Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Stock Code: 603609 Stock Abbreviation (English): Wellhope
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd.
2020 Interim Report
August 2020
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Important Statements
I. The Board of Directors, Supervisory Board, Directors, Supervisors and Senior
Management of Liaoning Wellhope hereby warrant that there are no false representations,
misleading statements or material omissions in this interim report, jointly and severally
accept full responsibility for the truthfulness, accuracy and completeness of the contents
in this report.
II. All the Directors attended the Board Meeting.
III. This interim report is unaudited.
IV. The Company's Chairman Jin Weidong and the Director of internal audit Zhang
Wenliang warrant the truthfulness, accuracy and completeness of the information
presented in the financial statements in this report.
V. In the reporting period, there has been no plan for dividend distribution or capital
reserve converted into share capital.
VI. Risk Statement of Forward-looking Statements
The forward-looking descriptions in this report in terms of plans, development strategies
and other information cannot be deemed the Company's commitment to investors. Please
beware of the investment risks.
VII. There has been no occurrence of the Company's non-business capital being occupied
by controlling shareholder and his related parties.
VIII. There has been no occurrence of the Company violating its decision-making
procedure while providing external guarantees.
IX. Material Risk Warning
The Company details possible risks in this report. Please refer to "Possible Risks" in Section
IV "Business Operations Analysis".
X. This interim report has been issued in both Chinese and English versions. In case there is
any discrepancy or inconsistency between the two versions, the Chinese version shall
prevail. The disclosed Chinese version of 2020 Interim Report can be obtained at:
www.sse.com.cn.
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Contents
Section I Glossary ............................................................................................................. 4
Section II Company Profile and Key Financial Information ............................................... 5
Section III Business Overview ............................................................................................ 8
Section IV Business Operations Analysis .......................................................................... 28
Section V Important Disclosures ..................................................................................... 50
Section VI Changes in Common Shares and Shareholder Information ............................ 63
Section VII Preference Share ............................................................................................. 67
Section VIII Directors, Supervisors and Senior Management ............................................ 68
Section IX Corporate Bond ............................................................................................... 69
Section X Financial Statements ....................................................................................... 70
Section XI Reference ...................................................................................................... 160
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Section I Glossary
CSRC refers to China Securities Regulatory Commission
SSE refers to Shanghai Stock Exchange
Wellhope,
Liaoning refers to Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd.
Wellhope,
the Company
Reporting Period refers to January 1, 2020-June 30, 2020
Wulian Heli Equity Investment Partnership (LP), one of the
Wulian Heli refers to
shareholders of Wellhope
Royal De Heus refers to Koninklijke De Heus B.V., the parent company of De Heus Mauritius
Ltd., the biggest feed company in the Netherlands
Company refers to The Constitution of Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd.
Constitution
Shareholders' refers to The Shareholders' Meeting of Liaoning Wellhope Agri-Tech Joint
Meeting Stock Co., Ltd.
Board of Directors refers to The Board of Directors of Liaoning Wellhope Agri-Tech Joint Stock
Co., Ltd.
Supervisory refers to The Supervisory Board of Liaoning Wellhope Agri-Tech Joint Stock
Board 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
Also known as additive premix, it is a well-proportioned mixture
prepared by two or more than two kinds of feed additives and
Premix refers to carrier or diluents according to appropriate proportion. It is a
general name for compound premix, microelement premix and
vitamin premix.
It is a well-proportioned mixture consisted of protein feed, mineral
Concentrate Feed refers to feed and feed additives according to appropriate proportion, it can
be made into compound feed by mixing with energy feed in a
specified proportion.
Based on the nutritional needs of animals, more feed raw materials
Compound Feed refers to and feed additives are industrially processed according to feed
formula, it can be directly used for feeding animals.
Broiler breeders lay eggs, the chicks hatched from eggs are the
Broiler Breeders refers to commercial broiler, which have good genetic characteristics for table
purpose.
Commercial
refers to Fattening from the chicks of commercial broilers.
Broiler
A method of farming as opposed to floor-reared, i.e., with the
Cage-reared refers to special cage as a symbol, a complete set of processes that compose
of customized feed, artificial insemination, on-site management, etc.
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Section II Company Profile and Key Financial Information
I. Company Information
Company name(English) Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd.
Abbreviation(English) Wellhope
Company name(Chinese) 辽宁禾丰牧业股份有限公司
Abbreviation(Chinese) 禾丰牧业
Legal representative Jin Weidong
II. Contact Person
Secretary of the Board Securities Affairs Representative
Name Zhao Xin Zhao Changqing
No. 169, Huishan Street, Shenbei No. 169, Huishan Street, Shenbei
Address New District, Shenyang, Liaoning, New District, Shenyang, Liaoning,
P. R. of China P. R. of 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,
Registered address
Shenyang, Liaoning, P. R. of China
Postal code 110164
No. 169, Huishan Street, Shenbei New District,
Office address
Shenyang, Liaoning, P. R. of China
Postal code 110164
Company website www.wellhope-ag.com
Email hfmy@wellhope.co
IV. Place where the Company prepares information to disclose
Media designated by the Company for China Securities Journal, Shanghai Securities
disclosing information News, Securities Times
Website designated by the CSRC for
www.sse.com.cn
publishing the interim report
Place where the Company prepared its
Securities Department of the Company
interim report
V. Stock Information
Stock type Stock exchange Stock abbreviation Stock code
Shanghai Stock
A Share Wellhope(禾丰牧业) 603609
Exchange
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VI. Other Information
Not applicable
VII. Key Accounting Data and Financial Performance Indicators
1. Key Accounting Data
RMB
Year-on-year
Item January-June, 2020 January-June, 2019
change %
Operating revenue 9,848,379,852.28 7,727,400,004.75 27.45
Net profit attributable to the
606,015,736.01 359,008,639.18 68.80
shareholders of the Company
Net profit attributable to the
shareholders of the Company 602,590,219.79 358,296,799.48 68.18
deducting non-recurring items
Net cash flow from operating
451,396,027.78 299,291,784.62 50.82
activities
Change compared
June 30, 2020 December 31, 2019 with the end of
prior year %
Net assets attributable to the
6,129,390,491.71 5,698,139,557.54 7.57
shareholders of the Company
Total assets 10,447,642,061.07 9,149,772,043.85 14.18
2. Key Financial Performance Indicators
January-June, January-June, Year-on-year
Item
2020 2019 change %
Basic earnings per share (RMB per share) 0.66 0.41 60.98
Diluted earnings per share (RMB per share) 0.66 0.41 60.98
Basic earnings per share deducting
0.65 0.41 58.54
non-recurring items (RMB per share)
Increased 1.79
Weighted average return on equity (%) 10.16 8.37
percentage points
Weighted average return on equity deducting Increased 1.74
10.10 8.36
non-recurring items (%) percentage points
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VIII. Non-Recurring Items
RMB
Item Amount
Gains or losses on disposal of non-current assets -567,086.15
Government grants charged to current gains or losses (excl. the government grants
that are closely related to the Company's ordinary course of business and gained
12,625,199.07
constantly at fixed quotas or amounts as per certain standards based on the state
polices)
Gains or losses on fair value changes in holding the trading financial assets and
liabilities as well as derivative financial assets and liabilities, and investment income
from disposal of the trading financial assets and liabilities, derivative financial -1,899,996.55
assets and liabilities as well as other debt investment (excl. the effective portion of
hedges that arise in the Company's ordinary course of business)
Non-operating income and expense other than those described above -4,960,053.70
Non-controlling interests effects -596,370.19
Income tax effects -1,176,176.26
Total 3,425,516.22
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Section III Business Overview
I.Principal Business, Operation Model and Circumstance of Related Industries in the
Reporting Period
Principal businesses of Wellhope (hereinafter referred to as "the Company") primarily
consist of feed production and sale, feed raw materials trade, broiler integration, hog
raising and related businesses. Whilst further expanding feed business, the Company aims
to take 5-8 years to vigorously boost broiler integration and hog raising businesses, forging
an operation model fueled by broiler and hog integration businesses to further heighten
its market power in animal husbandry industry.
1. Feed and feed raw materials trade
A. Industry overview
The gross production of China’s commercial feed reached 229 million tons in the year of
2019, which exceeded its target of 220 million tons in advance, according to the 13th
Five-Year Plan of the feed industry. Its gross output of more than 200 million tons for 5
years on end, has ranked top one for 9 consecutive years worldwide. It is expected that
national feed production will achieve further breakthrough in 2020. At the beginning of
this year, the spread of Coronavirus Disease 2019 (referred to as COVID-19 hereof) led to
nationwide suspension and stoppage of production. In the initial stage of COVID-19,
adverse factors such as transport restriction, rising freight rates, tight supply of raw
materials and panicked market, etc., have caused definite impacts and influences on the
feed industry. Based on the promulgated government policy of “fulfilling the
responsibilities of safeguarding residents’ vegetable and meat supply” and along with
gradual stabilization of this pandemic, the production and supply of feed industry has
gradually returned to normal level in the second quarter. The COVID-19 and African Swine
Fever (referred to as ASF hereof) reset the trajectory of feed industry and accelerated the
pace of consolidation, weeded out unqualified players. Against this backdrop, those
large-scale enterprises with robust system capacity and competitiveness who have been
still able to retain high-quality products and services during in the pandemic crisis, thus
obtained greater development opportunities.
In the first half of 2020, rapid recovery of both hog and reproductive sow inventories in
China pushed up the demand of swine feed. The national output of sow feed has realized
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year-on-year growth for 5 consecutive months with a 54% increase in June. Statistics
released by the Ministry of Agriculture and Rural Affairs indicated that beef and mutton
production was up 3.4% over a year earlier, eggs and milk production have year-on-year
growth rates of 7.1% and 7.9% respectively. This also led to an increasing demand within
the poultry and ruminant industry. There were 76,000 new hog raising enterprises in China,
with a growth rate of 109% compared with the same period of prior year. High hog raising
enthusiasm driven by high profit has brought well-known real estate companies and
internet giants stepping into this cross border business, also broadened opportunities for
the feed industry.
In June 2020, China’s gross feed production increased by 2.2% compared to the preceding
month and 7.5% over a year earlier. Judging from the trend, the aggregate output of feed
increased on a month-on-month basis in March, April and June. Despite a slight
year-on-year decline in March, the output of all other months has gained year-on-year
growth since February and reached a record high in June within the last three years. From
the perspective of varieties, swine feed output in June increased by 9.3% over a year
earlier, which has recorded positive growth again since October 2018. The production of
layer, broiler and ruminant feed rose by 14.1%, 10.4% and 9.8% respectively, whilst aquatic
feed fell by 11.6%. Overall, in the first half of 2020, the feed consumption was higher than
market expectations with a remarkable recovery, which showed a booming trend in both
production and marketing.
Note: Source of above-mentioned data—China Feed Industry Association
B. Business profile
The Company manufactures and sells animal feed for swine, poultry, ruminant, aquatic
and fur-farmed animals, which are marketed in 29 provinces and regions across China. It
has also built feed plants in Nepal, Indonesia and the Philippines, etc. Driven by the
principle of “constantly working on new products, never following the beaten path”, the
Company always designs tailor-made products for animals in different growth stages and it
is committed to offering farmers integrated services in terms of animal raising, disease
prevention as well as operation management, helping them to achieve the best economic
benefits.
The subsidiary trade companies mainly trade in feed raw materials in terms of fish meal,
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soybean meal and co-products of corn, also engage in feed additives including amino acid,
antioxidant, mold inhibitors and vitamin. In addition, the trade companies are the sales
agents of animal health products such as vaccines and veterinary drug produced by global
strategic suppliers. Meanwhile, the Company also launched pet clinics business. Now its
trade business is active in the regions of Northeast, Northern, Eastern and Southwest
China, Guangdong province and other areas, some products have been exported to Nepal,
Mongolia and other countries.
2. Broiler integration business
A. Industry overview
The outbreak of COVID-19 in early 2020 had a huge impact on national economy and
disrupted the original supply and demand pattern of white feather broiler industry.
Regarding supply, the overall supply of white feather broiler in China resumed
year-on-year growth from January to June, yet the growth rate fell short of expectations.
In terms of grandparent stock, the renewal in the first half year slightly changed in
comparison to the same period of prior year, but decreased by about 36.8% compared
with prior month, presenting a slower expansion of grandparent stock' production capacity.
In terms of parent stock, the output of day old chick of parent stock realized an increase of
approximately 30% over the same period prior year. However, under the impact of
COVID-19, the market was mandated to cut production capability by forced molting and
faster eliminating week-old broilers, making the inventories of forced molting broilers
decline significantly. In terms of commercial broiler, COVID-19 impaired the production
capability of white feather broilers in the first quarter, while along with gradually stabilized
pandemic in April nationwide, thus the deliveries of commercial broiler stepwise
recovered to a high level in May and June. Looking back the first half year, the deliveries of
domestic commercial broiler increased by about 4% over a year earlier. Compared to that
was expected before the COVID-19, the growth rate was lowered about 8 percentage
points.
In regard of demand, chicken has still played the role of filling the gap in consumption
caused by a severe shortage in China's pork supply. However, the increasing demand for
chicken declined due to the outbreak of COVID-19, which led to dropped profits of related
businesses in the industrial chain. In the first quarter, the COVID-19 influenced domestic
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consumption relatively hard with a presence of the sharp decrease in catering and group
meal. Affected by this, the overall consumption of chicken dropped off about 10% over the
same period prior year, among which, chicken consumed by catering and group meal
decreased by more than 30%. However, the demand has been recovered since the
pandemic being stabilized in April. In May and June, positive factors, such as social contact
basically resumed, some schools were reopened, a vast majority of enterprises were back
to work, the sales channels of chicken hampered by the epidemic situation was recovered
in succession, the supply of pork was lower still, etc., effectively boosted the recovery of
chicken consumption. It is worth mentioning that COVID-19 has led to a temporary closure
of social venues and home quarantine, which has directly altered the path for chicken
consumption. Away-from-home consumption, such as catering and group meal, has
shifted to at-home consumption, thus pushing chicken producers to change their
marketing strategies and step up efforts to expand the consumer market.
To conclude, in the first half of 2020, COVID-19 has broken the original expectations of “an
increase both in production and sales, a bloom both in supply and demand” within white
feather broiler industry. Instead, the growth rate of broiler supply was compressed, while
the demand of chicken was changed from increase to decrease. In the second half year,
chicken consumption demand is expected to rapidly rebound, while the import of meat
products will slow down due to the impact of COVID-19. In addition, stocking density that
limited by ASF will weigh on the recovery of domestic hog production capacity, yet the
substitution demand caused by the shortage of pork will still be significant.
Note: Source of above-mentioned data—www.boyar.cn
B. Business profile
The Company's broiler integration business, with three business units in terms of broiler
raising, raw meat processing and further processing, owns more than 40 holding and
associated entities, which are mainly located in the provinces of Liaoning, Hebei, Henan,
Jilin and Shandong, etc. Its value chain contains breeding, day old chick hatching, feed
producing, commercial broiler raising, slaughtering and processing of raw meat, further
processing of prepared and cooked food. The integrated operation can effectively ensure
the production and supply of all operating segments and facilitate the Company to control
food safety across the entire chain. Meanwhile, through standardized management and
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streamline operation, the Company consolidates the controls of bio-safety, drug residue
and in-process hygiene to achieve traceable food safety. Based on the number of broilers
slaughtered by holding and associated plants, the Company has stepped into the first
echelon of white feather broiler industry and become one of the leading suppliers of
broiler products nationwide.
Wellhope
◆ Broiler raising: This unit covers breeder raising, day old chick hatching, commercial
broiler rearing and feed production. By formulating scientific and rational feeding
programs, light programs and disease prevention systems for breeders, the Company
provides qualified eggs for the hatching farms. Meanwhile, it has established thorough
management system in the hatching process and introduced intelligent facilities that are
available for hatching in batches, also equipped high-efficient and energy-saving hatcher
and micro-environment control system for supplying healthy day old chicks. Entering
commercial broiler sector, the Company mainly raises broiler by own farms and
contract(out-sourcing) farms under the pattern of unifying nine aspects, including unified
site selection and planning, unified construction standards, unified day old chick supply,
unified disease prevention, unified feed supply, unified drug supply, unified technological
guidance, unified testing and unified slaughtering and processing. Guided by scientific
raising standards, all the farms apply three-tier cage system and automate all the
processes from feed intake, water temperature to moisture control, etc., meanwhile, the
farms combine crop planting with animal raising to reduce manure pollution and promote
resource recycling. The weight of the Company’s commercial broiler has reached over 3.0
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kg with the livability of over 95%, and the European production index exceeded 390, which
have received wide recognition from the cooperative farms.
◆Raw meat processing: The Company has invested 16 holding and associated
slaughtering and processing plants, which are equipped with domestically state-of-the-art
production lines that are available to slaughter 650-750 million broilers per year. Driven by
all-in and all-out inspection and quarantine, every single plant has established a total
quality guarantee system and traceability system to monitor all the processes. Meanwhile,
the Company constantly strengthens and improves slaughtering and processing techniques
by ways of systematic pre-job training and skill promotion training as well as conducting
"6S" management (i.e., Seiri, Seiton, Seiketsu, Shitsuke, Seiso, Safety), making the
killing-out percentage and per capita slaughtering efficiency stand out among companies
with similar scale. Now the Company’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, food service
companies and other local fresh food markets, etc., in the meantime, related products
have also been sold to the regions of Hong Kong and Macao, and exported to some
countries in terms of Mongolia and Bahrain, etc.
◆Further processing: Relying on the advantage of integration, the Company uses
high-quality chicken supplied by own slaughterhouses as raw materials and introduces
efficient and energy-saving equipment to process raw meat into prepared products. At
present it supplies over 100 kinds of further-processed chicken products to large
restaurant chains, supermarkets, local markets, canteens of enterprises and schools. In
terms of online marketing, Wellhope’s flagship store of raw meat product has been
launched on JDcom, whilst its official food store has been initiated on Taobao, some of
independent-brand products of Wellhope's subordinated companies have also been
entering e-commerce platforms of some residents’ communities. Moreover, under the
backdrop of continuous expansion of consumer demand, the Company has vigorously
explored its food export business, now some products have entered the markets of Japan
and South Korea.
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3. Hog raising business
A. Industry overview
In the first half of the year, as hog supply fell into a sharp slump, recovering production
capacity was still the central theme of hog industry, whilst the overlap of ASF and
COVID-19 pandemics made the supply and demand pattern more complicated.
On the supply side, taking more commercial sows as breeders in the fourth quarter of
2019 has further widened the gap between pork supply and demand. In the first half of
2020, China's hog deliveries continued to decline and caused tight supply of pork. From
January to June, hog deliveries fell by 49.89% on a year-on-year base, declined by 19.23%
compared to the second half of 2019; pork production fell by 41.21% over a year earlier,
went down 9.76% compared to the second half of 2019, whilst piglet supply decreased by
30.54% on a year-on-year base and dropped off 3.61% compared with the second half of
2019. Thereby, certain policies have been issued to stabilize hog production and ensure
pork supply. Large-scale enterprises have been continuously expanding their businesses to
capture market opportunities supported by their financing, technology, talents and other
advantages. Some companies that fatten hog by own farms and contract farms also
upgraded the selection criteria for cooperative farmers to stock more than 500 heads of
hog, which quickened the process of large-scale raising, thus the decline of production
capacity gradually slowed. The domestic sow inventories bottomed out in October 2019
and rebounded modestly. Coming to this year, the reproductive sow inventories increased
by 13.65% on year-on-year base in the end of June, 16.41% higher than the end of 2019.
However, it is remarkable that, as at the end of June, the percentage of commercial sows
taken as breeders exceeded 60% of reproductive sows, which would bring great
uncertainties in the production performance.
On the demand side, the COVID-19 has inflicted a rather big impact on national economy,
the sales of high-priced pork became difficult under this backdrop. Away-from-home food
consumption such as catering and group meal was hindered, which boosted the
percentage of at-home consumption increasing. Driven by the increased pork
consumption fueled by two festivals and the difficulties in purchasing hogs due to the
obstructed logistics in the early stage of COVID-19, hog prices shocked up to RMB 38.0 per
kg in January and February. Since March, a series of government policies were
promulgated to stabilize production and maintain supply, whilst the decreased final
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consumption led to declined hog prices, especially in May, the prices fell drastically to RMB
27.0 per kg caused by certain adverse factors, such as, the recovery of domestic
consumption was lower than expectation, circumstances of COVID-19 abroad continuously
worsened, market confidence weakened and farmers sold out hogs in a panic. Later, many
large overseas meat processers shut down due to the pandemic, China also suspended
pork import from infected enterprises. Meanwhile, the gap between pork supply and
demand emerged again supported by gradual recovery of domestic consumption, hog
prices bottomed out in late May and rose back to over RMB 35.0 per kg in June.
To conclude, hog market still showed strained supply--according to third-party research
institutions, hog deliveries are expected to go down 30% compared to 2019, accompanied
by a 20-25% decline of pork production. Besides, bio-safety has heightened the entry
barriers of hog farming industry and the pace of consolidation has been constantly
improving.
Note: Source of above-mentioned data—www.boyar.cn
B. Business profile
Through solely-invested and co-invested operations, the Company has actively built farms
and expanded businesses in Liaoning, Jilin, Heilongjiang, Henan, Hebei, Anhui provinces
and other areas suitable for hog raising. Among these projects, the farms located in Hebei
and Heilongjiang provinces were jointly built by the Company and Hunan Jiahe Agriculture
and Animal Husbandry Company, top-15 in hog raising industry nationwide, the farms
located in Anhui province were jointly constructed with Anhui Haoxiang Agriculture and
Animal Husbandry Company, a leading enterprise in agricultural integration in Anhui
province and a member of the National Hog Joint Breeding Cooperative Group, other
farms were invested by the Company solely. At present, the Company's hog raising
business mainly adopts the operation model that composes of breeder raising and sales,
commercial piglet sales, hog fattening via own farms and family farms(contract). At the
same time, each sow farm has boar house to reserve excellent boars to maintain breeding
advantage. Through establishing strict bio-safety system, advanced breeding system and
scientific feeding management system, the Company is devoting to crafting an integrated
chain that contains breeding, hog raising, marketing, slaughtering and processing.
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a. Building farms with high-standard:
In compliance with the principle of moderate scale for every single farm along with the
site planning of multi-point layout, the Company strictly controls bio-safety and
dynamically combines hog raising with planting via eco-friendly technologies to protect
environment. Driven by the goal of building first-rate modern farms, Fushun farm located
in Liaoning province was jointly designed by well-known domestic experts and
Architectural Design and Research Institute of Tsinghua University CO. LTD., breeder farm
located in Jilin province introduced efficient Dutch farm management technology, whilst
the farms located in Hebei and Henan provinces introduced Danish breeding management
system. All newly-built and under-construction projects have been equipped with
advanced production technique and equipment. In particular, the Company has carefully
designed the bio-safety systems for farms. Through automatic and information-based
means such as smart feeding system, environmental control equipment and production
management software, the intelligent hog raising system has been established to realize a
hog raising model based on equipment, environment and information, so as to create a
comfortable growth environment for animals and improve production efficiency.
b. All-round operation:
In terms of genetic selection and breeding: The Company introduces high-quality
breeders with French, American and Danish gene to match different business areas to
provide parent stock with pure blood and clear pedigree, truly grasps the source to supply
excellent breeders, commercial piglets and finishers to enhance the Company's core
competitiveness in the field of hog raising, which is conducive to forge the synergy effect
among hog raising business with feed and other businesses.
In terms of nutrition and supply: Relying on Europe's technical practices and
self-accumulated experiences in swine feed technology and hog industry, the Company
has launched a system-wide database to dynamically formulate nutrition for animals. The
Company, according to data and conditions of raw materials and hog markets, timely and
dynamically adjusts diet nutrition, feed processing technique and product portfolios to
realize tailor-made nutrition, accurate production and precise feeding, as well as to reduce
operating cost, improve production performance and provide marketable hogs. Moreover,
the Company has established antibiotic-free nutrition system and successfully changed all
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swine feed to antibiotic free (referred to as ABF hereof).
In terms of bio-safety prevention: Relying on well-designed bio-safety control system, all
the Company’s farms have been strictly equipped with bio-safety facilities and equipment,
applied corresponding quarantine and blocking schemes for the areas with different safety
level in the farm, meanwhile, all the farms are continuously optimizing and upgrading
related facilities. Besides, a professional team has been set up outside each farm to
conduct off-site bio-safety work, especially for breeder farm (there should be no other
farms within at least 3 kilometers). In the meantime, the Company has established a
diagnostic system for ASF by fluorogenic quantitative PCR and implemented monitoring
and early warning of risk points through real-time patrol inspection by bio-safety
supervision department and engineering department to ensure farm safety. In addition,
the Company regularly trains the staff in the farms about bio-safety principles and daily
operation details, and continuously improves the safety awareness of all staff via various
means such as job rotation and inspection notification.
In terms of feeding management: The Company's farms adopt benchmarking
management to enhance internal operation and reduce costs in the aspect of bio-safety
prevention, production performance, equipment and facilities, etc. At the same time, the
farms analyze key indicators related to production and other data through internal
management system to immediately adjust diet, micro-environment control, immune
health care and herd structure to ensure orderly feeding management.
II. Core Competitiveness Analysis within the Reporting Period
Core competitiveness of the Company lies in a highly educated, loyal and stable
management team, rationally planned and steady-development based business strategy,
increasingly matured and competitive business distribution, systematic, scientific and
unceasingly innovated technology system, constantly enhanced and full-fledged Wellhope
Brand, development-oriented and strongly rooted corporate culture.
1. Highly educated, loyal and stable management team
Talents are the primary resources and the core competitiveness of the Company. The
management team, led by seven founders, are highly educated with professional
background. They have deep insights into the Company’s core value and corporate culture.
They have been united, stable and always fighting in the front line of business operation
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with strong cohesion. The seven founders, who are praised as "Seven Pioneers of the
Industry”, always hold together and fight together, the high solidarity of the start-up
shareholders has become the Company's most significant competitiveness, whilst “Unity is
Power” is also part of the core culture. Almost all the middle and senior managers are
internally selected and cultivated by the Company, the core members have been granted
with many forms of medium and long-term incentives, they have strong sense of
ownership and devote themselves to the sustainable development of the Company. For
the past 25 years, the management team has maintained high stability, almost none of the
chief director and higher-level managers leave the Company. In regard of over 100 general
managers, besides those who are adjusted due to substandard performance, few of them
quit the job. Meanwhile, newly promoted members of the management team born in the
1980s and 1990s are selected from key talents’ cultivation programs, such as “Seedling
Plan” and “Sunflower Program”. They love the Company, highly recognize the corporate
culture and have become the backbone force of the management team. The Company also
attaches great importance to the continuous learning and ability improvement of these
managers, providing them with different training programs, including Executive
Development Program, Leadership Training Camp, etc., which include strict training,
appraisal rules and opportunities for managers to study from some leading companies at
home and abroad so as to expand their horizons for further progress. The main reason
that causes the failure of some domestic companies has been the “unstable and disunited
management team”. In contrast, the highly educated, loyal and stable management team
is one of our core competitiveness, boost the Company’s having confidence to move
forward.
Continuous talent growth and supply can be attributed to the advanced human resource
policy. In terms of talent introduction, the Company always adheres to the principle of
high-standard recruitment and upholds the core culture of "knowledge is power, unity is
strength". In terms of talent training, the Company formulates progressive and
dual-channel training system according to its strategic goals and the needs of staff’s career
development to help them to grow. In terms of talent incentives, the Company
continuously improves and optimizes the remuneration policy, providing a fair, just and
merit-based environment for rewarding employees. It also conducts separate performance
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appraisal system for the sales team and administrative departments to keep the team
dynamic. At the same time, driven by the principle of "sharing bumper harvest", the
Company shares its development achievements with managers in various ways, such as
holding shares in parent company and subsidiaries, profit sharing and elasticity welfare. In
2018, the Company carried out share incentive program, where 372 core talents were
granted restricted shares. Through this program, the interests of Company, shareholders
and key-employees have been combined to ensure the sustainable and stable
development of the Company and ultimately achieve mutual benefits for all. In the
meantime, the Company has been echeloning its talents team based on corporation
strategic to build a more competitive and sustainable team to realize its long-term goal.
2. Rationally planned and steady-development based business strategy
Based on in-depth understanding of domestic and global politics, economies and
industries trends, the Company has always attached great importance to its sustainable
development and risk control, focused on operation quality and investment return of new
projects. Driven by a stable and conscientious attitude towards investment, the Company,
with a goal of building to last, rationalizes its business layout and boosts expansion step by
step instead of investing and expanding businesses rashly, to maintain the rationality and
safety of industrial structures and to avoid all sorts of risks.
Rationally planned and steady-development based business strategy reflects in the
following aspects:
a. Business divisions
Staring from premix business, the Company has been dedicated to expanding its feed
business over the years, at present it has become one of the top 10 commercial feed
producers nationwide. In 2008, the Company entered broiler integration business after
strategic considerations. After 12 years of efforts, the number of broilers slaughtered by
the Company’s holding and associated entities has been standing in the forefront of the
white feather broiler industry, with its management and key technical indicators ranking
the top both at home and abroad. In 2018, under the considerations of seizing market
opportunities and controlling operating risks, the Company decided to take hog raising as a
strategic business after careful evaluations and investigations. Since then, it has been
faster forming the core competitive of this business through talents cultivation, practice
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accumulation and cooperating with leading companies. Meanwhile, in the year 2018, the
Company further confirmed its development strategy in the next ten years, i.e., whilst
unceasingly expanding feed business, it would further boost broiler and hog integration
businesses to create an operation model powered by these two complementary engines.
Such business layout with high risk hedging will not lead the Company to the woes and
ebbs due to tremendous blow or sharp downturn suffered by one of the businesses.
b. Operation model
The Company has gradually formed a value chain with high competitiveness and capability
of withstanding risk in the fields of feed production and selling, animal raising,
slaughtering and further processing, which enables all business divisions to connect closely,
reduce the cost of intermediate processes, lower trading risks, improve profit margin and
ensure food safety. Such set up has become a future direction for agricultural companies
under an increasingly complicated and changing economy.
c. Market expansion
Instead of rapidly expanding nationwide markets supported by the success of feed
business in Northeast regions and broiler integration business, the Company, with rich
experiences in market expanding, insists on exploring new markets based on overall
analysis and investigations, entering the markets step by step in Northeast, Northern China,
Henan, Shandong provinces and other areas, always moves forward steadily and pursues
asset-light operation, making much account of operation efficiency and returns on
investment.
d. Product mix
The Company has a full range of feed products. The sales volume and development of
swine, poultry, ruminant and aquatic feed products have achieved great achievements
respectively, which could avoid operational risks caused by diseases in animals or other
circumstances.
e. Financial risk control
The Company always attaches great importance to financial risk control. Since going public,
it has gradually improved internal control system, regulated corporate governance and
enhanced the awareness of risk control to avoid financial risks. The Company takes a
vertical management in finance, managing loans, cashes and guarantee policies in a
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centralized manner to improve capital usage efficiency, lower capital costs and ensure
capital safety. Meanwhile, it effectively controls liabilities and financial costs according to
economic circumstances, industry development and internal operations. The
asset-to-liability ratio was 32.31% at the end of reporting period. Due to outstanding
operating indicators and risk control, the Company was rated as one of the Top 50
Financial Health Companies listed on the main board market by the Data, a new media
platform of China’s Securities Times, only three enterprises involved in agriculture and
animal husbandry industries were selected. Entering 2020, corporate risk control becomes
critically important especially under the complicated political and economy caused by
COVID-19. Thus, the Company will further improve its risk control whilst maintain stable
operation.
3. Increasingly matured and competitive business distribution
The advantages of the Company’s business distribution mainly reflect in geographical
location and business portfolio.
a. Geographical location
The head office of the Company is located in Shenyang of Liaoning province, with its main
businesses mainly distributing in Northern China, especially in the Northeast regions.
Northeast China is a potential growth area for animal husbandry designated by the
government, where is suitable for agricultural companies to expand business supported by
its high-quality raw materials, mild climates, low raising density and relatively low human
resource costs. For instance, corn produced by Northeast region, featured by high bulk
density, low toxicity and low moisture, enables the Company to reduce purchasing costs
whilst ensuring feed product quality. Meanwhile, white feather broiler production of
Liaoning, Jilin, Henan, Hebei and Shandong provinces, where the Company’s broiler
integration business mainly distributed in, account for over 75% of national production,
and these areas are the most important regions for developing white feather broiler
industry in China, with a good basis for broiler raising and more mature marketing system.
Moreover, the Company actively explores overseas markets in answering the call of “the
Belt and Road Initiative”, building plants in the Philippines, Indonesia and Nepal, where
animal husbandry develops well with high potential.
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b. Business portfolio
Centered on agricultural and animal husbandry industries, the Company adopts the layout
strategy of "diversification and integration" to constantly optimize its business portfolio,
which has increasingly heightened its capacity of risk withstanding and sustained
profitability. In terms of diversification, the Company has been further expanding its feed
business, whilst vigorously promoting its broiler and hog integration businesses, aiming to
build an operation model powered by these two integrated businesses. The staggered
fluctuations in broiler and hog industries can effectively weaken risks from cyclical swing
and promote information sharing and synergy effects among the Company’s different
business divisions. In terms of integration, both from seeing the history of companies in
agriculture and animal husbandry industries in developed countries and seeing China's
rapidly changing industrial landscape, the integrated business model is the inevitable
direction for domestic companies that are active in these two industries. After years of
development in the raw materials trading, feed, animal raising, slaughtering, further
processing and food businesses, the Company has basically formed an value chain with
competitiveness and risk prevention, meantime, it is gradually perfecting the supporting
capability of each business segment in the chain, whilst constantly standardizing and
optimizing know-how and operation system to further enhance the synergy effect among
them.
