
enforcement of bio-security measures. In addition, specialized African swine fever testing laboratories
have been established in each business unit to protect pig farms through accurate detection,
identification and eradication using technologies such as quantitative PCR.
4.The Company's position in the involved industries
Wellhope has been awarded the honorary titles of National Leading Enterprise in Agricultural
Integration Industry, National Recognized Enterprise Technology Center, and National High-Tech
Enterprise. Since the completion of IPO in 2014, Wellhope has been selected four times as the Top 100
Most Valuable Corporation of Chinese Public Companies and seven times as China’s Top 500 Private
Enterprise, also has been selected as the 2022-2023 Top Ten Internationalized Branded Companies in
Livestock and Feed Industry. Meanwhile, it holds a leading position in the northeast regions of China,
while also becoming a highly influential brand in north, east, central and northwest regions across
China. In terms of feed business, Wellhope is the Vice Chairman of China Feed Industry Association and
has been recognized as National Top 10 Leading Feed Enterprise with the highest sales volume of
commercial feed, and the Company ranked 17th in the WATT Global Media Top Feed Companies in
2023. In terms of broiler business, Wellhope’s broiler integration business has developed rapidly in
recent years, and the complementary support between broiler farming and slaughtering, as well as the
overall scale, has been improved rapidly. Based on the number of broilers slaughtered and processed by
holding and associated companies, the Company ranked 6th in WATTPoultry Top Companies in 2023.
IV.Core Competence Analysis within the Reporting Period
The core competencies of Wellhope are embodied in a highly skilled, loyal and entrepreneurial
management team, integrated with rationally planned business strategy with focus on sustainable
development, a mature and highly developed industrial chain, a systematic, scientific and continuously
innovative R&D system, the ever-improving, vertically extended brand influence, coupled with a vibrant
and dynamic corporate culture that promotes Wellhope's development.
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1.A highly skilled, loyal and entrepreneurial management team
Talented people are the primary resource and the core competence of Wellhope. The core
management team has high education and senior professional background, rich management
experience and industry practice, they are highly capable of accurately grasping business environment,
scientifically formulating development strategy, and have deep insight and high recognition of
Wellhope's core values and business philosophy. Almost all the middle and senior managers are
selected and cultivated internally by Wellhope, these core members have been rewarded with various
incentives, and have a strong sense of ownership. Over the past 29 years, the middle and senior
management team has been very stable, with directors and general managers rarely leaving the
Company of their own accord, except for transfers to other positions due to poor performance.
Meanwhile, newly promoted members of the management team born in the 1985s and 1995s, were
selected from key talent cultivation programs such as the “Seedling Plan” and “Sunflower Program”.
They love the Company, they are active and enterprising, and have become the backbone of the
management team. Wellhope also attaches great importance to the continuous learning and skill
improvement of these managers, by setting up various training programs such as the EDP (Executive
Development Program), Leadership Training Camp, etc. At the same time, it also organizes managers to
study in outstanding companies at home and abroad to broaden their horizons and reflect on
improvement. The main reason for the failure of some domestic companies is the instability and
disunity of the management team. In contrast, the well-trained, loyal and enterprising management
team is one of Wellhope’s core strengths now and in the future, and the main reason why the Company
is so confident about the future.
2.Rationally planned business strategy with focus on sustainable development
With full insight into domestic and international political, economic and industry dynamics, Wellhope
has always attached great importance to its sustainable development and risk control, focusing on the
operational capability and returns of invested companies and new projects. Driven by the business
philosophy of steady growth and healthy development, Wellhope, rationalizes its business layout step
by step, maintains the rationality and safety of the industrial chain to mitigate all calculated risks, taking
the philosophy of "Built to Last" as an important goal.
Reflecting in the following aspects:
A.Prudent expansion of business areas. Starting off with the premix business, Wellhope has expanded
its feed business over the years, and now is one of the top 10 commercial feed producers nationwide.
In 2008, after careful research, Wellhope entered broiler integration business. After 16 years of efforts,
the number of broilers processed by Wellhope’s holding and associated entities ranked 6th in the global
broiler industry, and its management and key technical indicators ranked top both domestically and
internationally. In 2018, Wellhope decided to formally launch pig farming business to seize market
opportunities and control operational risks. Through cooperation and sole proprietorship, it has
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mastered the core competitive advantage of this business. From 2023 to 2025, the Company will firmly
strengthen the two core businesses of feed and broiler integration, explore and promote two strategic
businesses of pig farming and food processing with high quality, gradually build a regional food brand,
and to ultimately become a leading enterprise with leading safety, quality, cost and efficiency across
agriculture, animal husbandry and food industries.
B.Business model in line with future trends. Wellhope has gradually formed a value chain with high
competence and risk resistance in the fields of animal feed, raw material trading, breeding, farming,
animal health products, slaughtering and further processing, making each business in the chain closely
related and mutually supportive, reducing the cost of intermediate processes, lowering trade risks,
effectively resisting the fluctuation of market prices, increasing profit margins and ensuring food safety.
Such a set-up has become a future direction for agricultural companies under an increasingly complex
and changing economic and industrial environment.
C.Steady market expansion. Rather than expanding rapidly in the nationwide markets, supported by the
success of the feed business in the northeastern regions and the broiler integration business, Wellhope,
with its rich experience in market expansion, insists on exploring new markets based on comprehensive
analysis and research, carefully penetrating the markets in the northeast, northwest, northern China,
Henan, Shandong provinces and other areas step by step, while continuing to pursue asset-light
operation, taking into account operational efficiency and return on investment.
D.Strict financial risk control. Wellhope has always attached great importance to financial risk control.
Since its listing, it has gradually improved the internal control system, regulated the corporate
governance structure and raised awareness of risk control. It adopts vertical management methods in
dealing with finances, such as centralized financing and credit management, centralized funds and cash
management, and centralized decision management for providing guarantees. Considering the
socio-economic environment, industry development and operating conditions, the Company effectively
controlled the level of debt and financial costs, with an asset-liability ratio of 49.02% at the end of the
period under review.
3.A mature and highly developed industrial chain
The advantages of Wellhope’s industrial chain are mainly reflected in geographical locations and
business portfolios.
A.Preferred geographical location. Wellhope's head office is located in Shenyang, Liaoning Province,
with its primary business in northern China, particularly in north-eastern regions. The Northeast a
nationally identified potential growth area for livestock farming, characterized by high quality raw
materials, suitable climate, low farming density and relatively low labor costs, which is highly conducive
to the development of agriculture and animal husbandry businesses. The northeast is China's largest
grain producing areas, especially for corn and rice, which are characterized by high quality and large
production. Relying on a well-developed further processing industry, the northeast has abundant grain
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and its by-products that can be used as feed raw materials, which have the advantages of
high-performance, low cost and convenient logistics. After the implementation of the national rice
auction policy, the northeast can enjoy a unique advantage supported by large rice supply and
comprehensive cost. The use of brown rice in feed formulation has alleviated the pressure of high corn
prices on feed costs to a large extent. Meanwhile, broiler production is mainly concentrated in Liaoning,
Jilin, Henan, Hebei and Shandong provinces, where Wellhope’s broiler integration businesses are mainly
located, accounting for over 75% of the national production, and these areas are the most important
regions for the development of white broiler industry in China, with a strong foundation for broiler
farming and more mature marketing system. The Company's broiler integration and pig farming
businesses implement a regional, clustered and centralized layout to gather regional core industrial
resources, build industrial scale advantages in local areas to improve operational efficiency and reduce
logistics costs. In addition, the Company has been actively developing overseas markets, in countries
with greater potential for livestock development, such as the Philippines, Indonesia, Nepal and other
countries to build factories, with predictable future development.
B.Constantly optimized business portfolio. Centered on agriculture and animal husbandry industries,
the Company is pursuing the expansion strategies of "diversification and integration" to constantly
optimize its business portfolio, which has increasingly enhanced its risk resistance and sustainable
profitability. In terms of diversification, while strengthening and expanding the feed business, the
Company will vigorously promote broiler integration business, and strive to become a domestic and
even global leader in the future. Meanwhile, it will stabilize pig farming business to realize the regional
leadership in the areas set by the Company. In terms of integration, the integrated model is an
inevitable trend for domestic companies engaged in agriculture and animal husbandry. After years of
development in raw material trading, feed production, animal raising, slaughtering and further
processing businesses, Wellhope has formed a complete industrial chain with high competitive
advantage and risk prevention capability, and it is gradually perfecting its support structure for each
business sector in the chain, boldly exploring food further processing to rapidly complete the industrial
chain, while constantly standardizing and optimizing the division and cooperation system to further
enhance the synergies among all business sectors.
4. A systematic, scientific and continuously innovative R&D system
Adhering to the mission of “Through advanced technology, professional services, and high-quality
products, Wellhope is devoted to the development of China’s animal husbandry industry, resources
conservation, environmental protection, as well as food security for the benefit of the people”,
Wellhope’s R&D system always adheres to market-oriented and customer-oriented principles and
upholds the goal of “producing safe products, with stable quality, tailor-made nutrition and customer
focus”, constantly exploring innovative technology and working on new products. The Company has a
unique and competitive R&D cooperation model, an excellent and leading R&D team, and has
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established a three-level R&D system and a highly efficient performance transformation system,
supported by the large platform of Wellhope Research Institute. Meanwhile, the Company also has a
nationwide first-class testing capability, an efficient and accurate dynamic raw material database, a
distinct product portfolio and a constantly optimized service capability.
A.Excellent R&D team. Relying on a relatively complete industrial chain, Wellhope has built a R&D team
specializing in animal raising, product formulation, manufacturing and related technologies to focus on
feed, broiler integration, pig farming, biological feed additives, etc. The R&D team’s in-depth knowledge
have transformed many cutting-edge technologies into actual applications. Meanwhile, these
experienced technicians focus on conducting trials and demonstration projects to validate, select and
apply the most appropriate technologies. Relying on technical strengths, Wellhope has received many
national and local-level accreditation and awards, including the Nationally Recognized Enterprise
Technology Center, National and Local Joint Engineering Research Center for the Development and
Application of New Biological Feed, the National R&D Branch Center of Feed Processing, the
Comprehensive Trial Farm for National Pig Farming Industry Technology System, the R&D Center of
Agricultural Products Further Processing and Bio-pharmaceutical Industry Cluster of Liaoning Province,
and the Innovation Team for Feed Technology and Safety of Liaoning Province.
B.Competitive R&D collaborations. In 2006, Wellhope partnered with Royal De Heus, a century-old
company from the Netherlands. Drawing on its globally advanced technological resources, leading
know-how and a century of excellent management practices, Wellhope has made successful
breakthroughs and progresses in producing safe and high-quality feed with precise and efficient
nutritional contents and, most importantly, using antibiotic-free technologies. Meanwhile, the R&D
teams from both sides have maintained frequent exchanges, enabling Wellhope to keep pace with the
world's latest technologies in R&D achievements. By combining its own 29 years of technology and
experience, Wellhope is committed to providing customers with high quality products and technical
service. Adding to these, the Company closely cooperates with research institutes and universities, such
as China Agricultural University, Nanjing Agricultural University, Shenyang Agricultural University,
Northeast Agricultural University, Hefei University of Technology, Anhui Agricultural University, to
develop new technologies for feed products and meat products and jointly train professional talents.
C.World-class testing capability and database. The Company's central laboratory is one of the few
CNAS-accredited laboratories among domestic feed companies, and the test results can be recognized
by 60 countries or regions worldwide. The laboratory is equipped with advanced testing equipment and
is divided into three functional rooms for physical and chemical testing, microbiological testing and
precision instrument testing. From the micro to the macro level, the central laboratory is able to
maintain consistent quality and plays a vital role in implementing the safety-first concept at every step
of the production process. It has also developed an internal raw material database and shares data
resources with the Dutch partner. With an accurate net energy database for sows and growing pigs, an
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amino acid database, a crude fiber database, a fatty acid database, etc., animal rations can be
formulated precisely according to production performance and feed intake to achieve the lowest cost
formula and the best cost-performance ratio.
D.Fruitful research and development results. Research and development are the driving force behind
the company's sustainable development. Wellhope has made many fruitful achievements in the field of
research and development. By the end of the reporting period, Wellhope had obtained 266 approved
patents, including 74 invention patents, and won 2 National Science and Technology Progress Awards, 1
National Technology Invention Award and nearly 20 provincial and ministerial science and technology
awards.
5.The ever-improving, vertically extended brand influence
Wellhope has successfully established its product and corporate brand in domestic agriculture and
animal husbandry industries for the past 29 years. With the constant transformation and upgrading of
the animal husbandry industry, its branding will be further strengthened.
A.Product brand. Over the years, relying on the leading technology, high quality products and
continuous improvement in customer service, the brand of Wellhope has been widely accepted and
trusted by customers in the market coverage areas, especially more prominent in the northern part of
China. The "Wellhope" brand has received many honors, such as Liaoning Province Famous-brand
Product, Liaoning Province Famous Trademark, China Famous Brand, China’s Top 500 Most Valuable
Brands, Most Influential Brand in National Animal Husbandry Industry, Trustworthy Product in China's
Feed Industry, Governor's Quality Award of Liaoning Province.
B.Corporate brand. Over the years, the Company has adhered to the core values of "Integrity,
Responsibility and Double-Win", and many of its businesses are joint ventures with its partners, many
of which have been working together for more than ten or even twenty years, including 18 years of
friendly cooperation with the Royal De Heus Company, which fully illustrates the acceptance and
recognition of the corporate brand of "Wellhope" by its partners. Meanwhile, Wellhope’s corporate
brand is also manifested in the long-term and friendly strategic partnership with many multinational
and domestic suppliers, and all the loans provided by financial institutions for many years are credit
loans due to the good reputation of Wellhope’s parent company. As a strong employer brand,
"Wellhope" has been recognized and favored by employees, and potential job seekers. Wellhope has
twice won the "Best Employer" award based on rating by Zhaopin.com, and in the first half of 2022, the
Company was honored with the annual Top 10 Best Employer Brands Award in China's animal
husbandry and feed industry.
C.Brand extension. Along with the rapid development of the Company's broiler integration and pig
farming businesses, and supported by the business layout strategy of horizontal diversification and
vertical integration, Wellhope’s market shares in raw material trading, animal health products, livestock
and poultry breeding and farming, livestock and poultry fresh products, prepared and cooked food have
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been gradually increased, and its market reputation and goodwill have also been enhanced. In order to
regulate the use of the Wellhope brand and protect the core value of this brand, Wellhope has not used
the main brand recklessly in the above businesses. Depending on the business development of each
business, the Company will strengthen vertical brand building efforts in mature businesses to further
enhance the industry influence and business value of the Wellhope brand.
6. A vibrant and dynamic corporate culture that promote the development of Wellhope
After 29 years of development, Wellhope has established a vibrant and dynamic corporate culture that
has been acknowledged by all staff and drives its development. The core value of "Integrity,
Responsibility, Double-Win" and the management philosophy of "Innovation, Efficiency, Self-Discipline",
have been ingrained in the thinking and behavior of employees, and have been consistently applied in
daily management, strategic planning and business decisions. Shared values play a crucial role in
improving organizational efficiency, strengthening organizational cohesion and empowering the
organization. A good corporate culture is the fundamental principle of business operation that drives
the long-term development of Wellhope.
In 2023, the Company restructured and improved its corporate culture management system, clarifying
the responsibilities of related managers and duties of culture work at all levels, which laid a good
foundation for continuously enriching, developing, and rooting the cooperative culture. The Company
also initiated the selection and appointment of corporate culture ambassadors to play a role among
employees to further embed the culture in the hearts of employees. In order to raise the awareness of
cost reduction and efficiency enhancement, and to involve more employees in the Group's activities,
the Head Office held an innovation and efficiency improvement contest with the theme of "Cost
Reduction and Efficiency Enhancement", and then expanded the scope of the contest to encourage
every employee to think about innovation and efficiency improvement methods in his/her own work,
and to practice the culture of innovation and efficiency creation. In addition, the Head Office held a
study and exchange competition on " Taiichi Ohno’s Ten Management Admonitions", in which each
business and functional line used the contents of the book to carry out various forms of study,
discussion, and practice in relation to their actual work to achieve cost reduction and efficiency creation,
and to enhance corporate efficiency through continuous improvement. In addition, the culture of
"process performance", "benchmarking management", "execution", and "criticism and self-criticism"
was promoted and implemented. To strengthen physical fitness and enrich leisure time, the Company
organized "Run, Wellhope" walking and running activities. Through WeChat applet, individual
employees, various subsidiaries and business divisions competed to participate in the event. Nearly
10,000 people took part, strengthening the sense of collective honor while exercising, and the activity
was recognized and praised by all employees.
It has been proven that corporate culture is the moat of Wellhope's development, and the continuous
strengthening of culture construction will be a lasting and significant work for Wellhope.
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V.Operations during the reporting period
During the reporting period, the Company realized revenue of CNY 35.97 billion, an increase of 9.63%
year-on-year, the net profit attributable to equity shareholders amounted to CNY -457 million, a
decrease of 189.13% year-on-year, and the net profit attributable to equity shareholders less
extraordinary items amounted to CNY -503 million, a year-on-year decrease of 196.95%.
1.Analysis of primary business
A.Analysis of changes of income and cash flow
CNY
Item 2023 2022 Change %
Revenue 35,970,261,909.41 32,811,758,209.54 9.63
Costs of revenue 34,540,124,263.81 30,839,271,196.05 12.00
Sales expenses 718,365,669.03 622,444,761.15 15.41
Administrative expenses 614,800,562.62 537,063,858.72 14.47
Financial expenses 171,600,672.91 160,680,329.03 6.80
R&D expenses 83,797,469.99 90,105,075.01 -7.00
Net cash flow from operating
activities 956,152,750.32 196,266,510.34 387.17
Net cash flow from investing
-402,864,641.04 -743,139,911.44 Not applicable
activities
Net cash flow from financing
-308,196,369.71 995,492,458.01 -130.96
activities
Explanation of above changes.
Revenue-the revenue of primary businesses increased.
Cost of revenue-sales volume of primary businesses increased.
Sales expenses-the primary businesses increased, resulting in an increase in sales and operating
expenses.
Administrative expenses-the increase in travel and entertainment expenses for management personnel
and the increase in headcount and total remuneration.
Financial expenses-the increase in bond interest accrued in the current period as compared with the
same period of the previous year.
R&D expenses-the cost of materials and equipment invested in research and development decreased
significantly compared to the same period of the previous year.
Net cash flow from operating activities-the increase in net cash provided by operating activities was
greater than the increase in net cash used in operating activities.
Net cash flow from investing activities-cash paid for investing activities decreased compared to the
same period last year.
Net cash flow from financing activities-cash received from the issuance of convertible bonds in the
same period of the previous year.
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B.Analysis of revenue and cost
During the reporting period, the Company realized revenue of CNY 35.97 billion, an increase of 9.63%
year-on-year, cost of revenue recorded CNY 34.54 billion, an increase of 12.00% year-on-year.
a.Primary business analyzed by industries, product classification and regions
CNY
Analyzed by Industries
Revenue Cost Gross margin
Gross
Industry Revenue Cost of revenue fluctuation fluctuation fluctuation
margin %
YoY % YoY % YoY %
Increase by
0.62
Feed 16,470,405,515.84 15,083,073,339.98 8.42 5.29 4.57
percentage
points
Decrease by
Broiler 3.66
11,212,127,078.54 11,142,072,143.81 0.62 20.77 25.39
integration percentage
points
Decrease by
Raw
0.83
materials 5,299,325,244.82 5,153,336,835.63 2.75 2.31 3.19
percentage
trading
points
Decrease by
13.15
Pig farming 2,575,952,500.43 2,813,601,769.93 -9.23 25.19 42.33
percentage
points
Decrease by
Other 0.77
366,240,133.94 309,584,746.71 15.47 -40.37 -39.82
businesses percentage
points
Analyzed by Product Categories
Revenue Cost Gross margin
Gross
Industry Revenue Cost of revenue fluctuation fluctuation fluctuation
margin %
YoY % YoY % YoY %
Increase by
0.62
Feed 16,470,405,515.84 15,083,073,339.98 8.42 5.29 4.57
percentage
points
Decrease by
Broiler 3.66
11,212,127,078.54 11,142,072,143.81 0.62 20.77 25.39
integration percentage
points
Decrease by
Raw
0.83
materials 5,299,325,244.82 5,153,336,835.63 2.75 2.31 3.19
percentage
trading
points
Decrease by
13.15
Pig farming 2,575,952,500.43 2,813,601,769.93 -9.23 25.19 42.33
percentage
points
Decrease by
Other 0.77
366,240,133.94 309,584,746.71 15.47 -40.37 -39.82
businesses percentage
points
Analyzed by Regions
Revenue Cost Gross margin
Gross
Region Revenue Cost of revenue fluctuation fluctuation fluctuation
margin %
YoY % YoY % YoY %
Decrease by
East China 5,354,726,958.38 5,254,699,966.36 1.87 26.61 28.79
1.66
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Wellhope Foods Co., Ltd. 2023 Annual Report
percentage
points
Decrease by
North 3.45
4,552,937,019.10 4,402,233,842.94 3.31 1.10 4.84
China percentage
points
Decrease by
Northeast 2.10
17,434,788,976.85 16,642,821,809.63 4.54 11.56 14.07
China percentage
points
Decrease by
Central and
1.96
South 6,294,876,958.64 6,075,846,845.14 3.48 6.05 8.25
percentage
China
points
Increase by
Southwest 0.04
694,508,220.56 667,655,325.51 3.87 -16.46 -16.50
China percentage
points
Increase by
Northwest 0.78
1,177,614,582.92 1,068,728,646.97 9.25 -1.61 -2.44
China percentage
points
Decrease by
Overseas 2.02
414,597,757.13 389,682,399.51 6.01 -8.84 -6.84
market percentage
points
Analyzed by Sales Model
Revenue Cost Gross margin
Sales Gross
Revenue Cost of revenue fluctuation fluctuation fluctuation
model margin %
YoY % YoY % YoY %
Decrease by
2.30
Direct sales 23,717,076,110.27 22,785,501,428.95 3.93 6.46 9.07
percentage
points
Decrease by
Sell on 1.66
12,206,974,363.30 11,716,167,407.11 4.02 16.24 18.29
commission percentage
points
b.Analysis of sales volume
Production
Sales volume Inventory
Production volume Sales volume Inventory volume
Product fluctuation fluctuation
(10k tons) (10k tons) (10k tons) fluctuation
YoY % YoY %
YoY %
Feed 523.73 430.52 8.17 5.11 7.88 9.89
Sales of feed products are external sales and do not include sales for internal use.
c.Analysis of cost
CNY
% of
% of total Fluctuation
By Industry Item 2023 2022 total
costs YoY %
costs
Feed Raw material 13,760,282,630.25 95.71 13,214,824,240.53 95.90 4.13
Feed Labor cost 178,359,637.62 1.24 163,741,476.79 1.19 8.93
Feed Depreciation 134,483,142.61 0.94 120,087,065.95 0.87 11.99
Energy (electricity,
Feed 172,821,323.26 1.20 166,499,265.08 1.21 3.80
coal, steam)
Feed Other 131,452,494.49 0.91 115,070,637.48 0.84 14.24
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manufacturing
expenses (energy
and depreciation
excluded)
Total production
Feed 14,377,399,228.24 100.00 13,780,222,685.83 100.00 4.33
cost
Broiler Raw material 9,136,127,364.54 82.67 7,888,954,785.20 84.10 15.81
Broiler Labor cost 515,755,275.59 4.67 425,649,406.15 4.54 21.17
Broiler Depreciation 80,174,895.32 0.73 74,320,788.91 0.79 7.88
Energy (electricity,
Broiler 118,275,580.27 1.07 109,827,583.49 1.17 7.69
coal, steam)
Other
manufacturing
Broiler expenses (energy 1,200,822,494.66 10.87 882,037,081.47 9.40 36.14
and depreciation
excluded)
Total production
Broiler 11,051,155,610.38 100.00 9,380,789,645.22 100.00 17.81
cost
% of
% of total Fluctuation
By Product Item 2023 2022 total
costs YoY %
costs
Feed Raw material 13,760,282,630.25 95.71 13,214,824,240.53 95.90 4.13
Feed Labor cost 178,359,637.62 1.24 163,741,476.79 1.19 8.93
Feed Depreciation 134,483,142.61 0.94 120,087,065.95 0.87 11.99
Energy (electricity,
Feed 172,821,323.26 1.20 166,499,265.08 1.21 3.80
coal, steam)
Other
manufacturing
Feed expenses (energy 131,452,494.49 0.91 115,070,637.48 0.84 14.24
and depreciation
excluded)
Total production
Feed 14,377,399,228.24 100.00 13,780,222,685.83 100.00 4.33
cost
Broiler Raw material 9,136,127,364.54 82.67 7,888,954,785.20 84.10 15.81
Broiler Labor cost 515,755,275.59 4.67 425,649,406.15 4.54 21.17
Broiler Depreciation 80,174,895.32 0.73 74,320,788.91 0.79 7.88
Energy (electricity,
Broiler 118,275,580.27 1.07 109,827,583.49 1.17 7.69
coal, steam)
Other
manufacturing
Broiler expenses (energy 1,200,822,494.66 10.87 882,037,081.47 9.40 36.14
and depreciation
excluded)
Total production
Broiler 11,051,155,610.38 100.00 9,380,789,645.22 100.00 17.81
cost
d.Top 5 customers and suppliers
d-1: Major customers
Revenue from the top five customers amounted to CNY 1.68 billion, accounting for 4.66% of revenue, of
which revenue from sales to related parties amounted to CNY 763.80 million, accounting for 2.12% of
revenue.
d-2: Major suppliers
The purchase from top 5 suppliers amounted to CNY 5.54 billion, accounting for 16.17% of the
Company’s purchase orders during the reporting period, of which, there were no purchase orders from
related parties.
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C.Expense
CNY
Item 2023 2022 Change %
Sales expense 718,365,669.03 622,444,761.15 15.41
Administrative expense 614,800,562.62 537,063,858.72 14.47
R&D expense 83,797,469.99 90,105,075.01 -7.00
Financial expense 171,600,672.91 160,680,329.03 6.80
D.R&D Input
a.R&D input
CNY
Expensing R&D input 83,797,469.99
Capitalizing R&D expenditure 0
Total R&D expenditure 83,797,469.99
% of revenue 0.23
Percentage of capitalizing R&D expenditure 0
b.Headcount
Headcount of R&D 308
Percentage of total staff % 3.43
Educational structure
Item Headcount
Doctoral candidate 20
Masters 122
Bachelors 106
Junior college 55
High school and below 5
Age structure
Item Headcount
30 years old (30 excluded) 120
30-40 (30 included, 40 excluded) 134
40-50 (40 included, 50 excluded) 37
50-60 (50 included, 60 excluded) 17
60 and above 0
c.Circumstances of R&D
(a) Research advances in feed and farming technology
Pig feed: The Company has made good progress in the areas of creep feed, nursery feed and
grower-finisher feed. During the reporting period, the Company has developed a new generation of
creep feed that has improved piglet intake and reduced diarrhea rates, further enhancing the
company's reputation in the marketplace. It also developed and launched a fishmeal-free nursery feed
solution. In addition, the Company promoted highly inclusive premixes and optimized feed
formulations to meet market demand, thereby increasing sales.
Ruminant Feed: The Company continued to develop efficient fattening models and optimize farm
management for meat sheep and beef cattle, improving meat quality and market competitiveness. For
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the dairy product line, the Company leveraged the results of its research base to provide tailor-made
products that optimized farm operations and helped customers improve yields and efficiency.
Poultry Feed: Utilizing the data gained from broiler integration into poultry feed, the Company
continued to optimize nutritional solutions tailored to different seasons and regions. It strengthened
research and development in broiler nutrition to continuously improve broiler production performance.
In the layer sector, the Company continued to research and optimize diets for laying and rearing,
providing comprehensive solutions for customers.
During this period, the Company made significant progress in multi-grain and multi-protein diets as well
as the evaluation of maximum levels of key ingredients, which effectively helped to reduce feed costs
and improve product competitiveness. At the same time, the Company continued to carry out
formulation comparisons to accurately control the use of raw materials. Within the company, the front,
middle and back offices were closely integrated, and coordination meetings were held between the
engineering, purchasing, production and sales departments to respond quickly to changes in the raw
material market. The Company also took measures to promote centralized product management and
optimize product volumes, and implemented various initiatives to improve efficiency and reduce costs.
In terms of broiler integration, the Company focused on improving the production performance of
commercial broilers and fine-tuning feed nutrition to improve the overall efficiency of the industry
chain. The feed conversion ratio has been significantly reduced, which has strengthened the Company's
R&D capability in poultry feed. In pig farming, the Company implemented diversified management
programs for different regions and farming conditions, which helped to improve farm performance and
reproductive efficiency.
(b) Key projects, industry standards participation, awards and patents
Patents Obtained by the Company in 2023
Including:
Number of Total number of Including: Invention
Invention 7 74
patents patents granted patents
29 patents 266
granted in by the end of the
Utility model Utility model and design
2023 22 reporting period 192
patents patents
National or industry group standards developed, and technological projects undertaken by the Company in 2023
Local Standard of Liaoning Province: Antibiotic-Free Egg Production Technical Specification
Participation in the (Implemented on July 30, 2023)
development of Feed Industry Association Group Standard: Piglet Milk Replacer (Implemented on June 25, 2023)
standards National Ministry of Industry and Information Technology Light Industry Standard: Specifications
for Meat Product Safety Information Traceability System (Implemented on November 1, 2023)
Technology projects Open competition to select the best candidates to undertake key research projects in Liaoning
carried out or Province: Key Technologies for Breeding Superior Livestock and Poultry Varieties with Liaoning
managed by the Characteristics and for Production of the Entire Industry Chain
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Wellhope Foods Co., Ltd. 2023 Annual Report
Company Rural Science and Technology Special Dispatch Action Plan of Liaoning Province – Shenyang
Wellhope Ruminant Animal Feed Science and Technology Special Dispatch Group
Science and Technology Plan Project of Shenyang City (Open competition to select the best
candidates) Research and Development of China Feed Formulation Software System
Awards received by the Company for technical research and development in 2023
First Prize of the Beijing Agricultural Technology Promotion Award for the years 2020-2022
Development and Application of Functional Yeast Products to Reduce Antibiotics in Livestock
and Poultry Farming
Second Prize of Liaoning Province Science and Technology Progress Award in 2022 for Key
Technologies and Applications in Quality Evaluation and Control of Meat Prepared Food
First Prize of the 4th China Technology Market Association Golden Bridge Award for the
Integration and Promotion of High Efficiency Green Production Technology for White Feather
Awards received Broiler
First Prize in Scientific Research Achievements of the 2022-2023 Shen Nong China Agricultural
Science and Technology Award for Innovation of Key Technologies and Application of Biogenic
Feed Products
Third Prize in Scientific Research Achievements of the 2022-2023 Shen Nong China Agricultural
Science and Technology Award for Innovation and Application of Key Technologies for Efficient
Breeding and Utilization of High Quality Breeding Pigs
E.Cash flow
CNY
Item 2023 2022 Change %
Net cash flow from operating activities 956,152,750.32 196,266,510.34 387.17
Not
Net cash flow from investing activities -402,864,641.04 -743,139,911.44
applicable
Net cash flow from financing activities -308,196,369.71 995,492,458.01 -130.96
Net increase in cash and cash
246,054,337.82 450,706,660.91 -45.41
equivalents
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2.Assets and liabilities
A.Circumstance of assets and liabilities
CNY
% of total Closing balance of % of total
Item Closing balance of 2023 YoY change % Explanation
assets 2022 assets
Trading Not
829,591.32 0.01 0.00 0.00 Increase of buying debt in exchange for equity
financial assets applicable
Decrease in advance payments for raw
Prepayments 469,857,003.51 3.15 762,467,440.93 4.94 -38.38
materials
Contract assets 2,432,720.15 0.02 1,186,905.42 0.01 104.96 Increase in warranty deposits
Construction in Significant reclassification of construction in
158,377,935.65 1.06 601,125,529.45 3.90 -73.65
progress progress to property, plant and equipment
Right-of-use
525,191,183.39 3.52 328,428,097.10 2.13 59.91 Increase in finance leases
assets
Notes payable 0.00 0.00 600,000.00 0.00 -100.00 Decrease in notes payable due for settlement
Non-current Mainly due to increase in long-term loans,
liabilities due 932,730,557.07 6.24 471,328,595.34 3.06 97.89 lease liabilities and long-term liabilities due
within one year within one year
Lease liabilities 368,001,422.29 2.46 223,002,370.80 1.45 65.02 Increase in finance leases
Long-term Increase in loans payable to finance leasing
42,542,892.62 0.28 7,685,803.59 0.05 453.53
payables companies
Deferred
Mainly due to increase in temporary
income tax 53,459,620.43 0.36 37,698,221.22 0.24 41.81
differences arising on right-of-use assets
liabilities
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B.Overseas assets
CNY 4,922,720.08 of foreign assets, accounting for 0.03% of total assets.
C.Restrictions on major assets as at the end of the reporting period
CNY
Carrying amount at end of
Item Reason for restriction
period
Cash at bank 19,369,409.88 Margin for futures transactions
Cash at bank 974,828.25 Margin for letters of credit
Total 20,344,238.13 /
3.Investment analysis
As at the end of the reporting period, the balance of the Company’s long-term equity investment
amounted to CNY 2.32 billion, representing a decrease of 6.88% as compared with the end of the
previous year, the investment in other equity instruments amounted to CNY 14.83 million,
representing a decrease of 14.42% as compared with the end of the previous year.
For details, please refer to "Long-term equity investments" and "Investments in other equity
instruments" in "Notes to the consolidated financial statements".
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4.Main holding and associated companies
CNY 10k
Registered
Company Primary business Total assets Net assets Net profit Revenue Profit
capital
Beijing Sanyuan Wellhope Agri-Tech
Feed production and sales 1,000.00 26,900.79 22,365.48 3,652.42 75,576.47 4,213.37
Company
Shenyang Wellhope Agri-Tech
Feed production and sales 8,210.00 28,267.88 23,345.85 2,289.47 126,718.50 3,014.65
Company
Xi'an Wellhope Feed Sci-Tech
Feed production and sales 500.00 29,539.02 24,795.22 2,828.47 80,639.93 3,268.77
Company
Anshan Jiuguhe Food Company Broiler slaughtering 4,320.00 108,162.06 55,167.23 3,121.99 216,967.57 3,046.22
Feed processing, broiler
Beipiao Hongfa Food Company breeder farming, hatchery, 3,000.00 289,100.90 164,977.35 8,433.30 414,615.24 6,333.03
broiler raising and slaughtering
Feed processing, broiler
Dalian Heyuan Agri-Tech Company breeder farming, hatchery, 10,000.00 168,961.94 75,790.24 -8,129.62 385,483.30 -8,126.76
broiler raising
Dalian Chengsan Food Group Feed processing, broiler
1,008.61 248,351.90 109,510.48 -22,567.62 547,339.44 -29,189.89
Company farming
Liaoning Wellhope Agriculture and
Pig farming 10,000.00 101,254.23 12,054.13 -9,391.88 73,006.93 -9,174.26
Animal Husbandry Development
Anhui Wellhope Agri-Tech Company Feed processing, pig farming 16,000.00 61,805.77 -10,625.74 -14,075.25 118,854.66 -13,262.09
Tai’an Jiuguhe Agriculture Feed processing, broiler
1,060.00 79,117.51 6,682.46 -10,199.30 278,573.40 -10,759.69
Development Company farming
Shenyang Wellhope Ruminant Feed
Feed production and sales 550.00 29,196.06 23,707.36 3,358.24 86,605.13 4,219.18
Mill
Feed processing, broiler
Linghai Jiuguhe Feed Mill 1,755.00 25,855.85 10,760.95 -3,305.94 154,846.50 -3,428.29
farming
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VI.Outlook on the Company's Future Development
1.Industry outlook
China is a large agricultural country with a population of 1.4 billion, agriculture in China has always
been regarded as a strategic industry to stabilize the world and people's confidence, which lays the
foundation for the national economy. This is not only because agriculture is the source of food and
clothing for people and the basis for their survival, but also because it is it is the cornerstone for the
independence and development of other industries. China has always attracted great attention to the
development of agriculture. The No. 1 Document of the Central Government in 2024 pointed out that
"to promote Chinese-style modernization, we must persistently strengthen the foundation of
agriculture and promote the comprehensive revitalization of the countryside." In recent years, with the
constant changes in international trade, resource environment, technological conditions, industrial
structure, policies and regulations, the development of agriculture has shown several new trends.
A.Accelerating the elimination of overcapacity, consolidation in feed industry being increasingly
heightened
With fierce competitions in the feed industry, extra-large companies are constantly expanding their
scale of operations, medium-sized producers are seeking business opportunities, while the shares of
small producers gradually being squeezed. For the large companies, they are using their strengths and
advantages in technology, cost, brand, management, capital and logistics to continuously improve their
operational efficiency, rapidly expand their production scale and gain market shares through mergers
and acquisitions as well as embarking on new projects. These small and medium-sized feed producers
have been gradually squeezed out in the increasingly fierce competition due to their lower technical
level, higher comprehensive costs, weaker brand reputation, insufficient management ability and
higher capital pressure. In recent years, the sharp fluctuation in feed raw material prices, coupled with
frequent animal diseases and sluggish meat demand, have increased risks in the agriculture industry,
thus, so the backyard farmers are gradually withdrawing from the market, the share of large-scale
farms continuing to expand, and they have also significantly increased their demands for the
comprehensive strength of feed suppliers, which has accelerated the elimination of backward
production capacity and significantly accelerated the consolidation of the feed industry.
B.Vertical integration of resources and continuous extension of industrial chain
The animal husbandry industry consists of several industries such as feed production, animal health
product, livestock and poultry farming, slaughtering and processing, etc., where the upstream activities
are more related to the plantation industry, and the downstream activities serve the agri-food
processing industry, and a variety of related industries form an organic whole. With the elimination of
production capacity in the industry, large companies are continuously expanding their business scale.
To meet the needs such as risk control, profit growth and food safety, these agricultural giants, apart
from mergers and acquisitions, have gradually integrated resources to expand their businesses in both
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upstream and downstream industries, and continued to expand vertically, in an effort to penetrate the
industry chain and establish a strong competitive advantage and risk-resistant ability. Under the
development trend of industrial chain integration, the industrial division of labor of large enterprises
engaged in agricultural and animal husbandry industries has gradually weakened, while seizing the
resources of the whole industrial chain has become the theme of the development of animal
husbandry industry.
C.Constantly strengthened environment protection and promoting the concept of green development
being practiced
In recent years, China has issued a series of environmental protection regulations, such as the revision
of the Environmental Protection Law, the Environmental Protection Tax Law, the Regulations on
Pollution Prevention of Livestock and Poultry Scale Farming, and the Action Plan for Pollution
Abatement of Agriculture and Rural Areas, etc. These successive introduction of environmental
protection policies demonstrates the state's determination to strengthen the environmental protection
supervision of the livestock industry, and local governments have also issued some new regulations on
farm dismantling, prohibition of animal husbandry and farm restriction, which will further squeeze out
less qualified players and reshape the pattern of the livestock industry.
D.Stricter food safety supervision highlighting the advantages of large companies
Although China's food safety situation has improved in recent years, the current situation of a small and
fragmented food industry with low barriers to entry has not changed much, and the industrial chain
from farm to table is too long and too large, with many risk points. The new edition of China's Food
Safety Regulation, released in October 2019, not only provided clear regulatory initiatives to address
specific issues, but also strengthened the penalties for violating the law through the policy of
"implementing penalties on individuals". The regulation came into force from December 1, 2019, and
since then the market has been under the strongest supervision. In the future, more attention will be
paid to the normalization of food safety and industrial system. Stricter food safety supervision will
further squeeze out less qualified players, while highlighting the strengths and advantages of large
integrated companies.
E.Pig farming industry ending high-dividend period, bio-security remaining a top priority
As the domestic pig production capacity has recovered beyond expectations, but the capacity recovery
is out of line with pork consumption, resulting in high-cost pig farming from high profitability to serious
losses, those enterprises that had aggressively expanded pig production suffered have been subjected
to tremendous financial pressure. It can be seen that the pig industry has taken an important turn, the
period of high dividends has ended, the main theme of the industry has shifted from rapid expansion to
cost reduction, from investment to financing, which means that China's pig industry has entered a new
stage, under the transformation and upgrading of high-quality development, the new pattern of supply
and demand of China's pig industry is being reshaped. In addition, due to the frequent occurrence of
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animal diseases in recent years, bio-security has become the main issue that the industry has to face,
which further raises the entry barriers of the industry, and the economy and effectiveness of the cost of
epidemic prevention inputs has become an important factor affecting the total cost of farming.
F.The share of pork consumption gradually decreasing, accelerating the restructuring of meat
consumption
After the normalization of African swine fever, the average pork prices in China increased significantly
compared to previous cycles, but the remarkable decline in the consumption capacity of residents led
to a further reduction in pork consumption, pork purchased by group meals also decreased significantly,
food processing companies were forced to shift raw materials to chicken and vegetarian food, which
accelerated the adjustment of domestic meat consumption structure, the overall consumption habits of
the population are gradually changing. Chicken is characterized by high protein, low fat and low
cholesterol, which has been increasingly favored as a viable alternative to pork. Compared with pigs,
broilers also have greater advantages in terms of growth rate, farming costs, safety and environmental
protection. Looking at the experiences of developed countries, China's per capita chicken consumption
still has great growth potential with a huge market space.
2.Development strategy of the Company
The Company's long-term development goal is to become the world's leading enterprise in the fields of
agriculture, animal husbandry and food industry. 2023-2025 development strategy: Under the
centralized group management mode, firmly strengthen the two strategic core businesses of feed and
broiler integration, effectively promote two exploratory businesses of pig farming and food processing,
and gradually build a regional food brand, so as to become a leading enterprise with the principles of
"safety, quality, cost and efficiency" in agriculture, livestock and food industries.
According to the Company's three-year business plan and combined with the analysis and assessment
of the economic and industry development in 2024, the Company has set the specific business
strategies for 2024: strictly control investment projects and strengthen cash flow management. Under
the premise of ensuring business quality, focus resources on strengthening and expanding feed
business, steadily develop broiler integration business, further improve the industrial chain
management, consolidate the foundation of pig farming business, promote the improvement of
production performance indicators to make money, improve the layout and accelerate the
development of the food business. Meanwhile, continue to make efforts to build a competitive and
aggressive front office, a cost-effective middle office and an empowering and sharing back office, to
implement the synergistic interlocking of technology, purchasing, production and marketing to reduce
costs and increase efficiency, continuously optimize the key talent team, improve the incentive
mechanism and enhance the strategy implementation and performance evaluation system, accelerate
the digital transformation of finance and centralized management while strengthening risk control, and
further strengthen the construction of organization and operation capacity.
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3.Business plan for 2024
In FY2024, the supply of pigs and broilers is expected to gradually decrease, and consumer demand is
expected to gradually increase with the economic recovery. The Company will seize the industry
opportunities, further strengthen the core competitiveness, widen the economic moat, focus on the
front, middle and back office construction according to plan, rhythmically promote the layout of
production capacity and reserve talents, to lay a solid foundation for realizing the Company's long-term
plan.
A.Feed business
In FY2024, the Company will further reform the transformation of feed business and accelerate the
upgrading of system capability. In terms of technology, it will further transform feed formulation to a
"European-style formula", accelerate the multi-grain and multi-protein feed system, and utilize the
alternatives of various raw materials to improve the cost-effectiveness of products under the premise
of ensuring product quality. In terms of procurement, the Company will pay attention to recruiting
high-level talents, refine the division of work responsibilities and performance management, improve
the procurement process, and cooperate with internal experts and external brains to make up for our
shortages as soon as possible. In terms of products, based on the advantages of concentrate feed, it will
accelerate the leading position in complete feed, and further optimize the production process, upgrade
equipment and improve production efficiency, gradually shifting to automation, bulk and pellet. In
terms of market, it will further strengthen the technical service capacity, improve the bio-security
support for feed mills, accelerate the cooperation with third-party financing institutions, consolidate
the advantages of dealer sales, make every effort to increase the proportion of large-scale farms on the
premise of controllable bad debt risk. In 2024, the Company plans to increase external feed sales by
more than 10%.
B.Broiler integration business
The broiler integration business will continue to be guided by the philosophy of ensuring safety,
controlling the pace of expansion, adjusting the industrial structure, promoting the business ecosystem,
compressing costs, improving efficiency and increasing profit, and taking into account both scale and
profit, in order to expand market share in a planned and rhythmic manner. On the breeding side, the
Company will continue to expand breeder scale, increase the proportion of self-supplied chicks, while
focusing on the quality of DOC sources, maintain long-term strategic cooperation with suppliers of
excellent breeds, and continuously improve the cleaning process and biosecurity system to maximize
the protection of the quality of commercial chicks. On the farming side, the Company will moderately
expand the production according to slaughter layout to ensure a stable supply of chickens to the
slaughterhouses and will continue to improve the automation level of farms while ensuring continuous
progress in production performance. In 2024, the Company plans to achieve the target of slaughtering
more than 860 million broilers(holding and associated companies together).
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C.Pig farming business
In FY2024, the pig farming business will continue to adhere to a steady investment philosophy, maintain
a safe pace of development, and cautiously expand the scale of farming. In the production process, the
Company will continue to deepen the implementation of process performance management system,
accelerate the recruitment of talents for key positions, establish a standard and information-based
farming system, focus on improving the operational capacity of pig farms, optimize diet and nutrition
program, and improve the level of production management. At the same time, it will continue to
strengthen the breeding management, optimize the quality of breeding stock, improve the production
performance of breeding herd, and reduce production costs in an all-round way. In addition, pay close
attention to biosafety management, strengthen the supervision and evaluation of disease prevention,
accelerate the construction of veterinary system, focus on the three major diseases of African swine
fever, blue ear and diarrhea, strive to solve the problems of disease monitoring, diagnosis and
prevention, to ensure the safe and smooth operation of farms. By 2024, the Company aims to achieve
the sales of 1.2-1.4 million heads of pig (holding and associated companies).
This business plan cannot be deemed as the Company's performance commitment to investors, please
maintain sufficient risk awareness.
4.Potential risks
A. Risks of fluctuations in raw material prices
Raw materials account for the majority of the cost of feed business. Changes in the production in the
main raw material production areas, import policies, storage and grants, exchange rate fluctuations,
logistics costs and other factors may cause fluctuations in the market price of raw materials, which in
turn affect the cost and gross margin of the Company's feed business. With the deepening of
internationalization of agricultural trade in recent years, the supply and demand relationship and
trading price of raw materials are affected by domestic and international spot and futures markets in
many dimensions, and the price trend is becoming increasingly complex and volatile, which further
increases the difficulty of cost management of the Company. In addition, the complex changes in the
China-US relations, the Russia-Ukraine war and other international political and economic
environments have also made the purchase of raw materials more volatile.
Solutions
a. Wellhope has established strategic partnerships with many leading raw material suppliers at home
and abroad. Meanwhile, it adopts a three-level purchasing mode, which includes centralized purchasing
by the head office, bidding purchasing by different business regions and local subsidiary purchasing, to
clarify the role of purchasing.
b. Wellhope combines its raw material trading business with purchasing management, i.e., the
professional and practical raw materials’ purchasing team conducts targeted forward-looking research
and real-time tracking on the market to strategically reduce the purchasing price, such as uniformly
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managing different variety of raw materials, adopting spot purchasing and futures together.
c. The purchasing team works closely with the R&D, production and sales teams. The R&D team actively
develops low-cost homogeneous substitutes for key raw materials, the production team continuously
optimizes and transforms the process and equipment performance, the sales team helps the
purchasing team to adjust strategy in a timely manner through the wave volume forecast. Each
department works together, complementing each other's strengths and sharing information to
minimize the risk of raw material price fluctuations.
d. Wellhope has set up a raw material information sharing channel with Royal De Heus, which enables
the two sides to exchange information of raw materials and additives. In addition, the two sides have
started joint purchasing for vitamins, amino acids and other raw materials, and may further expand the
scope of joint procurement in the future to further enhance the overall bargaining power.
B. Risks of fluctuations in livestock and poultry prices
Livestock production is a typically cyclical industry and the hysteresis in supply causes prices to
fluctuate periodically. The sharp fluctuations in livestock and poultry prices have undoubtedly increased
uncertainty about the performance of companies in the sector.
Solutions
a. In terms of strategy. Wellhope always pays close attention to the price fluctuations of upstream and
downstream products, and over the years has continued to deepen market research, accurately predict
industry trends, and flexibly adjust its business strategy. Meanwhile, Wellhope’s three main business
divisions share resources and complement each other's strengths, and each business division promotes
the layout of production capacity according to the plan and in a rhythmic manner, so as to effectively
control the risk of price fluctuations of livestock and poultry at the strategic level.
b. In terms of business. Wellhope's broiler integration business has established an industrial chain from
broiler breeding, day-old chick hatching, feed production, commercial broiler farming, slaughtering,
processing and further processing of prepared food and cooked food. Through continuous
improvement of the industrial chain, the price fluctuations of each sector in the chain can be fully
hedged, thereby minimizing the price fluctuations of the entire industrial chain.
c. In terms of management. Wellhope has always been committed to improving the production
standard of each sector, constantly innovating the practical operation technology and management
mode of various businesses, reducing the overall operating costs by optimizing the production
indicators and improving the per capita efficiency. The costs advantage can mitigate the negative
impact of the industry downturn on the Company, while improving the overall profitability in the face
of a booming market.
C. Risks of serious animal epidemic
Feed and farming are Wellhope's two core businesses. Epidemics are one of the biggest risks facing
livestock businesses. Once an animal disease outbreak occurs, it is certain to cause panic in the
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marketplace, which will reduce demand, production and income while increasing costs. The feed
industry mainly serves the downstream livestock industry, so the downstream market will directly affect
the performance of the feed business. As an unpredictable emergency, an explosive epidemic will
undoubtedly have a strong impact on the Company's business.
Solutions
a. Wellhope places great emphasis on regional distribution and business structure, which is the most
direct way to disperse the risk of animal epidemic.
b. Disease prevention and control must be based on "prevention", and "treatment" as a complement,
the Company continues to improve the early warning mechanism for major epidemics, and has
established biosecurity testing centers at farm locations, and constantly adjusts the frequency and
scope of disease testing according to seasonal, geographical and regional epidemiological trends, and
strives to contain the disease before it breaks out.
c. When the epidemic comes, the speed of response is particularly critical, the faster to response, the
less to loss. Wellhope has set an emergency command system for major epidemics to minimize losses
when they occur.
d. Wellhope has continuously conducted post-epidemic analysis and research. Meanwhile, it has
continuously strengthened the epidemic prevention capacity from various aspects such as animal
nutrition and veterinary services.
e. For African Swine Fever, Wellhope has established a relatively complete prevention system from
product research to farm management.
D. Risks of the industrial pattern adjustment caused by environmental protection policies
In recent years, the State has issued a series of environmental regulations, such as the Revised
Environmental Protection Law, the Environmental Protection Tax Law, the Regulations on Pollution
Prevention and Control in Livestock and Poultry Farming and the Action Plan on Pollution Prevention in
Agriculture and Rural Areas. Relevant environmental policies have been issued one after the other to
show the government's determination to strengthen the supervision of environmental protection in
animal husbandry. Stricter control of environmental protection is the trend of the industry, the livestock
industry as a whole can’t avoid the reality.
Solutions
During the start-up period, Wellhope had input "saving resources, being committed to environmental
protection" as part of its mission, all Wellhope people have always taken saving resources and
protecting environment as the most important mission, taking strict compliance with laws and
regulations, and implementing environmental protection requirements as key performance appraisal
indicators for subsidiaries and managers.
a. In terms of animal farming and slaughtering. In the face of increasingly stringent environmental
protection requirements, all Wellhope's subsidiaries have carried out comprehensive identification of
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environmental risk points and formulated contingency plans for emergent environmental incidents
based on actual circumstances and the requirements of local governments at all levels to ensure
smooth operation. With regard to the main pollutant discharge entity, Wellhope has established a
complete self-monitoring program to identify problems in a timely manner and eliminate hidden
hazards, it also constantly increased personnel, capital investment in environmental protection to
ensure that the main pollutant discharge units always meet the national standards.
b. In terms of feed processing. Wellhope has always met all government environmental standards with
the strictest attitude, and has established complete control measures for exhaust gas, noise,
wastewater, solid waste and other pollution generated during the production process. Meanwhile, it
uses eco-friendly raw materials and additives in feed formulations and continuously develops safe feed
to reduce emissions of heavy metals, nitrogen and phosphorus.
E. Risks of exchange-rate fluctuations
Wellhope's international business started earlier and has developed rapidly, which can be affected by
exchange rate fluctuations in raw material purchasing, product export and overseas investment,
including the following aspects. Firstly, international development has made the global purchase of raw
materials more normal, so the risk of exchange rate fluctuation is particularly acute for raw materials
that are largely sourced from overseas. Secondly, Wellhope's export business for broiler parts products
is growing rapidly with customers from many countries and regions around the world, and exchange
rate fluctuations are inevitably caused by the settlement of multiple currencies. Finally, due to the large
overseas investment and overseas operations, the cross-border capital transactions and settlements
will also be affected by exchange rate fluctuations.
Solutions
a. Wellhope focuses closely on the dynamic international foreign exchange market, while enhancing the
awareness of foreign exchange risk and improving the research and forecasting capabilities of the
foreign exchange market.
b. Wellhope continues to improve the bargaining power in foreign trade transaction by enhancing the
competitiveness of its own products, while reducing the exchange rate risks by using CNY for
settlement, adding the insured value clause and the exchange rate risk allocation clause in the contract.
c. By making full use of foreign exchange forwards, swaps and options (portfolios) and other
instruments to maintain the exchange rate for foreign exchange exposure.
d. According to the specific conditions of different countries, based on the principle of "using foreign
currencies in foreign trade", Wellhope reasonably manages income and liabilities to control exchange
rate risks.
F. Risks of food safety
In recent years, there have been a number of food safety incidents in China that have affected
consumer confidence in food safety. China has been continuously improving the legislation on food
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safety and food sources, and has taken strong measures to deal with food safety violations. Once the
food safety incident happens, it will directly damage the interests of consumers and cause panic, which
may greatly affect the downstream demand, affect the brand and performance of enterprises.
Solutions
Since its establishment, Wellhope has always attached great importance to the issues of food safety
and quality assurance, adhering to the implementation of the quality policy of "six never" with the
most rigorous attitude -never accept unqualified raw material, never use abnormal equipment, never
allow nonstandard operation, never produce substandard product, never ignore unsatisfied customer,
never tolerate imperfect service. Wellhope’s head office has set up a Food and Quality Safety
Management Committee, while all business divisions and relevant subsidiaries have set up Food and
Quality Safety Management Groups to ensure that the team always maintains a high sense of
responsibility and awareness.
a. In terms of feed business. The Company has established a quality management mechanism and
inspection system managed at the head office, regional and subsidiary levels, adopted international
standards such as ISO9001, ISO22000 and ISO-IEC17025, and thoroughly implemented a series of
quality standards such as the Feed Quality and Safety Management Code, the Veterinary Drug
Production Quality Management Code and other specifications, the Company has controlled the whole
production process and established the traceability system. Meanwhile, it is vigorously popularizing
near-infrared detection technology, improving detection efficiency to share data in a timely manner and
quickly realize early risk warning, and focusing on the detection of heavy metals, harmful
microorganisms and mycotoxins, to provide an important guarantee for the safety of feed products.
b. In terms of farming and slaughtering business. As for production management, the Company strictly
monitors and checks drug selection and residue control in broiler integration and pig farming, while
constantly strengthening quality management in slaughtering and processing, earnestly implementing
all-in and all-out inspection and quarantine, and drug residue detection. As for business model,
Wellhope has established a broiler industry chain, including broiler breeding, day-old chick hatching,
feed production, commercial broiler farming, slaughtering and processing of raw meat, and further
processing of prepared and cooked food. The integrated operation ensures a sufficient supply of raw
materials in each sector of the chain and strict control of the whole process of food safety and quality
from the source. Through standardized management and streamlined operations, Wellhope
consolidates biosecurity, drug residue and in-process hygiene controls to achieve traceable food safety.
