Stock Code: 603609 Stock Abbreviation (English): Wellhope
Wellhope Foods Co., Ltd.2020 Annual Report
March 2021
Important StatementsI. The Board of Directors, Supervisory Board, Directors, Supervisors and Senior Management ofWellhope hereby warrant that there are no false representations, misleading statements or materialomissions in this annual report, jointly and severally accept full responsibility for the truthfulness,accuracy and completeness of the contents of this report.II. All Directors attended the Board Meeting.III. SuyaJincheng CPA LLP has issued a standard audit report for Wellhope.IV. Wellhope's Chairman Jin Weidong and the Director of internal audit Zhang Wenliang warrant thetruthfulness, accuracy and completeness of the information presented in the financial statements inthis annual report.V. The dividend plan for the reporting period has been deliberated by the Board of Directors.The plan for 2020 dividend distribution will be: based on total share capital on the equity registrationdate, Wellhope plans to pay dividends of RMB 2.20 yuan per 10 shares (tax included) to all shareholders.This dividend plan has been approved by the Board of Directors, pending submission to theShareholders' Meeting.VI. Risk Statement of Forward-looking StatementsThe forward-looking descriptions in this report such as plans, development strategies and otherinformation cannot be deemed the Company's commitment to investors. Please beware of theinvestment risks.VII. There has been no occurrence of the Company's non-business capital being occupied bycontrolling shareholder and his related parties.VIII. There has been no occurrence of the Company violating its decision-making procedure whileproviding external guarantees.IX. Material Risk WarningWellhope describes possible risks in detail, please refer to "Possible Risks" in Section IV "BusinessOperations Analysis".X. This annual report has been issued in both Chinese and English versions. In case there is anydiscrepancy or inconsistency between the two versions, the Chinese version shall prevail. The disclosedChinese version of 2020 Annual Report can be obtained at: www.sse.com.cn.
Contents
Section I Glossary ...... 4
Section II Company Profile and Key Financial Information ...... 5
Section III Business Overview ...... 9
Section IV Business Operations Analysis ...... 21
Section V Important Disclosures ...... 56
Section VI Changes in Common Shares and Shareholder Information ...... 76
Section VII Preference Share ...... 81
Section VIII Directors, Supervisors, Senior Management and Employees ...... 82
Section IX Corporate Governance ...... 88
Section X Corporate Bond ...... 91
Section XI Financial Statements ...... 92
Section XII Reference ...... 233
Section I GlossaryI. Glossary
| CSRC | refers to | China Securities Regulatory Commission |
| SSE | refers to | Shanghai Stock Exchange |
| Wellhope, the Company | refers to | Wellhope Foods Co., Ltd. |
| Reporting Period | refers to | January 1, 2020-December 31, 2020 |
| The end of the reporting period | refers to | December 31, 2020 |
| Royal De Heus | refers to | Koninklijke De Heus B.V., the parent company of De Heus Mauritius Ltd., the biggest privately-owned feed company in the Netherlands |
| Company Constitution | refers to | The Constitution of Wellhope Foods Co., Ltd. |
| Shareholders' Meeting | refers to | The Shareholders' Meeting of Wellhope Foods Co., Ltd. |
| Board of Directors | refers to | The Board of Directors of Wellhope Foods Co., Ltd. |
| Supervisory Board | refers to | The Supervisory Board of Wellhope Foods Co., Ltd. |
| Corporate Law | refers to | The Corporate Law of the People's Republic of China |
| Securities Law | refers to | The Securities Law of the People's Republic of China |
Section II Company Profile and Key Financial InformationI. Company Information
| Company name (English) | Wellhope Foods Co., Ltd. |
| Abbreviation (English) | Wellhope |
| Company name (Chinese) | 禾丰食品股份有限公司 |
| Abbreviation (Chinese) | 禾丰股份 |
| Legal Representative | Jin Weidong |
| Secretary of the Board | Representative of Securities Affairs | |
| Name | Zhao Xin | Zhao Changqing |
| Address | No. 169, Huishan Street, Shenbei New District, Shenyang, Liaoning Province, China | No. 169, Huishan Street, Shenbei New District, Shenyang, Liaoning Province, China |
| Tel | 024-88081409 | 024-88081409 |
| Fax | 024-88082333 | 024-88082333 |
| hfmy@wellhope.co | hfmy@wellhope.co |
| Registered address | No. 169, Huishan Street, Shenbei New District, Shenyang, Liaoning Province, China |
| Postal code | 110164 |
| Office address | No. 169, Huishan Street, Shenbei New District, Shenyang, Liaoning Province, China |
| Postal code | 110164 |
| Company website | www.wellhope-ag.com |
| hfmy@wellhope.co |
| Media designated by the Company for disclosing information | China Securities Journal, Shanghai Securities News, Securities Times |
| Website designated by the CSRC for publishing the annual report | www.sse.com.cn |
| Place where the Company prepares its annual report | Securities Department |
| Stock information | |||
| Stock type | Stock exchange for IPO | Stock abbreviation | Stock code |
| A share | Shanghai Stock Exchange | Wellhope(禾丰股份) | 603609 |
VI. Other Information
| Accounting firm (local) | Name | SuyaJincheng CPA LLP |
| Office address | 22nd-23rd F, Central International Plaza, No. 105-6 North Zhongshan Road, Nanjing, Jiangsu Province, China | |
| Name of signatory CPA | Zhou Jiawen, Wang Lei | |
| The sponsor performs the responsibility of continuous supervision during the reporting period | Name | GF Securities |
| Office address | GF Securities Tower, 26 Machang Road, Tianhe District, Guangzhou, China | |
| Name of signatory representative | Xu Hailin, He Yu | |
| Period of conducting continuous supervision | 2020 |
| Item | 2020 | 2019 | Year-on-Year change % | 2018 |
| Operating revenue | 23,817,600,766.26 | 17,792,091,973.58 | 33.87 | 15,750,798,120.67 |
| Net profit attributable to the shareholders of the Company | 1,235,162,151.48 | 1,199,347,355.96 | 2.99 | 551,928,618.35 |
| Net profit attributable to the shareholders of the Company deducting extraordinary items | 1,230,677,435.86 | 1,190,975,760.51 | 3.33 | 542,459,604.74 |
| Net cash flow from operating activities | 765,945,453.03 | 1,111,605,966.58 | -31.10 | 501,404,915.59 |
| As at the end of 2020 | As at the end of 2019 | Year-on-Year change % | As at the end of 2018 | |
| Net assets attributable to the shareholders of the Company | 6,752,397,489.35 | 5,698,139,557.54 | 18.50 | 3,851,915,758.64 |
| Total assets | 11,646,508,203.99 | 9,149,772,043.85 | 27.29 | 6,930,694,562.43 |
| Item | 2020 | 2019 | Year-on-Year change % | 2018 |
| Basic earnings per share (yuan per share) | 1.34 | 1.34 | 0.00 | 0.66 |
| Diluted earnings per share (yuan per share) | 1.34 | 1.34 | 0.00 | 0.66 |
| Basic earnings per share deducting extraordinary items (yuan per share) | 1.33 | 1.33 | 0.00 | 0.65 |
| Weighted average return on equity (%) | 19.93 | 24.57 | Decreased 4.64 percentage points | 15.30 |
| Weighted average return on equity deducting extraordinary items (%) | 19.86 | 24.40 | Decreased 4.54 percentage points | 15.04 |
VIII. Key Financial Figures by Quarters in 2020
Unit: yuan Currency: RMB
| Item | Q1 | Q2 | Q3 | Q4 |
| Operating revenue | 4,457,455,800.34 | 5,390,924,051.94 | 7,009,559,518.56 | 6,959,661,395.42 |
| Net profit attributable to the shareholders of the Company | 303,680,389.66 | 302,335,346.35 | 322,168,482.30 | 306,977,933.17 |
| Net profit attributable to the shareholders of the Company deducting extraordinary items | 303,734,949.01 | 298,855,270.78 | 317,160,086.57 | 310,927,129.50 |
| Net cash flow from operating activities | -40,329,752.04 | 491,725,779.82 | -168,590,314.05 | 483,139,739.30 |
| Item | 2020 | 2019 | 2018 |
| Gains or losses on disposal of non-current assets | 3,169,342.06 | -3,146,106.63 | -3,713,387.32 |
| 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 constantly at fixed quotas or amounts as per certain standards based on the state polices) | 33,102,019.89 | 22,363,695.79 | 19,471,241.10 |
| Income generated from the investment costs for acquiring subsidiaries, associated companies and joint ventures being lower than the fair value of the investee’s net identifiable assets acquired by the Company | 1,844.71 | ||
| Gains or losses on debt restructuring | -1,147,367.47 | ||
| 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 and liabilities as well as other debt investment (excl. the effective portion of hedges that arise in the Company's ordinary course of business) | -148,741.92 | 4,418,219.50 | 2,821,414.45 |
| Non-operating income and expense other than those described above | -24,964,468.42 | -15,858,496.27 | -3,208,527.84 |
| Other items that meet the definition of deducting extraordinary items | 820,378.27 | ||
| Non-controlling interests’ effects | -3,449,600.51 | 3,972,264.26 | -590,792.81 |
| Income tax effects | -3,223,835.48 | -4,200,204.18 | -4,163,566.50 |
| Total | 4,484,715.62 | 8,371,595.45 | 9,469,013.61 |
X. Item Measured at Fair Value
Unit: yuan Currency: RMB
| Item | Opening balance | Closing balance | Change | Effects on current profit |
| Derivative financial assets | 3,912,584.30 | 4,725,552.30 | 812,968.00 | -1,397,309.00 |
| Total | 3,912,584.30 | 4,725,552.30 | 812,968.00 | -1,397,309.00 |
Section III Business OverviewI. Primary Business, Operation Model and Circumstance of Industries in the Reporting Period
Wellhope is one of the renowned large-scale enterprises across domestic agriculture and animalhusbandry industries, primary businesses cover animal feed, feed raw materials trade, broilerintegration, and swine raising, it is also involved in veterinary drug, farming equipment manufacturing,pet clinic, etc. In 2018, Wellhope identified food business as its strategic business, which is now in fullswing implementation. Since establishment, Wellhope has always adhered to its corporate mission, i.e.,“Through advanced technology, professional service, and high-quality products, Wellhope is devoted tothe development of China’s animal husbandry industry, resources conservation, environmentprotection, as well as food security for the benefit of people", and all Wellhope people hold together toset sights on becoming one of the world's leading enterprise across agriculture, animal husbandry, andfood industries.During the reporting period, the primary businesses of Wellhope have not changed significantly.
| Primary business | Feed | Broiler integration | Swine raising |
| Primary products | Swine, poultry, ruminant, aquatic feed | Live broiler, broiler parts products | Finisher, piglet, pig breeders |
| Operation model | Sales model-dealer, direct sales Operation model-R&D, purchasing, production, marketing, service | Industrial chain-covering broiler breeder raising, day old chick hatching, feed processing, commercial broiler rearing, slaughtering and processing, further processing of prepared food and cooked food Raising model of commercial broiler-own farms together with contract farms(outsourcing) | Industrial chain-covering a complete swine breeding system, including great grandparent, grandparent and parent stock, piglet, and commercial swine Raising model of finisher- own farms together with contract farms(outsourcing) |
| Business distribution | 29 provincial-level administrative regions | Liaoning, Jilin, Henan, Hebei, and Shandong provinces | Liaoning, Jilin, Heilongjiang, Anhui, Hebei, and Henan provinces |
vaccines and veterinary drugs produced by global strategic suppliers. Now the trade business is active inthe regions of Northeast, North, East, South, and Southwest regions across China, some products havebeen exported to Nepal, Mongolia and other countries.
2. Broiler integration business
Wellhope has invested more than 50 holding and associated entities in the value chain of broilerintegration, which are mainly located in the provinces of Liaoning, Hebei, Henan, Jilin and Shandong,etc. Wellhope's broiler integration business, with three business sectors in terms of broiler raising, meatprocessing and further processing, contains all parts in the industrial chain, including broiler breedersraising, day-old chick hatching, feed production, commercial broiler rearing, slaughtering andprocessing of raw meat, further processing of prepared and cooked food. Through standardizedmanagement and streamline operation, Wellhope, cooperating with its partners, consolidates thecontrols of bio-safety, drug residue and in-process hygiene to achieve traceable food safety. Based onthe number of broilers slaughtered by holding and associated factories, Wellhope has stepped into thefirst echelon of white feather broiler industry and become one of the leading suppliers of broilerproducts nationwide.
? Broiler raising: This sector covers broiler breeder raising, day-old chick hatching, commercial broilerrearing and feed processing. By formulating scientific and rational feeding programs, light programs andcomprehensive disease prevention systems, Wellhope provides high-quality eggs for its hatching farms.Meanwhile, it has established thorough management systems in the hatching process and purchasedintelligent facilities that are available for hatching in batches, also equipped with high-efficient andenergy-saving hatcher and micro-environment control system for producing healthy day-old chicks.Entering commercial broiler sector, Wellhope mainly raises broiler by self-invested farms andcontract(out-sourcing) farms under the pattern of standardized management by unifying nine aspects.
All these farms apply three-tier cages and automate all the processes from feed intake, water supply,temperature to moisture control, etc. The average weight of Wellhope’s commercial broiler has reached
3.0 kg with the livability of over 96%, and the European production index exceeded 390, which havereceived wide recognitions from the cooperative farms.?Raw meat processing: Wellhope has set up 17 holding and associated slaughtering and processingfactories, which are equipped with domestically state-of-the-art production lines that are available toslaughter 800 million broilers per year. Driven by strict all-in and all-out inspection and quarantine aswell as drug residue detection, every single factory has established a total quality guarantee system andtraceability system to monitor all the processes. Meanwhile, Wellhope constantly strengthensslaughtering and processing techniques by ways of systematic pre-job training and skill promotiontraining 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 companieswith similar scale. Now Wellhope’s broiler parts products have entered the supply chain of ShinewayGroup, Jinluo Group, Yurun Group, China’s McDonalds and KFC, Yoshinoya, Wallace, Dili Fresh Food,Yonghui Superstores, RT-MART, other regional large food distributors, fresh markets and foodprocessing plants, etc. In the meantime, broiler products have also been sold to the regions of HongKong and Macao, and exported to some countries such as Mongolia and Bahrain, etc.?Further processing: Relying on the advantage of integration, Wellhope uses high-quality chickensupplied by own slaughterhouses as raw materials and installs efficient and energy-saving equipment toprocess raw meat into prepared products. At present it supplies over 100 kinds of further-processedchicken products to central kitchens of restaurant chains, corporate and school canteens, supermarketsand convenience stores. In terms of online marketing, Wellhope’s flagship store of food products hasbeen launched on Taobao and JDcom, whilst some of its independent-brand products produced byWellhope's subordinated companies have also been marketed via community e-commerce platforms. Inaddition, due to ever-growing demand from consumers, Wellhope has been vigorously expanding itsexport business of cooked products, and such products have successfully penetrated the Japanese andKorean markets with good response.
3. Swine raising business
By carefully considering industry trends and own strengthens, Wellhope has ventured swine raisingbusiness in 2016. Through solely-invested and co-invested operations, it has built farms and expandedbusinesses in some predominant regions suitable for raising swine, such as Liaoning, Jilin, Heilongjiang,Henan, Hebei, and Anhui provinces. Among these projects, those farms located in Hebei andHeilongjiang provinces are jointly built by Wellhope and Hunan Jiahe Agriculture and Animal HusbandryCompany, top 15 in national swine raising industry, whilst farms located in Anhui province are jointlyinvested with Anhui Haoxiang Agriculture and Animal Husbandry Company, a leading enterprise inagricultural integration in Anhui province and a member of the National Swine Joint Breeding
Cooperative Group, other farms are invested by Wellhope solely. At present, Wellhope's swine raisingbusiness mainly adopts the operation model that composes of pig breeders raising and sales,commercial piglet selling plus fattening via own farms and contract farms (such as leasing, agentconstruction, cooperative farming base). At the same time, each region set up boar house to reserveexcellent boars to maintain breeding advantage. Through establishing comprehensive and strictbio-safety systems, advanced breeding systems and scientific feeding management systems, Wellhopeis devoted to crafting an integrated chain that contains breeding, swine raising, slaughtering andprocessing.
A. Building farms with high standardWellhope insists on constructing farms in compliance with the principle of moderate scale for everysingle farm, whilst it strictly designs bio-safety systems driven by the philosophy of beginning with theend in mind. All newly-built and under-construction projects adopt advanced production process andfarming equipment, while using intelligent feeding system, environmental control equipment, andproduction management software to improve productivity and create a comfortable environment forswine.B. Holistic operationa. In terms of genetic selection and breeding. Wellhope introduces high-quality pig breeders withFrench, American and Danish genes to match different business areas to provide parent stock with pureblood and clear pedigree. At the same time, by establishing scientific breeding programs, Wellhopecontinuously optimizes the structures of breeding stock to ensure the source of excellent breeders, soas to enhance its competence in swine raising industry.b. In terms of feeding management. Wellhope has established a dynamic management system forfeeding swine. It covers feed nutrition and raw material database, feed processing and product qualitydatabase as well as production performance database, in combination with dynamic formulationtechnology, large-scale pig farm feeding management technology and bio-safety prevention technologyto provide systematic nutrition solutions for farms. Meanwhile, through continuous measures such asdata collection and analysis, result tracking, Wellhope is capable to accurately optimize nutritionprograms, refine internal management and risk warning to improve feeding performance.c. In terms of bio-safety prevention. After more than two years of exploration and experimentation,
Wellhope has established the bio-safety management system that consists of small group feeding,four-zone control, three-level disinfection, precise detection and monitoring with alarm system. Forinstance, various levels of security systems, such as service centers and disinfection areas have been setup outside the farms. Professional staff disinfect people, vehicles and materials thoroughly step by step.Regarding inside farms, all these farms have been divided into zones with different safety levelscorresponding to quarantine and isolation remedy, with installation of AI identification and surveillancecameras at key links and spots of bio-safety. The visualization management helps ensure enforcementof bio-safety measures. Moreover, each business unit has set up laboratories specialized in testingAfrican swine fever, which apply techniques like fluorescence quantitative PCR to achieve precisedetection, discovery and elimination to safeguard pig farms.
4. The Company's position in the involved industries
Wellhope has obtained the honorary titles of National Leading Enterprise in Agricultural IntegrationIndustry, National-recognized Enterprise Technology Center, National High-Tech Enterprise. Sincecompleting IPO in 2014, Wellhope has been elected as Top 100 Most Valuable Corporation of ChinesePublic Companies for four times and ranked on China’s Top 500 Private Enterprise for four times.Meanwhile, it holds a leading position in the Northeast regions of China, whilst has also become ahighly influential brand in North, East, Central and Northwest regions across China. Regarding feedbusiness, Wellhope is the Vice Chairman of China Feed Industry Association, and has been awarded asNational Top 10 Leading Feed Enterprise, with a higher sales volume of commercial feed in China.Regarding broiler integration, Wellhope’s broiler integration business has been developing rapidly inrecent years. Based on the number of broilers slaughtered and processed by holding and associatedcompanies, Wellhope is now among the top rank of China’s white feather broiler industry.
5. Development situation of the industries
Wellhope has analyzed the development circumstances of feed, broiler and swine raising industriesduring the reporting period, which are detailed in Section IV "Business Operations Analysis" hereof.II. Core Competence Analysis within the Reporting PeriodThe core competencies of Wellhope are embodied in a highly educated, loyal and enterprisingmanagement team, integrated with rationally planned and development-oriented business strategies, asophisticated and advanced industrial chain, widespread adoption of a systematic and scientific-basedinnovative R&D system, constantly enhanced and increasingly matured brand influence, coupled withhighly energized and dynamic corporate culture that powers the development of Wellhope.
1. A highly educated, loyal and enterprising management team
Talented people are the primary resources and the competitive core of Wellhope. The highly-educatedmanagement team, led by seven cofounders, all with professional backgrounds, abundance ofexperiences and practices in management and animal husbandry industries, are highly capable ofgrasping the business environment accurately, formulating the development strategy scientifically, and
have deep insights and high recognitions of Wellhope’s core values and business philosophy. The sevencofounders, who are praised as the "Seven Pioneers of the Industry”, have always held strong andfought together. They are united and stable, and have been working hard at the frontline of operationand management, making concerted efforts to move forward. Almost all the middle and seniormanagers are internally selected and promoted by Wellhope, these core members have been rewardedwith various incentives, and they have a strong sense of ownership and devote themselves entirely forthe sustainable development of the Company. For the past 26 years, the management team hasmanaged to maintain a high degree of stability, almost none of the chief director and higher-levelmanagers leave the Company, less those who were reassigned to other positions due to substandardperformance. Meanwhile, newly promoted members of the management team born in the 1980s and1990s are selected from key talents’ cultivation programs, such as “Seedling Plan” and “SunflowerProgram”. They love the Company, continue to forge ahead, having become the backbone force of themanagement team. Wellhope also attaches great importance to the continuous learning and abilityimprovement of these managers, by setting up various senior training programs such as the EDP(Executive Development Program), leadership training camp, etc. At the same time, it also providesopportunities to broaden managers’ horizons, such as mutual investigations and exchanges with bothdomestic and overseas outstanding enterprises. The main cause of failure of some domestic companiesis due to the “unstable and disunited management team”. In contrast, the highly educated, loyal andenterprising management team is one of Wellhope’s core competitive advantages at present and in thefuture, and it is also the main reason why the Company is so confident about the future.Continuous growth of talents and talent introduction can be attributed to Wellhope’s human resourcepolicy. In terms of talent introduction, Wellhope always adheres to the principle of high-standardrecruitment and upholds the core culture of "knowledge is power, unity is strength". In terms of talentstraining, Wellhope formulates progressive training system with dual-channel career paths, one beingstreamlined to become managers, and the other being technical experts, based on its strategic goalsand in tandem with staff’s career development and progression. In terms of talents incentives,Wellhope continuously improves compensation policy by providing a fair, just and merit-basedenvironment for rewarding employees. It also utilizes a "double appraisal system (job skill appraisal andwork performance appraisal)", "performance analysis", "sudoku analysis" and other methods to assessteam members. In the meantime, driven by the concept of "sharing bumper harvest", Wellhope sharesits development achievements with staff in various ways, such as holding shares in parent company andits subsidiaries, profit sharing and elasticity welfare. In 2018, Wellhope initiated a share incentiveprogram, where 372 identified core talents and key managers were granted restricted shares. Throughthis program, the interests of Wellhope, its shareholders and key employees have been combined toensure the sustainable and stable development of the Company and ultimately achieve mutual benefitsfor all. In the meantime, Wellhope has been echeloning its talents team based on corporation strategies
to build a more competitive and sustainable team to realize long-term goal.
2. Rationally planned and development-oriented business strategiesBased on in-depth understanding of both domestic and global politics, economies and industries’ trends,Wellhope has always attached great importance to its sustainable development and risk control, withfocus on operational quality and emphasis on profitable investment return from new projects. Drivenby the investment concepts of steady growth, strong sense of responsibility, healthy and sustainabledevelopment, Wellhope, rationalizes its business layout and consolidates using a step by step approach,instead of pushing through rash and impulsive investment, to maintain the rationality and safety of itsindustrial chain and to mitigate all calculated risks faced by enterprise operations, taking the “Built toLast” philosophy as a significant objective.Rationally planned and development-oriented business strategies reflect in the following aspects.A. Business divisionsStarting off with the premix business, Wellhope has been dedicated to expanding feed business overthe years, at present it has become one of the top 10 commercial feed producers nationwide. In 2008,Wellhope entered broiler integration business after careful thinking. After 13 years of efforts, thenumber of broilers processed by Wellhope’s holding and associated entities have been standing at theforefront of the white feather broiler industry, with its management and key technical indicatorsranking top position both at home and abroad. In 2018, in order to seize market opportunities andcontrol operating risks, Wellhope decided to undertake swine raising as a strategic business. Since then,it has been mastering the core competitive advantage of this business through talents cultivation,practice accumulation and cooperating with leading companies. Meanwhile, in the year 2018, Wellhopefurther recognized its development strategy in the next ten years, i.e., while unceasingly making feedbusiness grow stronger and larger, Wellhope would further boost broiler integration and swine raisingbusinesses to create an operation model powered by these two complementary engines. Such businesslayout with high risks hedging will not lead the Company to the woes and ebbs due to tremendous blowor sharp downturn suffered by one of the businesses.B. Operation modelWellhope has gradually formed a value chain with high competence and capability of withstanding riskin the fields of animal feed, raising, slaughtering and further processing, which enables all businessdivisions to closely connect and support each other, reduce the cost of intermediate processes, lowertrading risks, improve profit margin, and ensure food safety. Such set up has become a future directionfor agricultural companies under an increasingly complex and changing economic and industrialenvironment.C. Market expansionInstead of expanding rapidly in the nationwide markets supported by the success of feed business inNortheast regions and broiler integration business, Wellhope, with rich experiences in market
expansion, insists on exploring new markets based on overall analysis and investigations, carefullypenetrating the markets step by step in the Northeast, Northwest, Northern China, Henan, Shandongprovinces and other areas, while continuing to pursue asset-light operation, taking into accountoperational efficiency and returns on investment.D. Product mixWellhope offers a full range of feed products. The sales volume and development of swine, poultry,ruminant and aquatic feed products have reached great height of achievements respectively, which inturn could mitigate operational risks caused by sporadic animal diseases or other cases beyond theCompany’s control.E. Financial risk controlWellhope always attaches great importance to financial risk control. Since going public, it has graduallyimproved internal control system, regulated corporate governance structure and enhanced theawareness on risk control. It uses vertical management methods in coping with finances, such ascentralized financing and credit management, centralized funds and cash management and centralizedmanagement of decision-making for providing guarantees. Due to its outstanding operating indicatorsand risk control, Wellhope was rated as one of the Top 50 Public Companies with Healthy FinancialPosition by the Data, a new media platform of China’s Securities Times, where only three enterprisesinvolved in agriculture and animal husbandry industries were selected.
3. A sophisticated and advantaged industrial chain
The advantages of Wellhope’s industrial chain are mainly reflected in geographical locations andbusiness portfolios.A. Geographical locationThe head office of Wellhope is located at Shenyang in Liaoning province, with its primary businessesmainly involved distribution in Northern China, especially in the Northeast regions. Northeast China is apotential growth area for animal husbandry specially designated by the government, and is thussuitable for agricultural companies to expand their businesses with the availability of ample high-qualityraw materials, mild climates, small stocking density and a relatively lower human resource cost. Forinstance, corn produced by the Northeast regions, characterized by high bulk density, low toxicity andlow moisture, enables Wellhope to reduce purchasing costs while ensuring feed product quality.Meanwhile, broiler production in Liaoning, Jilin, Henan, Hebei and Shandong provinces, whereWellhope’s broiler integration businesses are mainly located in, account for over 75% of nationalproduction, and these areas are the most important regions for developing white feather broilerindustry in China, with a strong foundation for broiler raising and more mature marketing system.Moreover, Wellhope is actively exploring overseas markets by building feed mills in the Philippines,Indonesia and Nepal, where animal husbandry is developing well with high potential.
B. Business portfolioCentered on agriculture and animal husbandry industries, Wellhope adopts the expansion strategies of"diversification and integration" to constantly optimize its business portfolio, which has increasinglyheightened its capacity on risk resistance and sustained profitability. In terms of diversification, whilestrengthening and expanding feed business, Wellhope has been vigorously promoting broilerintegration and swine raising businesses to strive to build an operation model powered by these twobusinesses. The staggered fluctuations in broiler and swine raising industries can effectively weakenrisks from any cyclical swing. In terms of integration, the integrated model is an inevitable trend fordomestic companies that are active in agriculture and animal husbandry industries. After years ofdevelopment in raw materials trading, feed production, animal raising, slaughtering and furtherprocessing businesses, Wellhope has formed a complete industrial chain with high competitiveadvantage and risk prevention capability, and it is gradually perfecting its support structure to eachbusiness sector in the chain, boldly exploring the field of further food processing to fast complete theindustrial chain, while constantly standardizing and optimizing the division and cooperation system tofurther enhance the synergies among all business sectors.