4. Systematic, scientific and unceasingly innovative R&D system
The Company’s R&D system always lives up to the mission of “using advanced technology,
excellent service and outstanding products to promote the development of China’s
livestock industry, conserving resources, protecting the environment, providing food
security and benefiting the society”. Driven by the market-oriented and customer-oriented
principle and the goals of “safe products, stable quality, tailor-made nutrition and
powering business performance”, the R&D team is constantly innovating technology and
developing new products.
a. Excellent R&D team
Relying on a relatively complete industrial chain, the Company has built a R&D team
specialized in animal raising, product formulating, manufacturing and other technologies
in the fields of feed, poultry, hog, biological feed additive, etc. Assisted by more than one
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hundred masters, doctors, professors and senior experts who have profound knowledge
and experiences, the R&D team has applied cutting-edge technology into practice to boost
the Company’s know-how improvement. Relying on powerfully technical strength, the
Company has received national and local level of accreditations and honors, including
National-recognized Enterprise Technology Center, National and Local Collaborative
Engineering Research Center for New Biological Feed, Branch Center of Feed Processing of
National Agricultural Product Processing, Comprehensive Trial Farm for National Hog
Raising Industry Technology System, Agricultural Products Further Processing and
Bio-pharmaceutical Industry Cluster of Liaoning Province, Innovation Team for Feed
Technology and Safety of Liaoning Province.
b. Competitive R&D cooperation
In 2006, the Company partnered with Royal De Heus, a centurial-old Dutch company. By
drawing on its global reach, advanced technical resources, leading know-how and a
century of management experience, the Company has made breakthroughs in safe and
high quality feed, precise and efficient nutrition as well as ABF technology. The R&D teams
of the two sides have maintained high-frequency exchanges, which enables the Company
to keep abreast of the world's latest technologies. Meanwhile, by combing own 25-year’s
technology with the latest technology in the industry, the Company is committed to
providing customers with high quality products and technical service, it has also
established technical cooperation and other cooperative projects such as "Academician
Workstation" and " Official Research Base for Postdoctoral Fellows".
c. Fruitful research achievements
In the first half of 2020, the Company has initiated over 40 research projects. By far 70
patents have been authorized, including 47 patents for invention. It also received two
National Science and Technology Progress Awards, one National Technological Invention
Award and nearly 20 Science and Technology Awards at provincial-level and
ministerial-level. In the first half of the year, the Company led and participated in more
than 10 sci-tech projects and setting national standards and group standards, including
formulating 7 group standards for Concentrate Supplement with Co-Fermented Bacteria
and Enzyme for Lactating Cow organized by Beijing Bio-feed Industry Technology
Innovation Strategic Alliance. As an organizer, the Company undertook the major sci-tech
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project of Liaoning province- Feed Quality and Safety Control and Low Protein Feed in
2019 to 2021 with other 8 companies. Meanwhile, the Company participated in related
projects, including Jointly Building Chicken Net Energy Nutrition Technology System
chaired by Professor Guo Yuming from China Agricultural University, and the Application of
Fermented Feed for Piglet under Antibiotic-free Farming together with Zhejiang University.
As the leading organizer, the project of Research and Promotion of Energy-saving and
Eco-friendly Animal Feed won the second prize of Science and Technology Award of
Liaoning province, the project of the Establishment and Application of Swine Intestinal
Homeostasis Nutrition Technology System cooperated with Professor Zheng Xin from Jilin
Agricultural University, has been approved by the re-examination of the first prize of Jilin
Province Science and Technology Progress Award. Moreover, the R & D team successfully
screened and designed a series of high cost-effective antibiotic-free feed formula solutions,
which had been fully applied before the end of June, showing stable performance in the
farms and being well received by customers.
Along with continuously improved nutrition technologies and farming programs, related
technologies in the field of broiler and hog integration businesses have been becoming
increasingly mature. Through researches on nutrition strategy, feed processing and feeding
program, the growth performance and slaughtering performance of animals have been
further improved, which maximized the value of single animal.
d. Top-class testing ability and database
The Company's R&D and testing center has been accredited as National Laboratory by
CNAS (China National Accreditation Service for Conformity Assessment), equipped with
advanced testing equipment and composed of three types of testing rooms in terms of
physics and chemistry, microbiology and precision instruments. From micro to macro, the
testing center is able to secure quality in every step. The Company has become one of the
first companies capable of testing prohibited additives. As a national key laboratory, its
test results can be recognized in 60 countries or regions around the world. Meanwhile, the
Company has established own raw material database and shares data resources of the
Dutch partner, using regression equations to calculate the energy dynamics of raw
material, whilst basing on animal’s growth performance and feed intake to precisely
formulate nutrition with lowest cost to achieve the best cost-effective.
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5. Constantly enhanced and full-fledged Wellhope Brand
The Company has successfully established its product and corporate brand in domestic
agriculture and animal husbandry industries over the past 25 years. As related industries
keep evolving, its brand effect will be further highlighted.
a. Product brand
Over the years, relying on leading-edge technology, high quality products and continuously
improved customer service, the Company's brand has been widely recognized and trusted
by customers. With the outbreak of ASF, the demand of products with high nutrition and
immunization rose, moreover, high pork price fueled the need of products with high yield
and fast weight-gain. In the first half of 2020, the Company’s swine feed realized a
year-on-year growth rate of 61%, such explosive growth could prove the products’ high
quality, R&D strength and market recognition. Meanwhile, the brand “Wellhope” has been
honored 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, etc. In 2019, the Company won the Liaoning Governor's Quality Award for its
excellent business management and product strength.
b. Corporate brand
Driven by the core values of "Integrity, Responsibility, Win-Win", some of the Company’s
businesses are joint ventures with partners, it has been working together with many
partners for more than 10 or even 20 years, including a 14-year’s good relationship with
Royal De Heus. These successful cases of cooperation can adequately prove that
“Wellhope”, as a corporate brand, has been well recognized and trusted by its partners.
Meanwhile, the strength of the Company's brand can also be proved by long-term
strategic partnerships with some multinational and domestic suppliers, by financial
institutions granting loans on credit due to our good reputation. As an employer brand,
“Wellhope” has been recognized and favored by employees as well as pursued by job
seekers. In 2019, in the recommendation and selection of national model enterprise or
industrial park with harmonious labor relations initiated by the Ministry of Human
Resources and Social Security, the Company was awarded as "National Model Enterprise
with Harmonious Labor Relations", commended by the National Tripartite Evaluation and
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Commendation Office, it was also awarded as the "Best Employer" again by Zhaopin.com.
Meanwhile, the Company's online recruitment and "Wellhope Cup" research paper
contest held in the first half of 2020 displayed the strength of its employer brand.
6. Development-oriented and deeply rooted corporate culture
After 25 years of development, the Company has formed development-oriented and
widely recognized corporate value, among which, the core value of "Integrity,
Responsibility, Win-Win" and the management culture of "Innovation, Efficiency,
Self-Discipline", have been deeply entrenched in the thinking and behaviors of employees.
The core culture, represented by Wellhope Vision, declared at the very beginning of
establishment, which is mainly described as "Always put customers’ needs first and
constantly work on new products, never follow the beaten path, always conduct business
honestly, always aim to provide value to our society and to maintain sustained growth
through technology, innovation and creative work”, and by Wellhope Mission, described as
"Save resources, protect the environment, provide food security and benefit the society",
has become the basic principle of business operation of the Company and powers its
further progresses.
In the aspect of publicizing and implementing corporate culture in 2020, the Company
aims to further implement its culture into practice and combine the implementation with
performance appraisal, making culture integrate with the operation of each business line.
It is planned to hold 4 times of live streaming with the theme of “Telling Stories
Experienced in Wellhope", 40 employees and managers have been invited to tell stories by
their side. The first session attracted 110,000 viewers, which vigorously publicized
Wellhope culture. Meanwhile, the Company ushers in its 25th anniversary in 2020, it will
utilize this opportunity to carry out a number of culture promotion activities, including
brand and marketing promotion competition, physical fitness programs involving all our
people, job skill competition, essay writing, photography, calligraphy and painting activities,
etc., to enrich staff's leisure life and display their strengths. Moreover, its Corporate Code
of Conduct will be launched in the second half year, which will integrate the practice of
core values with all staff’s performance appraisal.
In the face of COVID-19 in 2020, the Company is one of the first agricultural enterprises to
resume work. In order to maintain operations and meet customer’s demand, many
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managers and employees overcame difficulties to actively return to work, doing their best
to organize production and ensure supply. Their devotions and passions touched our staff
deeply. The Company, together with managers and employees, donated more than RMB
12 million of materials and money for pandemic control. All these stems from the strength
of the Company's culture, the sense of mission and responsibility as well as the love for
the Company. The history of the Company fully proves that each time when Wellhope
faces difficulties and trials, the corporate culture assists it to defeat hard time and to soar
to broader horizons.
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Section IV Business Operations Analysis
I. Overview
In the first half of 2020, worldwide spread of the COVID-19 pandemic has hit global
economy particularly hard; the Sino-US relationship continued to deteriorate, whilst the
political and economic situation became extremely complicated; the ASF situation
remained severe due to the impact of heavy precipitation in the south China. Pressured by
COVID-19, globally economic downturn and ASF, the Company did a good job in pandemic
prevention and at the same time fully implemented its business strategy that focused on
three pillar business divisions in terms of feed and feed raw materials trade, broiler
integration and hog raising, fully captured market changes and opportunities. While
expanding feed business, it vigorously promoted white feather broiler integration and hog
raising businesses. Relying on fully leveraging its strengths including brand, technology,
R&D, marketing innovation and other aspects, the Company achieved high-quality and fast
development in all business divisions, showing strong profitability and capability of
withstanding risk. The Company's operating revenue and net profit attributable to
shareholders have continued to grow for six consecutive years with record highs, and it
was shortlisted into the Fortune China 500 in 2020.
1. Business highlight
During the reporting period, the Company realized an operating revenue of RMB 9.848
billion with a year-on-year growth rate of 27.45%. Pre-tax profit reached RMB 762 million
with a year-on-year growth rate of 65.25%, net profit attributable to the shareholders of
the Company reached RMB 606 million, net profit attributable to the shareholders
deducting non-recurring items reached RMB 603 million, respectively increased by 68.80%
and 68.18% compared with the corresponding period of prior year. The weighted average
return on equity reached 10.16%, net profit margin on sales reached 6.92% and
comprehensive gross margin reached 10.58%, increased by 1.79 percentage points, 1.36
percentage points and 0.98 percentage points respectively over the same period prior
year. Meanwhile, the period expense ratio decreased from 5.65% in the same period of
prior year to current 4.15%. At the end of the reporting period, the Company's debt asset
ratio was 32.31%, which has been lowered 40% since going public.
The main accounting data and financial indicators of the Company in the last three years
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(2018-2020) from January to June present as follows:
2. Business review
A. Feed business
In the first half of 2020, the Company fully leveraged its strengths as a leading player in
terms of brand image and technology advantages to increase market exploration and
continuously improve online and offline services, which have significantly heightened
customer stickiness and market reach. Meanwhile, by constantly improved production
efficiency and operating costs, the period expense ratio decreased by nearly 3 percentage
points. During the reporting period, the Company's feed business realized a sales revenue
of RMB 5.074 billion with a year-on-year increase of 50%.
Feed sales volume of the Company amounted to 1.64 million tons, increased by 41.96%
compared with the same period of prior year. From the perspective of varieties, swine
feed increased by 61%, among which high gross margin products in terms of creep feed,
piglet feed in the nursery period and sow feed in the lactation period grew 76%, weaning
piglet feed rose 72%, the percentage of these two kinds of feed respectively accounted for
26% and 50% of swine feed. Poultry feed increased by 38.61%, whilst ruminant feed grew
25.41%, among which beef cattle and mutton sheep feed increased by 62%. Aquatic
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products increased by 7.61%. From the perspective of categories, compound feed realized
a year-on-year growth rate of 43% and concentrated feed increased by 39%. From the
perspective of regions, sales volume contributed by the regions in Northeast China
increased by 51%, swine feed of which grew 102%, whilst the sales volume contributed by
the regions in East, North, Central, South, Southwest and Northwest China rose by 46%.
Overall, the Company's feed business in the first half year showed explosive growth, all the
feed varieties realized progresses, especially for swine feed, which achieved a growth rate
far beyond the average level of the industry.
Feed sales volume in January-June 2020:
Jan.-Jun. 2020 Jan.-Jun. 2019
Item Year-on-Year Change
(10k tons) (10k tons)
Swine feed 61.23 38.03 61.00%
Poultry feed 69.36 50.04 38.61%
Ruminant feed 26.11 20.82 25.41%
Aquatic feed 6.22 5.78 7.61%
Other feed 1.17 0.93 25.81%
Total 164.09 115.59 41.96%
a. Technology powers progress deeply, researches on antibiotic-free early
Facing the changing market and the new era of ABF, the Company actively upgraded and
innovated products to constantly meet market demand. In response to ASF, it has
successfully developed the line of products named “Wellhope Immune Nutrition”, which
have received higher recognition by farmers, whilst under the backdrop of historically
higher hog prices, the Company has launched high-yielding and fast-growing products, also
developed extra-large swine feed to meet the demand of raising over 120kg hogs in some
areas, as well as upgraded fermented feed, etc., these marketable high quality products
has won the favor of customers and gained the increase of market share. In terms of
antibiotic-free feed, relying on leading technical team and research strength as well as by
absorbing practices of De Heus, the Company has conducted unceasing explorations and
hundreds’ times of trials regarding ABF, by the end of June 2020, all products have been
upgraded to antibiotic-free feed, all ABF schemes have been stable and received good
feedback, which have further enhanced product competence.
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b. Implement precision marketing and innovate customer service system
The Company has always paid close attention to customers and markets, implemented
precision marketing strategies to constantly meet customers' personalized demands on
products and services, which have enhanced its service and brand influence and
significantly strengthened customer stickiness. For example, through in-depth cooperation
with hog farms, bio-tech companies, insurance companies and other third parties, the
Company provided customers with "one-stop" services, also timely adjusted the
organizational structure of sales system, upgraded terminal service and marketing system
to center on the key market and large-scale customers, as well as increased the promotion
of new products and high-margin products......In addition to precision marketing, the
Company constantly innovated its customer service by strengthening online marketing and
customer service, actively promoted marketing and service via live streaming, short video,
WeChat and other tools. In the meantime, the Company has built online service platforms,
which guided farmers by launching market analysis, management skills and solutions to
epidemic prevention as well as online Q&A. Furthermore, its experts’ team also organized
online trainings for end customers, which have gained good recognitions.
c. Guarantee production and supply and capture market opportunities
After the outbreak of COVID-19, although facing the pressures in terms of labor shortage,
panic buying of feed, dramatic increase in orders and traffic control, etc., the Company’s
feed plants resumed work quickly and all staff were dedicated to guaranteeing product
manufacture and supply. In terms of purchasing, the Company gave full play to its
advantages of large-scale purchasing and strategic partnership with suppliers, overcame
difficulties to retain stable supply of raw materials while obtaining more competitive
purchasing costs.
d. Enlarge production capacity and quicken market layout
To seize market opportunities to improve market reach and further expand feed business,
the Company has vigorously upgraded feed manufacture equipment and warehouses to
enlarge production capacity, also launched some new feed projects distributed in the
provinces of Hainan, Shanxi, Shandong, Jiangxi, Hunan and other regions through self-built,
mergers and acquisitions, leasing and OEM to speed up production capacity and market
distribution, which has laid foundation for the rapid expansion of feed business.
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B. Broiler integration business
COVID-19 caused a sluggish domestic consumer demand that blocked sales channels,
which greatly hit white feather broiler market. In respond to this, on the premise of
ensuring the safety of employees, the Company resumed work quickly, steadily boosted
business development. Although the operation performance of broiler integration
business declined in the short term, it has been still one of the big contributors towards
the Company’s final profit, meanwhile, the core competence of broiler integration
business has been constantly enhancing.
a. Accurately grasp market direction, scientifically and reasonably adjust production
capacity
In the first half year, the production capacity of breeders was expanded rapidly, which
made the inventories of grandparent and parent stocks rise to high levels. In view of this,
the Company moderately slowed down the construction progress of breeder farms, whilst
strengthened existing farms’ inside operation and improved growth performance of
breeders to ensure the quality of day old chicks. For commercial broiler raising and
slaughtering businesses, the Company chased short-term profit and long-term planning,
steadily expanded production capacity in the provinces of Henan, Hebei and Shandong,
etc. For food processing business, it rapidly developed new products to increase the sales
volume, whilst vigorously explored domestic and foreign markets to unswervingly expand
production and supply. From January to June 2020, the Company's holding and associated
entities raised 257 million broilers with a year-on-year growth rate of 35%, totally
slaughtered 265 million broilers, increased by 18%; produced 0.71 million tons of broiler
parts products and 7,659 tons of prepared and cooked food, respectively rose by 26% and
28%.
b. Continue to deepen lean management, focus on strengthening team building
In the context of the downturn of white feather broiler industry, the Company
continuously deepened lean management in its broiler integration business, rationally
reduced expenses and maintained efficient and smooth operation of each sector in the
industrial chain. In terms of broiler raising, the Company took measures in certain aspects
in terms of day old chick, feed production, animal health product and equipment to
constantly improve the growth performance of commercial broiler and further heighten
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automation. In terms of slaughtering, the Company continued to pay close attention to
production efficiency to reduce operating costs and strengthen management quality,
whilst it made efforts to improve the production capability of new projects to achieve
profitability as soon as possible. In terms of finance, it strictly managed accounts
receivable, reasonably arranged capital expenditure and quickened the inventory turnover
to ensure enough cash flow. While strengthening internal management, the Company gave
full play to its brand influence to actively absorb talents, optimized selection and training
system, broadened talents reserve and echeloned talents team. As a result, the corporate
culture has become increasingly rooted in staff’s behaviors with continuously enhanced
team cohesion.
c. Actively optimize marketing strategy, firmly promote food strategy
After the COVID-19 outbreak, domestic consumption was suppressed, whilst chicken
demand fell. The Company responded quickly and courageously by vigorously expanding
new sales channels to further explore domestic market, constantly optimizing product mix,
developing new cost-effective product portfolio and persisting in cultivating excellent
dealers and continuously improving their loyalty. At the same time, it continued to
unswervingly promote food business strategy. Relying on the advantage of raw materials,
utilizing multi-brand business model to rapidly develop domestic and foreign sales
channels, expand sales volume and strive to improve the percentage of prepared food and
high-value products as well as the export business, thus further improving the ecological
niche. Influenced by the pandemic, foreign cooked food market also suffered great losses,
the Company insisted on strict product quality, speeded up exploring foreign new
customers and rapidly researched on new products according to new needs. Meanwhile, it
dynamically adjusted production capacity and rapidly entered new channels to seize
market share. From January to June 2020, the Company exported 1,442 tons of cooked
food with a year-on-year growth rate of 83%.
C. Hog raising business
During the reporting period, each unit of the Company's hog raising business further
strengthened prevention of ASF and COVID-19, seized market opportunities on the
premise of ensuring safe production, took certain measures to constantly form the core
competitiveness of hog raising business, including quickening business distribution,
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attracting talents and heightening operation, etc.
a. Speed up hog raising strategy, all projects move forward together
In line with hog raising strategy, the Company, overcame many difficulties and captured
market opportunities in terms of tight hog supply and higher hog prices to vigorously
promote the increase of new production capacity contributed by existing hog projects,
also strengthened internal operation to lower costs and increase efficiency. Meanwhile
through constantly improved swinery structure and raising technology, some of its
performance indicators, such as fattening period and feed-weight ratio, have reached
advanced level nationwide. Meanwhile, the Company also made efforts to boost business
in Central, East and North China, some newly-built projects located in the cities of Linzhou,
Luoyang, Tongxu and Anhui province, etc., have been put into operation. Moreover, it
quickened to increase production capacity by asset-light strategy in terms of cooperation,
leasing and synchronizing breeder raising with farm construction. For the projects in
Northeast China, the first phase of Fushun Shangnian breeder farm has been fully
operated, its related production indexes have reached the first-class level in China; Fushun
Guanmenshan breeder farm will sell piglets in August; Jilin Wellhope breeder base was
rated as a Demonstration Farm of Jilin Modern Hog Industry by Jilin Animal Husbandry
Bureau in March and began to sell piglets in July. In the first half year, hogs delivered by
the Company’s holding and associated entities amounted to 212,500 heads, including
63,200 heads of finisher, 114,900 heads of piglet (68,300 head sold inside the Company,
46,600 heads sold to the market) and 34,400 heads of breeders, increased by more than
30% over a year earlier. Benefiting from higher hog prices, hog raising business
contributed a big part to the Company’s profit.
Furthermore, the Company launched or planned breeder farms and finisher farms with
different scales in Hebei, Henan, Southern Anhui, etc., also continuously developed
suitable areas for hog raising during the reporting period. By doing this, the Company aims
to rapidly increase the production capacity of breeders and enhance independent
fattening. Besides, it also vigorously promoted the progress of new projects in Northeast
China. Liaoning Lingyuan breeder farm began to construct in April, expected to be
completed by the end of the year. New farms with different scales in Jilin province are
expected to be put into use in the second half year. Hog integration project cooperated
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with Aohan Banner people's government that will deliver 500,000 heads of hogs per year
is expected to build in August this year. By the end of June, the Company’s inventories of
sow reached 54,000 heads, over 5 times increase compared with the same period of prior
year, and it is expected to stock more than 60,000 heads of sows by the end of the year
(holding and associated companies included).
b. Strictly prevent epidemics to ensure production safety
Along with doing good job of preventing epidemics, the Company increased input in
bio-safety control, continuously upgraded equipment and facilities to further safeguard
farms. All the farms optimized bio-safety control system and operation procedures as well
as carried out all-round supervision through cameras, patrol inspection and other means.
At the same time, the farm’s decontamination centers strictly set up a three-level system
to comprehensively clean vehicles and materials close to the farm, whilst the professional
testing center conducted defensive tests inside and outside the farm to ensure production
safety. The Company has also continuously improved its support for contract farms about
epidemic prevention, provided them comprehensive guidance and services, such as
equipment optimizing, safe material supply, herd management, feeding program, ASF
monitoring and professional support teams, to support farmers raise hogs safely in closed
environment.
c. Enter hog slaughtering and further processing to complete the value chain
Chifeng Wellhope Fuxinyuan Slaughtering Company, a holding entity of the Company,
actively expanded distribution channels, its hog parts products have been mainly sold to
different channels, universities, enterprises and first-tier cities, etc. Meanwhile, this
company also has been storing national reserved meat. In addition, the Company has
continuously broadened its value chain. It is going to build a hog slaughtering and further
processing project in Anhui province, which is expected to start construction in August.
Through entering slaughtering and food processing, the Company's hog integration chain
will be further improved to heighten risk resistance and stabilize profit contribution.
d. Strengthen expertise improvement and talents reserve to promote the sustainable
development
The Company further strengthened professional knowledge trainings in the field of
bio-safety, breeding system and feeding program by video conference and external
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exchanges. Meanwhile, based on breeder farms located in different areas, the Company
cultivated talents to its hog farms also reserved excellent talents via internal selection and
external recruitments, etc. In terms of talent incentive, it continued to optimize the
performance appraisal mechanism and tried to innovate the incentive model of hog
integration to attract and retain talents rapidly under the favorable situation of hog
business.
D. Feed raw material trade
Benefited from market quotation and IT application, the Company's trade business
achieved a substantial growth. Feed raw materials presented a short supply in the first half
of this year caused by certain factors, such as, those raw material producers resumed work
slowly, feed producers expanded production capacity, whilst imported raw materials
represented by fish meal were lack of supply, etc. Together these reasons drove up the
prices of raw materials. The Company seized these market opportunities and achieved a
significant growth in feed raw materials trade business. In terms of animal health product,
the Company, as the agent of top brand animal health products both domestic and
overseas, realized a year-on-year growth rate of over 30% in this business supported by a
high prosperous market of high-end animal health products in the first half year. While
enjoying the favorable market, the Company leveraged the advantages of IT application
platform to timely and accurately analyze data and research on market, conduct
forward-looking analysis and accurate marketing management, which has made the
operation of the Company's trading business safer and more efficient and further
amplified the profitability.
3. Technology Innovation
In the first half of 2020, regardless of the pressures from market demands and
competitions, such as the sporadic outbreak of ASF and ban of antibiotics in feed, the
Company’s R&D team has further enhanced the competitiveness of products and on-site
farming technology by selecting new raw materials, applying new technologies and
optimizing formulation. Meanwhile, the Company has proactively established a new
antibiotic-free system and popularized the application of antibiotic-free achievements to
strengthen marketing and create values.
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A. Well prepared to step into the new era of antibiotic free confidently
Feed industry has been in the new era of antibiotic free since July 2020. By adhering to the
mission of "protecting environment, providing food security and benefiting the society”,
the Company has been preparing and researching on antibiotic-free feed for a long time
and carried out more than 100 experiments from 2013 and 2019 based on own
technology accumulation and practices of the partner Royal De Heus.
Feeds for layers in laying period, ruminants, duck and aquaculture have been already
antibiotic free for a time and feed for white feather broiler has realized antibiotic free for
three years. Whilst in the past two years, the Company has done a lot of trials in order to
guarantee the effectiveness of antibiotic-free feed for swine. For this purpose, it paid
attention to the selectiveness of feedstuffs, feed formulation design, feed processing
technology and evaluation of feed additives. In the first half of 2020, the R&D team
actively transformed the achievements of ABF into the field of swine feed, established the
Wellhope's technical system of "antibiotic-free nutrition", and made multiple technical
schemes for cost-effective antibiotic-free feed formulation. The Company also applied
related products in the trial farms and some regional markets, which have been proved to
reach the goal of balanced nutrition, stability, easy digestibility, healthy animal bodies,
strong immunity and anti-stress capacity, thus the Company has successfully achieved ABF
for all series of swine feed products. By the end of June 2020, Wellhope has ungraded all
products to ABF, which have realized constant growth performance and good customer
feedback.
B. Dedicate to heightening R&D to improve products competitiveness
a. Swine feed: The Company strengthened those targeted products, such as fast-growing
feed and extra-large swine feed (over 120kg), to meet the needs of customers quickly. At
the same time, the new antibiotic-free products such as bio-fermented feed have been
developed to facilitate the successfully transition of antibiotic-free feed on the farm and
enhanced the health of herds; Meanwhile, the Company has established the nutrition
standards and feeding strategies for swine with different strains and optimized the mix and
quality of high value products, which boosted the significant growth of the sales volume of
piglet feed in the nursery phase.
b. Broiler feed: The Company continued to increase the input in the researches on
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broiler diet and nutrition selection, also boosted the application of feeding model as
pellet-powder-pellet, focused on improving broiler’s growth performance and slaughtering
quality, which maintained the technical advantages of broiler feed.
c. Layer feed: The Company constantly improved the manufacturing technique and
performance of fermented feed to further improve the economic benefits of farmers, also
enlarged the development of fermented feed for quail and goose. Meanwhile, the
Company has been dedicated to creating organic Wellhope brand eggs, at present, it has
launched lutein eggs, selenium-enriched eggs, DHA eggs and other functional eggs, which
laid a foundation for developing layer integration business.
d. Ruminant feed: The Company designed anti-stress solutions for lamb during the
transition period, which helped the lambs more easily adapt to the mode of being fed ad
libitum. This technology obviously prevented the occurrence of diarrhea and decreased
the mortality and thus increased the profit of finishing lamb in general. Meanwhile the
compound feeds for lambs and calves were also developed with the aim to better the
performance of young animals. The occurrence of kidney stone in lamb finishing has been
decreased to be lower than 1% by improving the compound through animal feeding
experiments on farm. This was very helpful to gain more profit for lamb finishing. For dairy
feed, the new compound was designed for the fresh cows according to the starch plus
sugar concept, which was proved to increase the daily milk production by 1 to 2 kg and
help to stabilize the rumen pH value by lower starch content and to improve the health of
cows and as a result to longer the duration of lactation peak and milk production as well as
height body health.
e. Aquatic feed: The Company developed high-quality fingerling fish feed and designed
the programs of animal health products to improve the livability of fry and the economic
benefits of aquaculture. At the same time, utilizing own technical advantages and
applications in the fermented feed, the Company launched fermented aquatic feed to
improve the intestinal health of animals and the water quality of the pond; it also
upgraded special aquatic feeds continuously and determined the nutrition standard and
formula model for different varieties under different farming modes, meanwhile, with the
upgrading of equipment and technology, the difficulties in the growth, stimulating feeding
and processing of special aquatic feeds have been solved.
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C. Constantly upgrade raising techniques to strengthen the competitiveness of the
Company
a. Broiler raising techniques
In the broiler farms, the Company continued to improve the nutrition programs for
breeders and the bio-safety to comprehensively enhance the performance of commercial
day old chicks. Through continuously improved on-site raising management and scientific
feeding mode, feed conversion ratio and animal growth potentiality have effectively
increased with reduced mortality and culling rate. Meanwhile, the Company has made
dramatic breakthroughs in raising broilers via cage. The automatic micro-environmental
control technology and the broiler growth performance have reached national top level;
the original ventilation mode and solar energy technology reduced air pollution. In
addition, the Company cooperated with numerous universities and research institutes. By
means of the necropsy, laboratory diagnosis and drug sensitivity test, veterinarians can
detect and treat diseases in time. Relying on the guideline of the complete bio-safety
system, company-owned farms and contract farms have fulfilled strict measures in terms
of disinfection, vaccination, quarantine, etc., to guarantee that the broilers can have a
good performance.
b. Hog raising techniques
The Company has established a high-efficiency and dynamic management system for the
whole process of hog raising, which integrated the dynamic formula nutrition technology,
large-scale feeding technology and full-system database of hog raising. At present, it has
created a "3-stage" gilt feeding mode and a "5430" high-efficient and grain-saving feeding
mode for the sows and piglet, and "7-stage" feeding mode for growing-finishing hog, and
continuously provided company-owned farms and contract farms with systematically
nutritional management programs through data collection and analysis, effect tracking, etc.
By far, the Company has established a database platform for fattening hogs, formed more
than 20 standard documents, rules and regulations, management plans, etc., and
formulated 3 corporate standards, 1 set of feed product manuals, 1 set of new processing
technology and 2 sets of new feeding modes, launched a new product specialized for
extra-large pigs (over 120kg), applied for 1 invention patent, 1 scientific research project
and published 10 papers.
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D. Attract and reserve technical talents via multiple ways to improve the overall
competitiveness of the technical team
The Company has continued to strengthen the attraction and reserve of key technical
talents through a variety of methods. In the first half of the year, it recruited nearly 20
doctors and masters through various channels, meanwhile, it further strengthened
trainings for R&D team through internal training, external communication and
high-frequency technical communication with Royal De Heus, which enabled the Company
to always keep eyes on the world's latest technological trends, research results and
maintain its leading position of know how. In addition, the Company held "Wellhope Cup"
postgraduate research paper competition to discover talents and excellent research
directions and ideas, also to build a bridge between theoretical research and practice,
promoting technological innovation and breakthroughs in the agriculture and animal
husbandry industries.
II. Analysis of primary business
1. Analysis of related items in the financial statements
RMB
Item January-June, 2020 January-June, 2019 Change %
Operating revenue 9,848,379,852.28 7,727,400,004.75 27.45
Operating costs 8,806,688,412.71 6,985,820,614.94 26.07
Sales expenses 212,669,710.62 239,990,725.07 -11.38
Administrative expenses 134,081,626.60 126,915,965.17 5.65
Financial expenses 31,065,360.72 39,721,751.73 -21.79
R&D expenses 30,944,918.31 30,021,345.87 3.08
Net cash flow from operating
451,396,027.78 299,291,784.62 50.82
activities
Net cash flow from investing
-611,726,432.66 -378,785,068.92 not applicable
activities
Net cash flow from financing
261,794,505.53 679,776,007.24 -61.49
activities
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Explanation for the change of operating revenue: feed product sales revenue grew.
Explanation for the change of operating cost: feed product sales cost grew.
Explanation for the change of sales expenses: due to implement the new revenue
standards, freight expenses of related products were adjusted to operating cost.
Explanation for the change of administrative expenses: the remuneration for managers
grew.
Explanation for the change of financial expenses: interest on deposit increased and
interest on borrowing decreased.
Explanation for the change of R&D expenses: expenses for R&D materials and instruments
increased.
Explanation for the change of net cash flow from operating activities: cash received from
sales of products increased compared to the same period of prior year.
Explanation for the change of net cash flow from investing activities: cash paid for
investment and for acquiring and building fixed assets, intangible assets and other
long-lived assets increased.
Explanation for the change of net cash flow from financing activities: cash paid for debt
increased.