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Section IV Corporate Governance
I.Overview of Corporate Governance
In strict compliance with the Corporation Law, the Securities Law, the Guidelines for Governance of
Listed Company and other requirements, the Company has continuously strengthened and improved
its corporate governance and standardized operations. The Board of Directors, the Supervisory Board,
the General Meeting and the Management of the Company have a clear division of labor, clear powers
and responsibilities, and the systems are designed to be mutually constraining and mutually supportive,
so as to gradually establish a set of scientific and highly efficient mechanisms for decision-making,
execution and supervision. The Independent Directors, the Supervisory Board and the Special
Committees of the Board of Directors have played a key roles in their functions, exercised due care,
loyalty and diligence, and provided objective and independent opinions to ensure that the Company's
operations are lawful, compliant, fair and transparent, and that the Directors and Supervisors have full
played their core role in corporate governance, continuously improved the corporate governance
structure, enhanced the transparency of corporate governance, and effectively safeguarded the
legitimate rights and interests of the Company and the shareholders.
During the period under review, the Company amended the Articles of Association in accordance with
relevant laws and regulations, and actively promoted the revision of the relevant system for
independent directors, and commenced preparations for the pre-election of the Board of Directors and
the Supervisory Board in the fourth quarter. In FY2024, the Company held 2 general meetings, 4 board
meetings, 4 supervisory meetings, 4 audit committee meetings, 1 remuneration and appraisal
committee meeting and 1 nomination committee meeting, and the convening, holding and voting
procedures of all the meetings were standardized, legal and effective. During the reporting period, the
Company continued to strengthen its information disclosure, standardized operation and investor
relationship management to continuously enhance the transparency of the Company, ensure investors'
right to know and effectively safeguard the legitimate interests of the Company and all shareholders.
The Company's information disclosure work for the year 2022-2023 has been awarded Grade A, which
has been awarded for six consecutive years. Since the completion of the IPO in 2014, the Company has
not been criticized, condemned or punished by regulatory authorities for information disclosure
violations.
II.General Meeting Convened during the Reporting Period
Disclosing Date of
Meeting Date Query URLs of Resolution
Resolution
2022 Annual General Meeting April 21, 2023 www.sse.com.cn April 22, 2023
2023 First Extraordinary November 13,
www.sse.com.cn November 14, 2023
Shareholders' Meeting 2023
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III.Information about Directors, Supervisors and Senior Managers
1.Changes in shareholdings and remuneration of incumbent and outgoing directors, supervisors and senior management during the reporting period
Whether
Pre-tax
Changes in obtain
Opening Closing remuneration
Start of End of shareholding Reason of remuneration
Name Office title Gender Age shareholding shareholding paid by the
tenure tenure (shares) in changes from related
(shares) (shares) Company (CNY
2023 parties of the
10k)
Company
Jin Weidong Chairman male 60 Feb. 3, 2015 Feb. 1, 2027 149,549,498 149,549,498 77.00 No
Director,
Qiu Jiahui male 52 Feb. 1, 2021 Feb. 1, 2027 72.50 No
President
Jacobus
Johannes de Director male 55 Feb. 3, 2015 Feb. 1, 2027 No
Heus
Director, Chief
Shao Caimei Technical female 58 Feb. 3, 2015 Feb. 1, 2027 49,773,878 49,773,878 70.00 No
Officer
Zhang Wenliang Director male 63 Feb. 3, 2015 Feb. 1, 2024 8,565,100 8,565,100 31.80 No
Director, Chief
Feb. 3, 2015 Feb. 1, 2027
HR Officer
Zhao Xin female 52 4,420,160 4,420,160 72.00 No
Mar. 18,
Board Secretary Feb. 1, 2024
2016
Independent
ZUO XIAOLEI female 70 Feb. 1, 2021 Feb. 1, 2027 9.82 No
Director
Independent
Jiang Yan female 50 Feb. 1, 2021 Feb. 1, 2027 9.82 No
Director
Independent
Zhang Shuyi male 59 Feb. 1, 2021 Feb. 1, 2027 9.82 No
Director
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Wang Fengjiu Vice President male 55 Feb. 3, 2015 Feb. 1, 2024 47,964,602 47,964,602 64.00 No
Wang Xueqiang Vice President male 57 Feb. 1, 2021 Feb. 1, 2024 9,355,000 9,355,000 72.00 No
Di Guo Vice President male 53 Feb. 1, 2021 Feb. 1, 2024 4,908,219 4,908,219 72.00 No
Financial
Chen Yu male 39 Aus. 12, 2022 Feb. 1, 2027 58.00 No
Director
Chairman of the
Wang Zhongtao Supervisory male 60 Feb. 3, 2015 Feb. 1, 2024 46,625,229 46,625,229 51.00 No
Board
Marcus
Leonardus van Supervisor male 55 Feb. 3, 2015 Feb. 1, 2027 No
der Kwaak
Li Jun Supervisor male 51 Apr. 27, 2016 Feb. 1, 2027 66.00 No
Mar. 27,
Ren Bingxin Supervisor male 60 Feb. 1, 2024 5,429,500 5,429,500 52.00 No
2019
Yuan Minger Supervisor female 53 Feb. 3, 2015 Feb. 1, 2024 29.69 No
Total / / / / / 326,591,186 326,591,186 / / 817.45 /
Name Work experience
Male, born in 1963, Chinese nationality, bachelor's degree in veterinary medicine from Shenyang Agricultural University, master's degree in physiology and biochemistry
from Jilin University (the former People's Liberation Army Veterinary University), senior animal husbandry expert, Ph.D. supervisor, his research project was supported by the
first batch of the National Natural Science Foundation of China. He is the core founder of Wellhope, and has been the Chairman of Wellhope since 1995. After postgraduate
studies, he worked in the university for two years, and went into business in 1991. He once served as the regional sales manager, national sales manager and the assistant to
the president of Asia-Pacific region of Beijing Continental Grain Company. Now he is the Vice Chairman of China Feed Industry Association, the Vice Chairman of China
Jin Weidong
Animal Agriculture Association, the Chairman of Liaoning Feed Association, the Chairman of Haicheng City’s Chamber of Commerce of Shenyang General Federation of
Industry and Commerce, also serves as the interviewer of MBA of Peking University and Tsinghua University, the teacher of MBA class, the visiting professor of Renmin
University of China, Ocean University of China and Northeast Agricultural University for many years. He has been awarded as China's Outstanding Private Science and
Technology Entrepreneur, National Outstanding Builder of the Socialist Cause, Top 10 Economic Figures in China's Feed Industry in the 30 Years of Reform and Opening Up,
May Day Labor Medal of Shenyang City, and Model Worker of Liaoning Province. In addition, he was honored as the Outstanding Entrepreneur of Liaoning Province in 2017,
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the Career-creating Talent in Science and Technology Innovation by the Ministry of Science and Technology of China in 2018, and selected as the fourth batch of Leading
Talents in Technology Entrepreneurship in the National Ten Thousand Talents Program in 2019, and awarded the honorary title of the National Model Worker in 2020.
Male, born in 1972, Chinese nationality, bachelor of veterinarian from Shenyang Agricultural University. After graduation from university, he worked in Dalian Broiler Breeder
Farm, a state-owned core breeding enterprise, engaged in technical and on-site management. He joined Wellhope in 2000, starting from business representative, and rapidly
promoted due to his outstanding ability, and served as General Manager of Haicheng Wellhope Feed Mill and Haicheng Xinzhongxin Feed Mill, Vice President of Former
Huakang Feed Group, Marketing Director of Wellhope, President of Broiler Integration Business Division, Vice President of Wellhope. Now he is the Director and President of
Wellhope. He also serves as Vice President of Liaoning Chinese and Foreign Entrepreneurs Club, Member of the 9th Liaoning Provincial Agricultural Committee, President of
Qiu Jiahui
Liaoning White Broiler Association, Vice President of Liaoning Provincial Animal Husbandry Association, Guest Professor of the College of Animal Science and Technology and
the College of Veterinary Medicine of Shenyang Agricultural University, and other social positions, received the first prize of the National Agriculture, Animal Husbandry and
Fishery Harvest Prize for the year of 2019-2021 (first completer), and was awarded Shenbei New District May 1st Labor Medal in 2022, awarded the honorary title of
Shenyang Outstanding Expert of the Eighth Session in 2023. Mr. Qiu Jiahui is the pioneer of Wellhope’s broiler integration business. With more than 10 years of leadership,
the broiler integration business has achieved rapid development.
Jacobus Johannes Male, born in 1969, the Netherlands’ nationality, master's degree in Arts in Economics from University of Groningen. He has worked for Royal De Heus since 1992, and is
de Heus currently the CEO of Royal De Heus and a Director of Wellhope.
Female, born in 1966, Chinese nationality, PhD in animal physiology and biochemistry from Nanjing Agricultural University. She is one of the founders of Wellhope. She
previously worked as a technician in a poultry breeding center under the Ministry of Agriculture and as a formulation manager at Continental Grain Company. Since founding
Wellhope, she has always taken charge of the technology of Wellhope, serving successively as the Technology Director and Vice President. Now she is the Board Director and
CTO of Wellhope, also holds the posts of standing director of Animal Nutrition Branch of Chinese Association of Animal Science and Veterinary Medicine, member of Chinese
Shao Caimei
Feed Industrial Standardization Technical Committee, head of the Comprehensive Trial Farm for National Swine Raising Industry Technology System. Meanwhile, she has
served as the master supervisor of China Agricultural University and Shenyang Agricultural University. She has won several first and second prizes of provincial-level science
and technology progress and applied nearly 30 technical invention patents. In 2022, she was honored as one of Forbes China's Top 50 Sci-Tech Women, and in 2023, she was
awarded the honorary title of Shenyang Outstanding Expert of the Eighth Session.
Male, born in 1960, Chinese nationality, master of quality cost management from Northeastern University, senior auditor, the first batch of China’s certified public
accountant. He used to work for the Shenyang Office of National Audit Office, mainly engaged in auditing of finance, national tax, customs and large enterprises. He joined
Zhang Wenliang Wellhope in 1996 and served successively as Financial Manager of Shenyang Wellhope Feed Mill, Auditing Manager of Wellhope, Financial Manager of Beijing Sanyuan
Wellhope Feed Mill, and Financial Director of Wellhope. He is currently the Board Director and CFO of Wellhope. Mr. Zhang Wenliang led and participated in some capital
operation projects of Wellhope, such as the shareholding system transformation, IPO and non-public offering new shares.
Female, born in 1972, Chinese nationality, bachelor of economics from Shenyang Agricultural University. She joined Wellhope in 1995 after graduation, successively served
as the Secretary to general manager, Director of Marketing Department, Director of HR Department, Human Resources Manager and Chief HR Director, Assistant to
Zhao Xin Chairman, etc. Now holds the posts of Board Director, Board Secretary and CHO of Wellhope. Ms. Zhao Xin has over 20 years of experiences in human resources and
enterprise management, she is one of the managers who established Wellhope's human resources management system. In 2020 and 2021, she was awarded as
"Outstanding Board Secretary" in the Selection of China’s Valuable Public Companies.
Female, born in 1953, Singaporean nationality, famous economist, Ph.D. of International Finance and Econometrics from University of Illinois, USA. She used to be a lecturer
in the School of Economic Statistics at the National University of Singapore, associate professor at the Asian Institute of Management in the Philippines, chief economist and
ZUO XIAOLEI chief president adviser of Galaxy Securities, independent director of Tongfang Co., Ltd. and Hubei Bank. Now she serves as the researcher at the Financial Center of
Counsellors' Office of the State Council of China. Ms. ZUO XIAOLEI is one of the most influential economists in China, who has published many papers in the fields of
econometrics, international finance and securities market. She is the author of "Xiaolei's Perspective: My View on China's Economy" and other books.
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Female, born in 1973, Chinese nationality, doctor of management from Institute of Fiscal Science of Ministry of Finance, certified public accountant, certified asset appraiser.
Jiang Yan She worked in the Stock Issuance Supervision Department at China Securities Regulatory Commission from 2002-2016, now holds the posts of core consultant of several
investment banks such as Minsheng Securities Co., Ltd., and the independent director of Weichai Power Co., Ltd.
Male, born in 1964, Chinese nationality, doctor of ecology from Marie Curie University, France, doctoral advisor of Shenyang Agricultural University. Once he held the posts
of researcher of the Institute of Zoology of Chinese Academy of Sciences, Dean of Interdisciplinary Institute of Science and Technology of East China Normal University, Dean
of the School of Management of Zhejiang Ocean University. Now he is the Dean of the School of Animal Husbandry and Veterinary of Shenyang Agricultural University. In
addition to the scientific field, he used to serve as an independent director of Wellhope, vice president of Tiansanqi Group Co., Ltd. (Beijing), etc. Mr. Zhang Shuyi has made
Zhang Shuyi
great achievements in the field of science. He has been funded by the National Natural Science Foundation of China for Distinguished Young Scholars, supported by the
"Changjiang Rive Scholars" team project of the Ministry of Education, and been selected into the first and second levels of the National Millions of Talents Project, the
"Hundred Talents Program" of the Chinese Academy of Sciences, and the Climbing Scholars Program of Universities in Liaoning Province. He has been awarded special
government allowance of the State Council, second prize of national science and technology progress, first prize of natural science of Shanghai and other awards, etc.
Male, born in 1969, Chinese nationality, master of animal nutrition and feed science from the Chinese Academy of Agricultural Sciences, one of the founders of Wellhope. He
once worked in the teaching office of Shenyang Agricultural University and then worked in Continental Grain Company as the sales manager of Northeast China. After
founding Wellhope, he served successively as Business Manager, Deputy General Manager and General Manager of some subsidiaries. He served as the Director and
Wang Fengjiu
President of Wellhope for more than ten years, and later became the Vice President for developing food processing business. He is now the Chairman of the Supervisory
Board of the Company, and also serves as the Executive Vice President of Liaoning Agricultural Industrialization Association, the Vice President of Liaoning Catering and
Culinary Industry Association, the Vice President of Shenyang Food Association.
Male, born in 1967, Chinese nationality, bachelor of animal husbandry from Shenyang Agricultural University. He once worked at Shenyang Institute of Applied Ecology of
Chinese Academy of Sciences. He joined Wellhope in 1995 and served successively as Sales Manager and Deputy General Manager, General Managers of some subsidiaries
Wang Xueqiang
and Vice President of Wellhope. Mr. Wang Xueqiang is one of the important contributors to Wellhope's feed business management system. The Liaoning Region under his
leadership is now the benchmark of Wellhope's "quality management", also the base camp of Wellhope's business development and talent growth.
Male, born in 1970, Chinese nationality, master of management from Shenyang Agricultural University. Joining Wellhope in 1996, he served successively as Salesman, Sales
Manager, Deputy General Manager and General Manager of some subsidiaries, President of former Huakang Group, Chief Director of feed business in Jilin and Heilongjiang
Di Guo
regions, Secretary of the Board of Directors and Vice President of Wellhope. Mr. Di Guo has rich experiences in marketing and enterprise management, who has been
appointed to take on important responsibilities in times of crisis. He is an innovator of business development in Jilin and Heilongjiang regions.
Male, born in 1984, Chinese nationality, master's degree from Shanghai University of Finance and Economics, certified public accountant. From September 2009 to January
2017, he worked at KPMG Huazhen LLP, holding the positions such as auditor and audit department manager. From January 2017 to May 2019, he worked at New Northeast
Chen Yu
Electric Group, where he was in charge of financial management. From May 2019 to November 2021, he worked at Anhui Hetian Hospital Management Co., Ltd. as the chief
financial officer. Now he is the Director and Financial Director of Wellhope.
Male, born in 1964, Chinese nationality, Bachelor of Animal Husbandry in Shenyang Agricultural University, one of the founders of Wellhope. He once worked in Tianjin
Huajin Company as a technical director, a large state-owned enterprise, and the sales manager of six provinces in North China at CONTINENTAL GRAIN COMPANY(the US).
Wang Zhongtao After founding Wellhope, he served successively as Purchasing Manager, Financial Manager, General Manager, Chairman of the Supervisory Board, etc. Mr. Wang Zhongtao is
the most important contributor to the development and growth of Wellhope’s trading business. Over the past 20 years, Wellhope’s trading business has flourished, and the
business scale is among the top in China.
Marcus Leonardus van
Male, born in 1969, the Netherlands’ nationality, master's degree, CFO of Royal De Heus, supervisor of Wellhope.
der Kwaak
Male, born in 1972, Chinese nationality, master of business administration from Northeastern University. He used to be the export salesman of Shenyang Grain, Oil and Food
Li Jun
Import and Export Company, and the sales manager of Shenyang Tongfeng Trading Company. He joined Wellhope in 2004 and successively served as General Manager of
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several trading subsidiaries. Now he is the Director of Wellhope’s trading business, General Manager of Liaoning Expert Trading Company, and Supervisor of Wellhope. Mr. Li
Jun has been engaged in international trade for many years, who has rich experience in trading feed raw materials. He has made important contributions to the development
of Wellhope’s trading business.
Male, born in 1963, Chinese nationality, PhD in cell engineering from Ocean University of China. He joined Wellhope in 1998 and has served as Production Manager,
Technical Manager, ISO System Manager and Deputy General Manager. Now he holds the post of Technical Director of Wellhope’s broiler feed line. Mr. Ren Bingxin is the
Ren Bingxin
chief expert of Wellhope’s broiler feed products, with rich experience in feed production and research and development. He is an important participant and contributor to
the rapid development of Wellhope’s broiler integration business, and has obtained 2 authorized invention patents and 3 utility model patents during his tenure.
Female, born in 1970, Chinese nationality, bachelor's degree, senior auditor, joined Wellhope in 2004, served successively as Deputy Financial Manager of Liaoning
Yuan Minger
Wellhope, Financial Manager of Wellhope Aquatic Feed Company and Supervisor of Wellhope. Now she holds the posts of Audit Manager of Wellhope.
Other information notes:
On January 15, 2024, the Company held the 20th meeting of the 7th session of the Board of Directors and the 16th meeting of the 7th session of the Supervisory
Board to deliberate and approve the ''Proposal on the Election of a New Session of the Board of Directors'' and the ''Proposal on the Nomination of Candidates for
Non-Employee Representative Supervisors for the Eighth Session of the Supervisory Board '', respectively. The Board of Directors agreed to nominate Mr. Jin
Weidong, Mr. Jacobus Johannes de Heus, Mr. Qiu Jiahui, Ms. Shao Caimei, Ms. Zhao Xin and Mr. Chen Yu as candidates for non-independent directors of the 8th
session of the Board of Directors, and to nominate Ms. ZUO XIAOLEI, Ms. Jiang Yan and Mr. Zhang Shuyi as t candidates for independent directors. The Supervisory
Board agreed to nominate Mr. Wang Fengjiu and Mr. Marcus Leonardus van der Kwaak as candidates for non-employee representative supervisors of the 8th
session of the Supervisory Board. On January 19, 2024, a general meeting of the employee representatives of the Company was held, at which Mr. Li Jun was
elected as the employee representative supervisor of the 8th session of the Supervisory Board.
On February 1, 2024, the First Extraordinary General Meeting of 2024 was held to deliberate and approve the "Proposal on the Election of Non-Independent
Directors of the 8th Session of the Board of Directors", "Proposal on the Election of Independent Directors of the 8th Session of the Board of Directors" and
"Proposal on the Election of Non-Employee Representatives of the 8th Session of the Supervisory Board ", Mr. Jin Weidong, Mr. Jacobus Johannes de Heus, Mr. Qiu
Jiahui, Ms. Shao Caimei, Ms. Zhao Xin and Mr. Chen Yu were elected as non-independent directors, and Ms. ZUO XIAOLEI, Ms. Jiang Yan and Mr. Zhang Shuyi were
elected as independent directors. The term of office would be three years from the date of approval at the first extraordinary general meeting of 2024. On the
same day, the first meeting of the 8th session of the Board of Directors was convened to deliberate and approve the ''Proposal on the Election of the Chairman of
the 8th Session of the Board of Directors'' and ''Proposal on the Appointment of Senior Management of the Company'', at which the Board of Directors agreed to
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Wellhope Foods Co., Ltd. 2023 Annual Report
elect Mr. Jin Weidong as the Chairman of the Board, agreed to appoint Mr. Qiu Jiahui as the President of the Company, Ms. Zhao Xin and Mr. Jin Ge as the Vice
Presidents, and appointed Mr. Chen Yu as the Financial Director and Secretary of the Board, with the term of office commencing from the date of deliberation and
approval by the Board of Directors to the date of expiry of the 8th session of the Board of Directors, of which the appointment of Mr. Chen Yu as the Secretary of
the Board will take effect formally upon obtaining the Certificate of Qualification for Secretary of the Board of Directors issued by Shanghai Stock Exchange. On the
same day, the first meeting of the 8th session of the Supervisory Board was held to deliberate and approve the ''Proposal on the Election of the Chairman of the
8th Session of the Supervisory Committee of the Company''. The Supervisory Committee agreed to elect Mr. Wang Fengjiu as the chairman of the 8th session of
the Supervisory Board, with a term of office commencing from the date of deliberation and approval by the Supervisory Board to the date of expiry of the 8th
session of the Supervisory Board.
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Wellhope Foods Co., Ltd. 2023 Annual Report
2.Post held by ongoing and outgoing directors, supervisors and senior managers in other entity
Post in other entities
Start of End of
Name Other entity Post
tenure tenure
Head of Animal
Shenyang Agricultural Husbandry and
Zhang Shuyi 2016
University Veterinary
Science
Wuxi Kezhiqian
Zhang Shuyi Executive director 2012
Technology Company
Liaoning Petmate Bio-tech
Zhang Shuyi Board director 2016
Company
Independent
Jiang Yan Weichai Power Co., Ltd. 2020
director
Jacobus Johannes de
Royal De Heus Company CEO 2002
Heus
Marcus Leonardus
Royal De Heus Company CFO 2001
van der Kwaak
Beijing Huikezhongda
Jin Weidong Information Consulting Board director 2020
Company
Changzhou Sangdichuan
Jin Weidong Agricultural Development Executive director 2021
Company
Liaoning Guowei Industrial
Jin Weidong Board director 2021
Group Company
3.Remuneration of Directors, Supervisors and Senior Management
According to the Company's performance appraisal
Decision-making procedure for management, related regulations and the stipulations of the
remuneration Remuneration and Performance Appraisal Committee of the
Board of Directors.
Whether a director recuses
himself/herself from the Board's
Yes
discussion of his/her own
remuneration matters
Details of the recommendations
made by the Remuneration and
The Remuneration and Appraisal Committee reviewed the
Appraisal Committee or the special
remuneration of directors and executives in conjunction with the
meeting of independent directors in
Company's remuneration evaluation standards and submitted
respect of the remuneration of
them to the Board of Directors.
directors, supervisors and senior
management
According to the remuneration level in the industry, the
Company's business performance, job responsibilities, etc., and
in accordance with the work plan made by the Board of
Basis for determining remuneration
Directors at the beginning of the year, in combination with
individual’s work performance and other qualitative and
quantitative indicators.
Paying in accordance with the annual performance of the
Actual payment Company, the work performance of senior managers and
management ability, etc.
Total remuneration during the Totally paid CNY 8.17 million to board directors, supervisory
reporting period board directors and senior managers.
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Wellhope Foods Co., Ltd. 2023 Annual Report
IV.Board Meetings held in the Reporting Period
Meeting Date Resolution
The 15th meeting of the 7th No. 2023-005
Mar. 29, 2023
session of Board of Directors announcement--meeting resolution
The 16th meeting of the 7th No. 2023-025 announcement
Apr. 26, 2023
session of Board of Directors --meeting resolution
The 17th meeting of the 7th No. 2023-044 announcement
Aug. 14, 2023
session of Board of Directors --meeting resolution
The 18th meeting of the 7th No. 2023-054 announcement
Oct. 26, 2023
session of Board of Directors --meeting resolution
V.Performance of Duties of Directors
1.Circumstance of attending board meeting and shareholders’ meeting
Shareholders'
Attendance of Board Meeting
Meeting
Whether
Number
Independent continually
of board Number of
Name director or Via Number fail to
meetings Physical Via general
not Tele- of physically
required presence proxy meeting
communi absences attend the
to attend attended
meeting
this year
two times
Jin Weidong No 4 4 2 0 0 no 1
Qiu Jiahui No 4 4 2 0 0 no 1
Jacobus
Johannes de No 4 4 4 0 0 no 0
Heus
Shao Caimei No 4 4 2 0 0 no 2
Zhang Wenliang No 4 4 3 0 0 no 2
Zhao Xin No 4 4 0 0 0 no 2
ZUO XIAOLEI Yes 4 4 4 0 0 no 1
Jiang Yan Yes 4 4 4 0 0 no 2
Zhang Shuyi Yes 4 4 1 0 0 no 2
Number of board meetings held this year 4
Including on-site meeting 0
Number of meetings held via telecommunication 0
Number of meetings held via on-site meeting and
4
telecommunication
2.Member of Special Committee of Board of Directors
Committee Member
Audit committee Jiang Yan(head), ZUO XIAOLEI, Zhang Wenliang
Nominating committee ZUO XIAOLEI(head), Zhang Shuyi, Shao Caimei
Compensation and appraisal committee Zhang Shuyi(head), Jiang Yan, Zhao Xin
Jin Weidong(head), Jacobus Johannes de Heus, Qiu Jiahui,
Strategy committee Zhang Wenliang, ZUO XIAOLEI
3.Meetings held by the audit committee in the reporting period
Important comments
Date Agenda Other circumstance
and suggestions
Mar. 24, 2023 To deliberate 2022 Agree to all proposals Non
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Wellhope Foods Co., Ltd. 2023 Annual Report
Annual Report, and submit them to
Renewing Contract the Board of Directors
with Accounting Firm,
2022 Audit Committee
Performance Report,
2022 Internal Control
Evaluation Report and
2022 Special Report of
the Deposit and Use of
Raised Funds
Agree to all proposals
To deliberate 2023 First
Apr. 21, 2023 and submit them to Non
Quarter Report
the Board of Directors
To deliberate 2023
Interim Report and
Agree to all proposals
Special Report of the
Aug. 10, 2023 and submit them to Non
Deposit and Use of
the Board of Directors
Raised Funds in the
first half of 2023
To deliberate 2023
Third Quarter Report Agree to all proposals
Oct. 24, 2023 and the Extension of and submit them to Non
Part of Raised Funds the Board of Directors
Investment Projects
4.Meetings held by the nominating committee in the reporting period
Important comments
Date Agenda Other circumstance
and suggestions
To deliberate
Candidates for
Independent Directors
Agree to all proposals
and Candidates for
Dec. 25, 2023 and submit them to Non
Non-Independent
the Board of Directors
Directors for the 8th
Session of the Board of
Directors
5.Meetings held by the compensation and appraisal committee
Important comments
Date Agenda Other circumstance
and suggestions
To deliberate Annual
Agree to all proposals
Compensation of
Mar. 20, 2023 and submit them to Non
Directors and Senior
the Board of Directors
Managers
VI.Employees of the Parent Company and Major Subsidiaries
1.Headcount
Full time employee of parent company 271
Full time employee of major subsidiaries 8,700
Total full-time employees 8,971
The number of retired employees whose expenses are
10
borne by the parent company and major subsidiaries
Functions
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Wellhope Foods Co., Ltd. 2023 Annual Report
Line Employees
Production 3,622
Sales 2,720
Technology 882
Finance 458
Administration 1,289
Total 8,971
Educational backgrounds
Educational background Employees
Master's degree and above 490
Bachelor's degree 2,956
Junior college 2,649
Below junior college 2,876
Total 8,971
2.Remuneration policy
Wellhope always adheres to the human resources strategy of providing a fair, equitable and
merit-based remuneration environment for employees, and builds a comprehensive remuneration and
performance incentive system based on salary policy, appointment management, short-term and
long-term incentive and welfare protection, and implements a remuneration management system with
fairness, incentive and competitiveness, and closely link employees' personal remuneration to overall
and individual performance, and determine the total amount of individual remuneration according to
the results of business performance and individual performance evaluation, so as to encourage
employees to continuously exercise their individual motivation and ultimately realize a win-win
situation for both the Company and the employees.
In 2023, the overall market environment was sluggish, and the Company endeavored to operate and
safeguard employee compensation and benefits. On this basis, the Company further promoted the
implementation of comprehensive performance management and applied process tracking to annual
performance, with a strong correlation between annual compensation and the annual performance of
the organization and individual performance results. The Company continued to promote
compensation optimization projects in some business sectors and regions and to standardize basic
compensation management. Meanwhile, the Company strengthened internal and external salary
surveys and analyses, benchmarked industry pay standards, attracted and retained outstanding talent
through sound salary policies. The Company also continued to optimize appointment management
measures, selecting better managers through a scientific talent appointment system, demoting and
appointing employees ranked in the bottom 10%, and using positive and negative multi-dimensional
incentives. The Company formulated a special commendation program for strategic businesses, which
provided special commendation according to annual performance, guided and stimulated employees'
sense of honor, and promoted their career development and self-realization. The Company provided
employees with salaries and benefits that were competitive in the industry and regions, and offered
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Wellhope Foods Co., Ltd. 2023 Annual Report
employees social security and housing funds. It also provided other welfare benefits such as
commercial insurance and annual medical checkups for employees and their families, and enriched
employees' benefits through the "Wings of Love" charity foundation and other ways to achieve internal
resource sharing and improve satisfaction.
3.Training plan
Under the joint guidance of overall strategic planning and the strategic objectives of human resources
development, during the reporting period, the Company focused more on the value of training to
support and strengthen business and operations and paid more attention on the growth and cultivation
of key talents and core businesses, being pragmatic and efficient.
A. Focusing on business and empowerment. The Company implemented result orientation and
vigorously promoted the skills development of key personnel. During the year, more than 50 training
projects were carried out, covering business skills of large-scale farms, production and operation skills,
farming skills, front-line management skills, and back-office support skills, to help each business sector
and functional unit to effectively enhance job skills and improve performance.
B. Refining generality and exploring excellence. The Company implemented business orientation,
explored several excellent benchmarking cases on strategic issues such as large-scale farm development,
cost reduction and efficiency improvement, extracted experience and promoted replication, involving
more than 14,000 people. Meanwhile, the Company launched "continuous improvement" within the
Group, created 21 improvement projects and promoted their implementation in the field.
C. Strengthening the construction of key talent echelons. Based on the original talent training system,
the Company optimized the implementation of a multi-level and more precise training program for new
employees to accelerate the integration, adaptation, stability and development of newcomers. It
focused on the training of new managers from social recruitment and the training of reserve cadres,
covering more than 400 people, and launched a series of special courses in finance, technology and
human resources to improve back-office support. It also organized live learning for the middle and
senior management team of over 3,600 people to build consensus and synergies interlocking.
VII.Common Stock Profit Distribution or Capital Reserve Converted into Share Capital
1.Cash dividend
Focusing on long-term and sustainable development, the Company has established a sustainable, stable
and scientific return mechanism for investor based on a comprehensive analysis of the actual operation,
the requirements and wishes of shareholders, the cost of social funds and the external financing
environment, while taking full account of the current and future profitability, cash flow situation,
development stage, project investment needs, financing, bank loans and debt financing environment,
so as to ensure the continuity and stability of the dividend distribution policy. During the reporting
period, there was no change in the Company's dividend policy.
On May 26, 2023, the Company implemented the 2022 annual equity distribution and distributed cash
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Wellhope Foods Co., Ltd. 2023 Annual Report
dividend of CNY 1.20 (tax included) per 10 shares to all shareholders based on the total share capital of
the Company registered on the date of registration of the implementation of the equity distribution
(excluding the shares held in the Company's repurchase special account), for a total payment of CNY
107,817,202.80 cash dividends.
As audited by Suya Jincheng CPA LLP, the net profit attributable to equity shareholders of the Company
for FY2023 amounted to CNY -457,037,550.28. The accumulated undistributed profits of the parent
company as of December 31, 2023, amounted to CNY 2,634,168,817.92. In view of the negative net
profit attributable to equity shareholders, which did not meet the conditions for payment of cash
dividends as set out in the Articles of Association of the Company, and taking into consideration the
long-term development plan and capital requirements of the Company, and in order to ensure the
sustainable, stable and healthy development of the Company, and to provide more stable and
long-term returns to investors, the Board of Directors of the Company has, after prudent consideration,
decided not to pay cash dividends for FY2023, and not to make any capitalization of additional paid-in
capital.
2.Special note on cash dividend policy
Whether it complies with the provisions of the articles of association or the Yes
requirements of the resolution of the general meeting
Whether the criteria and proportion of dividends are clear and unambiguous Yes
Whether the relevant decision-making procedures and mechanisms are complete Yes
Whether the independent directors have performed their duties and played their due Yes
roles
Whether small and medium-sized shareholders have sufficient opportunities to
express their opinions and demands, and whether their legitimate rights and interests Yes
are fully protected
VIII.Status of the Company's Share Incentive Scheme, Employee Share Ownership Scheme or other
Employee Incentives and their Impacts
1.Appraisal mechanism for senior management personnel and the establishment and
implementation of incentive mechanism during the reporting period
The annual performance appraisal of senior management personnel is conducted in accordance with
the actual operating conditions of the Company and implemented in accordance with the relevant
regulations of the Company.
IX.Internal Control System Construction and Implementation
The Company will disclose the evaluation report of internal control when discloses 2023 Annual Report.
Details, please refer to the website of Shanghai Stock Exchange (http://www.sse.com.cn).
X.Management and Control of Subsidiaries during the Reporting Period
The Company implemented internal control management on its subsidiaries in strict accordance with
relevant provisions of laws and regulations. Through the management of the subsidiaries' operations,
human resources, finance, internal audit, information disclosure, investment and financing, business
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Wellhope Foods Co., Ltd. 2023 Annual Report
evaluation and other management measures, the Company controlled the risk of subsidiaries. Each
subsidiary uniformly implemented the standards and regulations issued by the Company, and
established business plans and risk management procedures in accordance with the Company's overall
development strategic planning and annual business plan. Each subsidiary reported major business and
financial events to the Company's responsible person in a timely manner and reported major events to
the Company's Board of Directors or General Meeting, in accordance with the major event reporting
rules and review procedures. During the reporting period, the subsidiaries operated stably, the
Company has no major deficiencies in the management and control of the subsidiaries, and the
internal control of the subsidiaries has been effectively implemented.
XI.Explanation of Audit Report for Internal Control
SuyaJincheng CPA LLP issued the Audit Report, put forward that Wellhope has maintained effective
internal control over financial reports in all major aspects on December 31, 2023, in accordance with
relevant regulations. Details, please refer to the website of Shanghai Stock Exchange
(http://www.sse.com.cn).
Disclosure of internal control audit reports: Yes
Type of opinion on internal control audit reports: unmodified opinion
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Wellhope Foods Co., Ltd. 2023 Annual Report
Section V Environment and Social Responsibility
I.Environment information
Whether to establish mechanisms related to
Yes
environmental protection
Investment in environmental protection during
6.99
the reporting period (CNY million)
1.Description of the environmental protection situation of the Company and its principal subsidiaries
that are key emission units announced by the environmental protection authorities
A.Pollutant-discharging information
The subsidiaries of the Company, including, Puyang Wellhope Food Company (hereinafter referred to as
Puyang Wellhope), Dalian Zhongjia Wellhope Food Company (hereinafter referred to as Zhongjia Food),
Dalian Huakang Xinxin Food Company (hereinafter referred to as Dalian Huakang), Shenyang Huakang
Broiler Company (hereinafter referred to as Shenyang Huakang), Pingyuan Wellhope Food Processing
Company (hereinafter referred to as Pingyuan Wellhope), Changchun Wellhope Food Company
(hereinafter referred to as Changchun Wellhope), Chifeng Wellhope Fuxinyuan Food Company
(hereinafter referred to as Chifeng Wellhope), Shandong Heyuan Food Company (hereinafter referred
to as Shandong Heyuan), Dunhua Fengda Agriculture and Animal Husbandry Development Company
(hereinafter referred to as Dunhua Fengda), Daqing Wellhope Food Company (hereinafter referred to as
Daqing Wellhope), Hebei Taihang Wellhope Food Company (hereinafter referred to as Taihang
Wellhope), and Anhui Wellhope Food Company (hereinafter referred to as Anhui Wellhope), have been
designated by local environmental protection bureaus as the pollution dischargers. The details are set
below.
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Wellhope Foods Co., Ltd. 2023 Annual Report
Number of
Distribution of Total approved Whether discharge
Company Primary pollutants Way of discharge discharge Emission concentration Pollutant discharge standards Total emissions
outlets emissions excessive pollutants
outlet
1 wastewater
emission outlet
located in the
Wastewater (COD, ammonia southeast corner
Waste gas—directly COD: 40.045mg/L
nitrogen, total phosphorus, of the sewage
discharged after Ammonia nitrogen: 2.037mg/L Discharge Standard of Water Pollutants for Meat
PH, suspended solids, 1 outlet for monitoring
treatment, Total phosphorus: 0.786mg/L Processing Industry (GB 13457-1992) COD: 19.254753t/a COD: 72.48t/a
Puyang biochemical oxygen demand, waste gas, 1 station, 1 waste
waste water-- Total nitrogen: 16.172mg/L Boiler Air Pollutant Emission Standard (GB Ammonia nitrogen: Ammonia nitrogen: No
Wellhope animal and plant oil, total for gas exhaust
indirectly SO2: 0mg/m 13271-2014) 0.980831t/a 5.436t/a
coliform, total nitrogen). wastewater outlet
discharged Nitrogen oxides: 22mg/m
Waste gas (SO2, nitric oxide, distributed in the
Particulate matter: 3.4mg/m
particulate matter) boiler room in
the northeast
corner of the
factory
Wastewater
enters the
COD: 41.35mg/L
Wastewater (COD, ammonia sewage plant
Waste gas—directly Ammonia nitrogen: 1.98mg/L
nitrogen, total phosphorus, through the Comprehensive Wastewater Discharge Standard of
discharged after 1 outlet for Total nitrogen: 21.46mg/L
PH, suspended solids, pump, the Liaoning Province (DB 21/1627-2008)
Zhongjia treatment, waste gas, 1 Total phosphorus: 2.64mg/L Simplify management without
biochemical oxygen demand, exhaust gas Boiler Air Pollutant Emission Standard (GB Non No
Food waste water-- for PH value: 7.27 emissions
total nitrogen). outlet is 13271-2014)
discharged into wastewater Particulate matter: 22.9mg/m
Waste gas (SO2, nitric oxide, distributed in the
sewage works Sulfur dioxide: 209mg/m
particulate matter) boiler house on
Nitrogen oxides: 132mg/m
the north side of
the company
Wastewater
discharge outlet
Wastewater (COD, ammonia, is distributed in COD: 300mg/L Comprehensive Wastewater Discharge Standard of
total phosphorus, PH, Waste the southeast Ammonia nitrogen: 25mg/L Liaoning Province (DB 21/1627-2008) and Discharge
suspended solids, total water—discharged 3 outlets for corner of the Total phosphorus: 4mg/L Standard of Water Pollutants for Meat Processing Wastewater discharged into
Dalian nitrogen, five-day biochemical into the network waste gas, 1 factory's sewage Total nitrogen: 35mg/L Industry (GB 13457-1992) the network, no emissions,
Non No
Huakang oxygen demand, animal and after treatment, for treatment PH value: 6.0-8.5 Emission Standards for Odor Pollutants used the biomass boiler, no
vegetable oils). waste gas—directly wastewater workshop, BOD: 250mg/L (GB14554-93) and Boiler Air Pollutant Emission exhaust gas emissions
Waste gas (SO2, nitric oxide, discharged exhaust gas Suspended matter: 250mg/L Standard (GB 13271-2014)
particulate matter) outlet is located Animal and vegetable oil: 50mg/L
on the roof of
the boiler house
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Wellhope Foods Co., Ltd. 2023 Annual Report
Wastewater COD: 450mg/L
discharge outlet Animal and vegetable oil: 60mg/L
Wastewater (5 days is distributed in Five-day biochemical oxygen demand:
biochemical oxygen demand, Waste gas—directly the southeast 250mg/L
Comprehensive Wastewater Discharge Standard of
total nitrogen, suspended discharged after corner of the Total nitrogen: 50mg/L
Liaoning Province (DB 21/1627-2008) and Discharge COD: 118.27t/a
solids, animal and vegetable treatment, 1 outlet for factory's sewage Ammonia: 30mg/L COD: 7.0846t/a
Standard of Water Pollutants for Meat Processing Ammonia nitrogen:
Shenyang oils, ammonia, PH, COD, total waste water-- waste gas, 1 monitoring base Suspended solids: 300mg/L Ammonia nitrogen: 0.419t/a
Industry (GB 13457-1992) 32.76t/a No
Huakang phosphorus). Waste gas discharged into the for station, exhaust PH value: 6.0-8.5 Sulfur dioxide: 0.60415t/a
Comprehensive Emission Standards for Air Sulfur dioxide: 5.268t/a
(particulate matter, sulfur municipal network wastewater gas outlet is Total phosphorus: 5mg/L Nitrogen oxides: 1.655t/a
Pollutants (GB 16297-1996) and Emission Standards Nitrogen oxides: 5.506t/a
dioxide, nitrogen oxides, after treatment located at the Sulfur dioxide: 200mg/m
for Odor Pollutants (GB14554-93)
smoke blackness, mercury and boiler house in Blackness of flue gas: Grade 1
its compounds) the northeast Mercury and its compounds:
corner of the 0.05mg/m
boiler house Particulate matter: 30mg/m
Nitrogen oxides: 200mg/m
Wastewater
outlet is
distributed in the
old sewage
monitoring
Ammonia: 4mg/L
station on the
Wastewater (COD, ammonia, COD: 50mg/L
east side of the
total phosphorus, PH, PH value: 7.6-7.8
Waste gas—directly station, exhaust Discharge Standard of Water Pollutants for Meat
suspended solids, biochemical Suspended matter: 16mg/L
discharged via gas outlets are Processing Industry (GB 13457-1992) and inlet
oxygen demand, animal and 6 outlets for Animal and vegetable oil: 0.73mg/L COD: 3.78t/a COD: 74.488t/a
natural gas boiler, distributed in the water quality requirements of Linzhang County
Pingyuan vegetable oils, total coliforms, waste gas, 1 SO2: 4mg/m Ammonia nitrogen: 0.76t/a Ammonia: 9.732t/a
waste east side of the Boiler Air Pollutant Emission Standard (GB No
Wellhope total nitrogen). for Nitrogen oxides: 13mg/m SO2: 0.07098t/a SO2:3.395t/a
water—indirectly boiler room, the 13271-2014), Emission Standards for Odor
Waste gas (SO2, nitrogen wastewater Particulate matter: 4.5mg/m Nitrogen oxides: 1.1216t/a Nitrogen oxides:3.789t/a
discharged roof of the Pollutants (GB14554-93) and Standard for Oil Smoke
oxides, particulate matter, oily Oil smoke: 1.6mg/m
canteen, the Emission in Catering Industry (GB18483-2001)
fumes, odors, hydrogen Odor: 531mg/m
north side of the
sulfide, ammonia) Hydrogen sulfide: 0.20mg/m
sewage
Ammonia: 0.14mg/m
treatment
station, and the
east side of the
feather powder
workshop
COD: 14mg/L
Waste water (COD, ammonia Wastewater Suspended solids: 8mg/L Discharge Standard of Water Pollutants for Meat
Waste water--
nitrogen, total phosphorus, discharge outlet Coliforms: not detected Processing Industry (GB 13457-1992) and starting
discharged after COD: 12.619t/a
Changchun PH, suspended matter, 1 outlet for is distributed in PH value: 7.96 from February 2021, implemented Changchun City's COD: 3.487t/a
entering the Ammonia nitrogen: No
Wellhope biochemical oxygen demand, wastewater the sewage Ammonia: 0.587mg/L ultra-low emission standards, within 1mg/L for Ammonia nitrogen: 0.104t/a
sewage treatment 2.524t/a
animal and vegetable oils, monitoring Five-day biochemical oxygen demand: ammonia nitrogen and 0.4mg/L for total
station
total nitrogen) station 2.7mg/L phosphorus
Animal and vegetable oil: 0.17mg/L
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Wellhope Foods Co., Ltd. 2023 Annual Report
Wastewater
Wastewater (COD, ammonia
outlet is
nitrogen, total phosphorus, Wastewater--
distributed in the COD: 1000mg/L COD: 640.5t/a
Chifeng PH, suspended solids, five-day indirectly 1 outlet for Discharge Standard of Water Pollutants for Meat COD: 3.4t/a
east side of the Ammonia nitrogen: unlimited Ammonia nitrogen: No
Wellhope biochemical oxygen demand, discharged wastewater Processing Industry (GB 13457-1992) Ammonia nitrogen: 0.06t/a
sewage PH value: 6-9 0.06t/a
animal and plant oil, total
monitoring base
coliforms, total nitrogen)
station
Wastewater
outlet is
distributed in the Anionic surfactant: 10mg/L
Wastewater (COD, suspended Wastewater— southeast side of PH value: 6.5-9.5
Discharge Standard of Water Pollutants for Meat
solids, coliform count, anionic discharged after the pool of the Ammonia nitrogen: 35mg/L
Processing Industry (GB 13457-1992) and Water
surfactants, ammonia, total entering the sewage COD: 500mg/L
1 outlet for Quality Standards for Sewage Discharge into Urban COD: 1485t/a
nitrogen, total phosphorus, sewage treatment treatment Total nitrogen: 45mg/L COD: 192.8t/a
Shandong waste gas, 1 Sewers (GB/T 31962-2015) Ammonia nitrogen:
PH, five-day biochemical plant, waste gas- station, the Animal and vegetable oil: 100mg/L Ammonia nitrogen: 17.35t/a No
Heyuan for Emission Standards for Odor Pollutants 103.95t/a
oxygen demand, animal and directly discharged exhaust gas Five-day biochemical oxygen demand: Total nitrogen: 27t/a
wastewater (GB14554-93) and Shandong Province Boiler Air Total nitrogen: 133.65t/a
vegetable oils, color). Waste after treatment outlet is 200mg/L
Pollutant Emission Standards (DB 37/2374-2018)
gas (particulate matter, sulfur distributed in the Suspended solids: 400mg/L
dioxide, nitrogen oxides) boiler house on Total phosphorus: 6mg/L
the northwest Color: 64
side of the Coliforms: 10000/l
factory
The waste gas
outlet is located
at the boiler COD: 100mg/L
Wastewater (COD, ammonia,
Waste gas—directly room on the Ammonia nitrogen: 20mg/L
total phosphorus, total
discharged after southeast side of PH value: 6-8.5 Discharge Standard of Water Pollutants for Meat
nitrogen, PH, suspended
treatment, 1 outlet for the plant, the Animal and vegetable oil: 20mg/L Processing Industry (GB 13457-1992)
solids, five-day biochemical
Dunhua wastewater— waste gas, 1 wastewater Five-day biochemical oxygen demand: Boiler Air Pollutant Emission Standard (GB COD: 37.8t/a
oxygen demand, animal and Non No
Fengda discharge after for outlet is located 40mg/L 13271-2014), Emission Standards for Odor Ammonia nitrogen: 7.56t/a
vegetable oils, total coliforms).
entering the wastewater on the north side Suspended solids: 100mg/L Pollutants (GB 14554-93) and Integrated Emission
Waste gas (SO2, nitrogen
sewage treatment of the cesspool Coliforms: 10000/l Standard of Air Pollutants (GB 16297-1996)
oxides, particulate matter,
plant of the SO2: 300mg/m
smoke blackness)
wastewater Nitrogen oxides: 300mg/m
treatment Particulate matter: 50mg/m
station
COD: 80mg/L
Wastewater (COD, ammonia,
Five-day biochemical oxygen demand:
PH, total dissolved solids (all
15mg/L
salts), five-day biochemical
Suspended solids: 50mg/L
oxygen demand, suspended Waste gas—directly
The waste gas Ammonia: 12mg/L
solids, total nitrogen, total discharged after Discharge Standard of Water Pollutants for Meat
outlet and Animal and vegetable oil: 5mg/L Particulate matter: 0.51t/a
phosphorus, animal and treatment, 1 outlet for Processing Industry (GB 13457-1992)
wastewater PH value: 6-8.5 SO2: 2.45t/a
Daqing vegetable oils, coliform waste water— waste gas, 1 Boiler Air Pollutant Emission Standard (GB
outlet are Total phosphorus: 0.5mg/L Nitrogen oxides: 3.06t/a Non No
Wellhope counts, anionic surfactants). discharge after for 13271-2014) and Emission Standards for Odor
located on the Coliforms: 10000/l COD: 56t/a
Waste gas (particulate matter, entering the wastewater Pollutants (GB 14554-93)
north side of the Anionic surfactant: 3mg/L Ammonia nitrogen: 8.4t/a
SO2, nitrogen oxides, flue gas sewage treatment
plant Total nitrogen: 16mg/L
blackness, hydrogen sulphide, plant
Particulate matter: 50mg/m
ammonia, odour
Nitrogen oxides: 300mg/m
concentration, soot, mercury
Sulfur dioxide: 300mg/m
and its compounds)
Mercury and its compounds: 0.05/m
Wastewater (COD, ammonia, Waste gas- directly 1 outlet for Wastewater COD: 50mg/L Discharge Standard of Water Pollutants for Meat COD: 1.609t/a COD: 97.798t/a
Taihang
total phosphorus, PH, discharged after waste gas, 1 outlet is Ammonia nitrogen: 8mg/L Processing Industry (GB 13457-1992) Ammonia nitrogen: 0.0382t/a Ammonia nitrogen: No
Wellhope
suspended solids, five-day treatment, for distributed in the Total phosphorus: 0.5mg/L Boiler Air Pollutant Emission Standard of Hebei Total nitrogen: 0.898t/a 15.648t/a
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BOD, animal and vegetable wastewater- wastewater northwest Total nitrogen: 15mg/L Province (DB13/5161-2020) Total phosphorus: 0.017t/a Total nitrogen: 29.340t/a
oils, total coliforms, total indirectly corner of the Suspended solids: 10mg/L Total phosphorus:
nitrogen); Wastewater (SO2, discharged sewage Five-day biochemical oxygen demand: 0.987t/a
NOx, particulate matter) monitoring base 10mg/L
station, waste Animal and vegetable oil: 1mg/L
gas is distributed
in the northwest
corner at the
boiler room
Wastewater
Wastewater (5-day BOD, outlet is located
suspended solids, animal and Waste gas- directly in the southeast COD: 46mg/L
Discharge Standard of Water Pollutants for Meat
vegetable oils, ammonia, PH, discharged after 1 outlet for corner of the Ammonia nitrogen: 0.58mg/L
Processing Industry (GB 13457-1992) COD: 381.55t/a
Anhui COD, E. coli); Wastewater treatment, waste gas, 1 sewage station, Low concentration of particulate COD: 5.8t/a
Boiler Air Pollutant Emission Standard (GB Ammonia nitrogen: No
Wellhope (other characteristic pollutants wastewater- for exhaust gas matter: 12.3mg/m Ammonia nitrogen: 0.78t/a
13271-2014) 22.89t/a
such as particulate matter, discharged after wastewater outlet is located Nitrogen oxides: 24mg/m
sulfur dioxide, nitrogen oxides, treatment in the northwest Sulfur dioxide: Not detected
Ringelmann blackness) corner of the
sewage station
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B.Circumstance of building and operating pollution control facilities
Puyang Wellhope
a. Wastewater treatment: Puyang Wellhope has a 2,000-ton-per-day treatment station, which uses the
"pretreatment-oil separation-A2O-disinfection" treatment process to treat wastewater. Its
environmental protection facilities are operating normally, and the pollutant emission indexes have met
the required standards.
b. Waste gas treatment: Gas generated from the wastewater tank is collected and purified by alkali
scrubbing tower and activated carbon adsorption, and then discharged through a 25-metre-high stack
in accordance with relevant standard. The waste gas from the slaughtering shed, and broiler suspension
platform is collected and treated by alkali scrubbing tower and activated carbon adsorption and
purification and then discharged through a 15-meter-high stack. The traditional coal-fired boilers have
been replaced by gas-fired boilers, and low nitrogen upgrading has been carried out, all kinds of
pollutants have met the emission standards and discharged through an 8-meter-high stack.
Zhongjia Food
a. Wastewater treatment: Zhongjia Food has a 1,200-ton-per-day treatment station, which uses the
"mechanical barrier-oil separator-regulation pool-hydrolysis pool- catalytic oxidation
pool-sedimentation pool-sand filter" treatment process to treat wastewater, and the pollutant emission
indexes have met the required standards.
b. Waste gas treatment: Waste gas from the company’s 4T coal-fired boilers is dedusting smoke and
dust by wet method and magnesium oxide desulfurization, and then discharged through a
25-meter-high stack to meet the emission standards.
Dalian Huakang
a. Wastewater treatment: Dalian Huakang has a 1,500-ton-per-day treatment station that adopts the
treatment process of "mechanical barrier-oil separator-regulation pool-air flotation-hydrolysis
pool-A2O-sedimentation pool-advanced treatment pool-clean water pool", which have met required
standards.
b. Waste gas treatment: Waste gas from the company’s biomass boiler is dedusting smoke and dust by
wet method and magnesium oxide desulfurization, then discharged through a 36-meter-high stack to
meet the emission standards. The waste gas generated during the production process of
slaughterhouse and wastewater treatment station have complied with emission standards.
Shenyang Huakang
a. Wastewater treatment: Shenyang Huakang has a 2,220-ton-per-day treatment station, which adopts
the treatment process of "pretreatment-oil separation-A2O-secondary sedimentation tank- flocculation
dephosphorization sedimentation tank (advanced treatment process)" to treat wastewater. Its
environmental protection facilities are running normally, and the pollutant emission indexes have met
all required standards.
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b. Waste gas treatment: Waste gas from the company’s 4T biomass boiler is treated by the bag filter,
then discharged through a 35-meter-high stack to meet related standards.
Pingyuan Wellhope
a. Wastewater treatment: Pingyuan Wellhope has a 1,000-ton-per-day treatment station, which adopts
AO treatment process to treat wastewater. Its environmental protection facilities are operating normally,
and the pollutant emission indexes have met all required standards.
b. Waste gas treatment: Gas generated from the wastewater tank is collected and purified by activated
carbon adsorption and then discharged through a 15-meter-high stack. The traditional coal-fired boilers
have been replaced by low-carbon gas-fired boilers, and the exhaust gas from boilers discharged
through a 12-meter-high stack, all types of pollutants have met the emission standards.
Changchun Wellhope
Wastewater treatment: Changchun Wellhope has a 1,000-ton-per-day treatment station, which adopts
the treatment process of “air flotation-A2O” to treat wastewater. Its environmental protection facilities
are operating normally, and the pollutant emission indexes have met all required standards.
Chifeng Wellhope
Wastewater treatment: Chifeng Wellhope has a 2,400-ton-per-day treatment station, which adopts the
A2O treatment process. The equipment and facilities are operating normally, which can automatically
monitor the COD, ammonia nitrogen, PH value and flow of wastewater discharge, and it is networked
with the city's environmental protection bureau. The company has also constructed a biogas project
with a daily output of 8,000 m, which can ferment wastewater, livestock and poultry gastrointestinal
contents, manure and the remaining solids of harmless treatment, the marsh gas can be used for boiler
production, biogas residue and slurry used as fertilizer for grain.
Shandong Heyuan
a. Wastewater treatment: Shandong Heyuan has a 2,000-tons-per-day sewage treatment station, which
adopts AO treatment process to treat wastewater. Its environmental protection facilities are operating
normally, and the pollutant emission indexes have met all required standards.
b. Waste gas treatment: Gas generated from the wastewater tank is collected and purified by activated
carbon adsorption and then discharged through a 15-meter-high stack. The traditional coal-fired boilers
have been replaced by gas-fired boilers, which discharge gas by a 10-meter-high stack. All kinds of
pollutants have met the emission standards.
Dunhua Fengda
a. Wastewater treatment: Dunhua Fengda has an 800-ton-per-day treatment station, which adopts the
treatment process of air flotation-A2O to treat wastewater. Its environmental protection facilities are
operating normally, and the pollutant emission indexes have met all required standards.
b. Waste gas treatment: The gas produced from the boiler discharged through a 20-meter-high stack
after dust removal by cloth bags. The traditional coal-fired boilers have been replaced by biomass
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boilers, which discharge gas by a 20-meter-high stack. All types of pollutants have met the emission
standards.
Daqing Wellhope
a. Wastewater treatment: Daqing Wellhope has a 500-ton-per-day treatment station, which adopts the
A2O treatment process to treat wastewater. Its environmental protection facilities are operating
normally, and the pollutant emission indexes have met all required standards.
b. Waste gas treatment: Waste gas from the company’s 4T biomass boiler is removed by the bag filter
and multi-tube ceramic dust collector, then discharged by exhaust funnel. All types of pollutants have
met the emission standards.
Taihang Wellhope
a. Wastewater treatment: Taihang Wellhope has a 3,500-ton-per-day treatment station, the second
phase of the plant also has a 3,500-ton-per-day treatment station, the whole treatment scale will reach
7,000 tons per day, which adopts the grate-grease trap-regulation-air flotation-hydrolysis
acidification-anoxic-contact oxidation-phosphorus removal and coagulation process. Its environmental
protection facilities are operating normally, and the pollutant emission indexes have met all required
standards.
b. Waste gas treatment: Based on the treatment of a set of chemical scrubbing and absorption plus
biological filtration device, the waste gas is removed through 15-metre-high exhaust pipe emissions.