4. A systematic and scientific-based innovative R&D system
By holding fast to the corporate mission, i.e. “Through advanced technology, professional services, andhigh-quality products, Wellhope is devoted to the development of China’s animal husbandry industry,resources conservation, environmental protection, as well as food security for the benefit of thepeople”, Wellhope’s R&D system always adheres to market-oriented and customer-oriented principlesas well as upholding the objective of producing “safe products, with stable quality, tailored nutritionand being customer-centric”, constantly exploring innovative technology and working on new products.A. Excellent R&D teamRelying on a relatively complete industrial chain, Wellhope has built a R&D team specializing in animalraising, product formulation, manufacturing and related technologies to focus on feed, broilerintegration, swine raising, biological feed additives, etc. Wellhope’s R&D team is composed of hundredsof master and doctorate degree holders, professors and senior experts. These experts, with profoundknowledge, have transformed many cutting-edge technologies into actual applications. In themeantime, those experienced technicians focus on conducting trials and demonstrations projects tovalidate, choose and apply the most suitable technologies. Relying on technical strengths, Wellhope hasreceived many national and local-level accreditations and honors, including the Nationally-recognizedEnterprise Technology Center, National and Local Joint Engineering Research Center for theDevelopment and Application of New Biological Feed, National R&D Branch Center of Feed Processing,Comprehensive Trial Farm for National Swine Raising Industry Technology System, R&D Center ofAgricultural 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 cooperationIn 2006, Wellhope partnered with Royal De Heus, a century-old company from the Netherlands. Bydrawing on its globally advanced technological resources, leading know-how and a century of excellentmanagement practices, Wellhope has made successful breakthroughs and progresses in producing safeand high-quality feed, with precise and efficient nutritional contents, and most importantly usingantibiotic-free technologies. Meanwhile, the R&D teams from both sides have maintained frequentexchanges, which enable Wellhope to keep abreast with the world's latest technologies in R&Dachievements. By combining own 26-year’s technologies and experiences, Wellhope is committed toproviding customers with high quality products and technical service. Adding to these, it has alsoestablished various technical cooperation and other collaborative projects with institutions of higherlearning such as the "Academician Workstation" and "Official Research Base for Postdoctoral Fellows"to accelerate its R&D capabilities.C. Top-class testing ability and databaseWellhope's central laboratory has been accredited as National Laboratory by CNAS (China NationalAccreditation Service for Conformity Assessment), its test results are recognized in 60 countries orregions across the world. Very few feed companies have received this accreditation. The lab has beenequipped with advanced testing equipment and divided into three functional rooms to cater for physicsand chemistry testing, microbiology testing and precision instruments testing. From micro to macrolevels, the central laboratory is able to maintain consistency in quality and plays a vital role inimplementing the concept of safety first in every step of the production processes. Wellhope is amongone of the very first companies capable of testing for prohibited additives, such as melamine.Meanwhile, it has also established an internal raw material database and shares data resources withthe Dutch partner, using advanced regression methods to calculate the energy dynamics of rawmaterials, based on animal’s growth progress and feed intake, to formulate precise nutritional contentswith the best cost-effective solutions.D. Fruitful research and development resultsResearch and development power the sustainable development of an enterprise. Wellhope has mademany fruitful achievements on the road of research and development. By the end of the reportingperiod, Wellhope has received 117 authorized patents, including 49 invention patents, and won 2National Science and Technology Progress Awards, 1 National Technology Invention Award and nearly20 provincial and ministerial-level sci-tech awards. Relying on fruitful achievements in the field ofantibiotic-free feed, Wellhope has won quite a few coveted awards, such as Top 10 InnovationEnterprises regarding Antibiotic-free Technology and Its Alternatives, Outstanding Enterprise regardingAntibiotic-free Feed in China’s Swine Raising Industry Ecosphere, Pioneer Award of Antibiotic-freeCreep Feed in the 9th Session of Creep Feed Development Summit Forum. Meanwhile, Wellhope's"WIN Plus” nursery feed has won the prestigious prize of being crowned as "China’s Good Feed
2020-Pioneer Antibiotic-free Feed Brand". This is one of the most important products in the applicationof Antibiotic-free feed, and was highly acknowledged by farmers after it was launched into the market.(See Section IV - Description of R&D Input for details)
5. Constantly enhanced and increasingly matured brand influence
Wellhope has successfully established its product and corporate brand in domestic agriculture andanimal husbandry industries for the past 26 years. With the constant transformation and upgrading ofthe animal husbandry industry, its branding will be further strengthened.A. Product brandRelying on leading-edge technology, high quality products and continuous improvement in customerservice over the years, Wellhope’s brands have been widely accepted and trusted by customers in themarket, especially in the Northern regions of China. The branding of Wellhope can also be witnessedfrom the positive growth of feed sales volume in 2020 and the rapid development of broiler integrationbusiness. Meanwhile, the brand “Wellhope” has been recognized and honored as Liaoning ProvinceFamous-brand Product, Liaoning Province Famous Trademark, China Famous Brand, China’s Top 500Most Valuable Brands, Most Influential Brand in National Animal Husbandry Industry, TrustworthyProduct in China's Feed Industry, Governor's Quality Award of Liaoning Province.B. Corporate brandDriven by the core values of "Integrity, Responsibility, Double-Win", some of Wellhope’s businesses arejoint ventures with partners, it has been working closely together with many partners for more than 10or even 20 years, including a 15-year’s good relationship with Royal De Heus. These successful ventureshave proven that “Wellhope”, as a corporate brand, has been well recognized and trusted by itspartners. Meanwhile, the strength of Wellhope's brand has also been proved by long-term strategicpartnerships with various multinational and domestic suppliers, and all loans provided by financialinstitutions over the years have been credit loans due to the good reputation of Wellhope. As a strongemployer brand, “Wellhope” has been recognized and favored by employees, and potential job seekers.Wellhope has twice won the "Best Employer" based on rating by a third party Zhaopin.com. In 2020,Wellhope won the honorary title of "Outstanding Enterprise in Corporate Culture Construction" in theChina Corporate Culture Construction Summit, and the successful holding of activities such as "OnlineRecruitment" and "Wellhope Cup" Outstanding Paper Contest, all these vividly demonstrated thestrength of Wellhope's employer brand.
6. Highly energized and dynamic corporate culture that powers the development of WellhopeAfter 26 years of development, Wellhope has established energized and dynamic corporate culture thathas been acknowledged by all staff and powers its development. The core value of "Integrity,Responsibility, Double-Win" and the management philosophy of "Innovation, Efficiency, Self-Discipline",have been deeply entrenched in the thinking and behaviors of employees, and has been appliedwithout fail in day-to-day management, strategic planning and business decision. Common values play a
crucial role in improving organization efficiency, enhancing organizational cohesion and organizationalempowerment. A good corporate culture is the fundamental principle of success for corporateoperation, which powers the long-term development of Wellhope.In 2020, Wellhope held live streaming events 3 times with the theme of “Telling Stories Experienced inWellhope", where over 40 employees and managers have been invited to tell their stories, andmanaged to attract more than 220,000 viewers, which has successfully publicized Wellhope’s uniqueculture. Meanwhile, the annual corporate culture publicity campaign by Wellhope's managers, wheregood practices in daily work and leading by example have been freely shared as part of the corporateculture dissemination efforts. Wellhope recently ushered its 25th anniversary in 2020, and utilized thisopportunity to carry out quite a number of culture promotional activities, including brand andmarketing promotion competition, physical fitness programs involving all Wellhope people, job skillcompetition, essay writing, photography, calligraphy and painting activities, etc., with the purpose ofenriching the staff's leisure life and displaying their strengths. In the face of COVID-19 pandemic,Wellhope is one of the first agricultural enterprises to resume work. In order to maintain operationsand meet customer’s demand, many managers and employees overcame difficulties to actively returnto work, doing their best to run production to ensure stable supply. Their devotions and passions havetouched other staff deeply. Wellhope, together with its managers and employees, have donated morethan RMB 12 million worth of materials and money for pandemic control efforts. All these stems fromthe strength of Wellhope's culture, the sense of mission and responsibility as well as true, genuine lovefor the Company. The history of Wellhope has fully proven that each time whenever Wellhope facesdifficulties and trials, the corporate culture continues to assist it to defeat the hard times and to soarhigher..
Section IV Business Operations AnalysisI. OverviewIn 2020, the world economy saw a recession, international political and economic situations haveremained complicated due to COVID-19 pandemic worldwide. In addition, African swine fever has alsoposed another stiff challenge. While putting in efforts in fighting the pandemic, Wellhope, driven by itsbusiness strategy of focusing on three primary businesses, grasped market changes and opportunitiesto further expand feed business, whilst vigorously developed broiler integration and swine raisingbusinesses supported by the advantages of brand, technology, research and development, talents team.In 2020, Wellhope’s feed sales volume realized a year-on-year growth of 47%, the number of broilersraised by Wellhope’s holding and associated companies increased by 33%, whilst the number ofslaughtered broilers increased by 22%. Meanwhile, the number of swine sold by holding and associatedcompanies rose by 152% from a year earlier. All these three primary businesses overfulfilled theirbusiness objectives set at the beginning of the year.Since completing IPO in 2014, both operating revenue and net profit of Wellhope have grown for 7consecutive years, with the compound annual growth rate reaching 16% and 32% respectively. The ROEhas realized steady progress (although being declined a little bit influenced by the downward broilerindustry, it still steadily increased by nearly 20%), showing stable profitability and good growth of theCompany. The asset-liability ratio was 32.15%, remained below 40% in the past seven years, which wasremarkably better than the average level of the industry, reflecting strong ability of risk resistance.Main accounting data and financial indicators since IPO
1. Business highlight
Affected by the downturn of broiler market in 2020, the profit contributed by Wellhope’s broilerintegration business declined, but the performance of animal feed, swine raising and feed rawmaterials trade businesses all achieved great breakthroughs, hitting record highs.Wellhope’s operating revenue exceeded RMB 20 billion for the first time, reaching RMB 23.818 billionwith a year-on-year increase of 33.87%, the net profit attributable to shareholders of the Companyrecorded RMB 1.235 billion, increased by 2.99%, the net profit attributable to shareholders deductingextraordinary items realized RMB 1.231 billion, rose by 3.33%, the weighted average return on equitywas 19.93%, decreased by 4.64 percentage points. At the end of the reporting period, the total assetsreached RMB 11.647 billion with a year-on-year growth of 27.29%. The owner's equity attributable tothe parent company reached RMB 6.752 billion, increasing 18.50% compared with the end of the prioryear.
2. Review of industry development and the Company’s business progressA. Feed businessa. Industry overviewChina's feed industry started thriving since mid-late 1970s, and in just a dozen years, China’s feedindustry has achieved what developed countries have accomplished in decades. In 2011, China's feedproduction exceeded the United States for the first time, becoming the world's largest feed producer.Comparing with the rapid development of the early stage, China’s feed industry has witnessed a
slowdown in the growth of production output in recent years, but it still has a huge market size. Underthe backdrop of supply-side reform that has continuously deepened, the transformation of feedindustry has been accelerated and showed remarkable polarization. Large enterprises have been rabidlygrabbing market shares supported by their technologies, costing, branding, management, capital,logistics, and other advantages, whilst small and medium-sized companies have been graduallysqueezed out the market, the consolidation of feed industry has been unceasingly enhanced.In 2020, with the official implementation of "ban of antibiotics" and the continuous promotion of "bulkfeed", the entry barriers of feed industry have been raised again, customers have significantly increasedtheir requirements on the comprehensive strength of feed suppliers, which quickened the eliminationof companies lagging behind.In terms of supply, the production of national commercial feed in 2020 reached 252.761 million tonswith a year-on-year increase of 10.4%. Among them, swine feed increased by 16.4%, reaching 86% ofthe peak production in 2018. The production of layer feed, broiler feed and ruminant feed rose by 7.5%,
8.4% and 18.9% respectively, all of them set record highs. From the point of view of sales model, theproduction of bulk feed amounted to 58.976 million tons with a year-on-year growth of 33.6%,accounting for 25.6% of the total output of compound feed, which increased by 4.6 percentage pointsover the prior year. From the perspective of industry consolidation, there were 749 feed mills withannual capacity over 100,000 tons, newly increased 128 producers compared with the prior year. Thesefeed mills totally produced 133.52 million tons of feed throughout the entire year with a year-on-yearincrease of 19.8%, contributing towards 52.8% of the total national feed production, which rose by 6.2percentage points over the previous year, indicating that the industry has been further transformed tointensification.In terms of demand, the swine production has been recovering in 2020 with the rebounded inventoriesand higher slaughtered weight, whilst the feed to meat ratio has been increased significantly comparedwith previous years. Meanwhile, the inventories of layer reached a record high, while the inventories ofbroilers keeping high level throughout the entire year. In regards to ruminant feed, due to the boomingmarket of cattle and sheep products, farmers were keen to replenish their stocks, which led to a rapidincrease of productions. Driven by above factors, it could be seen strong demands for feed in 2020, andcustomers' requirements for product quality have been significantly enhanced.Overall, China's feed industry has an enormous market size with a booming trend in both supply anddemand. Although the overall growth rate has slowed down, the consolidation of this industry has beenincreasing. Those large groups have been growing swiftly in sales volume and market share, implyingthese industry leaders increasingly enjoying remarkable scale advantages.b. Business progress of feed businessThe demands for commercial feed in 2020 presented favorable growth, supported by factors such ascontinuous recovery of swine production, high inventories of poultry and prosperous supply and
demand of cattle and sheep products. Wellhope, as one of the domestic feed industry leaders, clung toindustry opportunities, exerted its competitive advantages in terms of brand, technology, marketing,service, and purchasing to swiftly response to market demands, and enhance market exploitations,pushing up feed sales volume reaching record level with the highest growth rate since completing IPO,which further improved market share.In 2020, Wellhope’s holding and associated companies totally produced 6.98 million tons of feed with ayear-on-year growth of 41%. Among feed entities, Wellhope has 11 feed mills with annual capacity over200,000 tons (6 holdings and 5 associates). Among them, the feed production of Dalian Heyuan, one ofWellhope’s subsidiaries, exceeded 520,000 tons. The entities included in the consolidated financialstatements, produced 3.85 million tons of feed in 2020 with a year-on-year increase of 47.02%, hitting anew high. The feed business contributed RMB 12.11 billion in operating revenue, increased by 55.54%compared to the year earlier. In terms of sales regions, the feed sales volume of Northeast Chinaincreased by 49%, accounting for 60% of total sales volume, whilst the sales volume of Central Chinaregions rose by 44%, accounting for 40% of the total. In terms of feed categories, the sales volume ofcompound feed increased by 51.18%, concentrate feed and premix rose by 36.19% and 20.45%respectively. In terms of feed varieties, the sales volume of swine feed increased by 71.59%, the creepfeed, nursery feed and feed for lactation sows as well as piglet feed accounted for 75% of total swinefeed. Whilst poultry feed rose by 35.64%, ruminant feed grew 40.85%. Among them, the sales volumeof beef cattle feed continuously maintained a rapid growth (y-o-y 77%). Other feed categories increasedby 8.62%. In general, Wellhope’s feed business in 2020 achieved explosive increase highlighted by threeprimary feed categories including swine, poultry and ruminant, while its growth rate being far ahead ofthe industry average level.Feed sales volume of companies included in the consolidated scope in 2020
| Item | Sales volume 2020 (10k tons) | % of total sales volume | Sales volume 2019 (10k tons) | YOY change | YOY change of national feed production |
| Swine feed | 155.99 | 40.53% | 90.91 | 71.59% | 16.40% |
| Poultry feed | 144.69 | 37.60% | 106.67 | 35.64% | 8.16% |
| Ruminant feed | 63.10 | 16.40% | 44.80 | 40.85% | 18.90% |
| Other feed | 21.05 | 5.47% | 19.38 | 8.62% | - |
| Total | 384.83 | 100.00% | 261.76 | 47.02% | 10.40% |
| Category | Sales volume 2020 (10k tons) | % of total sales volume | Sales volume 2019 (10k tons) | YOY change | YOY change of national feed production |
| Concentrated feed | 81.62 | 21.21% | 59.93 | 36.19% | 22.00% |
| Compound feed | 295.67 | 76.83% | 195.57 | 51.18% | 9.80% |
| Premix | 7.54 | 1.96% | 6.26 | 20.45% | 9.60% |
| Total | 384.83 | 100.00% | 261.76 | 47.02% | 10.40% |
During the reporting period, the main strategic actions and progresses of Wellhope's feed businessare as follows.(a) Accelerating product development to capture market opportunitiesFacing the changes of market pattern, Wellhope, relying on strong product development platform andmore than 20 years of technology accumulation, adhered to research on market demand-orientedproducts, also iterated and upgraded products to seize the market opportunities and supportmarketing. In response to African swine fever, Wellhope has successfully developed the line ofproducts named “Wellhope Immune Nutrition”, which has effectively enhanced the immunity of swine.In response to the demand of raising large swine above 120kg, Wellhope quickly developed large swinefeed to help customers capture the opportunity of benefitting from higher swine price. Also, Wellhopecontinuously developed and launched a series of high-yielding and fast-growing swine feed products.In terms of antibiotic-free feed, Wellhope has been preparing and researching on antibiotic-freetechnologies for a long time and carried out more than 100 experiments from 2013 and 2019, reservinga variety of comprehensive solutions to completely alternate antibiotics. Wellhope has already changedsome feed products to be antibiotic-free before the ban of antibiotics being issued. By the end of June2020, Wellhope has transformed all products to be antibiotic-free, which have realized constant growthperformance, good customer feedback and high market recognition. As a result, Wellhope received thehonor of "Top 10 Technology Innovation Enterprise regarding Anti-free Feed", and the “WIN plus(Upgraded Wellhope immune nutrition products)-Nursery Feed Product” was awarded as “China GoodFeed 2020-Pioneer Anti-free Feed Brand”.(b) Implementing precision marketing and innovating customer service systemIn 2020, Wellhope paid close attention to the market changes and implemented precision marketingstrategies in a multipronged manner. Firstly, Wellhope conducted in-depth researches on the marketand precisely positioned the demands of products. Secondly, it exactly matched customer service andprovided customers with "one-stop" services through profound cooperation with breeding farms,bio-tech companies, equipment companies, financial institutions, insurance companies and other thirdparties to enhance customer engagement. Thirdly, Wellhope increased the promotion of new productsand bestsellers to strengthen its brand image and heighten profitability. Following, Wellhope vigorouslyexplored new regions, new markets, and new customers to capture new profit growth points.Thereafter, Wellhope expanded its sales force and increased the density of market development toprepare for further exploration of market space.Owing to the impact of COVID-19 and changes in the market environment, Wellhope constantlyinnovated online service modes, actively provided efficient and accurate services to customers throughonline media such as video call, live streaming, short videos, WeChat and other platforms. In themeantime, Wellhope quickly carried out online guidance and training programs for customers, such as"remote questioning" and "remote teaching", to solve the problems effectively via remote interactions
to ensure that farmers could operate their farms in an orderly manner. Also, Wellhope has built onlineservice platforms, which guided farmers by launching market analysis, farming skills and preventivemeasures against epidemics to help farmers continuously expand their breeding knowledge and keepabreast of market conditions. The professional and systematic service system has been praised andhighly trusted by a lot of customers.(c) Heightening internal operation to achieve high quality, high efficiency and synergy effectAfter the outbreak of COVID-19 in early 2020, Wellhope responded quickly and overcame difficulties toresume production as soon as possible to achieve the goal of "ensuring staff safety, guaranteeingproduction and supply, stabilizing sales and development”, and fulfilled the responsibilities ofsafeguarding residents’ meat supply. Although facing the pressures such as labor shortage, insufficientraw material, soaring demand and traffic control, Wellhope exerted its advantages such as strongexecution, strategic and large-scale purchasing, lean production to ensure production and supply. Inaddition, Wellhope continued to improve internal operation, optimized its organizational structure tomake sure all functional departments were able to operate in a standardized, orderly and efficientmanner, which ensured that the Company’s management system could meet the needs of the growingbusiness scale.(d) Seeping up business exploration to continuously expand production capacityDuring the reporting period, Wellhope quickened the business exploration in new markets to increasefeed production capacity. It set up several feed mills in Liaoning, Hainan, Shanxi, Shandong, Jiangxi,Hunan, Sichuan, Fujian provinces by way of self-building, merger and acquisition, leasing, and OEM,which has laid a solid foundation for future rapid expansion. On the other hand, Wellhope constantlyrenovated feed production equipment and factories to increase efficiency and enhance the utilizationof capacity. With the continuous generalization of bulk feed, Wellhope has increased input in bulk silofacilities, its sales volume of bulk feed achieved 400,000 tons in 2020, with a year-on-year growth of124%.B. Broiler integration businessa. Industry overviewIn 2020, the COVID-19 pandemic has significantly hit the supply and demand of white feather broilers,which weighted on the supply and significantly curbed the consumption demand of chicken. Comparedwith 2019, the overall profits of this industrial chain fell sharply, and the backward players have beenweeded out quickly, while these large-scale companies continuously expanding their businesses tocapture market opportunities.Regarding supply, in the first half of the year, the COVID-19 disrupted the sales channels, whilst themarket was mandated to cut production capability by forced molting, and eliminating old broilerbreeders, which caused the inventories of molted broiler breeders declining significantly. In the secondhalf of the year, the number of broilers delivered for slaughter gradually recovered to a high level,
reaching a five-year peak in September and October, which resulted in a rapid increase in supply andexcessively low chicken prices. Thereafter, the supply of broiler decreased in November and December.For the whole year, the inventories of in-production grandparent stock and parent stock remained high,pushing the sales volume of commercial day-old chicks growing 8.1% compared to the year earlier, andthe number of live broilers increasing 8.4%. The outbreak of COVID-19 in the first half of the yearcaused a certain obstacle to production, which in turn lowered the annual production, generating aless-than-expected growth in the overall supply of white feather broilers in 2020.In regard of demand, chicken consumption shrank remarkably in the first half of 2020 caused by theCOVID-19 pandemic hitting domestic consumption, especially in the first quarter. Affected by thispandemic, the overall consumption of chicken in Q1 dropped by about 10% from a year earlier, amongwhich, chicken consumed by catering and group meal decreased by more than 30%. In May and June,chicken consumption gradually recovered, but the average price of chicken products throughout theyear declined by 19% compared to the year earlier due to extremely high intermediate and terminalinventories, coupled with the rapid growth of chicken supply in the second half of the year, and theremarkable decline of overall consumption power of residents. The overall profit of this industrial chainalso fell significantly.To conclude, the COVID-19 has broken the original estimate of “an increase both in production andsales, a bloom both in supply and demand” within white feather broiler industry, both the supply anddemand sides fell short of expectations in 2020. In short term, chicken has still played the role of thesubstitution for pork. Along with the economic recovery and the stabilization of the pandemic, chickenconsumption is expected to grow, but because the supply is still running at a high level, the industrymay be difficult to recover in a short time. As a result, unqualified companies will be continuouslyweeded out of the market, while large-scale enterprises constantly expanding their businesses tocapture market opportunities. In long term, chicken will be becoming increasingly popular relying on itscharacters of high protein, low fat and low cholesterol, whilst white feather broilers also have greateradvantages compared to swine in terms of growth rate, feeding costs, safety, and environmentalprotection. Seeing the experiences of developed countries, China's per capita chicken consumption stillhas large growth potential, showing a vast market space.Note: The statistical data in above industry information come from Industry Analysis Report of www.Boyar.cn.b. Business progress of broiler integration businessIn 2020, the broiler industry entered a downward cycle, and the COVID-19 pandemic had significantlyimpacted on national economy, which remarkably dented terminal consumption and pulled down themarket environment. Under such unfavorable circumstances, Wellhope’s broiler integration businessdivision focused on market exploration and chose opportunities to conduct business expansion.Meanwhile, based on the advantages of cost and efficiency formed over the years, it further heightened
core competencies and constantly enlarged market reach under fierce competitions, making its marketstanding further enhanced. Although the performance of broiler integration business declinedcompared with the prior year, it has been still one of the important contributors towards the overallprofit of Wellhope. In 2020, these holding and associated companies totally raised 561 million broilerswith a year-on-year increase of 33%, slaughtered 639 million broilers with a year-on-year growth of 22%,whilst produced 1.68 million tons of broiler products, which increased by 26%. Meanwhile, Wellhopetotally produced 26,100 tons of prepared food and cooked food with a year-on-year growth of 20%,including 3,010 tons of exported cooked food with an increase of 50%.(a) Conforming to the industry trends and planning business expansion steadilyIn 2020, the inventories of grandparent and parent stocks rose to high levels, boosting a sufficientsupply of commercial chicks. In view of this, Wellhope proactively slowed down the constructionprogress of breeding farms, whilst strengthened the performance management of these farms.Although the percentage of self-produced day-old chicks in total commercial broilers raised byWellhope declined compared with the prior year, the quality of day-old chicks has been significantlyimproved. Regarding commercial broiler raising business, Wellhope, relying on the geographicaladvantage of its slaughtering business, fully exerted its asset-light advantage by cooperating withcontract farms, and steadily expanded the scale of commercial broiler as planned based on the precisecontrol of capital investment, thus the ratio of broilers raised by Wellhope and contracted farms tobroilers slaughtered by Wellhope increased significantly, making a further enhancement of food safetytraceability of chicken product. For slaughtering and further processing business, Wellhope moderatelyexpanded slaughtering production capacity, all of the newly invested slaughtering projects have beenmatched with food factories, and the resources of broiler integration have been deeply inclined tofurther processing business.(b) Refining internal operation and reserving talents to continuously improve operationalcapabilitiesIn the context of downward broiler industry, Wellhope has continuously enhanced lean management inits broiler integration business, and rationally reduced period expenses, each sector in this industrialchain has maintained efficient and smooth operation. In terms of broiler raising, Wellhope tookmeasures in certain aspects including day old chick, feed production, animal health products andequipment to constantly improve the growth performance of commercial broiler and further enhanceautomation. Regarding slaughtering, Wellhope vigorously heightened production efficiency to reduceoperating costs and strengthen quality control. When new projects put into operation, Wellhope wouldrapidly expand the production and sales scale to achieve profitability at the fastest speed. In respect offinance, Wellhope stringently managed accounts receivables, reasonably arranged capital expenditures,and continuously accelerated the inventory turnover to ensure enough cash flow. While strengtheninginternal management, Wellhope gave full play to the influence of corporate culture to actively absorb
talents, also optimized selection and training system, broadened talents reserve, echeloned talentsteam, and improved incentive policies, to lay a solid foundation for achieving long-term objectives.(c) Focusing on market trends to valorously explore business and unhesitatingly boosting foodstrategyThe domestic consumption was significantly suppressed after the outbreak of COVID-19. Wellhopequickly responded to such changes and vigorously expanded new sales channels, also constantlyoptimized product mix, developed new cost-effective product portfolios, and continuously cultivatedoutstanding dealers, simultaneously improved their loyalty. Meanwhile, Wellhope continued to boostfood business strategy unhesitatingly. With the advantage of raw materials, Wellhope used multi-brandbusiness mode to quickly develop domestic and foreign sales channels, also focused on forging hitproducts, trained sales forces, expanded sales volume and strived to improve the percentage of bothprocessed food and high-value products, as well as the exported cooked food, thus further improvingthe ecological niche. Influenced by the pandemic, the consumption of foreign residents also shrunk, asa result the total amount of further-processed chicken products exported to Japan and Europedecreased significantly. Even in such an unfavorable environment, Wellhope attracted great importanceto the quality of cooked food, accelerated the exploration of new foreign customers, and rapidlyexplored small package products according to customers’ demand. Meanwhile, Wellhope dynamicallyadjusted production structure and rapidly entered new channels to seize new market share. In 2020,the export volume of Wellhope’s cooked food increased by 50% compared with the prior year, and thefood strategy has achieved initial results.C. Swine raising businessa. Industry overviewIn 2020, the production capacity of China's swine industry recovered in struggle under the joint attackfrom the COVID-19 and African swine fever. The price throughout the year was higher than expected,and the swine raising industry has ushered in an ultra-long period of gaining from higher swine price.On the supply side, benefiting from taking commercial gilts as pig breeders, the inventories of China’sbreeding sows recovered faster, with a year-on-year growth of 43% in the end of 2020, basicallyapproaching the numbers in 2017. However, the percentage of commercial gilts in breeding sows wasrelatively high, accounting for 40%-70% in the entire year, coupled with the long-term impact of Africanswine fever, resulting in a significant decline in the overall reproductivity of sows. From the perspectiveof commercial swine, the number of swine delivered for slaughter in 2020 still decreased by 35%compared with 2019. But due to the higher body weight, the decline in pork production was less, with ayear-on-year decrease of 22%. To stabilize swine production and ensure pork supply, a series of policieshave been introduced one after another, and large-scale companies constantly quickened businessexpansions to capture market shares relying on the advantages of capital, technology and talents, etc.On the demand side, dine out such as in eateries and group meals were blocked by the COVID-19, and
the percentage of household consumption increased, making the sales channels of slaughteringfactories change, and further processing companies began to expand new sales channels such as therapidly developed e-commerce live streaming. In addition to the consumption scenario, residents' meatconsumption manner also changed. High-priced pork has been already difficult to sell, the pandemichas tremendously impacted on the economy, and apparently weakened residents' consumption power,pushing a further drop in pork consumption. Those food processing companies have been compelled toadjust the percentage of pork in their formulas due to cost pressure. Meanwhile, the demand for porkalternatives increased, proving that the overall consumption habits of residents have changed.To conclude, China's swine industry has been still presented a tight supply, pushing swine raisingindustry ushering in a long profit-gaining period. The prevention of African swine fever has been still amajor problem faced by the industry as this disease becoming normal that has hampered productionrecovery. With the increase of stocking density, small and medium-scale farms have been facingpressures regarding bio-safety, whilst those large companies took the chance to vigorously conductstrategic expansion to fast capture markets by taking advantages of their capital, talents, technologyand other resources. In addition, at this stage, both swine raising companies and slaughtering factorieshave been showing their strategic intention to expand integrated businesses, which proved that theindustry integration may further accelerate.Note: The statistical data in above industry information come from Industry Analysis Report of www.Boyar.cn.b. Business progress of swine raising businessIn 2020, influenced by the tight supply of swine and African swine fever, the swine price has been still ata historical high level. On the basis of making every effort to ensure safe production, Wellhope rapidlypromoted the sales business of piglets and pig breeders, whilst further expanded swine fatteningbusiness via own farms and contract farms, overachieving the annual sales objective.(a) Expanding swine production vigorously to gain from high pricesSwine raising industry has been witnessed an ultra-long period of benefitting from high swine prices.Wellhope seized this opportunity to vigorously boost the increase of swine production of farms inoperation, whilst speeded up projects under construction, striving to rapidly expand swine productionin North, East and Northeast regions across China. In the meantime, Wellhope actively implementedbusiness expansion by leasing, out-source construction and cooperating with farms to expand availablepen areas to rapidly increase the production capacity. Wellhope also followed the market situation toquickly adjust its sales structure, such as seizing the opportunity of higher piglet price to increase thesales of piglet, quickening swine fattening business via contract farms to contribute to the number offinishers to fully enjoy the industry bonus and increase the Company's profit. During the reportingperiod, Wellhope's holding and associated companies totally sold 682,000 heads of swine, including216,000 heads of finishers, 369,000 heads of piglets (202,000 sold to subsidiary companies, and
167,000 to the market), and 97,000 heads of pig breeders.(b) Closing up bio-safety prevention system to make farms safetyUnder the threat of African swine fever, bio-safety has become a vital factor for pig farms. During thereporting period, Wellhope took production safety as the first priority and comprehensively reviewedbio-safety prevention systems of feed mills, own pig farms and contract farms. Wellhope has foundedmulti-level control systems and closed up the bio-safety prevention systems to guard against outsideAfrican swine fever cases and preventing infections inside the farms. Wellhope has also built materialsupplies disinfection and logistics centers, vehicle cleaning and disinfection centers, and personnelquarantine centers in each region to control the risk of African swine fever that might be brought in byvehicles, materials and personnel. Meanwhile, Wellhope has constantly iterated bio-safety regulationsand systems inside the farms, isolated and blocked African swine fever through strictly preventivemeasures under the four-level control systems, namely red, orange, yellow and green. More frequentinspections by professional teams have been implemented to ensure timely supervision and promptmanagement. At the same time, Wellhope increased the intensity and frequency of the detection ofAfrican swine fever and other diseases, also established regional central laboratory and "satellite"testing laboratory to heighten the defensive monitoring and early warning of diseases, and all pig farmscomprehensively conducted closed-loop management to ensure production safety.(c) Expanding the inventories of pig breeders with outstanding performance to power the rapiddevelopment of swine raising businessPig breeders lay a foundation of the rapid expansion of swine production. Within the reporting period,Wellhope swiftly increased the inventories of pig breeders by ways of strengthening internal breedingand outsourced purchasing, as well as combining the operation model of "separating farm building andbreeders raising”, which provided a solid guarantee for Wellhope to increase swine production tomaximumly seize the opportunities of this industry. Besides, Wellhope also continued to optimize andadjust the group structure of pig breeders to maintain the advantage of sows, and ensure the stabilityand sustainability of production performance. By the end of the reporting period, the percentage ofWellhope’s commercial gilts was only 6.5%, and the feeding performance of finishers, such as thegrowth rate and feed to meat ratio, has reached the advanced level nationwide. At present Wellhopehas established a complete swine breeding system including great-grandparent and grandparent stock,etc. As at the end of 2020, the inventories of Wellhope’s sows reached 65,000 heads.(d) Exploring slaughtering business to curb risks caused by industrial chain fluctuationsApart from Chifeng slaughtering project that has been in operation, Wellhope actively boosted theconstruction of a new project located in Anhui province, which would be engaged in swine slaughtering,further processing of pork and cold chain logistics. It is expected to be completed and put intooperation in 2021. Wellhope is well on its way to exploring business opportunities in relateddownstream industries, such as slaughtering and food processing, to continuously improve the
blueprint of swine raising business and enhance the ability to withstand market risks.D. Feed raw materials trade businessIn 2020, both the revenue and net profit of feed raw materials trade business increased greatly,contributing to the performance of Wellhope.Performance driver--Influenced by the COVID-19, bulk commodities’ inflation has intensified, whichcaused the tight supply of feed raw materials, then the prices rose, bringing opportunities toWellhope’s trade business. Meanwhile, the prosperity of the downstream feed industry increasedstrong demands of feed raw materials. With the high prices of swine and cattle, the customers’demands for high-class animal health products have risen greatly. As Wellhope's animal healthproducts are top brands at home and abroad, fueling the high market demands. In terms of internalreasons, the trade business division gave full play to its advantages, such as professional team andinformation platform, to study and judge the market conditions and implement precision marketing,which made its business operation safer and more efficient, and further enhanced profitability.