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2. Assets and liabilities
RMB
Percentage of Percentage of Year-on-year
Item June 30, 2020 June 30, 2019 Explanation
total assets % total assets % change %
Trading financial
100,000,000.00 0.96 0.00 0.00 not applicable purchases of structural deposits increased
assets
Derivative
9,100,936.30 0.09 4,765,331.00 0.06 90.98 position of derivative financial assets increased
financial assets
investment for associated companies increase and
Long-term equity
2,214,383,039.93 21.20 1,540,743,547.03 18.52 43.72 the investment that calculated by equity method
investment
increased
Other equity
Newly-increased other equity instrument
instrument 12,949,647.74 0.12 4,547,809.52 0.05 184.74
investment in current period
investment
Construction in
353,897,369.68 3.39 85,569,862.73 1.03 313.58 investment for swine and broiler houses increased
progress
Biological assets 181,047,726.38 1.73 56,033,181.19 0.67 223.11 breeding swine increased
Other non-current prepayment for long-lived assets and feeding fees
455,359,431.84 4.36 326,934,235.00 3.93 39.28
assets of farmers increased
Payroll 57,573,512.62 0.55 39,828,932.27 0.48 44.55 employees’ salary increased
Tax payable 58,151,031.99 0.56 30,041,321.29 0.36 93.57 corporate income tax payable increased
Non-current
long-term borrowings due within one year
liabilities due 93,200,042.05 0.89 56,374,186.31 0.68 65.32
increased
within one year
Long-term
353,830,000.00 3.39 42,500,000.00 0.51 732.54 long-term borrowings increased
borrowings
Long-term
66,953,833.28 0.64 16,845,833.40 0.20 297.45 finance lease increased
payables
Deferred income 38,699,498.00 0.37 18,915,195.31 0.23 104.59 government grants related to assets increased
Deferred income deferred income tax liabilities recognized on the
353,052.07 0.00 115,017.00 0.00 206.96
tax liabilities basis of taxable temporary differences increased
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3. Investment analysis
A. As at June 30, 2020, the balance of the Company's long-term equity investment
recorded RMB 2.21 billion, increased by 6.97% compared with the end of prior year.
B. Financial assets measured at fair value
During the reporting period, the Company has financial assets that were measured at fair
value and its changes recorded into current gains or losses. The income from the changes
in fair value recorded RMB -1,265,439.00.
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4. Main holding and associated companies
RMB 10k
Registered
Company Core business Total assets Net assets Net profit
capital
Shenyang Wellhope Ruminant Feed Feed manufacture and selling 550.00 15,281.14 13,254.96 1,068.24
Beijing Sanyuan Wellhope Agri-Tech Feed manufacture and selling 1,000.00 24,377.85 21,194.27 1,324.85
Feed, breeding broiler, day old
Dalian Heyuan Agri-Tech chick, broiler raising and 10,000.00 144,444.39 83,682.88 5,546.01
slaughtering
Zhang Jiakou Jiahe Animal Husbandry Hog raising, purchasing and selling 7,692.00 30,360.09 26,440.81 9,333.37
Broiler slaughtering, processing and
Anshan Jiuguhe Food 4,320.00 63,580.12 38,391.38 9,704.00
selling
Feed, breeding broiler, day old
Beipiao Hongfa Food chick, broiler raising and 3,000.00 176,942.95 139,549.12 13,222.08
slaughtering
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III. Other Disclosures
1. Possible risks
A. Risks of fluctuations in raw material prices
Most costs of the feed business come from raw materials. Factors in terms of production
changes in producing areas, import policies, purchasing and storage and grants, exchange
rate fluctuations, logistics costs, etc., may trigger fluctuations in the raw material market,
which will affect the Company's feed business costs and gross profit margins. With
deepened globalization of the trade of agricultural products in recent years, the
supply-demand relationship and trading price of raw materials have been affected by
market conditions such as spot and futures at home and abroad, and the price trend has
become more complex followed by increasingly fierce fluctuations, which further
increases the difficulties of the Company’s cost management. In addition, the fluctuations
of COVID-19, Sino-US trade relations, international political and economic environment
and other factors have also made the purchase price of raw materials more variable.
Solutions:
a. The Company has established strategic partnerships with many top domestic and
foreign raw material suppliers, and strategically reduced purchasing costs through
three-level purchasing mode in terms of head office centralized purchasing, regions’ price
compare purchasing and local departments’ purchasing of different varieties.
b. IT combines its raw material trading business with purchasing management, i.e., the
professional and practical raw materials’ purchasing team conducts targeted
forward-looking researches and real-time tracking on the market, makes great efforts to
reduce the purchasing price, such as uniformly managing different varieties, adopting spot
purchasing and futures together.
c. The purchasing team works closely with the R&D team to further optimize the
purchasing cost by way of re-formulating the feeds i.e., changing the composition of the
feed to use cheaper alternative raw materials while achieving the same results, which can
further optimize purchasing costs.
d. The Company and Royal De Heus have set up an information sharing channel, which
enables the two sides to timely share the market trends of raw materials and additives, etc.
In addition, the two sides may carry out joint purchasing cooperation in the future, which
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will greatly enhance the overall bargaining power.
B. Risks of fluctuations in livestock and poultry prices
Animal husbandry industry is a typical cyclical industry and the hysteretic adjustment of
supply causes the prices fluctuating periodically. At present, China's animal husbandry
industry is still dominated by back yard farms and small-scale farms, these farm owners
show the character of non-rational decision-making with an obvious “herd effect”, which
further aggravates the cyclical fluctuations in the market price.
Solutions:
a. In terms of strategy, while steadily developing feed and feed raw materials trade
businesses, the Company has increased its input in broiler integration business and
quickened the expanding of hog raising business to create an operating model powered by
broiler and hog integration businesses, which can effectively reduce the risks brought by
the cyclic fluctuations in the industries.
b. In terms of business, the Company's broiler integration business has established an
industrial chain, whilst in 2019 it also extended hog raising business to the downstream
industries, now the slaughtering business has been operated well. The continuously
improved industrial chain structure enables the price fluctuation of each sector to be fully
hedged, to maximize the price fluctuation of the whole industrial chain.
c. In terms of management, the Company has always been committed to improving the
production standard and operation model of each business sector, reducing overall
operating costs by optimizing the production indicators and improving per capita efficiency.
Costs advantage can mitigate the negative impacts of downward industry on the Company
while improve the overall profitability when facing a booming market.
C. Risks of serious animal disease
Feed and animal raising are the Company's two core businesses. Disease outbreak is one
of the main risks faced by animal raising companies. Once a disease happens, it will cause
panic in the market, which will reduce the demands, then lessen the production and
incomes as well as increase costs. The feed industry mainly serves downstream animal
raising industry; thus, the downstream market will directly affect the performance of feed
business. As an unpredictable emergency, an explosive disease will undoubtedly have a
strong impact on the Company's operations.
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Solutions:
a. The Company attaches great importance to regional distribution and business
structure, which is the most direct way to divert the risk of epidemic.
b. It continues to improve the prevention technology of major epidemics, completes the
early warning system and strives to control epidemics effectively before spreading.
c. When the epidemic comes, the speed of response is particularly critical, the faster to
response, the less to loss. The Company has set an emergency command system for major
epidemics to minimize losses when they occur.
d. The Company has constantly strengthened the analysis and research capabilities for
major epidemics, enhance animal’s immunity from the perspective of animal nutrition and
veterinary services.
e. For ASF, the Company has formed a relatively complete prevention system from
product researches to farm management. Specific prevention measures detailed in Section
IV hereof-Hog Raising Business.
D. Risks of the industrial pattern adjustment caused by environmental protection
policies
China has put forward some environmental protection regulations in recent years, such as
Environmental Protection Tax Law, etc., which show the government's determination to
increase supervision on environmental protection in animal husbandry industry, whilst the
local governments have also issued certain new regulations. It can be seen that the
continuously strengthened environmental protection is the trend of the industry also an
inevitable reality, which will further weed out unqualified players and reshuffle the
industry.
Solutions:
During the start-up period, the Company had input "Save Resources, Committed to
Environmental Protection" as part of its Vision. During the past 25 years, the Company has
always considered saving resources and protecting the environment as its important
mission, taken strict compliance with laws and regulations and implementation of
environmental protection requirements as key performance appraisal indicators for
managers.
a. Regarding to raising and slaughtering, in the face of increasingly strict environmental
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protection requirements, the Company have comprehensively identified environmental
risk points and formulated emergency plan for environmental emergencies so as to
maintain the stable operation. For the key pollutant discharge plants, the Company has
developed a complete self-monitoring program, which can find problems to repair,
eliminate hidden dangers in a timely manner. Meanwhile, it also deploys more resources
and manpower to ensure these plants always complying with national standards.
b. Regarding to feed production, the Company has always implemented national
environmental protection standards with the most rigorous attitude, established complete
control measures for waste gas, noise, wastewater, solid waste and other pollution
generated during the production process. Moreover, it uses eco-friendly raw materials and
additives in feed formulations and continuously develops safe diet to reduce the emissions
of heavy metals, nitrogen and phosphorus.
E. Risks of exchange rate fluctuations
The Company's international business started early and developed rapidly, the exchange
rate fluctuations have released great influence on raw material purchasing, product export
and overseas investment, presenting as follows: Firstly, international development has
made the global purchasing of raw materials becoming normally, therefore, the risks of
exchange rate fluctuations are particularly evident in the raw materials that are based on
oversea supply. Secondly, the Company’s export business of broiler parts products is
growing rapidly with customers from many countries and regions across the world, and
the exchange rate fluctuations are inevitably caused by the settlements 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. The Company closely focus on the dynamic international foreign exchange market,
whilst enhances the awareness of foreign exchange risk and improves the researching and
forecasting capabilities of the foreign exchange market.
b. The Company continues to improve the bargaining power in foreign trade transaction by
enhancing the competitiveness of products and using RMB for settlement, reduce the
exchange rate risks by adding insured value clause and the exchange rate risk allocation
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clause in the contract.
c. By making full use of foreign exchange forwards, swaps and options (combination) and
other instruments to maintain the exchange rate for foreign exchange exposure.
d. According to specific conditions of different countries, based on the principle of "using
foreign currencies in foreign trade", the Company reasonably matches the income and
debts to control the exchange rate risks.
F. Risks of food safety
In recent years, there have been some food safety incidents in China, which affected
consumers' confidence in food safety. China has continuously improved the legislation on
food safety and food sources, conducted forceful measures on handling food violations.
Once the food safety incident happens, it will directly damage the interests of consumers
and cause panic, which may greatly impact the downstream demand and affect the brand
and performance of the enterprises.
Solutions:
a. Regarding to feed business, the Company has established a three-level quality
management mechanism and testing system, which consists of headquarters, regions and
local departments, adopted ISO 9001, ISO 22000, ISO-IEC 17025 and other international
standards, thoroughly implemented a series of quality standards to realize the whole
process control of products and established the traceability system. The Company works
hard to popularize near-infrared detection technology to improve detection efficiency and
share data in time, by doing this, it can quickly realize risk warning and monitor heavy
metals, harmful microorganisms and mycotoxins, providing an important guarantee for
feed products. In addition, by drawing on the experiences of European antibiotic-free feed,
and basing on current situation in China, the Company has realized significant progresses
in antibiotic alternatives, at present, all the Company’s feed products have stepped into
antibiotic free.
b. Regarding to broiler integration business, the integrated operation can ensure the
ample supply of raw materials and strictly control the whole process from feed production,
broiler rearing, slaughtering, raw meat and food processing. Through standardized
management and streamline operation, it can integrate bio-safety, drug residue control
and in-process hygiene to achieve food safety traceability.
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Section V Important Disclosures
I. Shareholders' Meeting Convened during the Reporting Period
Website designated
Resolution
Meeting Date for disclosing the
disclosing date
resolution
2019 Annual
Shareholders' April 20, 2020 www.sse.com.cn April 21, 2020
Meeting
II. Plan of Dividend Distribution or Capital Reserve Converted into Share Capital in the
First Half Year
Whether distribute dividend or convert
No
capital reserve into share capital
Dividend per 10 shares (yuan, tax included) 0
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III. Execution of Commitment
Background Date of making Whether Whether
Type of Commitment
of making Content commitment and there is a performs
commitment party
commitment validity time limit strictly
Nature person I warrant and commit that I will not directly or indirectly develop, operate or
Handling shareholders assist in the operation or participate in or engage in any activity that is
March 2, 2011,
horizontal holding more competitive with the business of Liaoning Wellhope, if Liaoning Wellhope will yes yes
long-term valid
competition than 5% of the increase any business scope after the date of signing this commitment, I promise
shares to give up the business.
Legal person
Our company warrants and commits that our company will not directly or
shareholders
Handling indirectly develop, operate or assist in the operation or participate in or engage in
holding more March 2, 2011,
related party any activity that is competitive with the business of Liaoning Wellhope, if Liaoning yes yes
than 5% of the long-term valid
Commitment transaction Wellhope will increase any business scope after the date of signing this
shares-Heli
relating to IPO commitment, our company promises to give up the business.
Investment
Jin Weidong,
The controlling shareholder Jin Weidong and persons acting in concert with him
Wang Fengjiu,
undertake that there are no false records, misleading statements or material
Other Shao Caimei, Long-term valid yes yes
omissions in the prospectus of IPO and its abstract, and shall bear individual and
Wang Zhongtao,
joint legal liabilities for its authenticity, accuracy and completeness.
Ding Yunfeng
The Company undertakes that there are no false records, misleading statements
Liaoning
Other or material omissions in the prospectus of IPO and its abstract, and it shall bear Long-term valid yes yes
Wellhope
individual and joint legal liabilities for its authenticity, accuracy and completeness.
Commitment
Liaoning December 15,
relating to Dividend Liaoning Wellhope Three-Year’s Shareholder Dividend Plan (2017-2019) yes yes
Wellhope 2017, three years
re-Financing
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IV. Accounting Firm Engaged by the Company
The Company did not change the accounting firm during the reporting period.
SuyaJincheng CPA LLP undertakes the Company's auditing in 2020.
V. Major Litigation and Arbitration Matters
Non
VI. Statement of the Integrity of the Company, its Controlling Shareholder and Actual
Controller during the Reporting Period
During the reporting period, there has been no occurrence of the Company and its
controlling shareholder and actual controller failing to perform the effective judgment of
the court, needing to pay a large amount of unliquidated debt due.
VII. Employee’s Equity Incentive Plan, Stock Ownership Plan or other Incentive
Measures and Related Impacts
Overview Query URLs
On March 27, 2020, the board meeting approved the proposals of
unlocking restricted common shares after achieving the performance
objective disclosed in 2018 Restricted Stock Incentive Plan, adjusting the
repurchase price of restricted shares and repurchasing and writing off
part of locked restricted shares.
A. In this year, 367 managers can totally unlock 4.233 million restricted
shares.
See announcements disclosed on March
B. As the Company's dividend plan for 2018 had been implemented in
31, 2020 at www.sse.com.cn and
June 13, 2019. According to 2018 Restricted Stock Incentive Plan, the
designated media.
Board adjusted the repurchase price of restricted shares as RMB 4.67 per
share.
C. Due to 5 individuals left the Company and 31 individuals’ performance
appraisal did not meet the standards to unlock all the restricted shares
held by them, which had been disclosed in the 2018 Restricted Stock
Incentive Plan, 244,500 shares held by these 36 individuals would be
repurchased and written off by the Company.
On April 3, 2020, the Company disclosed the announcement that 4.233 See announcements disclosed on March
million restricted shares in the first lock-up period have been unlocked April 3, 2020 at www.sse.com.cn and
and can be traded in the capital market on April 9, 2020. designated media.
On May 15, 2020, the Company disclosed the announcement that it will See announcements disclosed on May 15,
repurchase and write off 244,500 shares held by 36 individuals on May 19, 2020 at www.sse.com.cn and designated
2020. media.
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VIII. Significant Related Party Transaction
Related party transactions in regard of day-to-day operations
RMB
Transaction Transaction Transaction
Related party Relationship Pricing principle Settlement mode
type content amount
Joint Comparable uncontrolled
Nepal Wellhope Agri-tech Pvt. Ltd. Selling Feed 11,852.89 Bank transfer
venture price
Associated Broiler feed and Comparable uncontrolled
Linghai Jiuguhe Feed Selling 22,500,000.44 Bank transfer
company raw materials price
Associated Broiler feed and Comparable uncontrolled
Tai’an Jiuguhe Agriculture Selling 44,087,063.31 Bank transfer
company raw materials price
Associated Comparable uncontrolled
Anshan Jiuguhe Food Selling Broiler 55,674,764.24 Bank transfer
company price
Associated Swine feed, feed Comparable uncontrolled
Qingdao Shenfeng Agri-Tech Selling 22,166,911.48 Bank transfer
company raw materials price
Associated Broiler parts Comparable uncontrolled
Huludao Jiuguhe Food Selling 591,354.13 Bank transfer
company product price
Feed raw
Dadong Chengsan Animal Associated Comparable uncontrolled
Selling materials and 2,303,424.77 Bank transfer
Husbandry company price
feed
Associated Feed raw Comparable uncontrolled
Guangzhou Yikun Trading Selling 2,846,401.98 Bank transfer
company materials price
Associated Comparable uncontrolled
Schippers(Beijing) Selling Other 703,164.60 Bank transfer
company price
Associated Comparable uncontrolled
Anshan Fengsheng Food Selling Broiler 91,615,790.14 Bank transfer
company price
Associated Feed raw Comparable uncontrolled
Dalian Chengsan Animal Husbandry Selling 2,883,926.12 Bank transfer
company materials price
Associated Comparable uncontrolled
Dalian Sida Food Selling Broiler 90,753,520.15 Bank transfer
company price
Associated Broiler parts Comparable uncontrolled
Anshan Jiuguhe Food Purchasing 19,601,413.70 Bank transfer
company product price
Associated Broiler parts Comparable uncontrolled
Huludao Jiuguhe Food Purchasing 255,807.60 Bank transfer
company product price
Associated Feed raw Comparable uncontrolled
Guangzhou Yikun Trading Purchasing 1,089,320.00 Bank transfer
company materials price
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Associated Broiler parts Comparable uncontrolled
Jinzhou Jiufeng Food Purchasing 10,835,045.50 Bank transfer
company product price
Associated Comparable uncontrolled
Schippers(Beijing) Purchasing Other 951,415.87 Bank transfer
company price
Associated Comparable uncontrolled
Tai’an Jiuguhe Agriculture Purchasing Feed 95,407,968.34 Bank transfer
company price
Associated Comparable uncontrolled
Qingdao Shenfeng Agri-Tech Purchasing Feed 12,456,335.41 Bank transfer
company price
Associated Comparable uncontrolled
Dalian Chengsan Animal Husbandry Purchasing Broiler 83,688,371.22 Bank transfer
company price
Associated Comparable uncontrolled
Linghai Jiuguhe Feed Purchasing Other 5,181,269.36 Bank transfer
company price
Associated Animal medicine Comparable uncontrolled
Shenyang Zhongwenjie Bio-Tech Purchasing 15,000.00 Bank transfer
company and vaccine price
Total / 565,620,121.25 /
Large amount sales return non
The Company and its associated companies know each other better and have maintained long-term
cooperation relationships, which can strengthen the trust of products produced by partners, reduce
transaction cost, improve working efficiency and avoid trading disputes. Meanwhile, purchasing raw
materials from related parties can ensure the quality. Moreover, by participating in the management and
Explanation of related party transaction exerting influence on related companies can help them to maintain a long-term and stable supply, also help
them reduce the marketing pressure. The purpose of conducting related party transactions is to satisfy the
needs of the Company's production and operation, the purchasing or selling price is determined according to
the market price of similar products. Such transactions do not violate relevant laws, Company Constitution,
etc., and do not damage the rights and interests of shareholders.
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IX. Anti-poverty Project of the Company
1. Targeted poverty alleviation
The 19th National Congress of the Communist Party of China has put forward to
take targeted poverty alleviation as one of the three major challenges that must be fought
to secure a decisive victory in building a moderately prosperous society in all
respects. The year 2020 will be a decisive year to win the battle against poverty and
to finish building a moderately prosperous society in all respects. Driving by the
principle of contributing to the society, the Company positively responded to the call and
requirements of the Party Central Committee and the government at all levels to
vigorously contribute to targeted poverty alleviation.
2. Overview of targeted poverty alleviation
In response to the call of Lankao County Party Committee and county government, Lankao
Duck Company, one of the Company’s associated companies, launched a duck integration
project targeted poverty alleviation in Lankao County, which implements the operating
model of rearing ducks by company and contract farms. In line with the principle of mutual
benefit, Lankao Duck signs contracts with farmers and adopts unified supply of ducklings,
feed, medicine, technical service and repurchasing, farmers are not required to prepare
working capital. In the first half of 2020, Lankao Duck offered 784 contracts to local
farmers and repurchased 8.57 million ducks with direct expenditure of RMB 5.11 million.
3. Figures of targeted poverty alleviation
RMB 10k
Index Details
1. Overall
including: funds for poverty alleviation 12.75
A. In details
Targeted poverty alleviation 12.75
4. Progress of targeted poverty alleviation
In the first half of 2020, faced with the impact of COVID-19, Lankao Duck not only ensured
the supply of materials, also heightened the service and support for farmers and provided
comprehensive trainings and guidance to improve their breeding techniques. By the end
of the reporting period, the farmers achieved an average profit of RMB 2.0 per duck,
making good profits.
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5. Follow-up targeted poverty alleviation
On June 16th, 2019, the Company signed a strategic cooperation agreement with Tai'qian
County People's Government of Henan Province, one of the nationally designated poor
counties. The two parties will build high-level production base of white feather broiler
integration, the Company will also help farmers to relieve financial pressure and increase
income according to local targeted poverty alleviation policies.
The Company will continue to focus on agriculture-related poverty alleviation projects,
assist in cultivating talents, providing job opportunities and increasing income of farmers.
Meanwhile, it will give full play to its advantages to integrate resources and contribute to
the goal of building a moderately prosperous society in all respects.
X. Environmental Protection Policy
1. Information of pollution discharge
Puyang Wellhope Food Co., Ltd. (hereinafter referred to as "Puyang Wellhope"), one of the
subsidiaries of the Company, has been listed as a company with sewage & gas waste
emission of Puyang City, Dalian Zhongjia Wellhope Food Co., Ltd. (hereinafter referred to
as "Zhongjia Food") and Dalian Huakang Xinxin Food Co., Ltd. (hereinafter referred to as
"Huakang Food"), subsidiaries of the Company, have been listed as an entity with sewage
& gas waste emission of Dalian City, Kaifeng Wellhope Meat Food Co., Ltd. (hereinafter
referred to as "Kaifeng Wellhope"), one of the subsidiaries of the Company, has been listed
as an entity with sewage waste emission of Kaifeng City. Shenyang Huakang Broiler Co., Ltd.
(hereinafter referred to as "Shenyang Huakang"), one of the subsidiaries of the Company,
has been listed as an entity with sewage waste emission of Shenyang City, Pingyuan
Wellhope Food Processing Co., Ltd. (hereinafter referred to as "Pingyuan Wellhope"), one
of the subsidiaries of the Company, has been listed as an entity with sewage & gas waste
emission of Handan City, Changchun Wellhope Food Co., Ltd. (hereinafter referred to as
"Changchun Wellhope"), one of the subsidiaries of the Company, has been listed as an
entity with sewage & gas waste emission of Changchun City; Chifeng Wellhope Fuxinyuan
Co., Ltd. (hereinafter referred to as "Chifeng Wellhope"), one of the subsidiaries of the
Company, has been listed as an entity with sewage & gas waste emission of Chifeng City.
Details are presented as follows:
Puyang Wellhope: The main pollutants include waste gas and waste water, among which
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waste water mainly contains COD, ammonia nitrogen, total phosphorus, pH, suspended
solids, biochemical oxygen requirement, animal and plant oil, total coliform and total
nitrogen. The waste gas mainly contains SO2, nitric oxide and particulate matter. Emission
method: 1 waste water emission outlet for sewage treatment located in the southeast
corner of the sewage monitoring station, 1 waste gas exhaust outlet distributed in the
boiler room in the northeast corner of the plant. Puyang Wellhope strictly implements the
Discharge Standard of Water Pollutants for Meat Processing Industry (GB 13457-1992)
with the emission permit (9141092367412881xt001p) and the indirect emission limit in
the water inflow agreement of Nanle County Sewage Treatment Co., Ltd, as well as follows
the requirements of Boiler Air Pollutant Emission Standard and emission permit
(9141092367412881xt001p). During the reporting period, the discharged pollutants
amounted to 2.1756 tons of COD and 0.11254 tons of ammonia nitrogen controlled within
the permitted scope, and the "three wastes" treatment met the requirements without
exceeding the standards.
Kaifeng Wellhope: The main pollutant is waste water, which mainly contains COD,
ammonia nitrogen, total phosphorus, pH, suspended solids, biochemical oxygen
requirements, animal and plant oil, total coliform and total nitrogen. Emission method: 1
waste water emission outlet for sewage treatment located in the east corner of the plant.
Kaifeng Wellhope strictly implements Level 2 standard of Discharge Standard of Water
Pollutants for Meat Processing Industry (GB 13457-1992) with the emission permit
(91410212MA4057G88A001R) and the sewage emission limit of No. 2501 Environmental
Evaluation Criteria. During the reporting period, the discharged pollutants amounted to
3.52 tons of COD and 0.72 tons of ammonia nitrogen controlled within the permitted
scope, and the "three wastes" treatment met the requirements without exceeding the
standards.
Zhongjia Food: The main pollutants include waste gas and waste water, among which
waste water mainly contains COD, ammonia nitrogen, total phosphorus, pH, suspended
solids and total nitrogen. The waste gas mainly contains SO2, nitric oxide and particulate
matter. Emission method: 1 waste water emission outlet for sewage treatment located in
the west side of the new sewage treatment workshop, 1 waste gas exhaust outlet
distributed on the roof of the boiler room. Zhongjia Food strictly implements the local
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level of Integrated Wastewater Discharge Standard of Liaoning Province, DB 21.1627-2008
and follows the Boiler Air Pollutant Emission Standard for waste gas emission (GB
13271-2014). During the reporting period, the discharged pollutants were controlled
within the permitted scope, the government did not require the total amount of pollutant
discharge of Zhongjia, its "three wastes" treatment met the requirements without
exceeding the standards.
Shenyang Huakang: The main pollutant is waste water, which mainly contains COD,
ammonia nitrogen, pH, suspended solids, total phosphorus and total nitrogen. Emission
method: 1 waste water emission outlet for sewage treatment located in the northeast of
the sewage treatment station. Shenyang Huakang strictly implements level 3 standard of
Integrated Wastewater Discharge Standard of Liaoning Province and the gas emission
follows Boiler Air Pollutant Emission Standard (GB13271-2014). During the reporting
period, the "three wastes" treatment met the requirements without exceeding the
standards.
Huakang Food: The main pollutants include waste gas and waste water, among which
waste water mainly contains COD, ammonia nitrogen, total phosphorus, pH, suspended
solids and total nitrogen, water gas mainly includes SO2, nitric oxide and particulate matter.
Emission method: 1 waste water emission outlet for sewage treatment located in the
southeast corner of sewage treatment workshop and 1 waste gas exhaust outlet
distributed on the roof of the boiler room. Huakang Food strictly implements the local
level of Integrated Wastewater Discharge Standard of Liaoning Province, DB 21.1627-2008
and follows the Boiler Air Pollutant Emission Standard for waste gas emission (GB
13271-2014). During the reporting period, the discharged pollutants were controlled
within the permitted scope, and the "three wastes" treatment met the requirements
without exceeding the standard.
Pingyuan Wellhope: The main pollutants include waste gas and waste water, among which,
the waste water mainly contains COD, ammonia nitrogen, suspended solids, BOD 5 and
animal and plant oil, the waste gas mainly contains SO2, nitrogen oxide and smoke.
Emission method: 1 wastewater discharge outlet for sewage treatment distributed at the
entrance of sewage monitoring station in the northeast corner of the plant, 3 waste gas
exhaust outlets distributed in the east side of the boiler room. Pingyuan Wellhope strictly
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implements the wastewater discharge standard of Meat Processing Industry (GB
13457-1992) and Level 2 Discharge Standard of Livestock and Poultry Slaughtering and
Processing (emission permit 91130423MA07LFUD6B001Q) and inlet water quality
requirements of Linzhang County. Exhaust gas emission implements the Boiler Air
Pollutant Emission Standard (GB 13271-2014) with the emission permit
(91130423MA07LFUD6B001Q). During the reporting period, the discharged pollutants
were controlled within the permitted scope without exceeding the standards.
Changchun Wellhope: The main pollutant is waste water, mainly containing COD, ammonia
nitrogen, total phosphorus, pH, suspended solids, biochemical oxygen demand, animal
and plant oil, total coliform, total nitrogen. Emission method: 1 waste water discharge
outlet for sewage treatment located at Xiajiadian Street, Dehui City. Changchun Wellhope
strictly implements Level 2 standard of Pollution Discharge Standard of Meat Processing
Industry (GB 13457-1992) with the emission permit (91220183MA13WF2K34001Y). During
the reporting period, the discharged pollutants amounted to 3.52 tons of COD and 0.72
tons of ammonia nitrogen, both of which were controlled within the permitted scope and
the treatment of "three wastes" met the requirements without exceeding the standards.
Chifeng Wellhope: The main pollutants include waste gas and waste water, among which
waste water mainly contains COD, ammonia nitrogen, total phosphorus, pH, suspended
solids, biochemical oxygen demand, animal and plant oil, total coliform group and total
nitrogen. Emission method: equipped with wastewater outfalls located in the south of the
company’s sewage monitoring station. Chifeng Wellhope strictly implements the Discharge
Standard of Water Pollutants for Meat Processing Industry (GB13457-1992). It also built a
waste gas discharge outlet located in the harmless treatment workshop, which adopts the
air pollutant emission standard GB16297-1996 and the odor pollutant emission standard
GB14554-93. During the reporting period, the discharged pollutants amounted to0.92 tons
of COD emissions and 0.034 tons of ammonia nitrogen, both of which were controlled
within the permitted range.
2. Circumstance of building and operating pollution control facilities
Puyang Wellhope:
a. Sewage treatment: Puyang Wellhope has a 2000-tons-per-day sewage treatment station,
which adopts the treatment process of "pretreatment-oil separation-A2O -disinfection" to
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
treat the wastewater. Its environmental protection facilities are running normally, and the
pollutant emission indexes all meet the required standards.
b. Waste gas treatment: Gas generated by the waste water pool of the sewage treatment
station is collected and purified by activated carbon adsorption and then discharged
through the 15-meters-high chimney in accordance with related standard; the traditional
coal-fired boilers are replaced by gas-fired boilers, and all kinds of pollutants meet the
emission standards.
Kaifeng Wellhope:
Sewage treatment: Kaifeng Wellhope has a 1500-tons-per-day sewage treatment station,
which adopts the treatment process of "air floatation-A2O" to treat the wastewater. Its
environmental protection facilities are running normally, and the pollutant emission
indexes all meet required standards.
Dalian Zhongjia:
a. Sewage treatment: Zhongjia Food has a 1200-tons-per-day sewage treatment station,
which adopts the treatment process of "mechanical barrier-oil separator-regulation
pool-hydrolysis pool- catalytic oxidation pool-sedimentation pool-sand filter" to treat the
wastewater.
b. Waste gas treatment: Dedusting smoke and dust by wet method and conducting
desulfurization by magnesium oxide. Discharging gas by a 25-meters-high chimney to has
effectively met related standards.
Shenyang Huakang:
Sewage treatment: Shenyang Huakang has a 2220-tons-per-day sewage treatment station,
which adopts the treatment process of "pretreatment- oil separation-A2O-disinfection" to
treat wastewater. Its environmental protection facilities are running normally, and the
pollutant emission indexes have reached all required standards.
Huakang Food:
a. Sewage treatment: Huakang Food has 900-tons-per-day and 300-tons-per-day sewage
treatment stations that adopt the treatment process of "mechanical barrier-oil
separator-regulation pool-air flotation- hydrolysis pool-A2O-sedimentation pool-advanced
treatment -sand filter-clean water pool", which can achieve required standards.
b. Waste gas treatment: Dedusting the smoke and dust by wet method and conducting
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desulfurization by magnesium oxide. Gas emission meet all required standards.
Pingyuan Wellhope:
a. Sewage treatment: Pingyuan Wellhope has a 1000-tons-per-day sewage treatment
station, which adopts AO treatment process to dispose wastewater. Its environmental
protection facilities are running normally, and the pollutant emission indexes have reached
all required standards.
b. Waste gas treatment: Gas generated by the waste water pool of the sewage treatment
station is collected and purified by activated carbon adsorption and then discharged
through the 15-meters-high chimney in accordance with related standard; the traditional
coal-fired boilers are replaced by gas-fired boilers with low carbon, all kinds of pollutants
meet the emission standards.
Changchun Wellhope:
Sewage treatment: Changchun Wellhope has a 1000-tons-per-day sewage treatment
station, which adopts AO treatment process to dispose wastewater. Its environmental
protection facilities are running normally, and the pollutant emission indexes have reached
all required standards.
Chifeng Wellhope:
a. Wastewater treatment: At present, Chifeng Wellhope has invested RMB 20 million to
build a sewage treatment plant that can treat 2,400 tons of wastewater per day, and
invested RMB 34 million to construct biogas project with a daily output of 8000 m, which
can ferment waste water and manure, etc., produced biogas can be used for boiler
production, biogas residue and slurry used as fertilizer to grain.
b. Waste gas treatment: Chifeng Wellhope has taken certain measures to lessen the
waste gas, such as, stop feeding hogs and broilers when enter the plant and slaughter the
animals on the same day, wash the houses in time, build closed waiting houses and install
fan exhaust to enhance ventilation.
3. 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
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administrative licenses. The Company has strictly implemented related environmental
protection requirements.