The boiler adopts low-nitrogen and eco-friendly natural gas boiler, and the low-carbon combustion flue
gas is discharged through no less than 15-meter-high stack. The pollutant emissions comply with the
requirements of the gas boiler emission concentration limits.
Anhui Wellhope
a. Wastewater treatment: Anhui Wellhope has an 1,800-ton-per-day treatment station, which adopts
the treatment process of grating pre-treatment -oil separation-hydrolysis acidification-A/O
process-disinfection to treat wastewater. Its environmental protection facilities are operating normally,
and the pollutant emission indexes have met all required standards.
b. Waste gas treatment: The waste gas is discharged to the standard through a 15-metre-high stack
after collection, two-stage treatment of alkali washing tower and active biological mould purification.
The company uses low-nitrogen eco-friendly boilers, which discharge gas by an 8-meter-high stack, the
pollutants have met the emission standards.
C.Environmental impact assessment of construction projects and other administrative permits for
environmental protection
During the reporting period, all the construction projects of the Company met the requirements of
environmental impact assessment and other environmental protection administrative licenses. The
Company has strictly implemented related environmental protection requirements.
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D.Emergency plan for environmental incident
According to the requirements of environmental protection authorities and relevant laws and
regulations, each factory of the Company has identified the site with potential environmental risk and
formulated the emergency plans for environmental incident. Meanwhile, related companies conducted
emergency exercises to improve self-rescue ability and continued to identify the hidden danger to
ensure normal operations.
E.Self-monitoring program for environment
In accordance with requirements of self-monitoring environment and information disclosure, the
pollutant discharging entities of the Company have formulated self-monitoring programs to monitor
environment and disclose information as scheduled.
2.Description of the environmental protection situation of companies other than key emission units
A.Administrative penalties imposed on environmental issues
On December 11, 2023, Hainan Wellhope Company received an administrative penalty decision letter
from the Chengmai County’s Comprehensive Administrative Law Enforcement Bureau of Hainan
Province, imposing a fine of CNY 200,250 on the Company for putting into operation before acceptance.
On July 20, 2023, Wafangdian Huinong Poultry Company. received a decision on administrative penalty
from the Ecological Environment Sub-bureau of Wafangdian (Changxing Island) of Dalian City, imposing
a fine of CNY 50,000 on the Company for the broiler farms directly discharging untreated livestock and
poultry wastes into the environment. Related companies have initiated the rectification work quickly,
while comprehensively reviewing and standardizing the management related to environmental
protection. The Company will strictly implement environmental protection initiatives in accordance
with the relevant national environmental protection policies to prevent the recurrence of such
incidents.
B.Description of environmental protection of other subsidiaries
A.Information that is conducive to protecting the ecology, preventing pollution, and fulfilling
environmental responsibility
While strengthening safety production, the Company has always advocated the concept of green
environmental protection and effectively fulfilled its responsibility to protect environment. The
Company and its holding companies have made long-term efforts to protect the ecology and prevent
pollution in farming, slaughtering and food processing. In terms of preventing water pollution, the
wastewater treatment plants of the farms and slaughterhouses met all standards and operated stably
throughout the year to meet discharge standards and ensure the water environment. With regard to
the prevention of air pollution, the abattoirs and farms have been equipped with biomass boilers and
natural gas boilers, which produce significantly less carbon oxides and nitrogen oxides than other fuels,
and do not require desulphurisation and denitrification technologies, which can fully ensure that pp
emissions meet the standards. In terms of preventing the pollution from farming waste emission, the
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Company has built the organic fertilizer project, which could quickly and conveniently convert farming
waste into efficient organic fertilizer through modern biotechnology, so that farming waste could be
resourcefully used to realize recycling.
B.Measures taken to reduce carbon footprint and the result in the reporting period
Whether taking carbon reduction measures Yes
Types of carbon reduction measures (e.g., using
clean energy to generate electricity, using carbon
Using carbon reduction technologies in the
reduction technologies in the production process,
production process
developing and producing new products that
contribute to carbon reduction, etc.)
During the reporting period, the Company focused on the source of carbon emissions and effectively
reduced its carbon footprint through practical measures. The Company and its holding companies use
natural gas boilers, and the carbon generated by the combustion of natural gas are significantly lower
than those of other fuels. In terms of broiler business, the Company adopts refrigeration heat recovery
technology, which can recover the waste heat from the exhaust of refrigeration compressors and from
oil temperature and heat the water in the workshop and other equipment through heat exchangers,
thus saving fuel and effectively reducing carbon footprint. In terms of equipment, the aeration fan at
the wastewater treatment plant was changed from a Roots blower to an air suspension fan to save 30%
of electricity and reduce carbon emissions from electricity generation. In terms of pig farming, the
Company strengthened the energy-saving design of pig house, pre-heated the air during winter
ventilation, reduced the use of heating gas through heat exchange, and introduced environmental
controllers to precisely control the start and stop of fans, which reduced electricity consumption
compared to the long running of fans, and reduced the carbon emissions generated by power
generation. In the future, the Company will continue to save energy and reduce carbon emissions, as
well as raise awareness of energy conservation and consumption reduction among all employees.
II.Social responsibilities
1. Specifics of social responsibility efforts
External donations, public
Amount Explanation
welfare projects
Scholarship, public welfare,
Total investment (CNY million) 4.339 poverty alleviation and other
donations
Of which: funds (CNY million) 4.339
Converted price of materials
/
(CNY 10k)
The upstream of agriculture and animal husbandry industries is connected with the planting industry,
and the downstream serves the agricultural and food processing industry, which is related to the food
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supply and farmers' income and other national livelihood. As a key leading enterprise of agricultural
integration, the Company wrote and announced the Declaration and Mission at the beginning of its
establishment in 1995, which indicated and warned all employees of the social responsibility and
mission that the Company should shoulder while progressing and developing itself, and further clarified
the Company's core values of "Integrity, Responsibility and Win-Win" in 2018, once again emphasizing
the importance of responsibility.
1.Living the corporate mission, assuming social responsibility
A.Saving food resources and protecting the ecological environment
The largest raw materials used in animal feed are corn and soybean meal, of which soybean is mainly
dependent on imports. In recent years, with the increase in consumption of meat, eggs, milk and other
products, the scale of livestock and poultry farming in China continues to expand, and the demand for
feed grains continues to grow. Since 2018, China has been vigorously promoting the reduction of the
use of corn and soybean meal in feed to ensure national food security. Adhering to the principle of
conserving food resources, the Company is actively building a diversified formulation system,
promoting multi-grain and multi-protein diets, increasing the amount of other meals by applying amino
acid balancing technology, and using wheat and brown rice to replace corn, so as to reduce feed's
dependence on food raw materials such as corn and soybean meal, conserve resources and contribute
to safeguarding national food security. As the livestock industry has an impact on the environment, the
Company has always been rigorous in implementing national environmental protection standards,
controlling the feed production process through technological innovation and investment in equipment,
while continuing to develop safe and eco-friendly diets to reduce the emission of heavy metals,
nitrogen and phosphorus. With regard to farming and slaughtering projects, the Company's subsidiaries
have comprehensively identified environmental risks in order to promptly repair and eliminate
potential problems, thereby promoting the healthy and sustainable development of the agricultural
industry.
B.Remembering corporate responsibility for food safety
In 2018, the Company positioned its long-term development objective as "being committed to
becoming the world's leading enterprise across agriculture, animal husbandry and food industries",
unswervingly pursuing the quality and safety of feed production and meat processing. For feed
production, the Company has established a quality management mechanism and inspection system
with three-level management at head office, business region and subsidiary companies, and strictly
implemented a series of quality standards such as Feed Quality and Safety Management Code,
Veterinary Medicine Production Quality Management Code and other internal standards to control raw
materials and feed products at all levels and established a traceability system. The Company has always
been committed to providing safe and high-quality products. Before the government officially
announced the ban on antibiotics in animal feed, the Company achieved a variety of feed products
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without antibiotics. In terms of farming and meat processing, the Company implements process
management in the farming process with unified production standards and feeding programs, and
constantly strengthens the quality management in the slaughtering and processing process, and
effectively implements all-in and all-out inspection and quarantine as well as drug residue testing to
ensure quality and safety. In terms of business mode, the Company has established a broiler industry
chain, implemented strict control of the whole process starting from feed, day-old chick to the
production and sales process. Through standardized management and streamlined operation, the
Company has consolidated the control of bio-safety, drug residue and in-process hygiene to achieve
traceable food safety. In the future, Wellhope will pay attention to food safety and provide safe and
high-quality products with a global vision.
C.Never forgetting the original purpose of entrepreneurship, being enthusiastic about public welfare
Wellhope’s corporate culture has always emphasized the mission of serving the society, insisting on
doing good to people and giving back to the society. Since its inception, the Company has always
supported public welfare and charitable ventures to the best of its ability. The Company and its
subsidiaries have made many donations to sudden disaster areas, support projects for the disabled, and
relevant educational institutions, either directly or through the Red Cross and other public welfare
organizations. The Company has also been actively involved in education and public welfare, donating
to build six hope middle and elementary schools, and continuing to provide education funds,
scholarships, grants and other support to nearly 30 colleges and universities across the country,
encouraging students of related professional colleges and universities to conduct scientific research and
innovation in their respective fields, and providing college students with opportunities for company
visits and internships during their vocations. In the future, the Company will continue to promote the
development of China's animal husbandry industry, support education and talent training, consolidate
the local poverty alleviation achievements, and practice the responsibilities of corporate citizenship
with down-to-earth actions.
D.Continuously attracting talent, promoting social employment
Talented people are the most important asset and valuable resource of Wellhope. According to the
development needs, the Company conducts social and campus recruitment every year to create jobs
for the society while promoting its own development. The international situation was complicated and
changeable in 2023, economic downward pressure and many other unfavorable factors increased the
pressure on social employment, the Company, on the basis of ensuring the employment of its own
employees, provided recruitment positions through various channels such as social recruitment and
campus recruitment to protect the employment of job seekers, also gave them systematic training to
promote the career development of talents.
2.Maintaining compliance and sharing the fruits of development
-For shareholders
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A.Improving corporate governance, comply withing information disclosure
In terms of internal governance, the Company has always adhered to honest management,
continuously improved its governance structure, and gradually established a scientific and efficient
decision-making, strategy implementation and supervision mechanism. With a clear division of labor,
authority and responsibility among the General Meeting, the Board of Directors, the Supervisory Board
and the Management, the Company has achieved a standardized, orderly and efficient operation. The
independent directors, the Supervisory Board and the special committees of the Board of Directors all
play key functional roles and perform their duties conscientiously, faithfully and diligently, thereby
enhancing the transparency of corporate governance and effectively safeguarding the legitimate rights
and interests of the Company and its shareholders. Meanwhile, during the reporting period, the
Company revised several internal management regulations to ensure compliance with the corporate
governance regulations. In terms of information disclosure, the Company has always attached
importance to information disclosure, formulated relevant systems and rules for internal
implementation based on information disclosure affairs management system, adhered to high-quality
information disclosure, disclosed the Company's annual report, interim report, quarterly report and
other important information in a timely manner through regular announcements and temporary
announcements, so as to provide investors with the Company's production and operating situation in a
fair and timely manner. For the sixth consecutive year, the Company's annual information disclosure
work received an A grade rating from the Shanghai Stock Exchange.
B.Enhancing information sharing and making every effort to reward shareholders
Based on the principle of "sharing the results", the Company has actively enhanced investors' returns
and shared the results of its operations through cash dividends and share buyback on the basis of
conscientiously implementing its development strategy and improving its management level. Since the
completion of the IPO in 2014, the Company has paid cash dividends for nine consecutive years,
effectively rewarding investors. The cumulative cash dividends amounted to CNY1.157 billion (including
the expenditure of CNY200 million in 2021 for the repurchase of the Company's shares, which is
deemed to be cash dividends). All funds raised from the IPO and the issuance of new shares to
designated shareholders in 2019 were returned to investors in the form of cash dividends. At the same
time, during the reporting period, the Company held three performance briefing sessions to provide
investors with a comprehensive introduction of the Company's operations, actively answered investors'
questions and popularized investor protection-related knowledge on the Company's official website
and self-media platforms to enhance information sharing with investors and strengthen investor
protection.
-For employees
A.Improving the compensation system, innovating incentives
In accordance with the human resources policy, the Company has established a comprehensive
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compensation and incentive system in terms of compensation policy, appointment management,
long-term and short-term incentives, and welfare protection, etc. In addition, the Company mobilizes
employees' enthusiasm and ensures internal equity by continuously optimizing the compensation
control mode and strengthening the salary research and result application of benchmark companies. At
the same time, the Company pays great attention to long-term incentives for high-performing
employees, which can fully mobilize the enthusiasm and sense of ownership of key talents and promote
the sustainable development of the Company during the industry downturn. The Company has also
implemented various incentive schemes in various business areas to continuously tap the internal drive
of employees and improve employee satisfaction.
B.Upgrading training system for career development
The Company has continuously improved the training management system in line with the overall
strategy and each business division’s strategy, providing courses and learning resources that are more
up-to-date and better suited to the practical needs of positions, to lead the growth and value
enhancement of employees. The Company has implemented a hierarchical training program in each
business region, including the Senior Management Training Series, Middle Management Training Camp,
Sales Backbone Training Camp, and New Employee Seedling Program, which covers talent growth and
learning development from senior management and general managers to middle and backbone
employees, helping each employee to achieve all-round improvement in job skills, management ability,
and professional knowledge. At the same time, the Company has established an "H-type" dual-channel
development plan, in which each employee can choose a management route or a technical route
according to his or her professional and future plans, and has the opportunity to switch between
channels during the development process, in order to make the best use of his or her talents and
promote the career development of employees.
C.Strengthening care and protection, building harmonious families together
In accordance with national laws, the Company provides five types of insurance and one type of
pension for its employees, as well as commercial insurance, annual medical examination and other
benefits for employees' families. In 2007, the Company established an internal public welfare
organization, the "Wings of Love" Foundation, to provide assistance, scholarships and care for
employees. For 17 years, the Company has insisted on rewarding employees' children for entering
national colleges and universities, encouraging employees to cultivate talents for the country and
society, insisting on subsidizing employees who encounter difficulties, and helping employees' families
to overcome difficulties. In addition, the Company organizes and arranges various forms of corporate
cultural activities every year to enrich the lives of employees and build a harmonious family of
Wellhope with care and dedication.
-For customers
A.Providing high quality products close to customers’ needs
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Adhering to the concept of "constantly developing new products and never sticking to the old ways",
the Company strictly controls the quality of its products. Through integrated operation, procurement of
high-quality raw materials, optimized formula design, professional quality management and intelligent
production, the Company provides society with high-quality and stable products to meet customers'
demand for safe and high-quality products. The R&D team always pays attention to market dynamics,
constantly upgrades products according to customers' needs and continuously develops new products.
All products are rigorously tested for performance by experimental farms before being launched to
provide reliable assurance to customers. For example, in response to changes in the pig farming market,
the Company has launched economical finisher feeds and high premix feeds, and in response to the
sluggish dairy market, the Company continues to develop tailor-made products, while helping
customers to implement cost reduction programs to generate revenue and improve efficiency.
B.Innovating technology services to achieve win-win goals
Following the concept of co-development with customers, the Company constantly innovates technical
services to vigorously provide farmers with systematic services such as farming technology, feeding
process, disease diagnosis and treatment, and market information, as well as integrated comprehensive
services and solutions such as farm management to help farmers improve their business philosophy
and farming level. In addition, the Company is actively innovating the online and remote service mode,
providing customers with efficient and accurate services such as technical guidance and skills training
through media tools such as live webcast and short video. By using self-media service platform to
provide customers with market analysis and farming tips, the Company helps customers to
continuously improve their farming knowledge and keep abreast of the market situation. Through a
professional and systematic service system, the Company can achieve a win-win situation with
customers.
III.Circumstance of promoting and expanding achievements in poverty alleviation and rural
revitalization
Poverty alleviation and rural revitalization
Amount/Content Explanation
projects
Total investment (CNY million) 7.82 See specific instructions below
Of which: funds (CNY million) 7.82 /
Converted price of materials (CNY 10k) / /
Forms of assistance (such as poverty
alleviation by developing industries, poverty alleviation by
/
offering job opportunities and supporting developing industry
education)
China has achieved a comprehensive victory in poverty alleviation, but there is still a long way to go in
consolidating and expanding the results of poverty alleviation and effectively linking rural revitalization.
The 2024 Work Report of the State Council Government proposes to relentlessly focus on the work of
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agriculture, rural areas, and rural residents, and firmly push forward the overall revitalization of the
countryside. Industrial revitalization is the top priority of rural revitalization and the starting point of
practical work. As an important leading enterprise in agricultural industrialization, the Company actively
participates in poverty alleviation by developing industry and helps the country to comprehensively
promote rural revitalization and accelerate the construction of a strong agricultural country.
During the reporting period, the Company's subsidiaries, Pingyuan Wellhope Food Processing Company,
Dalian Heyuan Animal Husbandry Company and Daqing Wellhope Food Company, cooperated with local
government to help revitalize the countryside in the impoverished areas by developing industries,
creating jobs for poor households, supporting poor families to participate in the Company's broiler
farming business, and helping farmers to increase income through dividends, with a total expenditure
of CNY 7.67 million. In addition, the Company's subsidiaries actively undertook tasks to support rural
revitalization and participated in the co-construction of local village enterprises to help improve the
health of the rural environment and improve rural production and living conditions.
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Section VI Important Disclosures
I.Execution of Commitment
Whether
Background there is a Validity of Whether
Type of Commitment Date of making
of making Content deadline the performs
commitment party commitment
commitment for commitment strictly
fulfillment
Nature person I warrant and commit that I will not directly or indirectly develop, operate
Horizontal shareholders or assist in the operation or participate in or engage in any activity that is
Long-term
competition holding more competitive with the business of Wellhope, if Wellhope will increase any March 2, 2011 Yes Yes
valid
management than 5% of the business scope after the date of signing this commitment, I promise to give
shares up the business.
Legal person
Our company warrants and commits that our company will not directly or
shareholders
Related party indirectly develop, operate or assist in the operation or participate in or
holding more Long-term
transaction engage in any activity that is competitive with the business of Wellhope, if March 2, 2011 Yes Yes
than 5% of the valid
management Wellhope will increase any business scope after the date of signing this
Commitment shares-Heli
commitment, our company promises to give up the business.
relating to Investment
IPO Jin Weidong,
The controlling shareholder Jin Weidong and persons acting in concert
Wang Fengjiu,
with him undertake that there are no false records, misleading statements
Shao Caimei, Long-term
Other or material omissions in the prospectus of IPO and its abstract, and shall March 2, 2011 Yes Yes
Wang valid
bear individual and joint legal liabilities for its authenticity, accuracy and
Zhongtao,
completeness.
Ding Yunfeng
The Company undertakes that there are no false records, misleading
statements or material omissions in the prospectus of IPO and its abstract, Long-term
Other Wellhope March 2, 2011 Yes Yes
and it shall bear individual and joint legal liabilities for its authenticity, valid
accuracy and completeness.
Measures taken by the Company for filling dilution resulting from issuing
bonds.
Commitment 1. Accelerating the implementation of fund-raising projects to enhance
Long-term
relating to Other The Company operational efficiency and profitability and reduce the risk of dilution. July 2, 2021 Yes Yes
2. Strengthening the management of fund-raising and ensure the valid
re-Financing
standardized and effective use of fund-raising.
3. Further strengthening business management and internal control,
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Wellhope Foods Co., Ltd. 2023 Annual Report
improving the efficiency of the Company's operations, reducing operating
costs, comprehensively and effectively controlling the operational and
management risks.
4. Strictly implementing the Company's dividend policy, strengthening the
investor return mechanism to protect the interests of the Company's
shareholders, especially the small and medium-sized shareholders. Future
operating results are affected by a variety of macro and micro factors and
are subject to uncertainty, and the measures taken by the Company for
filling dilution are not equivalent to guaranteeing the Company's future
profits.
5. To establish a more effective incentive and competition mechanism as
well as a scientific, reasonable and practical talent introduction and
training mechanism, to build a market-oriented talent operation mode,
and to provide a reliable talent guarantee for the sustainable development
of the Company.
To ensure that the remedial measures for the dilution of immediate
returns resulting from issuing bonds can be effectively implemented, the
controlling shareholder and actual controller of the Company make the
following commitments.
1.I will not interfere in the operation and management activities of the
Company beyond its authority, and will not encroach upon the interests of
Controlling the Company.
shareholder 2.If I violate or refuse to perform the above commitments, I agree to bear Long-term
Other the corresponding legal liabilities in accordance with the relevant July 2, 2021 Yes Yes
and actual valid
regulations and rules formulated or issued by CSRC, Shanghai Stock
controller
Exchange and other securities regulatory authorities.
3.Prior to the completion of the bond, if the regulatory authorities make
other detailed provisions on the remedial measures for diluted immediate
returns and its undertakings, and when the above undertakings fail to
meet the detailed requirements of the regulatory authorities, I will make
supplementary undertakings in accordance with the relevant provisions.
All board directors, senior managers made the following undertakings to
All board ensure that the remedial measures for the dilution of immediate returns
Commitment resulting from issuing bonds can be effectively implemented.
directors, Long-term
relating to Other 1.I will not transfer any interests to other entities or individuals without July 2, 2021, Yes Yes
senior valid
re-Financing consideration or with unfair conditions, nor otherwise damage the
managers interests of the Company.
2.I will impose constraints on position-related consumption behavior.
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Wellhope Foods Co., Ltd. 2023 Annual Report
3.I will not make any investment or consumption activity irrelevant to my
performance of duties using the Company’s assets.
4. I will propel to link the remuneration policy formulated by the Board or
the Remuneration Committee with the implementation of the Company’s
remedial measures for returns.
5. In the case that any equity incentive scheme (if any) is introduced
hereafter, I will actively support to link the vesting conditions of equity
incentive with the implementation of the Company’s remedial measures
for returns.
6. Prior to the completion of the Bond, if the regulatory authorities make
other detailed provisions on the remedial measures for diluted immediate
returns and its undertakings, and when the above undertakings fail to
meet the detailed requirements of the regulatory authorities, I will make
supplementary undertakings in accordance with the relevant provisions.
7. I promise following the regulations of this commitment. If I fail following
the regulations which lead to any financial loss to the company or
stockholders, I will take responsibility of compensation.
8.The above commitments are my true intentions. I voluntarily accept the
supervision of securities regulatory authorities, self regulatory
organizations and the public. If I fail to fulfill the above commitments, I will
assume corresponding responsibilities in accordance with relevant laws
and regulations and the requirements of regulatory authorities.
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Wellhope Foods Co., Ltd. 2023 Annual Report
II.Reason for changing in accounting policies, accounting estimates or making corrections of
significant accounting errors as well as the analysis of effects on the Company
1.Reason for changing accounting policies and accounting estimates and analysis of effects of
changes on the Company
For details, please refer to "Changes in Significant Accounting Policies and Accounting Estimates" in the
notes to this report.
2.Approval process and other clarifications
If a listed company is required to change its accounting policies in accordance with laws, administrative
regulations or the national unified accounting system, etc., it may be exempted from deliberation and
the accountant is not required to issue a separate statement on the change in accounting policies.
III.Accounting Firm Engaged by the Company
CNY 10k
Accounting firm (local) SuyaJincheng CPA LLP
Payment(CNY million) 1.2
Length of service 13 years
Name of Certified Public Accountant Zhou Qiong, Wang Lei
Cumulative years of audit services provided by
Zhou Qiong, 1 year, Wang Lei, 5 years
CPAs
Name Payment (CNY 10k)
Accounting firm of internal
SuyaJincheng CPA LLP 40
control
IV.Significant litigation and Arbitration Matters
Non
V.Statement of the Integrity of the Company, its Controlling Shareholder and Actual Controller during
the Reporting Period
There were no instances in which the company, its controlling shareholder and ultimate controller
failed to comply with the effective judgment of the court and had to pay a large amount of unliquidated
debt due.
VI.Significant Related Party Transaction
1.Transactions relating to operating activities
A.Matters not disclosed in the Company's extraordinary announcement
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Wellhope Foods Co., Ltd. 2023 Annual Report
CNY 10k
Transaction
Related Party Relationship Transaction type Transaction content Pricing principle Settlement mode
amount
Associated Comparable to non-controlled
Anshan Fengsheng Food Company Selling product Live broiler 2,441.06 Transfer of account
company prices
Associated Comparable to non-controlled
Anshan Jiuguhe Food Company Selling product Live broiler 7,165.53 Transfer of account
company prices
Associated Feed raw materials, Comparable to non-controlled
Dalian Chengsan Food Group Company Selling product 384.88 Transfer of account
company veterinary medicine prices
Dandong Wellhope Chengsan Agri-Tech Associated Feed, feed raw Comparable to non-controlled
Selling product 845.83 Transfer of account
Company company materials prices
Associated Feed, feed raw Comparable to non-controlled
Linghai Jiuguhe Feed Mill Selling product 5,045.20 Transfer of account
company materials prices
Shihaipu (Beijing) Science & Trade Associated Comparable to non-controlled
Selling product Other products 181.43 Transfer of account
Company company prices
Tai’an Jiuguhe Agriculture Development Associated Feed, feed raw Comparable to non-controlled
Selling product 15,081.50 Transfer of account
Company company materials prices
Associated Comparable to non-controlled
Dalian Sida Food Company Selling product Live broiler 24,892.80 Transfer of account
company prices
Associated Comparable to non-controlled
Shandong Fengkang Food Company Selling product Live broiler 51,487.18 Transfer of account
company prices
Associated Comparable to non-controlled
Harbin Weierhao Trading Company Selling product Feed raw materials 6,795.61 Transfer of account
company prices
Associated Feed, feed raw Comparable to non-controlled
Dazhou Wellhope Bio-Tech Company Selling product 3,257.76 Transfer of account
company materials prices
Associated Purchasing Broiler parts Comparable to non-controlled
Anshan Jiuguhe Food Company 649.88 Transfer of account
company product products prices
Associated Purchasing Comparable to non-controlled
Dalian Chengsan Food Group Company Live broiler 1,373.75 Transfer of account
company product prices
Gongzhuling Corn Purchasing and Storing Associated Purchasing Comparable to non-controlled
Feed raw materials 2,417.26 Transfer of account
Company company product prices
Associated Purchasing Broiler parts Comparable to non-controlled
Jinzhou Jiufeng Food Company 442.08 Transfer of account
company product products prices
Associated Purchasing Feed, broiler parts Comparable to non-controlled
Linghai Jiuguhe Feed Mill 404.09 Transfer of account
company product products prices
Shihaipu (Beijing) Science & Trade Associated Purchasing Comparable to non-controlled
Other products 133.01 Transfer of account
Company company product prices
Tai’an Jiuguhe Agriculture Development Associated Purchasing Feed, broiler parts Comparable to non-controlled 3,206.51 Transfer of account
81 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Company company product products prices
Jilin Hengfeng Animal Health Products Associated Purchasing Veterinary medicine, Comparable to non-controlled
12.13 Transfer of account
Company company product vaccines prices
Associated Purchasing Broiler parts Comparable to non-controlled
Harbin Weierhao Trading Company 3,334.44 Transfer of account
company product products prices
Associated Purchasing Comparable to non-controlled
Beipiao Hongfa Food Company Feed raw materials 74.70 Transfer of account
company product prices
Associated Purchasing Comparable to non-controlled
Anshan Fengsheng Food Company Feed 12.80 Transfer of account
company product prices
Hebei Taihang Wellhope Agri-Tech Associated Purchasing Comparable to non-controlled
Other products 4,731.89 Transfer of account
Company company product prices
Total / 134,371.33 /
Details of large sales returns Non
The Company and its related companies know each other better and have
maintained long-term cooperation relationships, which can strengthen trust in the
products produced by the partners, reduce transaction costs, improve work
efficiency and avoid trade disputes. Meanwhile, purchasing raw materials from
related parties can ensure the quality of products. In addition, by participating in
the management and exerting influence on related companies, it can help them to
Explanation of related party transactions
maintain long-term and stable supply and help them to reduce marketing
pressure. The purpose of conducting related party transactions is to meet the
needs of ordinary production and operation, and the purchase or sale price is
determined according to the market price of similar products. Such transactions
do not violate relevant laws, the Company's Articles of Association, etc. and do not
harm the rights and interests of shareholders.
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Wellhope Foods Co., Ltd. 2023 Annual Report
VII.Major Contracts and Performance
CNY 10k
The guarantee provided by the Company and its subsidiaries to its subsidiaries
Total amount of guarantee provided to subsidiaries 79,628.45
Balance of guarantee provided to the subsidiaries at the end of
62,984.28
reporting period
Total amount of guarantee(including the amount for subsidiaries)
Total amount of guarantee 62,984.28
Percentage of net assets % 9.46
including
The amount of guarantee provided to shareholders, actual
controller and their affiliates
The amount of debt guarantee provided directly or indirectly to the
16,245.10
subsidiaries whose asset-liability ratio exceeds 70%
Amount of total guarantees exceeding 50% of net assets
The sum of the above three type of guarantees 16,245.10
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Wellhope Foods Co., Ltd. 2023 Annual Report
VIII.Progress Report on the Use of Raised Funds
1.The use of raised funds
CNY 10k
Cumulative amount
Net raised funds Progress of inputs Percentage of
Source of Raised funds arrival Planned After of investments at Amount invested in
Total funds raised less the issuance as of the end of the investment in the
fund-raising time investment adjustment the end of the the current year
expenses reporting period % current year %
reporting period
Issuance of
April 28, 2022 150,000.00 148,988.35 148,988.35 148,988.35 75,992.88 51.01 0.00 0.00
convertible bonds
2.Fund-raising project details
CNY 10k
Whether
Cumulative Whether the
Progress of Date when the whether there
Amount amount of Whether progress of Margins
inputs as of project reaches has been a
Projects invested by the raised Source of Raised funds Planned After invested in investments the project input is in realized
the end of the its intended material
founds fund-raising arrival time investment adjustment the current at the end of has been line with the during the
reporting operational change in the
year the reporting completed planned year
period % status feasibility of
period progress
the project
Wellhope Nongda Feed
Issuance of
Company—Complete feed mill April 28, Not
convertible 8,400.00 8,400.00 7,988.44 95.10 March 2023 No Yes No
with an annual capacity of 2022 applicable
bonds
300,000 tons
Anhui Wellhope Agri-Tech
Company—Pig feed project with
Issuance of
an annual capacity of 300,000 April 28, Not
convertible 11,400.00 11,400.00 - - December 2025 No Yes No
tons, ruminant feed project with 2022 applicable
bonds
an annual capacity of 150,000
tons
Heilongjiang Wellhope Agri-Tech
Issuance of
Company—Creep feed and April 28, Not
convertible 3,900.00 3,900.00 262.40 6.73 December 2025 No Yes No
nursery feed with an annual 2022 applicable
bonds
capacity of 100,000 tons
Fuxin Wellhope Agriculture and
Animal Husbandry Company Issuance of
April 28,
—Pig breeding integration convertible 17,400.00 17,400.00 12,818.20 73.67 January 2023 No Yes -1,625.91 No
2022
project, supplying 150,000 bonds
heads of piglet per year
Lingyuan Wellhope Agriculture Issuance of
April 28, Not
and Animal Husbandry Company convertible 24,688.35 24,688.35 17.52 0.07 December 2025 No Yes No
2022 applicable
—Breeding farm with an annual bonds
84 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
production of 10,000 heads of
pig breeders
Anhui Wellhope Food
Company—Pig integration
project capable of slaughtering 1 Issuance of
April 28,
million heads of live pig and convertible 14,400.00 14,400.00 9,200.87 63.89 January 2023 No Yes -2,015.42 No
2022
processing 120,000 tons of meat bonds
per year, with cold chain
logistics
Pingyuan Wellhope Food
Processing Company—further
Issuance of
processing project with an April 28, Not
convertible 23,800.00 23,800.00 705.45 2.96 December 2025 No Yes No
annual capacity of 30,000 tons 2022 applicable
bonds
of prepared food and cooked
food
Issuance of
April 28, Not
Working capital complement convertible 45,000.00 45,000.00 45,000.00 100.00 - No Yes No
2022 applicable
bonds
3.Other use of raised funds during the reporting period
A.Temporary complement of working capital with unused raised funds
The Company held a meeting of the Board of Directors and the Supervisory Board on April 26, 2023, deliberated and approved the use of not more than CNY 600
million of unused raised funds to temporarily complement working capital, and the term of use shall not exceed 12 months from the date of being approved by the
Board of Directors. The Company's independent directors, and the broker entered into clear agreements in this regard. As of December 31, 2023, the Company has
used CNY 430 million of idle funds to temporarily supplement working capital.
B.Other
The Company held a meeting of the Board of Directors and the Supervisory Board on October 26, 2023, deliberated and approved to postpone the progress of
several fund-raising projects, see as follows:
Date when the project reaches its intended Date when the project reaches its intended
Project
operational status (before adjustment) operational status (after adjustment)
Anhui Wellhope Agri-Tech Company—Pig feed project with an annual capacity
April, 2024 December, 2025
of 300,000 tons, ruminant feed project with an annual capacity of 150,000 tons
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Wellhope Foods Co., Ltd. 2023 Annual Report
Heilongjiang Wellhope Agri-Tech Company—Creep feed and nursery feed with
December, 2023 December, 2025
an annual capacity of 100,000 tons
Lingyuan Wellhope Agriculture and Animal Husbandry Company—Breeding
December, 2023 December, 2025
farm with an annual production of 10,000 heads of pig breeders
Pingyuan Wellhope Food Processing Company—further processing project with
December, 2023 December, 2025
an annual capacity of 30,000 tons of prepared food and cooked food
For details, please refer to the "Announcement of Wellhope regarding Postponing the Progress of Several Fund-raising Projects" (Announcement No. 2023-057),
which was published by the Company on October 28, 2023.
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Wellhope Foods Co., Ltd. 2023 Annual Report
Section VII Changes in Common Shares and Shareholder Information
I.Changes in Common Shares
1.Changes of common share
Increase or decrease
Before changing After changing
in this year
Issuing
Shares Percentage % new Subtotal Shares Percentage %
shares
1. Restricted
shares
A. Shares held by
the state
B. Shares held by
state-owned
corporation
C. Shares held by
other domestic
investors
including:
Shares held by
domestic
non-state-owned
corporation
Shares held by
domestic natural
person
D. Shares held by
foreign investor
including: shares
held by foreign
corporation
Shares held by
foreign natural
person
2.Non-restricted
919,430,450 100.00 3,213 3,213 919,433,663 100.00
shares
A. CNY common
919,430,450 100.00 3,213 3,213 919,433,663 100.00
shares
3. Total common
919,430,450 100.00 3,213 3,213 919,433,663 100.00
shares
2.Explanation of changes in shares
On April 22, 2022, the Company issued CNY 1.5 billion convertible bonds (bond trading symbol 113647).
From January 1, 2023 to December 31, 2023, a total of CNY 33,000 of Wellhope convertible bonds were
converted into shares of the Company, resulting in 3,213 shares being converted, and the total number
of shares of the Company increasing from 919,430,450 shares to 919,433,663 shares.
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Wellhope Foods Co., Ltd. 2023 Annual Report
II.Issuance and Listing of Securities
1.Changes in the total number of shares and shareholder structure of the Company and changes in
the Company's asset and liability structure
During the reporting period, the total share capital of the Company changed from 919,430,450 shares
to 919,433,663 shares due to the conversion of convertible bonds, and there was no change in the
control of the Company. At the beginning of the reporting period, the Company’s total assets
amounted to CNY 15.43 billion and total liabilities to CNY 7.07 billion, with an asset-liability ratio of
45.84%. At the end of the reporting period, the Company's total assets amounted to CNY 14.94 billion,
and total liabilities amounted to CNY 7.32 billion, with an asset-liability ratio of 49.02%.
III.Shareholder and Actual Controller
1.Total shareholders
Total number of shareholders as of December 31, 2023 26,841
Total number of shareholders at the end of February 2024 26,670
2.Top ten shareholders and top ten shareholders holding unrestricted shares as at the end of the
reporting period
Shareholding of top ten shareholders
Total shares Pledged or Frozen
Changes in Restricted Nature of
Name of shareholder held at the %
this year shares held Status Shares shareholder
period-end
Domestic
Jin Weidong 0 149,549,498 16.27 0 Pledged 12,030,000 natural
person
Foreign
DE HEUS MAURITIUS 0 82,303,939 8.95 0
legal person
Domestic
Ding Yunfeng 0 81,929,558 8.91 0 natural
person
Domestic
Shao Caimei 0 49,773,878 5.41 0 natural
person
Domestic
Zhang Tiesheng 0 48,360,000 5.26 0 natural
person
Changzhou Heli
Venture Capital
0 48,360,000 5.26 0 Other
Partnership (Limited
Partnership)
Domestic
Wang Fengjiu 0 47,964,602 5.22 0 Pledged 8,040,000 natural
person
Domestic
Wang Zhongtao 0 46,625,229 5.07 0 natural
person
Special account for
buy-back shares of 0 20,956,579 2.28 0 Other
the Company
Domestic
Wang Zhenyong -3,000 9,800,000 1.07 0 natural
person
88 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Top ten shareholders holding unrestricted shares
Unrestricted shares Shares by type
Name of shareholder
held Type Shares
Jin Weidong 149,549,498 CNY common stock 149,549,498
DE HEUS MAURITIUS 82,303,939 CNY common stock 82,303,939
Ding Yunfeng 81,929,558 CNY common stock 81,929,558
Shao Caimei 49,773,878 CNY common stock 49,773,878
Zhang Tiesheng 48,360,000 CNY common stock 48,360,000
Changzhou Heli Venture Capital Partnership (Limited
48,360,000 CNY common stock 48,360,000
Partnership)
Wang Fengjiu 47,964,602 CNY common stock 47,964,602
Wang Zhongtao 46,625,229 CNY common stock 46,625,229
Special account for buy-back shares of the Company 20,956,579 CNY common stock 20,956,579
Wang Zhenyong 9,800,000 CNY common stock 9,800,000
In 2021, the Company totally bought back 20,956,579 shares
through bidding at stock exchange, accounting for 2.28% of the
Explanation of the special account for repurchasing the total share capital of the Company, with the highest price of CNY
Company’s stock 10.54 per share and the lowest price of CNY 8.88 per share, and
the Company totally paid CNY 200,003,612.37 (excluding
commission and other taxes).
1. Jin Weidong, Ding Yunfeng, Wang Fengjiu, Shao Caimei and
Wang Zhongtao perform together.
Relationship of above shareholders or statement made 2. Jin Weidong is the actual controller of Changzhou Huli Venture
by the parties acting in concert Capital Partnership (Limited Partnership).
3. There is no relationship or concerted action among the other
shareholders.
Change in the top ten shareholders from the previous period
Change in the top ten shareholders from the previous period
Number of shares held in shareholders' ordinary
Additions/ accounts and credit accounts and outstanding
Name exits during the shares lent on transfer at the end of the period
reporting period
Shares Percentage %
Hong Kong Securities Clearing
Exit 8,549,396 0.93
Company Limited
Wang Zhenyong Addition 9,800,000 1.07
IV.Controlling Shareholder and Actual Controller
1. Controlling shareholder
A.Natural person
Name Jin Weidong
Nationality China
Whether acquire the right of abode
No
in other countries or regions
Major occupation and position Chairman of Wellhope Foods Co., Ltd.
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Wellhope Foods Co., Ltd. 2023 Annual Report
B. Block diagram of the ownership and control relationship between the Company and the
controlling shareholder
Note: As of December 31, 2023, Jin Weidong directly held 149,549,498 shares of the Company,
representing 16.27% of the total share capital, indirectly controlled 5.26% of the voting rights of the
Company through the holding of Changzhou Heli, and jointly controlled 24.61% of the voting rights of
the Company through the Letter of Confirmation and Undertaking of Concerted Action with Ding
Yunfeng(shareholding 8.91%), Wang Fengjiu(shareholding 5.22%), Shao Caimei(shareholding 5.41%)
and Wang Zhongtao(shareholding 5.07%). In total, Jin Weidong controls 46.14% of the voting rights of
the Company and is the controlling shareholder of the Company.
2.Ultimate controller
A.Natural person
Name Jin Weidong
Nationality China
Whether acquire the right of abode in other
No
countries or regions
Major occupation and position Chairman of Wellhope Foods Co., Ltd.
B.Block diagram of the ownership and control relationship between the Company and the ultimate
controller
Note: As of December 31, 2023, Jin Weidong directly held 149,549,498 shares of the Company,
representing 16.27% of the total share capital, indirectly controlled 5.26% of the voting rights of the
Company through the holding of Changzhou Heli, and jointly controlled 24.61% of the voting rights of
90 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
the Company through the Letter of Confirmation and Undertaking of Concerted Action with Ding
Yunfeng(shareholding 8.91%), Wang Fengjiu(shareholding 5.22%), Shao Caimei(shareholding 5.41%)
and Wang Zhongtao(shareholding 5.07%). In total, Jin Weidong controls 46.14% of the voting rights of
the Company and is the ultimate controller of the Company.
Section VIII Preference Share
Not Applicable
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Wellhope Foods Co., Ltd. 2023 Annual Report
Section IX Corporate Bond
I.Status of Convertible Bonds
1.Issuance of bonds
With the approval of the China Securities Regulatory Commission, the Company publicly issued 15
million convertible bonds on April 22, 2022, at an issue price of CNY 100.00 per bond for a total issue of
CNY 1.5 billion with a term of 6 years. The Company's convertible bonds were listed for trading on the
Shanghai Stock Exchange on May 18, 2022, with the trading symbol of 113647.
2.Convertible bond holders and guarantors during the reporting period
Name of convertible bonds Wellhope convertible bonds
Number of convertible bond holders at the end of the period 8,844
Guarantors of the Company's convertible bonds Not applicable
The top ten convertible bondholders are as follows:
Bonds held at
Name of bondholders period end Percentage %
(CNY)
China Minsheng Banking Corporation Limited-Guangda Prudential
105,271,000 7.18
Credit Plus Bond Fund
Huaxia Fund Extended Life No. 9 Fixed Income Pension
72,953,000 4.97
Product-China Merchants Bank Co.
Efonda Yitian Allocation Mixed Pension Product-Industrial and
68,124,000 4.64
Commercial Bank of China Ltd.
Industrial Bank of China Limited-Tianhong Multi-Yield Bond
64,693,000 4.41
Securities Investment Fund
CICC Hongtai Convertible Bond Fixed Income Pension
37,295,000 2.54
Product-Industrial and Commercial Bank of China Ltd.
Industrial and Commercial Bank of China Limited-Efonda Assured
34,879,000 2.38
Return Bond Fund
Bank of Communications Co., Ltd.-Tianhong Hongfeng Enhanced
30,185,000 2.06
Return Bond Fund
China Everbright Bank Corporation-Boshi Bond Enhanced Bond
27,695,000 1.89
Securities Investment Fund
National Social Security Fund 202 Portfolio 23,340,000 1.59
China Construction Bank Corporation-Efonda Enhanced Bond
22,400,000 1.53
Securities Investment Fund
3.Changes in convertible bonds during the reporting period
CNY
Changes (increase or decrease)
Bond Bonds
Before changing After changing
name converted to Redemption Repurchase
shares
Wellhope
convertible 1,467,041,000 33,000 1,467,008,000
bonds
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Wellhope Foods Co., Ltd. 2023 Annual Report
Conversion of shares during the reporting period
Name of convertible bonds Wellhope convertible bonds
Amount of bonds converted into shares during
33,000
the reporting period (CNY)
Number of bonds converted into shares during
3,213
the reporting period (Share)
Cumulative conversions of convertible bonds
3,215,467
(Share)
Percentage of converted shares to the total
number of shares issued by the Company before 0.35
conversion (%)
Amount of shares yet to be converted (CNY) 1,467,008,000
Proportion of unconverted convertible bonds to
97.80
total number of convertible bonds issued (%)
4.Adjustments of the conversion price
Name of convertible bonds Wellhope convertible bonds
Conversion price
Conversion price
after adjustment Disclosure time Disclosure media Explanation
adjustment date
(CNY)
Due to the
Securities Journal,
buy-back and
Shanghai Securities
cancellation of
News, Securities
June 23, 2022 10.26 June 20, 2022 5.74 million
Times and SSE
restricted
website
shares by the
(www.sse.com.cn)
Company
Securities Journal,
Shanghai Securities Due to the
News, Securities implementation
May 26, 2023 10.14 May 22, 2023
Times and SSE of the 2022
website annual dividend
(www.sse.com.cn)
Latest conversion price as of the end
10.14
of this reporting period
5.The Company's indebtedness, changes in creditworthiness and cash arrangements for debt
repayment in future years
A.Liabilities of the Company
At the end of the reporting period, the total liabilities of the Company amounted to CNY 7.32 billion,
including current liabilities of CNY 4.56 billion and non-current liabilities of 2.76 billion, with an
asset-liability ratio of 49.02%.
B.Changes in creditworthiness
During the reporting period, Union Credit Appraisal Co., Ltd. issued the 2023 Tracking Rating Report on
Publicly Issued Convertible Bonds of Wellhope, with the following rating outcomes: the main corporate
credit rating is AA, Wellhope Convertible Bonds’ credit rating is AA, and the outlook is stable. The rating
outcome is unchanged from the previous one.
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Wellhope Foods Co., Ltd. 2023 Annual Report
C.Cash arrangements for debt repayment in future years
Going forward, the Company's principal and interest repayments on the bonds will be funded mainly
from its operating cash flow. The Company has a good debt service coverage and there are no overdue
bank loans.
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Wellhope Foods Co., Ltd. 2023 Annual Report
Section X Financial Statements
I.Audit Report
Audit Report
Suya Audit No. [2024]402
To all the shareholders of Wellhope Foods Co., Ltd.,
1. Opinion
We have audited the financial statements of Wellhope Foods Co., Ltd. (hereinafter referred to as "the
Company"), which comprise the statement of financial position as of December 31, 2023, and the
income statement, statement of changes in equity and cash flow statement for the year then ended,
and notes to the financial statements.
In our opinion, the financial statements give a true and fair view of the financial position of the
Company as of December 31, 2023, and of its operating performance and cash flow for the year then
ended, and have been properly prepared in compliance with the Accounting Standards for Business
Enterprises ("the ASBE").
2. Basis for Opinion
We conducted our audits in accordance with China's CPA Auditing Standards. Our responsibilities
under those standards are further described in the "Auditor’s Responsibilities for the Audit of the
Financial Statements" section of our report. We are independent of the Company in accordance with
China CPA's Code of Ethics for Professional Accountants ("the Code"), and we have fulfilled our other
ethical responsibilities in accordance with the Code. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
3. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements in the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
A. Confirmation and recognition of revenue
Please refer to the accounting policies described in Significant Accounting Policies, Accounting
Estimates, and Notes to Major Items in the Consolidated Financial Statements.
Key audit matters How our audit addressed key audit matters
The revenue of Wellhope in FY2023 Our audit procedures primarily included,
amounted to CNY 35,970,261,909.41, a. Understanding and evaluating the design of internal
representing an increase of 9.63% over controls in Wellhope's sales process and testing the
the previous year, of which the sales effectiveness of the implementation of key controls, such
revenue of broiler integration business as revenue recognition.
increased by 20.77%, and the revenue b. Identifying contractual rights and obligations through
of swine farming business increased by sample testing of sales contracts, assessing the timing of
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Wellhope Foods Co., Ltd. 2023 Annual Report
25.19%. As revenue is one of performance obligations, and evaluating whether the
Wellhope's key performance indicators, determination of transfer of control in relation to revenue
we consider the recognition of revenue recognition is consistent with the Company's accounting
to be the key audit matter. policies and the provisions of the Accounting Standards for
Business Enterprises.
c. Performing analytical procedures to determine whether
there are significant or unusual fluctuations and the
reasons for such fluctuations, and to determine the
reasonableness of changes in revenue and gross profit.
d. Performing the following procedures on a sample basis,
principally to confirm the existence and determination of
revenue,
(a) Examining supporting documentation, such as sales
contracts, sales orders, invoices, customer bills of lading,
etc., relating to revenue recognition.
(b) Performing correspondence procedures to confirm
accounts receivable balances and revenue amounts.
(c) performing cut-off tests for revenue recognized around
the balance sheet date and assessing whether revenue is
recognized in the correct period.
B. Income from investments accounted for using the equity method.
Please refer to the accounting policies described in Significant Accounting Policies, Accounting
Estimates, and Notes to Major Items in the Consolidated Financial Statements.
Key audit matters How our audit addressed key audit matters
Our audit procedures primarily consisted of,
1. Understanding and evaluating the design and
implementation of Wellhope's internal controls related to
the recognition of investment income accounted for using
the equity method.
2. Obtaining information about the investee's articles of
association, investment agreements and other information
The income from long-term equity
to determine whether it has significant influence over the
investments recorded CNY
investee and to determine whether the accounting
-133,401,069.07 under the equity
method is appropriate.
method, a decrease of CNY
3. Inquiring management about the reasons for significant
295700560.49 compared with the
or unusual fluctuations in the results of the investee and
same period of the previous year. As
analyzing and determining whether the fluctuations are
the investment income recognized
appropriate.
under the equity method had a
4. Obtaining the financial statements of the investee and
significant impact on the Company's
review whether the adjustment of unrealized profits from
financial statements, we regarded it as
connected transactions, the calculation of investment
the key audit matter.
income is accurate and whether the share of changes in
net assets is correct.
5. Performing analytical procedures on the operating
revenues and costs, inventories, etc. of investees with
significant investment income for the period; obtaining
and reviewing the schedules and related information
provided by the investees.
4. Other Information
The management of the Company is responsible for the other information. The other information
comprises information covered by the Company's 2023 Annual Report, but excludes the financial
statements and our auditor's report thereon.
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Wellhope Foods Co., Ltd. 2023 Annual Report
Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements, or our knowledge obtained during the audit or otherwise appears to be
materially misstated.
If, based on the work we have executed, we confirm that there is a material misstatement in the other
information, we are required to report the fact. We have nothing to report in this regard.
5. Responsibilities of the Management and Those Charged with Governance for Financial Statements
The management team of the Company is responsible for preparing the financial statements that give
a fair view in accordance with the ASBE, and for designing, executing, and maintaining requisite
internal control to enable the preparation of the financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing the Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the management either intends to liquidate the
Company or to cease operation, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
6. Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the auditing standards will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken based on these financial statements.
As part of an audit in accordance with the auditing standards, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
A. Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
B. Obtain an understanding of the internal control relevant to the audit in order to design audit
97 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
procedures that are appropriate in the circumstances.
C. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the management.
D. Conclude on the appropriateness of the management’s use of the going concern basis of accounting
and, based on the obtained audit evidence, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required by the auditing standards to draw the
statements users’ attention in our auditor’s report to the related disclosures in the financial statements,
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Company to cease to continue as a going concern.
E. Evaluate the overall presentation, structure, and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.
F. Obtain sufficient and appropriate audit evidence regarding the financial information of related
entities or business activities within the Company to express an opinion on its financial statements. We
are responsible for guiding, overseeing, and performing the audit of the Company, and solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timetable of the audit and significant audit findings, including any noteworthy deficiencies in
the internal control that we identify during our audit.
We also provide those charged with governance with a statement to declare that we have complied
with the professional ethics related to independence and communicate with the governance on all
relationships and other matters that may reasonably be considered to affect our independence, as well
as the relevant precautions.
From the matters communicated with those charged with governance, we determine which matters are
the most important for the audit of the current financial statements and thus constitute the key audit
matters. We describe these matters in the audit report, unless laws and regulations prohibit the public
disclosure of these matters, or in rare cases, if it is reasonably expected that the negative consequences
of communicating a matter in the audit report will outweigh the benefits in terms of the public interest,
we determine that the matter should not be communicated in the audit report.