3. Other progresses
A. Strengthening research and development, heightening technology leadershipIn 2020, faced with many market changes and competitive pressures, such as African swine fever, ban ofantibiotics in feed, price fluctuation of raw materials, Wellhope increased investment in R&D, focusingon immune nutrition, antibiotic-free technology, raw materials’ substitution, and iteration of animalraising programs. In the aspect of feed research and development, Wellhope paid close attention to themarket trends, continuously developed and upgraded marketable products, such as immune nutritionproducts, fast-growing large swine feed, new-type broiler feed, and concentrate supplement for dairycattle, to continuously enhance product competitiveness. Regarding antibiotic-free feed, Wellhopecontinued to upgrade and optimize feed products without antibiotics as well as providing customizedfeeding programs to maintain the leading position and competitiveness of antibiotic-free technology. Atthe same time, it guided farmers to continuously improve bio-safety and on-site management.Regarding raw materials’ substitution, Wellhope excavated diversified raw material resources andcarried out various substitution technologies to stabilize the impact of price fluctuations of rawmaterials. In regards of animal raising programs, Wellhope closely followed customer's demands toformulate integrated programs to help them improve production performance, such as the nutritionprogram for commercial gilt and large-weight finisher, and feeding programs for broiler raised bythree-tier cage. Moreover, Wellhope further strengthened the direct sales to large farms, the R&D teamprovided specialized solutions through product optimization and program customization to jointlyexpand large-scale farms and integration companies with the sales team. (Details of R&D progress see"Description of R&D Input”).
B. Improving the incentive mechanism and enriching talents reserves
Driven by the core values of "Integrity, Responsibility and Double-Win", and the management
philosophy of "Innovation, Efficiency and Self-Discipline", Wellhope has been committed to building ahighly-competent, innovative and potential team to lay a solid foundation for long-term and healthydevelopment. In 2020, Wellhope continued to optimize talents selection, training, and incentive system,also revised and promoted “Administrative Measures on Talents Appointment”. Especially in feed andswine raising business sectors, Wellhope focused on salary design and innovated incentive policies toselect and motivate talents better. During the reporting period, the performance appraisal objectivessetting for the first lockup period (2019) stated in Wellhope’s 2018 Restricted Stock Incentive Plan havebeen fulfilled, 367 managers who were awarded the incentive shares could unlock the restricted shares.Wellhope’s performance achieved new high in 2020, the objectives for the second lockup period havebeen accomplished, Wellhope has once again achieved a win-win result with employees. Meanwhile,Wellhope also focused on the construction of talent echelon, paying close attention to the selection,training and retention of key staff, and accurately implemented the key talent training plan. In 2020,Wellhope recruited a large number of new staff specialized in technology, management, marketing, andfinance through various channels. All of them are either excellent university graduates (exceptproduction line workers), or experienced and potential persons. Excellent and sufficient talents reservehave been the most critical factor for Wellhope to achieve medium and long-term strategic objectives.C. Accelerating IT construction to improve management efficiencyIn 2020, Wellhope continuously heightened IT application and accelerated the digital transformation ofthe enterprise. Wellhope reorganized information resources for head office, feed, broiler integration,swine raising, raw materials trade business divisions to build a solid foundation for data management.During the reporting period, Wellhope completed lean digital management and system upgrade in thefeed division, and finished system optimization in broiler integration, swine raising and trade sectors,which boosted the development of each business. In July 2020, Wellhope received a report from theChina Academy of Information and Communication Research about the assessment of the constructioncapacity of the secondary node, which concluded that Welllhope could build the secondary node of theindustrial internet identification, and was selected as a national digital business enterprise in this year.
4. Honors and recognitions received in 2020
?Fortune China 500(four years--2015, 2016, 2017, 2020)?Top 100 Most Valuable Corporation of Chinese Public Companies(four years--2016, 2017, 2019, 2020)?Top 100 Enterprises in China’s Light Industry, ranking 23(2016-2019)?Top 100 National Leading Enterprise in Agricultural Integration Industry?A Rating from the Shanghai Stock Exchange for Annual Information Disclosure?2019 Governor’s Awards of Liaoning Province?Outstanding Privately-owned Enterprise in Fight Against COVID-19 Pandemic?Top 10 Technology Innovation Enterprise regarding Anti-free Feed?2020 Outstanding Enterprise in Corporate Culture Building
II. Operations AnalysisAs at December 31, 2020, Wellhope's total assets recorded RMB 11.65 billion, the owner’s equityattributable to the Company reached RMB 6.75 billion, increased by 27.29% and 18.50% respectivelycompared with the end of prior year. Meanwhile, the operating revenue realized RMB 23.82 billion, andthe net profit attributable to the shareholders of the Company reached RMB 1.24 billion, recorded thegrowth rate of 33.87% and 2.99% respectively.
1. Analysis of primary business
A. Analysis of changes of income and cash flow
Unit: yuan Currency: RMB
| Item | 2020 | 2019 | Change % |
| Operating revenue | 23,817,600,766.26 | 17,792,091,973.58 | 33.87 |
| Operating costs | 21,683,591,011.74 | 15,792,020,015.55 | 37.31 |
| Sales expenses | 465,307,995.89 | 487,217,524.04 | -4.50 |
| Administrative expenses | 310,275,697.03 | 275,560,691.30 | 12.60 |
| R&D expenses | 83,587,106.40 | 65,209,116.65 | 28.18 |
| Financial expenses | 64,680,213.72 | 76,392,967.30 | -15.33 |
| Net cash flow from operating activities | 765,945,453.03 | 1,111,605,966.58 | -31.10 |
| Net cash flow from investing activities | -1,506,349,447.57 | -874,207,823.29 | Not applicable |
| Net cash flow from financing activities | 419,432,876.57 | 378,955,170.80 | 10.68 |
| Analyzed by Industries | ||||||
| Industry | Operating revenue | Operating cost | Gross profit margin % | YoY change of revenue % | YoY change of cost % | YoY change of gross profit margin % |
| Feed | 12,110,346,481.97 | 10,864,934,182.33 | 10.28 | 55.54 | 59.52 | Decreased 2.24 percentage points |
| Broiler integration | 7,169,209,939.86 | 6,802,940,554.47 | 5.11 | 8.64 | 17.07 | Decreased 6.84 percentage points |
| Raw materials trade | 3,150,947,600.99 | 2,981,290,348.81 | 5.38 | 14.58 | 12.67 | Increased 1.60 percentage points |
| Swine raising | 756,825,624.60 | 523,742,330.29 | 30.80 | 274.16 | 235.27 | Increased 8.03 percentage points |
| Related businesses | 608,332,089.69 | 496,133,721.46 | 18.44 | 36.46 | 36.23 | Increased 0.13 percentage points |
| Analyzed by Product Categories | ||||||
| Product | Operating revenue | Operating cost | Gross profit margin % | YoY change of revenue % | YoY change of cost % | YoY change of gross profit margin % |
| Feed | 12,110,346,481.97 | 10,864,934,182.33 | 10.28 | 55.54 | 59.52 | Decreased 2.24 percentage points |
| Broiler integration | 7,169,209,939.86 | 6,802,940,554.47 | 5.11 | 8.64 | 17.07 | Decreased 6.84 percentage points |
| Raw materials trade | 3,150,947,600.99 | 2,981,290,348.81 | 5.38 | 14.58 | 12.67 | Increased 1.60 percentage points |
| Swine raising | 756,825,624.60 | 523,742,330.29 | 30.80 | 274.16 | 235.27 | Increased 8.03 percentage points |
| Related businesses | 608,332,089.69 | 496,133,721.46 | 18.44 | 36.46 | 36.23 | Increased 0.13 percentage points |
| Analyzed by Regions | ||||||
| Region | Operating revenue | Operating cost | Gross profit margin % | YoY change of revenue % | YoY change of cost % | YoY change of gross profit margin % |
| East China | 2,806,351,236.21 | 2,549,423,561.09 | 9.16 | 21.05 | 20.59 | Increased 0.35 percentage points |
| North China | 3,049,155,844.64 | 2,748,831,450.23 | 9.85 | 39.72 | 40.38 | Decreased 0.42 percentage points |
| Northeast China | 11,305,489,966.51 | 10,294,015,962.44 | 8.95 | 31.18 | 38.69 | Decreased 4.92 percentage points |
| Central and South China | 3,897,682,448.62 | 3,567,141,817.59 | 8.48 | 41.78 | 40.02 | Increased 1.15 percentage points |
| Southwest China | 847,874,337.66 | 796,841,735.78 | 6.02 | 24.96 | 21.77 | Increased 2.46 percentage points |
| Northwest China | 1,573,502,084.13 | 1,437,031,048.43 | 8.67 | 69.86 | 80.76 | Decreased 5.51 percentage points |
| Overseas market | 315,605,819.34 | 275,755,561.81 | 12.63 | 1.65 | -6.94 | Increased 8.08 percentage points |
and customer services to further improve product performance and market competence. The incomeof feed business increased by 55.54% compared to the year earlier. Meanwhile, Wellhope furtheraccelerated business and production expansion of swine raising business, the deliveries of swinerealized a significant year-on-year growth, and the income increased by 274.16%.--Analyzed by geographical regionDuring the reporting period, Wellhope's sales revenue in East, North, Northeast, Central and South,Southwest and Northwest regions across China increased by more than 20%, mainly due to the rapidgrowth of feed business in the above regions. Wellhope’s overall feed sales volume realized ayear-on-year increase of 47.02%.b. Analysis of sales volume
| Product | Production volume (10k tons) | Sales volume (10k tons) | Inventory (10k tons) | YoY change of production volume % | YoY change of sales volume % | YoY change of inventory % |
| Feed | 385.77 | 384.83 | 6.30 | 46.24 | 47.02 | 17.54 |
| By Industry | Item | 2020 | % of total costs | 2019 | % of total costs | YoY change % |
| Feed | Raw material | 10,104,260,157.10 | 96.27 | 6,249,372,402.87 | 95.14 | 61.68 |
| Feed | Labor cost | 108,916,427.66 | 1.04 | 74,966,723.16 | 1.14 | 45.29 |
| Feed | Depreciation | 88,079,837.94 | 0.84 | 79,197,047.98 | 1.21 | 11.22 |
| Feed | Energy (electricity, coal, steam) | 103,360,428.22 | 0.98 | 79,658,096.87 | 1.21 | 29.76 |
| Feed | Other manufacturing expenses (energy and depreciation excluded) | 91,210,812.76 | 0.87 | 85,185,696.24 | 1.30 | 7.07 |
| Feed | Total production cost | 10,495,827,663.68 | 100.00 | 6,568,379,967.12 | 100.00 | 59.79 |
| Broiler | Raw material | 5,926,656,581.31 | 82.36 | 5,063,037,156.10 | 85.28 | 17.06 |
| Broiler | Labor cost | 333,817,293.68 | 4.64 | 229,677,924.71 | 3.87 | 45.34 |
| Broiler | Depreciation | 49,577,201.22 | 0.69 | 27,153,097.83 | 0.46 | 82.58 |
| Broiler | Energy (electricity, coal, steam) | 79,688,980.83 | 1.11 | 48,744,698.51 | 0.82 | 63.48 |
| Broiler | Other manufacturing expenses (energy and depreciation excluded) | 806,179,181.09 | 11.20 | 568,606,302.57 | 9.58 | 41.78 |
| Broiler | Total production cost | 7,195,919,238.13 | 100.00 | 5,937,219,179.72 | 100.00 | 21.20 |
| By Product | Item | 2020 | % of total costs | 2019 | % of total costs | YoY change % |
| Feed | Raw material | 10,104,260,157.10 | 96.27 | 6,249,372,402.87 | 95.14 | 61.68 |
| Feed | Labor cost | 108,916,427.66 | 1.04 | 74,966,723.16 | 1.14 | 45.29 |
| Feed | Depreciation | 88,079,837.94 | 0.84 | 79,197,047.98 | 1.21 | 11.22 |
| Feed | Energy (electricity, coal, steam) | 103,360,428.22 | 0.98 | 79,658,096.87 | 1.21 | 29.76 |
| Feed | Other manufacturing expenses (energy and depreciation excluded) | 91,210,812.76 | 0.87 | 85,185,696.24 | 1.30 | 7.07 |
| Feed | Total production cost | 10,495,827,663.68 | 100.00 | 6,568,379,967.12 | 100.00 | 59.79 |
| Broiler | Raw material | 5,926,656,581.31 | 82.36 | 5,063,037,156.10 | 85.28 | 17.06 |
| Broiler | Labor cost | 333,817,293.68 | 4.64 | 229,677,924.71 | 3.87 | 45.34 |
| Broiler | Depreciation | 49,577,201.22 | 0.69 | 27,153,097.83 | 0.46 | 82.58 |
| Broiler | Energy (electricity, coal, steam) | 79,688,980.83 | 1.11 | 48,744,698.51 | 0.82 | 63.48 |
| Broiler | Other manufacturing expenses (energy and depreciation excluded) | 806,179,181.09 | 11.20 | 568,606,302.57 | 9.58 | 41.78 |
| Broiler | Total production cost | 7,195,919,238.13 | 100.00 | 5,937,219,179.72 | 100.00 | 21.20 |
| Customer | Business | Sales revenue (RMB) | % of total operating revenue |
| Customer 1 | Broiler | 252,267,573.09 | 1.06 |
| Customer 2 | Broiler | 229,597,833.61 | 0.96 |
| Customer 3 | Broiler | 212,919,976.02 | 0.89 |
| Customer 4 | Feed | 177,506,015.60 | 0.75 |
| Customer 5 | Feed raw material | 130,285,220.51 | 0.55 |
| Total | 1,002,576,618.83 | 4.21 |
| Supplier | Business | Purchase amount (RMB) | % of total purchase amount |
| Supplier 1 | Soybean meal, soybean oil, etc. | 2,201,021,737.74 | 10.48 |
| Supplier 2 | Soybean meal, soybean oil, rapeseed meal, etc. | 779,245,067.38 | 3.71 |
| Supplier 3 | Corn | 458,833,832.62 | 2.18 |
| Supplier 4 | Soybean meal | 412,593,246.04 | 1.96 |
| Supplier 5 | Soybean meal | 302,661,448.56 | 1.44 |
| Total | 4,154,355,332.34 | 19.78 |
C. Expense
Unit: yuan Currency: RMB
| Item | 2020 | 2019 | Change % |
| Sales expense | 465,307,995.89 | 487,217,524.04 | -4.50 |
| Administrative expense | 310,275,697.03 | 275,560,691.30 | 12.60 |
| R&D expense | 83,587,106.40 | 65,209,116.65 | 28.18 |
| Financial expense | 64,680,213.72 | 76,392,967.30 | -15.33 |
| Expensing R&D input | 83,587,106.40 |
| Capitalizing R&D expenditure | 0 |
| Total R&D expenditure | 83,587,106.40 |
| % of total operating revenue | 0.35 |
| R&D headcount | 199 |
| % of the Company's headcount | 2.76 |
| Percentage of capitalizing R&D expenditure | 0 |
economic returns through launching series of concentrate supplement for dairy cattle and balancingTMR through RENB technology, which can improve milk yield during peak of lactation by 1.0-1.8kg perday and decrease milk manufacturing cost by RMB 0.1-0.3/kg.d. Layer feed: In response of the market competition caused by COVID-19 pandemic and African SwineFever as well as the sharp increase in raw materials price, Wellhope actively developed new products,such as launching a new type of compound feed for layer in egg producing period with highercost-effectiveness. Meanwhile, Wellhope has improved the premix production line, optimized andupgraded the special poultry feed products such as laying duck and goose breeder, which has furtherenhanced the product competitiveness and market share.e. Aquatic feed: Wellhope carried on the upgrading of aquatic feed products for some important species,such as common carp, channel catfish, loach and pacific white shrimp, making the feed conversionefficiency of these products decreased by 0.05-0.10 compared with the prior year. At the same time,Wellhope increased investment in research and development of feed for special aquaculture animals,and promoted the competitiveness of high value products such as crayfish, giant freshwater prawn andyellow catfish.B．Improving the nutrition system of antibiotic-free feed and carrying out reducing the use ofantibiotics on farmsBy the end of June 2020, all feed products of Wellhope have been successfully transitioned to beantibiotic-free after continuous researches and explorations based on more than one hundred testverification. The performance of the products has been proved stable, positive and been well receivedby the market. In order to maintain the leading position and market competitiveness, Wellhopeconstantly upgraded antibiotic-free feed products, also provided customized feeding programs tofarmers. In the meantime, Wellhope further boosted reducing the use of antibiotics on farms andguided farmers to constantly improve bio-safety, farm management and feeding programs.C. Exploring diversified raw material resources to cope with price fluctuations of feed raw materialsIn 2020, the prices of corn, soybean meal and other raw materials have been fluctuating sharply.Combining own accumulations and experiences of partner Royal De Heus in raw material substitution,Wellhope has explored diversified raw material resources and adopted methods such as raw materialsubstitution to optimize feed formula, so as to stabilize the impact of raw materials price fluctuations.For example, evaluating the application of unconventional raw materials, increasing the investment inresearch on low-protein and eco-friendly diets, using some local raw materials to reduce thedependence on soybean meal and control costs; selecting wheat, brown rice and other raw materialsto alternate corn, and taking the lead in developing and promoting corn-free growing-fattening swinefeed technology and related products in several regions to reserve the diet technology with a variety ofgrains in the future.
D. Upgrading farming management programs to facilitate the development of large-scale farmsa. Technology solutions for swine raising: In 2020, Wellhope has established health monitoringtechnology for breeding pig and concentrated breeding technology with different genes, also improvedthe integrated high-standard nutrition system of Danbred sows and piglets to continuously strengthenthe reproductive performance of sows, as well as the livability and weaning weight of weaned piglets.Meanwhile, Wellhope has established the nutrition supporting programs and implementation measuresfor commercial gilts and large-weight finishers under the backdrop of the "post African Swine Fever era",which has successfully settled the problems faced by swine raising industry, such as low feed intakeduring lactation period of commercial gilts, lower weaning weight of piglets, serious backfat loss afterweaning and difficulty in oestrus.b. Technology solutions for beef cattle and mutton sheep: Wellhope continued to implement the way ofnutritionists cooperating with product managers to enhance farm benefits through providing on-siteguidance, such as developing reasonable diet formulas and feeding programs that matched with feedmodel.c. Broiler raising and slaughtering technology: Wellhope further exerted the advantages of three tiercage system for broilers and combined different types and combinations of feeding programs toimprove feed conversion rate, reduce mortality and culling rate, promoting the full growth potential ofbroiler. Meanwhile, Wellhope vigorously improved slaughtering know-how to enhance the killing-outpercentage and meat quality, such as reducing broken wing percentage, and increasing skin waterkeeping ability, helping increase the profitability of the Company’s overall value chain.E. Introducing and reserving excellent talents to enhance the competence of the R & D systemWellhope has been always insisting on introducing and reserving key technological talents throughvarious ways. In 2020, it introduced nearly 50 professional talents to work on market research, productdevelopment, technical support and other positions in the fields of swine, poultry, ruminant, etc. Someof them are doctors and post-doctors from both domestic and overseas agricultural universities, such asChina Agricultural University, Nanjing Agricultural University, Wageningen University and the Universityof Queensland. The R&D team has been growing stronger, boosting Wellhope's R&D strength constantlyenhancing.
Honors and Patents
| Patents granted in 2020 | |||||||
| Number of authorized patents | 48 | Patent for invention | 4 | Number of authorized patents as at the period end | 117 | Patent for invention | 49 |
| Patent for utility models | 44 | Patent for utility models | 68 | ||||
| Circumstances of Wellhope participating in the formulation of national or community standards and undertaking sci-tech projects in 2020 | |||||||
| National standards | Formula Feeds for Starter and Growing-finishing Swine (issued on September 29, 2020, implemented on April 1, 2021) | ||||||
| Formula Feeds for Layer and Broiler (issued on September 29, 2020, implemented on April 1, 2021) | |||||||
| Community standards | Seven community standards, including Fermented Feed by Microbial with Enzyme for Dairy Cow, organized by Beijing Bio-feed Industry Technology Innovation Strategic Alliance (Implemented) | ||||||
| Sci-tech projects that Wellhope undertook and presided | Precision Nutrition and Feeding Program for Sow--Shenyang Sci-tech Planning Project in 2020 | ||||||
| Selecting and Raising Outstanding Livestock and Poultry Strains of Liaoning Province and Researching on Key Technologies of Integration Chain Project | |||||||
| Honors regarding technology research and development in 2020 | |||||||
| Honors | Outstanding Antibiotic-Free Feed Enterprise of China Swine Industry Chain Ecosystem | ||||||
| Top 10 Enterprise with Innovative Technology of Antibiotic-free and Alternatives in China’s Animal Husbandry and Feed Industry in 2020 | |||||||
| Pioneer Award of Antibiotic-free Creep Feed in the 9th Session of National Creep Feed Development Summit Forum in 2020 | |||||||
| Wellhope's WIN plus (Upgraded Wellhope immune nutrition products)-Nursery Feed Product was awarded as China Good Feed 2020-Pioneer Anti-free Feed Brand | |||||||
| Establishment and Application of Piglet Intestinal Steady Nutrition Technical System cooperated with Jilin Agricultural University won the First Prize for Progress in Science and Technology of Jilin Province | |||||||
| Item | 2020 | 2019 | Change % |
| Cash inflow of operating activities | 24,607,049,169.74 | 18,665,159,099.25 | 31.83 |
| Cash outflow of operating activities | 23,841,103,716.71 | 17,553,553,132.67 | 35.82 |
| Net cash flow from operating activities | 765,945,453.03 | 1,111,605,966.58 | -31.10 |
| Cash inflow of investing activities | 504,590,930.16 | 348,000,132.83 | 45.00 |
| Cash outflow of investing activities | 2,010,940,377.73 | 1,222,207,956.12 | 64.53 |
| Net cash flow from investing activities | -1,506,349,447.57 | -874,207,823.29 | Not applicable |
| Cash inflow of financing activities | 2,555,443,020.39 | 2,365,290,378.12 | 8.04 |
| Cash outflow of financing activities | 2,136,010,143.82 | 1,986,335,207.32 | 7.54 |
| Net cash flow from financing activities | 419,432,876.57 | 378,955,170.80 | 10.68 |
| Net cash flow | -322,192,838.64 | 619,185,607.71 | -152.03 |
2. Assets and liabilities
Unit: yuan Currency: RMB
| Item | Closing balance of 2020 | % of total assets | Closing balance of 2019 | % of total assets | YoY change % | Explanation |
| Notes receivable | 14,200,547.87 | 0.12 | 3,696,180.25 | 0.04 | 284.20 | Bank acceptance increased |
| Prepayments | 364,401,520.23 | 3.13 | 222,064,368.55 | 2.43 | 64.10 | Prepayment of purchasing increased |
| Other receivables | 121,043,476.45 | 1.04 | 85,600,811.75 | 0.94 | 41.40 | Guarantee deposits increased |
| Inventory | 2,473,827,570.38 | 21.24 | 1,568,373,133.15 | 17.14 | 57.73 | Raw materials purchasing increased, stockpiles increased due to raw materials price fluctuations |
| Contract assets | 4,301,418.29 | 0.04 | - | Implemented new revenue standard | ||
| Other equity instruments investment | 20,847,697.96 | 0.18 | 5,760,839.23 | 0.06 | 261.89 | Newly increased other equity instruments investment |
| Fixed assets | 2,860,162,059.91 | 24.56 | 2,023,113,939.02 | 22.11 | 41.37 | Fixed assets of broiler integration and swine raising businesses increased |
| Construction in progress | 322,895,206.90 | 2.77 | 240,012,874.86 | 2.62 | 34.53 | Increased project investments for broiler integration and swine raising businesses |
| Biological asset | 221,654,027.17 | 1.9 | 94,826,312.88 | 1.04 | 133.75 | Pig breeders increased |
| Other non-current assets | 531,140,679.24 | 4.56 | 337,463,267.56 | 3.69 | 57.39 | The number of contract farms increased, prepaying feeding fees increased |
| Notes payable | 4,000,000.00 | 0.03 | - | Bank acceptance payable increased | ||
| Accounts payable | 1,068,968,589.85 | 9.18 | 659,216,483.84 | 7.20 | 62.16 | Purchasing payments increased |
| Advance receipt | 15,522,362.13 | 0.13 | 209,529,248.68 | 2.29 | -92.59 | Implemented new revenue standard, recorded advance receipt with the nature of contract liability in the contract liabilities |
| Contract liabilities | 365,124,817.02 | 3.14 | - | Implemented new revenue standard, advance receipt with the nature of contract liability increased |
| Payroll | 92,456,475.56 | 0.79 | 62,549,364.12 | 0.68 | 47.81 | Salaries increased |
| Non-current liabilities due within one year | 121,896,906.66 | 1.05 | 70,593,717.62 | 0.77 | 72.67 | Long-term borrowings due within one year increased |
| Other current liabilities | 3,386,523.00 | 0.03 | - | Implemented new revenue standard, tax to be transferred increased | ||
| Long-term borrowings | 574,880,271.67 | 4.94 | 174,330,000.00 | 1.91 | 229.77 | Long-term borrowings increased |
| Long-term payables | 15,458,230.92 | 0.13 | 11,025,000.09 | 0.12 | 40.21 | Financing leases increased |
| Deferred income | 42,238,872.75 | 0.36 | 31,841,250.00 | 0.35 | 32.65 | Deferred income generated from receiving government grants that related to assets increased |
| Deferred income tax liabilities | 1,936,853.23 | 0.02 | 396,995.58 | 0.00 | 387.88 | Deferred income tax liability recognized as taxable temporary difference increased |
3. Investment analysis
As at December 31, 2020, the balance of Wellhope's long-term equity investment recorded RMB 2.42billion, increased by 17.14% compared with the end of prior year. For details, please refer to notes tothe items of Consolidated Financial Statements--long-term equity investment.