4. Emergency plan for environmental incident
According to the requirements of environmental protection authorities and relevant laws
and regulations, each plant 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-help
capability and continued to identify the hidden danger to ensure normal operations.
5. 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.
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Section VI Changes in Common Shares and Shareholder Information
I. Changes in Common Shares
1. Changes in shares
Unit: share
Increase/decrease in the
Before changing After changing
reporting period
Shares Percentage % Other Subtotal Shares Percentage %
1. Restricted
91,127,927 9.88 -73,375,136 -73,375,136 17,752,791 1.93
shares
A. Shares held by
the state
B. Shares held by
state-owned
corporations
C. Shares held by
other domestic 88,831,340 9.63 -73,375,136 -73,375,136 15,456,204 1.68
investors
including:
Shares held by
domestic 54,133,857 5.87 -54,133,857 -54,133,857 0
non-state-owned
corporations
Shares held by
domestic natural 34,697,483 3.76 -19,241,279 -19,241,279 15,456,204 1.68
persons
D. Shares held by
2,296,587 0.25 2,296,587 0.25
foreign investors
including: shares
held by foreign 2,296,587 0.25 2,296,587 0.25
corporations
Shares held by
foreign natural
persons
2. Non-restricted
831,176,469 90.12 73,130,636 73,130,636 904,307,105 98.07
shares
A. RMB common
831,176,469 90.12 73,130,636 73,130,636 904,307,105 98.07
shares
3. Total shares 922,304,396 100.00 -244,500 -244,500 922,059,896 100.00
2. Explanation of changes in shares
The Company held the board meeting on March 27, 2020 and 2019 annual shareholders
meeting on April 20, 2020, which approved the proposal of repurchasing and writing off
part of locked restricted shares. On May 19, 2020, the Company repurchased and wrote
off 244,500 shares held by 36 individuals. Total shares of the Company changed from
922,304,396 to 922,059,896.
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3. Changes in restricted shares
Unit: share
Number of Increase of Restricted
unlocking restricted shares in
Opening Date of
shares in shares in the end of Reason for
Name of shareholder restricted removing
the the the restriction
shares restriction
reporting reporting reporting
period period period
Sinosafe Assets Management-
Industrial and Commercial Bank
non-public
of China- April, 24,
29,527,559 29,527,559 0 issuing
Stably Increasing Profit 2020
stock
No. 12 Collective Asset
Management Product
non-public
Shenzhen Galaxy Investment April, 24,
4,921,259 4,921,259 0 issuing
Co., Ltd. 2020
stock
Zhongyi Asset Management-
China Minsheng Banking Corp- non-public
April, 24,
Zhongyi Asset-Non-public 19,685,039 19,685,039 0 issuing
2020
Offering Selection No. 103 Asset stock
Management Product
non-public
April, 24,
Wu Ying 14,763,779 14,763,779 0 issuing
2020
stock
Within 12,
24, 36
months
Employees who were granted equity after
14,575,000 4,233,000 244,500 10,097,500
restricted shares(totalling) incentive completing
restricted
stock
registration
non-public
April, 25,
Jin Weidong 3,062,117 3,062,117 issuing
2022
stock
non-public
April, 25,
DE HEUS MAURITIUS 2,296,587 2,296,587 issuing
2022
stock
non-public
April, 25,
Ding Yunfeng 1,531,058 1,531,058 issuing
2022
stock
non-public
April, 25,
Wang Zhongtao 765,529 765,529 issuing
2022
stock
Total 91,127,927 73,130,636 244,500 17,752,791 / /
II. Shareholders
1. The number of shareholders
Total number of common shareholders as at June
25,102
30, 2020
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2. Top ten shareholders and top ten shareholders holding unrestricted shares as at the
end of the reporting period
Unit: share
Shareholding of top ten shareholders
Total shares Pledged or Frozen
Restricted Nature of
Name of shareholder Changes held at the %
shares held Status Shares shareholder
period-end
Domestic
Jin Weidong 149,549,498 16.22 3,062,117 Pledged 59,470,000 natural
person
Foreign
DE HEUS MAURITIUS 82,303,939 8.93 2,296,587 0
corporation
Domestic
Ding Yunfeng 81,929,558 8.89 1,531,058 Pledged 47,620,000 natural
person
Domestic
Shao Caimei 49,773,878 5.40 0 natural
person
Domestic
Zhang Tiesheng 48,360,000 5.24 Pledged 6,600,000 natural
person
Wulian Heli Equity
Investment 48,360,000 5.24 0
Partnership (LP)
Domestic
Wang Fengjiu -1,181,600 47,964,602 5.20 Pledged 5,190,000 natural
person
Domestic
Wang Zhongtao 46,625,229 5.06 765,529 0 natural
person
Sinosafe Assets
Management-
Industrial and
Commercial Bank of
China-
-221,900 29,305,659 3.18 Unknown 0 Other
Stably Increasing
Profit
No. 12 Collective
Asset Management
Product
Zhongyi Asset
Management- China
Minsheng Banking
Corp-
Zhongyi 19,685,039 2.13 Unknown 0 Other
Asset-Non-public
Offering Selection
No. 103 Asset
Management Product
Top ten shareholders holding unrestricted shares
Shares by type
Name of shareholder Unrestricted shares held
Type Shares
Jin Weidong 146,487,381 RMB common stock 146,487,381
Ding Yunfeng 80,398,500 RMB common stock 80,398,500
DE HEUS MAURITIUS 80,007,352 RMB common stock 80,007,352
Shao Caimei 49,773,878 RMB common stock 49,773,878
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Zhang Tiesheng 48,360,000 RMB common stock 48,360,000
Wulian Heli Equity Investment
48,360,000 RMB common stock 48,360,000
Partnership (LP)
Wang Fengjiu 47,964,602 RMB common stock 47,964,602
Wang Zhongtao 45,859,700 RMB common stock 45,859,700
Sinosafe Assets Management-
Industrial and Commercial Bank
of China-
29,305,659 RMB common stock 29,305,659
Stably Increasing Profit
No. 12 Collective Asset
Management Product
Zhongyi Asset Management-
China Minsheng Banking Corp-
Zhongyi Asset-Non-public 19,685,039 RMB common stock 19,685,039
Offering Selection No. 103 Asset
Management Product
1. Jin Weidong, Ding Yunfeng, Wang Fengjiu, Shao Caimei and Wang Zhongtao act in
Relationship of above
concert.
shareholders or statement made
2. Jin Weidong is the actual controller of Wulian Heli Equity Investment Partnership.
by the parties acting in concert
3. No relation or concerted action is found among other shareholders.
Top ten shareholders holding restricted shares
Unit: share
Restricted shares available for
transaction
Restricted shares Restriction
No. Name of shareholder Newly increased
held Date available for condition
shares available
transaction
for transaction
Restricted period-
1 Jin Weidong 3,062,117 April, 25, 2022
36 months
Restricted period-
2 DE HEUS MAURITIUS 2,296,587 April, 25, 2022
36 months
Restricted period-
3 Ding Yunfeng 1,531,058 April, 25, 2022
36 months
Restricted period-
4 Wang Zhongtao 765,529 April, 25, 2022
36 months
Relationship of above
shareholders or statement 1. Jin Weidong, Ding Yunfeng and Wang Zhongtao act in concert;
made by the parties acting in 2. No relation or concerted action is found among other shareholders.
concert
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Section VII Preference Share
Not Applicable
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Section VIII Directors, Supervisors and Senior Management
I. Changes in Shareholdings
1. Changes in shareholdings of incumbent and outgoing directors, supervisors and
senior management during the reporting period
Unit: share
Opening Closing Changes in
Reason of
Name Office title shareholding shareholding shareholding
Changing
(shares) (shares) (shares)
Jin Weidong Director 149,549,498 149,549,498
Ding Yunfeng Director 81,929,558 81,929,558
Selling in the
Senior
Wang Fengjiu 49,146,202 47,964,602 -1,181,600 secondary
management
market
Shao Caimei Director 49,773,878 49,773,878
Wang Zhongtao Supervisor 46,625,229 46,625,229
Senior
Wang Zhenyong 9,800,000 9,800,000
management
Zhang Wenliang Director 8,565,100 8,565,100
Zhao Xin Director 4,470,160 4,470,160
Senior
Qiu Jiahui
management
Independent
Hu Jianmin
director
Independent
Liu Huan
director
Independent
Wang Zhe
director
Jacobus Johannes
Director
de Heus
Marcus Leonardus
Supervisor
van der Kwaak
Yuan Minger Supervisor
Li Jun Supervisor
Ren Bingxin Supervisor 5,429,500 5,429,500
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Section IX Corporate Bond
Not applicable
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Section X Financial Statements
I. Auditing Report
Not applicable
II. Financial Statements
Consolidated Balance Sheet
June 30, 2020
RMB
Item June 30, 2020 December 31, 2019
Current assets:
Monetary capital 1,622,191,216.53 1,554,781,324.13
Trading financial assets 100,000,000.00 40,000,000.00
Derivative financial assets 9,100,936.30 3,912,584.30
Notes receivable 2,205,961.50 3,696,180.25
Accounts receivable 576,179,529.39 362,060,802.38
Prepayments 263,956,886.28 222,064,368.55
Other receivables 107,578,908.70 85,600,811.75
including: dividends receivable 25,353,722.11 25,353,722.11
Inventory 1,734,856,819.92 1,568,373,133.15
Other current assets 105,151,422.67 121,711,175.93
Total current assets 4,521,221,681.29 3,962,200,380.44
Non-current assets:
Long-term equity investment 2,214,383,039.93 2,070,047,882.51
Other equity instrument investment 12,949,647.74 5,760,839.23
Fixed assets 2,269,553,170.07 2,023,113,939.02
Construction in progress 353,897,369.68 240,012,874.86
Biological assets 181,047,726.38 94,826,312.88
Intangible assets 263,272,625.33 245,564,167.39
Goodwill 290,425.67 290,425.67
Long-term prepaid expenses 137,261,597.32 134,504,217.80
Deferred income tax assets 38,405,345.82 35,987,736.49
Other non-current assets 455,359,431.84 337,463,267.56
Total non-current assets 5,926,420,379.78 5,187,571,663.41
Total assets 10,447,642,061.07 9,149,772,043.85
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Consolidated Balance Sheet(continue)
June 30, 2020
RMB
Item June 30, 2020 December 31, 2019
Current liabilities:
Short-term borrowing 1,223,388,823.53 1,050,878,205.81
Accounts payable 788,384,791.99 659,216,483.84
Advance receipt 209,529,248.68
Contract liability 324,131,304.96
Payroll 57,573,512.62 62,549,364.12
Tax payable 58,151,031.99 37,680,953.84
Other payables 370,743,746.63 342,239,361.28
including: interest payable 1,347,819.06 1,528,201.39
dividends payable 17,135,207.06 1,434,027.14
Non-current liabilities due within one year 93,200,042.05 70,593,717.62
Total current liabilities 2,915,573,253.77 2,432,687,335.19
Non-current liabilities:
Long-term borrowings 353,830,000.00 174,330,000.00
Long-term payables 66,953,833.28 11,025,000.09
Deferred income 38,699,498.00 31,841,250.00
Deferred income tax liabilities 353,052.07 396,995.58
Total non-current liabilities 459,836,383.35 217,593,245.67
Total liabilities 3,375,409,637.12 2,650,280,580.86
Owners' equity (or shareholders' equity):
Paid-up capital (or share capital) 922,059,896.00 922,304,396.00
Capital reserve 883,434,543.97 882,723,066.29
deduct: treasury stock 45,695,815.00 70,688,750.00
Other comprehensive income 8,707,287.90 6,122,835.30
Surplus reserves 352,059,456.90 352,059,456.90
Undistributed profits 4,008,825,121.94 3,605,618,553.05
Total equity attributable to the owners of
parent company 6,129,390,491.71 5,698,139,557.54
Non-controlling interests 942,841,932.24 801,351,905.45
Total owners' equity 7,072,232,423.95 6,499,491,462.99
Total liabilities and owners' equity 10,447,642,061.07 9,149,772,043.85
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Consolidated Balance Sheet of Parent Company
June 30, 2020
RMB
Item June 30, 2020 December 31, 2019
Current assets:
Monetary capital 1,284,747,992.64 1,039,575,222.99
Trading financial assets 100,000,000.00 40,000,000.00
Derivative financial assets 7,659,412.30 2,285,934.30
Accounts receivable 18,004,373.55 13,631,690.45
Prepayments 7,950,249.17 7,560,408.95
Other receivables 1,721,536,665.32 1,020,785,676.46
including: dividends receivable 33,977,209.35 33,977,209.35
Inventory 39,307,180.63 49,839,754.57
Total current assets 3,179,205,873.61 2,173,678,687.72
Non-current assets:
Long-term equity investment 4,446,649,155.04 4,117,315,830.10
Other equity instrument investment 12,651,707.44 5,539,369.92
Fixed assets 130,448,074.15 132,106,337.38
Construction in progress 7,231,022.16 5,163,075.76
Intangible assets 14,991,204.37 15,425,425.33
Long-term prepaid expenses 1,377,004.80 797,929.30
Deferred income tax assets 11,215,144.37 10,699,738.59
Total non-current assets 4,624,563,312.33 4,287,047,706.38
Total assets 7,803,769,185.94 6,460,726,394.10
Current liabilities:
Short-term borrowings 850,000,000.00 770,000,000.00
Accounts payable 29,022,790.01 34,960,859.00
Advance receipt 5,019,752.33
Contract liability 4,309,395.93
Payroll 2,487,557.30 4,611,910.56
Tax payable 6,336,402.83 4,624,045.02
Other payables 2,109,225,807.91 1,109,464,926.75
including: Interest payable 1,250,350.00 1,261,159.72
Dividends payable
Non-current liabilities due within one year 74,000,000.00 52,000,000.00
Total current liabilities 3,075,381,953.98 1,980,681,493.66
Non-current liabilities:
Long-term borrowings 333,500,000.00 174,000,000.00
Deferred income 22,398,248.00 21,520,000.00
Deferred income tax liabilities 8,972.25
Total non-current liabilities 355,898,248.00 195,528,972.25
Total liabilities 3,431,280,201.98 2,176,210,465.91
Owners' equity(or shareholders' equity):
Paid-up capital (or share capital) 922,059,896.00 922,304,396.00
Capital reserves 880,087,855.55 875,861,339.55
deduct: treasury stock 45,695,815.00 70,688,750.00
Other comprehensive income 8,999,487.92 5,621,991.32
Surplus reserves 352,059,456.90 352,059,456.90
Undistributed profits 2,254,978,102.59 2,199,357,494.42
Total owners' equity 4,372,488,983.96 4,284,515,928.19
Total liabilities and owners' equity (or
7,803,769,185.94 6,460,726,394.10
shareholders' equity)
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Consolidated Income Statement
January-June, 2020
RMB
Item Jan.-Jun. 2020 Jan.-Jun. 2019
1. Total operating revenue 9,848,379,852.28 7,727,400,004.75
including: Operating revenue 9,848,379,852.28 7,727,400,004.75
2. Total operating costs 9,229,270,624.14 7,435,169,130.12
including: Operating costs 8,806,688,412.71 6,985,820,614.94
Taxes and surtaxes 13,820,595.18 12,698,727.34
Selling expenses 212,669,710.62 239,990,725.07
Administrative expenses 134,081,626.60 126,915,965.17
R&D expenses 30,944,918.31 30,021,345.87
Financial expenses 31,065,360.72 39,721,751.73
including: Interest expenses 37,905,838.10 40,211,708.70
Interest income 8,451,668.98 2,641,228.16
add: Other income 5,942,599.70 2,192,950.10
Income from investment 172,589,751.04 188,067,031.15
including: Income from investments in
171,299,774.34 186,195,941.85
associated companies and joint ventures
Gain or loss from changes in fair value -1,265,439.00 -169,200.00
Credit impairment loss -24,175,313.93 -18,534,402.05
Assets impairment loss -11,612,155.42 -269,072.43
Gain or loss from assets disposal 1,547,289.40 -45,359.23
3. Operating profit 762,135,959.93 463,472,822.17
add: Non-operating income 8,405,544.70 15,814,929.98
deduct: Non-operating expenditure 8,797,374.58 18,322,686.59
4. Pretax profit 761,744,130.05 460,965,065.56
deduct: Income tax expense 80,417,791.15 31,218,522.69
5. Net profit 681,326,338.90 429,746,542.87
Net profit from continuing operations 681,326,338.90 429,746,542.87
Net profit attributable to the shareholders
606,015,736.01 359,008,639.18
of parent company
Non-controlling interests income 75,310,602.89 70,737,903.69
6. Other comprehensive income, net of tax 1,941,159.95 4,661,958.82
Attributable to owners of parent company 2,584,452.60 3,945,084.57
a. Other comprehensive income that
1,151,337.72
cannot be reclassified into gains or losses
(a) Remeasure changes in the defined
1,151,337.72
benefit plan
b. Other comprehensive income that will be
1,433,114.88 3,945,084.57
reclassified into the gains or losses
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
(a) Other comprehensive income that can
be transferred in gains or losses under the 2,265,159.08 3,068,904.93
equity method
(b) Exchange differences on translation of
-832,044.20 876,179.64
foreign currency financial statements
Attributable to non-controlling interests -643,292.65 716,874.25
7. Total comprehensive income 683,267,498.85 434,408,501.69
Attributable to the owners of parent
608,600,188.61 362,953,723.75
company
Attributable to non-controlling interests 74,667,310.24 71,454,777.94
8. EPS
a. Basic earnings per share (yuan per share) 0.66 0.41
b. Diluted earnings per share (yuan per
0.66 0.41
share)
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Consolidated Income Statement of Parent Company
January-June, 2020
RMB
Item Jan.-Jun. 2020 Jan.-Jun. 2019
1. Total operating revenue 403,204,253.52 261,739,621.75
Deduct: Operating costs 284,216,147.10 174,051,955.80
Taxes and surtaxes 729,054.51 812,810.61
Selling expenses 7,007,016.91 7,251,239.85
Administrative expenses 13,711,867.99 16,505,456.93
R&D expenses 9,208,354.47 10,304,335.79
Financial expenses 9,638,501.76 14,964,973.60
including: Interest expenses 27,518,014.88 29,112,564.27
Interest income 18,057,715.35 14,292,833.82
add: Other income 3,173,127.63 123,750.00
Income from investment 191,028,157.67 202,720,334.91
including: Income from investments in
164,877,586.86 185,679,010.80
associated companies and joint ventures
Gain or loss from changes in fair value -1,257,795.00 766,780.00
Credit impairment loss -1,620,607.54 -3,382,369.90
Assets impairment loss
Gain or loss from assets disposal -30,999.44
2. Operating profit 270,016,193.54 238,046,344.74
add: Non-operating income 21,550.00 10,628,520.00
deduct: Non-operating expenditure 899,558.51 1,326,100.00
3. Pretax profit 269,138,185.03 247,348,764.74
deduct: Income tax expense 10,708,409.74 4,335,646.14
4. Net profit 258,429,775.29 243,013,118.60
Net profit from continuing operations 258,429,775.29 243,013,118.60
5. Other comprehensive income, net of tax 3,377,496.60 3,068,904.93
a. Other comprehensive income that cannot
be reclassified into gains or losses
b. Other comprehensive income that will be
3,377,496.60 3,068,904.93
reclassified into gains or losses
(a) Other comprehensive income that can
be transferred in gains or losses under the 3,377,496.60 3,068,904.93
equity method
6. Total comprehensive income 261,807,271.89 246,082,023.53
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Consolidated Statement of Cash Flow
January-June, 2020
RMB
Item Jan.-Jun. 2020 Jan.-Jun. 2019
1. Cash flow from operating activities
Cash received by selling commodities, providing labor
9,791,553,393.03 7,948,606,132.70
services
Tax refunds 12,949,141.60 13,871,955.08
Cash received from other activities related to operating 34,403,326.39 38,922,770.34
Sub-total of cash inflow of operating activities 9,838,905,861.02 8,001,400,858.12
Cash paid for purchasing commodities and receiving
8,596,311,820.04 6,996,689,336.06
labor services
Cash paid to and for employee 357,223,172.66 307,874,894.10
Tax payments 91,560,326.32 60,790,924.96
Cash paid to other activities related to operating 342,414,514.22 336,753,918.38
Sub-total of cash outflow of operating activities 9,387,509,833.24 7,702,109,073.50
Net cash flow from operating activities 451,396,027.78 299,291,784.62
2. Cash flow from investing activities
Cash received from disinvestment 200,000,000.00 1,050,000.00
Cash received from return on investment 67,526,506.25 20,246,504.29
Net cash received from disposal of fixed assets,
2,127,566.33 1,235,466.00
intangible assets and other long-lived assets
Cash received from other activities related to
31,847,479.40 2,377,932.15
investment
Sub-total of cash inflow of investing activities 301,501,551.98 24,909,902.44
Cash paid for acquiring and building fixed assets,
506,939,660.64 211,754,778.24
intangible assets and other long-lived assets
Cash paid for investments 366,288,324.00 39,435,378.79
Net cash paid for acquiring subsidiaries and other
40,000,000.00 113,573,868.96
business units
Cash paid to other activities related to investment 38,930,945.37
Sub-total of cash outflow of investing activities 913,227,984.64 403,694,971.36
Net cash flow from investing activities -611,726,432.66 -378,785,068.92
3. Cash flow from financing activities
Cash received by absorbing investments 79,540,000.00 836,980,430.50
including: Capital contributed by non-controlling
79,540,000.00 67,202,692.00
interests to subsidiaries
Cash received from borrowings 1,507,367,311.32 857,207,911.79
Cash received from other activities related to financing 640,000.00
Sub-total of cash inflow of financing activities 1,586,907,311.32 1,694,828,342.29
Repayments of borrowings 1,080,307,060.21 814,501,307.93
Cash paid for distributing dividends, profits, or paid for
243,619,920.58 194,694,461.11
interests
including: Dividends or profits paid by subsidiaries to
23,713,213.00 4,420,306.88
non-controlling interests
Cash paid to other activities related to financing
1,185,825.00 5,856,566.01
activities
Sub-total of cash outflow of financing activities 1,325,112,805.79 1,015,052,335.05
Net cash flow from financing activities 261,794,505.53 679,776,007.24
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4. Effect of foreign exchange rate fluctuations on cash
10,149.73 -556,725.86
and cash equivalents
5. Net increase in cash and cash equivalents 101,474,250.38 599,725,997.08
add: Opening balance of cash and cash equivalents 1,508,390,481.68 889,204,873.97
6. Closing balance of cash and cash equivalents 1,609,864,732.06 1,488,930,871.05
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Consolidated Statement of Cash Flow of Parent Company
January-June, 2020
RMB
Item Jan.-Jun. 2020 Jan.-Jun. 2019
1. Cash flow from operating activities
Cash received by selling commodities, providing labor
396,352,393.51 254,250,757.39
services
Cash received from other activities related to operating 131,580,659.38 201,186,908.54
Sub-total of cash inflow of operating activities 527,933,052.89 455,437,665.93
Cash paid for purchasing commodities and receiving
276,419,081.91 155,902,826.52
labor services
Cash paid to and for employee 17,700,375.42 14,666,109.28
Tax payments 14,382,745.46 10,249,972.23
Cash paid to other activities related to operating 48,180,266.50 359,094,296.54
Sub-total of cash outflow of operating activities 356,682,469.29 539,913,204.57
Net cash flow from operating activities 171,250,583.60 -84,475,538.64
2. Cash flow from investing activities
Cash received from disinvestment 200,000,000.00 1,050,000.00
Cash received from return on investment 91,481,906.25 38,866,504.29
Net cash received from disposal of fixed assets,
34,000.00
intangible assets and other long-lived assets
Net cash received from disposal of subsidiaries and
4,000,000.00
other business units
Cash received from other activities related to
6,650,208.44
investment
Sub-total of cash inflow of investing activities 298,132,114.69 43,950,504.29
Cash paid for acquiring and building fixed assets,
4,040,756.40 7,169,414.68
intangible assets and other long-lived assets
Cash paid for investments 541,488,324.00 84,338,378.79
Cash paid to other activities related to investment 95,513,096.37 3,118,104.11
Sub-total of cash outflow of investing activities 641,042,176.77 94,625,897.58
Net cash flow from investing activities -342,910,062.08 -50,675,393.29
3. Cash flow from financing activities
Cash received by absorbing investments 769,777,738.50
Cash received from borrowings 1,100,000,000.00 695,000,000.00
Cash received from other activities related to financing 373,924,534.25
Sub-total of cash inflow of financing activities 1,473,924,534.25 1,464,777,738.50
Repayments of borrowings 838,500,000.00 692,000,000.00
Cash paid for distributing dividends, profits, or paid for
210,756,346.10 180,476,138.26
interests
Cash paid to other activities related to financing activities 1,185,825.00
Sub-total of cash outflow of financing activities 1,050,442,171.10 872,476,138.26
Net cash flow from financing activities 423,482,363.15 592,301,600.24
4. Effect of foreign exchange rate fluctuations on cash
93.42 6.56
and cash equivalents
5. Net increase in cash and cash equivalents 251,822,978.09 457,150,674.87
add: Opening balance of cash and cash equivalents 1,023,685,161.19 740,891,873.25
6. Closing balance of cash and cash equivalents 1,275,508,139.28 1,198,042,548.12
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Change Statement of Owner's Equity
January-June, 2020
RMB
January-June, 2020
Equity attributable to the owners of parent company
Item Non-controlling Total owners'
Other interests equity
Deduct: Surplus Undistributed
Share capital Capital reserve comprehensive Subtotal
Treasury stock reserve profits
income
1. Balance on
922,304,396.00 882,723,066.29 70,688,750.00 6,122,835.30 352,059,456.90 3,605,618,553.05 5,698,139,557.54 801,351,905.45 6,499,491,462.99
Dec. 31, 2019
add: changes in
accounting
policies
2. Opening
balance of 922,304,396.00 882,723,066.29 70,688,750.00 6,122,835.30 352,059,456.90 3,605,618,553.05 5,698,139,557.54 801,351,905.45 6,499,491,462.99
current period
3. Changes in
-244,500.00 711,477.68 -24,992,935.00 2,584,452.60 403,206,568.89 431,250,934.17 141,490,026.79 572,740,960.96
current period
A. Total
comprehensive 2,584,452.60 606,015,736.01 608,600,188.61 75,310,602.89 683,910,791.50
income
B. Capital
contributed and
-244,500.00 711,477.68 -24,992,935.00 25,459,912.68 87,440,000.00 112,899,912.68
reduced by
owners
a. Common stock
invested by 87,440,000.00 87,440,000.00
owners
b. Capital
contributed
by other equity
instrument
holders
c. Amount of
-244,500.00 711,477.68 -24,992,935.00 25,459,912.68 25,459,912.68
share-based
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
payment
included in the
owner's equity
d. Other
C. Dividend
-202,809,167.12 -202,809,167.12 -21,260,576.10 -224,069,743.22
distribution
a. Appropriation
of surplus
reserves
b. Extraction of
general risk
provisions
c. Dividend to
owners (or -202,809,167.12 -202,809,167.12 -23,713,213.00 -226,522,380.12
shareholders)
4. Closing
balance of 922,059,896.00 883,434,543.97 45,695,815.00 8,707,287.90 352,059,456.90 4,008,825,121.94 6,129,390,491.71 942,841,932.24 7,072,232,423.95
current period
January-June, 2019
Equity attributable to the owners of parent company
Item Non-controlling Total owners'
Deduct: Other
Undistributed interests equity
Share capital Capital reserve Treasury comprehensive Surplus reserve Subtotal
profits
Stock income
1. Balance on Dec. 31,
845,751,469.00 153,824,536.37 70,688,750.00 -1,316,942.00 272,882,920.19 2,651,462,525.08 3,851,915,758.64 414,072,220.38 4,265,987,979.02
2018
add: changes in
-481,544.75 -481,544.75 -645.73 -482,190.48
accounting policies
Other -91,554.12 91,554.12
2. Opening balance of
845,751,469.00 153,824,536.37 70,688,750.00 -1,798,486.75 272,791,366.07 2,651,554,079.20 3,851,434,213.89 414,071,574.65 4,265,505,788.54
current period
3. Changes in current
76,552,927.00 715,060,197.70 3,945,084.57 192,993,847.90 988,552,057.17 110,921,464.17 1,099,473,521.34
period
A. Total
3,945,084.57 359,008,639.18 362,953,723.75 70,737,903.69 433,691,627.44
comprehensive
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
income
B. Capital contributed
and reduced by 76,552,927.00 715,060,197.70 791,613,124.70 791,613,124.70
owners
a. Common stock
76,552,927.00 708,730,862.57 785,283,789.57 785,283,789.57
invested by owners
b. Capital contributed
by other equity
instrument holders
c. Amount of
share-based payment
10,013,022.10 10,013,022.10 10,013,022.10
included in the
owner's equity
d. Other -3,683,686.97 -3,683,686.97 -3,683,686.97
C. Dividend
-166,014,791.28 -166,014,791.28 -7,655,875.72 -173,670,667.00
distribution
a. Appropriation of
surplus reserves
b. Extraction of
general risk provisions
c. Dividend to owners
-166,014,791.28 -166,014,791.28 -7,655,875.72 -173,670,667.00
(or shareholders)
d．Other
D. Internal carryover
47,839,436.20 47,839,436.20
in the owner's equity
a. Other 47,839,436.20 47,839,436.20
4. Closing balance of
922,304,396.00 868,884,734.07 70,688,750.00 2,146,597.82 272,791,366.07 2,844,547,927.10 4,839,986,271.06 524,993,038.82 5,364,979,309.88
current period
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Change Statement of Owner's Equity of Parent Company
January-June, 2020
RMB
January-June, 2020
Item Other
Deduct: Treasury Undistributed
Share capital Capital reserve comprehensive Surplus reserve Total owners' equity
stock profits
income
1. Balance on Dec. 31, 2019 922,304,396.00 875,861,339.55 70,688,750.00 5,621,991.32 352,059,456.90 2,199,357,494.42 4,284,515,928.19
add: changes in accounting policies
2. Opening balance of current period 922,304,396.00 875,861,339.55 70,688,750.00 5,621,991.32 352,059,456.90 2,199,357,494.42 4,284,515,928.19
3. Changes in current period -244,500.00 4,226,516.00 -24,992,935.00 3,377,496.60 55,620,608.17 87,973,055.77
A. Total comprehensive income 3,377,496.60 258,429,775.29 261,807,271.89
B. Capital contributed and reduced by owners -244,500.00 4,226,516.00 -24,992,935.00 28,974,951.00
a. Common stock invested by owners
b. Capital contributed
by other equity instrument holders
c. Amount of share-based payment included in
-244,500.00 4,226,516.00 -24,992,935.00 28,974,951.00
the owner's equity
d. Other
C. Dividend distribution -202,809,167.12 -202,809,167.12
a. Appropriation of surplus reserves
b. Dividend to owners (or shareholders)
c. Other -202,809,167.12 -202,809,167.12
4. Closing balance of current period 922,059,896.00 880,087,855.55 45,695,815.00 8,999,487.92 352,059,456.90 2,254,978,102.59 4,372,488,983.96
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
January-June, 2019
Item
Deduct: Treasury Other comprehensive Surplus Undistributed Total owners'
Share capital Capital reserve
stock income reserve profits equity
1. Balance on Dec. 31, 2018 845,751,469.00 160,705,065.92 70,688,750.00 -1,305,935.62 272,882,920.19 1,656,011,455.34 2,863,356,224.83
add: changes in accounting policies -310,630.08 -310,630.08
2. Opening balance of current period 845,751,469.00 160,705,065.92 70,688,750.00 -1,616,565.70 272,882,920.19 1,656,011,455.34 2,863,045,594.75
3. Changes of current period 76,552,927.00 703,847,427.77 3,068,904.93 76,998,327.32 860,467,587.02
A. Total comprehensive income 3,068,904.93 243,013,118.60 246,082,023.53
B. Capital contributed and reduced by owners 76,552,927.00 703,847,427.77 780,400,354.77
a. Common stock invested by owners 76,552,927.00 692,373,258.57 768,926,185.57
b. Capital contributed
by other equity instrument holders
c. Amount of share-based payment included in
11,474,169.20 11,474,169.20
the owner's equity
d. Other
C. Dividend distribution -166,014,791.28 -166,014,791.28
a. Appropriation of surplus reserves
b. Dividend to owners (or shareholders)
c. Other -166,014,791.28 -166,014,791.28
4. Closing balance of current period 922,304,396.00 864,552,493.69 70,688,750.00 1,452,339.23 272,882,920.19 1,733,009,782.66 3,723,513,181.77
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
III.Basic Information of the Company
1. Overview of the Company
Approved by the People's Government of Liaoning Province, Liaoning Wellhope Agri-Tech
Joint Stock Co., Ltd. (hereinafter referred to as the Company) is a limited liability company
founded by 23 natural persons, including Jin Weidong, Ding Yunfeng, etc., which was
registered in Liaoning Province Administrative Bureau of Industry and Commerce on
March 27th, 2003. The head office of the Company locates Shenyang, currently it holds
the business license with the number of 9121000074712989XU and the registered capital
of RMB 922.06 million, registered address (headquarters address): No. 169, Huishan
Street, Shenbei New District, Shenyang, Liaoning Province. Jin Weidong is the legal
representative.
The Company's business scope covers feed and feed raw material trade, broiler
integration, hog raising, etc. The parent company covers feed and feed additives
processing, marketing; grain purchase (self-use); sales of feed raw materials; poultry and
livestock raising, seawater and freshwater aquaculture; agricultural and sideline products
processing; enterprise management service; supply chain management; information
services (internet information services only), ordinary road freight (the business activities
which need to be approved by the law, shall receive the approval of relevant authorities).