SuyaJincheng CPA LLP CPA: Zhou Qiong (Project Partner)
CPA: Wang Lei
China Nanjing March 28, 2024
98 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
II.Financial Statements
Consolidated Balance Sheet
December 31, 2023
CNY
Item Dec. 31, 2023 Dec. 31, 2022
Current Assets
Cash at bank 1,915,378,798.77 1,688,741,603.60
Tradable financial assets 829,591.32
Derivative financial assets 4,296,668.60 4,050,071.80
Notes receivable 6,620,586.95 5,778,682.68
Accounts receivable 1,114,486,394.01 1,035,056,761.74
Prepayments 469,857,003.51 762,467,440.93
Other receivables 92,732,094.80 97,791,911.95
including: Interest receivable
Dividends receivable 27,535,293.35
Inventory 2,686,755,249.88 3,361,552,176.45
Contract assets 2,432,720.15 1,186,905.42
Other current assets 129,436,936.38 149,114,790.69
Total current assets 6,422,826,044.37 7,105,740,345.26
Non-current assets
Long-term equity investment 2,316,034,522.19 2,487,150,109.37
Other equity instruments investment 14,826,710.99 17,325,896.26
Fixed assets 4,168,026,657.86 3,547,181,704.30
Construction in progress 158,377,935.65 601,125,529.45
Biological assets 199,776,536.89 186,579,922.68
Right-of-use asset 525,191,183.39 328,428,097.10
Intangible assets 363,530,774.64 362,988,059.95
Goodwill 290,425.67 290,425.67
Long-term prepaid expenses 65,324,043.39 64,133,625.16
Deferred income tax assets 102,365,943.34 87,908,932.47
Other non-current assets 600,544,056.16 638,741,381.87
Total non-current assets 8,514,288,790.17 8,321,853,684.28
Total Assets 14,937,114,834.54 15,427,594,029.54
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Wellhope Foods Co., Ltd. 2023 Annual Report
Consolidated Balance Sheet(continue) CNY
Item Dec. 31, 2023 Dec. 31, 2022
Current Liabilities
Short-term borrowings 970,957,309.50 933,785,791.96
Notes payable 600,000.00
Accounts payable 1,629,789,558.94 1,691,652,639.28
Advance receipt 18,172,031.73 17,873,252.23
Contract liabilities 252,530,723.35 336,134,719.84
Payroll 225,357,401.11 182,394,434.59
Taxes and surcharges 42,449,739.70 55,010,343.51
Other payables 479,780,643.59 460,870,503.46
including: Interest payable 5,184,931.51 3,105,236.78
Dividends payable 16,453,038.17 14,943,072.75
Non-current liabilities due within one
932,730,557.07 471,328,595.34
year
Other current liabilities 6,656,358.86 5,334,961.22
Total current liabilities 4,558,424,323.85 4,154,985,241.43
Non-current Liabilities
Long-term borrowings 920,051,517.19 1,312,757,309.28
Bonds payable 1,305,789,795.09 1,257,828,066.86
Lease liabilities 368,001,422.29 223,002,370.80
Long-term payables 42,542,892.62 7,685,803.59
Deferred income 73,419,574.05 78,011,407.06
Deferred income tax liabilities 53,459,620.43 37,698,221.22
Total non-current liabilities 2,763,264,821.67 2,916,983,178.81
Total Liabilities 7,321,689,145.52 7,071,968,420.24
Owners' equity (or shareholders'
equity)
Paid-up capital (or share capital) 919,433,663.00 919,430,450.00
Other equity instruments 233,672,216.24 233,677,472.64
Additional paid-in capital 872,912,049.17 880,746,284.55
less: Treasury stock 200,003,612.37 200,003,612.37
Other comprehensive income -23,877,064.04 -20,147,742.90
Surplus reserves 457,022,680.97 454,175,320.97
Undistributed profits 4,400,135,075.82 4,967,837,188.90
Total owners’ equity attributable to 6,659,295,008.79 7,235,715,361.79
100 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
the parent company
Non-controlling interests 956,130,680.23 1,119,910,247.51
Total owners' equity (or shareholders'
7,615,425,689.02 8,355,625,609.30
equity)
Total liabilities and owners' equity (or
14,937,114,834.54 15,427,594,029.54
shareholders' equity)
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Wellhope Foods Co., Ltd. 2023 Annual Report
Consolidated Balance Sheet of Parent Company
December 31, 2023
CNY
Item Dec. 31, 2023 Dec. 31, 2022
Current assets
Cash at bank 1,691,224,437.05 1,515,847,680.25
Derivative financial assets 558,832.00
Accounts receivable 27,663,635.24 44,246,791.88
Prepayments 3,801,364.20 2,251,482.92
Other receivables 2,344,452,508.57 2,228,913,499.76
including: Interest receivable
Dividends receivable 54,770,301.77 53,759,486.59
Inventory 49,373,613.63 67,625,995.98
Total current assets 4,116,515,558.69 3,859,444,282.79
Non-current assets
Long-term equity investment 6,197,179,106.62 5,986,733,076.32
Other equity instruments investment 4,824,017.06 14,849,769.15
Fixed assets 130,562,943.77 136,435,774.98
Construction in progress 4,163,600.00 4,569,791.00
Intangible assets 15,428,979.00 16,321,332.79
Long-term prepaid expenses 2,490,858.28 2,967,008.45
Deferred income tax assets 8,832,488.62 11,001,578.31
Other non-current assets 7,200,000.00 5,454,000.00
Total non-current assets 6,370,681,993.35 6,178,332,331.00
Total assets 10,487,197,552.04 10,037,776,613.79
Current liabilities:
Short-term borrowings 552,401,555.56 500,513,888.89
Accounts payable 21,019,772.54 48,315,158.17
Advance receipts 1,147,870.00
Contract liabilities 4,647,122.21 4,307,771.41
Payroll 9,642,962.98 11,269,322.85
Taxes and surcharges 5,125,029.13 1,001,650.34
Other payables 2,392,238,692.22 1,752,347,820.38
Non-current liabilities due within one year 775,600,000.00 421,600,000.00
Total current liabilities 3,760,675,134.64 2,740,503,482.04
Non-current liabilities
Long-term borrowings 481,999,161.11 1,011,998,911.11
Bonds payable 1,305,789,795.09 1,257,828,066.86
Deferred income 38,958,320.00 44,214,300.00
Deferred income tax liabilities 1,365.00 33,390.82
Total non-current liabilities 1,826,748,641.20 2,314,074,668.79
Total liabilities 5,587,423,775.84 5,054,578,150.83
Owners' equity (or shareholders' equity)
Paid-up capital (or share capital) 919,433,663.00 919,430,450.00
Other equity instruments 233,672,216.24 233,677,472.64
Capital reserves 878,828,709.67 878,256,358.18
less: Treasury stock 200,003,612.37 200,003,612.37
Other Comprehensive income -23,348,699.23 -18,697,307.25
Surplus reserves 457,022,680.97 454,175,320.97
Undistributed profits 2,634,168,817.92 2,716,359,780.79
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Wellhope Foods Co., Ltd. 2023 Annual Report
Total owners' equity 4,899,773,776.20 4,983,198,462.96
Total liabilities and owners' equity (or
10,487,197,552.04 10,037,776,613.79
shareholders' equity)
103 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Consolidated Income Statement
January-December, 2023
CNY
Item 2023 2022
1. Revenue 35,970,261,909.41 32,811,758,209.54
including: Revenue 35,970,261,909.41 32,811,758,209.54
2. Coat of revenue 36,183,648,470.74 32,296,894,302.27
including: Cost of revenue 34,540,124,263.81 30,839,271,196.05
Taxes and surtaxes 54,959,832.38 47,329,082.31
Selling expenses 718,365,669.03 622,444,761.15
Administrative expenses 614,800,562.62 537,063,858.72
R&D expenses 83,797,469.99 90,105,075.01
Financial expenses 171,600,672.91 160,680,329.03
including: Interest expenses 179,236,989.51 167,066,021.40
Interest income 13,127,370.37 13,023,769.68
plus: Other income 34,513,001.48 31,616,130.11
Income from investment -148,334,501.12 157,467,033.43
including: Income from
investments in associated companies -133,401,069.07 162,299,491.42
and joint ventures
Gain or loss from changes in fair
-490,609.02 -1,700,554.55
value
Credit impairment loss -38,716,956.58 -11,686,265.27
Assets impairment loss -143,836,924.38 -30,098,736.85
Gain or loss from assets disposal 20,674,676.33 -3,862,500.50
3. Operating profit -489,577,874.62 656,599,013.64
plus: Non-operating income 74,211,372.98 18,003,001.35
less: Non-operating expenditure 65,574,928.07 46,266,509.67
4. Pretax profit -480,941,429.71 628,335,505.32
less: Income tax expense 107,091,597.63 92,258,009.59
5. Net profit
Net Profit from continuing operations -588,033,027.34 536,077,495.73
Net profit attributable to the
-457,037,550.28 512,797,304.59
shareholders of parent company
Non-controlling interests income -130,995,477.06 23,280,191.14
6. Other comprehensive income, net of
-4,169,370.03 -2,613,281.46
tax
Attributable to owners of parent
-3,729,321.14 -3,083,729.52
company
a. Other comprehensive income that
-8,486,483.42 -3,076,318.89
can’t be reclassified into gains or losses
(a) Changes in the fair value of other
-8,486,483.42 -3,076,318.89
equity instruments
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Wellhope Foods Co., Ltd. 2023 Annual Report
b. Other comprehensive income that
will be reclassified into the gains or 4,757,162.28 -7,410.63
losses
(a) Other comprehensive income that
can be transferred in gains or losses 5,344,603.95 -587,636.80
under the equity method
(b) Exchange differences on translation
-587,441.67 580,226.17
of foreign currency financial statements
Attributable to non-controlling interests -440,048.89 470,448.06
7. Total comprehensive income -592,202,397.37 533,464,214.27
Attributable to the owners of parent
-460,766,871.42 509,713,575.07
company
Attributable to non-controlling interests -131,435,525.95 23,750,639.20
8. EPS
(1) Basic earnings per share (yuan per
-0.50 0.58
share)
(2) Diluted earnings per share (yuan per
-0.50 0.55
share)
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Wellhope Foods Co., Ltd. 2023 Annual Report
Consolidated Income Statement of Parent Company
January-December, 2023
CNY
Item 2023 2022
1. Revenue 716,127,171.26 806,587,568.60
less: Cost of revenue 538,676,281.08 620,778,240.03
Taxes and surtaxes 2,005,206.45 2,482,446.75
Selling expenses 13,941,941.52 14,045,030.28
Administrative expenses 54,956,164.98 42,519,575.17
R&D expenses 23,168,745.28 26,442,399.08
Financial expenses 53,893,983.25 75,870,816.26
including: Interest expenses 117,713,796.21 123,813,480.25
Interest income 63,964,147.19 48,021,158.62
add: Other income 5,982,990.84 7,185,222.37
Income from Investment 17,018,412.65 179,711,930.36
including: Income from investments in
-118,923,656.51 174,704,407.03
associated companies and joint ventures
Gain or loss from changes in fair value 9,100.00 222,605.45
Credit impairment loss -11,861,099.83 9,686,576.26
Assets impairment loss
Gain or loss from assets disposal 87,143.54
2. Operating profit 40,721,395.90 221,255,395.47
add: Non-operating income 3,731,810.00 1,700.00
deduct: Non-operating expenditure 3,471,507.36 797,232.25
3. Pretax profit 40,981,698.54 220,459,863.22
deduct: Income tax expense 10,807,557.67 1,088,884.17
4. Net profit 30,174,140.87 219,370,979.05
Net profit from continuing operations 30,174,140.87 219,370,979.05
5. Other comprehensive income, net of tax -4,651,391.98 -3,688,367.46
a. Other comprehensive income that can’t be
-10,025,752.09 -3,059,177.88
reclassified into gains or losses
(a) Changes in the fair value of other equity
-10,025,752.09 -3,059,177.88
instruments
b. Other comprehensive income that will be
5,374,360.11 -629,189.58
reclassified into gains or losses
(a) Other comprehensive income that can
be transferred in gains or losses under the 5,374,360.11 -629,189.58
equity method
6. Total comprehensive income 25,522,748.89 215,682,611.59
106 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Consolidated Statement of Cash Flow
January-December, 2023
CNY
Item 2023 2022
1. Cash flow from operating activities
Cash received by selling products, providing labor
37,256,317,508.82 33,699,345,225.81
services
Tax refunds 56,144,648.50 47,599,364.44
Cash received from other activities related to
200,210,649.34 196,572,108.74
operating
Sub-total of cash inflow of operating activities 37,512,672,806.66 33,943,516,698.99
Cash paid for goods purchase and labor services 34,376,170,787.12 31,966,060,633.58
Cash paid to and for employee 1,341,188,891.15 1,104,906,823.52
Tax payments 206,139,366.67 162,294,011.40
Cash paid to other activities related to operating 633,021,011.40 513,988,720.15
Sub-total of cash outflow of operating activities 36,556,520,056.34 33,747,250,188.65
Net cash flow from operating activities 956,152,750.32 196,266,510.34
2. Cash flow from investing activities
Cash received from disinvestment 31,320,000.00 915,200.00
Cash received from return on investment 75,098,517.32 27,243,680.56
Net cash received from disposal of fixed assets,
78,944,914.78 100,849,426.02
intangible assets and other long-lived assets
Net cash received from disposal of subsidiaries and
1,594,899.44
other business units
Cash received from other activities related to
20,625,440.88 5,685,477.01
investment
Sub-total of cash inflow of investing activities 205,988,872.98 136,288,683.03
Cash paid for acquiring and building fixed assets,
486,888,624.03 842,818,657.41
intangible assets and other long-lived assets
Cash paid for investments 87,325,879.79 26,247,136.90
Net cash paid for acquiring subsidiaries and other
31,609,074.72 321,545.94
business units
Cash paid to other activities related to investment 3,029,935.48 10,041,254.22
Sub-total of cash outflow of investing activities 608,853,514.02 879,428,594.47
Net cash flow from investing activities -402,864,641.04 -743,139,911.44
3. Cash flow from financing activities
Cash received by absorbing investments 80,869,000.00 76,449,000.00
including: Capital contributed by non-controlling
80,869,000.00 76,449,000.00
interests to subsidiaries
Cash received from borrowings 1,959,093,175.98 2,056,945,703.41
Cash received from issuing bonds 1,492,100,000.00
Cash received from other activities related to
17,502,820.88 52,488,976.77
financing
Sub-total of cash inflow of financing activities 2,057,464,996.86 3,677,983,680.18
Repayments of borrowings 1,913,030,822.71 2,390,674,821.29
Cash paid for dividends, profits, or paid for interests 260,193,609.83 139,539,838.45
including: Dividends or profits paid by subsidiaries 49,681,301.69 24,240,402.26
107 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
to non-controlling interests
Cash paid to other activities related to financing
192,436,934.03 152,276,562.43
activities
Sub-total of cash outflow of financing activities 2,365,661,366.57 2,682,491,222.17
Net cash flow from financing activities -308,196,369.71 995,492,458.01
4. Effect of foreign exchange rate fluctuations on
962,598.25 2,087,604.00
cash and cash equivalents
5. Net increase in cash and cash equivalents 246,054,337.82 450,706,660.91
plus: Opening balance of cash and cash equivalents 1,648,980,222.82 1,198,273,561.91
6. Closing balance of cash and cash equivalents 1,895,034,560.64 1,648,980,222.82
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Wellhope Foods Co., Ltd. 2023 Annual Report
Consolidated Statement of Cash Flow of Parent Company
January-December, 2023
CNY
Item 2023 2022
1. Cash flow from operating activities
Cash received by selling products, providing
729,864,336.81 794,579,846.42
labor services
Cash received from other activities related to
28,731,129.25 92,780,893.47
operating
Sub-total of cash inflow of operating activities 758,595,466.06 887,360,739.89
Cash paid for goods purchase and labor services 535,935,783.53 582,929,002.90
Cash paid to and for employee 61,839,292.07 47,803,787.13
Tax payments 6,605,925.10 4,581,203.25
Cash paid to other activities related to operating 29,901,683.93 33,968,355.04
Sub-total of cash outflow of operating activities 634,282,684.63 669,282,348.32
Net cash flow from operating activities 124,312,781.43 218,078,391.57
2. Cash flow from investing activities
Cash received from disinvestment 71,426,938.53 5,980,621.31
Cash received from return on investment 131,796,058.16 31,262,648.33
Net cash received from disposal of fixed assets,
189,609.57 123,907.06
intangible assets and other long-lived assets
Cash received from other activities related to
1,388,081.74
investment
Sub-total of cash inflow of investing activities 204,800,688.00 37,367,176.70
Cash paid for acquiring and building fixed assets,
17,731,144.01 5,007,634.51
intangible assets and other long-lived assets
Cash paid for investments 496,225,561.83 353,955,584.30
Cash paid to other activities related to investing 25,235,942.34 532,635,932.02
Sub-total of cash outflow of investing activities 539,192,648.18 891,599,150.83
Net cash flow from investing activities -334,391,960.18 -854,231,974.13
3. Cash flow from financing activities
Cash received from borrowings 900,000,000.00 894,000,000.00
Cash received from issuing bonds 1,492,100,000.00
Cash received from other activities related to
686,397,146.94 275,464,363.91
financing
Sub-total of cash inflow of financing activities 1,586,397,146.94 2,661,564,363.91
Repayments of borrowings 1,023,600,000.00 1,332,500,000.00
Cash paid for dividends, profits, or paid for
175,965,032.98 85,884,532.93
interests
Cash paid to other activities related to financing 26,505,160.00
Sub-total of cash outflow of financing activities 1,199,565,032.98 1,444,889,692.93
Net cash flow from financing activities 386,832,113.96 1,216,674,670.98
4. Effect of foreign exchange rate fluctuations
11,903.33 344.66
on cash and cash equivalents
5. Net increase in cash and cash equivalents 176,764,838.54 580,521,433.08
plus: Opening balance of cash and cash
1,505,577,987.70 925,056,554.62
equivalents
6. Closing balance of cash and cash equivalents 1,682,342,826.24 1,505,577,987.70
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Wellhope Foods Co., Ltd. 2023 Annual Report
Consolidated Statement of Changes in Equity
January-December, 2023
CNY
2023
Equity Attributable to the Owners of Parent Company
Item Other equity Other Non-controlling Total owners'
instruments less: Treasury Undistributed interests equity
Share capital Capital reserve comprehensive Surplus reserve Subtotal
stock profits
Other income
1. Closing
balance of prior 919,430,450.00 233,677,472.64 880,746,284.55 200,003,612.37 -20,147,742.90 454,175,320.97 4,967,837,188.90 7,235,715,361.79 1,119,910,247.51 8,355,625,609.30
period
plus: Changes in
accounting
policies
Other
2. Opening
balance of 919,430,450.00 233,677,472.64 880,746,284.55 200,003,612.37 -20,147,742.90 454,175,320.97 4,967,837,188.90 7,235,715,361.79 1,119,910,247.51 8,355,625,609.30
current period
3. Fluctuations of
3,213.00 -5,256.40 -7,834,235.38 -3,729,321.14 2,847,360.00 -567,702,113.08 -576,420,353.00 -163,779,567.28 -740,199,920.28
current period
A. Total
comprehensive -3,729,321.14 -457,037,550.28 -460,766,871.42 -131,435,525.95 -592,202,397.37
income
B. Capital
contributed and
3,213.00 -5,256.40 -7,834,235.38 -7,836,278.78 18,847,225.78 11,010,947.00
reduced by
owners
a. Common stock
invested by -11,391,428.92 -11,391,428.92 22,029,990.09 10,638,561.17
owners
b. Capital
contributed by
the holders of 3,213.00 -5,256.40 38,669.80 36,626.40 36,626.40
other equity
instruments
c. Other 3,518,523.74 3,518,523.74 -3,182,764.31 335,759.43
C. Profit
2,847,360.00 -110,664,562.80 -107,817,202.80 -51,191,267.11 -159,008,469.91
distribution
a. Withdrawal of
3,017,414.09 -3,017,414.09
surplus reserves
b. Extraction of
general risk
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Wellhope Foods Co., Ltd. 2023 Annual Report
provisions
c. Dividend to
owners (or -107,817,202.80 -107,817,202.80 -51,191,267.11 -159,008,469.91
shareholders)
d. Other -170,054.09 170,054.09
D. Internal
carry-over of
owners’ equity
a. Carry-over of
other
comprehensive
income to
retained earnings
4. Closing
balance of 919,433,663.00 233,672,216.24 872,912,049.17 200,003,612.37 -23,877,064.04 457,022,680.97 4,400,135,075.82 6,659,295,008.79 956,130,680.23 7,615,425,689.02
current period
2022
Equity Attributable to the Owners of Parent Company
Item Other equity Other Non-controlling Total owners'
less: Treasury Undistributed interests equity
Share capital instruments Capital reserve comprehensive Surplus reserve Subtotal
stock profits
Other income
1. Closing
balance of prior 921,960,196.00 877,984,810.18 224,292,272.37 -17,064,013.38 432,238,223.06 4,473,531,926.28 6,464,358,869.77 1,048,244,773.71 7,512,603,643.48
period
plus: Changes in
accounting -114,984.06 -114,984.06 24,698.41 -90,285.65
policies
Other
2. Opening
balance of 921,960,196.00 877,984,810.18 224,292,272.37 -17,064,013.38 432,238,223.06 4,473,416,942.22 6,464,243,885.71 1,048,269,472.12 7,512,513,357.83
current period
3. Fluctuations
of current -2,529,746.00 233,677,472.64 2,761,474.37 -24,288,660.00 -3,083,729.52 21,937,097.91 494,420,246.68 771,471,476.08 71,640,775.39 843,112,251.47
period
A. Total
comprehensive -3,083,729.52 512,797,304.59 509,713,575.07 23,750,639.20 533,464,214.27
income
B. Capital
contributed and
-2,529,746.00 233,677,472.64 2,761,474.37 -24,288,660.00 258,197,861.01 78,664,485.33 336,862,346.34
reduced by
owners
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Wellhope Foods Co., Ltd. 2023 Annual Report
a. Common
stock invested 83,367,623.25 83,367,623.25
by owners
b. Capital
contributed by
the holders of 3,212,254.00 233,677,472.64 30,296,373.97 267,186,100.61 267,186,100.61
other equity
instruments
c. Amount of
share-based
payment -5,742,000.00 -22,106,700.00 -24,288,660.00 -3,560,040.00 -3,560,040.00
included in the
owner's equity
d. Other -5,428,199.60 -5,428,199.60 -4,703,137.92 -10,131,337.52
C. Profit
21,937,097.91 -18,377,057.91 3,560,040.00 -30,774,349.14 -27,214,309.14
distribution
a. Withdrawal of
21,937,097.91 -21,937,097.91
surplus reserves
b. Extraction of
general risk
provisions
c. Dividend to
owners (or 3,560,040.00 3,560,040.00 -30,774,349.14 -27,214,309.14
shareholders)
D. Internal
carry-over of
owners’ equity
a. Carry-over of
other
comprehensive
income to
retained
earnings
4. Closing
balance of 919,430,450.00 233,677,472.64 880,746,284.55 200,003,612.37 -20,147,742.90 454,175,320.97 4,967,837,188.90 7,235,715,361.79 1,119,910,247.51 8,355,625,609.30
current period
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Wellhope Foods Co., Ltd. 2023 Annual Report
Statement of Changes in Owner's Equity of Parent Company
January-December, 2023
CNY
2023
Other equity Other
Item less: Treasury Undistributed Total owners'
Share capital instruments Capital reserve comprehensive Surplus reserve
stock profits equity
Other income
1. Closing balance of prior
919,430,450.00 233,677,472.64 878,256,358.18 200,003,612.37 -18,697,307.25 454,175,320.97 2,716,359,780.79 4,983,198,462.96
period
plus: Changes in
accounting policies
Other
2. Opening balance of
919,430,450.00 233,677,472.64 878,256,358.18 200,003,612.37 -18,697,307.25 454,175,320.97 2,716,359,780.79 4,983,198,462.96
current period
3. Fluctuations of current
3,213.00 -5,256.40 572,351.49 -4,651,391.98 2,847,360.00 -82,190,962.87 -83,424,686.76
period
A. Total comprehensive
-4,651,391.98 30,174,140.87 25,522,748.89
income
B. Capital contributed and
3,213.00 -5,256.40 572,351.49 570,308.09
reduced by owners
a. Common stock invested
by owners
b. Capital contributed by
the holders of other equity 3,213.00 -5,256.40 38,669.80 36,626.40
instruments
c. Amount of share-based
payment that included in
the owner's equity
d. Other 533,681.69 533,681.69
C. Profit distribution 2,847,360.00 -112,365,103.74 -109,517,743.74
a. Withdrawal of surplus
3,017,414.09 -3,017,414.09
reserves
b. Dividend to owners (or
-107,817,202.80 -107,817,202.80
shareholders)
c. Other -170,054.09 -1,530,486.85 -1,700,540.94
4. Closing balance of 919,433,663.00 233,672,216.24 878,828,709.67 200,003,612.37 -23,348,699.23 457,022,680.97 2,634,168,817.92 4,899,773,776.20
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Wellhope Foods Co., Ltd. 2023 Annual Report
current period
2022
Other equity
Item less: Treasury Other comprehensive Surplus Undistributed Total owners'
Share capital instruments Capital reserve
stock income reserve profits equity
Other
1. Closing balance of
921,960,196.00 870,193,796.83 224,292,272.37 -15,008,939.79 432,238,223.06 2,515,365,859.65 4,500,456,863.38
prior period
add: Changes in
accounting policies
Other
2. Opening balance of
921,960,196.00 870,193,796.83 224,292,272.37 -15,008,939.79 432,238,223.06 2,515,365,859.65 4,500,456,863.38
current period
3. Fluctuations of current
-2,529,746.00 233,677,472.64 8,062,561.35 -24,288,660.00 -3,688,367.46 21,937,097.91 200,993,921.14 482,741,599.58
period
A. Total comprehensive
-3,688,367.46 219,370,979.05 215,682,611.59
income
B. Capital contributed
-2,529,746.00 233,677,472.64 8,062,561.35 -24,288,660.00 263,498,947.99
and reduced by owners
a. Common stock
invested by owners
b. Capital contributed by
the holders of other 3,212,254.00 233,677,472.64 30,296,373.97 267,186,100.61
equity instruments
c. Amount of share-based
payment that included in -5,742,000.00 -22,106,700.00 -24,288,660.00 -3,560,040.00
the owner's equity
d. Other -127,112.62 -127,112.62
C. Profit distribution 21,937,097.91 -18,377,057.91 3,560,040.00
a. Withdrawal of surplus
21,937,097.91 -21,937,097.91
reserves
b. Dividend to owners (or
3,560,040.00 3,560,040.00
shareholders)
a. Other
4. Closing balance of
919,430,450.00 233,677,472.64 878,256,358.18 200,003,612.37 -18,697,307.25 454,175,320.97 2,716,359,780.79 4,983,198,462.96
current period
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Wellhope Foods Co., Ltd. 2023 Annual Report
III.Basic Information of the Company
1.Overview of the Company
Wellhope Foods Co., Ltd. (formerly known as Liaoning Wellhope Agri-Tech Co., Ltd., hereinafter
referred to as the Company) is a joint-stock company established by 23 individuals, including Jin
Weidong and Ding Yunfeng, etc., with the approval of Liaoning Provincial People's Government
(Liaozheng [2003] No. 40). The Company was incorporated on 27 March 2003 with a registered capital
of CNY 53 million, of which: Jin Weidong contributed CNY 12.19 million, representing 23.00% of the
share capital; Ding Yunfeng contributed CNY 7.68 million, representing 14.50% of the share capital;
Wang Fengjiu, Zhang Tiesheng, Shao Caimei and Wang Zhongtao each contributed CNY 4.50 million,
representing 8.50% of the share capital, other 17 shareholders contributed CNY 15.11 million,
representing 28.50% of the share capital.
On 22 August 2006, with the approval of the Ministry of Commerce of the People's Republic of China,
the Company issued 5.89 million new shares to De Heus (China) and the total share capital was
changed to 58.89 million shares. On 15 November 2007, with the approval of the Liaoning Foreign
Trade and Economic Cooperation Department, the Company issued 3.46 million shares to De Heus
(China) and the total share capital was increased to 62.35 million shares.
In 2010, with the approval of the Second Extraordinary General Meeting, the Company issued 50 bonus
shares for every 10 shares based on the total share capital as at 31 December 2009, which increased
the total share capital of the Company to 374.12 million shares. In addition, the Third Extraordinary
General Meeting of the Company in 2010 approved the use of capital reserves for the conversion of
100 million shares, which increased the total share capital of the Company to 474.12 million shares.
With the approval of the China Securities Regulatory Commission (CSRC License [2014] No. 675), the
Company issued 80 million new shares at a price of CNY 5.88 per share on4 August 2014, and the total
share capital of the Company after IPO increased to 554.12 million shares.
The Second Extraordinary General Meeting of the Company in 2015 approved to the conversion of
capital reserve into share capital by issuing 5 bonus shares for every 10 shares, and the total share
capital of the Company was increased to 831.18 million shares.
The Second Extraordinary General Meeting of the Company in 2018 approved to issue 14.575 million
restricted shares to 372 natural persons at CNY 4.85 per share on 29 December 2018, and the total
share capital of the Company was increased to 845.75 million shares.
With the approval of the China Securities Regulatory Commission (CSRC License [2018] No. 1742), the
Company privately issued 76.55 million ordinary shares on 18 April 2019, and the total share capital
was changed to 922.30 million shares.
On 27 March 2020, the Company repurchased and cancelled 244,500 restricted shares, and the total
share capital was changed to 922.06 million shares.
On 24 March 2021, the name of the Company was changed to Wellhope Foods Co., Ltd.
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Wellhope Foods Co., Ltd. 2023 Annual Report
On 19 May 2021, the Company repurchased and written off 99,700 restricted shares, and the total
share capital was changed to 921.96 million shares.
On 22 June 2022, the Company repurchased and cancelled 5.74 million restricted shares, and the total
share capital was changed to 916.22 million shares.
In 2022, the Company increased its shareholding by 3.21 million shares through issuing convertible
bonds, and the total share capital was changed to 919.43 million shares.
Social credit code: 9121000074712989XU
Type of company: Company limited by shares (Sino-foreign joint venture, listed)
Legal representative: Jin Weidong
Principal activities of the Company and its subsidiaries: production and sale of feed and feed additives,
trade in feed raw materials, broiler farming, slaughtering and processing, livestock farming, frozen food
processing, packaging, refrigeration, sales, processing of agricultural and local specialities, etc.
Registered address (head office address): No. 169, Huishan Street, Shenbei New District, Shenyang,
Liaoning Province.
The financial statements have been approved by the 2nd meeting of the 8th session of Board of
Directors held on March 28, 2024.
IV.Basis of Preparing Financial Statements
1.Basis of preparing
The Company prepares financial statements on a going concern basis.
2.Going concern
The Company's management believes that the Company is a going concern for at least 12 months from
the reporting period.
V.Important Accounting Policies and Accounting Estimates
The following important accounting policies and accounting estimates of the Company are formulated
in accordance with the Accounting Standards for Business Enterprises. The business that does not
mentioned is subject to relevant accounting policies in the Accounting Standards for Business
Enterprises.
1.Declaration about compliance with Accounting Standards for Business Enterprises
The financial statements prepared by the Company are in line with the requirements of Accounting
Standards for Business Enterprises, which truly and completely reflect the financial position, operating
results, changes in shareholders' equity, cash flow, and other relevant information during the reporting
period.
2.Accounting period
The Company's financial year begins on January 1 and ends on December31 of the Gregorian calendar.
3.Operating cycle
The Company takes a 12-month operating cycle.
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Wellhope Foods Co., Ltd. 2023 Annual Report
4.Bookkeeping base currency
CNY.
5.Method for determining materiality criteria and basis for selection
Item Criteria for materiality
Significant receivables with a single provision for bad debts CNY 1 million
Significant receivables written off CNY 1 million
Significant construction in progress CNY 10 million
Significant dividends receivable CNY 10 million
6.Accounting arrangement methods for business combination under the same control or the
different control
(1) Accounting arrangement methods for business combination under the same control
The Company adopts pooling of interest method to deal with the accounting of business combination,
which is under the same control.
On the date of combination, the assets and liabilities acquired by the Company in business combination
under the same control shall be measured according to the book value of assets and liabilities of the
combining party in the consolidated financial statements of the final controlling party. The share of the
book value of the owner's equity held by the combining party, which is owned, by the final controlling
party in the consolidated statement of the final controlling party is regarded as the initial investment
cost of long-term equity investment in the individual financial statements. The balance between initial
cost of long-term equity investment and paid combining consideration (including paid cash, non-cash
assets transferred, book value of occurred or assumed debt as well as the total face value of issued
stocks), capital reserve (equity premium or capital premium) shall be adjusted. If the balance of capital
reserve (equity premium or capital premium) is not sufficient for offset, the surplus reserves and
undistributed profit shall be offset successively.
(2) Accounting arrangement methods for business combination under the different control
The Company adopts acquisition method to deal with the accounting of business combination, which is
under the different control.
① The identifiable assets, liabilities and contingent liabilities acquired in the business combination
under the different control are measured at fair value. Based on the fair value of assets, liabilities
incurred or assumed and issued equity securities paid out as the combining consideration on the
acquisition date, the balance between the fair value and the book value of the Company is included
into current gains and losses.
② Combined cost shall be recognized according to the following conditions respectively:
(A) For the business combination realized by one-time transaction, the combined costs shall be
recognized by the sum of the fair values, on the acquisition date, of the assets paid, the liabilities
occurred or assumed and the equity securities issued by the Company to obtain the control right on the
acquiree and the contingent consideration complying with the recognition conditions. Combined cost is
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Wellhope Foods Co., Ltd. 2023 Annual Report
initial investment cost of such long-term equity investment.
(B) For business combination realized step by step through multiple exchange transactions, the
combined cost shall be the sum of the amount of equity investments held prior to the acquisition date
that are re-measured at fair value on the acquisition date and the investment cost newly increased on
the acquisition date. The long-term equity investment in individual financial statements is the sum of
the book value of the equity investment held before the acquisition date and the investment cost newly
increased on the acquisition date. Exclude package deal.
③ The Company allocates the combined cost between the identifiable assets and liabilities acquired
on the acquisition date.
(A) Where other assets other than intangible assets obtained from the Acquiree in the business
combination (not only finite to the assets which have been originally recognized by the Acquiree), the
future economic benefits are expected to flow into the Company and the fair values reliably measured,
they shall be separately recognized and measured at the fair values.
(B) Where the fair value of the intangible assets of the Acquiree acquired by the Company in business
combination can be reliably measured, it shall be separately recognized and measured at the fair value.
(C) Where the acquiree's liabilities, other than contingent liabilities, acquired by the Company in
business combination, are expected to result in the outflow of economic benefits from the Company
and the fair value can be reliably measured, they shall be separately recognized and measured at the
fair value.
(D) Where the fair value of the contingent liabilities of the Acquiree acquired by the Company in
business combination can be reliably measured, they shall be separately recognized as liabilities and
shall be measured at the fair values.
(E) When the Company allocates the cost of business combination and confirms that it has acquired
identifiable assets and liabilities in the combination, it shall not consider the goodwill and deferred
income tax items that have been recognized by the Acquiree before the combination.
④ Disposal of the balance of the business combination cost and the share of the fair value of the
identifiable net assets obtained from the Acquiree in the combination.
(A) The balance between the business combination costs greater than the share of fair value of the
identifiable net assets obtained from the Acquiree in the combination, shall be recognized as goodwill.
(B) The balance between the business combination cost less than the share of fair value of the
identifiable net assets obtained from the Acquiree in the combination shall be disposed pursuant to the
following provisions.
(a) The measurement of the fair values of the identifiable assets, liabilities and contingent liabilities
obtained from the Acquiree as well as the combination costs shall be reviewed;
(b) After the review, if the combined costs are still less than the fair value share of the identifiable net
assets obtained from the Acquiree in the combination, the balance shall be included into the current
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Wellhope Foods Co., Ltd. 2023 Annual Report
gains and losses.
(3) Disposal of relevant expenses accrued due to business combination by the Company
① All direct related expenses accrued due to business combination of the Company (including audit,
legal service, assessment consultation and other agency expense and other relevant administrative
expenses accrued due to business combination), shall be included into current gains and losses when
accruing.
② The commission and service fee paid by the Company for issuing debt securities for the merger of
enterprise shall be included in the initial measurement amount of debt securities.
(A) If the bond is issued at the discount or par value, the amount of discount will be increased.
(B) If the bond is issued at premium, the premium amount shall be reduced in this part of expenses.
③ The commission and service fee paid by the Company for issuing equity securities as consideration
for the business combination shall be included in the initial measurement amount of equity securities.
(A) When equity securities are issued at the premium, the cost shall be deducted from the capital
reserve (equity premium).
(B) When equity securities are issued at par value or at discount, the retained earnings shall be written
down from the fee.
7.Criteria for assessing control and method of preparation of consolidated financial statements
(1) Criteria for assessing control
The scope of consolidation of the consolidated financial statements is determined on the basis of
control. Control is defined as the investor's power over the investee to earn variable returns through
participation in the investee's relevant activities and the ability to utilize its power to affect the level of
the investee's returns. The Company will reappraise control when changes in relevant facts and
circumstances result in changes in the relevant elements of control.
(2) Uniformity of accounting policies and accounting periods
All subsidiaries included in the consolidation use accounting policies and reporting periods consistent
with those of the Company. Where the accounting policies and periods of the subsidiaries are not
consistent with those of the Company, the necessary adjustments are made to the consolidated
financial statements in accordance with those of the Company.
(3) Method of preparation of consolidated financial statements
The consolidated financial statements are prepared by the parent company on the basis of the financial
statements of the Company and its subsidiaries, with adjustments to long-term equity investments in
subsidiaries accounted for under the equity method in accordance with other relevant information,
while offsetting the effects of internal transactions between the Company and its subsidiaries or among
subsidiaries on the consolidated financial statements.
(4) Reflection of excess losses incurred by subsidiaries in consolidated financial statements
In the consolidated financial statements, if the parent company's share of current losses exceeds its
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Wellhope Foods Co., Ltd. 2023 Annual Report
share of the subsidiary's opening equity, the balance reduces the equity attributable to the parent
(undistributed earnings). If the minority interest in the subsidiary's current losses exceeds the minority
interest in the subsidiary's opening equity, the balance is further reduced by the minority interest.
(5) Treatment of subsidiaries acquired or disposed during the period
①Treatment of subsidiaries acquired during the period
(A)Treatment of subsidiaries acquired in a business combination under the common control during the
reporting period
If a subsidiary is acquired during the reporting period in a business combination under the common
control, the opening balance of the consolidated balance sheet will be adjusted, and the revenues,
expenses and profits of the consolidated subsidiary from the beginning to the end of the period will be
included in the consolidated income statement and the cash flows from the beginning to the end of the
period will be included in the consolidated cash flow statement.
(B)Treatment of subsidiaries acquired in a business combination under different control during the
reporting period
If a subsidiary is acquired during the reporting period in a business combination that is not under
common control, the opening balance of the consolidated balance sheet will not adjust, and the
revenues, expenses, and profits of the subsidiary from the date of acquisition to the end of the
reporting period will be included in the consolidated income statement and the cash flows from the
date of acquisition to the end of the reporting period will be included in the consolidated cash flow
statement.
②Treatment of subsidiaries disposed during the period
If the Company disposes of a subsidiary during the reporting period, it does not adjust the opening
balance of the consolidated balance sheet, and includes the revenues, expenses and profits of the
subsidiary from the beginning of the period to the date of disposal in the consolidated income
statement and includes the cash flows from the beginning of the period to the date of disposal in the
consolidated cash flow statement.
8.Recognition standard of cash and cash equivalents
Cash shall include cash on hand of the Company, as well as bank deposit and other monetary funds that
can be used for payment at any time.
The investments with short term (generally refer to three months from the acquisition date), high
liquidity, convenience to convert into known amount of cash and with low risk of change in value
owned by Company shall be recognized as cash equivalent.
9.Foreign currency transactions and foreign currency statement translation
(1) Accounting methods of foreign currency transactions
①Initial recognition of foreign currency transaction
For foreign currency transactions, the Company shall convert the amount of foreign currency into the
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Wellhope Foods Co., Ltd. 2023 Annual Report
amount of the book-keeping base currency according to the spot exchange rate (intermediate price)
announced by the People's Bank of China on the date of the transaction. Of which, for foreign currency
exchange or related transactions, the Company shall convert according to the exchange rate on the
date of the transaction.
②Adjustment or settlement of balance sheet date or settlement date
On the balance sheet date or settlement date, the Company shall dispose the foreign currency
monetary items and foreign currency non-monetary items according to the following methods:
(A) Accounting arrangement principle for foreign currency monetary item
For foreign currency monetary items, on the balance sheet date or settlement date, the Company
adopts spot exchange rate (intermediate price) for conversion on the balance sheet date or settlement
date to adjust the amount of the accounting base currency of foreign currency monetary items caused
by exchange rate fluctuations, and treat them as exchange balances. Among them, the exchange
balance between foreign currency loans related to the acquisition, construction or production of assets
eligible for capitalization is included in the cost of assets eligible for capitalization. Other balance of
exchange shall be included into current financial expense.
(B) Accounting arrangement principle for foreign currency non-monetary item
(a) For the foreign non-monetary currency asset measured at historical cost, the Company shall convert
at spot rate (intermediate price) on transaction date with unchanging its original recording currency
amount and without exchange balance.
(b) For inventory measured at a lower cost between the cost and net realizable value, if the net
realizable value is recognized in foreign currency, the Company first converts the net realizable value
into the accounting standard currency, and then compares it with the inventory cost reflected by the
accounting standard currency when determining the end value of the inventory.
(c) For non-monetary items measured at fair values, if the fair value at the end of the period is reflected
in foreign currency, the Company shall convert the foreign currency into the amount of recording
currency based on the spot exchange rate on the day when fair values are recognized, then compare
them with the original amount of recording currency, and the balance shall be treated as gains and
losses from the changes in fair value and included into current gains and losses.
(2) Accounting arrangement methods for foreign currency statement translation
①The Company shall conduct translation of the financial statements of overseas operations as the
following methods:
(A) The asset and liability items in the balance sheets shall be translated at a spot exchange rate on the
balance sheet date, among the equity items of owner, except for the items as “undistributed profits”,
other items shall be translated at the spot exchange rate at the time when they are incurred.
(B) The income and expense items in the profit statements shall be c translated at the spot exchange
rate of the transaction date, or at a spot exchange rate which is recognized through a systematic and
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rational method and which is approximate to the spot exchange rate on the transaction date.
The balance in the financial statement of foreign currency translated by the above-mentioned methods
shall be listed in the owners’ equity item "Other Comprehensive Income" of consolidated balance
sheet.
②The Company shall translate the financial statements of overseas operations in hyperinflation
economy according to the following methods:
(A) The Company shall restate the balance sheet items by utilizing the general price index, restate the
items of the income statement by utilizing the variation of the general price index, and then translate
them at the spot exchange rate on the recent balance sheet date.
(B) If an overseas business is no longer situated in the hyperinflationary economy, the Company shall
stop the restatement and shall translate the restated financial statements at the price of the cessation
date.
③When the Company disposes any overseas operation, shall translate the balance of foreign currency
financial statements related to the overseas business as shown below under the owner's equity items
in the balance sheet, and the balance shall be transferred from the owner's equity items and disposed
as current gains and losses. When the Company disposes part of the overseas operations, shall
calculate the balance according to the proportion of the disposal of foreign currency financial
statements, and record the balance as the current gains and losses.
10.Financial instrument
The financial instrument refers to a contract that forms the financial assets of one party and the
financial liabilities or equity instruments of the other party.
(1) Classification of financial instruments
①Classification of financial assets
According to the business model of financial assets management and the contractual cash flow
characteristics of financial assets, the Company classifies financial assets into the following three
categories :(A) financial assets measured at amortized cost. (B) financial assets measured at fair value
and the changes included in other comprehensive income (including financial assets designated to be
measured at fair value and the changes are included in other comprehensive income). (C) financial
assets measured at fair value and the changes recorded in current gains or losses.
②Classification of financial liabilities
According to business characteristics and risk management requirements, the Company divides the
financial liabilities into the following two categories: (A) The financial liabilities measured at fair value
and the changes included in current gains and losses (including trading financial liabilities and financial
liabilities designated as at fair value through profit or loss). (B) Financial liabilities measured at
amortized cost.
(2) Recognition basis and measurement method of financial instruments
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①Recognition basis of financial instruments
When becoming one party of financial instrument contract, the Company shall confirm a financial asset
or financial liability.
②Measurement method of financial instruments
(A)Financial assets
Financial assets shall be measured at fair value when they are initially recognized.
For financial assets measured at fair value and the changes booked into current gains or losses, relevant
transaction expenses shall be directly recorded into current gains or losses; for other financial assets,
relevant transaction expenses shall be included in the initial recognized amount. Accounts receivable or
notes receivable arising from selling products or providing labor services that do not contain a
significant financing component or do not consider the financing component of contracts that do not
exceed one year, shall take the amount of consideration to which it is expected to be entitled as the
initially recognized amount.
(a) Financial assets measured at amortized cost
After the initial recognition, the real interest method shall be adopted to implement follow-up
measurement of such financial assets at amortized cost. Gains or losses of financial assets measured at
amortized cost and not belong to part of any hedging relationship shall be recorded into current gains
and losses when recognition is terminated, reclassified, amortized or recognized as impairment
according to the real interest method.
(b) Financial assets measured at fair value and the changes included in other comprehensive income
After the initial recognition, such financial assets shall be subsequently measured at fair value. The
impairment loss or gain, exchange gain or loss and the interest calculated by the real interest method
shall be recorded into current gains or losses, other gains or losses shall be booked into other
comprehensive income. When the recognition is terminated, the accumulated gains or losses booked
into other comprehensive income before shall be transferred out from other comprehensive income
and booked into current gains or losses.
Where the Company designates part of non-trading equity instrument investments as the financial
assets that measured at fair value and the changes included in other comprehensive income, relevant
dividend income of such financial assets shall be included in current gains or losses, and changes in fair
value shall be included in other comprehensive income. When the recognition is terminated, the
accumulated gains or losses recorded in other comprehensive income shall be transferred to retained
income, and not recorded in current gains or losses.
(c) Financial assets measured at fair value and the changes recorded in current gains and losses
Besides the financial assets measured at amortized cost and those measured at fair value and the
changes included in other comprehensive income, the Company classifies other financial assets as the
assets measured at fair value and the changes included in current gains or losses.
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In addition, in the initial recognition, in order to eliminate or significantly reduce accounting
mismatches, the Company designates some financial assets as the financial assets measured at fair
value and the changes recorded into current gains or losses. For such financial assets, the Company
adopts fair value for follow-up measurement, and the changes in fair value are recorded into current
gains or losses.
(B) Financial liabilities
(a) Financial liabilities measured at fair value and the changes included in current gains or losses
Trading financial liabilities (including derivative instruments belonging to financial liabilities) shall be
subsequently measured in accordance with the fair value, and the changes in fair value shall be
recorded into current gains or losses except for those related to hedge accounting. For the financial
liabilities that are designated to be measured at fair value and the changes included in current gains or
losses, in case the changes in the fair value of liabilities are caused by the changes in the Company's
own credit risk shall be included in other comprehensive income, and when terminates such liabilities,
the accumulated changes in fair value shall be transferred to retained earnings. Other changes in fair
value shall be booked into current gains or losses.
(b) Financial liabilities measured at amortized cost
Besides the financial liabilities that do not meet the condition of derecognition or the financial liabilities
formed by transferred financial assets or financial guarantee contract, other financial liabilities shall be
measured at amortized cost, gains or losses arising from the termination of recognition or amortization
shall be booked into current gains or losses.
(3) The recognition basis and measurement method of financial assets transfer
If the Company transfers almost all the risks and rewards in the ownership of financial assets, it shall
terminate to recognize the financial assets and separately recognize the rights and obligations
generated or retained in the transfer as assets or liabilities; if almost all the risks and rewards in the
ownership of financial assets are retained, the transferred financial assets shall continue to be
recognized. If the Company neither transfers nor retains almost all the risks and rewards on the
ownership of the financial asset, it shall deal with the following situations:
① If it does not retain control of the financial asset, the recognition of the financial asset shall be
terminated, and the rights and obligations generated or retained in the transfer shall be separately
recognize as assets or liabilities.
② If the control of the financial asset is retained, the relevant financial asset shall be recognized
according to the phases of transferred financial asset, and relevant liabilities shall be recognized
accordingly.
(4) Terminating the recognition of financial liabilities
When the current obligation of the financial liability (or part thereof) has been discharged, the
Company shall terminate the recognition of such financial liability (or part thereof) and record the
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difference between its book value and the consideration paid (including non-cash assets transferred or
liabilities assumed) into the current gains or losses.
(5) Offsetting financial assets and financial liabilities
Financial assets and financial liabilities shall be listed separately in the balance sheet and shall not be
offset mutually. However, if the following conditions are met at the same time, the net offset shall be
shown in the balance sheet:
①The Company has the legal right to offset recognized amount, and such legal right is currently
enforceable.
②The Company plans to implement net settlement, or simultaneously sell off the financial assets and
liquidate such financial liabilities.
If a financial asset is transferred without meeting the conditions for derecognition, the transferor may
not offset the transferred financial asset and the associated liabilities.
(6) Equity instrument
Equity instruments are the contracts that prove the ownership of the residual equity in the Company's
assets after deducting all liabilities. Instruments issued (including refinancing), repurchased, sold or
written off by the Company shall be taken as the disposal of changes in equity. The Company does not
recognize changes in the fair value of equity instruments.
Transaction expenses associated with equity transactions shall be deducted from equity.
The Company shall take the distribution of equity instrument holders as profit distribution, and the
stock dividends paid will not affect the total equity of shareholders.
(7) The method of recognizing the fair value of financial instruments
When implement initial recognition, if the fair value of the financial asset or financial liability is
determined by quoting the same asset or liability in an active market or by other means other than
valuation techniques of observable market data, the Company will defer the difference between that
fair value and the trading price. After the initial recognition, the Company recognizes the deferred
difference as the gain or loss of the corresponding accounting period based on the degree of change of
a factor in the corresponding accounting period.
(8) Impairment of financial assets
Regarding the financial assets measured at amortized cost and the debt instrument investment
measured at fair value and the changes recorded in other comprehensive income, the Company
recognizes loss provision based on expected credit losses.
①Recognition method of impairment provision
(A)General method
At each balance sheet date, the Company measures the expected credit losses of financial instruments
at different stages. If the credit risk of the financial instrument has not significantly increased since its
initial recognition, it is in the first stage. The Company measures the loss provision according to the
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expected credit loss within the next 12 months. If the credit risk of the financial instrument has
significantly increased since its initial recognition but no credit impairment has occurred, it is in the
second stage, the Company measures the loss provision according to the expected credit loss of the
instrument during the whole period. If the financial instrument has experienced credit impairment
since its initial recognition, it is in the third stage, and the Company measures the loss provision
according to the expected credit loss of the instrument during the whole period. For the financial
instruments (such as time deposit in commercial banks with high credit rating, financial instruments
with external credit rating of "investment grade" or above), that have lower credit risk in the balance
sheet date, assuming that the credit risk has not increased significantly since the initial recognition, the
Company measures the loss provision according to expected credit loss within the next 12 month.
(B)Simplified method
For accounts receivable and revenue-related notes receivable that do not contain a significant financing
component or do not consider the financing component of contracts that do not exceed one year, the
Company measures the loss provision in accordance with the expected credit loss for the entire
duration.
②Criteria for determining whether credit risk has increased significantly since the initial recognition
If the probability of default of the financial asset recognized on the balance sheet date is significantly
higher than the probability of default at the time of initial recognition, the credit risk of the financial
asset is proved to be significantly increased.
No matter which way used by the Company to assess whether a significant increase in credit risk, if the
contract payment is overdue more than 30 (included), usually can presume the credit risk of financial
assets increase significantly, unless rational and evidence-based information is available to be obtained
by the company at reasonable cost to prove that the credit risk does not increase significantly even
after 30 days of delay
Except for special cases, the Company uses the change of default risk within the next 12 months as a
reasonable estimate of default risk in the whole duration to determine whether the credit risk has
increased significantly since the initial recognition.
③ The combination method and determination basis of credit risk assessment based on combination
The Company respectively evaluates the credit risks of notes receivable, accounts receivable and other
receivables with the following characteristics. Such as: the receivables in dispute with the other party or
involving litigation or arbitration; receivables with a clear indication that the debtor is likely to be
unable to repay.
When it is impossible to evaluate the information of the expected credit loss of each financial asset at a
reasonable cost, the Company divides the receivables into several portfolios according to the credit risk
characteristics and calculates the expected credit loss based on the portfolios.
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Portfolio Accrual method
For the notes receivable divided into portfolios, the expected credit loss shall be
calculated based on the default risk exposure and the expected credit loss rate of
Bank's acceptance bill,
the entire duration by referring to the experience of past credit losses and
commercial acceptance bill
combining the current situation and the forecast of future economic conditions.
It will not accrue the allowance for doubtful accounts of bank’s acceptance bill
For the accounts receivable divided into aging portfolios, the Company shall, by
referring to the experience of past credit loss and combining with the current
Aging situation and the prediction of future economic situation, prepare a table
comparing the aging of accounts receivable with the expected credit loss rate of the
whole period to calculate the expected credit loss.
For receivables that shall be paid by the subsidiary included in the scope of
consolidation, the Company shall, by referring to the experience of past credit loss
Other and combining with the current situation and the prediction of future economic
situation, prepare a table comparing the aging of accounts receivable with the
expected credit loss rate of the whole period to calculate the expected credit loss.
11.Notes receivable
The recognition method and accounting arrangement method for the expected credit loss of the
receivables have been shown in "Financial Instruments".
12.Accounts receivable
The recognition method and accounting arrangement method for the expected credit loss of the
receivables have been shown in "Financial Instruments".
13.Other receivables
The recognition method and accounting arrangement method for the expected credit loss of the
receivables have been shown in "Financial Instruments".
14.Inventory
(1) Classification of inventory
The Company's inventories are categorized as raw materials, supplies (including packaging and
low-value consumables), work in progress, finished goods, goods for resale, expendable biological
assets and engineering and construction costs. Expendable biological assets include broilers, piglets and
fattening pigs.
(2) Valuation method for inventories upon delivery
The delivered materials, delivered finished products, and delivered expendable biological assets shall
be calculated by weighted average method.
(3) Inventory system of inventories
The Company uses a perpetual inventory system for its inventory and conducts periodic physical
counts.
(4) Amortization method for supplies
① Amortization method for low-value consumables
The Company uses the 50/50 amortization method for ring moulds and wooden pallets and the
flat-rate method for other low-value consumables.
②Amortization method for packaging
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The Company uses the flat-rate transfer method of amortization for packaging received.
Criteria for the recognition and accrual method of inventory write-downs
(1) Basis for determining net realizable value of inventories and provision of inventory write-downs
①Basis for determining net realizable value of inventories
(A) The net realizable value of inventories of merchandise directly held for sale, such as inventories
(finished goods) and materials held for sale, is determined in the normal course of production and
operations based on the estimated selling price of these inventories, less estimated selling expenses
and related taxes.
(B) The net realizable value of inventories of materials to be processed is recognized in the normal
course of production and operations at the estimated selling price of finished goods less the estimated
cost at the time of completion of the work, estimated selling expenses and related taxes.
(C) For the inventory hold to execute sale contract or labor contract, its net realizable value shall be
calculated based on the contract price. In case inventory quantity hold by the Company is more than
the order quantity of the sale contract, the net realizable value of the exceeding part inventory shall be
calculated based on general sale price.
(D) But for materials held for production, etc., if the net realizable value of finished products made from
the materials is higher than the cost, the materials shall still be measured at the cost; If the decline of
material prices indicates that the net realizable value of finished products is lower than the cost, the
materials can be measured based on net realizable value.
(E) For expendable biological Assets: on the balance sheet date, the expendable biological assets shall
be measured at the lower of cost and net realizable value, and the falling price reserves shall be
calculated by the same way as that for recognizing the falling price reserves of inventory. If the
influencing factors of impairment have disappeared, the amount of write-down shall be recovered and
the amount of write-down shall be reversed back and recorded into the current gains or losses. If the
Company changes the use of consumable biological assets, the cost after the change of use shall be
determined by the book value at the time of the change of use.
②Provision of inventory write-downs
(A) Provision for individual items
The Company makes provision for inventory write-downs at the lower of cost or net realizable value of
individual items of inventories.
(B) Provision by category of inventory
For large quantities of inventories with low unit prices, the Company provides for inventory
write-downs provision by category of inventory.
15.Contract assets
The contract assets refer to that, the company has rights to charge consideration for products that have
been transferred to the customer, and such rights shall depend on factors other than the passage of
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time. The Company's contract assets mainly include completed and unsettled assets, and quality
retention money. The contract assets and contract liabilities under the same contract shall be shown on
a net amount, and the contract assets and contract liabilities under different contracts shall not be
offset.
16.Long-term equity investment
(1) Initial investment cost recognition of long-term equity investment
① The recognition of the initial investment cost of long-term equity investment formed by business
combination can be seen in the accounting arrangement of business combination under the same
control and under the different control in Note 5.
② Besides the long-term equity investment formed by business combination, the initial investment
cost of the long-term equity investment obtained by other means shall be recognized in accordance
with the following provisions:
(A) For long-term equity investment acquired through paying cash, the acquisition price actually paid
shall be taken as the initial investment cost. The initial investment cost includes the expenses directly
related to the long-term equity investment obtained, taxes and other necessary expenses.
(B) The long-term equity investment obtained by issuing equity securities (equity instruments) is
regarded as its initial investment cost according to the fair value of equity securities (equity instruments)
issued. If there is conclusive evidence that the fair value of long-term equity investment obtained is
more reliable than that of equity securities (equity instruments) issued, the initial investment cost is
recognized on the basis of the fair value of long-term equity investment invested by investors. If the
fees directly related to the issuance of equity securities (equity instruments), including service fees and
commissions, are reduced by the issuance premium, and if the premium is insufficient to be reduced,
the surplus reserve and undistributed profits are reduced in turn. Long-term equity investment
obtained by issuing debt securities (debt instruments) shall be treated by issuing equity securities
(equity instruments).
(C) For the long-term equity investment obtained through debt restructuring, the Company takes the
fair value of the shares enjoyed by the creditor's rights into equity as its initial investment cost.
(D) For long-term equity investment acquired through non-monetary assets exchange, if non-monetary
assets exchange is of commercial substance and fair value of converted assets can be reliably measured.
The Company confirms its initial investment cost on the basis of fair value of converted assets, unless
there is solid evidence that the fair value of converted assets is more reliable. If the above-mentioned
conditions cannot be met, the book value of swap-out assets and related payable taxes shall be taken
as the initial investment cost of swap-in long-term equity investments.
The expenses, taxes and other necessary expenses incurred by the Company directly related to the
acquisition of long-term equity investment are included in the initial investment cost of long-term
equity investment.
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No matter how the Company acquires long-term equity investment, the cash dividends or profits
declared but not yet paid in actual payments or consideration shall be accounted for separately as the
dividend receivable and shall not constitute the cost of long-term equity investment.
(2) The subsequent measurement and loss and profit recognition method of long-term equity
investment
① The long-term equity investment checked and calculated by cost method.
(A) The Company shall adopt method to calculate the long-term equity investment can be controlled by
the invested unit, that is, investment in subsidiaries.
(B) For long-term equity investment calculated by cost method, except for cash dividends or profits
which have been declared but not yet paid in the actual price or consideration at the time of
investment, the Company, regardless of whether it belongs to the net profits realized by the invested
units before and after investment, shall recognize the investment income according to the cash
dividends or profits declared by the invested units.
② The long-term equity investment checked and calculated by equity method
(A) A Company shall adopt the equity method to account for joint venture under the joint control of the
invested entity or joint venture with significant influence.
(B) For long-term equity investment adopted equity method, if the initial investment cost is more than
the enjoyed share of net asset fair value identified by the invested units when the investment happens,
the initial investment cost of the long-term equity interest investment shall not be adjusted; If the
initial investment cost is less than the enjoyed share of net asset fair value identified by the invested
units when the investment happens, its balance shall be included into the current gains and losses and
the initial investment cost of the long-term equity investment shall be adjusted simultaneously.
(C) After obtaining a long-term equity investment, the Company shall confirm the investment losses
and profits and other comprehensive income respectively and adjust the book value of the long-term
equity investment in terms of the due owned or borne share of the net gains or losses and other
comprehensive income achieved by the invested unit. When confirming the net loss and profit of the
invested unit that shall be owned or borne, recognition shall be conducted for the net profit of the
invested unit upon adjustment based on fair value of net identifiable assets of the invested unit when
obtaining the investment. However, if the Company is unable to reasonably confirm the fair value of the
identifiable assets of the invested unit at the time of obtaining investment, the balance between the
fair value of the identifiable assets of the invested unit at the time of investment and book value is
small or it is impossible to obtain relevant information of the invested unit due to other reasons, the
Company shall directly calculate and confirm the investment gains and losses on the basis of the net
book gains and losses of the invested unit. The Company shall reduce correspondingly the book value of
the long-term equity investment according to the deserved portion of assigning cash dividends or profit
declared by the invested unit. As for other changes concerning owner's equity of the invested unit
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besides net profit or loss, other comprehensive income and profit distribution, the Company shall
adjust the book value of the long-term equity investment and include them into the owner's equity.