4. Main holding and associated companies
Unit: 10k yuan
| Company | Primary business | Registered capital | Total assets | Net assets | Net profit |
| Xi'an Wellhope Feed Sci-Tech Company | Feed production and selling | 500.00 | 21,705.60 | 16,858.58 | 5,245.17 |
| Beijing Sanyuan Wellhope Agri-Tech Company | Feed production and selling | 1,000.00 | 26,925.89 | 22,753.59 | 2,850.09 |
| Shenyang Wellhope Agri-Tech Company | Feed production and selling | 8,210.00 | 26,823.22 | 16,751.45 | 3,598.78 |
| Tai’an Jiuguhe Agriculture Development Company | Broiler raising and feed processing | 1,060.00 | 47,640.93 | 22,578.66 | -4,206.71 |
| Huludao Jiuguhe Feed Mill | Broiler raising and feed processing | 1,085.00 | 25,650.36 | 3,138.64 | -4,417.99 |
| Anshan Jiuguhe Food Company | Broiler slaughtering, processing and selling | 4,320.00 | 71,420.94 | 43,428.53 | 15,344.57 |
| Huludao Jiuguhe Food Company | Broiler slaughtering, processing and selling | 7,370.00 | 30,552.66 | 22,306.21 | 7,195.25 |
| Beipiao Hongfa Food Company | Feed processing, broiler breeder raising, day old chick hatching, broiler raising and slaughtering | 3,000.00 | 209,838.54 | 144,635.40 | 22,928.36 |
| Dalian Heyuan Agri-Tech Company | Feed processing, broiler breeder raising, day old chick hatching, broiler raising and slaughtering | 10,000.00 | 152,874.84 | 86,706.58 | 7,367.84 |
| Dalian Chengsan Animal Husbandry Company | Broiler raising and feed processing | 1,008.61 | 194,200.43 | 157,571.42 | 14,274.68 |
| Liaoning Wellhope Agriculture and Animal Husbandry Development | Swine raising | 5,000.00 | 69,019.75 | 15,913.59 | 11,839.60 |
| Anhui Wellhope Agri-Tech Company | Feed production and selling, swine raising | 16,000.00 | 52,938.23 | 24,997.23 | 9,407.67 |
III. Outlook on the Company's Future Development
1. Industry outlook
China is a large agricultural producer with a population of 1.4 billion. In China, agriculture has alwaysbeen regarded as a strategic industry that provides security and stability to residents and lays afoundation for national economy. This is not only because agriculture is the source of food and clothingfor mankind and the basis of survival, but also because it is the pillar of the independence anddevelopment of other industries.China has always paid great attention to the development of agriculture. Along with latest changes ininternational trade, resources and environment, technological circumstance, industrial structure,policies and regulations and other factors, the development of agriculture has also ushered in a newphase. In 2019, the No. 1 Central Document put forward that downward pressure on the economy hasbeen mounting and profound changes have been taking place in the external environment, it was ofspecial importance to do intensive work related to agriculture, rural areas and farmers. In 2020, the No.1 Central Document made comprehensive plans for agriculture, rural areas and farmers to ensure asuccessful conclusion on the battle against poverty and building a moderately prosperous society inrural areas. The No. 1 Central Document of 2021 also further emphasizes that rural revitalization isnecessary for national rejuvenation. This document is based on the present and takes into account thefuture, puts forward clear requirements for comprehensively promoting rural revitalization andaccelerating agricultural and rural modernization.Under the backdrop of deepening reform on the supply-side and industrial transformation andupgrading, the animal husbandry industry in which Wellhope is active has also ushered in a newdevelopment opportunity despite numerous challenges.A. Edging out less qualified players, the consolidation of feed industry is increasingly heightenedAlong with fierce competitions taking place in the feed industry, extra-large companies are constantlyexpanding their businesses, medium-sized producers are seeking business opportunities, whilst smallproducers are gradually squeezed out of the market. For large companies, they enjoy their strengthsand advantages in technology, cost, brand, management, capital and logistics to continuously improvetheir total factor productivity, rapidly expand production scale and seize market shares through mergersand acquisitions as well as embarking on new projects. Those small and medium-sized feed producershave been gradually edged out in the increasingly fierce competitions due to their lower technical level,higher comprehensive costs, weaker brand reputation, lack of management skills, and bigger financialpressure. In addition, with the formal implementation of ban of antibiotics, and the continuouspromotion of bulk feed, the entry barriers of feed industry have been raised yet again, customers havealso increased their requirements on the comprehensive strength of feed suppliers significantly, whichwill speed up the elimination of backward players. In 2020, there were 749 large-scale feed mills withannual capacity over 100,000 tons, increased 128 plants compared to the prior year. These feed mills
have produced 133.52 million tons of feed with a year-on-year increase of 19.8%, which contributedtowards 52.8% of China’s total feed production, rising by 6.2 percentage points. The feed industry hasbeen further transformed to become more large-scale and intensive.B. Vertical integration of resources and continuous extension of industrial chainAnimal husbandry industry consists of several industries such as feed production, animal health product,livestock and poultry raising, slaughtering and processing, etc., where the upstream activities are morerelated to crop planting, whilst the downstream activities focus more on agricultural and sideline foodprocessing industries, with a mixture of other related industries in between to form an organic whole.As competition has intensified to edge out less qualified players, large-scale companies are continuouslyexpanding their business scale. For reasons of risk control, profit growth, food safety and other needs,apart from engaging in mergers and acquisitions, these giants involved in animal husbandry industrygradually integrate resources during this phase, while continuously expanding their businesses in bothupstream and downstream industries in order to break through the industrial chain and establish strongcompetitive advantages as well as develop better anti-risk capabilities. Under the development trend ofintegration, the industrial divisions of large enterprises in agricultural and animal husbandry industrieshave been gradually weakened, while seizing the resources of the whole industrial chain has becomethe theme of the development of animal husbandry industry.C. Constantly strengthened environment protection promoting the concept of green developmentbeing practicedIn recent years, China has put forward a series of regulations on environmental protection, such as therevision of the Environmental Protection Law, the promulgation of the Environmental Protection TaxLaw, and the release of the Regulations on Pollution Prevention of Large-scale Raising of Livestock andPoultry and the Action Plan for Pollution Abatement of Agriculture and Rural Areas, etc. Thesesuccessively launched policies have showed China's determination to increase supervision onenvironmental protection in animal husbandry industry, local governments have also issued certain newregulations related to farm removal, ban of raising and restriction of farms, which will further edge outless qualified players and reframe animal husbandry industry.D. Increasingly stringent supervisions on food safety highlighting the advantages of large-scalecompaniesIn recent years, food safety in China has been improving, but at present the circumstances of thesmall-scale, and fragmented food industry with low entry barriers have not been changed much, andthe farm-to-table industrial chain is too long and too large with many risk points. In October 2019,Premier Li Keqiang issued a Decree of State Council and released the new edition on Food SafetyRegulation of the People’s Republic of China, which not only provided clear regulatory initiatives toaddress specific issues, but also strengthened the penalties for violations of the law through the policyof "implementing penalties to individuals". The Regulation came into force from December 1, 2019 and
the market has since been the most heavily regulated. In the future, more attention will be paid to thenormalization of food safety and industrial system. Stringent food safety supervision will furthersqueeze out less qualified players, at the same time highlighting the strengths and advantages of largeintegrated companies.E. Bio-safety becoming a key factor, the prevention of African swine fever becoming normalDisease has always been one of the major risks faced by animal raising industry. In August 2018, China’sfirst case of African swine fever was identified, soon spread to more than 20 provincial-leveladministrative regions within the next six months, which has severely hit swine raising industry.Affected by this epidemic, China's swine inventories fell sharply in 2019, the key factor of bio-safety hasraised the entry barriers of swine raising industry, the living space of small and medium-sized back-yardfarms were continuously compressed, whilst large group companies took the chance to vigorouslyexpand their businesses to capture markets supported by their massive capital, talents, technology andother resources. In 2020, the prevention of African swine fever has become normal, boosting swineraising industry entering a prolonged period of gaining from high swine prices. However, the preventionof African swine fever remained the primary issue faced by the industry. African swine fever hasrestricted domestic swine stocking density, and the recovery of China's swine production will behampered for a long time until a safe and reliable vaccine can be developed.F. High pork prices curbing consumer demand, accelerating the adjustment of meat consumptionstructureIn 2019, African swine fever has hit China’s swine industry particularly hard, with severe productioncapacity losses and a remarkable increase in swine and pork prices, which fueled the prices of livestockand poultry products to record highs. In 2020, the outbreak of COVID-19 has severely attacked thenational economy and significantly weakened the consumption power of residents. It has been alreadyquite difficult to sell high-priced pork, the COVID-19 has once again reduced pork consumption, porkpurchases from the group meal dropped remarkably and food producers were forced to shift rawmaterials to chicken and vegetarian food, which quickened the adjustment of consumption structure ofdomestic meat products, and the overall consumption habits of residents have begun to change. Inaddition, characterized by high protein, low fat and cholesterol levels, chicken has been well acceptedby residents as a viable alternative to pork, and white feather broilers have a big advantage over swinesuch as growth rate and raising cost, etc. Seeing the experiences of developed countries, China's percapita chicken consumption still has great growth potential and a broad market.
2. Development strategy of the Company
Wellhope’s long-term development objective is to become the world's leading enterprise acrossagriculture, animal husbandry and food industries. In the next three years, Wellhope will vigorouslydevelop feed business, accelerate the pace of integration, complete the phased layout of food businessto form a regional food brand, and finally become an enterprise with leading-edge quality and
efficiency across agriculture, animal husbandry and food industries (2021-2023).According to the three-year plan, and the analysis and judgment of the economic and industrialdevelopment trend in 2021, Wellhope has determined its business strategy for 2021, i.e., by upholdingthe core values of “integrity, responsibility, double-win”, and the management philosophy of“innovation, high efficiency, and self-discipline”, Wellhope will further heighten systemic managementand the core competences, whilst improve the synergy management among all business divisions,strengthen brand building and risk control, innovate incentive mechanism, enhance talents’ echelon,research and development, and information platform, aiming at building competitive and aggressivefront platform(including product power, service ability, financial strength, marketing force),cost-efficient middle platform(including production, purchasing, quality assurance, technology), andenergized back-end platform(including HR, finance, technology, R&D, purchasing, IT, corporate culture).While further strengthening and expanding feed business, Wellhope will also vigorously develop broilerintegration and swine raising businesses, forming an integrated business mode that drives by broilerintegration and swine raising businesses. Meanwhile, Wellhope will also speed up food business to lay asolid foundation for becoming a leading-edge enterprise with high quality and efficiency acrossagriculture, animal husbandry and food industries.
3. Business plan for 2021
Although coping with unprecedented challenges in 2020, such as prices of feed raw materials risingsharply, broiler industry entering a downward cycle, the COVID-19 inhibiting consumption, and Africanswine fever hindering the recovery of swine production, all Wellhope people put in efforts to moveforward. In 2020, Wellhope’s operating revenue achieved a year-on-year growth of 33.87%, the netprofit attributable to shareholders increased by 2.99%, realizing the seventh consecutive increase inrevenue and profit after 2014-2019.2021 is the year of a new round of strategic change of Wellhope. The Company will further developthree primary businesses to strive to achieve better operating results. In addition, driven by the targetof heightening core competences in the fierce competition, Wellhope will make efforts to buildcompetitive and aggressive front platform(including product power, service ability, financial strength,marketing force), cost-efficient middle platform(including production, purchasing, quality assurance,technology), and energized back-end platform(including HR, finance, technology, R&D, purchasing, IT,corporate culture). It will also further research on the markets to grasp industrial trends to boostproduction expansion step by step and reserve talents to support future development.A. Feed businessWellhope will exert the strength of know-how to center on enhancing product power and constantlyimprove the power of service, financing, and marketing to build competitive and aggressive frontplatform. At the same time, Wellhope will further strengthen the coordination among purchasing,technology, marketing, and production, and simultaneously further deepen benchmarking
management based on data analysis and comparison, while centering on cost and efficiency to digdeeper into potential profit margin of each feed category and each feed mill to continuously improvethe core capabilities of feed business. In addition, Wellhope will comply with the trend of the feedindustry to embrace the era of bulk feed. Supported by the advantages of technology, finance, scale,branding and logistics services, Wellhope will swiftly increase the input of bulk feed such as equipmentintroduction and upgrading, pelleting technique improvement to seize the opportunities brought byindustrial changes and grab market shares at the time of backward companies being eliminated. In 2021,regarding feed business in Northeastern provinces (Liaoning, Jilin, Heilongjiang), Wellhope will continueto heighten the advantages of management system and brand image to steadily improve market shares,and forward explore the potential profit growth margin. Other than the Northeastern provinces,Wellhope will vigorously seek for new markets to expand market reach rapidly. To conclude, Wellhopeaims to achieve a growth rate of more than 20% regarding feed business in 2021.B. Broiler integration businessIn 2021, the inventories of grandparent and parent stock are expected to be at high level as well, whichwill increase the production capacity, thus the broiler industry is expected to remain a downward cycle.Under such unfavorable situations, Wellhope will implement the ideology of “guarding safety,controlling the pace of investment, cutting costs, heightening efficiency and increasing benefits” tofurther enhance internal operation, and guarantee safety margin. Meanwhile, Wellhope will alsoexpand production capacity step by step to preempt market shares in such downward cycle, so that itcan gain excess returns at the time of broiler industry entering an upward cycle. Regarding breedingbusiness, Wellhope will slow down the expansion of production capacity, strengthen the managementof self-produced day-old chicks and optimize production performance indicators, whist it will alsoenhance the selection of outsourced chicks to ensure quality. Regarding broiler raising sector, Wellhopewill give full play to the advantage of asset-light operation by cooperating with large farms, steadilyexpand the scale of commercial broiler raising according to plans and continue to improve theproduction performance based on precise control of capital input. Regarding slaughtering sector,Wellhope will moderately enlarge the production scale, constantly improve internal operation,strengthen the sales system and explore marketing channels. Regarding processed food sector,Wellhope will push the progress of new projects, rapidly expand the scale of production and marketing,and improve the capacity to take down large orders. Besides, Wellhope will also strengthen theresearch and development to launch hit products, increase sales channels, train the marketing team,and continuously strengthen core abilities and branding. The resources of the Company will focus moreon food business in the future. In addition, Wellhope will further accelerate the selection, cultivationand reserve of talents, and speed up the construction of talents’ echelon. In 2021, Wellhope plans toraise 610 million broilers and slaughter 720 million (including holding and associated companies).
C. Swine raising businessAfrican swine fever has become normal in China. Due to the continuous impact of the epidemic, swineprices are higher than expected, the period of gaining profit is expected to be prolonged. At the sametime, with the recovery of production capacity, the stocking density has been constantly increased,which stresses on the prevention of this epidemic. Owning to above circumstances, the prevention ofAfrican swine fever will be still the first priority in 2021. Thereby, Wellhope will continue to putbio-safety in the first place, such as constantly improving the professional skills of staff in pig farms,innovating preventive measures, further heighten the reward and punishment rules to ensure that theteam can always maintain a high sense of responsibility and awareness. Under the premise of fullysafeguarding the farms, Wellhope will take advantage of the structures of sows to rapidly expand swineproduction to maximumly grasp market opportunities. On the other hand, it will strive to build the corecompetences of swine raising business by heightening production performance, strengthening thequality of internal operation, and reducing comprehensive costs. In 2021, Wellhope plans to sell 1.2million to 1.5 million heads of swine (including holding and associated companies).This business plan can’t be deemed as the Company's performance commitment to investors, pleasemaintain sufficient risk awareness.
4. Possible risks
A. Risks of fluctuations in raw material pricesMost costs of the feed business come from raw materials. Factors in terms of production changes inproducing areas, import policies, purchasing, storage, and grants, exchange rate fluctuations, logisticscosts, etc., may cause fluctuations in the raw material market, which will affect the Company's feedbusiness costs and gross profit margins. With deepened globalization of the trade of agriculturalproducts in recent years, the supply-demand relationship and trading price of raw materials have beenaffected by market conditions such as spot and futures at home and abroad, and the price trend hasbecome more complex followed by increasingly fierce fluctuations, which further increases thedifficulties of the Company’s cost management. In addition, the fluctuations of COVID-19, Sino-USrelations, international political and economic environment, and other factors have also made thepurchase price of raw materials more variable.Solutionsa. Wellhope has established strategic partnerships with many leading domestic and overseas rawmaterial suppliers. Meanwhile, it adopts three-level purchasing mode that includes centralizedpurchasing of head office, bidding purchasing of different business regions and local subsidiarypurchasing to clarify the role of purchasing.b. Wellhope combines its raw material trading business with purchasing management, i.e., theprofessional and practical raw materials’ purchasing team conducts targeted forward-lookingresearches and real-time tracking on the market to strategically reduce the purchasing price, such as
uniformly managing different variety of raw materials, adopting spot purchasing and futures together.c. The purchasing team works closely with the R&D team to further optimize the purchasing cost byway of re-formulating the feeds i.e., changing the composition of the feed to use cheaper alternativeraw materials while achieving the same results.d. Wellhope and Royal De Heus have set up an information sharing channel, which enables the twosides to timely share the market trends of raw materials and additives. In addition, the two sides maycarry out joint purchasing cooperation in the future, which will greatly enhance the overall bargainingpower.B. Risks of fluctuations in livestock and poultry pricesAnimal husbandry industry is a typical cyclical industry, and the hysteretic adjustment of supply causesthe prices fluctuating periodically. At present, China's animal husbandry industry is still dominated byback yard farms and small-scale farms, these farm owners show the character of non-rationaldecision-making with an obvious “herd effect”, which further aggravates the cyclical fluctuations in themarket price.Solutionsa. Wellhope always keeps high attention of upstream and downstream product price fluctuations,continues to deepen market research to accurately predict industry trends and adjust businessstrategies. Meanwhile, Wellhope’s three primary businesses share resources and boost business layoutas planned to effectively control the risk of price fluctuations from the strategic level.b. Wellhope's broiler integration business has established an industrial chain from broiler breederraising, day-old chick hatching, feed production, commercial broiler raising, slaughtering, processing tofurther processing of prepared food and cooked food. In the meantime, Wellhope’s swine raisingbusiness has also been entering downstream industries, such as the smooth development ofslaughtering business. The continuous improvement of the industry chain makes the price fluctuationsof each sector in the chain can be fully hedged, which maximumly mitigate the price fluctuations of thewhole industry chain.c. Wellhope has always been committed to improving the production standard of each sector,constantly innovating the practical operation technology and management mode of various businesses,reducing overall operating costs indirectly by optimizing the production indicators and improving percapita efficiency. Costs advantage can mitigate the negative impacts of downward industry on theCompany while improving the overall profitability when facing a booming market.C. Risks of serious animal epidemicFeed and animal raising are Wellhope's two core businesses. Epidemic is one of the main risks faced byanimal raising companies. Once an animal epidemic happens, it will certainly cause panic in the market,which will reduce the demands, then lessen the production, the income shrinks and the cost rises. Thefeed 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 epidemicwill undoubtedly have a strong impact on the Company's operations.Solutionsa. Wellhope attaches great importance to regional distribution and business structure, which is themost direct way to divert the risk of animal epidemic.b. Wellhope continues to improve the prevention technology of major epidemics, completes theearly 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, theless to loss. Wellhope has set an emergency command system for major epidemics to minimize losseswhen they occur.d. Wellhope has been continuously conducting post-epidemic analysis and researches. Meanwhile, ithas been constantly strengthening the ability to prevent epidemics from multiple aspects such asanimal nutrition and veterinary services.e. For African swine fever, Wellhope has formed a relatively complete prevention system fromproduct researches to farm management. Specific preventive measures have been detailed in Section IVhereof-Swine raising business.D. Risks of the industrial pattern adjustment caused by environmental protection policiesChina has put forward some environmental protection regulations in recent years, such asEnvironmental Protection Tax Law, etc., which show the government's determination to increasesupervision on environmental protection in animal husbandry industry, whilst the local governmentshave also issued certain new regulations regarding farm demolition, prohibition or restriction of animalraising. It can be seen that the continuously strengthened environmental protection is the trend of theindustry, also an inevitable reality, which will further weed out unqualified players and reframe theindustry.SolutionsDuring the start-up period, Wellhope had input "saving resources, being committed to environmentalprotection" as part of its Mission. During the past 26 years, Wellhope has always considered savingresources and protecting environment as its important mission, taking strict compliance with laws andregulations, and implementing environmental protection requirements as key performance appraisalindicators for managers.a. In the face of increasingly strict environmental protection requirements, all Wellhope’s subordinatedentities have carried out a comprehensive identification of environmental risk points, and formulatedemergency plans for emergent environmental incident based on actual circumstances and therequirements of local governments at all levels. In view of the key pollutant discharge entity, Wellhopehas made a complete self-monitoring program to identify problems timely and eliminate hiddendangers, it also constantly increases personnel, capital investment in environmental protection to
ensure that the key pollutant discharge entities always meet the national standards.b. Wellhope has always performed all environmental standards of the state with the most rigorousattitude, established complete control measures for waste gas, noise, wastewater, solid waste and otherpollution generated during the production process. Meanwhile, it uses eco-friendly raw materials andadditives in feed formulas, and continuously develops safe diet to reduce the emissions of heavy metals,nitrogen and phosphorus.E. Risks of exchange-rate fluctuationsWellhope's international business started early and has been developed rapidly, which can be affectedby exchange-rate fluctuations in raw material purchasing, product export, overseas investment,including the following aspects.Firstly, international development has made the global purchasing of raw materials becoming normally,therefore, the risk of exchange-rate fluctuations is particularly acute for raw materials that are largelysupplied from abroad. Secondly, Wellhope’s export business of broiler parts products is growing rapidlywith customers from many countries and regions across the world, and the exchange-rate fluctuationsare inevitably caused by the settlements of multiple currencies. Finally, due to the large overseasinvestment and overseas operations, the cross-border capital transactions and settlements will also beaffected by exchange-rate fluctuations.Solutionsa. Wellhope closely focuses on the dynamic international foreign exchange market, whilst enhances theawareness of foreign exchange risk, and improves the researching and forecasting capabilities of theforeign exchange market.b. Wellhope continues to improve the bargaining power in foreign trade transaction by enhancing thecompetitiveness of products and using RMB for settlement, while reducing the exchange rate risks byadding insured value clause and the exchange-rate risk allocation clause in the contract.c. By making full use of foreign exchange forwards, swaps and options (portfolios) and otherinstruments to maintain the exchange-rate for foreign exchange exposure.d. According to specific conditions of different countries, based on the principle of "using foreigncurrencies in foreign trade", Wellhope reasonably matches the income and debts to control theexchange-rate risks.F. Risks of food safetyIn 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 foodsources, conducted forceful measures on handling food violations. Once the food safety incidenthappens, it will directly damage the interests of consumers and cause panic, which may greatly impactthe downstream demands, affect the brand and performance of the enterprises.
SolutionsSince its establishment, Wellhope has always attached great importance to the issues of food safety andquality assurance, adhering to implement the quality policy of "six never" with the most rigorousattitude--Never accept unqualified raw material, Never use abnormal equipment, Never allownonstandard operation, Never produce substandard product, Never ignore unsatisfied customer, Nevertolerate imperfect service. Wellhope’s head office has set up Food and Quality Safety ManagementCommittee, whilst all business sectors and corresponding subsidiaries have established food and qualitysafety management group to ensure that the team always maintains a high sense of responsibility andawareness.a. Wellhope has established a three-level quality management mechanism and testing system thatcompose of head office, regional center and subsidiary. By adopting international standards such asISO9001, ISO22000 and ISO-IEC17025, and thoroughly implementing a series of quality standards suchas the "Feed Quality and Safety Management Practice" and "Veterinary Drug Production QualityManagement Practice" issued by the Ministry of Agriculture and Rural Affairs, Wellhope has controlledthe whole production process and established the traceability system. Meanwhile, it vigorouslypopularizes near-infrared detection technology, improves detection efficiency to timely share data andquickly realize risk early warning. Wellhope also focuses on the detection and monitoring of heavymetals, harmful microorganisms, mycotoxins, which provides an important guarantee for the safety offeed products. In addition, by learning from the technical experiences of antibiotic-free feed in Europe,coupled with the current situation of China’s animal raising industry, Wellhope has achieved a leadingadvantage in the field of antibiotic-free feed, and now all the feed products have successfully transitedto be antibiotic-free.b. In terms of production management, Wellhope strictly monitors and checks the drug selection anddrug residue control in broiler integration and swine raising businesses. Whilst it constantly strengthensthe quality management in slaughtering and processing, earnestly implements the inspection andquarantine as well as drug residue detection. Regarding business model, Wellhope's broiler integrationbusiness has formed an industrial chain including broiler breeder raising, day-old chick hatching, feedproduction, commercial broiler rearing, slaughtering and processing of raw meat, further processing ofprepared and cooked food. The integrated operation ensures sufficient supply of raw materials in eachsector of the chain, and strictly controls the whole process of food and quality safety from the source.Through standardized management and streamline operation, Wellhope consolidates the controls ofbio-safety, drug residue and in-process hygiene to achieve traceable food safety.
Section V Important DisclosuresI. Common Stock Profit Distribution or Capital Reserve Converted into Share Capital
1. Cash dividend
Driven by the goal of realizing long-term and sustainable development, Wellhope has established asustainable, stable and scientific profit distribution system for investors based on considering its actualoperation, shareholders’ need, social factors such as capital costs, external financing environment,current and future profitability, cash flow, project investment and capital demand, bank credit and debtfinancing environment, etc.Wellhope held the 2nd meeting of the 7th Session of Board of Directors to formulate and deliberate theShareholders’ Dividend Plan for the Next Three Years (2020-2022), which will be submitted to its 2020Annual Shareholders’ Meeting. At least every three years, Wellhope re-reviews its Shareholders’Dividend Return Plan for the Next Three Years to evaluate on-going profit distribution policy and makenecessary modifications according to the opinions of shareholders (especially non-controllingshareholders), independent directors and supervisors, and determines the Shareholders’ Dividend Planfor that period.During the reporting period, according to the Proposal of 2019 Profit Distribution Plan approved byWellhope's 2019 Annual Shareholders’ Meeting on April 20, 2020: based on the total share capital onthe equity registration date, Wellhope paid cash dividends of RMB 2.20 per 10 shares (tax included) toall shareholders, amounted to RMB 202,853,177.12. The dividends had been paid in June 2020.Wellhope's 2020 profit distribution plan will be: based on the total share capital on the equityregistration date, it plans to pay cash dividends of RMB 2.20 per 10 shares (tax included) to allshareholders. This profit distribution plan is pending to be submitted to 2020 Annual Shareholders'Meeting.During the reporting period, Wellhope's planned cash dividends accounted for less than 30% of the netprofit attributable to shareholders of the Company in the current year, reasons are listed as follows.Feed, broiler integration, and swine raising are Wellhope’s three primary businesses. Feed industry hasa huge market size with increasing industry consolidation, and the leaders are expanding rapidly. Broilerindustry now enters a downward cycle, those leading companies conduct business expansion undersuch circumstance to steadily expand. Swine raising industry is under the phase of production recovery,large groups are actively expanding production to seize market share. In 2020, these three primarybusinesses have all exceeded the objectives set at the beginning of the year, the operating revenue andnet profit attributable to shareholders of the Company have realized growth for the seventhconsecutive year, with the compound growth rate reaching 16% and 32% respectively. Wellhope is nowin the stage of rapid development and expansion.Wellhope has been always focusing on returns to investors. The formulation of profit distribution plan isa reasonable arrangement based on the goal of sustainable development and taking into full
consideration of many factors such as the development stage of the industry, the growth cycle of theCompany, future strategic planning and capital plan, so as to ensure the continuity and stability of profitdistribution for investors in the future. The retained profits will be mainly used for the expansion of theprimary businesses, while taking into account the capital needs to deal with external risks, so as toprovide a solid guarantee for long-term planning.