The financial statements have been approved to be disclosed by the 17th board meeting
of the 6th Session of Board of Directors on August 5, 2020.
2. Scope of the Consolidated Financial Statements
The scope of the Company's consolidated financial statements is determined on the basis
of control, all the controlled subsidiaries are included in the consolidated financial
statements.
The changes in the scope of consolidated financial statements are shown in the table
below:
A. The subsidiaries which are newly included in the consolidation scope in the reporting
period
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Company Way of acquiring
Yangling Wellhope Agriculture and Animal Husbandry Combined under different control
Luoyang Wellhope Agriculture and Animal Husbandry Investment
Chifeng Wellhope Fuxinyuan Food Investment
Shenyang Xiangmai E-commerce Investment
Hebei Taihang Wellhope Food Investment
Anyang Wellhope Agriculture and Animal Husbandry Investment
Hebei Taihang Wellhope Agri-Tech Investment
Dalian Hongtu Agri-Tech Investment
Shandong Heyuan Agri-Tech Investment
Tongxu Wellhope Agriculture and Animal Husbandry Investment
Anhui Wellhope Haoxiang Hog Breeding Investment
Gongzhuling Wellhope Hog Raising Investment
Lishu Wellhope Ecological Hog Raising Investment
IV.Basis of Preparing Financial Statements
1. Basis of preparing
The Company, on the basis of going concern operation, confirms and measures the
transactions and activities actually occurred in accordance with the Accounting Standards
for Business Enterprises -- Basic Standards and various specific accounting standards and
other relevant provisions, and prepares financial statements on this basis.
2. Going concern
The Company has the ability of going concern within at least 12 months since the end of
the reporting period, and there are no major issues affecting the ability of going concern.
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 not mentioned is subject to relevant accounting policies in 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
Company's financial position, operating results, changes in shareholders' equity, cash flow
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
and other relevant information during the reporting period.
2. Accounting period
The Financial Year of the Company starts from January 1 and ends on December 31 of the
Gregorian calendar.
3. Operating cycle
The Company takes a 12-month operating cycle.
4. Bookkeeping base currency
RMB
5. Changes of important accounting policies and estimates
Important accounting policies
Approval
Content and reason for the changes of accounting policies Note
procedure
On July 5, 2017, the Ministry of Finance issued the Accounting Standard
for Business Enterprises No. 14 -- Revenue (2017 Revision), which Board of
See below
required companies listed in China to implement the new revenue Director
guidelines from January 1, 2020.
Consolidated balance sheet
RMB
Item December 31, 2019 January 1, 2020 Adjustment
Current Assets:
Monetary capital 1,554,781,324.13 1,554,781,324.13
Trading financial assets 40,000,000.00 40,000,000.00
Derivative financial assets 3,912,584.30 3,912,584.30
Notes receivable 3,696,180.25 3,696,180.25
Accounts receivable 362,060,802.38 362,060,802.38
Prepayments 222,064,368.55 222,064,368.55
Other receivables 85,600,811.75 85,600,811.75
including: Interest receivable
Dividends receivable 25,353,722.11 25,353,722.11
Inventory 1,568,373,133.15 1,568,373,133.15
Other current assets 121,711,175.93 121,711,175.93
Total current assets 3,962,200,380.44 3,962,200,380.44
Non-current assets:
Long-term equity investment 2,070,047,882.51 2,070,047,882.51
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Other equity instruments
5,760,839.23 5,760,839.23
investment
Fixed assets 2,023,113,939.02 2,023,113,939.02
Construction in progress 240,012,874.86 240,012,874.86
Biological assets 94,826,312.88 94,826,312.88
Intangible assets 245,564,167.39 245,564,167.39
Goodwill 290,425.67 290,425.67
Long-term prepaid expenses 134,504,217.80 134,504,217.80
Deferred income tax assets 35,987,736.49 35,987,736.49
Other non-current assets 337,463,267.56 337,463,267.56
Total non-current assets 5,187,571,663.41 5,187,571,663.41
Total Assets 9,149,772,043.85 9,149,772,043.85
Current liabilities:
Short-term borrowings 1,050,878,205.81 1,050,878,205.81
Accounts payable 659,216,483.84 659,216,483.84
Advance receipt 209,529,248.68 0 -209,529,248.68
Contract liabilities 0 209,529,248.68 209,529,248.68
Payroll 62,549,364.12 62,549,364.12
Taxes and surcharges payable 37,680,953.84 37,680,953.84
Other payables 342,239,361.28 342,239,361.28
including: Interest payable 1,528,201.39 1,528,201.39
Dividends payable 1,434,027.14 1,434,027.14
Non-current liabilities due within
70,593,717.62 70,593,717.62
one year
Total current liabilities 2,432,687,335.19 2,432,687,335.19
Non-current Liabilities:
Long-term borrowings 174,330,000.00 174,330,000.00
Long-term payable 11,025,000.09 11,025,000.09
Deferred income 31,841,250.00 31,841,250.00
Deferred income tax liabilities 396,995.58 396,995.58
Total Non-current liabilities 217,593,245.67 217,593,245.67
Total Liabilities 2,650,280,580.86 2,650,280,580.86
Owners' equity
(or shareholders' equity):
Paid-up capital (or share capital) 922,304,396.00 922,304,396.00
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Capital reserves 882,723,066.29 882,723,066.29
deduct: Treasury stock 70,688,750.00 70,688,750.00
Other comprehensive income 6,122,835.30 6,122,835.30
Surplus reserves 352,059,456.90 352,059,456.90
Undistributed profits 3,605,618,553.05 3,605,618,553.05
Total Equity attributable to the
5,698,139,557.54 5,698,139,557.54
owners of parent company
Non-controlling interests 801,351,905.45 801,351,905.45
Total owners' equity
6,499,491,462.99 6,499,491,462.99
(or shareholders' equity)
Total liabilities and owners' equity
9,149,772,043.85 9,149,772,043.85
(or shareholders' equity)
Consolidated balance sheet of parent company
RMB
Item December 31, 2019 January 1, 2020 Adjustment
Current Assets:
Monetary capital 1,039,575,222.99 1,039,575,222.99
Trading financial assets 40,000,000.00 40,000,000.00
Derivative financial assets 2,285,934.30 2,285,934.30
Accounts receivable 13,631,690.45 13,631,690.45
Prepayments 7,560,408.95 7,560,408.95
Other receivables 1,020,785,676.46 1,020,785,676.46
including: Interest receivable
Dividends receivable 33,977,209.35 33,977,209.35
Inventory 49,839,754.57 49,839,754.57
Total current assets 2,173,678,687.72 2,173,678,687.72
Non-current assets:
Long-term equity investment 4,117,315,830.10 4,117,315,830.10
Other equity instruments
5,539,369.92 5,539,369.92
investment
Fixed assets 132,106,337.38 132,106,337.38
Construction in progress 5,163,075.76 5,163,075.76
Intangible assets 15,425,425.33 15,425,425.33
Long-term prepaid expenses 797,929.30 797,929.30
Deferred income tax assets 10,699,738.59 10,699,738.59
88 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Total non-current assets 4,287,047,706.38 4,287,047,706.38
Total Assets 6,460,726,394.10 6,460,726,394.10
Current liabilities:
Short-term borrowings 770,000,000.00 770,000,000.00
Accounts payable 34,960,859.00 34,960,859.00
Advance receipt 5,019,752.33 -5,019,752.33
Contract liabilities 5,019,752.33 5,019,752.33
Payroll 4,611,910.56 4,611,910.56
Taxes and surcharges payable 4,624,045.02 4,624,045.02
Other payables 1,109,464,926.75 1,109,464,926.75
including: Interest payable 1,261,159.72 1,261,159.72
Dividends payable
Non-current liabilities due within
52,000,000.00 52,000,000.00
one year
Total current liabilities 1,980,681,493.66 1,980,681,493.66
Non-current Liabilities:
Long-term borrowings 174,000,000.00 174,000,000.00
Deferred income 21,520,000.00 21,520,000.00
Deferred income tax liabilities 8,972.25 8,972.25
Total Non-current liabilities 195,528,972.25 195,528,972.25
Total Liabilities 2,176,210,465.91 2,176,210,465.91
Owners' equity
(or shareholders' equity):
Paid-up capital (or share capital) 922,304,396.00 922,304,396.00
Capital reserves 875,861,339.55 875,861,339.55
deduct: Treasury stock 70,688,750.00 70,688,750.00
Other comprehensive income 5,621,991.32 5,621,991.32
Surplus reserves 352,059,456.90 352,059,456.90
Undistributed profits 2,199,357,494.42 2,199,357,494.42
Total owners' equity
4,284,515,928.19 4,284,515,928.19
(or shareholders' equity)
Total liabilities and owners' equity
6,460,726,394.10 6,460,726,394.10
(or shareholders' equity)
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
VI.Tax
1. Categories of taxes and tax rate
Categories Taxation basis Tax rate
Output VAT--deductable 1%,3%,6%,9%,10%,11%,13% (VAT on
Value-added tax
input VAT sales)
Urban maintenance and
Turnover tax payable 1%,5%,7%
construction tax
Corporate income tax Income tax payable 15%,20%,25%
Extra charges of education
Turnover tax payable 3%
funds
Extra charges of local
Turnover tax payable 2%
education funds
VII.Notes to the Items of Consolidated Financial Statements
1. Monetary capital
RMB
Item Closing balance Opening balance
Cash on hand 1,578,403.58 693,912.75
Cash at bank 1,608,286,328.48 1,507,696,568.93
Other monetary capital 12,326,484.47 46,390,842.45
Total 1,622,191,216.53 1,554,781,324.13
including: total amount of funds
2,912,302.09 719,833.99
deposited abroad
Other explanation:
Pledged deposits of letter of credit included in other monetary capital was RMB 1,141.97,
futures margin was RMB 12,325,342.50 in the end of the period.
2. Trading financial assets
RMB
Item Closing balance Opening balance
Measured at fair value and whose changes are booked
100,000,000.00 40,000,000.00
into current profits and losses
Wealth management products 100,000,000.00 40,000,000.00
Total 100,000,000.00 40,000,000.00
Other explanation:
On May 9, 2020, the Company bought the structural deposit of Shenyang Heping Branch of
Shanghai Pudong Development Bank with a principal of MTB 50 million, which will be due
on August 9, 2020 with an expected annualized return rate of 3.45%. On May 11, 2020, the
Company bought the structural deposit of Shenyang Shenbei New District Branch of
Shengjing Bank with a principal of RMB 50 million, which will be due on August 11, 2020
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
with an expected annualized yield of 3.70%.
3. Derivative financial assets
RMB
Item Closing balance Opening balance
Futures 9,100,936.30 3,912,584.30
Total 9,100,936.30 3,912,584.30
4. Notes receivable RMB
Item Closing balance Opening balance
Bank's acceptance bill 2,095,361.50 3,696,180.25
Commercial acceptance bill 110,600.00
Total 2,205,961.50 3,696,180.25
5. Accounts receivable
A. Categorized by aging
RMB
Aging Closing book balance
Within 1 year 544,360,705.93
1-2 years 46,602,913.58
2-3 years 28,502,809.76
Over 3 years 88,368,393.12
Total 707,834,822.39
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
B. Categorized by bad debt accrual method
RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category
Accruing Book value Accruing Book value
Amount Percentage % Amount Amount Percentage % Amount
percentage % percentage %
Accruing
bad debt
38,203,607.52 5.40 36,437,855.70 95.38 1,765,751.82 38,365,146.19 8.12 35,941,019.04 93.68 2,424,127.15
provision
individually
Accruing
bad debt
669,631,214.87 94.60 95,217,437.30 14.24 574,413,777.57 434,053,298.76 91.88 74,416,623.53 17.14 359,636,675.23
provision by
grouping
Aging 669,631,214.87 94.60 95,217,437.30 14.24 574,413,777.57 434,053,298.76 91.88 74,416,623.53 17.14 359,636,675.23
Total 707,834,822.39 / 131,655,293.00 / 576,179,529.39 472,418,444.95 / 110,357,642.57 / 362,060,802.38
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Accruing bad debt provision individually
RMB
Closing balance
Name Accruing
Book balance Bad debt provision Reason
percentage %
Expected to be
Customer 1 4,734,285.00 4,734,285.00 100.00
uncollectable
Expected to be
Customer 2 655,702.49 655,702.49 100.00
uncollectable
Expected to be
Customer 3 807,150.00 807,150.00 100.00
uncollectable
Expected to be
Customer 4 691,950.00 691,950.00 100.00
uncollectable
Expected to be
Customer 5 434,825.00 434,825.00 100.00
uncollectable
Expected to be
Customer 6 337,150.00 337,150.00 100.00
uncollectable
Expected to be
Customer 7 219,425.00 219,425.00 100.00
uncollectable
Expected to be
Customer 8 189,425.00 189,425.00 100.00
uncollectable
Expected to be
Customer 9 157,125.00 157,125.00 100.00
uncollectable
Expected to be
Customer 10 90,783.00 90,783.00 100.00
uncollectable
Expected to be
Customer 11 106,384.00 106,384.00 100.00
uncollectable
Expected to be
Customer 12 642,738.60 642,738.60 100.00
uncollectable
Expected to be
Customer 13 56,000.00 56,000.00 100.00
uncollectable
Expected to be
Customer 14 109,700.00 109,700.00 100.00
uncollectable
Expected to be
Customer 15 256,166.38 256,166.38 100.00
uncollectable
Expected to be
Customer 16 927,022.22 927,022.22 100.00
uncollectable
Accrued according to
Customer 17 2,942,919.70 1,177,167.88 40.00
expected loss
Expected to be
Customer 18 23,998,355.83 23,998,355.83 100.00
uncollectable
Expected to be
Customer 19 183,899.57 183,899.57 100.00
uncollectable
Expected to be
Customer 20 458,366.00 458,366.00 100.00
uncollectable
Expected to be
Customer 21 52,102.80 52,102.80 100.00
uncollectable
Expected to be
Customer 22 23,220.00 23,220.00 100.00
uncollectable
Expected to be
Customer 23 54,180.60 54,180.60 100.00
uncollectable
Expected to be
Customer 24 62,744.21 62,744.21 100.00
uncollectable
Expected to be
Customer 25 11,987.12 11,987.12 100.00
uncollectable
Total 38,203,607.52 36,437,855.70 95.38 /
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Accruing bad debt provision according to aging
RMB
Closing balance
Aging
Account receivable Bad debt provision Accruing percentage %
Within 1 year 544,360,705.93 27,225,484.73 5.00
1-2 years 46,602,913.58 4,660,291.35 10.00
2-3 years 25,559,890.06 10,223,956.02 40.00
Over 3 years 53,107,705.30 53,107,705.20 100.00
Total 669,631,214.87 95,217,437.30 /
C. Bad debt provision
RMB
Changes in current period
Opening
Category Charge off or Closing balance
balance Accruing Other change
write-off
Accounts
110,357,642.57 22,313,507.73 1,015,857.30 131,655,293.00
receivable
Total 110,357,642.57 22,313,507.73 1,015,857.30 131,655,293.00
D. The actual write-off of accounts receivable in current period
RMB
Item Write-off amount
Actual write-off of accounts receivable 1,015,857.30
Other important write-off of accounts receivable
RMB
Write-off Whether generated by
Name Nature Reason
amount related party transactions
Payment for Uncollectable after
Customer 1 360,000.00 No
products prosecuting
Total / 360,000.00 / /
E. Top 5 accounts receivable
RMB
Percentage of the closing balance of total
Debtor Closing balance Bad debt provision
accounts receivable %
1 35,500,811.17 5.02 1,775,040.56
2 24,735,281.28 3.49 1,236,764.06
3 23,998,355.83 3.39 23,998,355.83
4 12,700,780.87 1.79 635,039.04
5 8,990,205.35 1.27 449,510.27
Total 105,925,434.50 14.96 28,094,709.76
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
6. Prepayments
A. Presenting by aging
RMB
Closing balance Opening balance
Aging
Amount Percentage % Amount Percentage %
Within 1 year 261,927,528.27 99.23 217,146,116.15 97.79
Over 1 year 2,029,358.01 0.77 4,918,252.40 2.21
Total 263,956,886.28 100.00 222,064,368.55 100.00
B. Top 5 prepayments
Percentage of the closing balance
Company Closing balance
of total prepayments %
1 21,023,227.59 7.96
2 15,451,022.73 5.85
3 10,373,818.85 3.93
4 8,885,020.46 3.37
5 8,663,040.81 3.28
Total 64,396,130.44 24.40
7. Other receivables
RMB
Item Closing balance Opening balance
Interest receivable
Dividends receivable 25,353,722.11 25,353,722.11
Other receivables 82,225,186.59 60,247,089.64
Total 107,578,908.70 85,600,811.75
A. Dividends receivable
RMB
Item Closing balance Opening balance
Dividends from long-term investment
25,353,722.11 25,353,722.11
under the equity method
Total 25,353,722.11 25,353,722.11
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
B. Other receivables
a. Presenting by aging
RMB
Aging Closing book balance
Within 1 year 48,205,868.22
1-2 years 2,176,107.20
2-3 years 57,453,830.50
Over 3 years 7,698,087.60
Total 115,533,893.52
b. Presenting by nature
RMB
Nature Closing book balance Opening book balance
General operating receivables 66,991,402.22 48,549,112.40
Deposit and security 19,551,743.55 14,096,016.42
Export rebates receivable 518,947.75 37,833.46
Receivable from disposal of investment 28,471,800.00 28,471,800.00
Total 115,533,893.52 91,154,762.28
c. Accruing bad debt provision
RMB
First stage Second stage Third stage
Expected credit loss
Bad debt Expected credit loss
Expected credit for the entire Total
provision for the entire
losses over the next duration (credit
duration (no credit
12 months impairment
impairment)
occurred)
Balance on
January 1, 26,950,938.36 3,956,734.28 30,907,672.64
2020
Accruing in
the reporting 1,861,806.20 1,861,806.20
period
Reversing
back in the
reporting
period
Other change 539,228.09 539,228.09
Balance on
28,812,744.56 4,495,962.37 33,308,706.93
June 30, 2020
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
d. Bad debt provision
RMB
Changes in current period
Opening Collected Charge off Closing
Category Other
balance Accruing or or write-off balance
change
reversed
Other
30,907,672.64 1,861,806.20 539,228.09 33,308,706.93
receivables
total 30,907,672.64 1,861,806.20 539,228.09 33,308,706.93
e. Top 5 other receivables
RMB
Percentage of
Closing balance of
closing balance
Company Nature Closing balance Aging bad debt
of total other
provision
receivables %
Receivables
arising from
1 28,471,800.00 2-3 years 24.64 11,388,720.00
disposal of
investment
2 Temporary debit 27,611,673.00 2-3 years 23.90 11,044,669.20
Within 1
3 Security deposit 4,400,000.00 3.81 220,000.00
year
Within 1
4 Security deposit 3,900,000.00 3.38 195,000.00
year
Within 1
5 Commercial LC 3,426,860.90 2.97 171,343.05
year
Total / 67,810,333.90 / 58.70 23,019,732.25
8. Inventory
A. Category of inventory
RMB
Closing balance Opening balance
Item Falling price Falling price
Book balance Book value Book balance Book value
reserve reserve
Raw material 683,645,657.84 2,774,564.29 680,811,727.92 651,999,952.04 2,852,699.42 649,147,252.62
Product in
44,176,237.73 653,313.59 43,342,580.48 55,837,226.60 653,313.59 55,183,913.01
process
Finished
585,184,153.78 6,391,166.19 579,033,776.88 585,118,896.60 2,650,729.76 582,468,166.84
product
Consumptive
biological 427,885,766.09 26,054,133.72 401,831,632.37 274,774,516.57 26,670,559.74 248,103,956.83
assets
Low priced
and easily 14,818,723.46 14,817,643.46 13,182,022.60 13,182,022.60
worn articles
Wrappage 8,868,837.53 8,868,837.53 15,557,821.25 15,557,821.25
Engineering
6,150,621.28 6,150,621.28 4,730,000.00 4,730,000.00
construction
Total 1,770,729,997.71 35,873,177.79 1,734,856,819.92 1,601,200,435.66 32,827,302.51 1,568,373,133.15
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
B. Falling price reserves
RMB
Increased amount Reduced amount
Opening Closing
Item Reversing back
balance Accruing Other Other balance
or charging off
Raw material 2,852,699.42 78,135.13 2,774,564.29
Product in process 653,313.59 653,313.59
Finished product 2,650,729.76 11,612,155.42 7,871,718.99 6,391,166.19
Consumptive
26,670,559.74 616,426.02 26,054,133.72
biological assets
Total 32,827,302.51 11,612,155.42 8,566,280.14 35,873,177.79
9. Other current assets
RMB
Item Closing balance Opening balance
Available for deducting VAT and
105,151,422.67 121,711,175.93
prepaid tax
total 105,151,422.67 121,711,175.93
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
10. Long-term equity investment
RMB
Changes in the current period
Gains or losses on Adjustment of Closing balance
Investee Opening balance Additional Decreased investments other Dividends or Closing balance of impairment
investment investment recognized under comprehensive profits declared provision
the equity method income
Unphung Joint
4,167,616.44 4,167,616.44
Venture Company
Nepal Wellhope
7,501,575.10 7,501,575.10
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
Qingdao Shenfeng 13,573,648.97 748,458.85 14,322,107.82
Anshan Jiuguhe Food 152,438,428.77 40,248,068.41 33,242,400.00 159,444,097.18
Tai’an Jiuguhe
111,292,888.94 -24,036,930.68 87,255,958.26
Agriculture
Linghai Jiuguhe Feed 62,403,210.81 -8,542,203.13 53,861,007.68
Huludao Jiuguhe Food 70,721,671.34 17,004,977.98 13,300,000.00 74,426,649.32
Dandong Wellhope
52,614,814.23 10,083,391.76 2,000,000.00 60,698,205.99
Chengsan Food
Dandong Wellhope
112,253,275.58 -293,948.88 2,000,000.00 109,959,326.70
Chengsan Agri-Tech
Haicheng New
12,850,037.83 1,375,229.55 1,470,000.00 12,755,267.38
Hongzunda Agri-Tech
Beipiao Hongfa Food 442,144,638.08 46,277,265.92 488,421,904.00
Beijing Dahong
20,087,982.12 456,127.14 20,544,109.26
Hengfeng
Tai'an Jiufeng
5,951,804.50 182,624.00 -1,153,694.01 4,980,734.49
Agri-Tech
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Schipper(Beijing) 1,270,877.77 212,349.05 1,483,226.82
Shenyang Wenjie
12,442,904.99 141,560.82 12,584,465.81
Bio-Tech
Huludao Jiuguhe Feed 42,015,223.35 -10,077,547.46 13,300,000.00 18,637,675.89
Jinzhou Jiufeng Food 48,476,492.49 19,329,815.40 67,806,307.89
Zhangjiakou Jiahe
Agriculture and 68,145,308.99 32,666,799.59 100,812,108.58
Animal Husbandry
Tai'an Fengjiu
37,837,537.89 -476,164.49 37,361,373.40
Agri-Tech
Anshan Fengsheng
30,430,304.76 13,159,004.46 43,589,309.22
Food
Dalian Chengsan
353,954,231.89 6,101,236.52 360,055,468.41
Animal Husbandry
Tailai Jiahe Agriculture
27,134,553.62 17,849,560.97 44,984,114.59
and Animal Husbandry
Gongzhuling Corn
Purchasing and 61,494,603.43 -1,526,619.80 59,967,983.63
Storing
Lankao Skyland Duck 49,841,895.84 -6,112,003.85 43,729,891.99
Hainan Nongken
Wenfeng Wenchang 1,071,542.40 4,900,000.00 -165,429.32 5,806,113.08
Chicken
Dunhua Wellhope
4,178,671.25 385,403.69 4,564,074.94
Agri-Tech
Dunhua Fengda
Agriculture and 2,986,597.14 4,994,971.77 7,981,568.91
Animal Husbandry
PT KARKA NUTRI
38,998,739.72 647,315.58 -57,328.83 39,588,726.47
INDUSTRI.
GOLDEN HARVESTA
104,931,225.82 1,680,750.70 2,945,569.11 109,557,545.63
INC.