When affirming the investment income generated by the investment of joint ventures, the Company
offsets the unrealized internal transaction income between the Company and the joint venture which
belongs to the Company according to the share-holding ratio, and affirms the investment gains and
losses. The internal transaction loss occurred between the Company and invested unit belongs to assets
impairment loss, which shall be recognized in full amount. The Company shall offset the unrealized
internal transaction gains and losses between subsidiaries incorporated into combination and joint
ventures in accordance with the above-mentioned principles, and confirm the investment gains and
losses.
When net deficiency of the invested entity that recognized to be borne, it shall be disposed as the
following orders: The book value of the long-term equity investment shall be offset at first. If the book
value of long-term equity investment is not enough to be offset, the investment losses shall be
recognized continuously according to the limit that the book value of other long-term equity
investments substantially constitutes the net investment in the invested entity, to offset the book value
of long-term receivables. After the process above, if the Company still shall share extra duty according
to investment contract or the agreement, confirm beforehand liabilities according to estimated duty
that shall be undertaken and include it in the current investment loss. If the invested unit realizes to be
profitable in the following period, the Company shall process it in the sequence contrary to the
mentioned above after deducting the contribution of loss that hasn’t been recognized, write down the
book value that has been recognized to be estimated liabilities, resume other book values that
constitute the long-term interest and long-term equity investment of the invested unit in substance and
meanwhile confirm investment income.
(3) The basis recognized to have joint control and significant influence on the invested entity
① The basis recognized to have joint control on the invested entity
The joint control refers to the control jointly performed towards certain arrangement as per the related
agreements, and the related activities thereof must be agreed by all the participants who share the
control rights before making decisions. The relevant activities generally include sale and purchase of
goods or labor services, management of financial assets, acquisition and disposal of asset, R&D
activities and financing activities. Joint venture refers to the joint venture arrangement that the
Company has the right to arrange the net assets of the Company. The joint venture arrangement in
which the joint venture party enjoys assets related to arrangement and bears relevant liabilities is
cooperation rather than joint venture.
② The basis recognized to have significant influence on the invested entity
The significant influence refers to having the rights to participate in the decision-making of the financial
and business policies of the invested entity, but not being able to control or jointly control the
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formulation of these policies together with other parties. When the Company is able to exert significant
influence on the invested entity, the invested entity shall be its associated company.
17.Fixed assets
(1)Recognition conditions
The fixed assets refer to the tangible assets held for commodity production, rendering service, lease or
operation management with a service life of more than one accounting year. The fixed assets are
recognized when the following conditions are met,
① The economic interests related to the fixed assets are likely to flow into the Company;
② The costs of the fixed assets can be calculated reliably.
(2) Method of depreciation
Method of Period of
Item RM value rate % Yearly depreciation %
depreciation depreciation（year）
straight-line
Office and buildings 10-40 3 2.43-9.70
depreciation
Machinery straight-line
10 3 9.70
equipment depreciation
Transportation straight-line
4 3 24.25
equipment depreciation
straight-line
Other equipment 5 3 19.40
depreciation
18.Construction in progress
(1) Category of construction in process
Construction in process shall be calculated separately according to the approved projects.
(2) Criteria and timing for construction in process carried down fixed assets
All expenditures of the construction in progress that incurred before it reaches the estimated
serviceable condition shall be regarded as entry value of the fixed assets. The self-operating
engineering shall be measured according to direct materials, direct wages, direct mechanical
construction costs, etc. Package project is measured according to the payable project price; The
borrowing expenses that meet the capitalization conditions and occur before the project under
borrowing reaches its intended usable state shall be capitalized and included in the cost of the project
under construction.
If the fixed assets have reached the intended usable state but have not yet completed the final
accounts, the Company shall, from the date of reaching the intended usable state, determine its cost
according to the project budget, cost or actual cost of the project, as well as the estimated value,
transfer it to the fixed assets, and calculate the depreciation of the fixed assets in accordance with the
Company's fixed assets depreciation policy; After final account is completed, the Company shall adjust
the original provisionally estimated value according to actual cost, but not adjust the previously
accrued amount of depreciation.
19.Borrowing costs
(1) Scope of borrowing costs
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The Company's borrowing costs include interest on borrowings, amortization of discounts or premiums,
transaction costs and exchange rate differences arising on borrowings denominated in foreign
currencies.
(2) Principle of recognizing borrowing costs
Where the borrowing costs incurred by the Company are directly attributable to the acquisition,
construction, or production of a qualifying asset, they are capitalized and included in the cost of that
asset. Other borrowing costs are expensed as incurred and included in current profit or loss.
Assets eligible for capitalization include property, plant and equipment, investment property,
inventories and other assets that take a substantial period to acquire, construct or produce to get ready
for their intended use or sale.
(3) Recognition of the period for capitalizing borrowing costs
①Recognition of the timing of the capitalization of borrowing costs
Capitalization of borrowing costs may commence after the expenditure on the asset and the borrowing
costs have been incurred and the acquisition and construction or production activities necessary to
bring the asset to its working or marketable condition have commenced. The cost of an asset includes
the cash, transferred property, plant and equipment, or borrowing costs paid for the acquisition and
construction or production of assets eligible for capitalization.
②Recognition of the suspension of the capitalization of borrowing costs
If, during acquisition, construction or production, an asset eligible for capitalization is abnormally
interrupted and the interruption lasts for more than three months, the capitalization of borrowing costs
shall be suspended. The borrowing costs incurred during the interruption shall be recognized as a
current gain or loss in the income statement and the capitalization of borrowing costs shall be
continued until the commencement of the activities relating to the acquisition, construction or
production of the asset. If the interruption is a necessary step for the acquired, constructed, or
produced assets eligible for capitalization to reach an estimated usable and marketable status,
capitalization of borrowing costs shall continue.
③ Recognition of the discontinuance of the capitalization of borrowing costs
When the assets acquired, constructed or produced that are eligible for capitalization can be expected
to be ready for use and sale, the capitalization of borrowing costs shall cease; the borrowing costs
incurred thereafter shall be recognized as current gains and losses at their actual amounts.
When each part of an asset acquired, constructed or produced that qualifies for capitalization is
completed separately and each individual part is available for use or sale during the continuing
construction of other parts, and the acquisition and construction or production activities necessary for
that part of the asset to reach the estimated status of being available for use or sale have already been
substantially completed, the capitalization of borrowing costs in respect of that part of the asset shall
be discontinued. If each part of an asset that is to be acquired, constructed or produced and that is
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capable of being capitalized is completed separately, but it cannot be available for use or sale until the
whole of the construction has been completed, the entity shall cease capitalizing borrowing costs when
the whole of the asset is available for use or sale.
(4) The recognition of the amount of the capitalization of borrowing costs
① The recognition of the amount of the capitalization of borrowing interests
During the capitalization period, the interests' capitalization amount (including the amortization of
discounts or premiums) in each accounting period shall be recognized according to the following
provisions:
(A) As for special borrowing costs arising from the acquisition and construction or production of assets
which are eligible for capitalization, the amount shall be recognized based on the interests cost of the
special borrowings costs occurred actually in the current period deducting the interests' income earned
from depositing the unused borrowing costs or the income from temporary investment.
(B) Where general borrowing is used to acquire or produce assets that qualify for capitalization, the
amount of capitalized general borrowing is determined by multiplying the weighted average amount of
expenditure on assets for which cumulative capital expenditure exceeds the capital expenditure on the
specific borrowing by the general borrowing capitalization rate. The capitalization rate is based on the
weighted average interest rate of the general borrowing costs.
(C) If there is any discount or premium of the borrowings, the effective interest rate method shall be
used to recognize the amount of discount or premium amortized in each accounting period, and the
amount of interest shall be adjusted in each period.
(D) Within period of the capitalization, the interest capitalization amount of each accounting period
shall not exceed the amount of interest actually occurred to the relevant borrowings in the current
period.
② The recognition of the amount of the capitalization of borrowing auxiliary expenses
(A) Article For the ancillary expense incurred to a specifically borrowings, those incurred before assets
eligible for capitalization under acquisition, construction or production is ready for the intended use or
sale shall be capitalized at the incurred amount when they are incurred, and shall be included into the
costs of the asset eligible for capitalization those incurred after a qualified asset under acquisition and
construction or production is ready for the intended use or sale shall be recognized as expenses on the
basis of the incurred amount when they are incurred, and shall be recorded into the gains and losses of
the current period.
(B) The auxiliary expenses arising from general borrowings shall be recognized as expenses at the time
of occurrence and shall be included into the gains and losses of the current period.
③ The recognition of the amount of the capitalization of the balance of exchange
During the period of capitalization, the exchange balance on foreign currency specific borrowings shall
be capitalized, and shall be included in the cost of assets eligible for capitalization.
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20.Biological assets
(1) Classification of biological assets
Biological assets refer to live animals and plants. The Company's biological assets are divided into
expendable biological assets and productive biological assets.
(2) Conformation conditions of biological assets
The Company confirms the biological assets that satisfy the following conditions at the same time:
① The Company possesses or controls the biological asset as a result of past transaction or matter.
② The economic benefits or service potential concerning this biological asset are likely to flow into the
Company.
③ The cost of the biological asset can be measured reliably.
(3) Depreciation of productive biological assets
The Company shall depreciate the productive biological assets that have achieved the predetermined
purposes of production and operation, and reasonably confirm their service life, estimated net residual
value and depreciation method according to nature, usage and expected realization of the economic
benefits involved.
The type, service life, anticipated net residual value and yearly depreciation of the Company's
productive biological assets are as follows:
Anticipated net
Type Service life Depreciation method
residual value
Straight-line service
Pig breeder 36 months 20.00%
life
Broiler breeder 30 weeks CNY 22.50 per broiler Workload
Straight-line service
Laying duck 10 months CNY 30.00 per duck
life
Straight-line service
Layer 14 months CNY 21.00 per layer
life
Straight-line service
Breeding cow 6 years 30%
life
The depreciation rate and depreciation amount of the productive biological assets, which have been
prepared for impairment, are recalculated according to the book value, estimated net residual value
and usable life of the productive biological assets.
The Company reviews the service life, estimated net residual value and depreciation methods of
productive biological assets at regular intervals. If the expected number of service life or estimated net
residual value is different from the original estimate, or if there is any significant change in the expected
realization of the economic benefits involved, it shall be treated as a change in accounting estimate.
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21.Intangible assets
(1)Service life and the basis for its determination, estimation, amortization method or review
procedures
①Initial measurement of intangible assets
(A) Initial measurement of outsourcing intangible assets
The cost of outsourcing intangible assets, including acquisition price, relevant taxes and dues as well as
other expenditures which is directly attributed to make intangible assets to the estimated purpose.
When the payment of purchased intangible assets, price exceeding normal credit conditions is delayed
in payment, with financing nature in essence, the intangible assets cost shall be recognized based on
the present value of purchase price. The balance between the cost actually paid and the present value
of the purchasing cost will be included into the current gains and losses during the credit period except
the part that shall be capitalized.
(B) Initial calculation for independently developed intangible assets
The cost of self-developed intangible assets shall be recognized according to the total expenditure
incurred from meeting the capitalization conditions to reaching the intended purpose, and the
expenditure already expended in the previous period shall not be adjusted.
For the intangible assets researched and developed by the Company, the expenditure during research
stage shall be recorded into the current gains and losses as occurring; if the expenditures in
development stage which don't meet the conditions of capitalization shall be included into current
gains and losses when it occurs. Those meeting the condition of capitalization shall be recognized as
intangible assets. When the expenditures occur during research or development stage cannot be
distinguished, all the R&D expenditures occurred shall be included into the current gains and losses.
②Subsequent measurement of intangible assets
The service life shall be analyzed and recognized by the Company when obtaining the intangible assets.
The intangible assets acquired by the Company include intangible assets with finite service life and
indefinite service life.
(A) Subsequent calculation for intangible assets with finite service life
For intangible assets with limited service life, the Company will adopt the straight-line method to
amortize them in phases during their service life from the time they reach their intended purpose,
without reserving residual value. The amortization amount of intangible assets shall be included into
current gains and losses. If the economic benefits of an intangible asset are realized through product or
other assets, the amortization amount shall be included into the cost of the relevant assets.
The categories of intangible assets, estimated service life, estimated net residual value and annual
amortization rate are listed as follows:
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Estimated net residual Annual amortization
Categories Estimated service life(year)
value % rate %
According to the service life of
Land use rights 0 -
land license
Computer software and
5-10 0 10-20
other
The Company shall review the service life and the amortization method of intangible assets with the
finite service life on the balance sheet date.
(B) The subsequent measurement for intangible assets with indefinite service life
The Company shall not amortize intangible assets with uncertain service life during the holding period.
③Estimate the service life of intangible assets
(A) The service life of the intangible asset derived from the contractual rights or other statutory rights
shall be recognized according to the limit not exceed the contractual rights or other statutory rights; If
when the contract rights or other statutory rights are due, they can be extended because of renewal,
and there is evidence that the Company does not need to pay a large amount of cost to renew contract,
then the renewal period shall be included into the service life.
(B) If the service life is not stipulated in the contract or law, the Company shall confirm the period when
intangible assets can bring economic benefits to the Company by employing relevant experts for
demonstration or comparing with those in the same industry and referring to the Company's historical
experience.
(C) In accordance with the above method, if it is still unable to reasonably confirm the time limit when
the intangible assets can bring economic benefits for the Company, the intangible assets shall be
deemed as the intangible assets with uncertain service life.
④Arrangement of land use right
(A) The land use right acquired by the Company is usually recognized as intangible assets, but if the land
use right is used to earn rent or capital appreciation, it will be converted into investment real estate.
(B) If the Company develops and constructs buildings such as factory buildings, it shall treat the
relevant land use rights and buildings separately.
(C) The price paid for the acquisition of land and buildings shall be allocated between the building and
the right to use the land. If they cannot be reasonably distributed, they shall be recognized as fixed
assets.
(2)Scope of attribution of R&D expenditures and related accounting treatment
①Scope of attribution of R&D expenditures
It typically includes salary costs of research and development personnel, direct input costs,
depreciation and long-term amortization costs, design costs, equipment commissioning costs,
amortization of intangible assets, costs of commissioning external research and development, and
other costs, including expensed research and development costs and capitalized research and
development expenditures.
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②Specific criteria for classifying research and development phases
(A) Research stage
The research phase is the phase of original and planned investigation and research activities
undertaken to acquire and understand new scientific or technological knowledge, etc. Expenditure on
the research phase of internal research and development projects is recognized in the income
statement as incurred.
(B) Development stage
The development phase is the phase during which research results or other knowledge are applied to
plans or designs for the production of new or substantially improved materials, devices, products and
other activities prior to commercial production or use.
③Specific criteria for the capitalization of expenditures in the development phase
The expenditure of the internal R&D projects at the development stage shall be recognized as the
intangible assets when meeting the following conditions simultaneously:
(A) It is technically feasible to complete the intangible asset for use or sale.
(B) There is an intention to complete the intangible asset and use or sell it.
(C) The manner in which the intangible asset will generate economic benefits, including the ability to
demonstrate that there is a market for the product to be produced by the application of the intangible
asset or a market for the intangible asset itself and, if the intangible asset is to be used internally, the
usefulness of the intangible asset.
(D) Whether there is sufficient technical, financial and other resource support to complete the
development of the intangible asset and the ability to use or sell the intangible asset.
(E) The expenditures available for the development phase of the intangible asset can be measured.
22.Impairment of long-lived assets
The impairment test shall be made to long-term equity investments, investment property measured by
using the cost model, fixed assets, projects under construction, intangible assets with finite service life
and other long-term assets with signs of impairment on the balance sheet date. If the impairment test
result is indicated that the recoverable amount of assets is lower than its book value, it is withdrawn
impairment reserves in accordance with the balance and calculated into the impairment loss. The
recoverable amount shall be the higher one of the net amounts of the fair value of the assets deducted
by the disposal expenses and the present value of the expected future cash flow of the assets. Calculate
and confirm the assets impairment reserves based on single asset; shall it be difficult to estimate the
recoverable amount of single asset, the recoverable amount of the asset group shall be recognized
based on its belonging asset group. Asset group is the minimum asset portfolio that can generate cash
inflow independently.
Each year, the Company performs the impairment test on the goodwill and the intangible assets with
uncertain service life, no matter whether there are signs of impairment or not.
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When the Company conducts the impairment test on business reputation, as for the book value of
goodwill formed due to the business combination, it shall be amortized to related assets groups from
the acquisition date according to the reasonable methods; The part that is hard to be allocated to
related assets groups shall be amortized to related combined assets groups. When apportioning the
book value of the goodwill to the relevant asset groups or combinations of asset groups, it shall be
apportioned on the basis of the proportion of the fair value of each asset group or combination of asset
groups to the total fair value of the relevant asset groups or combinations of asset groups. Where it is
difficult to measure the fair value reliably, it shall be apportioned on the basis of the proportion of the
carrying value of each asset group or combination of asset groups to the total carrying value of the
relevant asset groups or combinations of asset groups. When making an impairment test on the
relevant asset groups or combinations of asset groups including goodwill, if any evidence shows that
the impairment of asset groups or combinations of asset groups is possible, the Company first makes an
impairment test on the asset groups or combinations of asset groups not including goodwill, calculate
the recoverable amount, compare it with the relevant carrying value and confirm the corresponding
impairment losses. The Company makes an impairment test of the asset groups or combinations of
asset groups containing business reputation, and compares the book value of these relevant asset
groups or combinations of asset groups (including the book value of goodwill amortized thereto) and
their recoverable amount. Where the recoverable amount of relevant assets or combinations of the
asset groups is lower than the book value thereof, the depreciation of the goodwill losses shall be
recognized.
Once the impairment loss of above-mentioned asset is recognized, it shall not be reversed in following
accounting periods.
23.Long-term prepaid expenses
(1) Scope of long-term prepaid expense
The long-term prepaid expense refers to an expense that has incurred but shall be amortized by the
current period and subsequent periods with the time limit of more than 1 year (exclusive), and includes
improvement expenditures incurred in fixed assets by way of operating lease.
(2) Initial calculation for long-term prepaid expense
The long-term prepaid expense received initial calculation based on the actual cost.
(3) Amortization of long-term prepaid expense
Long-term prepaid expenses in benefit period will be of amortization average using the straight-line
method.
24.Contract liabilities
Recognition method of contract liabilities
Contract liabilities refer to the obligation of the Company to transfer commodities to customers as the
Company has received the consideration or needs to receive the consideration from customers. Before
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the Company transferring the commodities to the customer, if the customer has paid the contract
consideration or the Company has obtained an unconditional right to collect the accounts, the
Company shall record the accounts received or needed to receive as the contractual liabilities based on
the time when the customer actually pays the accounts or when the accounts become due. The
contract assets and contract liabilities under the same contract shall be recorded on a net basis, and the
contract assets and contract liabilities under different contracts shall not be offset.
25.Employee remuneration
(1)The accounting arrangement method of short-term remuneration
Short-term remuneration refers to employee remuneration that needs to be paid in full amount within
12 months after the end of annual report period that the employee provides related service, except for
the remuneration given for labor relation removing with the employee.
Short-term remuneration includes: Employee salary, bonus, allowance and subsidy, employee welfare
expenses, medical insurance premiums, industrial injury insurance premium, birth insurance premium
and other social insurance premiums, housing accumulation fund, labor union expenditure and
employee education expenditure, short-term compensated absence, short-term profit-sharing plan,
non-monetary welfare and other short-term remunerations.
The Company shall confirm the actual short-term remuneration accrued as liabilities and include it into
current gains and losses or related asset cost during the accounting period of services provided by staff.
(2)The accounting arrangement method of post-employment welfare
The Company participates in the establishment of withdrawal plans, which include basic pension
insurance premiums, unemployment insurance premiums and enterprise annuity payments for
employees in accordance with relevant regulations. The amount due for deposit shall be recognized as
the debt of employee remuneration on the balance sheet date in order to exchange for the service
provided by employees during accounting period, and include into the current gains and losses or
relevant asset cost.
(3)Accounting arrangement method of dismissal welfare
Dismissal welfare refers to the remuneration for the employee when the Company terminates the labor
relationship with the employee before the labor contract expires or when the Company encourages the
employee to receive layoff voluntarily. If the Company provides dismissal welfare for staffs, the staff
remuneration liability generating from confirming dismissal welfare on the earlier one of the following
two dates shall be included into current gains and losses:
① When the Company cannot unilaterally withdraw the dismissal welfare provided by labor
relationship relief plan or reduction suggestion.
② When the Company confirms cost or expense relevant to the restructuring involved in paying
dismissal welfare.
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(4)Accounting arrangement method of other long-term employee benefits
Other long-term employee welfare refers to other welfares of all employees other than short-term
remuneration, welfare after demission and dismisses welfare. At the end of report period, staff
remuneration cost generating from other permanent staff welfare shall be recognized to the following
constituent parts:
① Cost to serve.
② Net interest amount of net liabilities or net asset of other permanent staff welfares.
③ The change generating from the recalculation of net liability or net asset of other permanent staff
welfares.
In order to simplify the relevant accounting arrangements, the total net amount of above items is
recorded into current gains and losses or relevant asset costs.
26.Estimated liabilities
(1) Recognition principles of estimated liabilities
When the external guarantees, pending litigation or arbitration, product quality assurance, loss of
contract, the obligation of restructuring matters or the relevant business meet three of the following
conditions, it shall be recognized as estimated liabilities:
① That obligation is a current obligation undertaken by the Company.
② It is likely to cause the economic benefit to flow out of the Company due to the performance of the
obligation.
③ The amount of the obligation can be measured reliably.
(2) Calculated method for estimated liabilities
The amount of the estimated liability is measured in accordance with the best estimate of the
expenditure required for the contingency.
① If there is a sequent range for the necessary expenses and if all the outcomes within this range are
equally likely to occur, the best estimate shall be recognized in accordance with the middle estimate
within the range.
② In other cases, the best estimate shall be disposed according to the following cases respectively:
(A) If the contingencies involve a single item, it shall be recognized according to the most likely
outcome.
(B) If the contingencies involve two or more items, the best estimate shall be calculated and recognized
according to all possible outcomes and the relevant probabilities.
27.Share-based payment
The share-based payments shall consist of equity-settled share-based payments and cash-settled
share-based payments.
(1) Accounting arrangement on the grant date
In addition to share-based payments of the immediate vesting, regardless of equity-settled share-based
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payment or cash-settled share-based payment, the Company shall not accept accounting arrangement
on the grant date.
(2) Accounting arrangement on each balance sheet date in the waiting period
In the waiting period of each balance sheet date, services acquired in hiring employees or other parties
shall be included in the cost, and the owner's equity or liabilities shall be recognized.
As for share-based payments with market conditions, as long as employees meet all other non-market
conditions, the acquired service shall be recognized. When the performance conditions are non-market
conditions, after the waiting period is fixed, if the subsequent information indicates that the estimation
of feasible rights needs to be adjusted, the earlier estimate shall be modified.
As for equity-settled share-based payment involving employees, according to fair value of equity
instruments in the grant date, it shall be included in cost and capital reserve (other capital reserve), and
its subsequent changes of fair value shall not be recognized. As for cash-settled share-based payment
involving employees, it shall be recounted according to fair value of equity instruments at each balance
sheet date to recognize the cost and payable employee remuneration.
On each balance sheet date within the waiting period, the Company shall make the best estimates
according to the newly obtained changes in exercisable right staff number variation and other follow-up
information, and amend the number of equity instruments of expected exercisable right.
According to the fair value of the above-mentioned equity instruments and the number of equity
instruments with predicted feasible rights, the cumulative cost and expense amount that shall be
recognized up to the current period is calculated, with the cumulative recognized amount in the
previous period subtracted, as the cost and expense amount that shall be recognized in the current
period.
(3) Accounting Arrangement on the Vesting Date
① As for equity-settled share-based payment, after vesting date, the recognized cost and the total
owner equity shall no longer be adjusted. On the vesting date, the Company shall confirm the share
capital and share premium according to the exercise situation, and the capital reserve (other capital
reserve) in the waiting period shall be carried forward at the same time.
② As for cash-settled share-based payment, after the vesting date, the Company shall no longer
confirm the cost, and changes in fair value of liabilities (staff remuneration) shall be included in current
gains and losses (changes of profit or loss in fair value).
(4) Accounting arrangement for using repurchased share as incentive stock option for staff Where the
Company rewards its employees in the form of share repurchase, when it repurchases shares, it shall
treat all the expenditures of the share repurchase as stock shares, and make a record. On each balance
sheet date during the waiting period, according to the fair value of equity instruments on the granting
date, the obtained staff services are included in the cost and expenses, and the capital reserve (other
capital reserve) is increased. When the employee's right to purchase shares of Company receives the
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price, the cost of the stocks in stock delivered to the employee and the accumulated amount of capital
reserve (other capital reserve) during the waiting period shall be resold, and the capital reserve (equity
premium) shall be adjusted according to its balance.
28.Revenue
(1) Disclosure of accounting policies for revenue recognition and measurement by nature of business
Principles and measurement of revenue recognition
①Revenue recognition
The Company recognizes revenue when it has fulfilled its contractual obligations (i.e., when the
customer obtains control of the underlying commodity). At the effective date of the contract, the
company evaluates the contract to determine each contractual performance obligation and whether
each obligation is satisfied within a specified period or at a specified point in time, and then recognizes
revenue separately when each obligation has been satisfied.
When one of the following conditions is met, a contractual obligation is fulfilled within a specified
period of time:
(A) When the Company performs its contract obligations, the customer receives and consumes the
economic benefits arising from the Company’s performance of the contract.
(B) The customer has control over the assets constructed by the Company in the course of performing
the contract.
(C) The assets produced by the Company in the course of performing the contract are irreplaceable,
and the Company is entitled to payment for the cumulative portion of performance completed to date
throughout the term of the contract.
For performance obligations that are due within a specified period of time, the Company recognizes
revenue based on the progress of performance within that period, unless the progress of performance
is not reasonably determinable. Depending on the nature of the goods, the Company determines the
appropriate progress of performance using either the output method or the input method.
For performance obligations that are to be fulfilled at a point in time rather than over a period of time,
the Company recognizes revenue when the customer obtains control of the goods.
In determining whether the customer has obtained control of the goods, the Company considers the
following evidence:
(A) The Company has a present right to receive payment for the goods, which means that the customer
has a present obligation to pay for the goods.
(B) The Company has transferred legal title to the goods to the customer, i.e. the customer has legal
title to the goods.
(C) The Company has physically transferred the goods to the customer, i.e. the customer has physical
possession of the goods.
(D) the Company has transferred the principal risks and rewards of ownership of the goods to the
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customer, i.e. the customer has acquired the principal risks and rewards of ownership of the goods.
(E) the Customer has accepted the Goods.
②Measurement of revenue
When a contract contains two or more performance obligations, at the inception of the contract the
Company allocates the transaction price to each separate performance obligation based on the relative
proportion of the individual selling price of the goods or services promised to each performance
obligation, and measures revenue based on the transaction price allocated to each separate
performance obligation. In determining the transaction price, the Company considers the impact of
variable consideration, the presence of significant financing elements in the contract, non-cash
consideration and consideration payable to the customer, assuming that the goods will be transferred
to the customer as agreed in the existing contract and that the contract will not be cancelled, renewed
or amended.
(A) Variable consideration
The Company determines the best estimate of the variable consideration based on the amount
expected or most likely to occur, provided that the transaction price that includes the variable
consideration does not exceed the amount by which it is more likely than not that the cumulative
recognized revenue will not be materially reversed when the related uncertainty is removed. In
assessing whether it is more likely than not that the cumulative recognized revenue will not be
materially reversed, the probability of a reversal of revenue and its weighting should also be
considered.
(B) Significant financing elements
If a significant financing element exists in a contract, the entity shall determine the transaction price
based on the amount payable, assuming that the customer pays in cash as soon as control of the goods
is obtained. The difference between the transaction price and the contractual consideration is
amortized over the life of the contract using the effective interest method.
(C) Non-cash consideration
When a customer pays non-cash consideration, the Company determines the transaction price based
on the fair value of the non-cash consideration. If the fair value of the non-cash consideration can’t be
reasonably estimated, the Company determines the transaction price indirectly by reference to the
individual selling prices of the goods it undertakes to transfer to the customer.
(D) Consideration payable to customers
In the case of consideration payable to a customer, the consideration payable is reduced by the
transaction price and is recognized as an offset against current revenue when the related revenue is
recognized and the customer has paid (or promised to pay) the consideration, whichever is later, unless
the consideration payable to the customer is for the purpose of obtaining other clearly distinguishable
goods from the customer.
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Specific revenue recognition policies
The Company's sales consist primarily of revenue from the sale of feed, feed raw materials, broiler
products, commercial pig and other goods. The Company recognizes revenue when payment has been
received (cash or prepayment method) or is expected to be received (credit method) and the goods
have been delivered to the customer in accordance with the contractual agreement, accepted and
confirmed by the customer and the customer has obtained control of the related goods.
29.Contract costs
Contract costs can be divided into contract performance costs and contract acquisition costs.
Costs incurred by the Company in the performance of a contract shall be recognized as an asset when
the following conditions are met.
(1) Such costs are directly related to a current or anticipated contract.
(2) Such costs increase the Company's resources that will be used in the future to meet performance
obligations.
(3) Such costs are expected to be recovered.
Assets related to contract costs are amortized on the same basis as the revenue recognition of goods or
services related to such assets. However, if the amortization period of the contract acquisition costs is
less than one year, the Company shall record such amortization into current gains or losses when it is
incurred.
If the book value of the assets related to the contract costs is higher than the difference between the
following two items, the Company will make provision for impairment of the excess part and recognize
it as impairment loss of the assets.
(1) The residual consideration expected to be realized from the transfer of goods or services related to
the asset.
(2) The estimated costs that will be incurred due to transfer such goods or services.
30.Government grant
(1) Category of government grant
Government grant refers to the monetary assets or non-monetary assets that the Company obtains
from the government free of charge, including the government grant related to assets and income.
The government grants pertinent to assets refer to the government assets that are obtained by
enterprises used for purchase or construction, or forming the long-term assets by other ways.
The government grants related to earnings refer to the government grants besides the government
grants related to assets.
(2) Recognition principle and recognition time-point of government grant
Recognition principle of government grant
① The Company can meet all attached conditions for governmental grant.
② The Company is able to receive governmental grant.
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Government grant may be recognized on condition that it meets the above conditions simultaneously.
(3) Measurement for government grant
① If the government grants belong to monetary assets, shall be calculated according to the received
or receivable amount.
② Non-monetary assets of government grants shall be measured by the fair value; if the fair value
cannot be obtained reliably, it shall be measured according to the nominal amount (the nominal
amount is CNY 1).
(4) Accounting arrangement method for government grants
① The government grant related to assets shall, when acquired, be deducted with the book value of
the relevant assets or recognized as deferred income. If it is recognized as deferred income, it shall be
divided into gains and losses in stages according to a reasonable and systematic method during the
service life of the relevant assets. The governmental grants calculated according to the nominal amount
shall be directly included in the current gains and losses.
② Government grant related to the incomes shall be disposed separately according to the conditions:
(A) If the grants are used to compensate for related expenses or losses in the later period of the
Company, it shall be recognized as deferred income and included in the current gains and losses during
recognition of relevant expenses or loss
(B) Those used for compensating the related expenses or losses have been incurred shall be included in
current gains and losses directly or relevant offset cost as obtaining.
③ If government grants that include both asset-related and revenue-related parts can be distinguished,
they are treated separately in different parts. If it is difficult to distinguish, it shall be wholly recognized
as government grants related to incomes.
④ Government grants related to the day-to-day operation of the Company shall be accounted for as
other benefits or deducted with relevant costs in accordance with the nature of its economic
operations. Government grants unrelated to the daily activities of enterprise are included in the income
and expenditure of non-business activities. If the finance allocates the discount funds directly to the
Company, the Company will deduct the relevant borrowing costs from the corresponding discount.
⑤ If it is necessary to return governmental grants which have been recognized, it shall be disposed
respectively according to the following conditions:
(A) If the book value of the relevant assets is deducted at the time of initial recognition, the book value
of the assets shall be adjusted.
(B) If there is the deferred income concerned, the book balance of the deferred income shall be offset
against, but the excessive part shall be included in the current gains and losses.
(C) In other circumstances, it shall be directly included in the gains and losses of the current period.
31.Deferred income tax assets or deferred income tax liabilities
The Company adopts the balance sheet debt method to calculate the income tax.
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(1) Recognition of the deferred income tax assets and the deferred income tax liabilities
① When the Company obtains the assets or liabilities, it shall determine its tax basis. On the balance
sheet date, the Company analyses and compares the book value of assets and liabilities with their tax
basis, and the book value of assets and liabilities with their tax basis. If there is temporary balance
between the book value of assets and liabilities and their tax basis, the Company shall recognize
deferred income tax liabilities or deferred income tax assets respectively for taxable temporary balance
or deductible temporary balance if the relevant temporary balance occurs in the current period and
meets the recognition conditions.
② Recognition basis of deferred income tax assets
(A) The Company shall confirm the deferred income tax assets arising from a deductible temporary
balance to the extent of the amount of the taxable income which it is likely to obtain, and which can be
deducted from the deductible temporary balance. The amount of taxable income likely to be obtained
in the future period includes the amount of taxable income realized in normal production and
operation activities in the future period, and the amount of taxable income increased due to the return
of temporary balance of taxable income during the period of deductible temporary balance.
(B) As for any deductible losses and tax deduction that can be carried over to the next years, the
corresponding deferred income tax assets shall be recognized to the extent that the amount of future
taxable income to be offset for the deductible loss and tax to be likely obtained.
(C) On the balance sheet date, the book value of deferred income tax assets shall be re-checked. If it is
unlikely to obtain sufficient taxable income to deduct from the benefit of the deferred income tax asset,
the carrying amount of the deferred income tax assets shall be written down. The write-down amount
shall be reversed when it is likely that the sufficient taxable income is available.
③ Recognition basis of the deferred income tax liabilities
The Company shall confirm the current or past taxable temporary balance that shall be paid but is not
paid as deferred income tax liabilities. But it doesn’t include goodwill and transaction formed by non-
business combination and the temporary balance neither affects the accounting profit nor taxable
income when transaction incurred.
(2) Measurement for the deferred income tax assets and the deferred income tax liabilities
① On the balance sheet date, the deferred income tax assets and deferred income tax liabilities shall
be measured at the applicable tax rate of the period during which the assets are expected to be
recovered or the liabilities are expected to be settled.
② If the applicable tax rate varies, the deferred income tax assets and deferred income tax liabilities
which have been recognized are re-measured, excluding the deferred income tax assets and deferred
income tax liabilities arising from any transactions or events directly recognized as the owners' equities,
the amount affected by them shall be included into the income tax expenses of the current period
during which the change occurs.
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③ When measuring deferred income tax assets and deferred income tax liabilities, the Company
adopts tax rates and tax basis consistent with the expected way of recovering assets or paying off debts.
④ The Company shall not discount any deferred income tax asset and deferred income tax liability.
32.Lease
The basis of judgement and accounting for the simplified treatment of short-term leases and leases
of low-value assets as a lessee.
(1) Accounting for right-of-use assets
A right-of-use asset is the lessee's right to use a leased asset during the lease term. At the
commencement of the lease term, the Company, as lessee, recognizes a right-of-use asset and a lease
liability for the lease, except for short-term leases and the simplified treatment of leases of low-value
assets.
① Initial measurement
On the commencement date of the lease term, the Company initially measures the right-of-use asset at
cost. This cost includes the following four items: the amount of the initial measurement of the lease
liability. The amount of lease payments to be made on or before the commencement date of the lease
term, net of the amount relating to lease incentives already enjoyed, if any. The initial direct costs
incurred, which are the incremental costs incurred to enter the lease. And costs that are expected to be
incurred such as costs incurred for dismantling and removing the leased asset or restoring the leased
asset to the condition agreed under the terms of the lease, except for those incurred to produce
inventory.
② Subsequent measurement
Subsequent to the commencement date of the lease term, the Company adopts the cost model for
subsequent measurement of the leased assets, which is measured at cost less accumulated
depreciation and accumulated impairment losses.
When the Company re-measures the lease liability in accordance with the standard, the carrying
amount of the right-of-use asset is adjusted accordingly. If the carrying amount of the right-of-use asset
has been reduced to zero, but the lease liability still needs to be further reduced, the remaining amount
is recognized in profit or loss for the current period.
The Company depreciates leased assets from the commencement of the lease term. Depreciation of
the right-of-use asset is recognized in the month in which the lease commences. Depreciation is
charged to the cost of the right-of-use asset or to current profit or loss, depending on the use to which
the right-of-use asset is put. In determining the depreciation method for right-of-use assets, the
Company depreciates right-of-use assets on a straight-line basis over the expected period of
consumption of the economic benefits associated with the right-of-use asset. If the right-of-use assets
are impaired, the Company records subsequent depreciation based on the carrying amount of the
right-of-use assets net of the impairment loss. The categories, service lives and annual amortization
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rates of the right-of-use assets are as follows:
Type of right-of-use asset Depreciable life Annual depreciation rate %
Housing & Buildings 5-20 5.00-20.00
Equipment 2-20 5.00-50.00
Land 5-40 2.50-20.00
(2) Accounting treatment of lease liabilities
① Initial measurement
The Company initially measured the lease liability at the present value of the lease payments
outstanding at the lease commencement date.
In calculating the present value of the lease payments, the Company uses the interest rate implicit in
the lease as the discount rate. If the interest rate implicit in the lease can’t be determined, the
incremental borrowing rate is used as the discount rate. The incremental borrowing rate is the interest
rate that the Company would have to pay to borrow funds on similar terms and for a similar period in a
similar economic environment to obtain an asset that approximates the value of the right of use. The
Company uses bank lending rates, adjusted for relevant factors, as the basis for determining this
incremental borrowing rate.
② Subsequent measurement
Subsequent to the commencement date of the lease term, the Company subsequently measures the
lease liability as follows: increases the carrying amount of the lease liability when interest is recognized
on the lease liability, decreases the carrying amount of the lease liability when lease payments are
made, and remeasures the carrying amount of the lease liability when the lease payments are changed
as a result of, among other things, a revaluation or lease modification.
After the commencement date of the lease term, the Company re-measures the carrying value of the
lease liability at the present value of the changed lease payments and adjusts the carrying value of the
right-of-use asset accordingly, if any of the following occurs. If the carrying amount of the right-of-use
asset has been reduced to zero, but the lease liability needs to be further reduced, the Company
recognizes the remaining amount in profit or loss for the current period.
(A) a change in the amount of a material fixed payment.
(B) a change in the amount expected to be paid for the residual value of the guarantee.
(C) a change in the index or ratio used to determine the amount of lease payments.
(D) changes in the valuation results or actual exercise of purchase options, lease renewal options or
lease termination options.
(3) Judgement and accounting policy for short-term leases and leases of low-value assets
A short-term lease is a lease with a term of less than 12 months from the commencement date of the
lease. Leases that include a purchase option are not considered to be short-term leases.
A low-value asset lease is a lease that has a low value where the individual leased asset is a new asset.
If a leased asset is subleased or is expected to be subleased, the original lease is not a low-value asset
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Wellhope Foods Co., Ltd. 2023 Annual Report
lease.
The Company simplifies the treatment of short-term leases and leases of low-value assets by charging
the lease payments for short-term leases and leases of low-value assets to the cost of the related assets
or to current profit or loss in each period during the lease term using the straight-line method or other
systematic and reasonable methods, and does not recognize right-of-use assets and lease liabilities.
Criteria for classification and accounting treatment of leases as lessors
(1) Lease classification criteria
The Company, as lessor, classifies leases into finance leases and operating leases on the
commencement date of the lease.
A finance lease is a lease that transfers substantially all of the risks and rewards associated with
ownership of the leased asset. Its ownership may or may not ultimately be transferred.
An operating lease is a lease other than a finance lease.
(2) Accounting treatments
① Finance lease
At the commencement date of the lease term, the Company recognizes the finance lease receivable
based on the net investment in the lease and derecognizes the finance lease asset. During each period
of the lease term, the Company calculates and recognizes interest income at a fixed periodic rate.
Variable lease payments received by the Company, which are not included in the net investment in the
lease are recognized in the income statement when they are actually incurred and relate to the future
performance or use of the asset.
The Company accounts for changes to finance leases as a separate lease when the amendment occurs
and both of the following conditions are met: the amendment extends the scope of the lease by
increasing the right to use one or more of the leased assets, and the increase in consideration is equal
to the separate price of the part of the lease that extends the scope of the lease, adjusted for
contractual circumstance.
②operating lease
The Company recognizes assets held under operating leases in the appropriate balance sheet heading
according to the nature of the asset. The Company capitalizes initial direct costs incurred in connection
with operating leases as part of the cost of the assets underlying the leases, which are amortized to the
income statement over the lease term on the same basis as rental income. At various times during the
lease term, the Company recognizes operating lease income as rental income using the straight-line
method or other systematic and appropriate methods. For fixed assets under operating leases, the
Company depreciates in accordance with the depreciation policy for similar assets, and for other assets
under operating leases, the Company depreciates in accordance with a systematic and appropriate
method. Variable lease payments received by the Company under operating leases that are not
recognized as lease income are recognized in the income statement when they are actually incurred.
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When an operating lease is changed, the Company accounts for it as a new lease from the effective
date of the change, and the amount of lease receipts received in advance or receivable related to the
lease prior to the change is considered to be the receipts under the new lease.
33.Other significant accounting policies and accounting estimates
(1) Basis for applying hedge accounting, and accounting treatments
①The hedging relationship is classified into fair value hedge, cash flow hedge and hedge of net
investment in foreign operations.
②For hedging that meets the following conditions, hedging accounting methods are used to deal with
it: (A)A hedging relationship consists only of qualifying hedging instruments and hedged items. (B) At
the inception of a hedge, the Company has formally designated hedging instruments and hedged items,
and prepared written documentation about the hedging relationship and the Company's risk
management strategy and risk management objectives for engaging in hedging. (C) The hedging
relationship meets the requirements for hedge effectiveness.
The Company determines that a hedging relationship meets the requirements for hedging effectiveness
when the hedge simultaneously meets all of the following conditions: (A) There is an economic
relationship between the hedged item and the hedging instrument. (B) Credit risk does not play a
predominant role in the changes in value caused by the economic relationship between hedged items
and hedging instruments. (C) Applying an appropriate hedge ratio, which does not create an imbalance
in the relative weights of hedged items and hedging instruments that would produce accounting results
inconsistent with the objective of hedge accounting. If the hedge ratio is no longer appropriate, but the
hedge risk management objective has not changed, the number of hedged items or hedging
instruments shall be adjusted so that the hedge ratio again meets the effectiveness requirement.
③Hedging accounting treatment
(A) Fair value hedge
Gain or loss arising from a hedging instrument shall be recognized in profit and loss of the current
period. If the hedging instrument is used to hedge a non-trading equity instrument (or a component
thereof) that is chosen to be measured at fair value and whose changes are included in other
comprehensive income, the gain or loss arising from the hedging instrument is recognized in other
comprehensive income.
The Gain or loss on a hedged item arising from the hedged risk exposure shall be recognized in profit or
loss of the current period and the carrying value of the hedged item that is not measured at fair value
shall be adjusted in the meantime. If a hedged item is classified as financial assets (or a component
thereof) that are measured at fair value and whose changes are recorded in other comprehensive
income according to Article 18 of Accounting Standards for Business Enterprises No.22-Recognition and
Measurement of Financial Instruments, its gains or losses due to hedged risk exposure are recorded in
profit and loss of the current period, and its carrying value that has been measured at fair value will not
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Wellhope Foods Co., Ltd. 2023 Annual Report
be adjusted. If the hedged item is a non-trading equity instrument investment (or a component thereof)
that the Company chooses to measure at fair value and its changes are recorded in other
comprehensive income, the gains or losses arising from the hedged risk exposure are recorded in other
comprehensive income, and its carrying value that has been measured at fair value will not be adjusted.
If a hedged item is an unrecognized firm commitment (or a component thereof), the cumulative
changes in the fair value arising from hedged risk after the designation of hedging relationship shall be
recognized as an asset or liability, and the related gain or loss shall be recorded in profit and loss of the
respective periods. In case of acquiring assets or bearing liabilities for performing a firm commitment,
the initially recognized amount of the assets or liabilities shall be adjusted to include the cumulative
changes in the fair value of the recognized hedged item.
If a hedged item is a financial instrument (or a component thereof) at measured amortized cost, the
adjustment to the carrying value of the hedged item shall be amortized based on the actual interest
rate recalculated on the commencement date of amortization and recorded in profit and loss of the
current period. If a hedged item is classified as financial assets (or a component thereof) that are
measured at fair value and whose changes are recorded in other comprehensive income according to
Article 18 of Accounting Standards for Business Enterprises No.22-Recognition and Measurement of
Financial Instruments, cumulative recognized hedging gains or losses are amortized in the same manner
and recorded in profit or loss of the current period, but the carrying value of financial assets (or their
components) is not adjusted.
(B) Cash flow hedge
The part of the gain or loss of the hedging instrument that belongs to the effective hedging is included
in the other comprehensive income as a reserve for cash flow hedges, and the invalid part is included in
profit or loss of the current period. The amount of reserve for cash flow hedges is recognized as the
absolute amount of the lower of the following two items: The cumulative gains or losses of hedging
instruments since hedging. The cumulative change in the present value of the estimated future cash
flows of the hedged item since hedging.
If a hedged item is a forecast transaction, which leads the Company to subsequently recognize a
non-financial asset or non-financial liability, or the forecast transaction of the non-financial asset or
non-financial liability forms a recognized commitment to which fair value hedge accounting is
applicable, the original amount of reserve for cash flow hedges recognized in other comprehensive
income shall be transferred out and recorded in the initially recognized amount of such non-financial
asset or non-financial liability.
For other cash flow hedges, the amount of reserve for cash flow hedges originally included in other
comprehensive income is transferred out during the same period when the hedged expected
transaction affects the profit and loss, and is recorded in the profit or loss of the current profit.
(C) Net investment hedge in a foreign operation
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The portion of the gain or loss on the hedging instrument that is part of an effective hedge is
recognized in other comprehensive income, and when disposing of foreign operations, it is transferred
out and recorded in the profit and loss of the current profit. The portion of the gain or loss on the
hedging instrument that is determined to be an ineffective hedge is recognized in the current period
income statement.
(2) Accounting treatment related to the buyback of the Company's shares
If the Company’s shares are acquired for reasons such as share capital reduction or employee incentives,
the amount actually paid is treated as treasury shares and is recorded as a memorandum item. If the
repurchased shares are cancelled, the difference between the total par value of the shares, calculated
on the basis of the par value of the shares cancelled and the number of shares cancelled, and the
amount actually paid for the repurchase is charged to share premium, or, if there is insufficient share
premium, to retained earnings. If the award of the repurchased shares to the Company's employees is
an equity-settled share-based payment transaction, the cost of the shares and the accumulated
amount of share premium (other capital surplus) during the vesting period are also recognized as
treasury shares, and the amount of treasury shares delivered to the employees is written off at the
same time. The cost of the shares delivered to the employees and the accumulated amount of share
premium during the vesting period are reversed when the employees receive the purchase price of the
Company's shares by exercising their options, and share premium is adjusted for the difference.
34.Changes of important accounting policies and estimates
A. Significant changes in accounting policies
CNY
Content and reason for the
statement item materially affected Amount affected
changes of accounting policies
Deferred income tax assets
34,278,629.78
(consolidated)
Deferred tax liabilities (consolidated) 35,374,697.44
See other notes for details Undistributed earnings
-850,061.49
(consolidated)
Minority interest (consolidated) -246,006.17
Income tax expense (consolidated) 1,005,782.01
Other explanations:
On November 30, 2022, the Ministry of Finance issued Interpretation No. 16 of the Accounting
Standards for Business Enterprises ([2022] No. 31, hereinafter referred to as "Interpretation No. 16"),
which states that “Accounting for assets arising from a single transaction and deferred income taxes
relating to liabilities for which the initial recognition exemption does not apply" has been effective from
January 1, 2023. The Company applied the cumulative effect retrospectively in accordance with
Interpretation No. 16 and the income tax regulations, adjusting retained earnings and other related
financial statement items. The impact of this change in accounting policy on the financial statements is
set out below:
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Wellhope Foods Co., Ltd. 2023 Annual Report
Consolidated balance sheet
CNY
December 31, 2022
Item
Before adjustment After adjustment Adjustment
Deferred income tax assets 53,630,302.69 87,908,932.47 34,278,629.78
Deferred tax liabilities 2,323,523.78 37,698,221.22 35,374,697.44
Undistributed earnings 4,968,687,250.39 4,967,837,188.90 -850,061.49
Minority interest 1,120,156,253.68 1,119,910,247.51 -246,006.17
Consolidated income statement
CNY yuan
2022
Item
Before adjustment After adjustment Adjustment
Income tax expense 91,252,227.58 92,258,009.59 1,005,782.01
VI.Tax
1.Categories of taxes and tax rate
Categories Taxation basis Tax rate
Output VAT--deductible
Value-added tax 1%, 3%, 9%, 13%
input VAT
Urban maintenance and
Turnover tax 1%, 5%, 7%
construction tax
Corporate income tax Income tax 15%, 20%, 25%
Extra charges of education
Turnover tax 3%
funds
Extra charges of local
Turnover tax 2%
education funds
Taxpayer Income tax rate%
Wellhope Foods Co., Ltd., Beijing Sanyuan Wellhope Agri-Tech Company, Xi'an
Wellhope Feed Sci-Tech Company, Gansu Wellhope Agri-Tech Company,
Guangzhou Xiangshun Livestock Equipment Company, Shenyang Fame 15
Bio-Tech Company, Yangling Wellhope Agriculture and Animal Husbandry
Company, Yunnan Wellhope Feed Mill, Lankao Wellhope Agri-Tech Company
Enterprises that
engaged in primary
66 subsidiaries, such as Dalian Huakang Xinxin Food Company, Kaifeng processing of
Wellhope Meat Products Company, Dalian Heyuan Agri-Tech Company, agricultural products,
Wafangdian Yifeng Agri-Tech Company and Shandong Heyuan Food Company, livestock and poultry
etc. raising businesses
exempt from levying
corporate income tax
Russia Wellhope Agri-Tech Company 20
Other companies 25
154 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
2.Tax preference
A. Value-added tax
In accordance with the provisions of the Circular on Exemption of Feed Products from Value Added Tax
(Caishui [2001] No. 121) and other documents, the sales of feed products by the Company and its
relevant subsidiaries are exempt from Value Added Tax ("VAT").
Pursuant to the Announcement on Policy on Reduction and Exemption of VAT for Small-Scale
Taxpayers (No. 19 of the Ministry of Finance and the State Administration of Taxation [2023]),
small-scale taxpayers with monthly turnover of less than CNY 100,000 (inclusive) are exempted from
VAT. Small VAT taxpayers applying a 3% tax rate on their taxable sales revenue are subject to a reduced
VAT tax rate of 1%, prepaid VAT items subject to a 3% prepayment rate are subject to a reduced
prepayment rate of 1%, and the policy has been extended until December 31, 2027.
B. Income tax
The Company and related subsidiaries, which are suitable to related government policies, such as
receiving the certificates of High-Tech enterprise, the applicable corporate income tax rate is 15% in the
valid period.
VII.Notes to the Items of Consolidated Financial Statements
1.Cash at bank
CNY
Item Closing balance Opening balance
Cash on hand 202,957.16 695,108.20
Cash deposit 1,894,831,603.48 1,648,285,114.62
Other cash equivalents 20,344,238.13 39,761,380.78
Total 1,915,378,798.77 1,688,741,603.60
including: total amount deposited
3,051,960.87 1,992,589.38
abroad
Other explanation:
At the end of the period, other monetary funds included CNY 974,828.25 of margin for letters of credit,
and CNY 19,369,409.88 of margin for futures transactions.
2.Trading financial assets
CNY
Item Closing balance Opening balance
Financial assets measured at fair value and the changes
829,591.32
recorded in current profits and losses
including
Others 829,591.32
Total 829,591.32
Other explanation:
Others are shares of listed company that have been acquired in exchange for debt.
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Wellhope Foods Co., Ltd. 2023 Annual Report
3.Derivative financial assets
CNY
Item Closing balance Opening balance
Futures 4,296,668.60 4,050,071.80
Total 4,296,668.60 4,050,071.80
Explanation: The accounting method of futures refer to fair value disclosure.
4.Notes receivable
A. Classification
CNY
Item Closing balance Opening balance
Bank's acceptance bill 6,620,586.95 5,778,682.68
Total 6,620,586.95 5,778,682.68
B. Bad debt provision
Not applicable.