2. Plan or scheme of common stock profit distribution or capital reserve converted into sharecapital in the latest three years
Unit: yuan Currency:RMB
| Year | Dividend per 10 shares (yuan, tax included) | Amount of cash dividends (tax included) | The net profit attributable to the common shareholders of the Company in the year of distributing cash dividend | Percentage of net profit attributable to the common shareholders of the Company in the consolidated statements % |
| 2020 | 2.20 | 202,853,177.12 | 1,235,162,151.48 | 16.42 |
| 2019 | 2.20 | 202,853,177.12 | 1,199,347,355.96 | 16.91 |
| 2018 | 1.80 | 166,014,791.28 | 551,928,618.35 | 30.08 |
II. Execution of Commitment
| Background of making commitment | Type of commitment | Commitment party | Content | Date of making commitment and validity | Whether there is a time limit | Whether performs strictly |
| Commitment relating to IPO | Handling horizontal competition | Nature person shareholders holding more than 5% of the shares | I warrant and commit that I will not directly or indirectly develop, operate or assist in the operation or participate in or engage in any activity that is competitive with the business of Wellhope, if Wellhope will increase any business scope after the date of signing this commitment, I promise to give up the business. | March 2, 2011, long-term valid | Yes | Yes |
| Handling related party transaction | Legal person shareholders holding more than 5% of the shares-Heli Investment | Our company warrants and commits that our company will not directly or indirectly develop, operate or assist in the operation or participate in or engage in any activity that is competitive with the business of Wellhope, if Wellhope will increase any business scope after the date of signing this commitment, our company promises to give up the business. | March 2, 2011, long-term valid | Yes | Yes | |
| Other | Jin Weidong, Wang Fengjiu, Shao Caimei, Wang Zhongtao, Ding Yunfeng | The controlling shareholder Jin Weidong and persons acting in concert with him undertake that there are no false records, misleading statements or material omissions in the prospectus of IPO and its abstract, and shall bear individual and joint legal liabilities for its authenticity, accuracy and completeness. | Long-term valid | Yes | Yes | |
| Other | Wellhope | The Company undertakes that there are no false records, misleading statements or material omissions in the prospectus of IPO and its abstract, and it shall bear individual and joint legal liabilities for its authenticity, accuracy and completeness. | Long-term valid | Yes | Yes | |
| Commitment relating to re-Financing | Dividend | Wellhope | Shareholder’s Dividend Plan for the Next Three Years (2017-2019) | December 15, 2017, three years | Yes | Yes |
III. Changes in Accounting Policies and Estimates made by the CompanyFor details, please refer to Financial Report- Significant Accounting Policies and Estimates, Changes inSignificant Accounting Policies and Estimates.IV. Accounting Firm Engaged by the Company
Unit: 10k yuan Currency: RMB
| Accounting Firm (Local) | SuyaJincheng CPA LLP |
| Payment | 110 |
| Length of Service | 10 years |
| Name | Payment | |
| Accounting Firm of Internal Control | SuyaJincheng CPA LLP | 35 |
| Sponsor | Xu Hailin, He Yu |
| Overview | Query URLs |
| On March 27, 2020, Wellhope’s 14th meeting of the 6th Session of Board of Directors and the 12th meeting of the 6th Session of Supervisory Board approved the proposals of Unlocking Restricted Shares after Achieving the Performance Objective Stated in 2018 Restricted Stock Incentive Plan, Adjusting the Repurchase Price of Restricted Shares, Repurchasing and Writing off Part of Locked Restricted Shares 1. 367 managers could totally unlock 4.233 million restricted shares. 2. As Wellhope had paid cash dividends on June 13, 2019, the repurchase price of per restricted share had been adjusted as RMB 4.67 per share. 3. In view of 5 managers (Yu Hongbing, Jiang Hua, Ma Dongmei, Zhang Peng, Wang Haibin) leaving the Company, they were no longer eligible for the incentive rules. 31 managers did not meet the conditions of unlocking restricted shares due to their work performance appraisal, 244,500 shares held by these 36 individuals would be repurchased and written off by the Company. | Details can be obtained at www.sse.com.cn, announcements disclosed on March 31, 2020, No. 2020-011, 2020-017, 2020-018, 2020-019, 2020-023 |
| On April 3, 2020, Wellhope disclosed the announcement of Listing and Circulation of Restricted Shares in the First Lockup Period, 4.233 million restricted shares could be exchanged on April 9, 2020. | Details can be obtained at www.sse.com.cn, announcement disclosed on April 3, 2020, No. 2020-026 |
| On May 15, 2020, Wellhope disclosed the announcement of the Implementation of Repurchasing and Writing off Part of Restricted Shares. 244,500 shares held by 36 individuals had been repurchased and written off by the Company. On May 19, 2020, these shares were written off. | Details can be obtained at www.sse.com.cn, announcement disclosed on May 15, 2020, No. 2020-040 |
VIII. Related Party TransactionMatters do not disclose in the Company's extraordinary announcement
Unit: 10k yuan Currency: RMB
| Related Party | Relationship | Transaction type | Transaction content | Pricing principle | Transaction amount | Settlement mode |
| Anshan Fengsheng Food Company | Associated company | Selling product | Live broiler | Comparable uncontrolled price | 21,292.00 | Transfer of account |
| Anshan Jiuguhe Food Company | Associated company | Selling product | Live broiler | Comparable uncontrolled price | 9,081.05 | Transfer of account |
| Beipiao Hongfa Food Company | Associated company | Selling product | Feed raw material | Comparable uncontrolled price | 468.53 | Transfer of account |
| Dalian Chengsan Animal Husbandry Company | Associated company | Selling product | Feed raw material | Comparable uncontrolled price | 639.11 | Transfer of account |
| Dandong Wellhope Chengsan Agri-Tech Company | Associated company | Selling product | Feed raw material | Comparable uncontrolled price | 666.75 | Transfer of account |
| Guangzhou Yikun Trading Company | Associated company | Selling product | Feed raw material | Comparable uncontrolled price | 284.64 | Transfer of account |
| Huludao Jiuguhe Food Company | Associated company | Selling product | Feed | Comparable uncontrolled price | 1,032.72 | Transfer of account |
| Linghai Jiuguhe Feed Mill | Associated company | Selling product | Feed raw material | Comparable uncontrolled price | 5,026.09 | Transfer of account |
| Nepal Wellhope Agri-tech Pvt. Ltd. | Associated company | Selling product | Feed | Comparable uncontrolled price | 256.35 | Transfer of account |
| Qingdao Shenfeng Agri-Tech Company | Associated company | Selling product | Feed raw material | Comparable uncontrolled price | 5,621.83 | Transfer of account |
| Shihaipu (Beijing) Technology and Trade Co., Ltd. | Associated company | Selling product | Other | Comparable uncontrolled price | 128.63 | Transfer of account |
| Tai’an Jiuguhe Agriculture Development Company | Associated company | Selling product | Feed raw material | Comparable uncontrolled price | 7,828.30 | Transfer of account |
| Dalian Sida Food Company | Associated company | Selling product | Live broiler | Comparable uncontrolled price | 25,226.76 | Transfer of account |
| Shandong Fengkang Food Company | Associated company | Selling product | Live broiler | Comparable uncontrolled price | 595.42 | Transfer of account |
| Anshan Jiuguhe Food Company | Associated company | Purchasing product | Broiler product | Comparable uncontrolled price | 2,184.86 | Transfer of account |
| Dalian Chengsan Animal Husbandry | Associated | Purchasing | Live broiler | Comparable uncontrolled | 18,601.81 | Transfer of account |
| Company | company | product | price | |||
| Gongzhuling Corn Purchasing and Storing Company | Associated company | Purchasing product | Feed raw material | Comparable uncontrolled price | 247.28 | Transfer of account |
| Huludao Jiuguhe Food Company | Associated company | Purchasing product s | Broiler product | Comparable uncontrolled price | 25.58 | Transfer of account |
| Jinzhou Jiufeng Food Company | Associated company | Purchasing product | Broiler product | Comparable uncontrolled price | 1,397.27 | Transfer of account |
| Linghai Jiuguhe Feed Mill | Associated company | Purchasing product | Other | Comparable uncontrolled price | 2,725.27 | Transfer of account |
| Qingdao Shenfeng Agri-Tech Company | Associated company | Purchasing product | Feed | Comparable uncontrolled price | 2,863.80 | Transfer of account |
| Shenyang Zhongwenjia Bio-Tech Company | Associated company | Purchasing product | Animal medicine, vaccines | Comparable uncontrolled price | 0.30 | Transfer of account |
| Shihaipu (Beijing) Technology and Trade Co., Ltd. | Associated company | Purchasing product | Other | Comparable uncontrolled price | 228.25 | Transfer of account |
| Tai’an Jiuguhe Agriculture Development Company | Associated company | Purchasing product | Feed | Comparable uncontrolled price | 20,835.70 | Transfer of account |
| Total | / | 127,258.30 | / | |||
| Large amount sales return | Non | |||||
| Explanation of related party transaction | Wellhope 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 quality of products. Moreover, by participating in the management and 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 Wellhope'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. | |||||
IX. The Circumstance of Entrusting others to Manage Cash Assets
1. Cash management
Unit: 10k yuan Currency: RMB
| Type | Source of fund | Amount | Undue balance |
| Wealth investment product of bank | Idle raised funds | 36,000 | 10,000 |
| Bank | Type | Amount | Start date | Maturity date | Source of fund | Interest | Annualized return | Actual return | Whether recover |
| China Minsheng Banking Corp | Structured deposit | 4,000 | October 9, 2019 | January 9, 2020 | Idle raised funds | Capital guaranteed floating income | 1.5%-3.7% | 37.30 | Yes |
| Industrial and Commercial Bank of China | Structured deposit | 10,000 | January 2, 2020 | April 3, 2020 | Idle raised funds | Capital guaranteed floating income | 1.3%-4.2% | 102.65 | Yes |
| Shanghai Pudong Development Bank | Structured deposit | 6,000 | January 3, 2020 | April 3, 2020 | Idle raised funds | Capital guaranteed floating income | 1.4%-3.5% | 52.50 | Yes |
| Shengjing Bank | Structured deposit | 5,000 | May 11, 2020 | August 11, 2020 | Idle raised funds | Capital guaranteed floating income | 1.65%-3.7% | 47.28 | Yes |
| Shanghai Pudong Development Bank | Structured deposit | 5,000 | May 11, 2020 | August, 9, 2020 | Idle raised funds | Capital guaranteed floating income | 1.4%-3.45% | 43.13 | Yes |
| Shengjing Bank | Certificate of deposit | 5,000 | August 11, 2020 | February 8, 2021 | Idle raised funds | Fixed income | 3.8% | 95.53 | Recovered on February 8, 2021 |
| Industrial and Commercial Bank of China | Structured deposit | 5,000 | September 29, 2020, | April 1, 2021 | Idle raised funds | Capital guaranteed floating income | 1.5%-3.2% | Has yet to recover |
X. Circumstance of Social Responsibilities
1. Anti-poverty project of the Listed Company
A. Targeted poverty alleviationThe 19th National Congress of the Communist Party of China has put forward to take targeted povertyalleviation as one of the three major challenges that must be fought to secure a decisive victory inbuilding a moderately prosperous society in all respects. The year 2020 was a decisive year to win thebattle against poverty and finish building a moderately prosperous society in all respects. In respect topoverty alleviation, President Xi Jinping noted, "Resolutely overcoming the impact of COVID-19 anduncompromisingly winning the comprehensive victory in the battle against poverty". Wellhopepositively responds to the call and requirements of the Party Central Committee and the government atall levels for targeted poverty alleviation. Driving by the principle of contributing to the society, it hasformulated poverty alleviation programs and work plans regarding to agricultural industry to facilitatetargeted poverty alleviation.B. Overview of targeted poverty alleviationIn terms of poverty alleviation through industry development, Wellhope signed the agreement of“Targeted Poverty Alleviation by Industry Development” with Woniushan Village of Dongliu Town ofZhangwu County in Fuxin City of Liaoning Province. Wellhope invested the funds of RMB 117,600 as thecollective assets into the cattle raising cooperation of this village, those registered poverty-strickenhouseholds would receive dividends based on their shareholdings. Meanwhile, Jiaozuo Wellhope FeedMill, one of the subsidiaries of Wellhope, positively participated in the new poverty alleviation model,which was named "capital to households and equity to households" in Chongyi Town of Qingyang City,and paid RMB 50,000 as poverty alleviation funds in 2020. In terms of social poverty alleviation, inorder to help Beipiao city to fight against poverty, Liaoning Wellhope Food Company, one of thesubsidiaries of Wellhope, donated RMB 100,000 to the government of Beipiao City for povertyalleviation.With regard to poverty alleviation contributed by Wellhope’s associated entities, Lankao Duck Company,responds to the call of LanKao County Party Committee and county government by launching a duckintegration project for targeted poverty alleviation in Lankao County, which has implemented theoperating mode of rearing ducks by the company and contract farms. In line with the principle ofmutual benefit, Lankao Duck Company signs contracts with farmers and adopts unified supply ofducklings, feed, medicine, technical service and repurchasing, farmers are not required to prepareworking capital. It also provides uniform subsidies for farmers, such as veterinary drugs, coal subsidy inwinter and cooling subsidy in summer. In 2020, Lankao Duck Company repurchased 18.98 million duckswith veterinary subsidy of RMB 3.80 million and other subsidies of RMB 0.90 million.
C. Figures of targeted poverty alleviation
Unit: 10k yuan Currency: RMB
| Index | Details |
| 1. Overall | |
| Funds invested for poverty alleviation | 26.76 |
| 2. In details | |
| A. Poverty alleviation through industry development | |
| a. The number of projects invested for poverty alleviation through industry development | 2 |
| b. Funds invested | 16.76 |
| B. Society poverty alleviation | |
| Funds invested for targeted poverty alleviation | 10.00 |
resource utilization. In terms of broiler slaughtering, Wellhope equips high-efficient equipment andconstantly refines technologies, also conducts lean management to heighten slaughtering operation,which has achieved efficient killing-out percentage and energy saving.Environment protection. By reason of animal husbandry having certain pollutions to the environment,Wellhope has been always utilizing various ways such as technological innovation and equipment inputto protect environment to achieve the sustainable development. In terms of technological innovation,Wellhope continuously researches on safe and eco-friendly feed. Through the application of enzymepreparation and the design of feed formula with low phosphorus and low protein, the nitrogen andphosphorus from animal feed have been greatly reduced. In terms of animal raising and slaughtering,Wellhope automates production lines and continuously strengthens the recycles wastes and combinesplanting with animal raising to realize environmental protection.Food safety. Wellhope has never forgotten social responsibility since its establishment. In 2018, it setlong-term development objective as "being committed to becoming the world's leading enterpriseacross agriculture, animal husbandry and food industries, and becoming a manufacturer of safe andhigh-quality meat product", unswervingly pursuing the quality and safety of feed processing and foodproduction. Wellhope’s central laboratory has been equipped with advanced testing equipment andalways conducted strict quality control of raw materials and products to ensure safety of feed. For thebroiler business, Wellhope takes stringent control of supply, production, sale process, and through the“nine unified” operation mode to combine biosafety, drug residue control and in-process hygiene toachieve traceable food safety. Meanwhile, Wellhope has always attached importance to the researchand development of antibiotic-free technology, all of the feed products have been successfullytransitioned to be antibiotic-free, the effect of the alternative programs has been stable with favorablefeedback, which has been further enhanced the product power. With years of focuses of providinghigh-quality, stable and safe products, Wellhope ranked the 7th in "2020 China Food Green Credit IndexTop 50 Report" with a "Green Credit Index" score of 86.3. In the future, Wellhope will continue to payattention to food safety and provide safe and high-quality products with global perspectives.Contributing to public charity giving. Wellhope has always persisted in the principle of contributing toits motherland by operating excellent businesses and giving back to the society. Over the years,Wellhope has donated to disaster areas, disabled aid projects and related educational institutionsdirectly or through the Red Cross. Since the outbreak of COVID-19, Wellhope’s holding and associatedcompanies, some managers and employees, have raised funds of RMB 12 million to support nationaland local-level government offices to defeat the disease, which included the donation of 18 ambulancesto several regions. Wellhope also actively devotes to educational public welfare undertakings. In recentyears, Wellhope has been working with a supplier to participate in donation activities on World Egg Dayby providing high-quality eggs to poor pupils to care for their healthy growth. Moreover, Wellhopeprovides awards and bursary supports to many college students nationwide, it also holds the “Wellhope
Cup” regularly, this is a postgraduate scientific and technological paper competition, which aims toencourage the innovation of postgraduates in related fields and offers them opportunities to attend ininternships and field trips. Moreover, the holding and associated companies of Wellhope vigorouslyparticipate in charity activities organized by local-level governments. The managers of Wellhope alsodevote themselves to the public charity in different forms.b. Offering job opportunitiesTalented person is the foundation of the development of an enterprise. According to the needs,Wellhope holds job fair and campus recruitment every year, creating job opportunities for the societywhile developing ourselves. In 2020, under the grim employment situation caused by the downwardpressure on the economy, Wellhope quickly carried out online recruitment via live broadcast to offeropportunities for job seekers, it has recruited a large number of middle and junior staff from the societythrough variety channels, and also introduced more than 500 undergraduates, masters and doctorsfrom several universities and provided systematic trainings to help them grow rapidly.B. Responsibilities to shareholdersInformation disclosure complying with laws and regulations. Wellhope always adheres to the code ofconduct of honesty and trustworthiness, and improves corporate governance to ensure the internaloperation complying with laws and regulations. In 2020, in strict accordance with the regulations ofChina Securities Regulatory Commission, Shanghai Stock Exchange, the Company Constitution andother internal regulations, Wellhope continued to consciously standardize the information disclosure toguarantee that all disclosed information was true, accurate, complete and timely. During the reportingperiod, Wellhope honestly and normatively disclosed 65 extraordinary announcements and 4 periodicreports via designated media. Moreover, its annual information disclosure was appraised as A-level byShanghai Stock Exchange. Entering 2021, Wellhope will constantly practice the principle of honestoperation and protect the legitimate rights and interests of the non-controlling shareholders.Return to shareholders. In line with the principle of "sharing the results", besides carefullyimplementing the development strategy and continuously improving internal operation, Wellhopespares no efforts to return to investors and share the operating results. Since completing IPO in 2014,its average dividend payout ratio was 20% with accumulated cash dividends of RMB 646 million. All thefunds raised from IPO have been returned to investors by cash dividends.C. Responsibilities to staffAdhering to “sharing bumper harvest”. Driven by the philosophy of “sharing bumper harvest”,Wellhope shares its achievements with employees by way of optimizing the remuneration system anddiversifying incentive methods. In 2018, 372 identified key managers were awarded with restrictedshares. During the reporting period, these manages have unlocked the restricted shares of the firstlockup period. This plan has achieved positive effects indeed based on the profit of the Company andother evaluations in 2020, achieved a win-win situation.
Powering career development of staff. In strict accordance with national laws and regulations,Wellhope provides social assurance and additional welfare to employees and also benefits their families.Wellhope also expands the scope of welfare through internal resource sharing, and pilot flexiblebenefits to improve employees’ happiness. In the meantime, Wellhope continues to upgrade itsthree-level training system, by using Wellhope E-Learning College and external resource to providemore training resources to promote the growth and value enhancement of employees. In the aspect ofcareer development, Wellhope has created a “H-shaped” dual-channel career path for employees tomake every single one can choose suitable career development according to their strengths, aiming tohelp them fully display potential abilities to achieve career goals.Caring about employees’ life. The “Wings of Love” charitable foundation, established by Wellhope in2007, continues to care for employees. It gives certain rewards to employees’ children who areadmitted to the universities, encouraging employees to cultivate talents for the society. In themeantime, it also provides financial assistance to the families of employees in difficulty, helping themtide over hard time. Since the foundation being established, it has donated RMB 4.16 million toemployees. Moreover, every year Wellhope organizes different forms of activities to continuouslyenrich the life of employees.D. Responsibilities to customersContinuously providing superior quality products. Wellhope conducts businesses honestly and controlsproduct quality strictly. Through integrated operation, high-quality raw material purchasing, scientificformula design, professional quality management and intelligent production, etc., Wellhope providessuperior quality products to the society, and constantly develops new products to meet the needs ofcustomers for product safety.Constantly improving technical services. Driven by the concept of progressing together with customers,Wellhope is dedicated to providing comprehensive technical services. In terms of animal raising,Wellhope offers farmers systematic services such as raising methods, feeding programs, diseasediagnosis and latest market information, also provides them trainings and farm management solutionsto improve their technology level and operation skills. In respect to African swine fever, Wellhope hasvigorously built technical team to render services in terms of preventive measures and solutions toresume production, etc. Meanwhile, Wellhope actively conducts on-line services and managementguidance, including holding live streaming and experts on line to help customers prevent African swinefever and reduce losses, making progress together with customers.
3. Environment information
A. Information of pollution dischargePuyang Wellhope Food Company (hereinafter referred to as "Puyang Wellhope"), a subsidiary of Wellhope, has been listed as the company with pollutiondischarging of Puyang City. Dalian Zhongjia Wellhope Food Company (hereinafter referred to as "Zhongjia Food") and Dalian Huakang Xinxin Food Company(hereinafter referred to as "Dalian Huakang"), subsidiaries of Wellhope, have been listed as the company with pollution discharging of Dalian City. KaifengWellhope Meat Food Company (hereinafter referred to as "Kaifeng Wellhope"), a subsidiary of Wellhope, has been listed as the company with pollution dischargingof Kaifeng City. Shenyang Huakang Broiler Company (hereinafter referred to as "Shenyang Huakang"), a subsidiary of Wellhope, has been listed as the companywith pollution discharging of Shenyang City. Pingyuan Wellhope Food Processing Company (hereinafter referred to as "Pingyuan Wellhope"), a subsidiary ofWellhope, has been listed as the company with pollution discharging of Handan City. Changchun Wellhope Food Company (hereinafter referred to as "ChangchunWellhope"), a subsidiary of Wellhope, has been listed as the company with pollution discharging of Changchun City. Chifeng Wellhope Fuxinyuan Food Company(hereinafter referred to as "Chifeng Wellhope"), a subsidiary of Wellhope, has been listed as the company with pollution discharging of Chifeng City. ShandongHeyuan Food Company (hereinafter referred to as "Shandong Heyuan"), a subsidiary of Wellhope, has been listed as the company with pollution discharging ofWeihai City. Details are presented as follows.