Guangrong Xinchuang 47,617,462.51 946,503.02 -623,081.20 47,940,884.33
Shenyang
4,060,534.77 533,672.62 4,594,207.39
Zhongwenjie Bio-Tech
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Shulan Fengtai Organic
1,500,000.00 1,500,000.00
Fertilizer
Weifang Wellhope
5,337,855.68 163,974.97 5,501,830.65
Xinhesheng Feed
Liaoning Mubang
Animal Husbandry
1,791,476.38 2,626,742.47 4,418,218.85
Equipment
Manufacturing
Anshan Yufeng Feed -193,154.81 -314,363.36 -507,518.17
Dalian Wellhope Fish
5,724,448.41 704,167.72 6,428,616.13
Meal
Liaoning Petmate
5,576,080.92 -289,321.86 5,286,759.06
Bio-Tech
Guangzhou Yikun
108,257.73 1,189,819.53 1,298,077.26
Trading
Jilin Hengfeng Animal
1,832,880.70 456,443.00 2,289,323.70
Health Products
Shenyang Wanlitian
Agriculture and 2,247,702.24 610,988.76 2,858,691.00
Animal Husbandry
Daqing Supply and
Marketing Wellhope 3,527,190.48 508,337.18 4,035,527.66
Agri-Tech
Heilongjiang Zhongyi
Pasture Information 442,305.46 -171,896.45 270,409.01
Technology Service
Indonesia Max
1,460,475.96 1,460,475.96
Livestock Technology
Dalian Sida Food 35,802,062.02 5,328,523.40 41,130,585.42
Shandong Fengkang
25,000,000.00 -1,914,873.80 23,085,126.20
Food
Dunhua Fengda
6,000,000.00 -56,689.40 5,943,310.60
Breeding Broiler
Subtotal 2,058,378,690.97 36,082,624.00 171,299,774.34 2,265,159.08 65,312,400.00 2,202,713,848.39
Total 2,087,947,882.51 36,082,624.00 171,299,774.34 2,265,159.08 65,312,400.00 2,232,283,039.93 17,900,000.00
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
11. Other equity instruments Investment
A. Other equity instruments Investment
RMB
Item Closing balance Opening balance
China-Russia Friendship Association
10,000.00 10,000.00
of Liaoning Province
Hengshui Hejia Agriculture and
1,454,281.94 1,454,281.94
Animal Husbandry
Xi'an Micro Monkey E-commerce 175,087.98
Jiayou Agriculture and Animal
900,000.00 900,000.00
Husbandry in Xinji City
Jiahe Agriculture and Animal
3,020,978.16 1,500,000.00
Husbandry in Shenze County
Dalian Xuelong Heniu Import and
7,266,447.34 1,500,000.00
Export
Henan Shanghui Feed Development 127,230.32 127,230.32
Shenyang Bononveit Animal Health 138,167.76 61,696.77
Beijing Haobang Swine Artificial
32,542.22 32,542.22
Insemination Service
Total 12,949,647.74 5,760,839.23
B. Non-transactional equity instrument investment
RMB
Dividend
income
Cumulative Cumulative
Item recognized in
gains losses
the current
period
China-Russia Friendship Association of Liaoning
Province
Hengshui Hejia Agriculture and Animal Husbandry 145,718.06
Xi'an Micro Monkey E-commerce 340,000.00
Jiayou Agriculture and Animal Husbandry in Xinji City
Jiahe Agriculture and Animal Husbandry in Shenze
1,520,978.16
County
Dalian Xuelong Heniu Import and Export 233,552.66
Henan Shanghui Feed Development 372,769.68
Shenyang Bononveit Animal Health 58,167.76
Beijing Haobang Swine Artificial Insemination Service 67,457.78
Total 1,579,145.92 1,159,498.18
12. Fixed assets
RMB
Item Closing balance Opening balance
Fixed assets 2,269,553,170.07 2,023,113,939.02
Disposal of fixed assets
Total 2,269,553,170.07 2,023,113,939.02
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
A. Circumstance of fixed assets
RMB
Buildings and Machinery Transportation Other
Item Total
structures equipment vehicle equipment
1. Original value
A. Opening balance 1,717,146,763.14 1,231,747,402.79 107,927,235.19 73,745,481.56 3,130,566,882.68
B. Increased
203,046,790.27 199,349,729.48 10,220,858.32 7,267,408.85 419,884,786.92
amount
a. Purchased 130,763,904.52 135,368,662.39 10,011,926.97 6,616,038.95 282,760,532.83
b. Construction in
progress transferred 34,213,999.67 44,851,669.65 53,097.35 276,169.00 79,394,935.67
in
c. Increased by
business 38,068,886.08 19,129,397.44 155,834.00 375,200.90 57,729,318.42
combination
C. Decreased
12,802,100.85 2,190,199.48 2,086,024.44 201,072.90 17,279,397.67
amount
a. Disposed or
866,926.85 2,231,935.66 2,067,524.44 201,072.90 5,367,459.85
scrapped
b. Other 11,935,174.00 -41,736.18 18,500.00 11,911,937.82
D. Closing balance 1,907,391,452.56 1,428,906,932.79 116,062,069.07 80,811,817.51 3,533,172,271.93
2. Accumulated
depreciation
A. Opening balance 370,740,456.95 501,199,843.43 80,296,331.86 51,738,432.70 1,003,975,064.94
B. Increased
62,385,081.12 86,899,462.05 6,011,863.30 5,360,944.51 160,657,350.98
amount
a. Accruing 49,894,857.38 74,592,683.24 5,906,675.29 4,996,142.13 135,390,358.04
b. Other 12,490,223.74 12,306,778.81 105,188.01 364,802.38 25,266,992.94
C. Decreased
1,960,023.20 550,646.52 1,805,101.86 168,096.25 4,483,867.83
amount
a. Disposed or
1,885,298.88 550,646.52 1,795,381.76 168,096.25 4,399,423.41
scrapped
b. Other 74,724.32 9,720.10 84,444.42
D. Closing balance 431,165,514.87 587,548,658.96 84,503,093.30 56,931,280.96 1,160,148,548.09
3. Impairment
provision
A. Opening balance 59,961,322.75 42,904,539.70 204,388.73 407,627.54 103,477,878.72
B. Increased
amount
a. Accruing
C. Decreased
6,093.60 1,218.00 13.35 7,324.95
amount
a. Disposed or
6,093.60 1,218.00 13.35 7,324.95
scrapped
D. Closing balance 59,961,322.75 42,898,446.10 203,170.73 407,614.19 103,470,553.77
4. Book value
A. Closing book
1,416,264,614.94 798,459,827.73 31,355,805.04 23,472,922.36 2,269,553,170.07
value
B. Opening book
1,286,444,983.44 687,643,019.66 27,426,514.60 21,599,421.32 2,023,113,939.02
value
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
B. Fixed assets rented through finance lease
RMB
Accumulated
Item Original book value Opening balance
depreciation
Manufacture equipment 92,352,635.00 8,838,713.00 83,513,922.00
C. Fixed assets leased out through operating lease
RMB
Item Closing balance of book value
Buildings and structures 18,221,668.31
13. Construction in progress
RMB
Item Closing balance Opening balance
Construction in progress 353,897,369.68 240,012,874.86
Total 353,897,369.68 240,012,874.86
A. Circumstance of construction in progress
RMB
Closing balance Opening balance
Item
Book balance Book value Book balance Book value
Jilin Wellhope- sewage
treatment and organic 5,566,842.71 5,566,842.71 4,607,316.99 4,607,316.99
fertilizer
Dalian Zhongjia
2,267,944.57 2,267,944.57 2,226,208.39 2,226,208.39
-workshop renovation
Shulan Fengtai-poultry
32,559,390.57 32,559,390.57 55,672,411.04 55,672,411.04
house
Fushun Agriculture and
Animal Husbandry-first 8,471,002.32 8,471,002.32 5,421,572.65 5,421,572.65
phase of Shangnian pig farm
Fushun Agriculture and
Animal Husbandry-Fushun 109,687,007.48 109,687,007.48 76,160,733.62 76,160,733.62
Guanshan pig farm
Puyang Wellhope-broiler
12,230.00 12,230.00 6,345,004.05 6,345,004.05
house
Shenyang Huakang-
1,936,318.45 1,936,318.45 8,929,925.91 8,929,925.91
workshop renovation
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Lankao Wellhope-premix
11,029,778.36 11,029,778.36 8,510,622.36 8,510,622.36
project
Hainan Wellhope-feed
production line with 200,000 37,787,565.37 37,787,565.37 13,326,858.52 13,326,858.52
tons per year
Pingyuan Food-second
3,329,853.44 3,329,853.44 1,723,490.95 1,723,490.95
production line
Huakang Xinxin Food-
185,891.50 185,891.50 3,660,000.00 3,660,000.00
refrigerated warehouse
Liaoning Wellhope-operation
3,447,131.26 3,447,131.26 2,319,079.26 2,319,079.26
center
Gansu Wellhope-bulk feed
2,132,421.08 2,132,421.08
workshop renovation
Anhui Wellhope-finished
products workshop 2,004,000.00 2,004,000.00 2,004,000.00 2,004,000.00
construction
Shenyang Wellhope-creep
1,119,600.00 1,119,600.00 1,119,600.00 1,119,600.00
feed production line
Daqing Wellhope-livestock
1,324,452.00 1,324,452.00
raising equipment
Liaoning Wellhope-office
2,768,656.50 2,768,656.50 2,518,656.50 2,518,656.50
building decoration
Dalian Heyuan-Dayao
43,947,768.53 43,947,768.53 28,067,787.50 28,067,787.50
hatching farm
Suizhong Renhe Fishery-fish
2,605,016.00 2,605,016.00
meal production line
Dalian Zhongjia-second
4,597,303.01 4,597,303.01
phase project construction
Dalian Zhongjia-workshop 632,004.94 632,004.94
Shandong Heyuan Food-
refrigeration and distribution 25,855,457.44 25,855,457.44
room
Changchun
Wellhope-apartment 31,509.43 31,509.43 31,509.43 31,509.43
building
Changchun
Wellhope-refrigeration 14,264.15 14,264.15
storage
Anhui Haoxiang-sow farm
3,230,000.00 3,230,000.00
equipment construction
Nongda
Wellhope-reconstructing 2,423,330.00 2,423,330.00
pelleting line
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Tai’an Wellhope-small
3,243,743.00 3,243,743.00
renovation projects
Lingyuan Wellhope-pig farm 8,909,715.82 8,909,715.82 2,119,531.03 2,119,531.03
Lingyuan
9,901,000.00 9,901,000.00
Wellhope-Lijiayingzi pig farm
Hebei Taihang-main
1,848,779.99 1,848,779.99
construction of workshop
Other constructions 24,484,264.84 24,484,264.84 11,791,693.58 11,791,693.58
Total 353,897,369.68 353,897,369.68 240,012,874.86 240,012,874.86
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B. Important constructions in progress
RMB
Percentage of
Amount accumulated Construction
Increased Other decreased Source of
Project Budget Opening balance transferred in fixed input progress
amount amount Closing balance funds
assets accounting %
for budget %
Jilin Wellhope- sewage
Raised
treatment and organic 6,000,000.00 4,607,316.99 959,525.72 5,566,842.71 92.78 95.00%
funds
fertilizer
Dalian Zhongjia
40,000,000.00 2,226,208.39 41,736.18 2,267,944.57 96.46 97.00% Own funds
-workshop
Shulan Fengtai-poultry
67,256,185.00 55,672,411.04 3,706,882.86 26,819,903.33 32,559,390.57 88.00 75.00% Own funds
house
Fushun Agriculture and
Raised
Animal Husbandry-first 160,000,000.00 5,421,572.65 6,156,706.77 3,107,277.10 8,471,002.32 108.57 100.00%
funds
phase of Shangnian pig farm
Fushun Agriculture and
Raised
Animal Husbandry-Fushun 140,300,000.00 76,160,733.62 33,526,273.86 109,687,007.48 78.18 80.00%
funds
Guanshan pig farm
Puyang Wellhope-broiler
28,762,478.67 6,345,004.05 126,792.00 6,459,566.05 12,230.00 99.23 99.00% Own funds
house
Shenyang Huakang-
12,741,491.00 8,929,925.91 5,071,392.03 12,064,999.49 1,936,318.45 109.89 94.00% Own funds
workshop renovation
Lankao Wellhope-premix
23,800,000.00 8,510,622.36 2,519,156.00 11,029,778.36 46.34 70.00% Own funds
project
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Hainan Wellhope-feed
production line with 200,000 60,000,000.00 13,326,858.52 24,460,706.85 37,787,565.37 62.98 80.00% Own funds
tons per year
Pingyuan Food-second
4,000,000.00 1,723,490.95 1,606,362.49 3,329,853.44 83.25 85.00% Own funds
production line
Huakang Xinxin Food-
4,300,000.00 3,660,000.00 500,000.00 3,913,343.05 60,765.45 185,891.50 100.00 96.00% Own funds
refrigerated warehouse
Liaoning
6,000,000.00 2,319,079.26 1,128,052.00 3,447,131.26 56.00 60.00% Own funds
Wellhope-operation center
Gansu Wellhope-bulk feed
3,000,000.00 2,132,421.08 527,600.00 2,660,021.08 88.67 100.00% Own funds
workshop renovation
Anhui Wellhope-finished
products workshop 2,800,000.00 2,004,000.00 2,004,000.00 71.57 72.00% Own funds
construction
Shenyang Wellhope-creep
1,399,500.00 1,119,600.00 1,119,600.00 80.00 80.00% Own funds
feed production line
Daqing Wellhope-livestock
1,620,000.00 1,324,452.00 229,500.00 1,553,952.00 100.00 100.00% Own funds
raising equipment
Liaoning Wellhope-office
3,100,000.00 2,518,656.50 250,000.00 2,768,656.50 89.31 90.00% Own funds
building decoration
Dalian Heyuan-Dayao
60,000,000.00 28,067,787.50 27,409,981.03 11,530,000.00 43,947,768.53 70.00 80.00% Own funds
hatching farm
Suizhong Renhe Fishery-fish
2,700,000.00 2,605,016.00 2,605,016.00 96.00 95.00% Own funds
meal production line
Dalian Zhongjia-second
200,000,000.00 4,597,303.01 4,597,303.01 2.30 10.00% Own funds
phase project construction
Dalian Zhongjia-workshop 15,000,000.00 632,004.94 632,004.94 4.20 20.00% Own funds
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Shandong Heyuan Food-
refrigeration and 42,000,000.00 26,612,881.44 757,424.00 25,855,457.44 63.36 70.00% Own funds
distribution room
Changchun
Wellhope-apartment 5,200,000.00 31,509.43 31,509.43 0.61 Own funds
building
Changchun
Wellhope-refrigeration 9,000,000.00 14,264.15 14,264.15 0.16 Own funds
storage
Anhui Haoxiang-sow farm
3,250,000.00 3,230,000.00 3,230,000.00 99.38 99.00% Own funds
equipment construction
Nongda
Wellhope-reconstructing 3,000,000.00 2,423,330.00 2,423,330.00 80.78 80.00% Own funds
pelleting line
Tai’an Wellhope-small
4,000,000.00 3,768,690.00 524,947.00 3,243,743.00 94.22 95.00% Own funds
renovation projects
Lingyuan Wellhope- pig farm 20,000,000.00 2,119,531.03 6,790,184.79 8,909,715.82 45.00 50.00% Own funds
Lingyuan Raised
50,000,000.00 9,901,000.00 9,901,000.00 19.80 25.00%
Wellhope-Lijiayingzi pig farm funds
Hebei Taihang-main
50,000,000.00 1,848,779.99 1,848,779.99 26.00 30.00% Own funds
construction of workshop
Total 1,029,229,654.67 228,221,181.28 170,644,122.11 68,634,009.10 818,189.45 329,413,104.84 / / /
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
14. Biological asset
Productive biological assets using cost measurement model
RMB
Animal husbandry
Item Total
Breeder (broiler) Breeder (swine)
1. Original value
A. Opening balance 52,264,742.77 67,953,454.22 120,218,196.99
B. Increased amount 49,353,239.87 146,143,687.88 195,496,927.75
a. Externally purchased 12,625,800.00 18,689,931.63 31,315,731.63
b. Raised by own farm 36,727,439.87 127,453,756.25 164,181,196.12
C. Decreased amount 42,491,398.30 68,962,388.34 111,453,786.64
a. Disposed 42,491,398.30 68,962,388.34 111,453,786.64
D. Closing balance 59,126,584.34 145,134,753.76 204,261,338.10
2. Accumulated depreciation
A. Opening balance 22,090,264.89 3,301,619.22 25,391,884.11
B. Increased amount 15,986,768.66 6,816,304.86 22,803,073.52
a. Accruing 15,986,768.66 6,816,304.86 22,803,073.52
C. Decreased amount 23,730,681.96 1,250,663.95 24,981,345.91
a. Disposed 23,730,681.96 1,250,663.95 24,981,345.91
D. Closing balance 14,346,351.59 8,867,260.13 23,213,611.72
3. Impairment provision
4. Book value
A. Closing book value 44,780,232.75 136,267,493.63 181,047,726.38
B. Opening book value 30,174,477.88 64,651,835.00 94,826,312.88
15. Intangible assets
RMB
Computer software
Item Land use rights Total
and other
1. Original value
A. Opening balance 283,885,270.01 12,795,928.14 296,681,198.15
B. Increased amount 23,489,314.73 114,116.81 23,603,431.54
a. Purchased 12,874,127.02 114,116.81 12,988,243.83
b. Increased by business
combination 10,615,187.71 10,615,187.71
C. Decreased amount
a. Disposed
b. Decreased by business
combination
D. Closing balance 307,374,584.74 12,910,044.95 320,284,629.69
2. Accumulated
amortization
A. Opening balance 45,817,866.76 5,299,164.00 51,117,030.76
B. Increased amount 5,172,504.75 722,468.85 5,894,973.60
a. Accruing 4,094,991.56 722,468.85 4,817,460.41
b. Increased by business
combination 1,077,513.19 1,077,513.19
C. Decreased amount
a. Disposed
b. Decreased by business
combination
110 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
D. Closing balance 50,990,371.51 6,021,632.85 57,012,004.36
3. Impairment provision
4. Book value
A. Closing book value 256,384,213.23 6,888,412.10 263,272,625.33
B. Opening book value 238,067,403.25 7,496,764.14 245,564,167.39
16. Goodwill
Original value of goodwill
RMB
Increased amount Decreased
Invested entity or amount
matters forming goodwill Opening balance Formed by Closing balance
business Disposal
combination
Dalian Zhongjia Food Co.,
Ltd. 290,425.67 290,425.67
Total 290,425.67 290,425.67
17. Long-term prepaid expenses
RMB
Item Opening balance Increased amount Amortized Closing balance
amount
Broiler cages 82,161,315.11 2,790,526.00 12,006,436.91 72,945,404.20
Land lease fee 30,526,112.57 11,839,355.85 4,479,187.83 37,886,280.59
Fixed assets
improvement 16,377,506.34 4,196,616.75 2,059,599.29 18,514,523.80
Other 5,439,283.78 5,684,341.00 3,208,236.05 7,915,388.73
Total 134,504,217.80 24,510,839.60 21,753,460.08 137,261,597.32
18. Deferred income tax assets/deferred income tax liabilities
a. Deferred income tax assets that are not offset
RMB
Closing balance Opening balance
Item Deductible Deductible Deferred
Deferred income
temporary temporary income tax
tax assets
difference difference assets
Provision for the
166,517,761.35 32,490,192.58 156,147,402.07 30,646,841.04
impairment of assets
Equity incentive expense 8,407,491.98 1,291,179.03 3,243,114.20 508,474.55
Changes in fair value 1,276,045.00 188,091.24 112,115.92 28,028.98
Unrealized profit of
19,048,556.19 4,435,882.97 23,895,127.90 4,804,391.92
internal transaction
Total 195,249,854.52 38,405,345.82 183,397,760.09 35,987,736.49
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
b. Deferred income tax liabilities that are not offset
RMB
Closing balance Opening balance
Taxable Taxable Deferred
Item Deferred income
temporary temporary income tax
tax liabilities
differences differences liabilities
Book value of asset
1,412,208.28 353,052.07 1,611,908.32 396,995.58
greater than the tax base
Total 1,412,208.28 353,052.07 1,611,908.32 396,995.58
c. Details of unrecognized deferred income tax asset
RMB
Item Closing balance Opening balance
Deductible temporary difference 43,738,446.96 51,189,855.72
Deductible losses 276,881,574.34 234,143,729.40
Total 320,620,021.30 285,333,585.12
d. The deductible losses of unrecognized deferred income tax assets that will be due in
the following years
RMB
Year Closing balance Opening balance Note
2020 32,419,997.44 26,306,707.29
2021 32,093,129.73 37,833,545.02
2022 47,622,896.40 38,752,564.40
2023 48,973,249.20 40,585,903.64
2024 75,245,555.11 77,825,369.67
2025 21,775,079.73
2026 611,959.34
2027 4,420,084.90 2,082,969.89
2028 8,255,571.42 6,715,140.33
2029 4,278,584.71 4,041,529.16
2030 1,185,466.36
Total 276,881,574.34 234,143,729.40
19. Other non-current assets
RMB
Closing balance Opening balance
Item
Book balance Book value Book balance Book value
Prepayments of
102,051,715.00 102,051,715.00 44,490,695.92 44,490,695.92
long-lived assets
Prepayments of fees to
333,064,114.08 333,064,114.08 277,650,038.27 277,650,038.27
contract farms
Prepayments of house
20,243,602.76 20,243,602.76 15,322,533.37 15,322,533.37
rent
Total 455,359,431.84 455,359,431.84 337,463,267.56 337,463,267.56
112 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
20. Short-term borrowing
RMB
Item Closing balance Opening balance
Guaranteed loan 126,926,364.65 109,638,205.81
Credit loan 1,096,462,458.88 941,240,000.00
Total 1,223,388,823.53 1,050,878,205.81
Explanation: The guaranteed loans were bank loans of subsidiaries in terms of Lingyuan
Wellhope, Liaoning Godaji E-commerce, Puyang Wellhope Food, Kaifeng Food and
Liaoning Expert Trading, which were guaranteed by the Company.
21. Accounts payable
RMB
Item Closing balance Opening balance
Accounts payable related to purchasing and expenses 743,649,377.04 613,009,029.34
Accounts payable related to long-lived assets 44,735,414.95 46,207,454.50
Total 788,384,791.99 659,216,483.84
22. Contract liability
RMB
Item Closing balance Opening balance
Sales proceeds 324,131,304.96 209,529,248.68
Total 324,131,304.96 209,529,248.68
23. Payroll
a. Payroll
RMB
Opening Increased Decreased Closing
Item
balance amount amount balance
1. Short-term benefits 61,001,277.97 324,661,345.87 328,444,438.03 57,218,185.81
2. Post-employeement benefits-
1,548,086.15 6,902,120.74 8,094,880.08 355,326.81
defined contribution plan
3. Termination benefits 124,580.05 124,580.05
4. Other benefits due within one
year
Total 62,549,364.12 331,688,046.66 336,663,898.16 57,573,512.62
b. Short-term benefits
RMB
Opening Increased Decreased
Item Closing balance
balance amount amount
1. Wages, bonuses,
59,658,147.63 286,870,724.12 291,907,928.94 54,620,942.81
allowances and subsidies
2. Staff benefits expenses 22,449,300.36 21,506,977.87 942,322.49
3. Social insurance charges 454,499.01 9,058,334.48 9,005,720.86 507,112.63
including: Medical 375,466.19 8,171,521.96 8,075,902.93 471,085.22
113 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
insurance premiums
Occupational
52,072.13 346,234.04 385,668.69 12,637.48
injury insurance premium
Birth insurance
26,960.69 540,578.48 544,149.24 23,389.93
premium
4. Housing provident fund 139,516.00 4,403,097.20 4,338,622.78 203,990.42
5. Employee labor union
dues, employee education 749,115.33 1,879,889.71 1,685,187.58 943,817.46
expense
6. Short-term paid
absences
7. Short-term profit
sharing plan
Total 61,001,277.97 324,661,345.87 328,444,438.03 57,218,185.81
c. Defined contribution plan
RMB
Opening Increased Decreased Closing
Item
balance amount amount balance
Basic endowment insurance 1,499,516.44 6,681,964.04 7,834,902.03 346,578.45
Unemployment insurance expense 48,569.71 220,156.70 259,978.05 8,748.36
Enterprise annuity
Total 1,548,086.15 6,902,120.74 8,094,880.08 355,326.81
24. Tax payable
RMB
Item Closing balance Opening balance
Value-added tax 1,505,188.31 1,351,995.42
Corporate income tax 51,416,303.18 32,731,646.44
Individual income tax 2,267,040.68 729,362.56
City maintenance and construction tax 105,778.15 109,286.49
Extra charges of education funds 68,326.62 74,513.94
House property tax 814,900.85 697,937.54
City and town land use tax 1,261,482.82 1,343,282.00
Stamp tax 354,685.67 462,741.13
Resource tax 117,698.60
Other 239,627.11 180,188.32
Total 58,151,031.99 37,680,953.84
25. Other payables
RMB
Item Closing balance Opening balance
Interest payable 1,347,819.06 1,528,201.39
Dividends payable 17,135,207.06 1,434,027.14
Other payables 352,260,720.51 339,277,132.75
Total 370,743,746.63 342,239,361.28
114 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
A. Interest payable
RMB
Item Closing balance Opening balance
Interests of long-term loan that are paid periodically
514,237.02 237,583.33
and repaid the principal due at maturity
Interest payable of short-term borrowing 833,582.04 1,290,618.06
Total 1,347,819.06 1,528,201.39
B. Dividends payable
RMB
Item Closing balance Opening balance
Common stock dividends 17,135,207.06 1,434,027.14
Total 17,135,207.06 1,434,027.14
C. Other payables
Other payables by nature
RMB
Item Closing balance Opening balance
Operating payables related to expenses
304,564,905.51 204,082,682.75
and transactions
Payables related to investment 2,000,000.00 64,505,700.00
Obligation of repurchasing non-restricted
45,695,815.00 70,688,750.00
stock
Total 352,260,720.51 339,277,132.75
26. Non-current liability due within 1 year
RMB
Item Closing balance Opening balance
Long-term borrowings due within 1 year 74,000,000.00 52,000,000.00
Long-term payables due within 1 year 19,200,042.05 18,593,717.62
Total 93,200,042.05 70,593,717.62
27. Long-term borrowing
RMB
Item Closing balance Opening balance
Credit loan 353,830,000.00 174,330,000.00
Total 353,830,000.00 174,330,000.00
List of long-term borrowing
RMB
Bank Due date Annual interest rate Closing balance
Shenyang Heping Branch of
Oct. 28, 2022 4.80% 72,000,000.00
Agricultural Bank of China
Shenyang Heping Branch of
Dec. 20, 2021 4.99% 14,000,000.00
Agricultural Bank of China
Shenyang Hunnan Branch of
Nov. 20, 2022 4.75% 50,000,000.00
China Construction Bank
Shenyang Lianhe Road
Branch of China Minsheng Jan. 17, 2023 4.75% 148,500,000.00
Bank
115 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Shenyang Lianhe Road
Branch of China Minsheng Mar. 23, 2023 4.75% 49,000,000.00
Bank
Chongqing Rural Commercial
Oct. 24, 2021 Interest-free 330,000.00
Bank
Linzhang Branch of Handan
Apr. 20, 2023 4.75% 10,000,000.00
Bank
Handan Bank Apr. 27, 2023 4.75% 10,000,000.00
Total 353,830,000.00
28. Long-term payable
RMB
Item Closing balance Opening balance
long-term payable 66,953,833.28 11,025,000.09
Total 66,953,833.28 11,025,000.09
A. Long-term payable by nature
RMB
Item Opening balance Closing balance
Financial lease outlay 66,953,833.28 11,025,000.09
Total 66,953,833.28 11,025,000.09
29. Deferred income
RMB
Opening Increased Decreased Closing
Item Reason
balance amount amount balance
Government grant 31,841,250.00 10,020,000.00 3,161,752.00 38,699,498.00
Total 31,841,250.00 10,020,000.00 3,161,752.00 38,699,498.00
Projects receiving government grants：
RMB
Amount Amount Related
Amount of
Opening included in included in Closing to assets/
Liability item newly increased
balance non-operati other income balance related to
grant
ng income income
2019 provincial
sic-tech major
2,180,000.00 3,220,000.00 1,350,000.00 4,050,000.00 Assets
special project
funds
Shenyang city
central
industrial
8,651,250.00 641,250.00 8,010,000.00 Assets
transformation
and upgrading
funds
2020 Central
Government’s
funds for
high-quality
8,100,000.00 2,700,000.00 405,000.00 10,395,000.00 Assets
development of
manufacturing
industry (green
manufacturing)
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Project funds
related to
4,310,000.00 215,502.00 4,094,498.00 Assets
benefit farming
policy
Lingyuan
Wellhope
50,000 tons of
2,700,000.00 150,000.00 2,550,000.00 Assets
organic
fertilizer
project
Lingyuan
Wellhope
100,000 tons of 3,500,000.00 250,000.00 3,250,000.00 Assets
ruminant feed
project
Lingyuan
Wellhope corn
2,400,000.00 150,000.00 2,250,000.00 Assets
purchasing and
storage barn
Lingyuan
Wellhope pig 4,100,000.00 4,100,000.00 Assets
farm
Total 31,841,250.00 10,020,000.00 550,000.00 2,611,752.00 38,699,498.00 /
30. Share capital
RMB
Changes(increase/decrease)
Opening balance Closing balance
Other Subtotal
Total shares 922,304,396.00 -244,500.00 -244,500.00 922,059,896.00
Explanation: According to the proposal of repurchasing and writing off part of locked
restricted shares approved by the Board, 244,500 shares were repurchased and written off
by the Company.
31. Capital reserve
RMB
Opening Increased Decreased
Item Closing balance
balance amount amount
Capital premium (share capital
853,610,605.56 853,610,605.56
premium)
Other capital reserves 29,112,460.73 711,477.68 29,823,938.41
Total 882,723,066.29 711,477.68 883,434,543.97
32. Treasury stock
RMB
Item Opening balance Increased amount Decreased amount Closing balance
Repurchase of
70,688,750.00 24,992,935.00 45,695,815.00
restricted stock
Total 70,688,750.00 24,992,935.00 45,695,815.00
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
33. Other comprehensive income
RMB
Amount in current period
Opening After-tax, After-tax,
Item attributable attributable to Closing balance
balance Pre-tax
to parent non-controlling
company interest
1. Other
comprehensive
income that -760,192.18 1,188,808.51 1,151,337.72 37,470.79 391,145.54
cannot be
reclassified into
gains or losses
Changes in the
fair value of
-760,192.18 1,188,808.51 1,151,337.72 37,470.79 391,145.54
other equity
instruments
2. Other
comprehensive
income that will 6,883,027.48 752,351.44 1,433,114.88 -680,763.44 8,316,142.36
be reclassified
into gains or
losses
including: other
comprehensive
income that can
be transferred in 5,932,621.40 2,265,159.08 2,265,159.08 8,197,780.48
gains or losses
under the equity
method
Translation
balance of
foreign currency 950,406.08 -1,512,807.64 -832,044.20 -680,763.44 118,361.88
financial
statements
Total other
comprehensive 6,122,835.30 1,941,159.95 2,584,452.60 -643,292.65 8,707,287.90
income
34. Surplus reserve
RMB
Item Opening balance Increased amount Dcreased amount Closing balance
Statutory surplus
352,059,456.90 352,059,456.90
reserve
Total 352,059,456.90 352,059,456.90
35. Undistributed profit
RMB
Item Jan.-Jun. 2020 Jan.-Jun. 2019
Undistributed profit at the end of prior period before
3,605,618,553.05 2,651,462,525.08
adjustment
Adjusting total undistributed profit at the beginning of
91,554.12
current period
118 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Undistributed profit at the beginning of current period
3,605,618,553.05 2,651,554,079.20
after adjustment
add: Net profit attributable to the owners of parent
606,015,736.01 1,199,347,355.96
company in current period
deduct: Extraction of statutory surplus reserve 79,268,090.83
Extraction of discretionary surplus reserve
Extraction of general risk provisions
Common stock dividends payable 202,809,167.12 166,014,791.28
Dividends of common stock transferred to share
capital
Undistributed profit at the end of current period 4,008,825,121.94 3,605,618,553.05
36. Operating revenue and cost
RMB
Jan.-Jun. 2020 Jan.-Jun. 2019
Item
Revenue Cost Revenue Cost
Principal
9,837,251,514.81 8,800,742,627.80 7,724,785,191.98 6,984,517,888.26
businesses
Other businesses 11,128,337.47 5,945,784.91 2,614,812.77 1,302,726.68
Total 9,848,379,852.28 8,806,688,412.71 7,727,400,004.75 6,985,820,614.94
37. Taxes and surtaxes
RMB
Item Jan.-Jun. 2020 Jan.-Jun. 2019
City maintenance and construction tax 491,979.35 546,650.44
Extra charges of education funds 354,066.13 391,249.47
Resources tax 219,195.48 232,741.90
House property tax 3,820,104.55 3,310,388.93
Land use tax 5,365,489.57 5,444,248.95
Vehicle and vessel use tax 29,187.49 61,315.46
Stamp tax 3,329,519.70 2,468,193.10
Other tax 211,052.91 243,939.09
Total 13,820,595.18 12,698,727.34
38. Sales expenses
RMB
Item Jan.-Jun. 2020 Jan.-Jun. 2019
Payroll 100,686,134.89 94,456,490.48
Travel expense 49,642,745.40 53,709,554.31
Transportation and handling expenses 36,866,924.68
Handling expenses 2,373,443.63
Business entertainment expenses 7,218,443.69 9,754,397.99
Business advertising expenses 16,289,097.01 12,600,876.75
Labor costs 8,155,988.35 7,946,172.09
Sales and service fees 3,699,097.44 2,327,406.82
Lease fee 4,868,178.14 3,495,494.43
Advertising expenses 478,345.34 259,264.00
119 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Office and communication fee 2,811,315.18 1,790,211.67
Vehicle costs 2,782,992.72 2,662,500.16
Exhibition expenses 256,885.00 573,200.00
Meeting expenses 1,533,498.19 1,793,004.34
Stock incentive expenses 1,607,223.03 3,837,843.75
Subtotal of other items 10,266,322.61 7,917,383.60
Total 212,669,710.62 239,990,725.07
39. Administration expense
RMB
Item Jan.-Jun. 2020 Jan.-Jun. 2019
Payroll 59,171,860.04 53,449,462.39
Depreciation 18,071,449.61 17,177,155.17
Office and communication fee 7,453,531.76 8,711,252.45
Travel expense 2,981,958.65 3,803,513.17
Repair charge 5,499,715.95 5,583,562.37
Lease fee 2,883,040.89 2,445,422.20
Heating fee 2,853,446.34 2,461,972.73
Vehicle costs 2,531,301.60 2,771,604.14
Amortization of intangible assets 4,109,442.11 3,309,384.57
Business entertainment expense 3,055,375.68 2,933,395.99
Water and electricity 2,328,956.48 1,996,702.31
Labor costs 7,360,317.40 4,241,165.89
Stock incentive expenses 3,197,302.35 6,498,748.75
Subtotal of other items 12,583,927.74 11,532,623.04
Total 134,081,626.60 126,915,965.17
40. R&D expenditure
RMB
Item Jan.-Jun. 2020 Jan.-Jun. 2019
Payroll 9,952,417.43 12,633,422.19
Design and testing fee 12,542,467.62 9,813,339.68
Cost of materials and appliances 5,359,577.21 1,389,033.03
Travel expense 725,181.16 1,478,480.57
Depreciation and amortization charge 1,467,979.79 1,947,348.78
Stock incentive expenses 457,955.51 1,462,706.47
Subtotal of other items 439,339.59 1,297,015.15
Total 30,944,918.31 30,021,345.87
41. Financial expense
RMB
Item Jan.-Jun. 2020 Jan.-Jun. 2019
Interest expenditure 37,905,838.10 40,211,708.70
deduct: Interest income -8,451,668.98 -2,641,228.16
add: Exchange loss (deduct income) 132,321.39 428,228.68
Service charge 1,477,985.62 1,482,551.47
Other 884.59 240,491.04
Total 31,065,360.72 39,721,751.73
120 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
42. Other income
RMB
Item Jan.-Jun. 2020 Jan.-Jun. 2019
Government grant 5,942,599.70 2,192,950.10
Total 5,942,599.70 2,192,950.10
Other explanation: Details are listed in “Government grants”
43. Income from investment
RMB
Item Jan.-Jun. 2020 Jan.-Jun. 2019
Income from long-term equity investment measured by the equity
171,299,774.34 186,195,941.85
method
Income from disposal of long-term equity investment 1,986,085.19
Income from disposal of financial assets that are measured at fair
-634,557.55 -314,995.89
value and the changes included in current gains or losses
Investment income from holding the trading financial asset 1,924,534.25
Dividend income from holding other equity instrument investment 100,000.00
Income from disposal of trading financial asset
Income from disposal of other equity instrument investment 100,000.00
Total 172,589,751.04 188,067,031.15
44. Income from changes in fair value
RMB
Source of income that generates changes in fair value Jan.-Jun. 2020 Jan.-Jun. 2019
Trading financial asset -1,265,439.00 -169,200.00
Including: Income from fair value changes generated by
-1,265,439.00 -169,200.00
derivative financial instruments
Total -1,265,439.00 -169,200.00
45. Credit impairment loss
RMB
Source of income from changes in fair value Jan.-Jun. 2020 Jan.-Jun. 2019
Bad debt loss of account receivables -22,313,507.73 -16,610,388.27
Bad debt loss of other receivables -1,861,806.20 -1,924,013.78
Total -24,175,313.93 -18,534,402.05
46. Asset impairment loss
RMB
Item Jan.-Jun. 2020 Jan.-Jun. 2019
loss on inventory valuation and impairment loss of
-11,612,155.42 -269,072.43
contract performance cost
Total -11,612,155.42 -269,072.43
121 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
47. Income from assets disposal
RMB
Item Jan.-Jun. 2020 Jan.-Jun. 2019
Gains or losses from disposal of fixed assets 875,330.03 1,104,606.81
Gains or losses from disposal of biological asset 671,959.37 -1,149,966.04
Total 1,547,289.40 -45,359.23
48. Non-operating Income
RMB
Amount recorded in current
Item Jan.-Jun. 2020 Jan.-Jun. 2019
non-recurring items
Total gains or losses from
605,704.68 172,530.64 605,704.68
disposal of non-current assets
including: Gains or losses from
328,904.68 172,530.64 328,904.68
disposal of fixed assets
Gains from scrapped biological
276,800.00 276,800.00
assets
Government grants 6,682,599.37 14,052,690.31 6,682,599.37
Other 1,117,240.65 1,589,709.03 1,117,240.65
Total 8,405,544.70 15,814,929.98 8,405,544.70
Government grants included in current gains and losses
RMB
Related to
Item Jan.-Jun. 2020 Jan.-Jun. 2019 assets/related
to income
Livestock and poultry manure and waste
2,000,000.00 income
treatment and resource utilization project
Fixed assets investment projects 1,430,000.00 income
Award for production increment 500,000.00 income
Deferred income transferred 550,000.00 550,000.00 asset
Subtotal for other projects under RMB
2,202,599.37 2,149,390.31 income
500,000
2018 special fund for the development of
Shenyang foreign trade and economic 3,884,800.00 income
cooperation
Funds provided by Bureau of Finance of
Shenyang city to benefit agricultural 4,310,000.00 income
projects
Incentive fund for China's top 500 private
2,000,000.00 income
enterprises
Special fund for air control and gas boiler 1,158,500.00 income
Total 6,682,599.37 14,052,690.31 /
122 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
49. Non-operating expenditure
RMB
Amount included in current
Item Jan.-Jun. 2020 Jan.-Jun. 2019
non-recurring items
Total losses from disposal of
2,720,080.23 4,258,987.96 2,720,080.23
non-current assets
including: Losses from disposal of
318,214.63 628,617.75 318,214.63
fixed assets
Losses from scrapped
2,401,865.60 3,630,370.21 2,401,865.60
biological assets
Penalties and late fees 519,619.48 487,260.00 519,619.48
External donations 2,515,826.50 1,614,600.00 2,515,826.50
Extraordinary loss 2,953,879.98 11,864,684.29 2,953,879.98
Other 87,968.39 97,154.34 87,968.39
Total 8,797,374.58 18,322,686.59 8,797,374.58
50. Income tax expense
RMB
Item Jan.-Jun. 2020 Jan.-Jun. 2019
Income tax expense 82,879,343.99 34,938,647.84
Deferred income tax expense -2,461,552.84 -3,720,125.15
Total 80,417,791.15 31,218,522.69
Adjustment procedure for accounting profit and income tax expense
RMB
Item Jan.-Jun. 2020
Total profit 761,744,130.05
Income tax expenses calculated at statutory or applicable tax rates 114,261,619.51
Effects of subsidiaries that are subject to different tax rates -8,146,777.21
Effects of adjusting the income tax on previous periods 506,781.40
Effects of non-taxable income -30,930,496.89
Effects of non-deductible costs, expenses and losses 4,252,755.40
Effects of using deductible losses of unrecognized deferred income tax
-3,559,697.88
assets of prior period
Effects of deductible temporary difference or deductible losses of
5,069,546.70
unrecognized deferred income tax assets of current period
Calculation and deduction of R&D expenditure -1,035,939.88
Income tax expense 80,417,791.15
51. Other comprehensive income
See Note 33- Other comprehensive income
123 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
52. Items in cash flow statement
A. Cash received from other activities related to operating
RMB
Item Jan.-Jun. 2020 Jan.-Jun. 2019
Government grants 19,483,447.07 14,907,868.31
Interest income 8,451,668.98 2,641,228.16
Subtotal of transactions and other 6,468,210.34 21,373,673.87
Total 34,403,326.39 38,922,770.34
B. Cash paid for other activities related to operating
RMB
Item Jan.-Jun. 2020 Jan.-Jun. 2019
Travelling expense 52,624,704.05 57,513,067.48
Transportation and handling expense 36,866,924.68
R&D expenditure 19,066,565.58 15,440,574.90
Business entertainment expense 10,273,819.37 12,687,793.98
Office and communication fee 10,264,846.94 10,511,548.03
Labor cost 15,516,305.75 12,187,337.98
Other operating expenses 54,566,380.26 68,747,525.48
Transactions and other 180,101,892.27 122,799,145.85
Total 342,414,514.22 336,753,918.38
C. Cash received from other activities related to investment
RMB
Item Jan.-Jun. 2020 Jan.-Jun. 2019
Futures margin 31,847,479.40
Net cash received from the acquiring
the shares of Suizhong Renhe 2,131,060.28
Fishery
Net cash received from acquiring the
shares of Harbin Baoweikang 246,871.87
Bio-Technology
Total 31,847,479.40 2,377,932.15
D. Cash paid for other activities related to investment
RMB
Item Jan.-Jun. 2020 Jan.-Jun. 2019
Futures margin 32,803,000.71
Net increase in financial assets held for trading
2,722,803.40
purposes
Net cash from disposal of the shares of
3,405,141.26
Weifang Wellhope Xinhesheng Feed
Total 38,930,945.37
124 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
E. Cash received from other activities related to financing
RMB
Item Jan.-Jun. 2020 Jan.-Jun. 2019
Cash received from disposal of shares of
640,000.00
subsidiaries
Total 640,000.00
F. Cash paid for other activities related to financing
RMB
Item Jan.-Jun. 2020 Jan.-Jun. 2019
Cash paid for buying non-controlling interests of the
5,856,566.01
subsidiaries
Repurchasing non-restricted shares 1,185,825.00
Total 1,185,825.00 5,856,566.01
53. Supplementary information of cash flow statement
A. Supplementary information
RMB
Further information Jan.-Jun. 2020 Jan.-Jun. 2019
1. Adjusting net profit to cash flow from operating activities
Net profit 681,326,338.90 429,746,542.87
add: Assets impairment provision 35,787,469.35 18,803,474.48
Depreciation of fixed assets, depletion of oil and gas assets, 158,193,431.56 95,565,429.32
depreciation of biological assets
Amortization of intangible assets 4,817,460.41 3,243,055.48
Amortization of long-term prepaid expenses 21,753,460.08 23,316,678.76
Losses on disposal of fixed assets, intangible assets and
-1,547,289.40 -45,359.23
other long-lived assets
Losses on retirement of fixed assets 2,114,375.55 4,086,457.32
Losses due to changes in fair value 1,265,439.00 169,200.00
Financial expense 38,038,159.49 40,742,726.29
Investment losses -172,589,751.04 -188,067,031.15
Decrease of deferred income tax assets -2,417,609.33 -3,835,142.15
Increase of deferred income tax liabilities -43,943.51 115,017.00
Decrease of inventory -122,846,851.71 22,960,735.22
Decrease of operating receivables -329,377,056.30 -328,421,823.92
Increase of operating payables 136,922,394.73 180,911,824.33
Other
Net cash flow from operating activities 451,396,027.78 299,291,784.62
2. Net changes in cash and cash equivalents
Closing balance of cash 1,609,864,732.06 1,488,930,871.05
deduct: opening balance of cash 1,508,390,481.68 889,204,873.97
add: Closing balance of cash equivalent
deduct: Opening balance of cash equivalent
Net increase in cash and cash equivalents 101,474,250.38 599,725,997.08
125 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
B. Cash paid for acquiring subsidiaries
RMB
Amount
Cash or cash equivalents paid for business combinations occurred
40,000,000.00
in current period
including: Yangling Wellhope Agriculture and Animal
40,000,000.00
Husbandry
Net cash paid for acquiring subsidiaries 40,000,000.00
C. Cash and cash equivalents
RMB
Item Closing balance Opening balance
1. Cash 1,609,864,732.06 1,508,390,481.68
including: Cash on hand 1,578,403.58 693,912.75
Bank deposits available for payment at any time 1,608,286,328.48 1,507,696,568.93
2. Closing balance of cash and cash equivalent 1,609,864,732.06 1,508,390,481.68
54. Assets in which ownership or use rights are restricted
RMB
Item Closing book value Reason for restriction
Monetary capital 1,141.97 L/C guarantee deposit
Monetary capital 12,325,342.50 Futures margin
Total 12,326,484.47 /
55. Foreign currency monetary items
A. Foreign currency monetary items
RMB
Closing balance
Closing balance of Translating exchange
Item translated into
foreign currency rate
RMB
Monetary capital - - 13,946,709.94
including: US dollar 96,708.36 7.07950 684,646.83
Euro 82.90 7.96100 659.97
Hong Kong dollar 11,380,356.85 0.91344 10,395,273.16
Ruble 28,405,648.96 0.10090 2,866,129.98
Account receivable - - 18,116,295.79
including: US dollar 1,773,461.74 7.07950 12,555,222.37
Hong Kong dollar 6,088,055.50 0.91344 5,561,073.42
Accounts payable - - 1,970,919.89
including: Ruble 19,533,398.32 0.10090 1,970,919.89
Prepayment - - 973,590.81
including: Ruble 9,649,066.50 0.10090 973,590.81
Contract liability - - 104,165.65
including: Ruble 1,032,365.21 0.10090 104,165.65
Short-term borrowing - - 27,926,364.65
including: US dollar 3,944,680.37 7.07950 27,926,364.65
126 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
B. Explanation of overseas business entity
Name of overseas business Currency
Business place abroad Recording currency
entity selection basis
Russia Wellhope Agri-Tech Russia Ruble Local currency
56. Government grant
RMB
Amount recorded
Category Amount Present item in current gains
or losses
Award for green manufacturing demonstration 500,000.00 Other income 500,000.00
Livestock and poultry manure and waste Non-operating
treatment and resource utilization project 2,000,000.00 2,000,000.00
income
Non-operating
Fixed assets investment projects 1,430,000.00 1,430,000.00
income
Non-operating
Award for production increment 500,000.00 500,000.00
income
Deferred income transferred 2,611,752.00 Other income 2,611,752.00
Non-operating
Deferred income transferred 550,000.00 550,000.00
income
Subtotal for other projects under RMB 500,000 2,830,847.70 Other income 2,830,847.70
Non-operating
Subtotal for other projects under RMB 500,000 2,202,599.37 2,202,599.37
income
Total 12,625,199.07 / 12,625,199.07
VIII.Change of consolidation scope
1. Business combination under different control
A. Business combination under different control occurred in current period
RMB
Basis for Investee's Investee's net
Time income from profit from
Acquisition Shareholding Way of Acquisition determining
Investee point of acquisition acquisition
acquiring
cost % acquisition date acquisition
date to the date to the
date period end period end
Yangling
Wellhope
May 12, Cash Control
Agriculture 42,000,000 100 May 12, 2020 0.00 -199,657.94
2020 investment transfer
and Animal
Husbandry
B. Combined cost and goodwill
RMB
Combined cost Yangling Wellhope Agriculture and Animal
Husbandry
Cash 42,000,000.00
Total combined costs 42,000,000.00
deduct: Fair value share of identifiable net assets
obtained 42,000,000.00
Goodwill or combined cost is less than the amount of
the fair value share of the identifiable net assets
obtained
127 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
C. Identifiable assets and liabilities of the investee on the acquisition date
RMB
Yangling Wellhope Agriculture and Animal Husbandry
Fair value on acquisition date Book value on acquisition date
Assets: 42,000,000.00 37,055,937.27
Fixed assets 32,462,325.48 32,462,325.48
Intangible assets 9,537,674.52 4,593,611.79
Liabilities:
Accounts payable
Net assets 42,000,000.00 37,055,937.27
deduct: Non-controlling interests
Net assets acquired 42,000,000.00 37,055,937.27
2. Other reasons that generate changes in the consolidated scope
The Company invested some new companies, including, Luoyang Wellhope Agriculture
and Animal Husbandry, holding 100.00% of shares; Chifeng Wellhope Fuxinyuan Food,
holding 70.00% of shares; Shenyang Xiangmai E-Commerce, holding 80.00% of shares;
Hebei Taihang Wellhope Food, holding 60.00% of shares; Anyang Wellhope Agriculture and
Animal Husbandry, holding 100.00% of shares; Hebei Taihang Wellhope Agri-Tech, holding
62.00% of shares.