5.Accounts receivable
A.Categorized by aging
CNY
Aging Closing book balance Opening book balance
Within 1 year 1,068,503,974.72 975,504,766.68
1-2 years 74,841,466.32 92,727,459.46
2-3 years 35,466,407.80 19,276,853.32
Over 3 years 109,873,833.23 130,520,511.25
Total 1,288,685,682.07 1,218,029,590.71
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Wellhope Foods Co., Ltd. 2023 Annual Report
B.Categorized by bad debt provision method
CNY
Closing balance Opening balance
Category Book balance Bad debt provision Book balance Bad debt provision
Accrued Book value Accrued Book value
Amount Percentage % Amount Amount Percentage % Amount
percentage % percentage %
Accruing
bad debt
21,864,441.90 1.70 21,864,441.90 100.00 46,975,455.73 3.86 45,145,551.28 96.10 1,829,904.45
provision
individually
Accruing
bad debt
1,266,821,240.17 98.30 152,334,846.16 12.02 1,114,486,394.01 1,171,054,134.98 96.14 137,827,277.69 11.77 1,033,226,857.29
provision by
portfolio
including
Aging
1,266,821,240.17 98.30 152,334,846.16 12.02 1,114,486,394.01 1,171,054,134.98 96.14 137,827,277.69 11.77 1,033,226,857.29
portfolio
Total 1,288,685,682.07 / 174,199,288.06 / 1,114,486,394.01 1,218,029,590.71 / 182,972,828.97 / 1,035,056,761.74
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Wellhope Foods Co., Ltd. 2023 Annual Report
Accruing bad debt provision individually
CNY
Closing balance
Name Accrued
Book balance Bad debt provision Reason
percentage %
Customer 1 4,734,285.00 4,734,285.00 100.00 uncollectible
Customer 2 2,348,413.70 2,348,413.70 100.00 uncollectible
Customer 3 1,631,640.00 1,631,640.00 100.00 uncollectible
Customer 4 1,395,549.91 1,395,549.91 100.00 uncollectible
Other bad debt
provision accrued 11,754,553.29 11,754,553.29 100.00 uncollectible
individually
Total 21,864,441.90 21,864,441.90 100.00 /
Accruing bad debt provision according to aging
CNY
Closing balance
Aging
Account receivable Bad debt provision Accrued percentage %
Within 1 year 1,068,034,546.62 31,753,571.26 2.97
1-2 years 71,746,147.62 10,761,922.14 15.00
2-3 years 34,442,386.34 17,221,193.17 50.00
Over 3 years 92,598,159.59 92,598,159.59 100.00
Total 1,266,821,240.17 152,334,846.16 12.02
C.Bad debt provision
CNY
Fluctuations in 2023
Opening
Category Charged off or Other Closing balance
balance Accrual Recovered
written off fluctuations
Accruing
bad debt
45,145,551.28 771,427.05 9,122,730.49 14,929,805.94 21,864,441.90
provision
individually
Accruing
bad debt
137,827,277.69 36,426,627.05 4,250,396.12 -17,668,662.46 152,334,846.16
provision
by portfolio
Total 182,972,828.97 37,198,054.10 9,122,730.49 19,180,202.06 -17,668,662.46 174,199,288.06
D.Accounts receivables written off in the current period
CNY
Item Write-off amount
Write-off of accounts receivable 19,180,202.06
Circumstances of other important accounts receivable written off:
CNY
Written off Whether generated by
Name Nature Reason
amount related party transactions
Payment for
Customer 1 14,875,625.34 Uncollectible No
products
Payment for
Customer 2 2,736,718.12 Uncollectible No
products
Total / 17,612,343.46 / /
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Wellhope Foods Co., Ltd. 2023 Annual Report
E.Top 5 accounts receivable and contract assets at the end of the reporting period
CNY
Percentage of
Closing balance of Closing balance of combined accounts
Closing balance of Closing balance of
Debtor accounts accounts receivable receivable and
contract assets bad debt provision
receivable and contract assets contract assets
closing balance
1 95,579,063.79 95,579,063.79 7.41 1,911,581.28
2 25,112,815.51 25,112,815.51 1.95 3,509,110.42
3 22,898,173.18 22,898,173.18 1.78 457,963.46
4 21,529,109.17 21,529,109.17 1.67 430,582.18
5 21,168,208.52 21,168,208.52 1.64 423,364.17
Total 186,287,370.17 186,287,370.17 14.45 6,732,601.51
6.Contract assets
A.Information of contact assets
CNY
Closing balance Opening balance
Aging
Carrying Provision for Carrying Provision for
Book value Book value
balance bad debt balance bad debt
Margin 2,482,367.50 49,647.35 2,432,720.15 1,256,805.00 69,899.58 1,186,905.42
Total 2,482,367.50 49,647.35 2,432,720.15 1,256,805.00 69,899.58 1,186,905.42
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Wellhope Foods Co., Ltd. 2023 Annual Report
B.Categorized by bad debt accrual method
CNY
Closing balance Opening balance
Category Book balance Bad debt provision Book balance Bad debt provision
Accrued Book value Accrued Book value
Amount Percentage % Amount Amount Percentage % Amount
percentage % percentage %
Accruing
bad debt
provision
individually
Accruing
bad debt
2,482,367.50 100.00 49,647.35 2.00 2,432,720.15 1,256,805.00 100.00 69,899.58 5.56 1,186,905.42
provision by
portfolio
including
Aging
2,482,367.50 100.00 49,647.35 2.00 2,432,720.15 1,256,805.00 100.00 69,899.58 5.56 1,186,905.42
portfolio
Total 2,482,367.50 / 49,647.35 / 2,432,720.15 1,256,805.00 / 69,899.58 / 1,186,905.42
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Wellhope Foods Co., Ltd. 2023 Annual Report
Provision for bad debts made on a portfolio basis:
CNY
Closing balance
Aging
Contractual assets Bad debt provision Accrued percentage %
Aging portfolio 2,482,367.50 49,647.35 2.00
Total 2,482,367.50 49,647.35 2.00
C.Provision for bad debts on contract assets during the period
CNY
Accrued in Charged off or Other
Item Recovered Reason
2023 written off fluctuations
Margin 31,391.19 -51,643.42
Total 31,391.19 -51,643.42 /
7.Prepayments
A.Presenting by aging
CNY
Closing balance Opening balance
Aging
Amount Percentage % Amount Percentage %
Within 1 year 464,654,321.65 98.89 760,310,068.40 99.72
Over 1 year 5,202,681.86 1.11 2,157,372.53 0.28
Total 469,857,003.51 100.00 762,467,440.93 100.00
B.Top 5 prepayments at the end of the reporting period
CNY
Percentage of the closing balance
Company Closing balance
of total prepayments %
1 31,113,454.50 6.62
2 23,947,522.45 5.10
3 21,011,568.43 4.47
4 20,462,930.10 4.36
5 18,219,417.25 3.88
Total 114,754,892.73 24.42
8.Other receivables
CNY
Item Closing balance Opening balance
Interest receivable
Dividends receivable 27,535,293.35
Other receivables 92,732,094.80 70,256,618.60
Total 92,732,094.80 97,791,911.95
A.Dividends receivable
CNY
Item Closing balance Opening balance
Dividends from long-term investment
27,535,293.35
under the equity method
Total 27,535,293.35
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Wellhope Foods Co., Ltd. 2023 Annual Report
B.Other receivables
a.Presenting by aging
CNY
Aging Closing book balance Opening book balance
Within 1 year 92,235,945.08 44,686,949.41
1-2 years 6,461,849.91 9,835,874.78
2-3 years 2,239,316.81 1,120,189.00
Over 3 years 16,035,831.47 28,041,960.29
Total 116,972,943.27 83,684,973.48
b.Presenting by nature
CNY
Nature Closing book balance Opening book balance
General operating receivables 30,370,169.36 38,356,333.90
Deposits and margins 42,957,773.91 38,978,639.58
Receivables from disposal of investments 39,295,000.00 2,000,000.00
Other 4,350,000.00 4,350,000.00
Total 116,972,943.27 83,684,973.48
c.Bad debt provision
CNY
First stage Second stage Third stage
Bad debt Expected credit loss Expected credit loss
Expected credit Total
provision for the entire for the entire
losses over the next
duration (no credit duration (credit
12 months
impairment) impairment)
Balance on
January 1, 4,196,194.30 9,232,160.58 13,428,354.88
2023
-recorded in
the second
stage
- recorded in
the third -1,580,583.57 1,580,583.57
stage
-recovered in
the second
stage
- recovered in
the first stage
Accrued in
the reporting 5,382,832.84 5,258,800.13 10,641,632.97
period
Recovered
Write-off 261,667.48 261,667.48
Other
432,528.10 432,528.10
fluctuations
Balance on
December 31, 8,430,971.67 15,809,876.80 24,240,848.47
2023
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Wellhope Foods Co., Ltd. 2023 Annual Report
Basis of classification of stages and percentage of provision for bad debts
Accrued percentage of
Provision for
Stage Carrying balance provision for bad Carrying value
bad debts
debts %
Stage 1 101,163,066.47 8.33 8,430,971.67 92,732,094.80
Stage 2
Stage 3 15,809,876.80 100.00 15,809,876.80
Total 116,972,943.27 20.72 24,240,848.47 92,732,094.80
d.Bad debt provision
CNY
Fluctuations in 2023
Opening Closing
Category Charged off Other
balance Accruing balance
or written off fluctuations
Other
13,428,354.88 10,641,632.97 261,667.48 432,528.10 24,240,848.47
receivables
total 13,428,354.88 10,641,632.97 261,667.48 432,528.10 24,240,848.47
e.Other receivables written off during the period
CNY
Item Amount written off
Other receivables written off 261,667.48
f.Top 5 other receivables at the end of the reporting period
CNY
Percentage of
closing balance Closing balance of bad
Company Closing balance Nature Aging
of other debt provision
receivables %
less than 1
1 33,400,000.00 28.55 Equity transfer 3,340,000.00
year
less than 1
2 10,000,000.00 8.55 Deposit 200,000.00
year
Security less than 1
3 6,000,000.00 5.13
Deposit year
Temporary
4 4,350,000.00 3.72 over 3 years 4,350,000.00
loans
Operating
5 2,014,874.40 1.72 over 3 years 2,014,874.40
receivables
Total 55,764,874.40 47.67 / / 9,904,874.40
9.Inventory
A. Category of inventory
CNY
Closing balance Opening balance
Provision for decline in Provision for decline in
value of value of
Item
Book balance inventories/impairment Book value Book balance inventories/impairment Book value
of contractual of contractual
performance costs performance costs
Raw materials 899,627,530.69 613,737.64 899,013,793.05 1,375,671,622.26 2,068,802.37 1,373,602,819.89
Work-in-progress 64,101,323.01 64,101,323.01 70,241,872.06 2,467.69 70,239,404.37
Inventories 915,053,061.24 33,437,376.01 881,615,685.23 1,129,292,339.70 5,663,491.75 1,123,628,847.95
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Wellhope Foods Co., Ltd. 2023 Annual Report
Expendable
830,749,973.43 42,645,221.93 788,104,751.50 750,801,994.48 12,755,035.13 738,046,959.35
biological assets
Low-value
33,924,805.09 33,924,805.09 30,261,679.70 30,261,679.70
consumables
Packaging 19,994,892.00 19,994,892.00 25,772,465.19 25,772,465.19
Total 2,763,451,585.46 76,696,335.58 2,686,755,249.88 3,382,041,973.39 20,489,796.94 3,361,552,176.45
B. Provision for decline in value of inventories and impairment of contractual performance costs
CNY
Increased Decreased amount
Opening amount Closing
Item
balance Recovered or Other balance
Accrued
charged off
Raw materials 2,068,802.37 331,699.92 1,786,764.65 613,737.64
Work-in-progress 2,467.69 2,467.69
Inventories 5,663,491.75 69,122,906.34 41,349,022.08 33,437,376.01
Expendable biological
12,755,035.13 74,350,926.93 44,354,240.23 106,499.90 42,645,221.93
assets
Total 20,489,796.94 143,805,533.19 87,492,494.65 106,499.90 76,696,335.58
10.Other current assets
CNY
Item Closing balance Opening balance
Deductible input VAT 124,309,514.95 148,360,679.74
Other 5,127,421.43 754,110.95
Total 129,436,936.38 149,114,790.69
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11.Long-term equity investment
CNY
Fluctuations in the current period
Gains or losses on Adjustment of Declared Closing balance
Other
Investee Opening balance Additional Decrease in investments other payment of Closing balance of impairment
changes in Other
investments investment recognized under comprehensive dividends or provision
equity
the equity method income profits
1.Joint Venture
Unphung Joint Venture
4,167,616.44 4,167,616.44
Company
Nepal Wellhope Agri-tech
7,501,575.10 7,501,575.10
Pvt. Ltd.
NEXUS WELL-HOPE
AGRITECH INTERNATIONAL 17,900,000.00 17,900,000.00 17,900,000.00
LIMITED
Subtotal 29,569,191.54 29,569,191.54 17,900,000.00
2.Associated Company
Qingdao Shenfeng Agri-Tech
12,101,282.20 267,353.82 12,368,636.02
Company
Anshan Jiuguhe Food
222,480,035.09 12,971,864.02 6,232,950.00 229,218,949.11
Company
Tai’an Jiuguhe Agriculture
69,517,616.35 -42,964,246.14 26,553,370.21
Development Company
Linghai Jiuguhe Feed Mill 52,208,347.50 -12,170,470.78 40,037,876.72
Huludao Jiuguhe Food
73,434,526.26 -38,546,579.78 34,887,946.48
Company
Dandong Wellhope
92,558,083.55 8,790,225.46 101,348,309.01
Chengsan Food Company
Dandong Wellhope
Chengsan Agri-Tech 119,912,053.78 -9,810,061.13 110,101,992.65
Company
Beipiao Hongfa Food
558,684,161.53 29,516,556.32 10,780,000.00 577,420,717.85
Company
Beijing Dahong Hengfeng
23,109,320.82 658,936.18 23,768,257.00
Sci-Tech Company
Tai'an Jiufeng Agri-Tech
- -
Company
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Wellhope Foods Co., Ltd. 2023 Annual Report
Shihaipu (Beijing)
Technology and Trade 2,019,189.52 176,290.82 2,195,480.34
Company
Shenyang Wenjie Bio-Tech
13,892,988.26 41,686.98 13,934,675.24
Company
Huludao Jiuguhe Feed Mill 3,086,991.16 3,363,000.00 1,348,446.13 1,072,437.29
Jinzhou Jiufeng Food
99,223,747.11 14,190,556.29 15,200,000.00 98,214,303.40
Company
Zhangjiakou Wellhope
Agriculture and Animal 85,541,195.49 -27,126,914.44 -58,414,281.05
Husbandry Company
Tai'an Fengjiu Agri-Tech
63,831,058.70 6,650,489.04 9,120,000.00 61,361,547.74
Company
Anshan Fengsheng Food
62,212,780.56 -6,917,155.10 55,295,625.46
Company
Dalian Chengsan Food
380,725,325.09 -45,135,248.96 335,590,076.13
Group Company
Tailai Wellhope Animal
37,799,463.33 1,366,094.23 533,681.69 -39,699,239.25
Husbandry Company
Gongzhuling Corn
Purchasing and Storing 61,468,416.32 -8,606,335.72 52,862,080.60
Company
Lankao Skyland Duck
35,036,743.87 -4,769,464.50 30,267,279.37
Industry Company
Hainan Nongken Wenfeng
Wenchang Chicken (Group) 1,090,744.95 -1,153.85 1,089,591.10
Company
PT SEKAR GOLDEN
34,913,989.58 -1,891,080.84 1,102,413.68 34,125,322.42
HARVESTA INDONESIA
GOLDEN HARVESTA INC. 104,065,497.55 12,018,351.54 2,642,030.95 118,725,880.04
PT. Mulia Harvest Agritech 55,074,231.84 4,531,234.35 1,629,915.48 61,235,381.67
Shulan Fengtai Organic
1,843,405.61 -182,095.42 1,661,310.19
Fertilizer Company
Shenyang Zhongwenjie
7,826,097.46 2,532,378.50 10,358,475.96
Bio-Tech Company
Liaoning Mubang Animal
Husbandry Equipment 17,205,527.99 1,104,500.53 6,080,000.00 12,230,028.52
Manufacturing Company
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Wellhope Foods Co., Ltd. 2023 Annual Report
Liaoning Yufeng Bio-Tech
1,364,492.92 30,471,043.00 -15,555,298.96 16,280,236.96
Company
Weifang Wellhope
6,033,351.79 227,443.04 6,260,794.83
Xinhesheng Feed Mill
Dunhua Fengda Broiler
5,824,442.48 -180,755.02 5,643,687.46
Breeding Company
Tai’an Huijun Biomass
4,245,780.44 -3,736,054.16 509,726.28
Energy Company
Dazhou Wellhope Bio-Tech
12,676,748.43 1,467,135.13 14,143,883.56
Company
Anshan Jiuguhe Paper
5,081,091.38 555,033.83 5,636,125.21
Packaging Company
Anshan Antai Plastic
3,613,395.52 642,668.96 4,256,064.48
Products Company
Wudalianchi Shengda Ranch
Professional Cooperative 13,102,980.87 -1,968,592.70 11,134,388.17
Society
Heilongjiang Beian
Agricultural Reclamation
764,814.03 131.10 764,945.13
Zongwang Dairy Farming
Professional Cooperative
Jinzhou Xinfeng Food
11,400,000.00 -235,061.64 11,164,938.36
Company
Jiyuan Sunshine Rabbit
12,174,873.39 334,618.62 12,509,492.01
Technology Company
Hebei Taihang Wellhope
31,252,330.76 1,714,574.95 60,169.24 33,027,074.95
Livestock Company
Jilin Jinfeng Livestock
4,500,000.00 -3,215.52 4,496,784.48
Company
Chongqing Kuizhou Rabbit
7,000,000.00 544,722.25 7,544,722.25
Industry Company
Huludao Jiuguhe Livestock
3,363,000.00 -906,763.97 2,456,236.03
Company
Chongqing Dahong
Agricultural and Animal
18,235,099.30 -2,481,685.08 -1,360,099.30 14,393,314.92
Husbandry Machinery
Company
Dalian Wellhope Fishery 10,900,230.99 1,874,611.37 12,774,842.36
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Wellhope Foods Co., Ltd. 2023 Annual Report
Company
Liaoning Petmate Bio-Tech
7,699,653.78 -1,159,849.38 6,539,804.40
Company
Jilin Hengfeng Animal
6,020,240.96 1,997,467.79 8,017,708.75
Health Products Company
Harbin Weierhao Trading
10,653,462.24 3,521,505.06 14,174,967.30
Company
Shenyang Yihe Enterprise
Management Partnership 1,855,062.29 -176.23 1,854,886.06
(Limited Partnership)
Shenyang Wanlitian
Agriculture and Animal 8,359,194.41 1,986,945.42 10,346,139.83
Husbandry Company
Daqing Supply and
Marketing Wellhope 6,243,781.49 -1,341,790.64 4,901,990.85
Agri-Tech Company
Indonesia Godaji Trading
2,395,781.76 -8,069.91 -38,089.30 18,739.61 2,368,362.16
Company
Indonesia Max Animal
Husbandry Technology 1,464,174.96 14,880.60 1,479,055.56
Company
Dalian Sida Food Company 45,940,098.01 -369,372.32 45,570,725.69
Shandong Fengkang Food
18,176,428.05 -18,176,428.05 -
Company
Shenyang Wellhope Huahu
282,152.08 -93,269.99 188,882.09
Food Technology Company
Dahongda Construction
Engineering Chongqing 2,141,645.85 -95,700.57 -2,045,945.28 -
Company
Subtotal 2,475,480,917.83 108,617,254.82 3,363,000.00 -133,401,069.07 5,351,151.41 552,421.30 47,412,950.00 -101,459,395.64 2,304,365,330.65 -
Total 2,505,050,109.37 108,617,254.82 3,363,000.00 -133,401,069.07 5,351,151.41 552,421.30 47,412,950.00 -101,459,395.64 2,333,934,522.19 17,900,000.00
1.In view of the peculiarities of the market and regulatory environment in the locations of Unphung Joint Venture Company, Nepal Wellhope Agri-tech Pvt. Ltd. and NEXUS WELL-HOPE
AGRITECH INTERNATIONAL LIMITED., and the extent to which the Company is able to exert its influence over them, the Company's investments in the above three companies are accounted
for using the cost method of accounting.
2.The net assets of Tai’an Jiufeng at the end of the period were CNY -9,547,777.39, the book value of long-term equity investment was reduced to CNY 0, and the unrecognized investment
loss at the end of the period recorded CNY -3,973,116.61. The net assets of Shandong Fengkang at the end of the period were CNY -16,859,472.57, the book value of long-term equity
168 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
investment was reduced to CNY 0, and the unrecognized investment loss at the end of the period recorded CNY -8,261,141.56.
12.Other equity instruments Investment
CNY
Fluctuations in the current period
Dividend
Gains included Losses included Accumulated Accumulated
income
Opening in other in other Closing gains in other losses in other
Item Additional Decrease in recognized
balance comprehensive comprehensive Other balance comprehensive comprehensive
investments investment during the
income during income during income income
period
the period the period
Liaoning China-Russia
10,000.00 10,000.00
Friendship Association
Hengshui Heyou
Agricultural and Animal 813,621.88 2,630,632.16 1,817,010.28 3,417,010.28
Husbandry Company
Xi'an Micro Monkey
340,000.00
E-commerce Company
Xinji Heyou Farming &
Animal Husbandry 1,915,770.37 648,935.41 -1,266,834.96 533,165.04
Company
Shenze Hezhi Farming &
Animal Husbandry 1,868,551.23 601,311.42 -1,267,239.81 1,732,760.19
Company
Dalian Chengsan Xuelong
Wagyu Food Processing 10,241,825.67 6,144,873.10 4,096,952.57 10,903,047.43
Company
Henan Shanghui Feed
156,127.11 8,649.27 164,776.38 50,000.00 335,223.62
Development Company
Mudanjiang Wanding
9,022,830.49 1,532,151.55 10,554,982.04 1,532,151.55
Dairy Company
Guizhou Pumeixin
Agricultural Science and 2,320,000.00 2,320,000.00
Technology Company
Total 17,325,896.26 9,022,830.49 2,320,000.00 1,540,800.82 10,025,752.09 -717,064.49 14,826,710.99 50,000.00 1,532,151.55 17,261,206.56
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Wellhope Foods Co., Ltd. 2023 Annual Report
13.Fixed assets
CNY
Item Closing balance Opening balance
Fixed assets 4,168,026,657.86 3,547,181,704.30
Disposal of fixed assets
Total 4,168,026,657.86 3,547,181,704.30
Circumstance of fixed assets
CNY
Buildings and Machinery Transportation Other
Item Total
structures equipment vehicle equipment
1. Original value
A. Opening
2,968,631,384.13 2,206,614,126.34 130,053,268.24 144,727,647.66 5,450,026,426.37
balance
B. Increased
808,564,292.82 424,900,347.08 24,199,159.91 22,212,768.26 1,279,876,568.07
amount
a. Purchased 84,781,828.97 124,851,153.27 8,535,803.87 8,111,814.66 226,280,600.77
b. Construction
in progress 482,921,055.77 209,880,906.95 2,333,943.72 2,756,570.43 697,892,476.87
transferred in
c. Increased by
business 240,861,408.08 90,168,286.86 13,329,412.32 11,344,383.17 355,703,490.43
combination
C. Decreased
166,091,245.84 117,450,572.51 12,082,665.32 6,483,343.03 302,107,826.70
amount
a. Disposed or
70,322,053.77 66,250,078.97 9,683,705.15 5,692,573.78 151,948,411.67
retired
b. Decreased by
business 82,570,062.62 46,469,894.42 2,269,960.17 790,769.25 132,100,686.46
combination
c. Transferred in
construction in 13,199,129.45 4,730,599.12 129,000.00 18,058,728.57
progress
D. Closing
3,611,104,431.11 2,514,063,900.91 142,169,762.83 160,457,072.89 6,427,795,167.74
balance
2. Accumulated
depreciation
A. Opening
689,619,536.88 943,395,542.42 93,830,631.83 86,037,164.04 1,812,882,875.17
balance
B. Increased
219,110,087.81 235,064,329.17 22,687,735.47 19,237,689.89 496,099,842.34
amount
a. Accruing 147,766,064.99 204,843,514.85 16,344,492.28 11,673,861.86 380,627,933.98
b. Increased by
business 71,344,022.82 30,220,814.32 6,343,243.19 7,563,828.03 115,471,908.36
combination
C. Decreased
46,401,704.87 60,614,795.89 9,379,790.81 5,145,285.38 121,541,576.95
amount
a. Disposed or
35,275,333.94 48,576,761.32 7,696,358.17 4,745,402.75 96,293,856.18
retired
b. Decreased by 10,971,397.81 10,874,815.76 1,665,184.48 399,882.63 23,911,280.68
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Wellhope Foods Co., Ltd. 2023 Annual Report
business
combination
c. Transferred in
construction in 154,973.12 1,163,218.81 18,248.16 1,336,440.09
progress
D. Closing
862,327,919.82 1,117,845,075.70 107,138,576.49 100,129,568.55 2,187,441,140.56
balance
3. Impairment
provision
A. Opening
51,481,093.34 37,765,502.28 91,498.28 623,753.00 89,961,846.90
balance
B. Increased
amount
a. Accruing
C. Decreased
11,160,332.02 6,457,760.05 16,385.51 17,634,477.58
amount
a. Disposed or
11,160,332.02 6,457,760.05 16,385.51 17,634,477.58
retired
D. Closing
40,320,761.32 31,307,742.23 91,498.28 607,367.49 72,327,369.32
balance
4. Book value
A. Closing book
2,708,455,749.97 1,364,911,082.98 34,939,688.06 59,720,136.85 4,168,026,657.86
value
B. Opening
2,227,530,753.91 1,225,453,081.64 36,131,138.13 58,066,730.62 3,547,181,704.30
book value
14.Construction in progress
CNY
Item Closing balance Opening balance
Construction in progress 158,377,935.65 601,125,529.45
Engineering material
Total 158,377,935.65 601,125,529.45
A.Circumstance of construction in progress
CNY
Closing balance Opening balance
Item
Book balance Book value Book balance Book value
Hebei Taihang
Wellhope-broiler 360,243,376.35 360,243,376.35
slaughtering and processing
Hainan Wellhope-feed
production line with 200,000 2,658,725.44 2,658,725.44 543,876.00 543,876.00
tons capacity per year
Lingyuan Wellhope-pig farm
630,800.00 630,800.00 2,002,418.44 2,002,418.44
construction
Dalian Zhongjia-the second
phase of chicken processing 8,286,191.62 8,286,191.62 7,050,377.03 7,050,377.03
and slaughtering project
Qingyuan Wellhope-feed
production line with 400,000 829,817.00 829,817.00
tons capacity per year
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Wellhope Foods Co., Ltd. 2023 Annual Report
Changchun Wellhope
54,455.45 54,455.45 7,814,693.83 7,814,693.83
Food-factory renovation
Fushun Agriculture and
Animal Husbandry-pig farm 3,753,480.00 3,753,480.00 67,419.00 67,419.00
construction
Shenyang Nongda-the
second phase plant 83,291,607.80 83,291,607.80
construction and renovation
Liaoning Wellhope Egg
Business-production line and
1,888,058.82 1,888,058.82
related equipment
renovation
Heilongjiang Wellhope-creep
feed and nursery feed 4,557,981.00 4,557,981.00 4,755,981.00 4,755,981.00
workshop
Baotou Hechen-feed
production line with 150,000 51,269,819.50 51,269,819.50 480,999.19 480,999.19
tons capacity per year
Pingyuan Wellhope- Cold
44,377,073.84 44,377,073.84 20,700,310.59 20,700,310.59
storage project
Anhui Wellhope Food
Company-pig
integration project with
25,328,546.45 25,328,546.45
slaughtering capacity of 1
million heads of live pig
per year
Neihuang County Wellhope-
Workshop equipment
17,476,767.29 17,476,767.29
replacement and upgrading
project
Fuzhou Wellhope- feed
production line with 200,000 894,389.04 894,389.04 15,690,619.74 15,690,619.74
tons capacity per year
Daqing Wellhope Food-Plant
7,335,512.62 7,335,512.62
phase II upgrading project
Shandong
Heyuan-Retrofitting of water 9,798,025.36 9,798,025.36 5,748,025.36 5,748,025.36
reservoirs
Haicheng Wellhope-Plant
7,353,647.36 7,353,647.36 3,280,040.00 3,280,040.00
phase II construction project
Other incidental projects 24,743,347.04 24,743,347.04 36,597,082.94 36,597,082.94
Total 158,377,935.65 158,377,935.65 601,125,529.45 601,125,529.45
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Wellhope Foods Co., Ltd. 2023 Annual Report
B.Changes of important constructions in progress
CNY
Percentage of
accumulated
Increased Amount transferred Construction Source of
Project Budget Opening balance Closing balance input
amount in fixed assets progress funds
accounting for
the budget %
Hebei Taihang
Wellhope-broiler
400,000,000.00 360,243,376.35 67,056,312.13 427,299,688.48 100.00 100.00% Self-finance
slaughtering and
processing
Hainan Wellhope-feed
production line with
72,000,000.00 543,876.00 2,203,649.44 88,800.00 2,658,725.44 90.00 95.00% Self-finance
200,000 tons capacity per
year
Self-finance
Lingyuan Wellhope-pig
85,000,000.00 2,002,418.44 4,347,271.24 5,718,889.68 630,800.00 100.00 100.00% and raised
farm construction
funds
Dalian Zhongjia-the
second phase of chicken
250,000,000.00 7,050,377.03 1,235,814.59 8,286,191.62 15.00 10.00% Self-finance
processing and
slaughtering project
Qingyuan Wellhope-feed
production line with
100,000,000.00 829,817.00 5,031,393.06 5,861,210.06 100.00 100.00% Self-finance
400,000 tons capacity per
year
Changchun Wellhope
97,300,000.00 7,814,693.83 1,772,330.45 9,532,568.83 54,455.45 100.00 100.00% Self-finance
Food-factory renovation
Fushun Agriculture and
Animal Husbandry-pig 380,300,000.00 67,419.00 5,538,425.54 1,852,364.54 3,753,480.00 100.00 100.00% Raised funds
farm construction
Shenyang Nongda-the
Self-finance
second phase plant
110,000,000.00 83,291,607.80 771,688.54 84,063,296.34 100.00 100.00% and raised
construction and
funds
renovation
173 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Liaoning Wellhope Egg
Business-production line
46,685,000.00 1,888,058.82 3,529,632.95 5,417,691.77 100.00 100.00% Self-finance
and related equipment
renovation
Heilongjiang Self-finance
Wellhope-creep feed and 50,000,000.00 4,755,981.00 416,000.00 614,000.00 4,557,981.00 34.00 15.00% and raised
nursery feed workshop funds
Baotou Hechen-feed
production line with
60,000,000.00 480,999.19 51,175,662.71 386,842.40 51,269,819.50 86.09 95.00% Self-finance
150,000 tons capacity per
year
Pingyuan Wellhope- Cold
88,000,000.00 20,700,310.59 52,996,813.20 29,320,049.95 44,377,073.84 80.00 80.00% Self-finance
storage project
Anhui Wellhope Food
Company-pig
Self-finance
integration project with
162,000,000.00 25,328,546.45 475,144.48 25,803,690.93 90.00 96.00% and raised
slaughtering capacity of 1
funds
million heads of live pig
per year
Neihuang County
Wellhope- Workshop
23,930,262.41 17,476,767.29 1,687,919.55 19,164,686.84 100.00 100.00% Self-finance
equipment replacement
and upgrading project
Fuzhou Wellhope- feed
production line with
80,000,000.00 15,690,619.74 42,952,677.45 57,748,908.15 894,389.04 76.12 98.00% Self-finance
200,000 tons capacity per
year
Daqing Wellhope
Food-Plant phase II 25,000,000.00 7,335,512.62 11,131,432.37 18,466,944.99 100.00 100.00% Self-finance
upgrading project
Shandong
Heyuan-Retrofitting of 15,000,000.00 5,748,025.36 4,050,000.00 9,798,025.36 65.32 66.00% Self-finance
water reservoirs
Haicheng Wellhope-Plant
phase II construction 73,500,000.00 3,280,040.00 10,058,206.36 5,984,599.00 7,353,647.36 13.00 13.00% Self-finance
project
Total 2,118,715,262.41 564,528,446.51 266,430,374.06 697,324,231.96 133,634,588.61 / / /
174 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
15.Productive biological asset
Productive biological assets using cost measurement model
CNY
Livestock industry
Item Total
Broiler breeder Pig breeder Laying duck Layer Cow breeder
1. Original value
A. Opening balance 60,196,868.17 147,417,896.64 3,078,437.67 22,284,921.09 1,957,036.79 234,935,160.36
B. Increased amount 81,332,200.65 284,886,304.95 31,216,802.23 19,785,704.14 417,221,011.97
a. Externally purchased 40,529,284.19 91,742,498.88 2,497,526.84 5,835,668.60 140,604,978.51
b. Breeding by own farm 40,802,916.46 122,354,994.40 28,719,275.39 13,950,035.54 205,827,221.79
c. Increased by business
70,788,811.67 70,788,811.67
combination
C. Decreased amount 76,629,165.36 283,667,425.80 3,078,437.67 25,458,699.96 16,682,961.94 405,516,690.73
a. Disposed 76,629,165.36 226,705,558.26 3,078,437.67 8,440,060.73 16,682,961.94 331,536,183.96
b.Charged to expendable
56,961,867.54 17,018,639.23 73,980,506.77
biological assets
D. Closing balance 64,899,903.46 148,636,775.79 28,043,023.36 5,059,778.99 246,639,481.60
2. Accumulated depreciation
A. Opening balance 19,517,075.64 19,899,960.34 607,224.57 8,316,966.92 14,010.21 48,355,237.68
B. Increased amount 46,654,099.71 58,271,889.80 513,111.10 9,296,945.38 846,269.61 115,582,315.60
a. Accruing 46,654,099.71 43,290,660.80 513,111.10 9,296,945.38 846,269.61 100,601,086.60
b. Increased by business
14,981,229.00 14,981,229.00
combination
C. Decreased amount 47,690,747.15 55,863,703.84 1,120,335.67 11,876,152.78 523,669.13 117,074,608.57
a. Disposed 47,690,747.15 47,734,176.75 1,120,335.67 3,174,321.41 523,669.13 100,243,250.11
b.Charged to expendable
8,129,527.09 8,701,831.37 16,831,358.46
biological assets
D. Closing balance 18,480,428.20 22,308,146.30 5,737,759.52 336,610.69 46,862,944.71
3. Impairment provision
4. Book value
A. Closing book value 46,419,475.26 126,328,629.49 22,305,263.84 4,723,168.30 199,776,536.89
B. Opening book value 40,679,792.53 127,517,936.30 2,471,213.10 13,967,954.17 1,943,026.58 186,579,922.68
175 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
16.Right-of-use asset
CNY
Buildings and Machinery
Item Land Total
structures equipment
1. Original value
A. Opening balance 237,997,265.99 60,673,174.46 86,245,329.44 384,915,769.89
B. Increased amount 347,663,205.96 39,285,015.24 11,797,848.78 398,746,069.98
a. New lease 200,435,621.78 39,285,015.24 9,847,525.55 249,568,162.57
b. Increased by
business combination 147,227,584.18 1,950,323.23 149,177,907.41
C. Decreased amount 135,672,549.74 10,769,342.91 146,441,892.65
a. Expiry of tenancy 135,672,549.74 10,769,342.91 146,441,892.65
b. Decreased by
business combination
D. Closing balance 449,987,922.21 99,958,189.70 87,273,835.31 637,219,947.22
2. Accumulated
amortization
A. Opening balance 28,373,659.65 9,237,685.33 18,876,327.81 56,487,672.79
B. Increased amount 68,899,005.33 5,727,835.47 9,476,888.50 84,103,729.30
a. Accruing 45,149,057.50 5,727,835.47 9,072,237.99 59,949,130.96
b. Increased by
business combination 23,749,947.83 404,650.51 24,154,598.34
C. Decreased amount 27,528,181.30 1,034,456.96 28,562,638.26
a. Disposed
b. Expiry of tenancy 27,528,181.30 1,034,456.96 28,562,638.26
D. Closing balance 69,744,483.68 14,965,520.80 27,318,759.35 112,028,763.83
3. Impairment provision
4. Book value
A. Closing book value 380,243,438.53 84,992,668.90 59,955,075.96 525,191,183.39
B. Opening book value 209,623,606.34 51,435,489.13 67,369,001.63 328,428,097.10
17.Intangible assets
CNY
Computer software
Item Land use rights Total
and other
1. Original value
A. Opening balance 425,884,389.68 18,325,636.17 444,210,025.85
B. Increased amount 23,761,833.99 5,355,428.62 29,117,262.61
a. Purchased 23,761,833.99 5,355,428.62 29,117,262.61
b. Increased by business
combination
C. Decreased amount 15,396,226.98 3,238,872.41 18,635,099.39
a. Disposed 10,193,588.98 3,238,872.41 13,432,461.39
b. Decreased by business
5,202,638.00 5,202,638.00
combination
D. Closing balance 434,249,996.69 20,442,192.38 454,692,189.07
2. Accumulated
amortization
A. Opening balance 71,244,926.33 9,977,039.57 81,221,965.90
B. Increased amount 10,640,016.88 3,934,260.70 14,574,277.58
a. Accruing 10,640,016.88 3,934,260.70 14,574,277.58
b. Increased by business
combination
C. Decreased amount 2,451,931.36 2,182,897.69 4,634,829.05
176 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
a. Disposed 1,567,116.19 2,182,897.69 3,750,013.88
b. Decreased by business
884,815.17 884,815.17
combination
D. Closing balance 79,433,011.85 11,728,402.58 91,161,414.43
3. Impairment provision
4. Book value
A. Closing book value 354,816,984.84 8,713,789.80 363,530,774.64
B. Opening book value 354,639,463.35 8,348,596.60 362,988,059.95
18.Goodwill
A.Original value of goodwill
CNY
Increased amount Decreased
amount
Invested entity or Opening balance Closing balance
matters forming goodwill Resulting from
business Disposal
combination
Dalian Zhongjia Food
Company 290,425.67 290,425.67
Tianyi Choumei (Beijing)
Technology Company 1,844,995.57 1,844,995.57
Total 2,135,421.24 2,135,421.24
B.Impairment provision for goodwill
CNY
Increased amount Decreased
Invested entity or Opening balance amount Closing balance
matters forming goodwill
Accrued Disposal
Tianyi Chuwei (Beijing)
Technology Company 1,844,995.57 1,844,995.57
Total 1,844,995.57 1,844,995.57
C.Specific determination of recoverable amount
The recoverable amount is determined as the present value of the expected future cash flows.
CNY
Key
Key
parameters
parameters Basis for
Basis for of the
for the determining
Number of determining stabilization
forecast key
Recoverable Impairment years in the parameters period
Item Opening balance period parameters
amount amount forecast during the (growth
(growth for the
period forecast rate, profit
rates, profit stabilization
period margin,
margins, period
discount
etc.)
rate, etc.)
Determined
by reference Determined
to historical by reference
growth to historical
rates, growth rates,
Profit Profit
industry industry
Dalian Zhongjia margin, margin,
238,077,526.82 352,715,515.74 5 growth growth rates
Food Company discount discount
rates and and the
rate, etc. rate, etc.
the Company's
Company's current
current overall
overall capabilities
capabilities
Total 238,077,526.82 352,715,515.74 / / / / /
177 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
D.Performance commitments and corresponding goodwill impairment
Other explanations:
Tianyi Choumei (Beijing) Technology Company was canceled in January 2024.
19.Long-term prepaid expenses
CNY
Item Opening balance Increased amount Amortized Closing balance
amount
Land formation
costs 15,479,168.31 3,523,906.10 9,440,157.47 9,562,916.94
Fixed assets
betterment 42,637,266.05 11,484,021.80 13,894,341.96 40,226,945.89
Other 6,017,190.80 17,274,597.56 7,757,607.80 15,534,180.56
Total 64,133,625.16 32,282,525.46 31,092,107.23 65,324,043.39
20.Deferred tax assets or deferred tax liabilities
A. Deferred tax assets not offset
CNY
Closing balance Opening balance
Deductible Deductible
Item Deferred tax Deferred tax
temporary temporary
assets assets
difference difference
Provision for the
210,834,718.41 46,027,617.10 199,498,451.76 43,947,379.75
impairment of assets
Unrealized profit on
14,338,602.28 3,046,834.38 19,215,196.40 4,505,312.11
internal transactions
Deferred income 5,709,166.67 983,925.00 29,693,799.99 4,678,903.33
Fair value changes 234,900.00 58,725.00 1,994,830.00 498,707.50
Lease liabilities 211,468,285.47 52,248,841.86 138,214,519.11 34,278,629.78
Total 442,585,672.83 102,365,943.34 388,616,797.26 87,908,932.47
B. Deferred tax liabilities not offset
CNY
Closing balance Opening balance
Taxable Taxable
Item Deferred tax Deferred tax
temporary temporary
liabilities liabilities
differences differences
Carrying value of assets
217,729,256.18 53,459,620.43 155,130,897.15 37,698,221.22
greater than tax basis
Total 217,729,256.18 53,459,620.43 155,130,897.15 37,698,221.22
C. Details of unrecognized deferred tax asset
CNY
Item Closing balance Opening balance
Deductible temporary difference 67,331,835.17 51,089,203.08
Deductible losses 355,689,965.17 309,691,542.00
Total 423,021,800.34 360,780,745.08
D. The deductible losses of unrecognized deferred tax assets will be due in the following years
CNY
Year Closing balance Opening balance
2024 44,012,348.46 51,516,234.05
2025 30,102,261.27 38,711,534.19
2026 56,927,486.74 63,889,215.61
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Wellhope Foods Co., Ltd. 2023 Annual Report
2027 106,163,347.12 135,382,865.67
2028 106,548,400.53 8,255,571.42
2029 4,278,584.71 4,278,584.71
2030 75,655.03 75,655.03
2031 4,299,903.27 4,299,903.28
2032 3,281,978.04 3,281,978.04
Total 355,689,965.17 309,691,542.00
21.Other non-current assets
CNY
Closing balance Opening balance
Item
Book balance Book value Book balance Book value
Prepayments for long-lived assets 76,500,287.28 76,500,287.28 85,901,907.05 85,901,907.05
Prepayments for fees to contract farms 521,843,768.88 521,843,768.88 549,839,474.82 549,839,474.82
Prepayments for house rent 2,200,000.00 2,200,000.00 3,000,000.00 3,000,000.00
Total 600,544,056.16 600,544,056.16 638,741,381.87 638,741,381.87
22.Assets with restricted ownership or use
CNY
Closing balance Opening balance
Item Type of Book value Type of
Book balance Book value Note Book balance Note
restriction restriction
Futures
margins,
Futures
letter of
margin,
credit
Cash at bank 20,344,238.13 20,344,238.13 Pledge letter of 39,761,380.78 39,761,380.78 Pledge
margins,
credit
bankers'
margin
acceptances
margins
Total 20,344,238.13 20,344,238.13 / / 39,761,380.78 39,761,380.78 / /
23.Short-term borrowing
CNY
Item Closing balance Opening balance
Guaranteed loans 208,263,920.52 232,845,975.15
Credit loans 761,240,000.00 699,146,360.00
Interest due 1,453,388.98 1,793,456.81
Total 970,957,309.50 933,785,791.96
Explanation:
The guaranteed loans at the end of the period were bank loans guaranteed by the Company for its
subsidiaries, Lingyuan Wellhope, Liaoning Expert Trading, Puyang Wellhope, and Lixin Xiangfeng.
24.Notes payable
CNY
Item Closing balance Opening balance
Bank acceptance 600,000.00
Total 600,000.00
179 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
25.Accounts payable
CNY
Item Closing balance Opening balance
Accounts payable related to purchasing and expenses 1,511,676,623.40 1,607,441,382.04
Accounts payable related to long-lived assets 118,112,935.54 84,211,257.24
Total 1,629,789,558.94 1,691,652,639.28
26.Advance receipt
CNY
Item Closing balance Opening balance
Sales receipts in advance 18,172,031.73 17,873,252.23
Total 18,172,031.73 17,873,252.23
27.Contract Liabilities
CNY
Item Closing balance Opening balance
Sales receipts in advance 252,530,723.35 336,134,719.84
Total 252,530,723.35 336,134,719.84
28.Payroll
A. Payroll payable
CNY
Decreased Change in
Opening Increased
Item amount scope of Closing balance
balance amount
consolidation
1. Short-term
179,647,114.20 1,249,436,263.48 1,228,277,448.72 23,333,024.81 224,138,953.77
compensation
2. Post-employment
benefits- defined 2,747,320.39 98,239,625.52 99,771,384.02 2,885.45 1,218,447.34
contribution plan
3. Termination benefits 1,612,038.34 1,612,038.34
4. Other benefits due
within one year
Total 182,394,434.59 1,349,287,927.34 1,329,660,871.08 23,335,910.26 225,357,401.11
B. Short-term compensation
CNY
Change in
Opening Increased Decreased
Item scope of Closing balance
balance amount amount
consolidation
1. Salaries, bonuses,
177,218,586.47 1,094,647,836.34 1,073,420,793.52 23,330,940.76 221,776,570.05
allowances and subsidies
2. Employee welfare
68,607,468.39 68,607,468.39
expenses
3. Social insurance
1,082,406.48 55,533,660.62 55,907,659.07 2,084.05 710,492.08
premiums
including: Medical
952,586.18 49,234,286.52 49,545,124.83 1,874.05 643,621.92
insurance premiums
Employment injury
107,575.87 4,702,687.54 4,766,291.55 210.00 44,181.86
insurance premiums
Maternity insurance
22,244.43 1,596,686.56 1,596,242.69 22,688.30
premiums
4. Housing provident
161,386.76 21,102,393.15 21,113,728.15 150,051.76
fund
5. Labor union funds, 1,184,734.49 9,544,904.98 9,227,799.59 1,501,839.88
180 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
employee education
expense
Total 179,647,114.20 1,249,436,263.48 1,228,277,448.72 23,333,024.81 224,138,953.77
C. Defined contribution plan
CNY
Change in
Opening Increased Decreased Closing
Item scope of
balance amount amount balance
consolidation
Basic endowment insurance 2,658,591.38 94,923,699.63 96,401,744.05 2,720.00 1,183,266.96
Unemployment insurance
88,729.01 3,315,925.89 3,369,639.97 165.45 35,180.38
expense
Enterprise annuity
Other post-employment benefits
Total 2,747,320.39 98,239,625.52 99,771,384.02 2,885.45 1,218,447.34
29.Tax payable
CNY
Item Closing balance Opening balance
Value-added tax 2,693,798.13 2,410,807.08
Enterprise income tax 27,984,343.36 39,651,968.46
Individual income tax 2,511,721.24 5,167,196.20
Urban maintenance and construction tax 128,663.10 215,239.13
Extra surcharge 97,215.04 164,093.37
Property tax 1,641,369.59 1,452,755.25
Urban land use tax 1,729,045.15 1,743,036.67
Stamp duty 5,040,290.51 3,823,586.78
Others 623,293.58 381,660.57
Total 42,449,739.70 55,010,343.51
30.Other payables
CNY
Item Closing balance Opening balance
Interest payable 5,184,931.51 3,105,236.78
Dividend payable 16,453,038.17 14,943,072.75
Other payables 458,142,673.91 442,822,193.93
Total 479,780,643.59 460,870,503.46
A.Interest payable
CNY
Item Closing balance Opening balance
Interest payable on convertible
5,184,931.51 3,105,236.78
bonds
Total 5,184,931.51 3,105,236.78
B.Dividend payable
CNY
Item Closing balance Opening balance
Common stock dividends 16,453,038.17 14,943,072.75
Total 16,453,038.17 14,943,072.75
C.Other payables
Other payables presented by nature
181 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
CNY
Item Closing balance Opening balance
Operating payables related to expenses
391,398,162.64 340,661,315.53
and transactions
Investment-related payables 2,064,978.80 4,885,578.40
Transactions with external parties 64,679,532.47 97,275,300.00
Total 458,142,673.91 442,822,193.93
31.Non-current liability due within 1 year
CNY
Item Closing balance Opening balance
Long-term loans due within 1 year 812,076,600.00 429,600,000.00
Long-term payables due within 1 year 63,513,759.91 18,656,882.06
Lease liabilities due within 1 year 57,140,197.16 23,071,713.28
Total 932,730,557.07 471,328,595.34
32.Other non-current liability
CNY
Item Closing balance Opening balance
Unamortized output VAT 6,656,358.86 5,334,961.22
Total 6,656,358.86 5,334,961.22
33.Long-term borrowings
CNY
Item Closing balance Opening balance
Guaranteed loans 272,667,461.86 178,291,600.00
Credit loans 645,604,210.00 1,132,564,210.00
Interest payable 1,779,845.33 1,901,499.28
Total 920,051,517.19 1,312,757,309.28
The guaranteed loan is the bank loan guaranteed by the Company for its subsidiaries, Anhui Wellhope
Food Company and Daqing Wellhope Food Company. The guaranteed loans at the end of the period
were bank loans guaranteed by the Company for its subsidiaries Anhui Wellhope, Daqing Wellhope,
Dalian Heyuan, Dalian Zhongjia, Liaoning Qingyuan, Hebei Taihang, and Haicheng Wellhope.
34.Bonds payable
A.Bonds payable
CNY
Item Closing balance Opening balance
Wellhope convertible bonds 1,305,789,795.09 1,257,828,066.86
Total 1,305,789,795.09 1,257,828,066.86
182 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
B.Details of bonds payable: (excluding other financial instruments such as preferred shares and perpetual bonds classified as financial liabilities)
CNY
Amortization of Amount of bonds
Bond Par Bond Total issuing Issuing in the Interest accrued Current period
Coupon rate% Issuing date Opening balance premium and converted to shares Closing balance
name value maturity amount reporting period at par value Reimbursement
discount during the period
0.3 in year 1,
0.5 in year 2,
Wellhope
1.0 in year 3,
convertible 100 Apr. 22, 2022 6 years 1,500,000,000.00 1,257,828,066.86 47,994,728.23 32,959,000.00 33,000.00 1,305,789,795.09
1.5 in year 4,
bond
1.8 in year 5,
2.0 in year 6
Total / / / / 1,500,000,000.00 1,257,828,066.86 47,994,728.23 32,959,000.00 33,000.00 1,305,789,795.09
C.Description of convertible corporate bonds
Bond name Conditions for conversion of shares Conversion time
Wellhope Convertible bonds may be converted to shares from the first trading day
October 28, 2022 to April 21, 2028
convertible bond after the expiration of 6 months from the closing date of issuance
183 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
35.Lease liabilities
CNY
Item Closing balance Opening balance
Lease liabilities 425,141,619.45 246,074,084.08
Lease liabilities due within 1 year -57,140,197.16 -23,071,713.28
Total 368,001,422.29 223,002,370.80
36.Long-term payables
CNY
Item Closing balance Opening balance
Long-term payable 42,542,892.62 7,685,803.59
Special payable
Total 42,542,892.62 7,685,803.59
Long-term payable presented by nature
CNY
Item Opening balance Closing balance
Long-term borrowings from
42,542,892.62 7,685,803.59
non-bank financial institutions
37.Deferred income
CNY
Opening Increased Decreased Closing
Item Reason
balance amount amount balance
Government grant 78,011,407.06 9,554,300.00 14,146,133.01 73,419,574.05
total 78,011,407.06 9,554,300.00 14,146,133.01 73,419,574.05 /
38.Share capital
CNY
Fluctuations (increase or decrease)
Opening balance Bonds converted to Closing balance
Subtotal
shares
Total shares 919,430,450.00 3,213.00 3,213.00 919,433,663.00
Other explanations: In FY2023, a total of CNY 33,000 of Wellhope convertible bonds were converted
into shares of the Company, and the number of shares resulting from the conversion was 3,213 shares.
39.Other equity instruments
A.Basic information on other financial instruments such as preferred shares and perpetual bonds issued
and outstanding at the end of the period
Approved by China Securities Regulatory Commission of Public Offering of Convertible Bonds (Securities
Regulatory Permit [2022] No. 662), the Company issued 15 million convertible bonds on April 22, 2022,
with an issue price of CNY 100.00 per bond, total issuance amount of CNY 1.5 billion, and a maturity of
6 years. With the consent of Shanghai Stock Exchange Self-disciplinary Supervision Decision [2022] No.
130, the Company's convertible bonds were listed and traded on SSE from May 18, 2022, with the
abbreviation of Wellhope Convertible Bonds and the trading symbol of 113647.
B.Changes in preferred stock, perpetual bonds and other financial instruments issued and outstanding
at the end of the period
184 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
CNY
Increase during the Decrease during
Outstanding Opening balance Closing balance
period the period
financial
Carrying Carrying
instruments Number Carrying value Number Number Number Carrying value
value value
Wellhope
convertible 14,670,410 233,677,472.64 330 5,256.40 14,670,080 233,672,216.24
bond
Total 14,670,410 233,677,472.64 330 5,256.40 14,670,080 233,672,216.24
40.Capital reserve
CNY
Opening Increased Decreased
Closing balance
balance amount amount
Capital premium (share capital
880,792,325.74 5,004,844.88 16,357,604.00 869,439,566.62
premium)
Other capital reserves -46,041.19 3,518,523.74 3,472,482.55
Total 880,746,284.55 8,523,368.62 16,357,604.00 872,912,049.17
Explanation-- The change in capital premium for the period was due to the increase of CNY 38,669.80
yuan in the conversion of convertible bonds into shares of the Company, the increase of CNY
4,966,175.08 in the change of the Company's equity in subsidiaries, and the decrease of CNY
16,357,604.00 in the part of capital premium attributable to the parent company as a result of the
reduction of the capital of minority shareholders.
The change in other capital surplus during the period was due to the effect of changes in capital surplus
of associated companies accounted for under the equity method of the Company and other changes.
41.Treasury stock
CNY
Item Opening balance Increased amount Decreased amount Closing balance
Repurchased
stock of the 200,003,612.37 200,003,612.37
Company
Total 200,003,612.37 200,003,612.37
42.Other comprehensive income
CNY
2023
Opening After-tax, After-tax,
Item Closing balance
balance attributable to attributable to
Pre-tax
parent non-controlling
company interest
1. Other
comprehensive
income that can’t be -7,244,103.74 -8,484,951.27 -8,486,483.42 1,532.15 -15,730,587.16
reclassified into gains
or losses
Changes in fair value
of investments in
-7,244,103.74 -8,484,951.27 -8,486,483.42 1,532.15 -15,730,587.16
other equity
instruments
2. Other -12,903,639.16 4,315,581.24 4,757,162.28 -441,581.04 -8,146,476.88
185 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
comprehensive
income that will be
reclassified into gains
or losses
including: Other
comprehensive
income that can be
-11,795,004.96 5,351,151.41 5,344,603.95 6,547.46 -6,450,401.01
transferred in gains
or losses under the
equity method
Translation balance
of foreign currency -1,108,634.20 -1,035,570.18 -587,441.67 -448,128.51 -1,696,075.87
financial statements
Total other
comprehensive -20,147,742.90 -4,169,370.03 -3,729,321.14 -440,048.89 -23,877,064.04
income
43.Surplus reserve
CNY
Item Opening balance Increased amount Decrease amount Closing balance
Statutory surplus
454,175,320.97 3,017,414.09 170,054.09 457,022,680.97
reserve
Total 454,175,320.97 3,017,414.09 170,054.09 457,022,680.97
44.Undistributed profit
A.Schedule of deductions from revenue
CNY 10k
Item 2023 Specific deductions 2022 Specific deductions
Revenue 3,597,026.19 / 3,281,175.82 /
Total amount of / /
items deducted 4,621.14 3,252.30
revenue
Total amount of /
deductions as a
0.13 0.10 /
percentage of
revenue
1. Income from operations not related to the main business
Income from
operations other
than normal
operations.
Income realized
from leasing of
fixed assets,
intangible assets,
packaging, sales of
materials, Mainly from sales Mainly from sales
non-monetary of materials, of materials,
asset exchange of brokers and brokers and
4,621.14 3,252.30
materials, technical service technical service
management of fees, testing fees, fees, testing fees,
entrusted etc. etc.
business, etc., as
well as income
outside the
normal operation
of the listed
company,
although included
in the income
from the main
186 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
business
Subtotal of
revenue from
operations not 4,621.14 / 3,252.30 /
related to the
main business
2.Revenue that does not have commercial nature
3.Other income that is not related to the main business or does not have commercial nature
Revenue after
3,592,405.05 / 3,277,923.52 /
deduction
CNY
Item 2023 2022
Undistributed profit at the end of prior period before
4,967,837,188.90 4,473,531,926.28
adjustment
Adjusting total undistributed profit at the beginning of
-114,984.06
current period
Undistributed profit at the beginning of current period
4,967,837,188.90 4,473,416,942.22
after adjustment
plus: Net profit attributable to the owners of the
-457,037,550.28 512,797,304.59
parent company in current period
less: Extraction of statutory surplus reserve 3,017,414.09 21,937,097.91
Dividends payable on common shares 107,817,202.80 -3,560,040.00
Other 170,054.09
Undistributed profit at the end of current period 4,400,135,075.82 4,967,837,188.90
Adjustment of undistributed profit at the beginning of the period:
The change of accounting policy affected the undistributed profits at the beginning of the period CNY
-850,061.49. Of which CNY -114,984.06 at the beginning of the period in 2022 and CNY -735,077.43 in
2022.