| Company | Primary pollutants | Way of discharge | Number of discharge outlet | Distribution of outlets | Emission concentration | Pollutant discharge standards | Total amount of discharge | Total approved emissions | Whether discharge excessive pollutants |
| Puyang Wellhope | Waste water (COD, ammonia nitrogen, total phosphorus, PH, suspended solids, biochemical oxygen demand, animal and plant oil, total coliform, total nitrogen). Waste gas (SO2, nitric oxide, particulate matter) | Waste gas—direct discharge after treatment, waste water-- indirect discharge | 1 outlet for waste gas, 1 for waste water | 1 waste water emission outlet located in the southeast corner of the sewage monitoring station, 1 waste gas exhaust outlet distributed in the boiler room in the northeast | COD--45mg/L, ammonia nitrogen --4.19mg/L, total phosphorus --1.74mg/L, total nitrogen --7.97mg/L, SO2--0mg/m3, nitric oxide --19mg/m3, particulate matter --2.8mg/m3 | Discharge Standard of Water Pollutants for Meat Processing Industry (GB 13457-1992). Boiler Air Pollutant Emission Standard (GB 13271-2014) | COD--5.358t/a, ammonia nitrogen --0.218t/a | COD--15.58t/a, ammonia nitrogen --2.95t/a | No |
| corner of the factory | |||||||||
| Zhongjia Food | Waste water (COD, ammonia nitrogen, total phosphorus, PH, suspended solids, biochemical oxygen demand, total nitrogen). Waste gas (SO2, nitric oxide, particulate matter) | Waste gas—direct discharge after treatment, waste water-- access to sewage works | 1 outlet for waste gas, 1 for waste water | Waste water enters the sewage plant through the pump; the exhaust gas outlet is distributed in the boiler house on the north side of the company | COD--41.35mg/L, ammonia nitrogen--1.98mg/L, total nitrogen--21.46mg/L, total phosphorus-- 2.64mg/L, PH--7.27, particulate matter--22.9mg/m?, sulfur dioxide--209mg/m?, nitric oxide--132mg/m? | Comprehensive Wastewater Discharge Standard of Liaoning Province (GB 21/1627-2008). Boiler Air Pollutant Emission Standard (GB 13271-2014) | Simplified management of no emissions | Non | No |
| Dalian Huakang | Waste water (COD, ammonia nitrogen, total phosphorus, PH, suspended solids, total nitrogen). Waste gas (SO2, nitric oxide, particulate matter) | Waste water-- put into the pipe network after treatment, waste gas—direct discharge | 1 outlet for waste gas, 1 for waste water | Wastewater discharge outlet is distributed in the southeast corner of the company's sewage treatment workshop; exhaust gas outlet is located on the roof of the company's boiler house | COD--112mg/L, ammonia nitrogen--2.26mg/L, smoke--30.5mg/m?, sulfur dioxide—113mg/?, nitric oxide—147mg/? | Comprehensive Wastewater Discharge Standard of Liaoning Province (GB 21/1627-2008). Boiler Air Pollutant Emission Standard (GB 13271-2014) | Waste water enter the pipe network, no discharge. Smoke--531KG, sulfur dioxide--1976KG, nitric oxide--2570KG | Non | No |
| Kaifeng Wellhope | Waste water (COD, ammonia nitrogen, total phosphorus, PH, suspended solids, biochemical oxygen demand, animal and plant oil, total coliform, total nitrogen) | Waste water— indirect discharge | 1 outlet for waste water | Wastewater discharge outlet is distributed in the northeast corner of the company's sewage monitoring infrastructure station | COD--43mg/L, ammonia nitrogen--6.5mg/L | Level 2 standard of Discharge Standard of Water Pollutants for Meat Processing Industry (GB 13457-1992) | COD--3.43t/a, ammonia nitrogen--0.77t/a | COD--3.6t/a, ammonia nitrogen--0.79t/a | No |
| Shenyang Huakang | Waste water (coliform group, 5 days biochemical oxygen demand, suspended matter, animal and plant oil, ammonia nitrogen, PH, chemical oxygen demand, total phosphorus). Waste gas (particulate matter, sulfur dioxide, nitrogen oxides, smoke blackness, mercury and its compounds) | Waste gas—direct discharge after treatment, waste water-- put into the municipal pipe network after treatment | 1 outlet for waste gas, 1 for waste water | Wastewater discharge outlet is distributed in the southeast corner of the company's sewage monitoring base station. The exhaust gas outlet is located at the boiler house in the northeast corner of the company | COD--40mg/m3, suspended matter--8mg/m3, ammonia nitrogen--25.915mg/m3, 5 days biochemical oxygen demand--4.3mg/m3, total phosphorus--4.05mg/m3, animal and plant oil--5.33mg/m3, coliform group<20MPN/L, particulate matter--26.9mg/m3, sulfur dioxide--9mg/m3, nitrogen oxides--133mg/m3, mercury and its compounds<0.003ug/m3, ringelman emittance<level 1 | Discharge Standard of Water Pollutants for Meat Processing Industry (GB 13457-1992). Comprehensive Wastewater Discharge Standard (GB 21/1627-2008). Boiler Air Pollutant Emission Standard (GB 13271-2014) Integrated Emission Standard of Air Pollutants (GB 16297-1996). Emission Standards for Odor Pollutants (GB 14554-92) | COD--6.5556t/a, ammonia nitrogen--0.984t/a | COD--84t/a, ammonia nitrogen--13.44t/a | No |
| Pingyuan Wellhope | Waste water (COD, ammonia nitrogen, total phosphorus, PH, suspended matter, biochemical oxygen demand, animal and plant oil, total coliform group, total nitrogen). Waste gas (SO2, nitric oxide, particulate matter) | Waste gas—direct discharge via natural gas boiler, waste water—indirect discharge | 2 outlets for waste gas, 1 for waste water | Wastewater discharge outlet is distributed in the north of the company sewage monitoring base station house, the exhaust gas outlets are distributed in the boiler house on the east side of the company | COD--100mg/L, ammonia nitrogen--20mg/L, PH--6-9, suspended matter--200mg/L, biochemical oxygen demand—60, animal and plant oil--20mg/L, SO2--0mg/Lm?, nitric oxide--21mg/Lm?, particulate matter--2.8mg/Lm? | Discharge Standard of Water Pollutants for Meat Processing Industry (GB 13457-1992) and inlet water quality requirements of Linzhang County. Boiler Air Pollutant Emission Standard (GB 13271-2014) | COD--13t/a, ammonia nitrogen--2.6t/a, SO2--0t/a, nitric oxide--0.8t/a | COD--39.45t/a, ammonia nitrogen--2.724t/a, SO2--2.31t/a, nitric oxide--2.36t/a | No |
| Changchun Wellhope | Waste water (COD, ammonia nitrogen, total phosphorus, PH, suspended matter, biochemical oxygen demand, total nitrogen). | Waste water-- discharge after entering the sewage treatment station | 1 outlet for waste water | Wastewater discharge outlet is distributed in the company's sewage | COD--14mg/L, suspended matter--8mg/L, coliform group—non, PH--7.96mg/L, ammonia nitrogen--0.587mg/L, 5 days biochemical oxygen | Level 2 standard of Discharge Standard of Water Pollutants for Meat Processing Industry (GB 13457-1992) | COD--3.487t/a, ammonia nitrogen--0.104t/a | COD--12.619t/a, ammonia nitrogen--2.524t/a | No |
| monitoring station | demand--2.7mg/L, animal and plant oil--0.17mg/L | ||||||||
| Chifeng Wellhope | Waste water (COD, ammonia nitrogen, total phosphorus, PH, suspended solids, biochemical oxygen demand, animal and plant oil, total coliform group, total nitrogen). Waste gas (SO2, nitric oxide, particulate matter) | Waste gas—direct discharge after treatment, waste water-- indirect discharge | 1 outlet for waste gas, 1 for waste water | Wastewater outlet is distributed in the east side of the company's sewage monitoring base station.The exhaust gas outlet is located on the north side of the boiler house | COD--100mg/L, ammonia nitrogen--20mg/L, PH--6-8.5 | Discharge Standard of Water Pollutants for Meat Processing Industry (GB 13457-1992). Integrated Emission Standard of Air Pollutants (GB 16297-1996). Emission Standards for Odor Pollutants (GB 14554-93). Boiler Air Pollutant Emission Standard (GB 13271-2014) | COD--0.92t/a, ammonia nitrogen--0.034t/a | COD--40.6t/a, ammonia nitrogen--6.28t/a | No |
| Shandong Heyuan | Waste water (chemical oxygen demand, suspended matter, coliform group, anionic surfactant, ammonia nitrogen, PH, total nitrogen, total phosphorus, PH, 5 days biochemical oxygen demand). Waste gas (particulate matter, sulfur dioxide, nitrogen oxides) | Waste water— discharge after entering the sewage treatment plant | 1 outlet for waste gas, 1 for waste water | Wastewater outlet is distributed in the southeast side of the sewage pool of the company's sewage treatment station, the exhaust gas outlet is distributed in the boiler house on the northwest side of the company | Chemical oxygen demand--32mg/L, ammonia nitrogen--1mg/L, total nitrogen--12mg/L, total phosphorus--0.2mg/L, PH--6-8.5 | Comprehensive Discharge Standard for Water Pollutants in Peninsula Watershed of Shandong Province (DB37/676-2007). Emission Standard for Air Pollutants from Boilers (DB 37/2374-2018) | COD--0.048t/a, ammonia nitrogen--0.002t/a, total nitrogen--0.018t/a, total phosphorus--0.0003t/a | Non | No |
B. Circumstance of building and operating pollution control facilitiesPuyang Wellhopea. Sewage treatment: Puyang Wellhope has a 2,000-tons-per-day sewage treatment station, whichadopts the treatment process of "pretreatment-oil separation-A2O-disinfection" to treat thewastewater. Its environmental protection facilities are running normally, and the pollutant emissionindexes all meet the required standards.b. Waste gas treatment: Gas generated by the waste water pool of the sewage treatment station iscollected and purified by alkali washing tower and activated carbon adsorption and then dischargedthrough the 21-meter-high chimney in accordance with related standard. The waste gas of theslaughtering shed and broiler suspension platform can be collected and treated by alkali washing towerand activated carbon adsorption and purification. After that, the waste gas can be discharged throughthe 15-meter-high chimney. The traditional coal-fired boilers are replaced by gas-fired boilers, and thecompany carried out low nitrogen upgrading, all kinds of pollutants meet the emission standards.Kaifeng WellhopeSewage treatment: Kaifeng Wellhope has a 1,500-tons-per-day sewage treatment station, which adoptsthe treatment process of "air floatation-A2O" to treat the wastewater. Its environmental protectionfacilities are running normally, and the pollutant emission indexes all meet required standards.Zhongjia Fooda. Sewage treatment: Zhongjia Food has a 1,200-tons-per-day sewage treatment station, which adoptsthe treatment process of "mechanical barrier-oil separator-regulation pool-hydrolysis pool- catalyticoxidation pool-sedimentation pool-sand filter" to treat the wastewater.b. Waste gas treatment: Dedusting smoke and dust by wet method and conducting desulfurization bymagnesium oxide. Discharging gas by a 25-meter-high chimney to effectively met related standards.Shenyang HuakangSewage treatment: Shenyang Huakang has a 2,220-tons-per-day sewage treatment station, whichadopts the treatment process of "pretreatment-oil separation-A2O-secondary sedimentation tank-flocculation dephosphorization sedimentation tank (advanced treatment process)" to treat wastewater.Its environmental protection facilities are running normally, and the pollutant emission indexes havereached all required standards.Dalian Huakanga. Sewage treatment: Dalian Huakang has a 300-tons-per-day sewage treatment station that adopts thetreatment process of "mechanical barrier-oil separator-regulation pool-air flotation-hydrolysispool-A2O-sedimentation pool-advanced treatment pool-clean water pool", which can achieve requiredstandards.b. Waste gas treatment: Dedusting the smoke and dust by wet method and conducting desulfurizationby magnesium oxide, then discharging gas by a 16-meter-high chimney. Gas emission meet all required
standards.Pingyuan Wellhopea. Sewage treatment: Pingyuan Wellhope has a 1,000-tons-per-day sewage treatment station, whichadopts AO treatment process to dispose wastewater. Its environmental protection facilities are runningnormally, 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 iscollected and purified by activated carbon adsorption and then discharged through the 15-meter-highchimney. The traditional coal-fired boilers are replaced by gas-fired boilers with low carbon, all kinds ofpollutants meet the emission standards. Discharging gas by a 12-meter-high chimney.Changchun WellhopeSewage treatment: Changchun Wellhope has a 1,000-tons-per-day sewage treatment station, whichadopts the treatment process of “air flotation-A2O” to dispose wastewater. Its environmentalprotection facilities are running normally, and the pollutant emission indexes have reached all requiredstandards.Chifeng Wellhope:
Wastewater treatment: Chifeng Wellhope has a 2,400-tons-per-day sewage treatment station, whichadopts the treatment process of A?/0. The equipment and facilities are running normally, which canautomatically monitor the COD, ammonia nitrogen, PH and flow of wastewater discharge, and it isnetworked with the Municipal Natural Environmental Protection Bureau. The company has alsoconstructed a biogas project with a daily output of 8,000 m?, which can ferment waste water andmanure, etc., marsh gas can be used for boiler production, biogas residue and slurry used as fertilizer tograin.Waste gas treatment: Chifeng Wellhope has taken certain measures to lessen the waste gas, such as,stopping feeding swine and broilers when enter the factory and slaughtering the animals on the sameday, washing the houses in time, building closed waiting houses and installing fan exhaust to enhanceventilation, etc.Shandong Heyuana. Sewage treatment: Shandong Heyuan has a 2,000-tons-per-day sewage treatment station, whichadopts AO treatment process to dispose wastewater. Its environmental protection facilities are runningnormally, 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 iscollected and purified by activated carbon adsorption and then discharged through the 15-meter-highchimney. The traditional coal-fired boilers are replaced by gas-fired boilers, all kinds of pollutants meetthe emission standards. Discharging gas by a 10-meter-high chimney.
C. Environmental impact assessment of construction projects and other administrative permits forenvironmental protectionDuring the reporting period, all the construction projects of the Company met the requirements ofenvironmental impact assessment and other environmental protection administrative licenses. TheCompany has strictly implemented related environmental protection requirements.D. Emergency plan for environmental incidentAccording to the requirements of environmental protection authorities and relevant laws andregulations, each factory of the Company has identified the site with potential environmental risk andformulated the emergency plans for environmental incident. Meanwhile, related companies conductedemergency exercises to improve self-rescue ability and continued to identify the hidden danger toensure normal operations.E. Self-monitoring program for environmentIn accordance with requirements of self-monitoring environment and information disclosure, thepollutant discharging entities of the Company have formulated self-monitoring programs to monitorenvironment and disclose information as scheduled.
Section VI Changes in Common Shares and Shareholder InformationI. Changes in Common Shares
1. Changes of common share
| Before changing | Increase or decrease in 2020 | After changing | ||||
| Shares | Percentage % | Issuing new shares | Subtotal | Shares | Percentage % | |
| 1. Restricted shares | 91,127,927 | 9.88 | -73,375,136 | -73,375,136 | 17,752,791 | 1.93 |
| A. Shares held by the state | ||||||
| B. Shares held by state-owned corporation | ||||||
| C. Shares held by other domestic investors | 88,831,340 | 9.63 | -73,375,136 | -73,375,136 | 15,456,204 | 1.68 |
| including: Shares held by domestic non-state-owned corporation | 54,133,857 | 5.87 | -54,133,857 | -54,133,857 | ||
| Shares held by domestic natural person | 34,697,483 | 3.76 | -19,241,279 | -19,241,279 | 15,456,204 | 1.68 |
| D. Shares held by foreign investor | 2,296,587 | 0.25 | 2,296,587 | 0.25 | ||
| including: shares held by foreign corporation | 2,296,587 | 0.25 | 2,296,587 | 0.25 | ||
| Shares held by foreign natural person | ||||||
| 2.Non-restricted shares | 831,176,469 | 90.12 | 73,130,636 | 73,130,636 | 904,307,105 | 98.07 |
| A. RMB common shares | 831,176,469 | 90.12 | 73,130,636 | 73,130,636 | 904,307,105 | 98.07 |
| 3. Total common shares | 922,304,396 | 100.00 | -244,500 | -244,500 | 922,059,896 | 100.00 |
2. Changes in restricted shares
| Name of shareholder | Opening restricted shares | Number of unlocking shares in the reporting period | Decrease of restricted shares in the reporting period | Restricted shares in the period end | Reason for lockin | Date of unlocking shares |
| Sinosafe Property and Asset Management- Industrial and Commercial Bank of China- Stably Increasing Profit No. 12 Collective Asset Management Product | 29,527,559 | 29,527,559 | 0 | non-public issuing stock | April, 24, 2020 | |
| Shenzhen Galaxy Investment Co., Ltd. | 4,921,259 | 4,921,259 | 0 | non-public issuing stock | April, 24, 2020 | |
| Zhongyi Asset Management- China Minsheng Banking Corp- Zhongyi Asset-Non-public Offering Selection No. 103 Asset Management Product | 19,685,039 | 19,685,039 | 0 | non-public issuing stock | April, 24, 2020 | |
| Wu Ying | 14,763,779 | 14,763,779 | 0 | non-public issuing stock | April, 24, 2020 | |
| Employees who were granted restricted shares(totalling) | 14,575,000 | 4,233,000 | 244,500 | 10,097,500 | equity incentive | Within 12, 24, 36 months after completing restricted stock registration |
| Jin Weidong | 3,062,117 | 3,062,117 | non-public issuing stock | April, 25, 2022 | ||
| DE HEUS MAURITIUS | 2,296,587 | 2,296,587 | non-public issuing stock | April, 25, 2022 | ||
| Ding Yunfeng | 1,531,058 | 1,531,058 | non-public issuing stock | April, 25, 2022 | ||
| Wang Zhongtao | 765,529 | 765,529 | non-public issuing stock | April, 25, 2022 | ||
| Total | 91,127,927 | 73,130,636 | 244,500 | 17,752,791 | / | / |
II. Shareholder and Actual Controller
1. Total shareholders
2. Top ten shareholders and top ten shareholders holding unrestricted shares as at the end of thereporting period
Unit: share
| Shareholding of top ten shareholders | |||||||
| Name of shareholder | Changes in 2020 | Total shares held at the period-end | % | Restricted shares held | Pledged or Frozen | Nature of shareholder | |
| Status | Shares | ||||||
| Jin Weidong | 149,549,498 | 16.22 | 3,062,117 | Pledged | 55,375,000 | Domestic natural person | |
| DE HEUS MAURITIUS | 82,303,939 | 8.93 | 2,296,587 | Non | Foreign legal person | ||
| Ding Yunfeng | 81,929,558 | 8.89 | 1,531,058 | Pledged | 47,620,000 | Domestic natural person | |
| Shao Caimei | 49,773,878 | 5.40 | Non | Domestic natural person | |||
| Zhang Tiesheng | 48,360,000 | 5.24 | Pledged | 6,600,000 | Domestic natural person | ||
| Wulian Heli Equity Investment Partnership (Limited Partnership) | 48,360,000 | 5.24 | Non | Domestic non-State- owned legal person | |||
| Wang Fengjiu | -1,181,600 | 47,964,602 | 5.20 | Pledged | 5,190,000 | Domestic natural person | |
| Wang Zhongtao | 46,625,229 | 5.06 | 765,529 | Non | Domestic natural person | ||
| Sinosafe Property and Asset Management- Industrial and Commercial Bank of China- Stably Increasing Profit No. 12 Collective Asset Management Product | -11,877,413 | 17,650,146 | 1.91 | Unknown | Other | ||
| Zhongyi Asset Management- China Minsheng Banking Corp-Zhongyi Asset-Non-public Offering Selection No. 103 Asset Management Product | -5,268,500 | 14,416,539 | 1.56 | Unknown | Other | ||
| Total number of shareholders as at December 31, 2020 | 39,757 |
| Total number of shareholders at the end of February 2021 | 41,574 |
| Top ten shareholders holding unrestricted shares | |||
| Name of shareholder | Unrestricted shares held | Shares by type | |
| 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 |
| Zhang Tiesheng | 48,360,000 | RMB common stock | 48,360,000 |
| Wulian Heli Equity Investment Partnership (Limited Partnership) | 48,360,000 | RMB common stock | 48,360,000 |
| Wang Fengjiu | 47,964,602 | RMB common stock | 47,964,602 |
| Wang Zhongtao | 45,859,700 | RMB common stock | 45,859,700 |
| Sinosafe Property and Asset Management- Industrial and Commercial Bank of China- Stably Increasing Profit No. 12 Collective Asset Management Product | 17,650,146 | RMB common stock | 17,650,146 |
| Zhongyi Asset Management-China Minsheng Banking Corp-Zhongyi Asset-Non-public Offering Selection No. 103 Asset Management Product | 14,416,539 | RMB common stock | 14,416,539 |
| Relationship of above shareholders or statement made by the parties acting in concert | 1. Jin Weidong, Ding Yunfeng, Wang Fengjiu, Shao Caimei and Wang Zhongtao act in concert. 2. Jin Weidong is the actual controller of Wulian Heli Equity Investment Partnership. 3. No relation or concerted action is found among other shareholders. | ||
| No. | Name of shareholder | Restricted shares held | Public trading of restricted shares | Restriction condition | |
| Date available for public trading | Newly increased number of share available for public trading | ||||
| 1 | Jin Weidong | 3,062,117 | April 25, 2022 | Lockup period- 36 months | |
| 2 | DE HEUS MAURITIUS | 2,296,587 | April 25, 2022 | Lockup period- 36 months | |
| 3 | Ding Yunfeng | 1,531,058 | April 25, 2022 | Lockup period- 36 months | |
| 4 | Wang Zhongtao | 765,529 | April 25, 2022 | Lockup period- 36 months | |
| Relationship of above shareholders or statement made by the parties acting in concert | 1. Jin Weidong, Ding Yunfeng and Wang Zhongtao act in concert. 2. No relation or concerted action is found among other shareholders. | ||||
III. Controlling Shareholder and Actual Controller
1. Controlling shareholder
A. Natural person
| Name | Jin Weidong |
| Nationality | China |
| Whether acquire the right of abode in other countries or regions | No |
| Major occupation and position | Chairman of Wellhope Foods Co., Ltd. |
| Name | Jin Weidong |
| Nationality | China |
| Whether acquire the right of abode in other countries or regions | No |
| Major occupation and position | Chairman of Wellhope Foods Co., Ltd. |
| Domestic and foreign listed companies once held by the actual controller in the past 10 years | Non |
B. A block diagram of the property rights and controlling relationship between the Company and its
actual controller
Note: Note: As at the end of the reporting period, Jin Weidong directly held 149,549,498 shares of theCompany, accounting for 16.22% of the total share capital. He controlled 5.24% of the voting rights ofthe Company through holding Wulian Heli Investment, and controlled 24.55% of the voting rights of theCompany through signing the Agreement of Acting in Concert with Ding Yunfeng(shareholding 8.89%),Wang Fengjiu(shareholding 5.20%), Shao Caimei(shareholding 5.40%) and Wang Zhongtao(shareholding
5.06%). Jin Weidong is the actual controller of the Company, who totally controls 46.01% of theCompany’s voting rights.
Section VII Preference ShareNot Applicable
Section VIII Directors, Supervisors, Senior Management and EmployeesI. Changes in Shareholdings and Remuneration
1. Changes in shareholdings and remuneration of incumbent and outgoing directors, supervisors and senior management during the reporting period
| Name | Office title | Gender | Age | Start of tenure | End of tenure | Opening shareholding (shares) | Closing shareholding (shares) | Changes in shareholding (shares) in 2020 | Reason of changes | Pre-tax remuneration paid by the Company (RMB 10k) | Whether obtain remuneration from related parties of the Company |
| Jin Weidong | Chairman | male | 58 | Feb. 3, 2015 | Feb. 1, 2021 | 149,549,498 | 149,549,498 | 75.05 | No | ||
| Ding Yunfeng | Director and President | male | 58 | Feb. 3, 2015 | Feb. 1, 2021 | 81,929,558 | 81,929,558 | 70.00 | No | ||
| Wang Fengjiu | Vice President | male | 52 | Feb. 3, 2015 | Feb. 1, 2021 | 49,146,202 | 47,964,602 | -1,181,600 | Selling in the secondary market | 70.00 | No |
| Shao Caimei | Director and Chief Technical Officer | female | 55 | Feb. 3, 2015 | Feb. 1, 2021 | 49,773,878 | 49,773,878 | 70.31 | No | ||
| Wang Zhongtao | Chairman of the Supervisory Board | male | 57 | Feb. 3, 2015 | Feb. 1, 2021 | 46,625,229 | 46,625,229 | 70.00 | No | ||
| Wang Zhenyong | Vice President | male | 55 | Feb. 3, 2015 | Feb. 1, 2021 | 9,800,000 | 9,800,000 | 70.00 | No | ||
| Zhang Wenliang | Director and Chief Financial Officer | male | 61 | Feb. 3, 2015 | Feb. 1, 2021 | 8,565,100 | 8,565,100 | 39.60 | No | ||
| Zhao Xin | Director, Board Secretary, Chief HR Officer | female | 49 | Feb. 3, 2015 | Feb. 1, 2021 | 4,470,160 | 4,420,160 | -50,000 | Selling in the secondary market | 70.00 | No |
| Qiu Jiahui | Vice President | male | 49 | Feb. 3, 2015 | Feb. 1, 2021 | 70.00 | No | ||||
| Hu Jianmin | Independent Director | male | 62 | Feb. 3, 2015 | Feb. 1, 2021 | 6.00 | No |
| Liu Huan | Independent Director | male | 66 | Feb. 3, 2015 | Feb. 1, 2021 | 6.00 | No | ||||
| Wang Zhe | Independent Director | female | 41 | Feb. 2, 2018 | Feb. 1, 2021 | 6.00 | No | ||||
| Jacobus Johannes de Heus | Director | male | 52 | Feb. 3, 2015 | Feb. 1, 2021 | - | No | ||||
| Marcus Leonardus van der Kwaak | Supervisor | male | 52 | Feb. 3, 2015 | Feb. 1, 2021 | - | No | ||||
| Yuan Minger | Supervisor | female | 51 | Feb. 3, 2015 | Feb. 1, 2021 | No | |||||
| Li Jun | Supervisor | male | 49 | Apr. 27,2016 | Feb. 1, 2021 | No | |||||
| Ren Bingxin | Supervisor | male | 58 | Mar. 27,2019 | Feb. 1, 2021 | 5,429,500 | 5,429,500 | No | |||
| Total | 405,289,125 | 404,057,525 | -1,231,600 | / | 622.96 | / |
| Name | Work experience |
| Jin Weidong | Male, born in 1963, Chinese nationality, bachelor of veterinarian from Shenyang Agricultural University, master of physiology and biochemistry from Jilin University, doctoral advisor of Shenyang Agricultural University, winner of the first batch of National Natural Science Foundation of China, core founder of Wellhope, serving as the Chairman of Wellhope since 1995. After graduation, he worked in the university for two years. In 1991, he joined Continental Grain Company (the US), successively served as the sales manager of China’s Northeast Region, national sales manager and assistant vice president of Asia Region. Currently he holds the posts of Vice President of China Feed Industry Association, Vice President of China Animal Husbandry Industry Association, President of Liaoning Feed Industry Association, also the MBA interviewer of Peking University and Tsinghua University, guest professor of Remin University of China, Ocean University of China and Northeast Agricultural University, etc. He has been awarded the honorary titles of "China's Outstanding Private Science and Technology Entrepreneur", "National Outstanding Builder of the Socialist Cause", "China's Top Ten Economic Figures in the 30 Years of Reform and Opening up of Feed Industry", "May 1st Labor Medal of Shenyang City", "Model Worker of Liaoning Province" and etc. In 2015, he was awarded as One of the Top Ten Models of Entrepreneurship for Agriculture, Rural Areas and Farmers. Meanwhile, he was awarded as Outstanding Entrepreneur of Liaoning Province in 2017, and awarded as Career-creating Talent regarding Science and Technology Innovation by China’s Ministry of Science and Technology in 2018. In 2019, he was selected as the fourth batch of leading talents regarding technology entrepreneurship in the National Ten Thousand Talents Program, and in 2020 awarded as the National Model Worker. |
| Ding Yunfeng | Male, born in 1963, Chinese nationality, bachelor's degree, one of the founders of Wellhope. Once served as the deputy general manager of Liaohe Feed Group, the northeast regional manager and consulting manager of Continental Grain Company. After founding Wellhope, serving as general manager of Gongzhuling Wellhope, Liaoning Wellhope, Shanghai Wellhope and many other subsidiaries, now holds the posts of board director and President. |
| Wang Fengjiu | Male, born in 1969, Chinese nationality, master's degree, one of the founders of Wellhope, served successively as northeast regional sales manager of Continental Grain Company, business manager and vice general manager of Liaoning Wellhope, general manager of Gongzhuling Wellhope, Shenyang Wellhope, Daqing Wellhope and Liaoning Wellhope Food, now holds the post of Vice President, taking charge of Wellhope’s food business division. |
| Shao Caimei | Female, born in 1966, Chinese nationality, Ph.D., one of the founders of Wellhope, the board director and CTO of Wellhope, also holds the posts of standing director of Animal Nutrition Branch of Chinese Association of Animal Science and Veterinary Medicine, member of Chinese Feed Industrial Standardization Technical Committee, etc. |
| Wang Zhongtao | Male, born in 1964, Chinese nationality, master's degree, one of the founders of Wellhope, served successively as purchasing manager, financial manager of Liaoning Wellhope, general manager of Harbin Wellhope and Dalian Wellhope, chief financial officer and vice president of Wellhope. Now holds the post of Chairman of Supervisory Board, taking charge of Wellhope’s feed raw materials trade business division. |
| Wang Zhenyong | Male, born in 1966, Chinese nationality, Ph.D., joined Wellhope in 1996, served successively as technical manager, general manager and northeast region technical director, now holds the post of Vice President, taking charge of international business. |
| Zhang Wenliang | Male, born in 1960, Chinese nationality, master's degree, senior auditor, certified public accountant, lawyer, joined Wellhope in 1996, now holds the posts of board director and CFO. |
| Zhao Xin | Female, born in 1972, Chinese nationality, bachelor's degree, joined Wellhope in 1995, successively served as the secretary to the general manager, Director of marketing department, Director of HR Department, Human Resources Manager and Chief HR Director. Now holds the posts of board director, Board Secretary and CHO of Wellhope. |
| Qiu Jiahui | Male, born in 1972, Chinese nationality, bachelor's degree, joined Wellhope in 2000, served successively as General Manager of Haicheng Wellhope Feed Mill, Haicheng Xinzhongxin Feed Mill, Vice President of Former Huakang Feed Group, Marketing Director of Wellhope, President of Broiler Integration Business Division, Vice President of Wellhope. Due to his outstanding performance and diligence, he has been elected as the board director and President of Wellhope on February 1, 2021. Qiu Jiahui is the pioneer of Wellhope’s broiler integration business. With more than 10 years of leadership, the broiler integration business has achieved rapid development, the comprehensive strength of this business has ranked among the best in the industry. |
| Wang Zhe | Female, born in 1980, Chinese nationality, Ph.D., professor and doctoral advisor of School of Animal Husbandry and Veterinarian of Shenyang Agricultural University, independent director of Wellhope. |
| Hu Jianmin | Male, born in 1959, Chinese nationality, Ph.D., professor of School of Animal Husbandry and Veterinarian of Shenyang Agricultural University, independent director of Wellhope. |
| Liu Huan | Male, born in 1955, Chinese nationality, CPA, Deputy Dean of School of Tax Administration of Central University of Finance and Economics, independent director of Wellhope. |
| Jacobus Johannes de Heus | Male, born in 1969, the Netherlands’ nationality, master's degree, been working in Royal De Heus since 1992, now serves as the CEO of Royal De Heus, board director of Wellhope. |
| Marcus Leonardus van der Kwaak | Male, born in 1969, the Netherlands’ nationality, master's degree, CFO of Royal De Heus, supervisor of Wellhope. |
| Yuan Minger | Female, born in 1970, Chinese nationality, bachelor's degree, senior auditor, joined Wellhope in 2004, served successively as vice finance manager of Liaoning Wellhope and finance manager of Wellhope Aquatic Feed Company, now holds the posts of supervisory board director and audit manager of Wellhope. |
| Li Jun | Male, born in 1972, Chinese nationality, master's degree, joined Wellhope in 2004, served successively as the general manager of Wellhope Trading Branch, Shenyang Expert and Shenyang Pufeng Trade, now holds the posts of supervisory board director, chief director of raw material trade business and general manager of Liaoning Expert Trading Co., Ltd. |
| Ren Bingxin | Male, born in 1963, Ph.D., once worked in Animal Husbandry and Veterinary Science Institute of Liaoning province, joined Wellhope in 1998, served successively as production manager of Gongzhuling Wellhope, technical manager of Liaoning Wellhope, vice general manager of Qingdao Shenfeng, etc., now holds the posts of the supervisory board director and technical director of Wellhope’s broiler integration business division. |
2. Post held in other entity
| Name | Other entity | Post | Start of tenure | End of tenure |
| Wang Zhe | Shenyang Agricultural University | Professor | 2015 | |
| Hu Jianmin | Shenyang Agricultural University | Professor | 2000 | |
| Hu Jianmin | Liaoning-Shenyang Agricultural Wellhope Bio-Tech Co., Ltd. | Board director | 2016 | |
| Liu Huan | School of Tax Administration of Central University of Finance and Economics | Deputy dean and professor | 2010 | |
| Jacobus Johannes de Heus | Royal De Heus | CEO | 2002 | |
| Marcus Leonardus van der Kwaak | Royal De Heus | CFO | 2001 | |
| Jin Weidong | Beijing BOYAR Agriculture and Animal Husbandry Technology Co., Ltd. | Supervisor | 2010 | |
| Jin Weidong | Beijing Huikezhongda Information Consulting Co., Ltd. | Board director | 2020 | |
| Jin Weidong | Shenyang Shengjing Asset Management Group Co., Ltd. | Board director | 2019 |
| Decision-making procedure for remuneration | According to the Company's performance appraisal management, related regulations and the stipulations of the Remuneration and Performance Appraisal Committee of the Board of Directors. |
| Basis for determining remuneration | According to the remuneration level in the industry, the Company's business performance, job responsibilities, etc., and in accordance with the work plan made by the Board of Directors at the beginning of the year, in combination with individual’s work performance and other qualitative and quantitative indicators. |
| Actual payment | Paying in accordance with the annual performance of the Company, the work performance of senior managers and management ability, etc. |
| Total remuneration during the reporting period | Totally paid RMB 6.23 million to board directors, supervisory board directors and senior managers. |
III. Employees of the Parent Company and Major Subsidiaries
1. Headcount
| Full time employee of parent company | 224 |
| Full time employee of major subsidiaries | 6,981 |
| Total full-time employees | 7,205 |
| The number of retired employees whose expenses are borne by the parent company and major subsidiaries | 12 |
| Functions | |
| Line | Employees |
| Production | 2,829 |
| Sales | 2,445 |
| Technology | 811 |
| Finance | 403 |
| Administration | 717 |
| Total | 7,205 |
| Educational backgrounds | |
| Educational background | Employees |
| Master's degree and above | 408 |
| Bachelor's degree | 2,412 |
| Junior college | 2,186 |
| Below junior college | 2,199 |
| Total | 7,205 |
In addition, Wellhope, in strict accordance with national laws and regulations, also offers staff socialinsurances and housing fund. Besides, Wellhope provides commercial insurance to benefit employeesand their families, also enriches their benefits through internal resource sharing, 25th anniversary’sbenefits package, “Wings of Love” foundation and other ways to improve satisfaction.