Dalian Heyuan Agri-Tech, a subsidiary of the Company, invested Dalian Hongtu Agri-Tech,
holding 51.00% of shares; Shandong Heyuan Food, a subsidiary of the Company, invested
Shandong Heyuan Agri-Tech, holding 100.00% of shares; Luoyang Wellhope Agriculture
and Animal Husbandry, a subsidiary of the Company, invested Tonxu Wellhope Agriculture
and Animal Husbandry, holding 100.00% of shares; Anhui Wellhope Agri-Tech, a subsidiary
of the Company, invested Anhui Wellhope Haoxiang Hog Breeding, holding 100.00% of
shares; Gongzhuling Wellhope Agri-Tech, a subsidiary of the Company, invested
Gongzhuling Wellhope Hog Raising, holding 65.00% of shares, and Lishu Wellhope
Ecological Breeding, holding 65.00% of shares. All these newly-established companies
were included in the consolidated scope.
128 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
IX.Equity in other entities
1. Equity in subsidiaries
A. Composition of the Company
Business Registered Business Shareholding % Mode of
Subsidiary
site site type Direct Indirect acquisition
Haicheng Xinzhongxin Haicheng Haicheng
production 51.00 investment
Wellhope Feed city city
Dalian Huakang Xinxin
Dalian city Dalian city production 65.00 investment
Food
Changchun Hengfeng
Changchun Changchun
Agriculture and Animal trading 51.00 investment
city city
Husbandry
Jinan Xinweita Trading Jinan city Jinan city trading 76.00 investment
Henan Wellhope
Kaifeng city Kaifeng city production 100.00 investment
Agri-Tech
Zhengzhou Wellhope Zhengzhou Zhengzhou
production 70.00 investment
Agri-Tech city city
Zhumadian Wellhope Zhumadian Zhumadian
production 90.00 investment
Agri-Tech city city
Jiaozuo Wellhope Feed Jiaozuo city Jiaozuo city production 98.30 investment
Nanyang Nanyang
Nanyang Wellhope Feed production 70.00 investment
city city
Zhangwu Wellhope Zhangwu Zhangwu
production 60.00 investment
Agriculture Development county county
Xifeng Xifeng
Xifeng Qianyue Planting production 100.00 investment
county county
Sanjiang Wellhope Jixian Jixian
production 100.00 investment
Agri-Tech county county
Jixian Jixian
Jixian Expert Trading trading 65.00 investment
county county
Gongzhuling Wellhope Gongzhuling Gongzhuling
production 100.00 investment
Agri-Tech city city
Shenyang Shenyang
Shenyang Expert Trading trading 100.00 investment
city city
Liaoning Skyland Shenyang Shenyang
production 100.00 investment
Livestock Equipment city city
Shenyang Wellhope Shenyang Shenyang
production 100.00 investment
Ruminant Feed city city
Shenyang Wellhope Shenyang Shenyang
production 100.00 investment
Extruded Feed city city
Shenyang Wellhope Shenyang Shenyang
production 100.00 investment
Aquatic Feed city city
Shenyang Jiahe Tianfeng Shenyang Shenyang
trading 100.00 investment
Commerce and Trade city city
Liaoning Wellhope Food Beipiao city Beipiao city production 60.00 investment
Haicheng Wellhope Haicheng Haicheng
production 100.00 investment
Agri-Tech city city
Tai'an Tai'an
Tai'an Wellhope Feed production 100.00 investment
county county
Lingyuan Wellhope Lingyuan Lingyuan production 90.50 investment
129 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Agri-Tech city city
Beijing Helai Sci-Tech Beijing city Beijing city production 100.00 investment
Beijing Wellhope
Beijing city Beijing city trading 100.00 investment
Agri-Tech
Beijing Sanyuan Wellhope
Beijing city Beijing city production 70.00 investment
Agri-Tech
Jilin Wellhope Agri-Tech Jilin city Jilin city production 100.00 investment
Gongzhuling Gongzhuling
Jilin Hefeng Hog Breeding production 100.00 investment
city city
Harbin Weierhao Trading Harbin city Harbin city trading 51.00 investment
Daqing Wellhope Bayi
Daqing city Daqing city production 70.00 investment
Nongda Animal Sci-Tech
Mudanjiang Wellhope Mudanjiang Mudanjiang
production 100.00 investment
Agri-Tech city city
Jinzhou Wellhope
Jinzhou city Jinzhou city production 100.00 investment
Agri-Tech
Gongzhuling Wellhope Gongzhuling Gongzhuling
production 100.00 investment
Ruminant Feed city city
Heilongjiang Wellhope
Harbin city Harbin city production 100.00 investment
Agri-Tech
Tangshan Tangshan
Tangshan Wellhope Feed production 85.00 investment
city city
Cangzhou Cangzhou
Cangzhou Helai Sci-Tech production 70.00 investment
city city
Xi'an Wellhope Feed
Xi'an city Xi'an city production 85.00 investment
Sci-Tech
Gansu Wellhope
Wuwei city Wuwei city production 100.00 investment
Agri-Tech
Jining Wellhope Agri-Tech Jining city Jining city production 70.00 investment
Shanghai Shanghai
Shanghai Wellhope Feed production 65.00 investment
city city
Shanghai Shanghai
Shanghai Hehong Trading trading 32.00 42.00 investment
city city
Zhejiang Pinghu Wellhope
Pinghu city Pinghu city production 85.00 investment
Agri-Tech
Huai'an Wellhope Feed Huai'an city Huai'an city production 100.00 investment
Qingdao Wellhope
Pingdu city Pingdu city trading 95.00 investment
Agri-Tech
Guangzhou Xiangshun Guangzhou Guangzhou
production 56.00 investment
Livestock Equipment city city
Hainan Wellhope Chengmai Chengmai
production 60.00 investment
Agri-Tech county county
Fuyu Wellhope Agri-Tech Fuyu city Fuyu city production 97.00 investment
Fuyu Wellhope Taolaizhao
Fuyu city Fuyu city production 97.00 investment
Poultry Raising
Changchun Wellhope Nong'an Nong'an
production 98.00 investment
Feed county county
Changtu Changtu
Changtu Wellhope Feed production 100.00 investment
county county
Lankao Wellhope Lankao Lankao
production 100.00 investment
Agri-Tech county county
Tongliao Wellhope Tianyi Tongliao city Tongliao city production 51.00 investment
130 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Prataculture
Liaoning Wellhope Shenyang Shenyang
trading 100.00 investment
Purchasing & Trading city city
Shenyang Wellhope Shenyang Shenyang
production 100.00 investment
Agri-Tech city city
combined
Shenyang Shenyang under the
Shenyang Fame Bio-Tech production 100.00
city city same
control
combined
Shenyang Pufeng Shenyang Shenyang under the
trading 100.00
Commerce and Trade city city same
control
combined
Shenyang Huawei Shenyang Shenyang under the
production 51.00
Pharmaceutical city city same
control
combined
Liaoning Wellhope
Shenyang Shenyang under
Agriculture and Animal production 100.00
city city different
Husbandry Development
control
combined
under
Puyang Wellhope Food Puyang city Puyang city production 49.81
different
control
Jingzhou Wellhope Jingzhou Jingzhou
trading 86.00 investment
Agricultural Sci-Tech city city
Dalian Heyuan Wellhope
Dalian city Dalian city production 51.00 investment
Agri-Tech
Shenyang Nongda Shenyang Shenyang
production 100.00 investment
Wellhope Feed city city
Dalian Wellhope Feed Dalian city Dalian city production 100.00 investment
Xingcheng Xingcheng
Xingcheng Wellhope Feed production 100.00 investment
city city
Kunming Kunming
Yunnan Wellhope Feed production 97.00 investment
city city
Liaoning Godaji Shenyang Shenyang
trading 100.00 investment
E-commerce city city
Haozhou Haozhou
Anhui Wellhope Agri-Tech production 70.00 investment
city city
Shanxi Wellhope Yuanping Yuanping
production 100.00 investment
Agri-Tech city city
Pingyuan Wellhope Food Handan city Handan city production 100.00 investment
Shenyang Huaweida Shenyang Shenyang
trading 100.00 investment
Animal Health Product city city
combined
under
Dalian Zhongjia Food Dalian city Dalian city production 100.00
different
control
Wellhope Shenyang Shenyang
production 100.00 investment
Food(Shenyang) city city
Changchun Wellhope Changchun Changchun production 85.00 investment
131 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Food city city
Pingyuan Wellhope
Handan city Handan city production 100.00 investment
Agri-Tech
Puyang Wellhope
Puyang city Puyang city production 100.00 investment
Agri-Tech
combined
Chongqing Dahong
Chongqing Chongqing under
Agriculture and Animal production 50.00
city city different
Husbandry Equipment
control
Beijing Brilliant Dragon
Beijing city Beijing city trading 51.00 investment
Commerce and Trade
Tangshan Hejia
Tangshan Tangshan
Agriculture and Animal production 65.00 investment
city city
Husbandry
combined
Tangshan Wellhope Tangshan Tangshan under
production 70.00
Sci-Tech city city different
control
Shenyang Huakang Xinxin Shenyang Shenyang
production 85.00 investment
Food city city
Kaifeng Wellhope Food Kaifeng city Kaifeng city production 100.00 investment
Shenyang Shenyang
Shenyang Huakang Broiler production 85.00 investment
city city
Kaifeng Wellhope
Agriculture and Animal Kaifeng city Kaifeng city production 100.00 investment
Husbandry
Fushun Wellhope
Agriculture and Animal Fushun city Fushun city production 100.00 investment
Husbandry
Shenyang Wellhope Shenyang Shenyang
production 100.00 investment
Poultry city city
Shenyang Huakang
Shenyang Shenyang
Agriculture and Animal production 100.00 investment
city y city y
Husbandry
Dehui Wellhope Agri-Tech Dehui city Dehui city production 100.00 investment
Shenyang Tianjingde Shenyang Shenyang
trading 100.00 investment
Trading city city
Chongqing Wellhope Chongqing
production 65.00 investment
Agri-Tech city
Dahong Agriculture and
Animal Husbandry
Chongqing
Technology Research production 100.00 investment
city
Institute Chongqing
Branch
Russia Wellhope
production 55.00 investment
Agri-Tech
combined
Suizhong Suizhong under
Suizhong Renhe Fishery production 95.00
county county different
control
Harbin Baoweikang combined
Harbin city Harbin city production 100.00
Bio-Tech under
132 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
different
control
Shulan Fengtai
Agriculture and Animal Shulan city Shulan city production 60.00 investment
Husbandry
Shulan Fengtai Farming Shulan city Shulan city production 51.00 investment
Xi'an Linfeng Shengyi
Xi’an city Xi’an city trading 100.00 investment
Trading
Linxi Helai Agri-Tech Linxi city Linxi city production 100.00 investment
Nanchang Wellhope Nanchang Nanchang
production 65.00 investment
Agri-Tech city city
Hengyang Wellhope Hengyang Hengyang
production 78.50 investment
Agri-Sci-Tech city city
Anhui Wellhope Haoxiang
Lixin county Lixin county production 100.00 investment
Agricultural Development
Lixin Xiangfeng
Agriculture and Animal Lixin county Lixin county production 100.00 investment
Husbandry
Lixin Hongfeng
Agriculture and Animal Lixin county Lixin county production 100.00 investment
Husbandry
Guangzhou Dashang Guangzhou Guangzhou
trading 51.00 investment
Trading city city
Shandong Heyuan Food Weihai city Weihai city production 65.00 investment
Wafangdian Yifeng Wafangdian Wafangdian
production 51.00 investment
Agri-Tech city city
combined
under
Hebei Deheng Farming Handan city Handan city production 100.00
different
control
Dahongda Chongqing Chongqing Chongqing
production 100.00 investment
Construction Engineering city city
Zhangwu Zhangwu
Zhangwu Jiufeng Trading trading 100.00 investment
city city
Shandong Heyuan
Weihai city Weihai city production 100.00 investment
Agri-Tech
combined
Yangling Wellhope
Xianyang Xianyang under
Agriculture and Animal production 100.00
city city different
Husbandry
control
Anhui Wellhope Haoxiang
Lixin county Lixin county production 100.00 investment
Hog Breeding
Luoyang Wellhope
Mengjin Mengjin
Agriculture and Animal production 100.00 investment
county county
Husbandry
Zhuanghe Zhuanghe
Dalian Hongtu Agri-Tech production 51.00 investment
city city
Gongzhuling Wellhope Gongzhuling Gongzhuling
production 65.00 investment
Hog Raising city city
Anyang Wellhope
Agriculture and Animal Anyang city Anyang city production 100 investment
Husbandry
133 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Lishu Wellhope Ecological
Siping city Siping city production 65.00 investment
Raising
Tongxu Wellhope
Tongxu Tongxu
Agriculture and Animal production 100.00 investment
county county
Husbandry
Chifeng Wellhope
Chifeng city Chifeng city production 70.00 investment
Fuxinyuan Food
Shenyang Xiangmai Shenyang Shenyang
trading 80.00 investment
E-Commerce city city
Hebei Taihang Wellhope
Baoding city Baoding city production 60.00 investment
Food
Hebei Taihang Wellhope
Baoding city Baoding city production 62.00 investment
Agri-Tech
B. Important non-wholly owned subsidiary
RMB
Shareholding Gain or losses Declared dividends Closing balance of
Subsidiary of attributable to to non-controlling non-controlling
non-controlling non-controlling interests interests
interests % interests
Dalian Heyuan 49.00 28,972,010.70 15,300,000.00 403,717,778.65
Agri-Tech
Xi'an Wellhope 15.00 3,990,273.80 24,388,917.10
Feed Sci-Tech
Beijing Sanyuan
Wellhope 30.00 3,974,554.72 63,582,801.89
Agri-Tech
Anhui Wellhope 30.00 14,082,671.99 60,848,973.82
Agri-Tech
134 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
C. Financial figures of important non-wholly owned subsidiary
RMB
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 756,953,254.85 687,490,631.52 1,444,443,886.37 549,320,532.08 58,294,583.28 607,615,115.36 647,431,144.31 566,852,586.60 1,214,283,730.91 406,157,814.72 24,986,023.48 431,143,838.20
Agri-Tech
Xi'an
Wellhope
110,453,709.28 81,539,735.41 191,993,444.69 29,400,664.00 29,400,664.00 120,990,215.88 40,503,567.21 161,493,783.09 25,655,577.75 25,655,577.75
Feed
Sci-Tech
Beijing
Sanyuan
220,126,311.21 23,652,177.71 243,778,488.92 31,835,815.95 31,835,815.95 203,102,041.98 25,669,497.12 228,771,539.10 30,470,419.37 30,470,419.37
Wellhope
Agri-Tech
Anhui
Wellhope 254,118,681.23 157,584,312.79 411,702,994.02 208,873,081.26 208,873,081.26 231,529,237.37 127,328,236.82 358,857,474.19 262,977,525.56 262,977,525.56
Agri-Tech
Jan.-Jun. 2020 Jan.-Jun. 2019
Total Total
Subsidiary Operation Cash flow from Operation Cash flow from
Net profit comprehensive Net profit comprehensive
revenue operating activities revenue operating activities
income income
Dalian Heyuan Agri-Tech 1,642,200,981.97 55,460,057.05 55,460,057.05 77,608,652.38 1,327,581,618.96 145,237,370.67 145,237,370.67 116,800,316.66
Xi'an Wellhope Feed Sci-Tech 322,102,441.12 26,601,825.36 26,601,825.36 326,690,752.66 196,827,616.01 15,463,928.29 15,463,928.29 25,075,637.85
Beijing Sanyuan Wellhope
239,405,340.68 13,248,515.73 13,248,515.73 220,684,395.62 151,971,609.85 3,106,944.82 3,106,944.82 14,575,623.74
Agri-Tech
Anhui Wellhope Agri-Tech 166,956,108.19 46,942,239.95 46,942,239.95 -30,522,617.73 70,174,789.94 -23,646,624.05 -23,646,624.05 73,822,452.16
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
2. Equity in joint ventures or associated companies
A. Important joint ventures or associated companies
RMB
Shareholding %
Company name Business site Registered site Business type Accounting treatment methods
Direct Indirect
Beipiao Hongfa Food Beipiao city Beipiao city production 35.00 equity method
Anshan Jiuguhe Food Tai'an county Tai'an county production 41.55 equity method
Tai'an Jiuguhe Agriculture Tai'an county Tai'an county production 41.55 equity method
Dalian Chengsan Animal Husbandry Dalian city Dalian city production 20.00 equity method
B. Financial figures of important joint ventures or associated companies
RMB
Jan.-Jun. 2020 Jan.-Jun. 2019
Beipiao Hongfa Anshan Jiuguhe Tai'an Jiuguhe Dalian Chengsan Beipiao Hongfa Anshan Jiuguhe Tai'an Jiuguhe Dalian Chengsan
Food Food Agriculture Animal Husbandry Food Food Agriculture Animal Husbandry
Current assets 1,147,405,469.42 530,758,988.89 211,652,137.16 1,596,129,746.15 808,320,727.52 433,236,440.94 225,516,906.39 1,467,906,023.75
Non-current
622,024,017.06 105,042,161.91 189,055,765.31 412,638,710.46 720,803,998.40 102,408,547.67 191,500,344.01 448,345,020.68
assets
Total assets 1,769,429,486.48 635,801,150.80 400,707,902.47 2,008,768,456.61 1,529,124,725.92 535,644,988.61 417,017,250.40 1,916,251,044.43
Current
301,136,624.81 250,705,156.99 190,106,596.18 542,982,195.71 242,424,331.42 162,491,901.70 148,906,962.33 498,609,123.11
liabilities
Non-current
72,801,707.40 1,182,232.98 599,000.00 2,032,614.19 23,430,000.00 2,313,480.78 256,500.00 5,851,807.11
liabilities
Total liabilities 373,938,332.21 251,887,389.97 190,705,596.18 545,014,809.90 265,854,331.42 164,805,382.48 149,163,462.33 504,460,930.22
Non-controlling
246,321,862.76 224,864,512.85
interests
Equity
attributable to
shareholders of 1,395,491,154.27 383,913,760.83 210,002,306.29 1,217,431,783.95 1,263,270,394.50 370,839,606.13 267,853,788.07 1,186,925,601.36
parent
company
Share of net
assets
488,421,904.00 159,516,167.63 87,255,958.26 243,486,356.79 442,144,638.08 154,083,856.35 111,293,248.94 237,385,120.27
calculated by
shareholdings
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Adjustment -72,070.45 116,569,111.62 -1,645,427.58 -360.00 116,569,111.62
--Goodwill 116,569,111.62 116,569,111.62
--Unrealized
profit of
-72,070.45 -1,645,427.58
internal
transaction
--Other -360.00
Book value of
equity
488,421,904.00 159,444,097.18 87,255,958.26 360,055,468.41 442,144,638.08 152,438,428.77 111,292,888.94 353,954,231.89
investment in
joint venture
Operating
1,017,764,224.81 935,284,890.12 909,978,727.89 1,622,600,997.70 1,604,376,361.57 1,040,530,464.64 847,585,511.99 1,369,798,572.24
revenue
Net profit 132,220,759.76 97,040,045.38 -57,850,615.35 46,425,641.86 235,991,846.09 45,632,783.22 29,077,153.72 239,504,463.51
Total
comprehensive 132,220,759.76 97,040,045.38 -57,850,615.35 46,425,641.86 235,991,846.09 45,632,783.22 29,077,153.72 203,610,336.32
income
Dividends
received from
33,242,400.00 4,986,360.00 4,986,360.00
associated
companies
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C. Financial information of unimportant joint ventures and associated companies
RMB
Jan.-Jun. 2020 Jan.-Jun. 2019
Joint venture:
Book value of investment 11,669,191.54 11,669,191.54
Items calculated according to the
shareholdings
--Net profit 8,094,994.12 6,432,233.24
--Other comprehensive income -1,854,393.45 465,443.74
--Total comprehensive income 6,240,600.67 6,897,676.98
Associated company:
Book value of investment 1,107,536,420.55 998,548,503.29
Items calculated according to the
shareholdings
--Net profit 102,710,134.18 31,834,749.66
--Other comprehensive income 2,265,159.08 3,068,904.93
--Total comprehensive income 104,975,293.26 34,903,654.59
X.Risks Related to Financial Instruments
The Company's main financial instruments include equity investment, borrowing, accounts
receivable and accounts payable. Detailed descriptions of various financial instruments can
be found in the relevant items in Note V. The Company manages and monitors these risk
exposures to ensure to control the risks above in the limited scope.
The Company's objective in risk management is to strike a balance between risks and
return, minimize the negative impact of risk on the Company's operating results, and
maximize the benefits of shareholders and other equity investors. Based on this risk
management objective, the basic strategy of the Company’s risk management is to identify
and evaluate various risks of the Company, set up appropriate limit of risk tolerance,
conduct risk management, and supervise various risks in a timely and reliable way to
control risks within the limited range.
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 RMB, with a small amount of import and
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
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 confirmed 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.
XI.Disclosure of fair value
1. Fair value of assets and liabilities in the end of period
RMB
Closing fair value
The first level of The second level The third level of
Item
fair value of fair value fair value Total
measurement measurement measurement
Continuous fair value
measurement
1. Trading financial assets 100,000,000.00 100,000,000.00
Financial assets measured
at fair value and changes
100,000,000.00 100,000,000.00
recorded into current gains
or losses
2. Other equity 12,949,647.74 12,949,647.74
instrument investment
3. Derivative financial 9,100,936.30 9,100,936.30
assets
Total assets continuously
9,100,936.30 112,949,647.74 122,050,584.04
measured at fair value
XII.Related party and transaction
1. Snapshot of joint ventures and associated companies
Circumstance of the joint ventures and associated companies, which had related
transactions with the Company in the reporting period.
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Company Relationship
Unphung Joint Venture Company joint venture
Nepal Wellhope Agri-tech Pvt. Ltd. joint venture
Anshan Fengsheng Food associated company
Anshan Jiuguhe Food associated company
Beipiao Hongfa Food associated company
Dalian Chengsan Animal Husbandry associated company
Dalian Wellhope Fish Meal associated company
Daqing Supply and Marketing Wellhope Agri-Tech associated company
Dandong Wellhope Chengsan Agri-Tech associated company
Dunhua Wellhope Agri-Tech associated company
Gongzhuling Corn Purchasing and Storing associated company
Guangzhou Yikun Trading associated company
Haicheng New Hongzunda Agri-Tech associated company
Huluodao Jiuguhe Food associated company
Huluodao Jiuguhe Feed associated company
Jinzhou Jiufeng Food associated company
Lankao Skyland Duck associated company
Linghai Jiuguhe Feed associated company
Qingdao Shenfeng Agri-Tech associated company
Shenyang Wenjie Bio-Tech associated company
Schipper(Beijing) associated company
Tai'an Fengjiu Agri-Tech associated company
Tai'an Jiufeng Agri-Tech associated company
Tai'an Jiuguhe Agriculture Development associated company
Tailai Jiahe Agriculture and Animal Husbandry associated company
Zhangjiakou Jiahe Agriculture and Animal Husbandry associated company
Beijing Dahong Hengfeng Agri-Tech associated company
Shenyang Zhongwenjie Bio-Tech associated company
Liaoning Mubang Animal Husbandry Equipment Manufacturing associated company
Dunhua Fengda Agriculture and Animal Husbandry
associated company
Development
Heilongjiang Zhongyi Pasture Information Technology Service associated company
Dalian Sida Food associated company
Dunhua Fengda Agriculture and Animal Husbandry associated company
Weifang Wellhope Xinhesheng Feed associated company
2. Snapshot of other related party
Related party Relationship
Wulian Heli Equity Investment Partnership (Limited Partnership) Other
DE HEUS MAURITIUS Other
Jin Weidong Other
Ding Yunfeng Other
Shao Caimei Other
Wang Fengjiu Other
Wang Zhongtao Other
Zhang Tiesheng Other
Wang Zhenyong Other
Zhang Wenliang Other
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Ren Bingxin Other
Zhao Xin Other
Qiu Jiahui Other
Yuan Minger Other
Li Jun Other
Jacobus Johannes de Heus Other
Marcus Leonardus van der Kwaak Other
Hu Jianmin Other
Liu Huan Other
Wang Zhe Other
Wulian Heli Equity Investment Partnership and DE HEUS MAURITIUS are the shareholders
that hold more than 5% shares of the Company; Jin Weidong is the actual controller and
Chairman; Ding Yunfeng, Wang Fengjiu, Shao Caimei and Wang Zhongtao are the
shareholders who hold more than 5% shares of the Company and they are senior
managers; Zhang Tiesheng holds more than 5% shares of the Company; the rest persons
are the board directors, supervisory board directors and senior managers of the Company.