45.Revenue and cost
A.Information of revenue and cost
CNY
2023 2022
Item
Revenue Cost Revenue Cost
Primary businesses 35,924,050,473.57 34,501,668,836.06 32,779,235,244.83 30,794,818,901.75
Other businesses 46,211,435.84 38,455,427.75 32,522,964.71 44,452,294.30
Total 35,970,261,909.41 34,540,124,263.81 32,811,758,209.54 30,839,271,196.05
B.Breakdown information on revenues and costs
CNY
Total
Contract classification
Revenue Cost
Commodity type
Feed products 16,470,405,515.84 15,083,073,339.98
Broiler integration 11,212,127,078.54 11,142,072,143.81
Feed ingredients 5,299,325,244.82 5,153,336,835.63
Pig farming 2,575,952,500.43 2,813,601,769.93
Other businesses 412,451,569.78 348,040,174.46
Categorized by the timing of the
transfer of commodity
187 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Revenue recognized at a point in
35,967,551,884.73 34,537,429,903.31
time
Recognize revenue at a period 2,710,024.68 2,694,360.50
Categorized by sales channel
Direct sales 23,763,287,546.11 22,823,956,856.70
Dealer 12,206,974,363.30 11,716,167,407.11
Total 35,970,261,909.41 34,540,124,263.81
46.Taxes and surtaxes
CNY
Item 2023 2022
City maintenance and construction tax 970,600.29 1,211,228.52
Extra charges of education funds 734,254.67 903,575.64
House property tax 12,885,626.54 12,202,473.48
Land use tax 14,195,273.86 13,964,383.42
Stamp tax 20,649,461.73 14,921,643.21
Other 5,524,615.29 4,125,778.04
Total 54,959,832.38 47,329,082.31
47.Sales expenses
CNY
Item 2023 2022
Payroll 417,073,446.86 370,582,343.28
Travelling expense 132,919,025.74 123,986,949.75
Transportation stevedoring and car expenses 14,969,771.61 16,911,259.03
Labor costs 23,697,073.29 19,630,978.25
Business entertainment expense 32,226,824.44 21,269,353.99
Business promotion expense 13,072,709.74 8,973,524.39
Lease expense 9,267,600.70 7,214,334.31
Meeting expenditure 7,764,762.98 2,261,324.49
Sales service charge 29,594,914.00 19,226,117.24
Office and communication fee 8,047,246.54 9,387,087.31
Subtotal of other items 29,732,293.13 23,001,489.11
Total 718,365,669.03 622,444,761.15
48.Administration expense
CNY
Item 2023 2022
Payroll 336,844,279.87 296,418,682.64
Depreciation 59,304,108.82 55,468,193.25
Office and communication fee 30,843,944.70 27,190,260.46
Travelling expense 21,668,013.42 13,367,047.99
Repair costs 20,831,900.49 17,031,777.04
Lease expense 6,794,333.17 7,718,800.87
Amortization of intangible assets 12,018,541.37 11,708,435.13
Business entertainment expense 21,008,876.49 14,974,999.77
Utilities 10,131,127.79 8,920,820.19
Labor costs 25,117,908.18 19,336,571.21
Heating fee 8,101,572.83 7,804,942.76
Vehicle expenses 9,180,128.38 8,088,330.87
Depreciation of right-of-use assets 16,220,683.05 9,476,539.60
188 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Amortization of long-term amortized
7,685,704.77 7,271,837.07
expenses
Other 29,049,439.29 32,286,619.87
Total 614,800,562.62 537,063,858.72
49.R&D expenditure
CNY
Item 2023 2022
Payroll 41,560,993.54 32,577,171.30
Design and experiment fee 23,770,287.44 25,734,570.75
Material and appliance charge 8,500,766.24 22,218,959.19
Travel expense 4,001,887.73 3,570,012.37
Depreciation and amortization expense 4,210,524.77 4,317,828.49
Subtotal of other items 1,753,010.27 1,686,532.91
Total 83,797,469.99 90,105,075.01
50.Financial expense
CNY
Item 2023 2022
Interest expenditure 179,236,989.51 167,066,021.40
Interest income -13,127,370.37 -13,023,769.68
Exchange loss 1,170,711.85 1,003,506.14
Service charge 4,320,341.92 5,634,571.17
Total 171,600,672.91 160,680,329.03
51.Other income
CNY
Item 2023 2022
Government grant recorded in 34,115,034.44 31,462,128.67
Income tax return 238,308.79 154,001.44
Other 159,658.25
Total 34,513,001.48 31,616,130.11
52.Income from investment
CNY
Item 2023 2022
Income from long-term equity investment measured by the
-133,401,069.07 162,299,491.42
equity method
Investment income from disposal of long-term equity
-3,304,258.63 -161,422.19
investments
Investment income from disposal of derivative financial
-815,658.23 -4,671,035.80
instruments
Investment income from trading financial assets during the
100,273.97
holding period
Dividend income from investments in other equity instruments
50,000.00
during the holding period
Gain or loss on previously held equity interests remeasured at
-6,697,756.66
fair value before the date of purchase
Other changes in owners' equity accounted for under the
-2,966,102.44
equity method
Gain on remeasurement of remaining equity at fair value after
-1,299,930.06
loss of control
Total -148,334,501.12 157,467,033.43
189 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
53.Gain or loss from changes in fair value
CNY
Source of gain from changes in fair value 2023 2022
Gains on changes in fair value arising from derivative
-490,609.02 -1,700,554.55
financial instruments
Total -490,609.02 -1,700,554.55
54.Credit impairment loss
CNY
Item 2023 2022
Bad debt losses on accounts receivable -28,075,323.61 -24,687,984.19
Bad debt losses on other receivables -10,641,632.97 13,001,718.92
Total -38,716,956.58 -11,686,265.27
55.Asset impairment loss
CNY
Item 2023 2022
Impairment loss on contract assets -31,391.19 76,029.36
Loss on decline in value of inventories and impairment
-143,805,533.19 -27,221,526.25
loss on contractual performance costs
Impairment losses on fixed assets -1,108,244.39
Impairment loss on goodwill -1,844,995.57
Total -143,836,924.38 -30,098,736.85
56.Gain or loss from assets disposal
CNY
Item 2023 2022
Gain or loss on disposal of fixed assets 38,155,370.45 -1,300,520.53
Gain or loss on disposal of productive biological asset -19,952,257.91 -2,561,979.97
Gain or loss on disposal of right-of-use assets 2,471,563.79
Total 20,674,676.33 -3,862,500.50
57.Non-operating Income
CNY
Amount included in current
Item 2023 2022
extraordinary items
Total gain on disposal of
1,380,187.01 128,153.63 1,380,187.01
non-current assets
Government grants 45,214,985.44 8,612,756.40 45,214,985.44
Income from liquidated damages 8,440,256.81 2,807,211.25 8,440,256.81
Business combinations under the
14,299,036.35 58.82 14,299,036.35
different control
Other 4,876,907.37 6,454,821.25 4,876,907.37
Total 74,211,372.98 18,003,001.35 74,211,372.98
58.Non-operating expenditure
CNY
Amount included in current
Item 2023 2022
extraordinary items
Total losses on disposal of
24,035,370.81 20,395,373.87 24,035,370.81
non-current assets
External donations 4,339,033.35 1,995,398.27 4,339,033.35
Extraordinary losses 29,369,640.72 12,532,661.32 29,369,640.72
190 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Expenditure on fines 6,520,211.44 8,625,688.37 6,520,211.44
Other 1,310,671.75 2,717,387.84 1,310,671.75
Total 65,574,928.07 46,266,509.67 65,574,928.07
59.Income tax expense
A. Table of income tax expense
CNY
Item 2023 2022
Current income tax expense 108,437,292.60 97,531,345.19
Deferred income tax expense -1,345,694.97 -5,273,335.60
Total 107,091,597.63 92,258,009.59
B. Process of adjusting accounting profit and income tax expense
CNY
Item 2023
Total profit -480,941,429.71
Income tax expense at statutory or applicable tax rates -72,141,214.46
Effects of subsidiaries that are subject to different tax rates 165,516,900.10
Effects of adjustments to the income tax on previous periods 2,647,525.69
Effects of non-taxable income -6,876,979.31
Effects of non-deductible costs, expenses, and losses 12,621,301.91
Effects of using deductible losses of deferred income tax assets that
-10,914,035.19
have not been recognized in previous period
Effect of deductible temporary differences or deductible losses for
which deferred income tax assets were not recognized in the current 28,010,213.36
period
Deduction of research and development expenses -9,517,679.52
Other -2,254,434.95
Income tax expense 107,091,597.63
60.Other comprehensive income
See note.
61. Items in cash flow statement
A.Cash related to operating activities
a.Other cash received related to operating activities
CNY
Item 2023 2022
Government grants 78,524,150.40 61,676,108.80
Interest income 9,341,406.84 9,098,869.68
Subtotal of transactions and other 112,345,092.10 125,797,130.26
Total 200,210,649.34 196,572,108.74
b.Other cash paid related to operating activities
CNY
Item 2023 2022
Travelling expense 158,588,926.89 140,924,010.10
Transportation and handling expense 14,969,771.61 12,647,746.63
R&D expenditure 34,024,063.95 47,953,529.94
Business entertainment expense 53,235,700.93 36,244,353.76
Office and communication fee 38,891,191.24 36,577,347.77
191 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Service fee 48,814,981.47 38,967,549.46
Other operating expenses paid 177,074,919.47 127,414,649.52
Transactions and other paid 107,421,455.84 73,259,532.97
Total 633,021,011.40 513,988,720.15
c.Other cash received related to investing activities
CNY
Item 2023 2022
Decrease in letter of credit deposits 9,505,937.38
Decrease in futures margin 9,791,205.27 4,772,457.53
Net cash received from acquisition of
1,328,298.23 913,019.48
subsidiaries
Total 20,625,440.88 5,685,477.01
d.Other cash paid related to investing activities
CNY
Item 2023 2022
Increase in margin for letters of credit 9,889,618.46
Net cash paid on disposal of subsidiaries 3,029,935.48 151,635.76
Total 3,029,935.48 10,041,254.22
B.Cash related to financing activities
a.Other cash received relating to financing activities
CNY
Item 2023 2022
Borrowings received from external
10,548,144.88 43,590,224.96
counterparties
Decrease in bankers' acceptance deposit 120,000.00 660,000.00
Capital increase received in advance from
1,320,128.56
minority shareholders of subsidiaries
Cash received from disposal of part of equity
6,834,676.00 6,918,623.25
interest in subsidiaries
Total 17,502,820.88 52,488,976.77
b.Other cash paid related to financing activities
CNY
Item 2023 2022
Parent company repurchased shares that did not meet
24,288,660.00
the unlocking conditions
Finance lease charges 530,868.88
Cash paid for purchasing non-controlling interests of
62,580,212.37 24,183,999.00
subsidiaries
Convertible bond issuance costs 1,766,500.00
Payment of borrowings from external counterparties 47,937,133.19 46,864,924.96
Payment of rent and interest on right-of-use assets 81,919,588.47 54,641,609.59
Total 192,436,934.03 152,276,562.43
192 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
c.Changes in liabilities arising from financing activities
CNY
Increase during the period Decrease during the period
Item Opening balance Non-cash Non-cash Closing balance
Cash movements Cash movements
movements movements
Short-term
933,785,791.96 1,356,141,913.31 36,043,383.16 1,344,013,778.93 11,000,000.00 970,957,309.50
loans
Long-term
1,312,757,309.28 548,292,461.86 63,014,583.25 191,936,237.20 812,076,600.00 920,051,517.19
loans
Long-term
7,685,803.59 54,658,800.81 80,271,344.03 31,513,375.20 68,559,680.61 42,542,892.62
payables
Lease liabilities 223,002,370.80 326,288,098.79 56,581,028.75 124,708,018.55 368,001,422.29
Interest
3,105,236.78 6,480,730.73 4,401,036.00 5,184,931.51
payable
Non-current
liabilities due 471,328,595.34 935,071,436.11 473,669,474.38 932,730,557.07
within one year
Dividends
14,943,072.75 159,008,469.91 153,029,090.55 4,469,413.94 16,453,038.17
payable
Other payables
- external 97,275,300.00 10,548,144.88 4,793,220.78 47,937,133.19 64,679,532.47
parties
Total 3,063,883,480.50 1,969,641,320.86 1,610,971,266.76 2,303,081,154.20 1,020,813,713.10 3,320,601,200.82
62.Supplementary information of cash flow statement
A.Supplementary information
CNY
Further information 2023 2022
1. Adjusting net profit to cash flow from operating activities
Net profit -588,033,027.34 536,077,495.73
add: Assets impairment provision 143,836,924.38 30,098,736.85
Credit impairment losses 38,716,956.58 11,686,265.27
Depreciation of fixed assets, depletion of oil and gas assets,
541,136,040.70 435,669,568.47
depreciation of productive biological assets
Amortization of intangible assets 14,198,669.42 10,655,309.84
Amortization of long-term unamortized expense 31,092,107.23 24,710,907.16
Losses on disposal of fixed assets, intangible assets, and
-20,674,676.33 3,862,500.50
other long-lived assets
Losses on retirement of fixed assets 22,655,183.80 20,267,220.24
Losses on changes in fair value 490,609.02 1,700,554.55
Financial expense 178,274,391.28 165,747,270.18
Loss on investments 148,334,501.12 -157,467,033.43
Decrease in deferred income tax assets -14,457,010.87 -29,412,056.78
Increase in deferred income tax liabilities 15,761,399.21 23,957,985.96
Decrease in inventories 520,883,086.77 -817,339,137.15
Decrease in operating receivables 169,895,586.58 -666,578,755.01
Increase in operating payables -242,357,431.74 550,156,440.68
Other -3,600,559.49 52,473,237.28
Net cash flow from operating activities 956,152,750.32 196,266,510.34
2. Net changes in cash and cash equivalents
Closing balance of cash 1,895,034,560.64 1,648,980,222.82
less: Opening balance of cash 1,648,980,222.82 1,198,273,561.91
plus: Closing balance of cash equivalent
193 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
less: Opening balance of cash equivalent
Net increase in cash and cash equivalents 246,054,337.82 450,706,660.91
B.Net cash paid during the period to acquire subsidiaries
CNY
Amount
Cash or cash equivalents paid for business combinations occurred in
35,199,300.00
current period
Of which: Tailai Wellhope Agricultural and Animal Husbandry Company 34,479,800.00
Zhangjiakou Wellhope Agricultural and Animal Husbandry Company 79,500.00
Dalian Rixin Plumbing and Building Materials Company 640,000.00
less: Cash and cash equivalents held by the subsidiary on the date of
4,918,523.51
acquisition
Of which: Tailai Wellhope Agricultural and Animal Husbandry Company 3,505,828.96
Zhangjiakou Wellhope Agricultural and Animal Husbandry Company 1,407,798.23
Dalian Rixin Plumbing and Building Materials Company 4,896.32
add: Cash or cash equivalents paid in the current period for business
combinations occurring in prior periods
Net cash paid for acquisition of subsidiaries 30,280,776.49
C.Net cash received from disposal of subsidiaries during current period
CNY
Amount
Cash or cash equivalents received during current period for the
disposal of subsidiaries
Of which: Hebei Taihang Wellhope Farming Company
Chongqing Dahong Farming Machinery Company
less: Cash and cash equivalents held by the subsidiary on the date
3,029,935.48
of loss of control
Of which: Hebei Taihang Wellhope Farming Company 73,458.35
Chongqing Dahong Farming Machinery Company 2,956,477.13
add: Cash or cash equivalents received in current period from the
disposal of subsidiaries in prior periods
Net cash received from disposal of subsidiaries -3,029,935.48
D.Composition of cash and cash equivalents
CNY
Item Closing balance Opening balance
1. Cash 1,895,034,560.64 1,648,980,222.82
of which: Cash on hand 202,957.16 695,108.20
Bank deposits readily available for disbursement 1,894,831,603.48 1,648,285,114.62
2. Cash equivalent
3. Closing balance of cash and cash equivalents 1,895,034,560.64 1,648,980,222.82
of which: Cash and cash equivalents with restricted use
by the parent company or subsidiaries within the
group
63.Notes to the statement of changes in owners' equity items
Indicate the name of the "Other" item and the amount of adjustment made to the closing balance of
the previous year:
A.Statement of changes in owners' equity of the parent company
194 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Other adjustments were adjustments to retained earnings amounting to CNY -1,700,540.94, of which
CNY -170,054.09 was adjusted to surplus reserves and CNY -1,530,486.85 was adjusted to undistributed
profits, which was due to the fact that Wellhope, which originally held a 62% equity interest in Hebei
Taihang Wellhope Farming Company, changed its shareholding to 30% after transferring a 32% equity
interest in January, 2023, and held a 50% equity interest of Chongqing Dahong Farming Machinery
Company, changed the percentage of shareholding to 45% after transferring a 5% equity interest in
August, 2023, and long-term equity investment was changed from cost method accounting to equity
method accounting.
Adjustments are made in accordance with Article 15 of ASBE No. 2 - Long-term Equity Investments and
its related regulations, if the investor loses control of the audited entity due to the disposal of part of
the equity investment, at the time of preparation of the individual financial statements, the residual
equity interest after the disposal is capable of exercising joint control over the investee, it should be
reclassified under the equity method of accounting, and the remaining equity interest should be
adjusted as if it had been accounted for by the equity method from the time of acquisition. The
adjustment affected retained earnings by CNY -1,700,540.94, of which CNY -170,054.09 was adjusted to
surplus reserves and CNY -1,530,486.85 was adjusted to undistributed profits, and at the same time,
the amount of the long-term equity investment was adjusted by CNY -1,700,540.94.
B.Consolidated statement of changes in owners' equity
In accordance with the "Interpretation No. 16 of the Accounting Standards for Business Enterprises",
"Accounting for Deferred Taxes Related to Assets and Liabilities Arising from Individual Transactions for
which the Initial Recognition Exemption Does Not Apply" has been effective from January 1, 2023, the
Company retroactively adjusted undistributed profit by CNY -850,061.49, of which CNY -114,984.06 on
January 1, 2022, and CNY -735,077.43 in FY2022, adjusted minority interests by CNY -246,006.17, of
which CNY 24,698.41 on January 1, 2022, and CNY -270,704.58 in FY2022, adjusted income tax expense
by CNY 1,096,067.66, of which CNY 90,285.65 on January 1, 2022, and CNY 1,005,782.01 in FY2022.
Making adjustment of surplus reserve at consolidated statements by CNY -170,054.09 and adjustment
of undistributed profit of CNY 170,054.09 for the reasons shown in Note (1).
64.Foreign currency monetary items
A. Foreign currency monetary items
CNY
Closing balance
Closing balance of Translating exchange
Item translated into
foreign currency rate
CNY
Monetary capital - - 10,367,023.47
US Dollar 1,337,180.21 7.0827 9,470,846.27
Euro 82.88 7.8592 651.37
Hong Kong Dollar 403,944.55 0.9062 366,054.55
Singapore Dollar 5,215.25 5.3772 28,043.44
Ruble 6,244,431.42 0.0803 501,427.84
195 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Accounts receivable - - 30,187,483.86
US dollar 2,027,385.69 7.0827 14,359,364.63
Hong Kong Dollar 16,873,095.60 0.9062 15,290,399.23
Singapore Dollar 100,000.00 5.3772 537,720.00
Short-term borrowing - - 63,852,857.39
US Dollar 9,015,327.12 7.0827 63,852,857.39
Advance Receipts - - 3,786,535.37
US Dollar 534,617.50 7.0827 3,786,535.37
Other payables - - 503,511.78
Ruble 6,270,383.37 0.0803 503,511.78
B. Explanation of overseas operating entity
Currency
Operating entity Business place abroad Local currency
selection basis
Russia Wellhope Agri-Tech
Russia Ruble Major currency
Company
Singapore Jinfeng Trading
Singapore Singapore Dollar Major currency
Company
65.Leases
A.As lessee
Lease costs for short-term leases or low-value assets with simplified treatment：
CNY 16,061,933.87.
Total cash outflows related to leases:
CNY 97,981,522.34.
B.As lessor
Operating leases as lessor:
CNY
Of which: Income relating to
Item Lease income variable lease payments not
recognized as lease receipts
Own property for rent 2,207,029.12
Other 502,995.56
Total 2,710,024.68
VIII.Research and development expenditures
1.Presentation by nature of expenses
CNY
Item 2023 2022
Employee compensation 41,560,993.54 32,577,171.30
Design and experiment fee 23,770,287.44 25,734,570.75
Material and equipment costs 8,500,766.24 22,218,959.19
Travel expenses 4,001,887.73 3,570,012.37
Depreciation and amortization 4,210,524.77 4,317,828.49
Subtotal of other items 1,753,010.27 1,686,532.91
Total 83,797,469.99 90,105,075.01
Of which: Expensed R&D expenditures 83,797,469.99 90,105,075.01
Capitalized R&D expenditures
196 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
IX.Change of Consolidation Scope
1.Business combination under different control
A. Business combination under different control occurred in current period
CNY
Investee's
Investee's
Basis for Investee's net cash flow
Time of Method of revenue from
Cost of equity Shareholding determining profit from the from the
Investee equity equity Acquisition date the acquisition
acquisition % the acquisition acquisition date acquisition
acquisition acquisition date to the
date to the period end date to the
period end
period end
Tailai Wellhope
Agricultural and
May 31, Purchase of Transfer of
Animal 68,959,600.00 70.00 May 31, 2023 90,791,906.65 -44,895,483.72 2,896,969.70
2023 equity control
Husbandry
Company
Zhangjiakou
Wellhope
Agricultural and May 31, Purchase of Transfer of
146,406,763.64 90.00 May 31, 2023 74,055,763.12 -36,086,144.64 15,457,324.36
Animal 2023 equity control
Husbandry
Company
Dalian Rixin
Plumbing and
Purchase of Transfer of
Building July 31, 2023 640,000.00 100.00 July 31, 2023 -1,232,850.65 83,092.82
equity control
Materials
Company
B. Combined cost and goodwill
CNY
Tailai Wellhope Zhangjiakou Wellhope Dalian Rixin
Combined cost Plumbing and
Agricultural and Animal Agricultural and Animal Building Materials
Husbandry Company Husbandry Company Company
--Cash 34,479,800.00 79,500.00 640,000.00
--Fair value of equity held prior
to acquisition date at the 34,479,800.00 56,935,963.64
acquisition date
--Other 89,391,300.00
Total cost of consolidation 68,959,600.00 146,406,763.64 640,000.00
less: Share of fair value of
identifiable net assets acquired 79,398,478.50 150,208,151.28 698,770.21
Amount by which goodwill/cost
of combination is less than share
of fair value of identifiable net -10,438,878.50 -3,801,387.64 -58,770.21
assets acquired
197 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
C. Identifiable assets and liabilities of the investee on the acquisition date
CNY
Tailai Wellhope Agricultural and Zhangjiakou Wellhope Agricultural Dalian Rixin Plumbing and
Animal Husbandry Company and Animal Husbandry Company Building Materials Company
Fair value on Book value on Fair value on Book value on Fair value on Book value on
acquisition date acquisition date acquisition date acquisition date acquisition date acquisition date
Assets: 287,485,881.87 287,485,881.87 348,637,969.67 348,637,969.67 38,057,598.32 38,057,598.32
Monetary 3,505,828.96 3,505,828.96 1,407,798.23 1,407,798.23 4,896.32 4,896.32
capital
Accounts 1,523,968.60 1,523,968.60
receivable
Prepayments 202,540.45 202,540.45 8,624,640.85 8,624,640.85 10,000.00 10,000.00
Other
14,441,537.01 14,441,537.01 103,974,063.79 103,974,063.79
receivables
Inventories 53,849,685.88 53,849,685.88 45,853,231.02 45,853,231.02
Long-term 4,832,863.30 4,832,863.30
receivables
Long-term
equity 7,537,475.89 7,537,475.89
investments
Fixed assets 159,231,621.79 159,231,621.79 42,957,258.28 42,957,258.28 38,042,702.00 38,042,702.00
Construction in 2,712,855.00 2,712,855.00
progress
Productive
36,982,795.49 36,982,795.49 18,824,787.18 18,824,787.18
biological assets
Right-of-use
15,091,657.93 15,091,657.93 109,931,651.14 109,931,651.14
assets
Long-term
unamortized 4,180,214.36 4,180,214.36 457,376.39 457,376.39
expenses
Liabilities: 170,926,294.23 194,610,574.07 177,204,004.34 177,850,377.34 37,358,828.11 37,358,828.11
Payables 54,496,508.55 54,496,508.55 38,395,216.64 38,395,216.64
Receipts in
24,441.00 24,441.00 564,358.80 564,358.80
advance
Payroll 8,039,020.84 8,039,020.84 16,817,102.70 16,817,102.70
Taxes payable 9,424.39 9,424.39 5,919.74 5,919.74
Other payables 22,256,523.92 22,256,523.92 13,632,871.00 13,632,871.00 37,358,828.11 37,358,828.11
Non-current
liabilities due 5,141,608.20 5,141,608.20
within one year
Lease liabilities 14,641,539.45 14,641,539.45 97,078,042.61 97,078,042.61
Long-term
71,458,836.08 69,761,291.90 5,568,884.65 5,568,884.65
payables
Deferred
25,381,824.02 646,373.00
income
Net assets 116,559,587.64 92,875,307.80 171,433,965.33 170,787,592.33 698,770.21 698,770.21
Less: Minority
37,161,109.14 30,055,825.19 21,225,814.05 21,161,176.75
interests
Net assets
79,398,478.50 62,819,482.61 150,208,151.28 149,626,415.58 698,770.21 698,770.21
acquired
D. Gains or losses arising from the remeasurement of equity interests held prior to the date of
purchase at fair value
CNY
Time of Amounts
acquisition Method of
Carrying value Gain or loss transferred to
of Acquisition Fair value of determining the
Acquisition cost of previously arising from investment
previously method of previously held fair value of the
Original of previously held equity remeasurement income or
Investee held equity previously equity interests previously held
interest shareholding % held equity interests at the at the date of of previously retained
interests held equity equity interest
prior to the date of purchase held equity earnings from
interests at the date of
date of purchase interests other
purchase
purchase comprehensive
198 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
income related
to previously
held equity
interests
Tailai Wellhope
Agricultural Reference
September Purchase of
and Animal 35.00 35,000,000.00 39,699,239.25 34,479,800.00 -5,219,439.25 transaction
20, 2017 equity price
Husbandry
Company
Zhangjiakou
Wellhope
Reference
Agricultural November Purchase of
35.00 50,000,000.00 58,414,281.05 56,935,963.64 -1,478,317.41 transaction
and Animal 8, 2016 equity price
Husbandry
Company
199 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
2.Disposal of subsidiary
CNY
Difference between the
share of the net assets of Gains or losses arising
Basis for Carrying value of the Fair value of the
Disposal price at the Percentage of the subsidiary in the Remaining equity from the
Point of loss determining remaining equity remaining equity
Subsidiary point of loss of disposed Disposal way consolidated financial interest at the date of remeasurement of the
of control the point of interest at the date of interest at the date of
control shareholding % statement, which caused by losing control % remaining equity at
loss of control losing control losing control
the disposal of price and the fair value
disposal of the investment
Hebei Taihang
Wellhope Farming Jan. 1, 2023 33,400,000.00 32.00 Transfer of equity Loss of control -3,733,954.87 30.00 31,252,330.76 31,312,500.00 60,169.24
Company
Chongqing Dahong
Farming Machinery Aus. 31, 2023 1,875,000.00 5.00 Transfer of equity Loss of control -151,122.14 45.00 18,235,099.30 16,875,000.00 -1,360,099.30
Company
Other explanation:
As of December 31, 2023, the Company has not yet recovered the disposal price of its equity interests in Wellhope Farming Company and Chongqing Dahong
Farming Machinery Company.
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Wellhope Foods Co., Ltd. 2023 Annual Report
3.Change of consolidation scope caused by other reasons
During the year, the Company newly initiated 10 subsidiaries, cancelled 6 subsidiaries. Details are listed
in the notes.
A. New subsidiaries included in the scope of consolidation during the period
Company name Acquisition method
Hengshui Welhope Feed Company Investment
Hebei New Taihang Wellhope Livestock Company Investment
Siping Huiliang Wellhope Animal Husbandry Company Investment
Singapore Jinfeng Trading Company Investment
Tangshan Lekai Animal Husbandry Partnership (Limited Partnership) Investment
Baicheng Wellhope Animal Husbandry Company Investment
Dalian Hefengyuan Animal Husbandry Company Investment
Heilongjiang Wellhope Great Forest Food Company Investment
Heilongjiang Wellhope Great Forest Pasture Company Investment
Tianjin Weierhao Trading Company Investment
B. Subsidiaries no longer included in the scope of consolidation due to write-offs during the period
Company name Reason
Shenyang Huakang Agriculture and Animal Husbandry Company Write-off
Hongkong Expert Trading Company Write-off
Beijing Helai Sci-Tech Company Write-off
Qiqihar Jiafeng Agricultural and Animal Husbandry Company Write-off
Anhui Wellhope Haoxiang Swine Breeding Company Write-off
Inner Mongolia Bifeng Husbandry Technology Development Company Write-off
201 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
X.Equity in other Entities
1.Equity in subsidiaries
A.Composition of the Company
CNY 10k
Business Registered Registered Business Shareholding % Way of
Subsidiary
site capital site type Direct Indirect acquisition
Haicheng
Xinzhongxin Haicheng Haicheng
600.00 Production 51.00 Investment
Wellhope Feed city city
Mill
Dalian Huakang
Xinxin Food Dalian city 1,600.00 Dalian city Production 65.00 11.00 Investment
Company
Changchun
Hengfeng
Agriculture and Changchun Changchun
4,700.00 Trade 49.47 Investment
Animal city city
Husbandry
Company
Jinan Xinweita
Trading Jinan city 1,500.00 Jinan city Trade 62.00 Investment
Company
Henan
Wellhope
Kaifeng city 5,000.00 Kaifeng city Production 100.00 Investment
Agri-Tech
Company
Zhengzhou
Wellhope Zhengzhou Zhengzhou
800.00 Production 100.00 Investment
Agri-Tech city city
Company
Zhumadian
Wellhope Zhumadian Zhumadian
1,000.00 Production 90.00 Investment
Agri-Tech city city
Company
Jiaozuo
Wellhope Feed Jiaozuo city 5,000.00 Jiaozuo city Production 100.00 Investment
Mill
Nanyang
Nanyang Nanyang
Wellhope Feed 1,000.00 Production 100.00 Investment
city city
Mill
Zhangwu
Wellhope
Zhangwu Zhangwu
Agriculture 300.00 Production 60.00 Investment
county county
Development
Company
Sanjiang
Wellhope Jixian Jixian
2,100.00 Production 61.00 Investment
Agri-Tech county county
Company
Jixian Expert
Jixian Jixian
Trading 500.00 Trade 65.00 Investment
county county
Company
Gongzhuling
Wellhope Gongzhuling Gongzhuling
3,500.00 Production 100.00 Investment
Agri-Tech city city
Company
Shenyang
Shenyang Shenyang
Expert Trading 3,000.00 Trade 100.00 Investment
city city
Company
202 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Liaoning
Skyland
Shenyang Shenyang
Livestock 2,775.00 Production 100.00 Investment
city city
Equipment
Company
Shenyang
Wellhope Shenyang Shenyang
550.00 Production 100.00 Investment
Ruminant Feed city city
Mill
Shenyang
Wellhope Shenyang Shenyang
3,300.00 Production 100.00 Investment
Extruded Feed city city
Mill
Shenyang
Wellhope Shenyang Shenyang
1,500.00 Production 100.00 Investment
Aquatic Feed city city
Mill
Shenyang Jiahe
Tianfeng Shenyang Shenyang
1,000.00 Trade 100.00 Investment
Commerce and city city
Trade Company
Liaoning
Wellhope Food Beipiao city 5,000.00 Beipiao city Production 60.00 Investment
Company
Haicheng
Wellhope Haicheng Haicheng
1,250.00 Production 100.00 Investment
Agri-Tech Feed city city
Mill
Tai'an Wellhope Tai'an Tai'an
3,200.00 Production 100.00 Investment
Feed Mill county county
Lingyuan
Wellhope Lingyuan Lingyuan
500.00 Production 90.50 Investment
Agri-Tech city city
Company
Beijing
Wellhope
Beijing 500.00 Beijing Trade 100.00 Investment
Agri-Tech
Company
Beijing Sanyuan
Wellhope
Beijing 1,000.00 Beijing Production 70.00 Investment
Agri-Tech
Company
Jilin Wellhope
Agri-Tech Jilin city 1,600.00 Jilin city Production 100.00 Investment
Company
Jilin Wellhope
Gongzhuling Gongzhuling
Swine Breeding 1,500.00 Production 100.00 Investment
city city
Company
Daqing
Wellhope Bayi
Nongda Animal Daqing city 4,000.00 Daqing city Production 90.00 Investment
Sci-Tech
Company
Mudanjiang
Wellhope Mudanjiang Mudanjiang
2,300.00 Production 100.00 Investment
Agri-Tech city city
Company
Jinzhou
Wellhope
Jinzhou city 1,700.00 Jinzhou city Production 100.00 Investment
Agri-Tech
Company
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Wellhope Foods Co., Ltd. 2023 Annual Report
Gongzhuling
Wellhope Gongzhuling Gongzhuling
500.00 Production 100.00 Investment
Ruminant Feed city city
Mill
Heilongjiang
Wellhope
Harbin city 12,000.00 Harbin city Production 100.00 Investment
Agri-Tech
Company
Tangshan
Tangshan Tangshan
Wellhope Feed 5,000.00 Production 85.00 Investment
city city
Mill
Cangzhou Helai
Cangzhou Cangzhou
Sci-Tech 500.00 Production 70.00 Investment
city city
Company
Xi'an Wellhope
Feed Sci-Tech Xi'an city 500.00 Xi'an city Production 80.00 Investment
Company
Gansu
Wellhope
Wuwei city 4,000.00 Wuwei city Production 100.00 Investment
Agri-Tech
Company
Jining Wellhope
Agri-Tech Jining city 2,800.00 Jining city Production 70.00 Investment
Company
Shanghai
Wellhope Feed Shanghai 300.00 Shanghai Production 65.00 Investment
Mill
Shanghai
Hehong Trading Shanghai 2,400.00 Shanghai Trade 70.00 Investment
Company
Zhejiang Pinghu
Wellhope
Pinghu city 100.00 Pinghu city Production 85.00 Investment
Agri-Tech
Company
Huai'an
Wellhope Feed Huai'an city 3,000.00 Huai'an city Production 100.00 Investment
Mill
Qingdao
Wellhope
Pingdu city 3,000.00 Pingdu city Production 95.00 Investment
Agri-Tech
Company
Guangzhou
Xiangshun
Livestock Guangzhou 500.00 Guangzhou Production 56.00 Investment
Equipment
Company
Hainan
Wellhope Chengmai Chengmai
9,500.00 Production 60.00 Investment
Agri-Tech county county
Company
Fuyu Wellhope
Agri-Tech Fuyu city 4,800.00 Fuyu city Production 97.00 Investment
Company
Fuyu Wellhope
Taolaizhao
Fuyu city 2,620.00 Fuyu city Production 98.19 Investment
Poultry Raising
Company
Changchun
Nong'an Nong'an
Wellhope Feed 8,600.00 Production 98.00 Investment
county county
Mill
Lankao Lankao 4,300.00 Lankao Production 100.00 Investment
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Wellhope county county
Agri-Tech
Company
Tongliao
Wellhope Tianyi
Tongliao city 2,000.00 Tongliao city Production 51.00 Investment
Prataculture
Company
Liaoning
Wellhope
Shenyang Shenyang
Purchasing and 3,000.00 Trade 100.00 Investment
city city
Trading
Company
Shenyang
Wellhope Shenyang Shenyang
8,210.00 Production 100.00 Investment
Agri-Tech city city
Company
Liaoning Expert
Shenyang Shenyang Same-control
Trading 8,000.00 Trade 100.00
city city consolidation
Company
Shenyang Fame
Shenyang Shenyang Same-control
Bio-Tech 2,000.00 Production 100.00
city city consolidation
Company
Shenyang
Pufeng Shenyang Shenyang Same-control
700.00 Trade 100.00
Commerce and city city consolidation
Trade Company
Shenyang
Huawei Shenyang Shenyang Same-control
1,000.00 Production 51.00
Pharmaceutical city city consolidation
Company
Liaoning
Wellhope
Agriculture and Shenyang Shenyang Non-same-control
10,000.00 Production 100.00
Animal city city consolidation
Husbandry
Development
Puyang
Non-same-control
Wellhope Food Puyang city 3,500.00 Puyang city Production 60.00
consolidation
Company
Jingzhou
Wellhope
Jingzhou Jingzhou
Agricultural 5,000.00 Production 86.00 Investment
city city
Sci-Tech
Company
Dalian Heyuan
Agri-Tech Dalian city 10,000.00 Dalian city Production 57.00 Investment
Company
Shenyang
Nongda Shenyang Shenyang
4,420.00 Production 100.00 Investment
Wellhope Feed city city
Mill
Dalian
Wellhope Feed Dalian city 4,710.00 Dalian city Production 100.00 Investment
Mill
Xingcheng
Xingcheng Xingcheng
Wellhope Feed 8,250.00 Production 100.00 Investment
city city
Mill
Yunnan
Kunming Kunming
Wellhope Feed 2,500.00 Production 100.00 Investment
city city
Mill
Liaoning Godaji Shenyang 2,000.00 Shenyang Trade 100.00 Investment
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Wellhope Foods Co., Ltd. 2023 Annual Report
E-commerce city city
Company
Anhui Wellhope
Haozhou Haozhou
Agri-Tech 16,000.00 Production 70.00 Investment
city city
Company
Shanxi
Wellhope Yuanping Yuanping
4,800.00 Production 100.00 Investment
Agri-Tech city city
Company
Pingyuan
Wellhope Food
Handan city 20,991.70 Handan city Production 100.00 Investment
Processing
Company
Shenyang
Huaweida
Shenyang Shenyang
Animal Health 50.00 Trade 100.00 Investment
city city
Products
Company
Dalian Zhongjia Non-same-control
Dalian city 3,962.80 Dalian city Production 100.00
Food Company consolidation
Wellhope
Shenyang Shenyang
Food(Shenyang) 500.00 Production 100.00 Investment
city city
Company
Changchun
Changchun Changchun
Wellhope Food 1,000.00 Production 85.00 Investment
city city
Company
Pingyuan
Wellhope
Handan city 13,550.00 Handan city Production 100.00 Investment
Agri-Tech
Company
Puyang
Wellhope
Puyang city 7,600.00 Puyang city Production 100.00 Investment
Agri-Tech
Company
Beijing Brilliant
Dragon
Beijing 800.00 Beijing Trade 61.00 Investment
Commerce and
Trade Company
Tangshan Hejia
Agriculture and
Tangshan Tangshan
Animal 3,000.00 Production 65.00 35.00 Investment
city city
Husbandry
Company
Tangshan
Wellhope Tangshan Tangshan Non-same-control
3,000.00 Production 70.00
Sci-Tech city city consolidation
Company
Shenyang
Shenyang Shenyang
Huakang Xinxin 200.00 Production 85.00 Investment
city city
Food Company
Kaifeng
Wellhope Meat
Kaifeng city 10,000.00 Kaifeng city Production 100.00 Investment
Products
Company
Shenyang
Shenyang Shenyang
Huakang Broiler 6,200.00 Production 95.00 Investment
city city
Company
Kaifeng
Wellhope
Kaifeng city 13,100.00 Kaifeng city Production 100.00 Investment
Agriculture and
Animal
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Wellhope Foods Co., Ltd. 2023 Annual Report
Husbandry
Company
Fushun
Wellhope
Agriculture and
Fushun city 3,000.00 Fushun city Production 100.00 Investment
Animal
Husbandry
Company
Shenyang
Wellhope Shenyang Shenyang
5,000.00 Production 100.00 Investment
Poultry Industry city city
Company
Dehui Wellhope
Agri-Tech Dehui city 100.00 Dehui city Production 100.00 Investment
Company
Chongqing
Wellhope Chongqing Chongqing
500.00 Production 65.00 Investment
Agri-Tech city city
Company
Russia
Wellhope
Overseas RUB10,074.50 Overseas Production 55.00 Investment
Agri-Tech
Company
Suizhong Renhe
Suizhong Suizhong Non-same-control
Fishery 800.00 Production 90.00
county county consolidation
Company
Shulan Fengtai
Agriculture and
Animal Shulan city 8,000.00 Shulan city Production 80.00 Investment
Husbandry
Company
Daqing Bifeng
Agriculture and
Animal Shulan city 1,000.00 Shulan city Production 51.00 Investment
Husbandry
Company
Linxi Helai
Agri-Tech Linyi city 4,000.00 Linyi city Production 100.00 Investment
Company
Nanchang
Wellhope Nanchang Nanchang
1,000.00 Production 65.00 Investment
Agri-Tech city city
Company
Anhui Wellhope
Haoxiang
Agricultural Lixin county 5,000.00 Lixin county Production 100.00 Investment
Development
Company
Lixin Xiangfeng
Agriculture and
Animal Lixin county 1,000.00 Lixin county Production 100.00 Investment
Husbandry
Company
Lixin Hongfeng
Agriculture and
Animal Lixin county 5,000.00 Lixin county Production 100.00 Investment
Husbandry
Company
Guangzhou
Dashang Guangzhou 500.00 Guangzhou Trade 51.00 Investment
Trading
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Wellhope Foods Co., Ltd. 2023 Annual Report
Company
Shandong
Heyuan Food Weihai city 18,000.00 Weihai city Production 100.00 Investment
Company
Wafangdian
Wafangdian Wafangdian
Yifeng Agri-Tech 2,000.00 Production 51.00 Investment
city city
Company
Hebei Deheng
Non-same-control
Farming Handan city 1,700.00 Handan city Production 100.00
consolidation
Company
Yangling
Wellhope
Agriculture and Xianyang Xianyang Non-same-control
4,200.00 Production 100.00
Animal city city consolidation
Husbandry
Company
Dunhua
Wellhope Non-same-control
Dunhua city 1,000.00 Dunhua city Production 51.00
Agri-Tech consolidation
Company
Dunhua Fengda
Agriculture and
Animal Non-same-control
Dunhua city 1,000.00 Dunhua city Production 51.00
Husbandry consolidation
Development
Company
Anhui Wellhope
Lixin county 5,000.00 Lixin county Production 100.00 Investment
Food Company
Anyang
Wellhope
Agriculture and
Anyang city 5,500.00 Anyang city Production 100.00 Investment
Animal
Husbandry
Company
Hebei Taihang
Wellhope Food Baoding city 40,850.00 Baoding city Production 90.00 Investment
Company
Shenyang
Xiangmai
Shenyang Shenyang
Electronic 100.00 Trade 65.00 Investment
city city
Commerce
Company
Chifeng
Wellhope
Chifeng city 17,000.00 Chifeng city Production 70.00 Investment
Fuxinyuan Food
Company
Hainan Expert
Chengmai Chengmai
Trading 1,000.00 Trade 71.00 Investment
county county
Company
Liaoning
Qingyuan
Wellhope
Agriculture and Fushun city 12,000.00 Fushun city Production 95.00 Investment
Animal
Husbandry
Company
Nanyang Jinwan
Animal Nanyang Nanyang
1,250.00 Production 51.00 Investment
Husbandry city city
Company
Fuzhou Fuzhou city 8,000.00 Fuzhou city Production 75.50 Investment
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Wellhope Foods Co., Ltd. 2023 Annual Report
Wellhope
Xingyuan
Animal
Husbandry
Development
Company
Tianjin Fullyond
Supply Chain Tianjin city 1,000.00 Tianjin city Other 100.00 Investment
Company
Daqing
Wellhope Food Daqing city 1,500.00 Daqing city Production 51.00 Investment
Company
Zhumadian
Wellhope
Zhumadian Zhumadian
Agricultural 3,191.00 Production 94.01 Investment
city city
Development
Company
Datong Hejia
Agriculture and
Animal Datong city 2,000.00 Datong city Production 65.00 35.00 Investment
Husbandry
Company
Shijiazhuang
Hejia
Agriculture and Shijiazhuang Shijiazhuang
2,128.00 Production 65.00 35.00 Investment
Animal city city
Husbandry
Company
Fuxin Wellhope
Agriculture and
Animal Fuxin city 3,000.00 Fuxin city Production 100.00 Investment
Husbandry
Company
Dalian Hongtu
Agri-tech Dalian city 1,600.00 Dalian city Production 51.00 Investment
Company
Shandong
Heyuan
Weihai city 6,000.00 Weihai city Production 100.00 Investment
Agri-tech
Company
Wafangdian
Huinong Poultry Wafangdian Wafangdian
6,800.00 Production 52.94 Investment
Industry city city
Company
Luoyang
Wellhope
Agriculture and
Luoyang city 7,500.00 Luoyang city Production 100.00 Investment
Animal
Husbandry
Company
Gongzhuling
Wellhope Swine Gongzhuling Gongzhuling
678.15 Production 100.00 Investment
Farmig city city
Company
Lishu Wellhope
Ecological
Siping city 1,800.00 Siping city Production 68.50 Investment
Farming
Company
Kaifeng Jiufeng
Agriculture and Kaifeng city 5,319.00 Kaifeng city Production 94.00 Investment
Animal
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Wellhope Foods Co., Ltd. 2023 Annual Report
Husbandry
Company
Tianjin Expert
Trading Tianjin city 2,500.00 Tianjin city Trade 100.00 Investment
Company
Fuyang
Wellhope
Agriculture and
Animal Fuyang city 6,000.00 Fuyang city Production 75.00 Investment
Husbandry
Technology
Company
Liaoning
Wellhope Egg
Anshan city 18,000.00 Anshan city Production 75.15 Investment
Industry
Company
Shenyang
Wellhope
Agriculture and
Shenyang Shenyang
Animal 2,000.00 Production 100.00 Investment
city city
Husbandry
Technology
Company
Lingyuan
Wellhope
Agriculture and Lingyuan Lingyuan
500.00 Production 100.00 Investment
Animal city city
Husbandry
Company
Shenyang
Wellhope Swine Shenyang Shenyang
500.00 Production 100.00 Investment
Farming city city
Company
Shenyang
Xiaohe
Agriculture and Shenyang Shenyang
500.00 Production 100.00 Investment
Animal city city
Husbandry
Company
Qingdao
Haifeng Animal Non-same-control
Qingdao city 500.00 Qingdao city Production 100.00
Husbandry consolidation
Company
Xi'an Linfeng
Non-same-control
Shengyi Trading Xi'an city 600.00 Xi'an city Trade 100.00
consolidation
Company
Beijing Linfeng
Shengyi Trading Beijing 500.00 Beijing Trade 60.00 Investment
Company
Tianyi First
Taste (Beijing) Non-same-control
Beijing 500.00 Beijing Production 70.00
Technology consolidation
Company
Inner Mongolia
Bifeng Animal
Husbandry
Tongliao city 2,000.00 Tongliao city Production 48.30 Investment
Technology
Development
Company
Dehui Fengyuan
Dehui city 500.00 Dehui city Production 51.00 Investment
Agriculture and
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Animal
Husbandry
Company
Fame
(Shenyang)
Biological
High-tech Shenyang Shenyang
1,000.00 Other 100.00 Investment
Industry city city
Research
Institute
Company
Changsha
Wellhope
Changsha Changsha
Animal 1,000.00 Production 83.00 Investment
city city
Husbandry
Company
Fuyu Wellhope
Fuyu city 1,000.00 Fuyu city Production 52.00 Investment
Layer Company
Harbin Linfeng
Shengyi Trading Harbin city 500.00 Harbin city Trade 51.00 Investment
Company
Lixin Rongfeng
Agriculture and
Haozhou Haozhou
Animal 5,000.00 Production 100.00 Investment
city city
Husbandry
Company
Fuxin Welhope
Agriculture and
Fuxin city 1,000.00 Fuxin city Production 100.00 Investment
Livestock Sci-
tech Company
Hebei Linfeng
Tangshan Tangshan
Shengyi Trading 300.00 Trade 100.00 Investment
city city
Company
Huairen
Dazhuang Shuozhou Shuozhou
150.00 Production 70.00 Investment
Farming city city
Company
Harbin
Wellhope
Agricultural and
Animal Harbin city 500.00 Harbin city Production 51.00 Investment
Husbandry
Technology
Company
Suihua
Wellhope
Animal Suihua city 5,835.00 Suihua city Production 47.30 37.70 Investment
Husbandry
Company
Jilin Dalong
Wellhope
Animal Jilin city 1,700.00 Jilin city Production 24.29 26.71 Investment
Husbandry
Company
Daqing
Wellhope
Animal Daqing city 1,000.00 Daqing city Production 51.00 Investment
Husbandry
Company
Qiqihar
Qiqihar 1,500.00 Qiqihar Production 51.00 Investment
Wellhope
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Animal
Husbandry
Company
Lankao Skyland Lankao Lankao Non-same-control
4,000.00 Production 100.00
Feed Company county county consolidation
Linyi Wellhope
Animal
Linyi city 1,500.00 Linyi city Production 100.00 Investment
Husbandry
Company
Jiyuan Helai Jiyuan Jiyuan
2,300.00 Production 100.00 Investment
Feed Company county county
Wan'an
Wan'an Wan'an
Wellhope Feed 1,500.00 Production 52.00 Investment
county county
Company
Baotou Hechen
Baotou Baotou
Animal 3,367.50 Production 46.77 Investment
county county
Company
Haicheng New
Hongzunda
Haicheng Haicheng Non-same-control
Animal 4,400.00 Production 51.00
city city consolidation
Husbandry
Company
Chifeng
Wellhope
Animal Chifeng city 800.00 Chifeng city Production 85.00 Investment
Husbandry
Company
Neihuang
Wellhope
Animal Anyang city 8,000.00 Anyang city Production 75.00 20.00 Investment
Husbandry
Company
Tailai Welhope
Agricultural and
Non-same-control
Animal Tailai county 27,000.00 Tailai county Production 70.00
consolidation
Husbandry
Company
Inner Mongolia
New Haoji
Agricultural and
Xing'an Xing'an Non-same-control
Animal 3,000.00 Production 71.00
League League consolidation
Husbandry
Development
Company
Zhangjiakou
Wellhope
Agricultural and Zhangjiakou Zhangjiakou Non-same-control
7,692.00 Production 90.00
Animal city city consolidation
Husbandry
Company
Tangshan
Fengnan Heyou
Agricultural and Tangshan Tangshan Non-same-control
3,000.00 Production 100.00
Animal city city consolidation
Husbandry
Company
Hengshui
Hechen
Hengshui Hengshui Non-same-control
Agricultural and 1,700.00 Production 100.00
city city consolidation
Animal
Husbandry
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Wellhope Foods Co., Ltd. 2023 Annual Report
Company
Hengshui Heyou
Agricultural and
Hengshui Hengshui Non-same-control
Animal 1,000.00 Production 16.00 73.00
city city consolidation
Husbandry
Company
Shenze Hezhi
Agricultural and
Shenze Shenze Non-same-control
Animal 2,000.00 Production 15.00 80.10
county county consolidation
Husbandry
Company
Xinji Heyou
Agricultural and
Non-same-control
Animal Xinji city 1,200.00 Xinji city Production 15.00 85.00
consolidation
Husbandry
Company
Hengshui
Hengshui Hengshui
Welhope Feed 800.00 Production 80.00 Investment
city city
Company
Hebei New
Taihang
Wellhope Baoding city 10,000.00 Baoding city Production 100.00 Investment
Livestock
Company
Siping Huiliang
Wellhope
Animal Siping city 1,000.00 Siping city Production 51.00 Investment
Husbandry
Company
Singapore
Jinfeng Trading Singapore USD1,000.00 Singapore Trade 100.00 Investment
Company
Tangshan Lekai
Animal
Husbandry Tangshan Tangshan
10.00 Investment 99.90 Investment
Partnership city city
(Limited
Partnership)
Baicheng
Wellhope
Baicheng Baicheng
Animal 1,000.00 Production 51.00 Investment
city city
Husbandry
Company
Dalian
Hefengyuan
Animal Dalian city 7,000.00 Dalian city Production 37.00 28.00 Investment
Husbandry
Company
Dalian Rixin
Plumbing &
Non-same-control
Building Dalian city 4,000.00 Dalian city Production 100.00
consolidation
Materials
Company
Heilongjiang
Wellhope Great Qitai River Qitai River
2,000.00 Production 51.00 Investment
Forest Food City City
Company
Heilongjiang
Wellhope Great Qitai River Qitai River
2,000.00 Production 51.00 Investment
Forest Agri-Tech City City
Company
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Tianjin
Weierhao
Tianjin city 1,500.00 Tianjin city Trade 79.00 Investment
Trading
Company
B.Significant non-wholly owned subsidiary
CNY
Shareholding of Gain or loss attributable Declared dividends to Closing balance of
Subsidiary non-controlling to non-controlling non-controlling non-controlling
interests % interests interests interests
Dalian Heyuan
43.00 -38,503,047.62 347,292,355.66
Agri-Tech Company
Xi'an Wellhope
Feed Sci-Tech 20.00 5,656,947.23 4,000,000.00 49,590,445.01
Company
Beijing Sanyuan
Wellhope Agri-Tech 30.00 10,957,270.47 12,000,000.00 67,096,442.74
Company
Tangshan Wellhope
15.00 1,854,945.93 12,507,499.95
Feed Mill
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Wellhope Foods Co., Ltd. 2023 Annual Report
C.Financial figures of important non-wholly owned subsidiary
CNY
Closing balance Opening balance
Subsidiary Non-current Current Non-current Non-current Current Non-current
Current assets Total assets Total liabilities Current assets Total assets Total liabilities
assets liabilities liabilities assets liabilities liabilities
Dalian
Heyuan
715,240,246.03 974,379,130.37 1,689,619,376.40 760,607,527.85 171,109,410.84 931,716,938.69 738,742,888.64 946,569,429.72 1,685,312,318.36 725,201,733.40 120,911,992.99 846,113,726.39
Agri-Tech
Company
Xi'an
Wellhope
Feed 204,843,733.11 90,546,515.63 295,390,248.74 46,753,270.99 684,752.68 47,438,023.67 210,940,240.84 94,843,830.53 305,784,071.37 65,416,997.60 699,584.87 66,116,582.47
Sci-Tech
Company
Beijing
Sanyuan
Wellhope 254,811,001.22 14,196,891.17 269,007,892.39 45,353,083.25 45,353,083.25 279,148,717.73 18,468,034.94 297,616,752.67 70,486,178.44 70,486,178.44
Agri-Tech
Company
Tangshan
Wellhope 56,211,338.13 51,687,938.48 107,899,276.61 24,515,943.64 24,515,943.64 45,122,640.07 63,815,230.87 108,937,870.94 37,920,844.17 37,920,844.17
Feed Mill
2023 2022
Total Cash flow from Total
Subsidiary Cash flow from
Revenue Net profit comprehensive operating Revenue Net profit comprehensive
operating activities
income activities income
Dalian Heyuan Agri-Tech
3,854,833,036.13 -81,296,154.26 -81,296,154.26 240,466,374.04 3,229,796,473.64 7,260,069.05 7,260,069.05 31,462,527.18
Company
Xi'an Wellhope Feed Sci-Tech
806,399,333.75 28,284,736.17 28,284,736.17 40,223,965.02 771,733,668.09 20,624,566.49 20,624,566.49 31,021,085.82
Company
Beijing Sanyuan Wellhope
755,764,730.14 36,524,234.91 36,524,234.91 54,995,249.36 871,228,954.22 23,609,747.33 23,609,747.33 20,606,664.14
Agri-Tech Company
Tangshan Wellhope Feed Mill 246,382,143.02 12,366,306.20 12,366,306.20 14,570,853.22 211,823,047.29 -2,587,245.78 -2,587,245.78 3,153,153.76
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Wellhope Foods Co., Ltd. 2023 Annual Report
2.Transactions that change the share of owner's equity in a subsidiary but the subsidiary is still
controlled
A.Description of changes in share of owner's equity
During the period, the Company transferred 8% equity interest in Jilin Dalong Wellhope Animal
Husbandry Co., 8.6% equity interest in Baotou Hechen Animal Husbandry Co., and 49% equity interest
in Nanyang Jinwan Animal Husbandry Co.
During the period, the Company respectively increased equity interest in its subsidiaries, of which, 10%
in Beijing Brilliant Dragon Commerce and Trade Co., 35% in Suihua Wellhope Animal Husbandry Co.,
25.1% in Shenze Hezhi Agricultural and Animal Husbandry Co., 30% in Xinji Heyou Agricultural and
Animal Husbandry Co., 31.50% in Gongzhuling Wellhope Swine Farming Co., 10.19% in Puyang
Wellhope Food Co., 20% in Daqing Wellhope Bayi Nongda Animal Sci-Tech Co., 0.03% in Jiaozuo
Wellhope Feed Mill, 3% in Yunnan Wellhope Feed Mill, 5.5% in Fuzhou Wellhope Xingyuan Animal
Husbandry Development Co., and 2.04% in Neihuang Wellhope Animal Husbandry Co.
B.The impact of the transaction on non-controlling interests and the equity attributable to the
owners of parent company
CNY
Nanyang Jinwan Baotou Hechen Jilin Dalong
Animal Husbandry Animal Wellhope Animal
Co. Husbandry Co. Husbandry Co.
Cost of acquisition/disposal
considerations
-Cash 5,474,676.00 1,360,000.00
-Fair value of non-cash assets
Total cost of acquisition or disposal
5,474,676.00 1,360,000.00
considerations
less: Share of net assets in the subsidiary
calculated by the percentage of acquired -1,620,888.84 5,474,409.05 1,551,228.66
or disposed shareholdings
Difference 1,620,888.84 266.95 -191,228.66
of which: Adjustment to capital reserve 1,620,888.84 266.95 -191,228.66
Adjustment to surplus reserve
Adjustment to undistributed profits
Suihua Shenze Hezhi
Beijing Brilliant
Wellhope Agricultural and
Dragon Commerce
Animal Animal
and Trade Co.
Husbandry Co. Husbandry Co.
Cost of acquisition/disposal
considerations
-Cash 1,327,127.17 15,692,000.00 1,858,666.77
-Fair value of non-cash assets
Total cost of acquisition or disposal 1,327,127.17 15,692,000.00 1,858,666.77
considerations
less: Share of net assets in the subsidiary
calculated by the percentage of acquired 1,226,598.88 16,685,074.27 2,094,329.83
or disposed shareholdings
Difference 100,528.29 -993,074.27 -235,663.06
of which: Adjustment to capital reserve -100,528.29 993,074.27 235,663.06
Adjustment to surplus reserve
Adjustment to undistributed profits
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Wellhope Foods Co., Ltd. 2023 Annual Report
Daqing
Xinji Heyou Gongzhuling
Puyang Wellhope
Agricultural Wellhope
Wellhope Bayi Nongda
and Animal Swine
Food Co. Animal
Husbandry Co. Farming
Sci-Tech Co.
Cost of acquisition/disposal
considerations
-Cash 2,477,974.56
-Fair value of non-cash assets 8,527,318.83
Total cost of acquisition or disposal
considerations 2,477,974.56 8,527,318.83
less: Share of net assets in the
subsidiary calculated by the
percentage of acquired or disposed 2,528,100.39 -2,136,172.51 4,860,811.08 8,556,818.25
shareholdings
Difference -50,125.83 2,136,172.51 -4,860,811.08 -29,499.42
of which: Adjustment to capital
reserve 50,125.83 -2,136,172.51 4,860,811.08 29,499.42
Adjustment to surplus reserve
Adjustment to undistributed
profits
Fuzhou
Wellhope Neihuang
Jiaozuo Yunnan Xingyuan Wellhope
Wellhope Feed Wellhope Animal Animal
Mill Feed Mill Husbandry Husbandry
Development Co.