3. Training plan
Under the guidance of overall strategy and human resource strategy, Wellhope continues to build andupdate the training system to help employees make signs of progress. In 2020, stressed by theCOVID-19 and African swine fever, Wellhope focused on creating online training methods andimproving course design, as well as centered on the improvement of basic skills and professionalknowledge of employees.A. Continuously improving the training system and optimizing the selection & training mechanismThe three-level training system supported by Wellhope’s head office, business regions and subsidiaryhave been becoming increasingly clear, and each performs own roles and cooperates with others inmultiple aspects, such as new employee training, middle and senior manager training. In regards tonew employees, Wellhope innovated the training methods via online platform and other tools to watchthe growth of new bloods and help them adapt to their job effectively. Regarding middle managers,Wellhope carried out three-dimensional training to continuously improve the ability of the Company’sbackbones. For instance, holding the "Sunflower" training program and other programs to constantlyimprove the professional competence of the managers. In addition, Wellhope actively organized videoconferences and live streaming for all employees, including both external cooperation and internalcourses, to lay a solid foundation for long-term development.B. Further developing the training courses to boost up professional knowledgeWellhope has been actively promoting the development of new training courses based on workscenarios and task modules, etc. During the reporting period, Wellhope developed a total of more than140 new courses for each business line, with an internal course system update rate of over 20%, andthe overall learning participation rate of was over 95%, showing a significant increase in employees’learning enthusiasm. To cope with the adverse impact brought by the COVID-19, Wellhope rapidlyupdated relevant courses, widely introduced external training resources, and vigorously organizedtrainings via various methods such as live broadcast and online academy.
4. Labor outsourcing
| The total number of working hours | 3,878,967 |
| Total amount of remuneration paid for outsourcing | RMB 80,568,060 |
Section IX Corporate GovernanceI. Overview of Corporate GovernanceIn accordance with the Corporation Law, the Securities Law, the Guidelines for Governance of ListedCompany and other requirements, Wellhope has constantly improved corporate governance andinternal control, such as shareholder’s meeting, board meeting, supervisory board meeting, etc. In2020, Wellhope held 1 time of shareholders' meeting, 6 times of board meetings and 5 times ofsupervisory board meetings. The actual circumstance of corporate governance has been basically inline with the requirements of the normative documents issued by China Securities RegulatoryCommission. Wellhope’s corporate governance regarding shareholder’s meeting, board meeting,supervisory board meeting, information disclosure and stakeholder complied with the requirements ofrelevant documents.A. Shareholder and shareholders’ meeting. Wellhope convened and held shareholders’ meeting instrict accordance with relevant laws, and adopted physical voting and online voting to ensure that allshareholders, especially non-controlling shareholders, could fully exercise their right to vote. Thecontrolling shareholder (actual controller) of the Company conscientiously performed the obligation ofgood faith and did not damage the rights and interests of the Company and non-controllingshareholders.B. Board directors and board meeting. The convening procedure of the board of directors compliedwith the requirements of laws and regulations. All directors actively attended the board meetings andshareholders’ meetings held by the Company, got familiar with relevant laws and regulations,understood the rights, obligations and responsibilities of directors, and safeguarded the legitimaterights and interests of all shareholders.C. Supervisors and supervisory board meeting. Wellhope's supervisors, in accordance with theCompany Constitution and relevant laws and regulations, have conscientiously performed their duties,supervised the Company's financial position, related transactions, periodic reports, as well as thecompliance of the directors and senior managers regarding their performance of duties, andsafeguarded the legitimate rights and interests of the Company and its shareholders.D. Information disclosure. Wellhope strictly implemented its Information Disclosure ManagementRegulation, which has clarified the person taking charge of information disclosure to ensure that thedisclosed information could be true, accurate, complete, timely and fair. It designated the boardsecretary to take charge of information disclosure and investor relations management, strictlyimplemented the Company’s regulations regarding information disclosure, such as ManagementRegulation on Insider Information Registration, so as to disclose information truly, accurately,completely and timely to guarantee that all shareholders could have equal right to know theinformation of the Company. Meanwhile, Wellhope constantly improved corporate governancestructure and standardized internal operations in strict accordance with the requirements of the
Corporation Law, the Securities Law, relevant laws and regulations issued by China SecuritiesRegulatory Commission.E. Stakeholder. Wellhope fully respected and safeguarded the legitimate rights and interests ofstakeholders, strived to achieve the coordination and balance among shareholders, employees, andother parties, and jointly promoted the sustainable, healthy and stable development of the Company.II. Shareholders' Meeting Convened during the Reporting Period
| Meeting | Date | Query URLs of Resolution | Disclosing Date of Resolution |
| 2019 Annual Shareholders' Meeting | April 20, 2020 | www.sse.com.cn | April 21, 2020 |
| Name | Independent director or not | Attendance of Board Meeting | Shareholders' Meeting | |||||
| Number of attended board meetings in 2020 | Physical presence | Via Tele- communi | Via proxy | Number of absences | Whether continually fail to physically attend the meeting two times | Number of attended shareholders' meeting | ||
| Jin Weidong | no | 6 | 6 | 3 | 0 | 0 | no | 0 |
| Ding Yunfeng | no | 6 | 6 | 3 | 0 | 0 | no | 0 |
| Jacobus Johannes de Heus | no | 6 | 6 | 6 | 0 | 0 | no | 0 |
| Shao Caimei | no | 6 | 6 | 3 | 0 | 0 | no | 0 |
| Zhang Wenliang | no | 6 | 6 | 6 | 0 | 0 | no | 1 |
| Zhao Xin | no | 6 | 6 | 2 | 0 | 0 | no | 1 |
| Hu Jianmin | yes | 6 | 6 | 5 | 0 | 0 | no | 1 |
| Liu Huan | yes | 6 | 6 | 6 | 0 | 0 | no | 0 |
| Wang Zhe | yes | 6 | 6 | 6 | 0 | 0 | no | 1 |
| Number of board meetings held in 2020 | 6 |
| Including on-site meeting | 0 |
| Number of meeting held via telecommunication | 2 |
| Number of meeting held via on-site meeting and telecommunication | 4 |
IV. Whether Disclosing Self-evaluation Report of the Internal Control
Wellhope will disclose the evaluation report of internal control when discloses 2020 Annual Report.Details please refer to the website of Shanghai Stock Exchange (http://www.sse.com.cn).V. Explanation of Audit Report for Internal ControlSuyaJincheng CPA LLP issued the Audit Report of Internal Control, put forward that Wellhope hasmaintained effective internal control over financial reports in all major aspects on December 31, 2020in accordance with relevant regulations. Details please refer to the website of Shanghai Stock Exchange(http://www.sse.com.cn).
Section X Corporate BondNot applicable
Section XI Financial StatementsI. Audit Report
Audit ReportSuya Audit No. [2021]248To all the shareholders of Wellhope Foods Co., Ltd.,
1. Opinion
We have audited the financial statements of Wellhope Foods Co., Ltd. (hereinafter referred to as "theCompany"), which comprise the statement of financial position as at December 31, 2020, and theincome statement, statement of changes in equity and cash flow statement for the year then ended,and notes to the financial statements.In our opinion, the financial statements give a true and fair view of the financial position of theCompany as at December 31, 2020, and of its operating performance and cash flow for the year thenended, and have been properly prepared in compliance with the Accounting Standards for BusinessEnterprises ("the ASBE").
2. Basis for Opinion
We conducted our audits in accordance with China's CPA Auditing Standards. Our responsibilitiesunder those standards are further described in the "Auditor’s Responsibilities for the Audit of theFinancial Statements" section of our report. We are independent of the Company in accordance withChina CPA's Code of Ethics for Professional Accountants ("the Code"), and we have fulfilled our otherethical responsibilities in accordance with the Code. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
3. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance inour audit of the financial statements in the current period. These matters were addressed in thecontext of our audit of the financial statements as a whole, and in forming our opinion thereon, and wedo not provide a separate opinion on these matters.
| A. Confirmation and recognition of revenue | |
| Please refer to Important Accounting Policies and Accounting Estimates | |
| Key audit item | How our audit addressed the key audit item |
| The operating revenue of the Company reached RMB 23.82 billion with a year-on-on growth rate of 33.87%, increased RMB 6.03 billion compared with prior year. Of which, sales revenue of feed business increased RMB 4.32 billion compared with prior year, rose | Our audit procedures mainly include: a. We got to know and evaluated the design of internal control in Wellhope’s sales process and tested the effectiveness of the implementation of critical control. b. Through sampling inspection of the sales contracts and interviewing with the management team, we identified the rights and obligations of the contract, evaluated the |
| by 55.54%. As the operating revenue is one of the key performance indicators of Wellhope, we took the recognition of operating revenue as the key audit item. | time point of performing the obligations, and evaluated whether the judgment of the transfer of control rights related to revenue recognition conformed to the provisions of the Company's accounting policies and accounting standards for enterprises. c. We implemented analytical review procedures to identify whether there were significant or abnormal fluctuations and recognized the reasons that caused such fluctuations. We also determined the rationality of changes in operating revenue and gross profit. d. We conducted the following procedures for sales revenue based on sampling method to confirm the occurrence and cut-off of sales revenue. (a) Checking the supporting documents related to revenue recognition, including sales contracts, sales orders, sales invoices, customer receipt, etc. (b) Issuing external confirmations to recognize the balance of accounts receivable and the amount of sales revenue. (c) Carrying out cut-off test on the revenue recognized before and after the balance sheet date to evaluate whether the revenue was recognized during the appropriate period. |
| B. Income from long-term equity investment recognized by the equity method. | |
| Please refer to Important Accounting Policies and Accounting Estimates | |
| Key audit item | How our audit addressed the key audit item |
| The income from long-term equity investment calculated by the equity method in the reporting period reached RMB 361.32 million, which had a significant impact on current gains and losses, thus we took it as the key audit item. | Our audit procedures mainly include: a. We reviewed and evaluated Wellhope’s internal control regarding the income from long-term equity investment measured by the equity method. b. We obtained related investee’s constitution, investment agreements and other documents to judge whether Wellhope had a significant effect on related investee and whether the accounting method was correct. c. We obtained related investee's audit reports or financial statements to review the adjustment of unrealized profit of related transactions, whether the calculation of investment income was accurate and whether the share of net asset changes was correct. d. We inquired the management team about the reasons of significant or abnormal fluctuations in investment returns, analyzed and determined whether they were reasonable. e. We analyzed the operating income, cost, inventory and other things of the investees with large investment income in the current period, whilst obtained and checked the detailed list and related materials provided by the investees. |
Our opinion on the financial statements does not cover the other information and we do not expressany form of assurance conclusion thereon.In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent withthe financial statements or our knowledge obtained during the audit or otherwise appears to bematerially misstated.If, based on the work we have executed, we confirm that there is a material misstatement in the otherinformation, we are required to report the fact. We have nothing to report in this regard.
5. Responsibilities of the Management and Those Charged with Governance for Financial StatementsThe management team of the Company is responsible for preparing the financial statements that givea fair view in accordance with the ASBE, and for designing, executing and maintaining requisite internalcontrol to enable the preparation of the financial statements that are free from material misstatement,whether due to fraud or error.In preparing the financial statements, the management is responsible for assessing the Company’sability to continue as a going concern, disclosing, as applicable, matters related to going concern andusing the going concern basis of accounting unless the management either intends to liquidate theCompany or to cease operation, or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’s financial reportingprocess.
6. Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a wholeare free from material misstatement, whether due to fraud or error, and to issue an auditor’s reportthat includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee thatan audit conducted in accordance with the auditing standards will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and are considered materialif, individually or in the aggregate, they could reasonably be expected to influence the economicdecisions of users taken on the basis of these financial statements.As part of an audit in accordance with the auditing standards, we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
A. Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain auditevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting amaterial misstatement resulting from fraud is higher than for one resulting from error, as fraud mayinvolve collusion, forgery, intentional omissions, misrepresentations, or the override of internalcontrol.B. Obtain an understanding of the internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances.C. Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by the management.D. Conclude on the appropriateness of the management’s use of the going concern basis of accountingand, based on the obtained audit evidence, whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company’s ability to continue as a going concern. Ifwe conclude that a material uncertainty exists, we are required by the auditing standards to draw thestatements users’ attention in our auditor’s report to the related disclosures in the financial statements,or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor’s report. However, future events or conditions maycause the Company to cease to continue as a going concern.E. Evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions and events ina manner that achieves fair presentation.F. Obtain sufficient and appropriate audit evidence regarding the financial information of relatedentities or business activities within the Company to express an opinion on its financial statements. Weare responsible for guiding, overseeing and performing the audit of the Company, and solelyresponsible for our audit opinion.We communicate with those charged with governance regarding, among other matters, the plannedscope and timetable of the audit and significant audit findings, including any noteworthy deficiencies inthe internal control that we identify during our audit.We also provide those charged with governance with a statement to declare that we have compliedwith the professional ethics related to independence, and communicate with the governance on allrelationships and other matters that may reasonably be considered to affect our independence, as wellas the relevant precautions.From the matters communicated with those charged with governance, we determine which matters arethe most important for the audit of the current financial statements and thus constitute the key auditmatters. We describe these matters in the audit report, unless laws and regulations prohibit the publicdisclosure of these matters, or in rare cases, if it is reasonably expected that the negative consequencesof communicating a matter in the audit report will outweigh the benefits in terms of the public interest,we determine that the matter should not be communicated in the audit report.SuyaJincheng CPA LLP CPA: Zhou Jiawen (Project Partner)CPA: Wang LeiChina Nanjing March 29, 2021
II. Financial Statements
Consolidated Balance Sheet
December 31, 2020Wellhope Unit: yuan Currency: RMB
| Item | Dec. 31, 2020 | Dec. 31, 2019 |
| Current Assets | ||
| Monetary capital | 1,197,722,799.16 | 1,554,781,324.13 |
| Tradable financial assets | 50,000,000.00 | 40,000,000.00 |
| Derivative financial assets | 4,725,552.30 | 3,912,584.30 |
| Notes receivable | 14,200,547.87 | 3,696,180.25 |
| Accounts receivable | 450,170,744.45 | 362,060,802.38 |
| Prepayments | 364,401,520.23 | 222,064,368.55 |
| Other receivables | 121,043,476.45 | 85,600,811.75 |
| including: Interest receivable | ||
| Dividends receivable | 49,123,722.11 | 25,353,722.11 |
| Inventory | 2,473,827,570.38 | 1,568,373,133.15 |
| Contract assets | 4,301,418.29 | |
| Other current assets | 109,698,865.94 | 121,711,175.93 |
| Total current assets | 4,790,092,495.07 | 3,962,200,380.44 |
| Non-current assets | ||
| Long-term equity investment | 2,424,902,965.26 | 2,070,047,882.51 |
| Other equity instruments investment | 20,847,697.96 | 5,760,839.23 |
| Fixed assets | 2,860,162,059.91 | 2,023,113,939.02 |
| Construction in progress | 322,895,206.90 | 240,012,874.86 |
| Biological assets | 221,654,027.17 | 94,826,312.88 |
| Intangible assets | 291,785,453.15 | 245,564,167.39 |
| Goodwill | 290,425.67 | 290,425.67 |
| Long-term prepaid expenses | 143,945,562.29 | 134,504,217.80 |
| Deferred income tax assets | 38,791,631.37 | 35,987,736.49 |
| Other non-current assets | 531,140,679.24 | 337,463,267.56 |
| Total non-current assets | 6,856,415,708.92 | 5,187,571,663.41 |
| Total Assets | 11,646,508,203.99 | 9,149,772,043.85 |
| Consolidated Balance Sheet(continue) | Unit: yuan Currency: RMB | |
| Item | Dec. 31, 2020 | Dec. 31, 2019 |
| Current Liabilities | ||
| Short-term borrowings | 1,110,672,869.40 | 1,050,878,205.81 |
| Notes payable | 4,000,000.00 | |
| Accounts payable | 1,068,968,589.85 | 659,216,483.84 |
| Advance receipt | 15,522,362.13 | 209,529,248.68 |
| Contract liabilities | 365,124,817.02 | |
| Payroll | 92,456,475.56 | 62,549,364.12 |
| Taxes and surcharges | 47,590,795.53 | 37,680,953.84 |
| Other payables | 280,673,085.07 | 342,239,361.28 |
| including: Interest payable | 1,528,201.39 | |
| Dividends payable | 1,500,000.00 | 1,434,027.14 |
| Non-current liabilities due within one year | 121,896,906.66 | 70,593,717.62 |
| Other current liabilities | 3,386,523.00 | |
| Total current liabilities | 3,110,292,424.22 | 2,432,687,335.19 |
| Non-current Liabilities | ||
| Long-term borrowings | 574,880,271.67 | 174,330,000.00 |
| Long-term payables | 15,458,230.92 | 11,025,000.09 |
| Deferred income | 42,238,872.75 | 31,841,250.00 |
| Deferred income tax liabilities | 1,936,853.23 | 396,995.58 |
| Total Non-current liabilities | 634,514,228.57 | 217,593,245.67 |
| Total Liabilities | 3,744,806,652.79 | 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 reserves | 888,159,916.65 | 882,723,066.29 |
| deduct: Treasury stock | 45,695,815.00 | 70,688,750.00 |
| Other comprehensive income | -2,157,502.61 | 6,122,835.30 |
| Surplus reserves | 417,370,506.33 | 352,059,456.90 |
| Undistributed profits | 4,572,660,487.98 | 3,605,618,553.05 |
| Total owners’ equity attributable to the parent company | 6,752,397,489.35 | 5,698,139,557.54 |
| Non-controlling interests | 1,149,304,061.85 | 801,351,905.45 |
| Total owners' equity (or shareholders' equity) | 7,901,701,551.20 | 6,499,491,462.99 |
| Total liabilities and owners' equity (or shareholders' equity) | 11,646,508,203.99 | 9,149,772,043.85 |
Consolidated Balance Sheet of Parent Company
December 31, 2020
Unit: yuan Currency :RMB
| Item | Dec. 31, 2020 | Dec. 31, 2019 |
| Current assets | ||
| Monetary capital | 882,265,252.26 | 1,039,575,222.99 |
| Tradable financial assets | 50,000,000.00 | 40,000,000.00 |
| Derivative financial assets | 4,725,552.30 | 2,285,934.30 |
| Accounts receivable | 20,085,558.13 | 13,631,690.45 |
| Prepayments | 9,917,656.22 | 7,560,408.95 |
| Other receivables | 1,371,365,317.28 | 1,020,785,676.46 |
| including: Interest receivable | ||
| Dividends receivable | 57,747,209.35 | 33,977,209.35 |
| Inventory | 51,828,244.25 | 49,839,754.57 |
| Total current assets | 2,390,187,580.44 | 2,173,678,687.72 |
| Non-current assets | ||
| Long-term equity investment | 4,984,232,967.75 | 4,117,315,830.10 |
| Other equity instruments investment | 20,151,707.44 | 5,539,369.92 |
| Fixed assets | 137,920,401.73 | 132,106,337.38 |
| Construction in progress | 9,937,098.75 | 5,163,075.76 |
| Intangible assets | 14,556,983.41 | 15,425,425.33 |
| Long-term prepaid expenses | 1,997,913.51 | 797,929.30 |
| Deferred income tax assets | 7,805,635.89 | 10,699,738.59 |
| Other non-current assets | 1,800,000.00 | |
| Total non-current assets | 5,178,402,708.48 | 4,287,047,706.38 |
| Total assets | 7,568,590,288.92 | 6,460,726,394.10 |
| Current liabilities: | ||
| Short-term borrowings | 680,000,000.00 | 770,000,000.00 |
| Accounts payable | 38,179,034.66 | 34,960,859.00 |
| Advance receipt | 5,019,752.33 | |
| Contract liabilities | 5,446,528.15 | |
| Payroll | 7,302,711.24 | 4,611,910.56 |
| Taxes and surcharges | 4,129,417.63 | 4,624,045.02 |
| Other payables | 1,472,651,727.41 | 1,109,464,926.75 |
| including: Interest payable | 1,261,159.72 | |
| Dividends payable | ||
| Non-current liabilities due within one year | 78,000,000.00 | 52,000,000.00 |
| Total current liabilities | 2,285,709,419.09 | 1,980,681,493.66 |
| Non-current liabilities | ||
| Long-term borrowings | 494,500,000.00 | 174,000,000.00 |
| Deferred income | 25,056,500.00 | 21,520,000.00 |
| Deferred income tax liabilities | 8,972.25 | |
| Total non-current liabilities | 519,556,500.00 | 195,528,972.25 |
| Total liabilities | 2,805,265,919.09 | 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 | 885,579,203.34 | 875,861,339.55 |
| deduct: Treasury stock | 45,695,815.00 | 70,688,750.00 |
| Other Comprehensive income | -337,193.02 | 5,621,991.32 |
| Surplus reserves | 417,370,506.33 | 352,059,456.90 |
| Undistributed profits | 2,584,347,772.18 | 2,199,357,494.42 |
| Total owners' equity | 4,763,324,369.83 | 4,284,515,928.19 |
| Total liabilities and owners' equity (or shareholders' equity) | 7,568,590,288.92 | 6,460,726,394.10 |
Consolidated Income Statement
January-December, 2020
| Wellhope | Unit: yuan Currency: RMB | |
| Item | 2020 | 2019 |
| 1. Total operating revenue | 23,817,600,766.26 | 17,792,091,973.58 |
| including: Operating revenue | 23,817,600,766.26 | 17,792,091,973.58 |
| 2. Total operating costs | 22,638,742,889.31 | 16,722,910,797.89 |
| including: Operating costs | 21,683,591,011.74 | 15,792,020,015.55 |
| Taxes and surtaxes | 31,300,864.53 | 26,510,483.05 |
| Selling expenses | 465,307,995.89 | 487,217,524.04 |
| Administrative expenses | 310,275,697.03 | 275,560,691.30 |
| R&D expenses | 83,587,106.40 | 65,209,116.65 |
| Financial expenses | 64,680,213.72 | 76,392,967.30 |
| including: Interest expenses | 75,771,816.48 | 77,508,278.78 |
| Interest income | 14,953,268.10 | 9,696,477.31 |
| add: Other income | 23,500,036.20 | 11,495,398.41 |
| Income from investment | 362,563,704.83 | 637,479,444.82 |
| including: Income from investments in associated companies and joint ventures | 361,315,137.75 | 629,093,604.62 |
| Gain or loss from changes in fair value | -1,397,309.00 | 577,449.00 |
| Credit impairment loss | -6,184,987.84 | -26,344,201.05 |
| Assets impairment loss | -35,172,892.83 | -98,459,269.89 |
| Gain or loss from assets disposal | 3,169,342.06 | 572,151.35 |
| 3. Operating profit | 1,525,335,770.37 | 1,594,502,148.33 |
| add: Non-operating income | 12,873,829.17 | 13,406,536.26 |
| deduct: Non-operating expenditure | 28,976,468.62 | 25,737,839.85 |
| 4. Pretax profit | 1,509,233,130.92 | 1,582,170,844.74 |
| deduct: Income tax expense | 151,654,167.45 | 84,706,528.93 |
| 5. Net profit | ||
| Net Profit from continuing operations | 1,357,578,963.47 | 1,497,464,315.81 |
| Net profit attributable to the shareholders of parent company | 1,235,162,151.48 | 1,199,347,355.96 |
| Non-controlling interests income | 122,416,811.99 | 298,116,959.85 |
| 6. Other comprehensive income, net of tax | -10,236,917.41 | 8,699,609.38 |
| Attributable to owners of parent company | -8,280,337.91 | 7,921,322.05 |
| a. Other comprehensive income that cannot be reclassified into gains or losses | 1,240,959.08 | -278,647.43 |
| (a) Changes in the fair value of other equity instruments | 1,240,959.08 | -278,647.43 |
| b. Other comprehensive income that will be reclassified into the gains or losses | -9,521,296.99 | 8,199,969.48 |
| (a) Other comprehensive income that can be transferred in gains or losses under the equity method | -7,100,475.65 | 7,238,557.02 |
| (b) Exchange differences on translation of foreign currency financial statements | -2,420,821.34 | 961,412.46 |
| Attributable to non-controlling interests | -1,956,579.50 | 778,287.33 |
| 7. Total comprehensive income | 1,347,342,046.06 | 1,506,163,925.19 |
| Attributable to the owners of parent company | 1,226,881,813.57 | 1,207,268,678.01 |
| Attributable to non-controlling interests | 120,460,232.49 | 298,895,247.18 |
| 8. EPS | ||
| (1) Basic earnings per share (yuan per share) | 1.34 | 1.34 |
| (2) Diluted earnings per share (yuan per share) | 1.34 | 1.34 |
Consolidated Income Statement of Parent Company
January-December, 2020
Unit: yuan Currency: RMB
| Item | 2020 | 2019 |
| 1. Total operating revenue | 969,102,637.82 | 653,173,744.91 |
| deduct: Operating cost | 668,625,276.01 | 440,528,615.18 |
| Taxes and surtaxes | 1,466,963.13 | 1,565,707.59 |
| Selling expenses | 12,812,998.32 | 15,499,507.05 |
| Administrative expenses | 31,515,779.33 | 35,606,213.46 |
| R&D expenses | 30,983,694.34 | 19,801,103.17 |
| Financial expenses | 18,445,842.72 | 25,764,751.95 |
| including: Interest expenses | 54,535,663.77 | 56,712,261.00 |
| Interest income | 36,300,491.74 | 31,126,902.17 |
| add: Other income | 6,458,638.63 | 2,446,851.22 |
| Income from Investment | 451,034,585.06 | 699,355,097.82 |
| including: Income from investments in associated companies and joint ventures | 364,045,983.90 | 625,627,992.53 |
| Gain or loss from changes in fair value | -1,397,425.00 | 689,565.00 |
| Credit impairment loss | 19,002,016.21 | -15,937,167.84 |
| Assets impairment loss | ||
| Gain or loss from assets disposal | 44,255.41 | -22,077.70 |
| 2. Operating profit | 680,394,154.28 | 800,940,115.01 |
| add: Non-operating income | 3,171,550.00 | 8,319,590.00 |
| deduct: Non-operating expenditure | 1,419,521.13 | 3,435,681.90 |
| 3. Pretax profit | 682,146,183.15 | 805,824,023.11 |
| deduct: Income tax expense | 29,035,688.84 | 16,371,114.85 |
| 4. Net profit | 653,110,494.31 | 789,452,908.26 |
| Net profit from continuing operations | 653,110,494.31 | 789,452,908.26 |
| 5. Other comprehensive income, net of tax | -5,959,184.34 | 7,238,557.02 |
| a. Other comprehensive income that cannot be reclassified into gains or losses | 1,112,337.52 | |
| (a) Changes in the fair value of other equity instruments | 1,112,337.52 | |
| b. Other comprehensive income that will be reclassified into gains or losses | -7,071,521.86 | 7,238,557.02 |
| (a) Other comprehensive income that can be transferred in gains or losses under the equity method | -7,071,521.86 | 7,238,557.02 |
| 6. Total comprehensive income | 647,151,309.97 | 796,691,465.28 |
Consolidated Statement of Cash FlowJanuary-December, 2020Wellhope Unit: yuan Currency: RMB
| Item | 2020 | 2019 |
| 1. Cash flow from operating activities | ||
| Cash received by selling products, providing labor services | 24,482,275,075.02 | 18,515,520,875.71 |
| Tax refunds | 25,001,167.43 | 31,713,272.85 |
| Cash received from other activities related to operating | 99,772,927.29 | 117,924,950.69 |
| Sub-total of cash inflow of operating activities | 24,607,049,169.74 | 18,665,159,099.25 |
| Cash paid for goods purchase and labor services | 22,505,368,996.49 | 16,331,792,562.75 |
| Cash paid to and for employee | 746,684,020.36 | 664,160,201.72 |
| Tax payments | 206,928,395.54 | 126,114,944.41 |
| Cash paid to other activities related to operating | 382,122,304.32 | 431,485,423.79 |
| Sub-total of cash outflow of operating activities | 23,841,103,716.71 | 17,553,553,132.67 |
| Net cash flow from operating activities | 765,945,453.03 | 1,111,605,966.58 |
| 2. Cash flow from investing activities | ||
| Cash received from disinvestment | 325,807,581.05 | 267,623,915.25 |
| Cash received from return on investment | 75,296,262.02 | 39,407,633.67 |
| Net cash received from disposal of fixed assets, intangible assets and other long-lived assets | 57,631,307.35 | 5,272,664.08 |
| Net cash received from disposal of subsidiaries and other business units | 344,858.74 | |
| Cash received from other activities related to investment | 45,855,779.74 | 35,351,061.09 |
| Sub-total of cash inflow of investing activities | 504,590,930.16 | 348,000,132.83 |
| Cash paid for acquiring and building fixed assets, intangible assets and other long-lived assets | 1,400,466,040.74 | 752,328,478.91 |
| Cash paid for investments | 490,847,437.70 | 431,091,352.29 |
| Net cash paid for acquiring subsidiaries and other business units | 115,039,491.85 | 753,128.13 |