3. Snapshot of related party transaction
A. Purchasing and selling products, providing and accepting labor service
RMB
Relate party Transaction Jan.-Jun. 2020 Jan.-Jun. 2019
Dalian Wellhope Fish Meal feed raw materials 11,796,237.45 12,756,733.30
Anshan Jiuguhe Food broiler parts 19,601,413.70 4,515,828.00
product
Huludao Jiuguhe Food broiler parts 255,807.60 2,246,232.09
product
Guangzhou Yikun Trade feed raw materials 1,089,320.00 711,590.00
Tai'an Jiufeng Agri-Tech day old chick 12,429,129.72 5,654,998.00
Jinzhou Jiufeng Food broiler parts 10,835,045.50 781,273.00
product
Zhangjiakou Jiahe Agriculture and piglet 45,239,123.40 3,714,472.60
Animal Husbandry
Haicheng New Hongzunda Agri-Tech feed 379,075.00 658,306.00
Schipper(Beijing) other 951,415.87 503,416.69
Shenyang Wenjie Bio-Tech animal medicine 4,908,387.91 5,605,041.28
and vaccine
Daqing Supply and Marketing feed raw materials 22,752,377.16 5,739,474.44
Wellhope Agri-Tech
Tai’an Jiuguhe Agriculture feed 95,407,968.34 9,754,694.20
Development
Qingdao Shenfeng Agri-Tech feed 12,456,335.41 92,099.79
Dalian Chengsan Animal Husbandry broiler 83,688,371.22 75,100,013.71
Linghai Jiuguhe Feed other 5,181,269.36
Lankao Skyland Duck feed 56,935.50
Dunhua Wellhope Agri-Tech feed 9,284,127.90
Shenyang Zhongwenjie Bio-Tech animal medicine 15,000.00
and vaccine
Total 336,327,341.04 127,834,173.10
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Selling products or providing labor service
RMB
Relate party Transaction Jan.-Jun. 2020 Jan.-Jun. 2019
Nepal Wellhope Agri-tech Pvt. Ltd. feed 11,852.89
Linghai Jiuguhe Feed boiler feed and
feed raw materials 22,500,000.44 22,683,324.09
Tai’an Jiuguhe Agriculture boiler feed and
Development feed raw materials 44,087,063.31 40,091,071.76
Anshan Jiuguhe Food broiler 55,674,764.24 114,520,526.72
Qingdao Shenfeng Agri-Tech swine feed and
feed raw materials 22,166,911.48 8,794,272.38
Huludao Jiuguhe Feed feed and feed raw
materials 12,396,491.62 11,960,328.36
Huludao Jiuguhe Food broiler parts
product 591,354.13 481,301.83
Haicheng New Hongzunda Agri-Tech boiler feed and
feed raw materials 46,024,776.68 9,590,723.57
Dandong Wellhope Chengsan feed and feed raw
Agri-Tech materials 2,303,424.77 1,185,476.03
Tai'an Jiufeng Agri-Tech boiler feed and
feed raw materials 469,518.62
Guangzhou Yikun Trade feed raw materials 2,846,401.98 67,067,284.33
Beipiao Hongfa Food feed raw materials 2,706,690.47
Zhangjiakou Jiahe Agriculture and feed
Animal Husbandry 11,206,804.83 13,243,528.88
Weifang Wellhope Xinhesheng Feed feed raw materials 270,959.95
Schipper(Beijing) other 703,164.60 199,007.12
Jinzhou Jiufeng Food broiler 3,002,040.00
Anshan Fengsheng Food broiler 91,615,790.14 84,921,882.44
Dalian Chengsan Animal Husbandry feed raw materials 2,883,926.12 2,399,275.86
Tailai Jiahe Agriculture and Animal feed
Husbandry 14,054,459.60 10,638,112.31
Daqing Supply and Marketing feed raw materials
Wellhope Agri-Tech 22,602,220.10 17,730,092.13
Dunhua Wellhope Agri-Tech feed 4,308,633.39 1,943,276.42
Dalian Wellhope Fish Meal feed raw materials 28,620.69
Tai'an Jiufeng Agri-Tech feed raw materials 714,618.19
Lankao Skyland Duck feed raw materials 16,800.00
Dunhua Fengda Agriculture and broiler
Animal Husbandry 20,048,327.62
Dalian Sida Food broiler 90,753,520.15
Total 467,511,306.28 413,927,313.96
B. Related party guarantee
The Company acted as guarantor
RMB
Whether the
Amount of Guarantee guarantee
Guaranteed party Guarantee date
guarantee maturity date has been
fulfilled
Lingyuan Wellhope Agri-Tech 20,000,000.00 Jun. 1, 2020 May 25, 2021 No
Puyang Wellhope Food 49,000,000.00 Mar. 21, 2020 Mar. 21, 2021 No
Kaifeng Wellhope Food 30,000,000.00 Mar. 24, 2020 Mar. 24, 2021 No
Liaoning Expert Trading 17,362,496.97 May 21, 2020 May 20, 2021 No
Liaoning Expert Trading 6,549,036.78 Feb. 24, 2020 Feb. 21, 2021 No
Liaoning Godaji E-Commerce 4,014,830.90 Mar. 23, 2020 Jun. 30, 2021 No
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
C. Borrowings to related party
RMB
Related Starting Due
Borrowings Note
party date date
Lankao
After transferring part of the equity, it became an
Skyland 27,067,493.00
associated company of the Company
Duck
D. Remuneration for key management
RMB 10k
Item Jan.-Jun. 2020 Jan.-Jun. 2019
Remuneration for key management 241.48 231.57
4. Related party receivables and payables
A. Receivables
RMB
Closing balance Opening balance
Item Related party Bad debt Bad debt
Book balance Book balance
provision provision
Dandong Wellhope
Accounts receivable 842,830.00 42,141.50
Chengsan Agri-Tech
Accounts receivable Anshan Jiuguhe Food 24,735,281.28 1,236,764.06 21,356,822.76 1,067,841.14
Zhangjiakou Jiahe
Accounts receivable Agriculture and 3,459,809.60 172,990.48 3,618,629.61 180,931.48
Animal Husbandry
Guangzhou Yikun
Accounts receivable 2,549,120.90 127,456.05 24,042,357.79 1,202,117.89
Trade
Anshan Fengsheng
Accounts receivable 4,648,572.36 232,428.62 6,249,082.04 312,454.10
Food
Dalian Chengsan
Accounts receivable 868,300.00 43,415.00 523,200.00 26,160.00
Animal Husbandry
Tailai Jiahe
Accounts receivable Agriculture and 5,234,853.16 261,742.66 2,695,169.64 134,758.48
Animal Husbandry
Daqing Supply and
Accounts receivable Marketing Wellhope 2,177,415.54 108,870.78 525,195.44 26,259.77
Agri-Tech
Haicheng New
Accounts receivable 3,188,793.54 159,439.68 234,200.00 11,710.00
Hongzunda Agri-Tech
Tai’an Jiufeng
Accounts receivable 218,159.00 10,907.95
Agri-tech
Heilongjiang Zhongyi
Accounts receivable Pasture Information 43,174.50 2,158.73
Technology Service
Nepal Wellhope
Accounts receivable Agri-tech Pvt. Ltd. 90,802.75 4,540.14
Accounts receivable Linghai Jiuguhe Feed 1,500,000.00 75,000.00
Tai’an Jiuguhe
Accounts receivable Agriculture 411,000.00 20,550.00
Development
Qingdao Shenfeng
Accounts receivable Agri-Tech 48,000.00 2,400.00
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Huludao Jiuguhe
Accounts receivable Food 644,576.00 32,228.80
Accounts receivable Schipper(Beijing) 309,188.00 15,459.40
Accounts receivable Huludao Jiuguhe Feed 1,500,000.00 75,000.00
Accounts receivable Lankao Skyland Duck 16,800.00 840.00
Accounts receivable Dalian Sida Food 7,867,453.46 393,372.67
Other receivables Lankao Skyland Duck 27,611,673.00 11,044,669.20 27,067,493.00 10,826,997.20
Weifeng Wellhope
Other receivables 3,035,880.00 151,794.00
Xinhesheng
Dunhua Fengda
Prepayment Agriculture and 5,000,000.00 5,000,000.00
Animal Husbandry
Dalian Wellhope Fish
Prepayment Meal 914,705.00
Gongzhuling Corn
Prepayment Purchasing and 738,630.00
Storing
Liaoning Mubang
Animal Husbandry
Prepayment 514,333.00 7,624,669.60
Equipment
Manufacturing
Guangzhou Yikun
Prepayment Trade 4,997,400.00
Tai’an Jiuguhe
Prepayment Agriculture 10,373,818.85
Development
Dividends receivable Linghai Jiuguhe Feed 3,800,000.00
Tai’an Jiuguhe
Dividends receivable Agriculture 328,178.76
Development
Dividends receivable Anshan Jiuguhe Food 4,965,543.35
Huludao Jiuguhe
Dividends receivable Food 14,060,000.00
Dividends receivable Huludao Jiuguhe Feed 2,200,000.00
B. Payables
RMB
Closing book Opening book
Item Related party
balance balance
Accounts payable Dalian Wellhope Fish Meal 2,716,351.95
Accounts payable Anshan Jiuguhe Food 2,369,800.00 1,049,646.00
Accounts payable Tai’an Jiuguhe Agriculture Development 7,077,312.65
Accounts payable Shenyang Wenjie Bio-Tech 1,335,174.65 2,593,516.64
Accounts payable Dalian Chengsan Animal Husbandry 4,749,094.21
Accounts payable Tai’an Fengjiu Agri-Tech 138,708.74
Accounts payable Jingzhou Jiufeng Food 3,850,650.00 1,617,740.00
Liaoning Mubang Animal Husbandry
Accounts payable 11,284,184.00
Equipment Manufacturing
Accounts payable Shenyang Zhongwenjie Bio-Tech 18,000.00
Daqing Supply and Marketing Wellhope
Accounts payable 49,228.00 457,060.50
Agri-Tech
Accounts payable Qingdao Shenfeng Agri-Tech 1,570,924.91
Zhangjiakou Jiahe Agriculture and Animal
Accounts payable 14,312,881.60
Husbandry
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Accounts payable Dunhua Wellhope Agri-Tech 60,164.96
Contract liability Linghai Jiuguhe Feed 7,860.00
Contract liability Huludao Jiuguhe Feed 564,892.50
Contract liability Nepal Wellhope Agri-tech Pvt. Ltd. 38,700.00 38,700.00
Contract liability Tai’an Jiuguhe Agriculture Development 1,263,596.30 281,300.00
Contract liability Dunhua Wellhope Agri-Tech 323,000.00
Contract liability Qingdao Shenfeng Agri-Tech 30,916.00
Contract liability Haicheng New Hongzunda Agri-Tec 442,525.00
Other payables Nepal Wellhope Agri-tech Pvt. Ltd. 2,999.41 2,999.41
Other payables Unphung Joint Venture Company 71,682.43 71,682.43
Liaoning Mubang Animal Husbandry
Other payables 5,932,500.00
Equipment Manufacturing
Other payables Tai’an Jiufeng Agri-Tech 688.00
XIII.Share-based payment
1. Circumstance of share-based payment
RMB
Total amount of equity instrument granted by the Company during current period 0
Total amount of exercised equity instruments 4,233,000
Total amount of all invalid equity instruments 244,500
Note:
In accordance with the approved resolutions--Liaoning Wellhope 2018 Restricted Stock
Incentive Plan and Its Abstract (draft), Adjusting Related Items regarding to 2018
Restricted Stock Incentive Plan, the Company issued 14.575 million restricted shares to
372 key managers at the price of 4.85 yuan per share in 2018, increased RMB 14.575
million of the registered capital.
This incentive plan should be valid from the date of granting restricted shares to the date
when all restricted shares could be removed trading restrictions or repurchased and
written off by the Company, with a maximum period of no more than 48 months. The
restricted shares should not be transferred, used for guarantee or repaying debts before
removing the trading restrictions, and the shares and dividends obtained from the
restricted shares due to the Company conducting capital reserve converted to share
capital, distributing share dividends, etc., should be simultaneously locked according to
the incentive plan. After the expiration of restricted period, the Company shall handle
related matters, such as removing trading restrictions, whilst the restricted shares held by
the incentive objects who could not meet the conditions of removing restriction, should
be repurchased and written off by the Company, relevant equity could not be deferred to
the next period.
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Arrangement of restricted shares:
Arrangement of Percentage of
removing trading Time of removing trading restrictions unrestricted
restrictions shares
The first trading day after 12 months from the date of
finishing the registration of granted shares to the last
First unlocked period 30.00%
trading day within 24 months from the date of finishing
the registration of granted shares
The first trading day after 24 months from the date of
Second unlocked finishing the registration of granted shares to the last
30.00%
period trading day within 36 months from the date of finishing
the registration of granted shares
The first trading day after 36 months from the date of
finishing the registration of granted shares to the last
Third unlocked period 40.00%
trading day within 48 months from the date of finishing
the registration of granted shares
On March 27, 2020, the board meeting approved the proposal of unlocking restricted
common shares after achieving the performance objective disclosed in 2018 Restricted
Stock Incentive Plan, 367 managers have been qualified to unlock their restricted shares
held in the first lock-up period. 4.233 million restricted shares in the first lock-up period
could be traded in the capital market on April 9, 2020.
2. Equity-settled share-based payment
RMB
Confirmation method of fair value of equity instrument
Closing price at the grant date
at the grant date
It is expected that the conditions can be
Basis for determining the number of exercised equity
met and all the granted objects can exercise
instrument
the equity
Accumulated amount of equity-settled share-based
29,948,845.58
payment that recorded into capital reserve
Total expense recognized by equity-settled share-based
5,167,841.00
payment
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
XIV.Notes to major items of the parent company's financial statements
4. Account receivable
A. Categorized by aging
RMB
Aging Closing book balance
Within 1 year 12,039,998.18
1-2 years 4,924,493.48
2-3 years 3,317,998.70
Over 3 years 28,985,790.90
Total 49,268,281.26
147 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
B. Categorized by bad debt provision method
RMB
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
49,268,281.26 100.00 31,263,907.71 63.46 18,004,373.55 43,173,647.52 100.00 29,541,957.07 68.43 13,631,690.45
provision by grouping
including:
Aging 46,397,642.70 94.17 31,263,907.71 67.38 15,133,734.99 43,173,647.52 100.00 29,541,957.07 68.43 13,631,690.45
Other 2,870,638.56 5.83 2,870,638.56
Total 49,268,281.26 / 31,263,907.71 / 18,004,373.55 43,173,647.52 / 29,541,957.07 / 13,631,690.45
Accruing bad debt provision according to aging
RMB
Closing balance
Aging
Accounts receivable Bad debt provision Accruing percentage %
Within 1 year 9,169,359.62 458,467.98 5.00
1 -2 year 4,924,493.48 492,449.35 10.00
2-3 years 3,317,998.70 1,327,199.48 40.00
Over 3 years 28,985,790.90 28,985,790.90 100.00
Total 46,397,642.70 31,263,907.71 /
148 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
C. Bad debt provision
RMB
Changes in current
Category Opening balance period Closing balance
Accruing
Aging 29,541,957.07 1,721,950.64 31,263,907.71
total 29,541,957.07 1,721,950.64 31,263,907.71
D. Top 5 accounts receivable
RMB
Percentage of
Bad debt
Debtor Nature Closing balance total accounts
provision
receivable %
1 Non related party 8,293,237.00 16.83 7,197,379.00
2 Non related party 7,350,329.71 14.92 7,350,329.71
3 Non related party 7,053,335.00 14.32 7,053,335.00
4 Non related party 3,082,405.25 6.26 282,195.53
5 Non related party 2,997,425.00 6.08 982,385.63
Total / 28,776,731.96 58.41 22,865,624.87
5. Other receivable
RMB
Item Closing balance Opening balance
Interest receivable
Dividends receivable 33,977,209.35 33,977,209.35
Other receivables 1,687,559,455.97 986,808,467.11
Total 1,721,536,665.32 1,020,785,676.46
A. Dividends receivable
RMB
Item Closing balance Opening balance
Dividends from long-term investment
8,623,487.24 8,623,487.24
under cost method
Dividends from long-term investment
25,353,722.11 25,353,722.11
under equity method
Total 33,977,209.35 33,977,209.35
149 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
B. Other receivable
a. Categorized by aging
RMB
Aging Closing book balance
Within 1 year
Subtotal 1,653,840,572.87
1-2 years 101,436.00
2-3 years 56,178,845.00
Over 3 years 259,254.66
Total 1,710,380,108.53
b. Categorized by nature
RMB
Nature Closing book balance Opening book balance
Operating receivable 1,052,303.66 665,830.66
Cash pledge and guarantee deposit 261,200.00 259,200.00
Related party- fund transaction 1,680,594,804.87 980,333,632.11
Receivables from disposal of investment 28,471,800.00 28,471,800.00
Total 1,710,380,108.53 1,009,730,462.77
c. Bad debt provision accruing
RMB
First stage Second stage Third stage
Expected credit loss
Bad debt Expected credit loss
Expected credit for the entire Total
provision for the entire
losses over the next duration (credit
duration (no credit
12 months impairment
impairment)
occurred)
Balance on
January 1, 22,921,995.66 22,921,995.66
2020
Accruing in
the reporting -101,343.10 -101,343.10
period
Balance on
22,820,652.56 22,820,652.56
June 30, 2020
d. Bad debt provision
RMB
Changes in current period
Opening Closing
Category Collected or Charge off or
balance Accruing balance
reversed write-off
Aging 22,921,995.66 -101,343.10 22,820,652.56
total 22,921,995.66 -101,343.10 22,820,652.56
150 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
e. Top 5 other receivables
RMB
% of closing Closing balance
Company Type Closing balance Aging balance of total of bad debt
other receivables provision
Within 1
1 Subsidiary 297,000,000.00 10.34
year
Within 1
2 Subsidiary 97,507,148.20 7.20
year
Within 1
3 Subsidiary 87,531,310.00 7.13
year
Within 1
4 Subsidiary 83,591,501.52 6.15
year
Within 1
5 Subsidiary 83,351,016.00 5.80
year
Total / 648,980,975.72 / 36.62
6. Long-term equity investment
RMB
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Investment in
2,330,344,891.04 2,330,344,891.04 2,113,924,536.04 2,113,924,536.04
subsidiaries
Investment in
associates and 2,134,204,264.00 17,900,000.00 2,116,304,264.00 2,021,291,294.06 17,900,000.00 2,003,391,294.06
joint ventures
Total 4,464,549,155.04 17,900,000.00 4,446,649,155.04 4,135,215,830.10 17,900,000.00 4,117,315,830.10
A. Investment in subsidiaries
RMB
Increase in current
Company Opening balance Closing balance
period
Haicheng Wellhope Feed 12,620,515.83 22,912.00 12,643,427.83
Tai'an Wellhope Feed 33,059,905.41 9,546.00 33,069,451.41
Shenyang Wellhope Ruminant
6,050,115.42 120,292.00 6,170,407.42
Feed
Liaoning Wellhope Agriculture
47,541,089.95 106,926.00 47,648,015.95
and Animal Husbandry
Shenyang Nongda Wellhope
44,593,664.17 61,534.00 44,655,198.17
Feed
Xingcheng Wellhope Feed 82,799,527.09 66,828.00 82,866,355.09
Dalian Wellhope Feed 42,390,969.16 64,920.00 42,455,889.16
Jinzhou Wellhope Agri-Tecj 17,265,295.42 59,190.00 17,324,485.42
Changtu Wellhope Feed 3,000,000.00 3,000,000.00
Shenyang Wellhope Extruded
33,042,789.58 9,546.00 33,052,335.58
Feed
Shenyang Wellhope Aquatic
15,290,969.17 64,918.00 15,355,887.17
Feed
Shenyang Wellhope Agri-Tech 83,036,592.50 206,214.00 83,242,806.50
Shenyang Wellhope Poultry 68,463.33 15,276.00 83,739.33
151 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Gongzhuling Wellhope
35,513,807.92 113,088.00 35,626,895.92
Agri-Tech
Jilin Wellhope Agri-Tech 16,248,947.92 28,446.00 16,277,393.92
Gongzhuling Wellhope
5,085,579.17 19,094.00 5,104,673.17
Ruminant Feed
Sanjiang Wellhope Agri-Tech 21,214,420.81 3,190.00 21,217,610.81
Mudanjiang Wellhope
23,286,612.96 7,638.00 23,294,250.96
Agri-Tech
Heilongjiang Wellhope
120,876,334.58 194,758.00 121,071,092.58
Agri-Tech
Beijing Helai Sci-Tech 25,473,427.09 105,016.00 25,578,443.09
Beijing Wellhope Agri-Tech 5,094,470.00 5,094,470.00
Huai'an Wellhope Feed 30,265,295.42 32,118.00 30,297,413.42
Gansu Wellhope Agri-Tech 40,117,754.58 26,732.00 40,144,486.58
Henan Wellhope Agri-Tech 52,849,621.66 77,658.00 52,927,279.66
Lankao Wellhope Agri-Tech 43,085,579.17 19,094.00 43,104,673.17
Kaifeng Branch of Henan
193,757.50 36,930.00 230,687.50
Wellhope Agri-Tech
Shenyang Huaweida Animal
77,021.25 -59,837.24 17,184.01
Health Product
Jilin Wellhope Hog Breeding 15,000,000.00 15,000,000.00
Shenyang Expert Trading 30,000,000.00 30,000,000.00
Shenyang Jiahe Tianfeng
10,146,170.00 32,460.00 10,178,630.00
Commerce and Trade
Liaoning Expert Trading 73,899,932.50 158,212.68 74,058,145.18
Shenyang Pufeng Commerce
15,499,788.72 15,499,788.72
and Trade
Liaoning Wellhope Purchasing
30,282,411.25 7,174.00 30,289,585.25
& Trading
Liaoning Skyland Livestock
28,669,810.83 14,888.00 28,684,698.83
Equipment
Shenyang Fame Bio-Tech 20,500,521.85 84,012.00 20,584,533.85
Pingyuan Wellhope Food 147,540,969.17 64,918.00 147,605,887.17
Pingyuan Wellhope Agri-Tech 273,853.33 61,100.00 334,953.33
Kaifeng Wellhope Food 100,000,000.00 100,000,000.00
Wellhope Food (Shenyang) 5,160,191.67 5,160,191.67
Liaoning Godaji E-Commerce 10,497,690.83 118,384.00 10,616,074.83
Linxi Helai Agri-Tech 9,023,617.50 1,021,004.00 10,044,621.50
Xi'an Linfeng Shengyi Trading 2,000,000.00 2,000,000.00
Luoyang Wellhope Agriculture
45,200,000.00 45,200,000.00
and Animal Husbandry
Lingyuan Wellhope Agri-Tech 16,915,295.41 59,192.00 16,974,487.41
Haicheng Xinzhongxin Feed 6,004,151.48 24,822.00 6,028,973.48
Fuyu Wellhope Agri-Tech 46,602,789.58 9,546.00 46,612,335.58
Changchun Wellhope Feed 84,604,867.91 70,648.00 84,675,515.91
Daqing Wellhope Bayi Nongda
13,896,289.17 40,096.00 13,936,385.17
Animal Sci-Tech
Beijing Sanyuan Wellhope
8,808,814.58 393,037.51 9,201,852.09
Agri-Tech
Tangshan Wellhope Feed 43,441,837.54 32,062.30 43,473,899.84
Cangzhou Helai Sci-Tech 3,533,898.75 5,728.00 3,539,626.75
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Shanxi Wellhope Agri-Tech 40,042,789.58 9,546.00 40,052,335.58
Tangshan Hejia Agriculture
19,636,926.67 30,550.00 19,667,476.67
and Animal Husbandry
Tangshan Wellhope Sci-Tech 21,034,231.67 7,638.00 21,041,869.67
Shanghai Wellhope Feed 2,302,930.84 71,151.75 2,374,082.59
Pinghu Wellhope Agri-Tech 1,029,716.25 40,096.00 1,069,812.25
Anhui Wellhope Agri-Tech 70,165,675.08 42,022,912.00 112,188,587.08
Anhui Wellhope Haoxiang
15,276.00 15,276.00
Agriculture Development
Xi'an Wellhope Feed 4,962,363.33 152,750.00 5,115,113.33
Zhengzhou Wellhope
4,044,926.67 28,012.00 4,072,938.67
Agri-Tech
Zhumadian Wellhope
9,061,961.67 13,366.00 9,075,327.67
Agri-Tech
Nanyang Wellhope Feed 11,125,637.39 21,004.00 11,146,641.39
Jiaozuo Wellhope Feed 49,209,905.42 13,366.00 49,223,271.42
Jingzhou Wellhope
21,443,959.42 58,802.00 21,502,761.42
Agri-Sci-Tech
Qingdao Wellhope Agri-Tech 28,893,664.16 87,832.00 28,981,496.16
Jining Wellhope Agri-Tech 19,751,300.83 19,094.00 19,770,394.83
Yunnan Wellhope Feed 24,284,231.67 13,366.00 24,297,597.67
Fuyu Wellhope Taolaizhao
5,660,231.67 4,254.00 5,664,485.67
Poultry Raising
Harbin Weierhao Trading 3,970,817.50 29,292.00 4,000,109.50
Changchun Hengfeng
Agriculture and Animal 239,621.66 53,464.00 293,085.66
Husbandry Equipment
Beijing Brilliant Dragon
222,505.83 27,648.00 250,153.83
Commerce and Trade
Shanghai Hehong Trading 1,191,063.75 13,482.00 1,204,545.75
Jinan Xinweita Trading 171,158.33 21,268.00 192,426.33
Zhangwu Wellhope
1,800,000.00 1,800,000.00
Agriculture
Tongliao Wellhope Tianyi
10,200,000.00 10,200,000.00
Prataculture
Chongqing Dahong
Agriculture and Animal 119,810.83 26,732.00 146,542.83
Husbandry Equipment
Guangzhou Xiangshun
3,001,347.50 11,456.00 3,012,803.50
Livestock Equipment
Dalian Huakang Xinxin Food 11,709,361.25 292,134.00 12,001,495.25
Dalian Heyuan Agri-Tech 51,710,307.08 158,478.00 51,868,785.08
Dalian Zhongjia Food 196,832.08 43,916.00 240,748.08
Shenyang Huakang Broiler 2,152,531.67 126,018.00 2,278,549.67
Shenyang Huakang Xinxin
1,973,853.33 61,100.00 2,034,953.33
Food
Shenyang Huakang
Agriculture and Animal 770,212.50 171,844.00 942,056.50
Husbandry
Changchun Wellhope Food 8,671,158.33 38,188.00 8,709,346.33
Dehui Wellhope Agri-Tech 51,347.50 11,456.00 62,803.50
Puyang Wellhope Food 20,213,947.92 47,734.00 20,261,681.92
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Puyang Wellhope Agri-Tech 51,347.50 11,456.00 62,803.50
Kaifeng Wellhope Agriculture
51,347.50 11,456.00 62,803.50
and Animal Husbandry
Liaoning Wellhope Food 30,045,198.33 45,826.00 30,091,024.33
Chongqing Wellhope
1,500,000.00 -14,286.00 1,485,714.00
Agri-Tech
Nanchang Wellhope Agri-Tech 3,250,000.00 3,250,000.00
Hengyang Wellhope
4,600,000.00 4,600,000.00
Agri-Sci-Tech
Shulan Fengtai Agriculture
6,000,000.00 13,366.00 6,013,366.00
and Animal Husbandry
Shulan Fengtai Raising 5,100,000.00 5,100,000.00
Hainan Wellhope Agri-Tech 38,164,884.20 9,000,000.00 47,164,884.20
Russia Wellhope Agri-Tech 11,700,000.00 11,700,000.00
Chifeng Wellhope Fuxinyuan
105,000,000.00 105,000,000.00
Food
Shenyang Xiangmai
800,000.00 800,000.00
E-Commerce
Hebei Taihang Wellhope Food 9,000,000.00 9,000,000.00
Total 2,113,924,536.04 216,420,355.00 2,330,344,891.04
154 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
B. Investment in associates and joint ventures
RMB
Increase or decrease in current period
Closing
Gains or losses
Adjustment of Declaring of balance of
Company Opening balance on investments Closing balance
Additional other paying impairment
recognized
investment comprehensive dividend or provision
under equity
income profit
method
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 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
Dunhua Wellhope
4,178,671.25 385,403.69 4,564,074.94
Agri-Tech
Dunhua Fengda
Agriculture and Animal 2,986,597.14 4,994,971.77 7,981,568.91
Husbandry Development
Qingdao Shenfeng 13,573,648.97 748,458.85 14,322,107.82
Zhangjiakou Jiahe
Agriculture and Animal 68,145,308.99 32,666,799.59 100,812,108.58
Husbandry
Tailai Jiahe Agriculture
27,134,553.62 17,849,560.97 44,984,114.59
and Animal Husbandry
Gongzhuling Corn
49,602,919.46 -1,526,619.80 48,076,299.66
Purchasing and Storing
155 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Beijing Dahong Hengfeng
20,087,982.12 456,127.14 20,544,109.26
Agri-Tech
Schipper(Beijing) 1,270,877.77 212,349.05 1,483,226.82
GOLDEN HARVESTA INC. 104,931,225.82 1,680,750.70 2,945,569.11 109,557,545.63
PT KARKA NUTRI
38,998,739.72 647,315.58 -57,328.83 39,588,726.47
INDUSTRI.
Hainan Nongken
Wenfeng Wenchang 1,071,542.40 4,900,000.00 -165,429.32 5,806,113.08
Chicken
Tai’an Jiuguhe Agriculture 111,292,888.94 -24,036,930.68 87,255,958.26
Linghai Jiuguhe Feed 62,403,210.81 -8,542,203.13 53,861,007.68
Dandong Wellhope
52,614,814.23 10,083,391.76 2,000,000.00 60,698,205.99
Chengsan Food
Anshan Jiuguhe Food 152,438,428.77 40,248,068.41 33,242,400.00 159,444,097.18
Beipiao Hongfa Food 442,144,638.08 46,277,265.92 488,421,904.00
Haicheng New
12,850,037.83 1,375,229.55 1,470,000.00 12,755,267.38
Hongzunda Agri-Tech
Huludao Jiuguhe Food 70,721,671.34 17,004,977.98 13,300,000.00 74,426,649.32
Dandong Wellhope
112,253,275.58 -293,948.88 2,000,000.00 109,959,326.70
Chengsan Agri-Tech
Tai'an Jiufeng Agri-Tech 5,951,804.50 182,624.00 -1,153,694.01 4,980,734.49
Shenyang Wenjie
12,442,904.99 141,560.82 12,584,465.81
Bio-Tech
Shenyang Zhongwenjie
4,060,534.77 533,672.62 4,594,207.39
Bio-Tech
Huluodao Jiuguhe Feed 42,015,223.35 -10,077,547.46 13,300,000.00 18,637,675.89
Jinzhou Jiufeng Food 48,476,492.49 19,329,815.40 67,806,307.89
Dalian Chengsan Animal
353,954,231.89 6,101,236.52 360,055,468.41
Husbandry
Tai'an Fengjiu Agri-Tech 37,837,537.89 -476,164.49 37,361,373.40
Anshan Fengsheng Food 30,430,304.76 13,159,004.46 43,589,309.22
Lankao Skyland Duck 52,618,773.55 -6,112,003.85 46,506,769.70
Guangrong Xinchuang 47,617,462.51 946,503.02 -623,081.20 47,940,884.33
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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Shulan Fengtai Organic
1,500,000.00 1,500,000.00
Fertilizer
Weifang Wellhope
4,517,477.41 163,974.97 4,681,452.38
Xinhesheng Feed
Liaoning Mubang Animal
Husbandry Equipment 1,791,476.38 2,626,742.47 4,418,218.85
Manufacturing
Anshan Yufeng Feed -193,154.81 -314,363.36 -507,518.17
Dunhua Fengda Broiler
6,000,000.00 -56,689.40 5,943,310.60
Breeding
subtotal 1,991,722,102.52 11,082,624.00 164,877,586.86 2,265,159.08 65,312,400.00 2,104,635,072.46
Total 2,021,291,294.06 11,082,624.00 164,877,586.86 2,265,159.08 65,312,400.00 2,134,204,264.00 17,900,000.00
157 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
7. Operating revenue and cost
RMB
Jan.-Jun. 2020 Jan.-Jun. 2019
Item
Revenue Cost Revenue Cost
Revenue from principal
402,473,395.82 283,945,280.55 261,094,599.13 173,755,790.76
businesses
Revenue from other
730,857.70 270,866.55 645,022.62 296,165.04
businesses
Total 403,204,253.52 284,216,147.10 261,739,621.75 174,051,955.80
8. Return on investment
RMB
Item Jan.-Jun. 2020 Jan.-Jun. 2019
Income from long-term equity investments
24,244,972.00 17,600,000.00
under cost method
Income from long-term equity investments
164,877,586.86 185,679,010.80
under equity method
Income from holding trading financial assets 1,924,534.25
Income from disposal of other equity
100,000.00
instrument investments
Income from disposal of financial assets that
are measured at fair value and its changes -18,935.44 -658,675.89
are recorded in current gains and losses
Total 191,028,157.67 202,720,334.91
XV.Supplementary Information
1. Non-recurring items in current period
RMB
Item Amount Note
Gains or losses from disposal of non-current assets -567,086.15
Government grants charged to current gains or losses
(excl. the government grants which are closely related to
the Company's ordinary course of business and gained 12,625,199.07
constantly at fixed quotas or amounts as per certain
standards based on the state polices)
Gains or losses on fair-value changes in trading financial
assets and liabilities, derivative financial assets and
liabilities, and the income from disposal of trading
financial assets and liabilities, derivative financial assets -1,899,996.55
and liabilities as well as other debt investment (excl. the
effective portion of hedges that arise in the Company's
ordinary course of business)
Non-operating income and expense other than those
-4,960,053.70
described above
Income tax effects -1,176,176.26
Non-controlling interests effects -596,370.19
Total 3,425,516.22
158 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
2. Return on equity and earnings per share
Weighted average EPS
Profit in Jan.-Jun. 2020
ROE % Basic EPS Diluted EPS
Net profit attributable to common
10.16 0.66 0.66
shareholders of the Company
Net profit attributable to common
shareholders of the Company deducting 10.10 0.65 0.65
non-recurring items
159 / 160
Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2020 Interim Report
Section XI Reference
Financial statements with the signature and seal of the legal representative,
Reference file
the person in charge of the accounting work and the person in charge of
directory
the accounting department.
During the reporting period, all the original documents and original
Reference file
announcements of the Company that have been publicly disclosed in the
directory
newspapers designated by the CSRC.
Chairman of the Board of Directors: Jin Weidong
The submission date approved by the Board of Directors: August 7, 2020
160 / 160