Co.
Cost of acquisition/disposal
considerations
-Cash 263,600.00 787,500.00 4,400,000.00
-Fair value of non-cash assets
Total cost of acquisition or disposal
considerations 263,600.00 787,500.00 4,400,000.00
less: Share of net assets in the
subsidiary calculated by the
percentage of acquired or disposed 137,624.29 743,814.57 4,174,726.16 -1,289.93
shareholdings
Difference 125,975.71 43,685.43 225,273.84 1,289.93
of which: Adjustment to capital
reserve -125,975.71 -43,685.43 -225,273.84 -1,289.93
Adjustment to surplus reserve
Adjustment to undistributed
profits
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Wellhope Foods Co., Ltd. 2023 Annual Report
3.Equity in joint ventures or associated companies
A.Important joint ventures or associated companies
Shareholding % Accounting
Business Registered Business
Company arrangement
site site type Direct Indirect method
Beipiao Hongfa Food Beipiao Beipiao
Production 35.00 Equity method
Company city city
Anshan Jiuguhe Food Tai'an Tai'an
Production 41.55 Equity method
Company county county
Tai’an Jiuguhe Agriculture Tai'an Tai'an
Production 41.55 Equity method
Development Company county county
Dalian Chengsan Food Dalian
Dalian city Production 20.00 Equity method
Group Company city
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Wellhope Foods Co., Ltd. 2023 Annual Report
B.Financial figures of important joint ventures or associated companies
CNY
2023 2022
Tai’an Jiuguhe Tai’an Jiuguhe
Dalian Chengsan Dalian Chengsan
Beipiao Hongfa Anshan Jiuguhe Agriculture Beipiao Hongfa Anshan Jiuguhe Agriculture
Food Group Food Group
Food Company Food Company Development Food Company Food Company Development
Company Company
Company Company
Current assets 1,302,293,418.95 835,334,488.93 695,805,327.33 1,771,343,843.54 1,221,903,313.61 787,915,184.91 677,252,697.26 1,786,787,135.76
Non-current
1,588,715,537.01 246,286,145.99 95,369,809.62 712,175,132.58 1,313,933,212.77 155,926,134.02 86,748,298.65 674,735,944.68
assets
Total assets 2,891,008,955.96 1,081,620,634.92 791,175,136.95 2,483,518,976.12 2,535,836,526.38 943,841,318.93 764,000,995.91 2,461,523,080.44
Current liabilities 967,892,510.66 435,777,855.47 724,350,582.67 1,026,034,340.60 740,031,823.24 397,167,516.02 595,169,902.34 799,092,034.01
Non-current
273,342,965.71 94,170,459.07 128,586,258.43 199,564,241.61 11,221,371.88 13,500.00 41,452,025.80
liabilities
Total liabilities 1,241,235,476.37 529,948,314.54 724,350,582.67 1,154,620,599.03 939,596,064.85 408,388,887.90 595,183,402.34 840,544,059.81
Non-controlling
233,793,554.49 300,197,953.25
interests
Equity
attributable to
1,649,773,479.59 551,672,320.38 66,824,554.28 1,095,104,822.60 1,596,240,461.53 535,452,431.03 168,817,593.57 1,320,781,067.38
shareholders of
parent company
Share of net
assets calculated 577,420,717.85 229,219,849.12 27,765,602.30 219,020,964.51 558,684,161.53 222,480,485.09 70,143,710.13 264,156,213.47
by shareholdings
Adjustment -900.00 -1,212,232.10 116,569,111.62 -450.00 -626,093.78 116,569,111.62
--Goodwill 116,569,111.62 116,569,111.62
--Unrealized
profit of internal -1,212,232.10 -626,093.78
transaction
--Other -900.00 -450.00
Book value of
equity investment 577,420,717.85 229,218,949.11 26,553,370.21 335,590,076.13 558,684,161.53 222,480,035.09 69,517,616.35 380,725,325.09
in associates
Revenue 4,146,152,397.83 2,169,675,699.57 2,785,734,022.15 5,473,394,399.20 3,406,895,331.57 1,871,840,202.95 2,515,337,879.70 5,142,391,071.08
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Wellhope Foods Co., Ltd. 2023 Annual Report
Net profit 84,333,018.06 31,219,889.35 -101,993,039.29 -225,676,244.78 202,643,061.43 56,297,728.07 32,211,735.91 151,514,934.91
Total
comprehensive 84,333,018.06 31,219,889.35 -101,993,039.29 -225,676,244.78 202,643,061.43 56,297,728.07 32,211,735.91 151,514,934.91
income
Dividends
received from
10,780,000.00 6,232,950.00 5,390,000.00 6,232,950.00
associates during
the year
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Wellhope Foods Co., Ltd. 2023 Annual Report
C.Summarized financial information for immaterial joint ventures and associates
CNY
2023 2022
Joint ventures:
Book value of investment 11,669,191.54 11,669,191.54
Aggregate of the following on a percentage of shareholding basis
--Net profit -2,540,981.32 4,632,218.03
--Other comprehensive income 1,595,774.57 -105,632.51
--Total comprehensive income -945,206.75 4,526,585.52
Associates:
Book value of investment 1,135,582,217.35 1,244,073,779.77
Aggregate of the following on a percentage of shareholding basis
--Net profit -87,789,994.31 23,657,703.90
--Other comprehensive income 5,351,151.41 -554,988.18
--Total comprehensive income -82,438,842.90 23,102,715.72
Note: Unphung Joint Venture Company, Nepal Wellhope Agri-tech Pvt. Ltd., NEXUS WELL-HOPE
AGRITECH INTERNATIONAL LIMITED use cost method.
XI.Government grants
1.Liability items involving government grants
CNY
Other
Transferred to
Financial Amount of new Amount included changes
Opening other income Related to
statement grants during in non-operating during Closing balance
balance during the assets/revenue
items the period revenue the
period
period
Deferred
78,011,407.06 9,554,300.00 14,146,133.01 73,419,574.05 Asset-related
income
Total 78,011,407.06 9,554,300.00 14,146,133.01 73,419,574.05 /
2.Government grants recognized in current profit or loss
CNY
Type 2023 2022
Asset-related 14,146,133.01 13,078,476.27
Revenue-related 68,969,850.40 30,921,308.80
Total 83,115,983.41 43,999,785.07
XII.Risks Related to Financial Instruments
The Company's major financial instruments include equity investments, loans, accounts receivable and
accounts payable. A detailed description of each financial instrument is provided in the related item in
this document. The Company's management manages and monitors these exposures to ensure that the
aforementioned risks are kept within the limits.
The Company engages in risk management with the goal of striking an appropriate balance between
risk and return, minimizing the negative impact of risk on the Company's operating performance, and
maximizing the interests of shareholders and other equity investors. Based on such risk management
objective, the Company's basic strategy for risk management is to identify and analyze various risks to
which the Company is exposed, establish appropriate risk tolerance and conduct risk management, and
monitor various risks in a timely and reliable manner in order to control the risks within the limits.
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Wellhope Foods Co., Ltd. 2023 Annual Report
1. Market risks
A. Interest rate risk
The Company's risk of cash flow changes in financial instruments due to the changes in interest rates
mainly related to floating-rate bank loans. The Company's policy is to maintain the floating-rate of
these loans.
B. Foreign exchange risks
Foreign exchange risk refers to the risk of loss caused by exchange rate movement. The Company's
main business activities are settled in CNY, with a small amount of import and export business, changes
in exchange rate have little impact on the Company.
2. Credit risk
The maximum credit risk exposure that may cause financial losses to the Company mainly comes from
financial assets loss caused by the other party of contract failed to perform duty.
In order to reduce credit risk, the Company constantly strengthens the risk management awareness of
accounts receivable, and only deals with recognized and reputable third parties. In accordance with the
Company's policies, it is necessary to conduct credit audit and approval, carefully confirm the credit
limit, implement other monitoring procedures and take necessary measures to recover overdue claims.
3. Liquidity risk
In regard of managing liquidity risk, the Company monitors cash and cash equivalents, to satisfy its
operation demand, and to reduce the influence caused by cash flow fluctuation. The management of
the Company supervises the usage circumstances of bank loans and ensures the Company complying
with the agreement of loan.
XIII.Disclosure of fair value
1.Closing fair value of assets and liabilities measured at fair value
CNY
Closing fair value
Item Level 1 fair value Level 2 fair value Level 3 fair value
Total
measurement measurement measurement
Continuous fair value measurement
1. Trading financial assets 829,591.32 829,591.32
Financial assets measured at fair value
and changes recorded into current gains 829,591.32 829,591.32
or losses
2. Derivative financial assets 4,296,668.60 4,296,668.60
3. Other equity instrument investment 14,826,710.99 14,826,710.99
Total assets continuously measured at fair
5,126,259.92 14,826,710.99 19,952,970.91
value
2.Basis for determining the market value of continuing and discontinued level 1 fair value
measurements
For financial instruments traded in an active market, the Company measures them at the unadjusted
quoted prices in an active market for identical assets or liabilities at the balance sheet date.
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Wellhope Foods Co., Ltd. 2023 Annual Report
3.Continuing and discontinued Level 3 fair value measurements, valuation techniques used and
qualitative and quantitative information on significant parameters
Investments in other equity instruments held by the Company are equity investments in which the
Company does not have control, joint control or significant influence and which are not quoted in an
active market, and are measured at the cost of the investment combined with a reasonable estimate of
the operating conditions of the investee.
XIV.Related Party and Transaction
1.Snapshot of joint ventures and associates
Circumstance of the joint ventures and associates, which had related transactions with the Company in
the period.
Company Relationship
Unphung Joint Venture Company Joint venture
Nepal Wellhope Agri-tech Pvt. Ltd. Joint venture
Anshan Fengsheng Food Company Associated company
Anshan Jiuguhe Food Company Associated company
Beipiao Hongfa Food Company Associated company
Dalian Chengsan Food Group Company Associated company
Dalian Wellhope Fish Meal Company Associated company
Daqing Supply and Marketing Agri-Tech Company Associated company
Dandong Wellhope Chengsan Agri-Tech Company Associated company
Gongzhuling Corn Purchasing and Storing Company Associated company
Huluodao Jiuguhe Feed Mill Associated company
Jinzhou Jiufeng Food Company Associated company
Lankao Skyland Duck Company Associated company
Linghai Jiuguhe Feed Mill Associated company
Qingdao Shenfeng Agri-Tech Company Associated company
Shenyang Wenjie Bio-Tech Company Associated company
Shihaipu (Beijing) Technology and Trade Company Associated company
Tai'an Fengjiu Agri-Tech Company Associated company
Tai'an Jiufeng Agri-Tech Company Associated company
Tai'an Jiuguhe Agriculture Development Company Associated company
Tailai Welhope Agricultural and Animal Husbandry
Associated company
Company[note 1]
Zhangjiakou Welhope Agricultural and Animal Husbandry
Associated company
Company[note 2]
Shenyang Zhongwenjie Bio-Tech Company Associated company
Liaoning Mubang Animal Husbandry Equipment Manufacturing
Associated company
Company
Dalian Sida Food Company Associated company
Wudalianchi Shengda Ranch Professional Cooperative [note 3] Associated company
Shandong Fengkang Food Company Associated company
Anshan Jiuguhe Paper Packaging Company Associated company
Anshan Antai Plastic Products Company Associated company
Harbin Weierhao Trading Company Associated company
Jiyuan Sunshine Rabbit Technology Company Associated company
Heilongjiang Bei'an Nongken Zhongwang Dairy Cattle Breeding
Associated company
Specialized Cooperative Society
Hebei Taihang Wellhope Animal Husbandry Company[note 4] Associated company
223 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Other explanation:
[note 1] In May 2023, the Company purchased 35.00% of the minority shareholders of Tailai Welhope
Agricultural and Animal Husbandry Company, and after the purchase, its shareholding in Tailai Welhope
was 70.00%, which changed from an associate to a subsidiary within the scope of consolidation.
[note 2] In May 2023, the Company purchased 55.00% of the minority shareholders of Zhangjiakou
Welhope Agricultural and Animal Husbandry Company, and after the purchase, its shareholding in
Zhangjiakou Welhope was 90.00%, which changed from an associate to a subsidiary within the scope of
consolidation.
[note 3] In March 2023, Bei’an Nongken Shengda Pasture Specialized Cooperative changed its name to
Wudalianchi Shengda Ranch Professional Cooperative.
[note 4] In January 2023, the Company transferred 32.00% equity interest in Hebei Taihang Wellhope
Animal Husbandry Company, and after the transfer, its shareholding in Hebei Taihang Animal
Husbandry was 30.00%, which changed from a subsidiary within the scope of consolidation to an
associate.
2.Snapshot of other related parties
Related party Relationship
Controlling shareholder, natural
person shareholders who hold
more than 5% shares of the
Associated natural persons
Company, board directors,
supervisors, senior managers
and their relatives
Shareholder who holds more
Changzhou Heli Venture Capital Partnership (Limited Partnership)
than 5% shares of the Company
3.Snapshot of related party transaction
A.Purchasing and selling products, providing and accepting labor service
CNY
Relate party Transaction 2023 2022
Dalian Wellhope Fish Meal Company Feed raw material 95,952,015.50 102,266,988.92
Hebei Taihang Wellhope Animal
Live broiler 47,318,854.44
Husbandry Company
Harbin Weierhao Trading Company Feed raw material 33,344,376.52 7,397,188.88
Tai'an Jiuguhe Agriculture
Feed, live broiler 32,065,105.21 60,799,179.98
Development Company
Daqing Supply and Marketing
Feed raw material 29,703,469.35 26,596,127.86
Agri-Tech Company
Huluodao Jiuguhe Animal Husbandry
Live broiler 25,242,539.20
Company
Gongzhuling Corn Purchasing and
Feed raw material 24,172,617.21 4,802,114.70
Storing Company
Liaoning Yufeng Bio-tech Company Feed raw material 17,246,305.00 19,194,394.95
Tai'an Jiufeng Agri-Tech Company Day old chick 14,710,134.17 19,257,125.96
Dalian Chengsan Food Group
Live broiler 13,737,496.97 38,725,935.09
Company
Anshan Jiuguhe Food Company Broiler product 6,498,786.23 5,762,586.00
224 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Zhangjiakou Welhope Agricultural
Piglet 5,062,309.70 22,035,499.40
and Animal Husbandry Company
Jinzhou Jiufeng Food Company Broiler product 4,420,827.00 12,690,178.50
Linghai Jiuguhe Feed Mill Feed, live broiler 4,040,920.50 757,085.00
Shenyang Wanlitian Agriculture and Veterinary drugs,
3,098,058.03 2,874,247.91
Animal Husbandry Company vaccine
Tailai Welhope Agricultural and
Piglet 2,636,965.84
Animal Husbandry Company
Anshan Jiuguhe Paper Packaging
Other 1,735,573.27 3,114,856.43
Company
Shihaipu (Beijing) Technology and
Other 1,330,066.83 2,570,408.93
Trade Company
Beipiao Hongfa Food Company Broiler product 746,950.00 7,081,994.06
Anshan Antai Plastic Products
Other 486,454.92 585,052.50
Company
Anshan Fengsheng Food Company Feed raw material 128,000.00 53,211.01
Jilin Hengfeng Animal Health Veterinary drugs,
121,340.71 505,577.94
Products Company vaccine
Qingdao Shenfeng Agri-Tech
Feed 26,311.00 151,514.24
Company
Shenyang Wenjie Bio-Tech Company Other 3,135,329.56
Dunhua Fengda Broiler Breeding
Day old chick 1,643,845.00
Company
Total / 363,825,477.60 342,000,442.82
Selling products or providing labor service
CNY
Relate party Transaction 2023 2022
Shandong Fengkang Food Company Live broiler 514,871,771.15 318,685,102.91
Dalian Sida Food Company Live broiler 248,928,031.15 303,008,793.95
Tai'an Jiuguhe Agriculture Feed raw material,
Development Company feed 150,815,000.73 127,676,845.57
Huluodao Jiuguhe Feed Mill Feed raw material,
feed 76,670,460.04 45,685,168.02
Anshan Jiuguhe Food Company Live broiler 71,655,291.80 73,948,755.57
Harbin Weierhao Trading Company Feed raw material 67,956,115.31 63,519,205.04
Linghai Jiuguhe Feed Mill Feed raw material,
feed 50,452,041.39 67,403,844.03
Dazhou Wellhope Bio-Tech Company Feed raw material,
feed 32,577,628.84 62,110,129.84
Daqing Supply and Marketing Feed
Agri-Tech Company 27,840,120.00 92,831,460.07
Qingdao Shenfeng Agri-Tech Feed raw material,
Company feed 27,213,619.91 33,989,357.61
Tailai Welhope Agricultural and Feed raw material,
Animal Husbandry Company feed 26,659,659.42 57,067,001.08
Anshan Fengsheng Food Company Live broiler 24,410,632.68 25,267,017.27
Liaoning Yufeng Bio-tech Company Broiler product,
feed raw material 37,574,749.79 19,102,682.44
Zhangjiakou Welhope Agricultural Feed
and Animal Husbandry Company 12,860,535.87 25,437,678.39
Dandong Wellhope Chengsan Feed raw material,
Agri-Tech Company feed 8,458,299.13 10,645,214.70
Nepal Wellhope Agri-tech Pvt. Ltd. Feed 8,027,945.95 6,258,226.96
Wudalianchi Shengda Ranch Feed
Professional Cooperative Society 6,863,810.90 1,284,072.43
Dalian Chengsan Food Group Feed raw material,
Company veterinary drugs 3,848,751.84 7,375,666.19
225 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Huluodao Jiuguhe Animal Husbandry Feed
Company 1,865,507.10
Shihaipu (Beijing) Technology and Other products
Trade Company 1,814,346.16 2,696,970.22
Jilin Jinfeng Animal Husbandry Piglet, feed
Company 1,063,823.04
Shenyang Wellhope Huahu Food Other products
Technology Company 855,864.19
Mulia Harvest Indonesia Feed raw material 531,225.00
Jiyuan Sunshine Rabbit Technology Other products
Company 305,367.26 535,981.69
Dalian Wellhope Fish Meal Company Feed raw material 260,031.67 233,628.32
Dunhua Fengda Broiler Breeding Feed
Company 39,000.00 460,500.16
Haicheng New Hongzunda Agri-Tech Feed raw material
Company 5,978,442.02
Huluodao Jiuguhe Food Company Broiler product 2,253,666.06
Heilongjiang Bei'an Nongken
Zhongwang Dairy Cattle Breeding Feed raw material 214,960.00
Specialized Cooperative Society
Tai'an Jiufeng Agri-Tech Company Feed raw material 80,570.10
Total / 1,404,419,630.32 1,353,750,940.64
The related party transactions incurred by the Company are necessary for the normal operation, and
the pricing of purchases or sales is determined in accordance with the market price of similar products
using the comparable uncontrolled price method.
B.Related party guarantee
The Company acted as the guarantor
CNY
Whether the
Amount of Guarantee guarantee
Guaranteed party Guarantee date
guarantee maturity date has been
completed
Liaoning Expert Trading
20,112,863.51 December 8, 2023 December 8, 2024 No
Company
Liaoning Expert Trading
28,110,656.76 June 13, 2023 June 13, 2024 No
Company
Anhui Wellhope Food
15,629,337.46 November 9, 2023 November 8, 2024 No
Company
Lixin Xiangfeng Agriculture
September 25, September 24,
and Animal Husbandry 25,000,000.00 No
2023 2024
Company
Lixin Xiangfeng Agriculture
and Animal Husbandry 10,000,000.00 March 16, 2023 March 16, 2024 No
Company
Puyang Wellhope Food
50,000,000.00 March 27, 2023 March 27, 2024 No
Company
Lingyuan Wellhope Animal September 28, September 25,
10,000,000.00 No
Husbandry Company 2023 2024
Lingyuan Wellhope Animal
20,000,000.00 June 30, 2023 June 20, 2024 No
Husbandry Company
Daqing Wellhope Animal
30,000,000.00 September 7, 2023 September 6, 2024 No
Husbandry Company
Lingyuan Wellhope Animal 44,291,600.00 March 6, 2021 March 5, 2026 No
226 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Husbandry Company
Dalian Zhongjia Food
49,980,000.00 October 28, 2022 October 27, 2025 No
Company
Dalian Heyuan Agri-Tech
49,970,000.00 May 31, 2022 May 30, 2025 No
Company
Daqing Wellhope Food September 30, September 29,
8,000,000.00 No
Company 2021 2024
Daqing Wellhope Food
39,820,000.00 July 27, 2022 July 27, 2025 No
Company
Hebei Taihang Wellhope
101,084,230.00 April 28, 2023 October 30, 2033 No
Food Company
Haicheng Wellhope November 20,
5,288,500.00 October 25, 2033 No
Agri-Tech Feed Mill 2023
Liaoning Qingyuan Wellhope
Agriculture and Animal 9,709,731.86 August 18, 2023 August 18, 2033 No
Husbandry Company
C.Borrowings to related party
CNY
Related Starting Due
Borrowings Note
party date date
Wudalianchi Bei’an Nongken Shengda Pasture Specialized
Shengda Cooperative is an associated company of Wellhope,
Ranch 4,350,000.00 each member of the cooperative provides funds to
Professional the cooperative in proportion to their shareholding
Cooperative under the agreement.
D.Key management compensation
CNY million
Item 2023 2022
Key management compensation 8.17 8.49
4.Unsettled items such as receivables and payables from related parties
A.Receivables
CNY
Closing balance Opening balance
Item Related party Bad debt Bad debt
Book balance Book balance
provision provision
Accounts
Linghai Jiuguhe Feed Mill 7,649,631.00 526,485.42 8,139,479.10 162,789.58
receivable
Accounts Tai’an Jiuguhe Agriculture
9,044,419.00 351,349.98 13,081,701.90 261,634.04
receivable Development Company
Accounts
Anshan Jiuguhe Food Company 19,904,264.00 398,085.28 31,391,484.65 627,829.69
receivable
Accounts
Huludao Jiuguhe Feed Mill 4,786,800.00 95,736.00 4,786,800.00 95,736.00
receivable
Accounts Dalian Chengsan Food Group
432,000.00 8,640.00 845,840.00 16,916.80
receivable Company
Accounts
Mulia Harvest Indonesia 531,225.00 10,624.50
receivable
Accounts Liaoning Yufeng Bio-tech
1,427,217.50 28,544.35
receivable Company
227 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Wudalianchi Shengda Ranch
Accounts
Professional Cooperative 13,652,578.33 273,051.57 6,745,785.43 134,915.71
receivable
Society
Accounts Dazhou Wellhope Bio-Tech
3,984,322.80 79,686.46 3,872,726.06 77,454.52
receivable Company
Accounts Jiyuan Sunshine Rabbit
251,840.00 5,036.80
receivable Technology Company
Heilongjiang Bei'an Nongken
Accounts Zhongwang Dairy Cattle
1,333,862.00 26,677.24 1,333,862.00 26,677.24
receivable Breeding Specialized
Cooperative Society
Accounts Shandong Fengkang Food
95,579,063.79 1,911,581.28 67,894,560.19 1,357,891.20
receivable Company
Accounts
Dalian Sida Food Company 1,213,980.86 24,279.62 15,391,105.00 307,822.10
receivable
Zhangjiakou Welhope
Accounts
Agricultural and Animal 11,418,541.47 228,370.83
receivable
Husbandry Company
Accounts Tailai Welhope Agricultural and
12,827,310.23 256,546.20
receivable Animal Husbandry Company
Accounts Daqing Supply and Marketing
10,165,125.79 203,302.52
receivable Agri-Tech Company
Accounts Dandong Wellhope Chengsan
783,860.00 15,677.20
receivable Agri-Tech Company
Accounts Harbin Weierhao Trading
306,557.00 6,131.14
receivable Company
Accounts Jilin Jinfeng Animal Husbandry
4,950.00 99.00
receivable Company
Accounts Nepal Wellhope Agri-tech Pvt.
1,941,955.26 38,839.11
receivable Ltd.
Wudalianchi Shengda Ranch
Other
Professional Cooperative 4,350,000.00 4,350,000.00 4,350,000.00 652,500.00
receivables
Society
Dalian Wellhope Fish Meal
Prepayments 303,360.00
Company
Harbin Weierhao Trading
Prepayments 900,010.10 185,600.00
Company
Zhangjiakou Welhope
Prepayments Agricultural and Animal 71,250.00
Husbandry Company
B.Payables
CNY
Closing book Opening book
Item Related party
balance balance
Accounts payable Anshan Jiuguhe Food Company 717,216.00 5,000,000.00
Accounts payable Qingdao Shenfeng Agri-Tech Company 5,100,000.00 5,100,000.00
Shihaipu (Beijing) Technology and Trade
Accounts payable 5,760.00
Company
Accounts payable Tai'an Fengjiu Agri-Tech Company 372,855.52 423,697.23
Gongzhuling Corn Purchasing and Storing
Accounts payable 1,120,700.48
Company
Accounts payable Liaoning Yufeng Bio-tech Company 5,455,770.00 5,151,573.00
Accounts payable Anshan Jiuguhe Paper Packaging Company 481,347.54 197,950.36
228 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Accounts payable Anshan Antai Plastic Products Company 185,909.80 14,161.00
Accounts payable Dalian Wellhope Fish Meal Company 5,033,880.00 5,366,854.28
Shenyang Wanlitian Agriculture and
Accounts payable 1,203,434.00 621,656.00
Animal Husbandry Company
Accounts payable Harbin Weierhao Trading Company 5,100.00
Tai'an Jiuguhe Agriculture Development
Accounts payable 2,041,726.20
Company
Zhangjiakou Welhope Agricultural and
Accounts payable 15,200,000.00
Animal Husbandry Company
Accounts payable Shenyang Wenjie Bio-Tech Company 2,057,790.00
Jilin Hengfeng Animal Health Products
Accounts payable 315,120.00
Company
Daqing Supply and Marketing Agri-Tech
Accounts payable 136,900.40
Company
Accounts payable Jinzhou Jiufeng Food Company 3,000,000.00
Huluodao Jiuguhe Animal Husbandry
Accounts payable 4,092,604.40
Company
Tai'an Jiuguhe Agriculture Development
Advance receipts 286,545.49 725,000.00
Company
Advance receipts Huludao Jiuguhe Feed Mill 285,600.00 46,000.00
Advance receipts Harbin Weierhao Trading Company 1,221,140.00
Advance receipts Nepal Wellhope Agri-tech Pvt. Ltd. 38,700.00
Advance receipts Liaoning Yufeng Bio-tech Company 47,048.40
Contract liabilities Linghai Jiuguhe Feed Mill 593,368.16 2,907,700.00
Tai'an Jiuguhe Agriculture Development
Contract liabilities 880,438.91 3,807,600.00
Company
Contract liabilities Huludao Jiuguhe Feed Mill 593,154.45 1,903,800.00
Contract liabilities Harbin Weierhao Trading Company 500,000.00
Other payables Unphung Joint Venture Company 71,682.43 71,682.43
Other payables Nepal Wellhope Agri-tech Pvt. Ltd. 2,999.41 2,999.41
XV.Notes to major Items of the Parent Company's Financial Statements
1.Accounts receivable
A.Categorized by aging
CNY
Aging Closing book balance Opening book balance
Within 1 year 28,002,017.00 41,640,129.64
1-2 years 539,258.75 1,297,508.00
2-3 years 1,058,108.00 4,191,691.30
Over 3 years 30,662,435.60 27,370,009.30
Total 60,261,819.35 74,499,338.24
229 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
B.Categorized by bad debt provision method
CNY
Closing balance Opening balance
Category Book balance Bad debt provision Book balance Bad debt provision
Book value Book value
Amount Percentage% Amount Accruing % Amount Percentage% Amount Accruing %
Accruing bad debt
provision on an 686,300.00 1.14 686,300.00 100.00 686,300.00 0.92 686,300.00 100.00
individual basis
Accruing bad debt
59,575,519.35 98.86 31,911,884.11 53.57 27,663,635.24 73,813,038.24 99.08 29,566,246.36 40.06 44,246,791.88
provision by portfolio
including:
Aging portfolio 59,470,239.35 98.69 31,911,884.11 53.66 27,558,355.24 60,483,943.90 81.19 29,566,246.36 48.88 30,917,697.54
Other portfolio 105,280.00 0.17 105,280.00 13,329,094.34 17.89 13,329,094.34
Total 60,261,819.35 / 32,598,184.11 / 27,663,635.24 74,499,338.24 / 30,252,546.36 / 44,246,791.88
230 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Accruing bad debt provision by portfolio
CNY
Closing balance
Aging Accruing
Accounts receivable Bad debt provision
percentage %
Within 1 year 27,896,737.00 1,325,805.70 4.75
1 -2 year 539,258.75 80,888.81 15.00
2-3 years 1,058,108.00 529,054.00 50.00
Over 3 years 29,976,135.60 29,976,135.60 100.00
Total 59,470,239.35 31,911,884.11 53.66
C.Bad debt provision
CNY
Fluctuations in current
Category Opening balance period Closing balance
Accruing
Individual 686,300.00 686,300.00
Portfolio 29,566,246.36 2,345,637.75 31,911,884.11
Total 30,252,546.36 2,345,637.75 32,598,184.11
D.Top five accounts receivable and contract assets
CNY
Percentage of total
Closing balance of
closing balance of
Closing balance of accounts Closing balance of
Name accounts
accounts receivable receivable and bad debt provision
receivable and
contract assets
contract assets %
1 9,044,419.00 9,044,419.00 15.01 351,349.98
2 7,649,631.00 7,649,631.00 12.69 526,485.42
3 7,350,077.71 7,350,077.71 12.20 7,350,077.71
4 7,053,335.00 7,053,335.00 11.70 7,053,335.00
5 6,629,161.00 6,629,161.00 11.00 5,199,569.60
Total 37,726,623.71 37,726,623.71 62.60 20,480,817.71
2.Other receivables
CNY
Item Closing balance Opening balance
Interests receivable
Dividends receivable 54,770,301.77 53,759,486.59
Other receivables 2,289,682,206.80 2,175,154,013.17
Total 2,344,452,508.57 2,228,913,499.76
A.Dividends receivable
a. Dividends receivable
CNY
Item Closing balance Opening balance
Dividends from long-term investment
54,770,301.77 26,224,193.24
under cost method
Dividends from long-term investment
27,535,293.35
under equity method
Total 54,770,301.77 53,759,486.59
231 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
b.Significant dividends receivable with an age of more than one year
CNY
Whether
impairment has
Closing Reasons for
Item(investee) Age occurred and the
balance non-recovery
basis for its
determination
Less than 1 year CNY 18,117,476.00,
Puyang Wellhope Food
35,718,182.00 1-2 years CNY 8,800,353.00, 2-3 years Not yet paid No
Company
CNY 8,800,353.00
Daqing Wellhope Bayi
Less than 1 year CNY 10,428,632.53,
Nongda Animal 16,541,119.77 Not yet paid No
over 3 years CNY 6,112,487.24 yuan
Sci-Tech Company
Total 52,259,301.77 / /
B.Other receivables
a.Categorized by aging
CNY
Aging Closing book balance Opening book balance
Within 1 year 2,293,011,737.14 2,163,550,850.93
1-2 years 63,143.00 8,043,183.50
2-3 years 398,700.00 198,700.00
Over 3 years 4,593,700.00 4,395,000.00
Total 2,298,067,280.14 2,176,187,734.43
b.Categorized by nature
CNY
Nature Closing book balance Opening book balance
Operating receivables 2,466,112.54 1,293,062.89
Deposits and guarantees 900,526.00 257,900.00
Related party- fund transactions 2,256,950,641.60 2,170,286,771.54
Receivables from disposal of investments 33,400,000.00
Other 4,350,000.00 4,350,000.00
Total 2,298,067,280.14 2,176,187,734.43
c.Bad debt provision accruing
CNY
Phase 1 Phase 2 Phase 3
Expected credit loss for Expected credit loss for
Bad debt
Expected credit losses the entire duration (no the entire duration Total
provision
over the next 12 months credit impairment (credit impairment
occurred) occurred)
Balance on
849,221.26 184,500.00 1,033,721.26
January 1, 2023
-charged to
phase 2
- charged to
-652,500.00 652,500.00
phase 3
-recovered in
phase 2
- recovered in
phase 1
232 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Accrued in the
5,817,962.08 3,697,500.00 9,515,462.08
reporting period
Written off in
the reporting 2,164,110.00 2,164,110.00
period
Balance on
December 31, 3,850,573.34 4,534,500.00 8,385,078.34
2023
Classification of phases and percentage of bad debt provision
Percentage of the
Phase Carrying balance accrual of provision for Provision for bad debts Carrying value
bad debts %
Phase 1 2,293,532,780.14 0.17 3,850,573.34 2,289,682,206.80
Phase 2
Phase 3 4,534,500.00 100.00 4,534,500.00
Total 2,298,067,280.14 0.36 8,385,073.34 2,289,682,206.80
d.Bad debt provision
CNY
Fluctuations in current period
Opening Closing
Category Collected or Charged off or
balance Accruing balance
recovered written off
Other
1,033,721.26 9,515,462.08 2,164,110.00 8,385,073.34
payables
Total 1,033,721.26 9,515,462.08 2,164,110.00 8,385,073.34
e.Top five other receivables
CNY
% of closing
Closing balance
balance of total
Company Closing balance Nature Aging of bad debt
other
provision
receivables
1 351,206,223.54 15.28 Current accounts within 1 year
2 141,288,515.88 6.15 Current accounts within 1 year
3 126,662,500.00 5.51 Current accounts within 1 year
4 122,747,360.61 5.34 Current accounts within 1 year
5 113,079,039.62 4.92 Current accounts within 1 year
Total 854,983,639.65 37.20 / /
f.Presented in other receivables due to centralized management of funds
CNY
Amounts reported in other receivables due
2,256,950,641.60
to centralized management of funds
Information notes /
233 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
3.Long-term equity investment
CNY
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Investment in
3,999,638,880.61 3,999,638,880.61 3,628,321,267.36 3,628,321,267.36
subsidiaries
Investment in
associates and 2,215,440,226.01 17,900,000.00 2,197,540,226.01 2,376,311,808.96 17,900,000.00 2,358,411,808.96
joint ventures
Total 6,215,079,106.62 17,900,000.00 6,197,179,106.62 6,004,633,076.32 17,900,000.00 5,986,733,076.32
A.Investment in subsidiaries
CNY
Decrease in
Company Jan. 1, 2023 Increase in 2023 Dec. 31, 2023
2023
Haicheng Wellhope
12,614,789.85 12,614,789.85
Feed Mill
Tai'an Wellhope Feed
33,055,140.93 33,055,140.93
Mill
Shenyang Wellhope
6,038,738.05 6,038,738.05
Ruminant Feed Mill
Liaoning Wellhope
Agriculture and Animal
97,604,896.30 97,604,896.30
Husbandry
Development Company
Shenyang Nongda
44,562,397.18 44,562,397.18
Wellhope Feed Mill
Xingcheng Wellhope
82,794,584.59 82,794,584.59
Feed Mill
Dalian Wellhope Feed
42,386,167.87 42,386,167.87
Mill
Jinzhou Wellhope
17,260,917.78 17,260,917.78
Agri-Tech Company
Shenyang Wellhope
33,042,083.51 33,042,083.51
Extruded Feed Mill
Shenyang Wellhope
15,286,167.88 15,286,167.88
Aquatic Feed Mill
Shenyang Wellhope
82,988,342.49 82,988,342.49
Agri-Tech Company
Shenyang Wellhope
Poultry Industry 60,565.62 60,565.62
Company
Gongzhuling Wellhope
35,514,907.90 35,514,907.90
Agri-Tech Company
Jilin Wellhope Agri-Tech
16,241,715.94 16,241,715.94
Company
Gongzhuling Wellhope
5,084,167.03 5,084,167.03
Ruminant Feed Mill
Sanjiang Wellhope
13,022,410.76 13,022,410.76
Agri-Tech Company
Mudanjiang Wellhope 23,286,048.10 23,286,048.10
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Wellhope Foods Co., Ltd. 2023 Annual Report
Agri-Tech Company
Heilongjiang Wellhope
120,848,465.45 120,848,465.45
Agri-Tech Company
Beijing Helai Sci-Tech
25,472,592.05 25,472,592.05
Company
Beijing Wellhope
5,071,980.16 5,071,980.16
Agri-Tech Company
Huai'an Wellhope Feed
30,230,704.60 30,230,704.60
Mill
Gansu Wellhope
40,108,690.76 40,108,690.76
Agri-Tech Company
Henan Wellhope
52,769,238.99 52,769,238.99
Agri-Tech Company
Lankao Wellhope
43,084,167.03 43,084,167.03
Agri-Tech Company
Shenyang Huaweida
Animal Health Product 36,032.42 36,032.42
Company
Jilin Wellhope Swine
15,000,000.00 15,000,000.00
Breeding Company
Shenyang Expert
30,010,648.28 30,010,648.28
Trading Company
Shenyang Jiahe
Tianfeng Commerce 10,143,614.30 10,143,614.30
and Trade Company
Liaoning Expert Trading
73,771,350.84 73,771,350.84
Company
Shenyang Pufeng
Commerce and Trade 1,999,788.72 1,999,788.72
Company
Liaoning Wellhope
Purchasing & Trading 30,278,344.48 30,278,344.48
Company
Liaoning Skyland
Livestock Equipment 28,667,982.56 28,667,982.56
Company
Shenyang Fame
20,494,308.42 20,494,308.42
Bio-Tech Company
Pingyuan Wellhope
Food Processing 210,203,167.88 210,203,167.88
Company
Pingyuan Wellhope
264,258.47 264,258.47
Agri-Tech Company
Kaifeng Wellhope Meat
100,000,000.00 100,000,000.00
Product Company
Wellhope Food
5,160,191.67 5,160,191.67
(Shenyang) Company
Liaoning Godaji
20,496,378.16 20,496,378.16
E-commerce Company
Linxi Helai Agri-Tech
33,038,762.97 33,038,762.97
Company
Luoyang Wellhope 75,000,000.00 75,000,000.00
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Wellhope Foods Co., Ltd. 2023 Annual Report
Agriculture and Animal
Husbandry Company
Anyang Wellhope
Agriculture and Animal 55,000,000.00 55,000,000.00
Husbandry Company
Hainan Expert Trading
9,151.86 9,151.86
Company
Tianjin Fullyond Supply
10,000,000.00 10,000,000.00
Chain Company
Zhumadian Wellhope
Agriculture and Animal
30,000,000.00 30,000,000.00
Husbandry
Development Company
Linyi Wellhope
15,000,000.00 15,000,000.00
Agri-Tech Company
Jiyuan Helai Feed
23,000,000.00 23,000,000.00
Company
Lankao Skyland Feed
46,069,798.90 46,069,798.90
Company
Fuxin Wellhope Farming
30,000,000.00 30,000,000.00
& Livestock Company
Lingyuan Wellhope
Farming & Livestock 5,000,000.00 5,000,000.00
Company
Fame (Shenyang)
Biological High-tech
10,000,000.00 10,000,000.00
Industry Research
Institute Company
Hebei New Taihang
Wellhope Animal 10,000,000.00 10,000,000.00
Husbandry Company
Shenyang Pufeng
5,500,000.00 5,500,000.00
Trading Company
Lingyuan Wellhope
16,910,917.77 16,910,917.77
Agri-Tech Company
Haicheng Xinzhongxin
6,002,315.70 6,002,315.70
Feed Mill
Fuyu Wellhope
46,602,083.51 46,602,083.51
Agri-Tech Company
Changchun Wellhope
84,597,782.33 84,597,782.33
Feed Mill
Daqing Wellhope Bayi
Nongda Animal Sci-Tech 30,694,098.94 8,527,318.83 39,221,417.77
Company
Beijing Sanyuan
Wellhope Agri-Tech 8,719,369.88 8,719,369.88
Company
Tangshan Wellhope
43,434,466.04 43,434,466.04
Feed Mill
Cangzhou Helai Sci-Tech
3,531,614.46 3,531,614.46
Company
Shanxi Wellhope 48,042,083.51 48,042,083.51
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Wellhope Foods Co., Ltd. 2023 Annual Report
Agri-Tech Company
Tangshan Hejia
Agriculture and Animal 19,634,667.24 19,634,667.24
Husbandry Company
Tangshan Wellhope
21,033,666.81 21,033,666.81
Sci-Tech Company
Shanghai Wellhope
2,295,632.60 2,295,632.60
Feed Mill
Pinghu Wellhope
1,026,750.75 1,026,750.75
Agri-Tech Company
Anhui Wellhope
112,148,987.28 112,148,987.28
Agri-Tech Company
Xi'an Wellhope Feed
4,688,849.43 4,688,849.43
Sci-Tech Company
Zhengzhou Wellhope
6,898,005.82 6,000,000.00 12,898,005.82
Agri-Tech Company
Zhumadian Wellhope
9,052,956.04 9,052,956.04
Agri-Tech Company
Nanyang Wellhope
17,925,324.47 17,925,324.47
Feed Mill
Jiaozuo Wellhope Feed
50,441,004.92 263,600.00 50,704,604.92
Mill
Jingzhou Wellhope
Agricultural Sci-Tech 21,432,261.58 21,432,261.58
Company
Qingdao Wellhope
28,887,168.30 28,887,168.30
Agri-Tech Company
Jining Wellhope
19,726,723.27 19,726,723.27
Agri-Tech Company
Yunnan Wellhope Feed
24,294,994.77 787,500.00 25,082,494.77
Mill
Fuyu Wellhope
Taolaizhao Poultry 25,757,551.60 25,757,551.60
Raising Company
Changchun Hengfeng
Agriculture and Animal 235,667.66 235,667.66
Husbandry Company
Beijing Brilliant Dragon
Commerce and Trade 205,085.39 205,085.39
Company
Shanghai Hehong
203,454.84 203,454.84
Trading Company
Jinan Xinweita Trading
157,757.98 157,757.98
Company
Zhangwu Wellhope
Agriculture 1,800,000.00 1,800,000.00
Development Company
Tongliao Wellhope
Tianyi Prataculture 10,200,000.00 10,200,000.00
Company
Chongqing Dahong 117,833.83 10,000,000.00 10,117,833.83
237 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Agriculture and Animal
Husbandry Equipment
Company
Guangzhou Xiangshun
Livestock Equipment 3,000,500.21 3,000,500.21
Company
Dalian Huakang Xinxin
11,662,375.47 11,662,375.47
Food Company
Dalian Heyuan
103,890,054.28 103,890,054.28
Agri-Tech Company
Dalian Zhongjia Food
155,824.28 155,824.28
Company
Shenyang Huakang
68,558,404.83 68,558,404.83
Broiler Company
Shenyang Huakang
1,969,334.47 1,969,334.47
Xinxin Food Company
Changchun Wellhope
8,668,334.04 8,668,334.04
Food Company
Dehui Wellhope
45,424.21 45,424.21
Agri-Tech Company
Puyang Wellhope Food
20,210,417.54 20,210,417.54
Company
Puyang Wellhope
45,424.21 45,424.21
Agri-Tech Company
Kaifeng Wellhope
Agriculture and Animal 40,348.21 40,348.21
Husbandry Company
Liaoning Wellhope Food
30,041,809.18 30,041,809.18
Company
Chongqing Wellhope
2,230,000.00 2,230,000.00
Agri-Tech Company
Nanchang Wellhope
6,500,000.00 6,500,000.00
Agri-Tech Company
Shulan Fengtai
Agriculture and Animal 63,394,541.16 63,394,541.16
Husbandry Company
Shulan Fengtai Farming
5,100,000.00 5,100,000.00
Company
Hainan Wellhope
68,155,732.34 68,155,732.34
Agri-Tech Company
Russia Wellhope
11,700,000.00 11,700,000.00
Agri-Tech Company
Chifeng Wellhope
Fuxinyuan Food 125,000,000.00 125,000,000.00
Company
Shenyang Xiangmai
650,000.00 650,000.00
E-commerce Company
Hebei Taihang Wellhope
234,150,000.00 234,150,000.00
Food Company
Dunhua Wellhope
7,652,794.97 7,652,794.97
Agri-Tech Company
Dunhua Fengda 13,095,094.63 13,095,094.63
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Wellhope Foods Co., Ltd. 2023 Annual Report
Agriculture and Animal
Husbandry
Development Company
Heibei Taihang
74,400,000.00 74,400,000.00
Agri-Tech Company
Nanyang Jinwan
10,000,000.00 10,000,000.00
Agri-Tech Company
Liaoning Qingyuan
Wellhope Agriculture
114,694,899.21 114,694,899.21
and Animal Husbandry
Company
Fuzhou Wellhope
Xingyuan Agri-Tech 43,100,000.00 43,100,000.00
Development Company
Daqing Wellhope Food
7,650,000.00 7,650,000.00
Company
Shandong Heyuan Food
37,759.87 37,759.87
Company
Shijiazhuang Hejia
Agriculture and Animal 13,000,000.00 13,000,000.00
Husbandry Company
Inner Mongolia Bifeng
Animal Husbandry
9,660,000.00 9,660,000.00
Technology
Development Company
Changsha Wellhope
Animal Husbandry 8,300,000.00 8,300,000.00
Company
Dehui Fengyuan
Agriculture and Animal 2,550,000.00 2,550,000.00
Husbandry Company
Fuzhou Wellhope
Xingyuan Animal
2,400,000.00 14,900,000.00 17,300,000.00
Husbandry
Development Company
Wan’an Wellhope Feed
7,800,000.00 7,800,000.00
Company
Fuyu Wellhope Layer
5,200,000.00 5,200,000.00
Company
Chifeng Wellhope
6,800,000.00 6,800,000.00
Agri-Tech Company
Baotou Hechen
4,554,000.00 11,196,000.00 15,750,000.00
Agri-Tech Company
Qiqihar Agri-Tech
7,650,000.00 7,650,000.00
Company
Neihuang Wellhope
37,500,000.00 22,500,000.00 60,000,000.00
Agri-Tech Company
Jilin Dalong Wellhope
4,130,000.00 4,130,000.00
Feed Company
Haicheng New
Hongzunda Animal 16,902,841.13 17,340,000.00 34,242,841.13
Husbandry Company
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Wellhope Foods Co., Ltd. 2023 Annual Report
Kaifeng Jiufeng Farming
& Animal Husbandry 42,302,615.65 42,302,615.65
Company
Hengshui Wellhope
6,400,000.00 6,400,000.00
Feed Company
Suihua Wellhope
27,889,500.00 27,889,500.00
Agri-Tech Company
Siping Huiliang
Wellhope Agri-Tech 5,100,000.00 5,100,000.00
Company
Heilongjiang Wellhope
Great Forest Farming 10,200,000.00 10,200,000.00
Company
Heilongjiang Wellhope
Great Forest Food 10,200,000.00 10,200,000.00
Company
Dalian Hefengyuan
37,000,000.00 37,000,000.00
Agri-Tech Company
Baicheng Wellhope
5,100,000.00 5,100,000.00
Agri-Tech Company
Zhangjiakou Wellhope
Agriculture and Animal 147,885,081.05 147,885,081.05
Husbandry Company
Tailai Wellhope
Agriculture and Animal 144,179,039.25 144,179,039.25
Husbandry Company
Total 3,628,321,267.36 500,968,039.13 129,650,425.88 3,999,638,880.61
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Wellhope Foods Co., Ltd. 2023 Annual Report
B.Investment in associated companies and joint ventures
CNY
Fluctuations in 2023
Gains or losses Adjustment of Closing
Additional on investments other Other changes in Declaring of paying balance of
Company Opening balance Other Closing balance
investment recognized under comprehensive equity dividend or profit impairment
equity method income provision
1.Joint Venture
Unphung Joint
7,501,575.10 7,501,575.10
Venture Company
Nepal Wellhope
4,167,616.44 4,167,616.44
Agri-tech Pvt. Ltd.
NEXUS WELL-HOPE
AGRITECH
17,900,000.00 17,900,000.00 17,900,000.00
INTERNATIONAL
LIMITED
Subtotal 29,569,191.54 29,569,191.54 17,900,000.00
2. Associated Company
Qingdao Shenfeng
12,101,282.20 267,353.82 12,368,636.02
Agri-Tech Company
Anshan Jiuguhe Food
222,480,035.09 12,971,864.02 6,232,950.00 229,218,949.11
Company
Tai’an Jiuguhe
Agriculture
70,143,710.13 -42,378,107.82 27,765,602.31
Development
Company
Linghai Jiuguhe Feed
52,515,262.95 -11,623,666.60 40,891,596.35
Mill
Huludao Jiuguhe
73,434,526.26 -38,546,579.78 34,887,946.48
Food Company
Dandong Wellhope
Chengsan Food 92,558,083.55 8,790,225.46 101,348,309.01
Company
Dandong Wellhope
119,912,053.78 -9,810,061.13 110,101,992.65
Chengsan Agri-Tech
241 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Company
Beipiao Hongfa Food
558,684,161.53 29,516,556.32 10,780,000.00 577,420,717.85
Company
Beijing Dahong
Hengfeng Sci-Tech 23,109,320.82 658,936.18 23,768,257.00
Company
Tai'an Jiufeng
- -
Agri-Tech Company
Shihaipu (Beijing)
Technology and 2,019,189.52 176,290.82 2,195,480.34
Trade Company
Shenyang Wenjie
13,892,988.26 41,686.98 13,934,675.24
Bio-Tech Company
Huludao Jiuguhe
3,086,991.16 -3,363,000.00 1,893,093.89 1,617,085.05
Feed Mill
Jinzhou Jiufeng Food
99,223,747.11 14,190,556.29 15,200,000.00 98,214,303.40
Company
Zhangjiakou
Wellhope Agriculture
85,541,195.49 89,470,800.00 -27,126,914.44 -147,885,081.05
and Animal
Husbandry Company
Tai'an Fengjiu
63,831,058.70 6,650,489.04 9,120,000.00 61,361,547.74
Agri-Tech Company
Anshan Fengsheng
62,212,780.56 -6,917,155.10 55,295,625.46
Food Company
Dalian Chengsan
Foods Group 380,725,325.09 -45,135,248.96 335,590,076.13
Company
Tailai Wellhope
Animal Husbandry 37,799,463.33 34,479,800.00 1,366,094.23 533,681.69 -74,179,039.25
Company
Gongzhuling Corn
Purchasing and 49,576,732.35 -8,606,335.72 40,970,396.63
Storing Company
Lankao Skyland Duck
37,813,621.58 -4,769,464.50 33,044,157.08
Industry Company
Hainan Nongken 1,090,744.95 -1,153.85 1,089,591.10
242 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Wenfeng Wenchang
Chicken (Group)
Company
PT SEKAR GOLDEN
HARVESTA 34,913,989.58 -1,891,080.84 1,102,413.68 34,125,322.42
INDONESIA
GOLDEN HARVESTA
104,065,497.55 12,018,351.54 2,642,030.95 118,725,880.04
INC.
PT. Mulia Harvest
55,074,231.84 4,531,234.35 1,629,915.48 61,235,381.67
Agritech
Shulan Fengtai
Organic Fertilizer 1,843,405.61 -182,095.42 1,661,310.19
Company
Shenyang
Zhongwenjie 7,826,097.46 2,532,378.50 10,358,475.96
Bio-Tech Company
Liaoning Mubang
Animal Husbandry
Equipment 17,205,527.99 1,104,500.53 6,080,000.00 12,230,028.52
Manufacturing
Company
Liaoning Yufeng
1,364,492.92 30,471,043.00 -15,555,298.96 16,280,236.96
Bio-Tech Company
Weifang Wellhope
5,212,973.52 227,443.04 5,440,416.56
Xinhesheng Feed Mill
Dunhua Fengda
Broiler Breeding 5,824,442.48 -180,755.02 5,643,687.46
Company
Tai’an Huijun
Biomass Energy 4,245,780.44 -3,736,054.16 509,726.28
Company
Dazhou Wellhope
12,676,748.43 1,467,135.13 14,143,883.56
Bio-Tech Company
Anshan Jiuguhe
Paper Packaging 5,081,091.38 555,033.83 5,636,125.21
Company
Anshan Antai Plastic
3,613,395.52 642,668.96 4,256,064.48
Products Company
243 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Wudalianchi Shengda
Ranch Professional 13,102,980.87 -1,968,592.70 11,134,388.17
Cooperative Society
Jiyuan Sunshine
Rabbit Technology 12,174,873.39 334,618.62 12,509,492.01
Company
Heilongjiang
Province Beian
Agricultural
Reclamation 764,814.03 131.10 764,945.13
Zongwang Dairy
Farming Professional
Cooperative
Jinzhou Xinfeng Food
11,400,000.00 -235,061.64 11,164,938.36
Company
Chongqing Kuizhou
Rabbit Industry 7,000,000.00 544,722.25 7,544,722.25
Company
Jilin Jinfeng Livestock
4,500,000.00 -3,215.52 4,496,784.48
Company
Hebei Taihang
Wellhope Livestock 36,000,000.00 1,714,574.95 -4,747,669.24 32,966,905.71
Company
Chongqing Dahong
Agricultural and
10,000,000.00 -1,545,990.23 3,047,128.30 11,501,138.07
Animal Husbandry
Machinery Company
Huludao Jiuguhe
3,363,000.00 -906,763.97 2,456,236.03
Livestock Company
Subtotal 2,346,742,617.42 223,321,643.00 -118,923,656.51 5,374,360.11 533,681.69 47,412,950.00 -223,764,661.24 2,185,871,034.47 -
Total 2,376,311,808.96 223,321,643.00 -118,923,656.51 5,374,360.11 533,681.69 47,412,950.00 -223,764,661.24 2,215,440,226.01 17,900,000.00
244 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
4.Revenue and cost
A.Information of revenue and cost
CNY
2023 2022
Item
Revenue Cost Revenue Cost
Revenue from primary
712,023,965.19 538,367,572.22 804,332,359.69 620,243,627.16
businesses
Revenue from other
4,103,206.07 308,708.86 2,255,208.91 534,612.87
businesses
Total 716,127,171.26 538,676,281.08 806,587,568.60 620,778,240.03
B.Split of revenue and cost
CNY
Total
Contract classification
Revenue Cost
Commodity type
Feed products 712,023,965.19 538,367,572.22
Others 4,103,206.07 308,708.86
Classification by timing of commodity
transfer
Revenue recognized at a point in time 715,851,941.90 538,367,572.22
Revenue recognized at a certain point in
275,229.36 308,708.86
time
Classification by sales channel
Direct sales 4,103,206.07 308,708.86
Dealers’ sales 712,023,965.19 538,367,572.22
Total 716,127,171.26 538,676,281.08
5.Income from investment
CNY
Item 2023 2022
Income from long-term equity investments
155,233,214.54 14,340,353.00
under cost method
Income from long-term equity investments
-118,923,656.51 174,704,407.03
under equity method
Investment income from disposal of
-17,936,406.61 -4,886,391.00
long-term equity investments
Investment income from disposal of
-1,455,012.74 -4,446,438.67
derivative financial instruments, etc.
Investment income from financial assets
100,273.97
held for trading
Total 17,018,412.65 179,711,930.36
XVI.Supplementary Information
1.Extraordinary items in 2023
CNY
Item Amount Note
Gains or losses on disposal of non-current assets, including
17,370,417.70
reversal of provision for impairment of assets
Government grants recognized in profit or loss for the current 83,115,983.41
245 / 246
Wellhope Foods Co., Ltd. 2023 Annual Report
Item Amount Note
period, except for those government grants that are closely
related to the ordinary course of business, in line with
national policies and in accordance with defined criteria, and
that have a sustained impact on the Company's profit or loss
Gains or losses from changes in the fair value of financial
assets and liabilities held by non-financial corporations and
gains or losses on the disposal of financial assets and -1,205,993.28
liabilities, except for effective hedges in the ordinary course
of business
Write-back of impairment provision for individually assessed
9,122,730.49
impaired receivables
Gains arising from the Company's acquisition of subsidiaries,
associates and joint ventures where the cost of the
14,299,036.35
investment paid by the Company is less than its share of the
fair value of the investee's identifiable net assets
Non-operating income and expense other than those listed
-49,135,731.60
above
Other items that meet the definition of extraordinary items -10,565,822.12
Less: Income tax effects 21,574,736.43
Non-controlling interests effects -4,586,887.91
Total 46,012,772.43
2.Return on equity and earnings per share
Weighted average Earnings per share
Profit in 2023
ROE % Basic EPS Diluted EPS
Net profit attributable to shareholders who
-6.58 -0.50 -0.50
hold common stock
Net profit attributable to equity shareholders
-7.24 -0.55 -0.55
less extraordinary items
Chairman Jin Weidong
Date of approval of Board of Directors—March 30, 2024
246 / 246