| Cash paid to other activities related to investment | 4,587,407.44 | 38,034,996.79 |
| Sub-total of cash outflow of investing activities | 2,010,940,377.73 | 1,222,207,956.12 |
| Net cash flow from investing activities | -1,506,349,447.57 | -874,207,823.29 |
| 3. Cash flow from financing activities | ||
| Cash received by absorbing investments | 208,487,520.00 | 833,019,100.67 |
| including: Capital contributed by non-controlling interests to subsidiaries | 208,487,520.00 | 77,295,000.00 |
| Cash received from borrowings | 2,340,899,248.82 | 1,512,771,597.45 |
| Cash received from other activities related to financing | 6,056,251.57 | 19,499,680.00 |
| Sub-total of cash inflow of financing activities | 2,555,443,020.39 | 2,365,290,378.12 |
| Repayments of borrowings | 1,826,910,664.27 | 1,723,732,178.39 |
| Cash paid for dividends, profits, or paid for interests | 307,059,194.55 | 256,169,043.57 |
| including: Dividends or profits paid by subsidiaries to non-controlling interests | 28,463,213.00 | 3,804,074.08 |
| Cash paid to other activities related to financing activities | 2,040,285.00 | 6,433,985.36 |
| Sub-total of cash outflow of financing activities | 2,136,010,143.82 | 1,986,335,207.32 |
| Net cash flow from financing activities | 419,432,876.57 | 378,955,170.80 |
| 4. Effect of foreign exchange rate fluctuations on cash and cash equivalents | -1,221,720.67 | 2,832,293.62 |
| 5. Net increase in cash and cash equivalents | -322,192,838.64 | 619,185,607.71 |
| 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 | 1,186,197,643.04 | 1,508,390,481.68 |
Consolidated Statement of Cash Flow of Parent Company
January-December, 2020
Unit: yuan Currency: RMB
| Item | 2020 | 2019 |
| 1. Cash flow from operating activities | ||
| Cash received by selling products, providing labor services | 965,432,917.07 | 657,717,981.13 |
| Cash received from other activities related to operating | 44,593,997.18 | 48,571,846.31 |
| Sub-total of cash inflow of operating activities | 1,010,026,914.25 | 706,289,827.44 |
| Cash paid for goods purchase and labor services | 663,825,841.93 | 413,396,277.57 |
| Cash paid to and for employee | 33,388,862.93 | 28,770,817.79 |
| Tax payments | 28,959,107.21 | 19,458,354.60 |
| Cash paid to other activities related to operating | 45,247,262.37 | 35,097,588.50 |
| Sub-total of cash outflow of operating activities | 771,421,074.44 | 496,723,038.46 |
| Net cash flow from operating activities | 238,605,839.81 | 209,566,788.98 |
| 2. Cash flow from investing activities | ||
| Cash received from disinvestment | 326,865,784.65 | 242,076,974.20 |
| Cash received from return on investment | 163,698,097.56 | 83,541,669.81 |
| Net cash received from disposal of fixed assets, intangible assets and other long-lived assets | 58,834.95 | 54,912.63 |
| Cash received from other activities related to investment | 10,373,911.25 | |
| Sub-total of cash inflow of investing activities | 500,996,628.41 | 325,673,556.64 |
| Cash paid for acquiring and building fixed assets, intangible assets and other long-lived assets | 24,815,741.58 | 12,973,326.66 |
| Cash paid for investments | 949,351,043.00 | 486,919,077.89 |
| Net cash paid for acquiring subsidiaries and other business units | 8,543,248.66 | |
| Cash paid to other activities related to investing | 111,555,196.70 | 174,207,415.01 |
| Sub-total of cash outflow of investing activities | 1,094,265,229.94 | 674,099,819.56 |
| Net cash flow from investing activities | -593,268,601.53 | -348,426,262.92 |
| 3. Cash flow from financing activities | ||
| Cash received by absorbing investments | 769,777,738.50 | |
| Cash received from borrowings | 1,430,000,000.00 | 940,000,000.00 |
| Cash received from other activities related to financing | 204,715,710.21 | 87,172,401.90 |
| Sub-total of cash inflow of financing activities | 1,634,715,710.21 | 1,796,950,140.40 |
| Repayments of borrowings | 1,173,500,000.00 | 1,157,000,000.00 |
| Cash paid for dividends, profits, or paid for interests | 257,346,854.76 | 218,297,464.88 |
| Cash paid to other activities related to financing | 1,141,815.00 | |
| Sub-total of cash outflow of financing activities | 1,431,988,669.76 | 1,375,297,464.88 |
| Net cash flow from financing activities | 202,727,040.45 | 421,652,675.52 |
| 4. Effect of foreign exchange rate fluctuations on cash and cash equivalents | -338.21 | 86.36 |
| 5. Net increase in cash and cash equivalents | -151,936,059.48 | 282,793,287.94 |
| 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 | 871,749,101.71 | 1,023,685,161.19 |
Change Statement of Owner's Equity
January-December, 2020
Unit: yuan Currency: RMB
| Item | 2020 | ||||||||
| Equity Attributable to the Owners of Parent Company | Non-controlling interests | Total owners' equity | |||||||
| Share capital | Capital reserve | Deduct: Treasury stock | Other comprehensive income | Surplus reserve | Undistributed profits | Subtotal | |||
| 1. Closing balance of prior period | 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 |
| add: Changes in accounting policies | |||||||||
| Other | |||||||||
| 2. Opening balance of current period | 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 |
| 3. Changes of current period | -244,500.00 | 5,436,850.36 | -24,992,935.00 | -8,280,337.91 | 65,311,049.43 | 967,041,934.93 | 1,054,257,931.81 | 347,952,156.40 | 1,402,210,088.21 |
| A. Total comprehensive income | -8,346,872.91 | 1,235,162,151.48 | 1,226,815,278.57 | 120,460,232.49 | 1,347,275,511.06 | ||||
| B. Capital contributed and reduced by owners | -244,500.00 | 5,436,850.36 | -24,992,935.00 | 30,185,285.36 | 257,455,136.91 | 287,640,422.27 | |||
| a. Common stock invested by owners | 247,921,446.89 | 247,921,446.89 | |||||||
| b. Amount of share-based payment included in the owner's equity | -244,500.00 | 5,330,798.53 | -24,992,935.00 | 30,079,233.53 | 4,429,445.04 | 34,508,678.57 | |||
| c. Other | 106,051.83 | 106,051.83 | 5,104,244.98 | 5,210,296.81 | |||||
| C. Profit distribution | 65,311,049.43 | -268,120,216.55 | -202,809,167.12 | -29,963,213.00 | -232,772,380.12 | ||||
| a. Appropriation of surplus reserves | 65,311,049.43 | -65,311,049.43 | |||||||
| b. Extraction of general risk provisions | |||||||||
| c. Dividend to owners (or shareholders) | -202,809,167.12 | -202,809,167.12 | -29,963,213.00 | -232,772,380.12 | |||||
| D. Internal carry-over of owners’ equity | 66,535.00 | 66,535.00 | 66,535.00 | ||||||
| a. Carry-over of other comprehensive income to retained earnings | 66,535.00 | 66,535.00 | 66,535.00 | ||||||
| 4. Closing balance of current period | 922,059,896.00 | 888,159,916.65 | 45,695,815.00 | -2,157,502.61 | 417,370,506.33 | 4,572,660,487.98 | 6,752,397,489.35 | 1,149,304,061.85 | 7,901,701,551.20 |
| Item | 2019 | ||||||||
| Equity Attributable to the Owners of Parent Company | Non-controlling interests | Total owners' equity | |||||||
| Share capital | Capital reserve | Deduct: Treasury stock | Other comprehensive income | Surplus reserve | Undistributed profits | Subtotal | |||
| 1. Closing balance of prior period | 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 |
| add: Changes in accounting policies | -481,544.75 | -481,544.75 | -645.73 | -482,190.48 | |||||
| Other | -91,554.12 | 91,554.12 | |||||||
| 2. Opening balance of current period | 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 |
| 3. Changes of current period | 76,552,927.00 | 728,898,529.92 | 7,921,322.05 | 79,268,090.83 | 954,064,473.85 | 1,846,705,343.65 | 387,280,330.80 | 2,233,985,674.45 | |
| A. Total comprehensive income | 7,921,322.05 | 1,199,347,355.96 | 1,207,268,678.01 | 298,895,247.18 | 1,506,163,925.19 | ||||
| B. Capital contributed and reduced by owners | 76,552,927.00 | 728,898,529.92 | 805,451,456.92 | 92,189,157.70 | 897,640,614.62 | ||||
| a. Common stock invested by owners | 76,552,927.00 | 709,853,069.86 | 786,405,996.86 | 94,885,588.06 | 881,291,584.92 | ||||
| b. Amount of share-based payment included in the owner's equity | 22,783,015.06 | 22,783,015.06 | 22,783,015.06 | ||||||
| c. Other | -3,737,555.00 | -3,737,555.00 | -2,696,430.36 | -6,433,985.36 | |||||
| C. Profit distribution | 79,268,090.83 | -245,282,882.11 | -166,014,791.28 | -3,804,074.08 | -169,818,865.36 | ||||
| a. | 79,268,090.83 | -79,268,090.83 | |||||||
| Appropriation of surplus reserves | |||||||||
| b. Extraction of general risk provisions | |||||||||
| c. Dividend to owners (or shareholders) | -166,014,791.28 | -166,014,791.28 | -3,804,074.08 | -169,818,865.36 | |||||
| 4. Closing balance of current period | 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 |
Change Statement of Owner's Equity of Parent Company
January-December, 2020
Unit: yuan Currency: RMB
| Item | 2020 | ||||||
| Share capital | Capital reserve | Deduct: Treasury stock | Other comprehensive income | Surplus reserve | Undistributed profits | Total owners' equity | |
| 1. Closing balance of prior 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 |
| add: Changes in accounting policies | |||||||
| Other | |||||||
| 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 of current period | -244,500.00 | 9,717,863.79 | -24,992,935.00 | -5,959,184.34 | 65,311,049.43 | 384,990,277.76 | 478,808,441.64 |
| A. Total comprehensive income | -5,959,184.34 | 653,110,494.31 | 647,151,309.97 | ||||
| B. Capital contributed and reduced by owners | -244,500.00 | 9,717,863.79 | -24,992,935.00 | 34,466,298.79 | |||
| a. Common stock invested by owners | |||||||
| b. Amount of share-based payment that included in the owner's equity | -244,500.00 | 9,717,863.79 | -24,992,935.00 | 34,466,298.79 | |||
| C. Profit distribution | 65,311,049.43 | -268,120,216.55 | -202,809,167.12 | ||||
| a. Appropriation of surplus reserves | 65,311,049.43 | -65,311,049.43 | |||||
| b. Dividend to owners (or shareholders) | -202,809,167.12 | -202,809,167.12 | |||||
| c. Other | |||||||
| 4. Closing balance of current period | 922,059,896.00 | 885,579,203.34 | 45,695,815.00 | -337,193.02 | 417,370,506.33 | 2,584,347,772.18 | 4,763,324,369.83 |
| Item | 2019 | ||||||
| Share capital | Capital reserve | Deduct: Treasury stock | Other comprehensive income | Surplus reserve | Undistributed profits | Total owners' equity | |
| 1. Closing balance of prior period | 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 | |||||
| Other | -91,554.12 | -823,987.07 | -915,541.19 | ||||
| 2. Opening balance of current period | 845,751,469.00 | 160,705,065.92 | 70,688,750.00 | -1,616,565.70 | 272,791,366.07 | 1,655,187,468.27 | 2,862,130,053.56 |
| 3. Changes of current period | 76,552,927.00 | 715,156,273.63 | 7,238,557.02 | 79,268,090.83 | 544,170,026.15 | 1,422,385,874.63 | |
| A. Total comprehensive income | 7,238,557.02 | 789,452,908.26 | 796,691,465.28 | ||||
| B. Capital contributed and reduced by owners | 76,552,927.00 | 715,156,273.63 | 791,709,200.63 | ||||
| a. Common stock invested by owners | 76,552,927.00 | 692,373,258.57 | 768,926,185.57 | ||||
| b. Amount of share-based payment that included in the owner's equity | 22,783,015.06 | 22,783,015.06 | |||||
| C. Profit distribution | 79,268,090.83 | -245,282,882.11 | -166,014,791.28 | ||||
| a. Appropriation of surplus reserves | 79,268,090.83 | -79,268,090.83 | |||||
| b. Dividend to owners (or shareholders) | -166,014,791.28 | -166,014,791.28 | |||||
| c.Other | |||||||
| 4. Closing 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 |
III. Basic Information of the Company
1. Overview of the Company
Approved by the People's Government of Liaoning Province, Wellhope Foods Co., Ltd. (former nameLiaoning Wellhope Agri-Tech Joint Stock, hereinafter referred to as the Company) is a limited liabilitycompany founded by 23 natural persons, including Jin Weidong, Ding Yunfeng, etc., which wasregistered in the Administrative Bureau of Industry and Commerce of Liaoning Province on March 27,2003. The head office of the Company is located in Shenyang, currently it holds the business licensewith the number of 9121000074712989XU and the registered capital of RMB 922.06 million, registeredaddress (head office)--No. 169, Huishan Street, Shenbei New District, Shenyang, Liaoning Province. JinWeidong is the legal representative.The primary business of Wellhope covers feed, feed raw material trade, broiler integration, swineraising. The business scope of its parent company covers feed and feed additives processing, marketing;grain purchase (self-use), sales of feed raw materials, poultry and livestock raising, seawater andfreshwater aquaculture, agricultural and sideline products processing, enterprise management service,supply chain management, information services (internet information services only), ordinary roadfreight (the business activities that need to be approved by the laws, shall receive the approval ofrelevant authorities).These financial statements have been approved to be disclosed by the 2nd board meeting of the 7thSession of Board of Directors on March 29, 2021.
2. Scope of the consolidated financial statements
The scope of the Company's consolidated financial statements is determined on the basis of control, allthe controlled subsidiaries are included in the consolidated financial statements.The changes in the scope of the consolidated financial statements are shown in the table below.A. The subsidiaries which are newly included in the consolidation scope in the reporting period
| Company | Way of obtaining |
| Yangling Wellhope Agriculture and Animal Husbandry Company | Combination under different control |
| Yixian Dingli Hesheng Livestock and Poultry Feeding Company | Combination under different control |
| Yixian Weijing Livestock and Poultry Feeding Company | Combination under different control |
| Hebei Hetai Livestock and Poultry Farming Company | Combination under different control |
| Yixian Hekang Agri-Tech Company | Combination under different control |
| Dunhua Wellhope Agri-Tech Company | Combination under different control |
| Dunhua Fengda Agriculture and Animal Husbandry Development Company | Combination under different control |
| Anhui Wellhope Haoxiang Swine Breeding Company | Invested |
| Anhui Wellhope Food Company | Invested |
| Anyang Wellhope Agriculture and Animal Husbandry Company | Invested |
| Hebei Taihang Wellhope Food Company | Invested |
| Hebei Taihang Wellhope Agri-Tech Company | Invested |
| Shenyang Xiangmai Electronic Commerce Company | Invested |
| Chifeng Wellhope Fuxinyuan Food Company | Invested |
| Hongkong Expert Trading Company | Invested |
| Hainan Expert Trading Company | Invested |
| Liaoning Qingyuan Wellhope Agriculture and Animal Husbandry Company | Invested |
| Nanyang Wellhope Cattle Industry Sci-Tech Company | Invested |
| Fuzhou Wellhope Xingyuan Animal Husbandry Development Company | Invested |
| Tianjin Fullyond Supply Chain Company | Invested |
| Daqing Wellhope Food Company | Invested |
| Zhumadian Wellhope Agricultural Development Company | Invested |
| Datong Hejia Agriculture and Animal Husbandry Company | Invested |
| Shijiazhuang Hejia Agriculture and Animal Husbandry Company | Invested |
| Fuxin Wellhope Agriculture and Animal Husbandry Company | Invested |
| Dalian Hongtu Agri-tech Company | Invested |
| Shandong Heyuan Agri-tech Company | Invested |
| Wafangdian Huinong Poultry Industry Company | Invested |
| Luoyang Wellhope Agriculture and Animal Husbandry Company | Invested |
| Tongxu Wellhope Agriculture and Animal Husbandry Company | Invested |
| Gongzhuling Wellhope Swine Farming Company | Invested |
| Lishu Wellhope Ecological Farming Company | Invested |
| Kaifeng Jiufeng Agriculture and Animal Husbandry Company | Invested |
| Company | Reason of excluding from the consolidation scope |
| Shenyang Tianjingde Trading Company | Cancelled |
| Changtu Wellhope Feed Mill | Cancelled |
| Xi'an Linfeng Shengyi Trading Company | Transferred |
V. Important Accounting Policies and Accounting Estimates
The following important accounting policies and accounting estimates of the Company are formulatedin accordance with the Accounting Standards for Business Enterprises. The business that does notmentioned is subject to relevant accounting policies in the Accounting Standards for BusinessEnterprises.
1. Declaration about compliance with Accounting Standards for Business EnterprisesThe financial statements prepared by the Company are in line with the requirements of AccountingStandards for Business Enterprises, which truly and completely reflect the financial position, operatingresults, changes in shareholders' equity, cash flow, and other relevant information during the reportingperiod.
2. Accounting period
The Financial Year of the Company starts from January 1 and ends on December 31 of the Gregoriancalendar.
3. Operating cycle
The Company takes a 12-month operating cycle.
4. Bookkeeping base currency
RMB
5. Accounting arrangement methods for business combination under the same control or the
different control
(1). Accounting arrangement methods for business combination under the same controlThe Company adopts pooling of interest method to deal with the accounting of business combination,which is under the same control.On the date of combination, the assets and liabilities acquired by the Company in business combinationunder the same control shall be measured according to the book value of assets and liabilities of thecombining party in the consolidated financial statements of the final controlling party. The share of thebook value of the owner's equity held by the combining party, which is owned, by the final controllingparty in the consolidated statement of the final controlling party is regarded as the initial investmentcost of long-term equity investment in the individual financial statements. The balance between initialcost of investment of long-term equity investment and paid combining consideration (including paidcash, non-cash assets transferred, book value of occurred or assumed debt as well as the total facevalue of issued stocks), capital reserve (equity premium or capital premium) shall be adjusted; If thebalance of capital reserve (equity premium or capital premium) is not sufficient for offset, the surplusreserves and undistributed profit shall be offset successively.
(2). Accounting arrangement methods for business combination under the different controlThe Company adopts acquisition method to deal with the accounting of business combination, which isunder the different control.
① The identifiable assets, liabilities and contingent liabilities acquired in the business combinationunder the different control are measured at fair value. Based on the fair value of assets, liabilitiesincurred or assumed and issued equity securities paid out as the combining consideration on theacquisition date, the balance between the fair value and the book value of the Company is includedinto current gains and losses.
② Combined cost shall be recognized according to the following conditions respectively:
(A) For the business combination realized by one-time transaction, the combined costs shall berecognized by the sum of the fair values, on the acquisition date, of the assets paid, the liabilitiesoccurred or assumed and the equity securities issued by the Company to obtain the control right on theacquiree and the contingent consideration complying with the recognition conditions. Combined cost isinitial investment cost of such long-term equity investment.(B) For business combination realized step by step through multiple exchange transactions, thecombined cost shall be the sum of the amount of equity investments held prior to the acquisition datethat are re-measured at fair value on the acquisition date and the investment cost newly increased onthe acquisition date. The long-term equity investment in individual financial statements is the sum ofthe book value of the equity investment held before the acquisition date and the investment cost newlyincreased on the acquisition date. Exclude package deal.
③ The Company allocates the combined cost between the identifiable assets and liabilities acquiredon the acquisition date.(A) Where other assets other than intangible assets obtained from the Acquiree in the businesscombination (not only finite to the assets which have been originally recognized by the Acquiree), thefuture economic benefits are expected to flow into the Company and the fair values reliably measured,they shall be separately recognized and measured at the fair values.(B) Where the fair value of the intangible assets of the Acquiree acquired by the Company in businesscombination can be reliably measured, it shall be separately recognized and measured at the fair value.(C) Where the acquiree's liabilities, other than contingent liabilities, acquired by the Company inbusiness combination, are expected to result in the outflow of economic benefits from the Companyand the fair value can be reliably measured, they shall be separately recognized and measured at thefair value.(D) Where the fair value of the contingent liabilities of the Acquiree acquired by the Company inbusiness combination can be reliably measured, they shall be separately recognized as liabilities andshall be measured at the fair values.(E) When the Company allocates the cost of business combination and confirms that it has acquiredidentifiable assets and liabilities in the combination, it shall not consider the goodwill and deferredincome tax items that have been recognized by the Acquiree before the combination.
④ Disposal of the balance of the business combination cost and the share of the fair value of the
identifiable net assets obtained from the Acquiree in the combination.(A) The balance between the business combination costs greater than the share of fair value of theidentifiable net assets obtained from the Acquiree in the combination, shall be recognized as goodwill.(B) The balance between the business combination cost less than the share of fair value of theidentifiable net assets obtained from the Acquiree in the combination shall be disposed pursuant to thefollowing provisions.(a) The measurement of the fair values of the identifiable assets, liabilities and contingent liabilitiesobtained from the Acquiree as well as the combination costs shall be reviewed;(b) After the review, if the combined costs are still less than the fair value share of the identifiable netassets obtained from the Acquiree in the combination, the balance shall be included into the currentgains and losses.
(3) Disposal of relevant expenses accrued due to business combination by the Company
① All direct related expenses accrued due to business combination of the Company (including audit,legal service, assessment consultation and other agency expense and other relevant administrativeexpenses accrued due to business combination), shall be included into current gains and losses whenaccruing.
② The commission and service fee paid by the Company for issuing debt securities for the merger ofenterprise shall be included in the initial measurement amount of debt securities.(A) If the bond is issued at the discount or par value, the amount of discount will be increased.(B) If the bond is issued at premium, the premium amount shall be reduced in this part of expenses.
③ The commission and service fee paid by the Company for issuing equity securities as considerationfor the business combination shall be included in the initial measurement amount of equity securities.(A) When equity securities are issued at the premium, the cost shall be deducted from the capitalreserve (equity premium).(B) When equity securities are issued at par value or at discount, the retained earnings shall be writtendown from the fee.
6. Preparation methods for consolidated financial statements
(1) Uniform accounting policy and accounting period
All the accounting policies and accounting period adopted by subsidiaries included in the consolidatedfinancial statements shall be consistent with the Company. In case of any inconsistency, adjustmentaccording to the accounting policies and accounting period is necessary when preparing consolidatedfinancial statements.
(2) Preparation methods for consolidated financial statements
Based on the financial statements of the Company and its subsidiaries, according to other relevantinformation, the parent company prepares consolidated financial statements after adjusting thelong-term equity investment in the subsidiaries according to the equity method to offset the impact of
internal transactions among the Company and its subsidiaries on the consolidated financial statements.
(3) The reflection of excess deficit of subsidiaries in consolidated financial statementsIn the consolidated financial statements, if the current loss shared by the parent company exceeds itsshare of the owner's equity of the subsidiary company at the beginning of the period, the balance ofwrite-downs shall be attributed to the owner's equity of the parent company (undistributed profits). Ifthe current loss shared by the non-controlling shareholders of the subsidiaries exceeds its share of theowner's equity of the subsidiary company at the beginning of the period, the balance shall continuallyoffset the non-controlling interests.
(4) Disposal of increased or decreased number of subsidiaries during the report period
①Disposal of increased number of subsidiaries during the report period
(A) Disposal of increased number of subsidiary due to business combination under the same controlduring the report periodDuring the report period, if the number of subsidiary increases due to business combination under thesame control, the Company shall adjust the opening balance of consolidated balance sheet, take theincome, expenses and profit of such subsidiary from the beginning to the end of combination into theconsolidated income statement, and the cash flow of the subsidiary from the acquisition date to theend of the report period shall be included in the consolidated cash flow statement.(B) Disposal of increased number of subsidiary due to business combination under the different controlduring the report periodDuring the report period, if the number of subsidiaries increases due to business combination underthe different control, the Company shall not adjust the opening balance of consolidated balance sheet,take the income, expenses and profit of such subsidiary from the acquisition date to the end of thereport period into the consolidated income statement, and the cash flow of the subsidiary from theacquisition date to the end of the report period shall be included in the consolidated cash flowstatement.
②Disposal of subsidiary during the report period
Where the company disposes a subsidiary during the report period, the opening balance of theconsolidated balance sheet shall not be adjusted, take the income, expenses and profit of suchsubsidiary from the beginning of the beginning to the disposal date into the consolidated profitstatement, and include the cash flow of such subsidiary into the consolidated cash flow statement, andthe cash flow of the subsidiary from the beginning to the disposal date shall be included in theconsolidated cash flow statement.
7. Recognition standard of cash and cash equivalents
Cash shall include cash on hand of the Company, as well as bank deposit and other monetary funds thatcan be used for payment at any time.The investments with short term (generally refer to three months from the acquisition date), high
liquidity, convenience to convert into known amount of cash and with low risk of change in valueowned by Company shall be recognized as cash equivalent.
8. Foreign currency transactions and foreign currency statement translation
(1) Accounting methods of foreign currency transactions
①Initial recognition of foreign currency transaction
For foreign currency transactions, the Company shall convert the amount of foreign currency into theamount of the book-keeping base currency according to the spot exchange rate (intermediate price)announced by the People's Bank of China on the date of the transaction. Of which, for foreign currencyexchange or related transactions, the Company shall convert according to the exchange rate on the dateof the transaction.
②Adjustment or settlement of balance sheet date or settlement date
On the balance sheet date or settlement date, the Company shall dispose the foreign currencymonetary items and foreign currency non-monetary items according to the following methods:
(A) Accounting arrangement principle for foreign currency monetary itemFor foreign currency monetary items, on the balance sheet date or settlement date, the Companyadopts spot exchange rate (intermediate price) for conversion on the balance sheet date or settlementdate to adjust the amount of the accounting base currency of foreign currency monetary items causedby exchange rate fluctuations, and treat them as exchange balances. Among them, the exchangebalance between foreign currency loans related to the acquisition, construction or production of assetseligible for capitalization is included in the cost of assets eligible for capitalization. Other balance ofexchange shall be included into current financial expense.(B) Accounting arrangement principle for foreign currency non-monetary item(a) For the foreign non-monetary currency asset measured at historical cost, the Company shall convertat spot rate (intermediate price) on transaction date with unchanging its original recording currencyamount and without exchange balance.(b) For inventory measured at a lower cost between the cost and net realizable value, if the netrealizable value is recognized in foreign currency, the Company first converts the net realizable valueinto the accounting standard currency, and then compares it with the inventory cost reflected by theaccounting standard currency when determining the end value of the inventory.(c) For non-monetary items measured at fair values, if the fair value at the end of the period is reflectedin foreign currency, the Company shall convert the foreign currency into the amount of recordingcurrency based on the spot exchange rate on the day when fair values are recognized, then comparethem with the original amount of recording currency, and the balance shall be treated as gains andlosses from the changes in fair value and included into current gains and losses.
(2) Accounting arrangement methods for foreign currency statement translation
①The Company shall conduct translation of the financial statements of overseas operations as the
following methods:
(A) The asset and liability items in the balance sheets shall be translated at a spot exchange rate on thebalance sheet date, among the equity items of owner, except for the items as “undistributed profits”,other items shall be translated at the spot exchange rate at the time when they are incurred.(B) The income and expense items in the profit statements shall be c translated at the spot exchangerate of the transaction date, or at a spot exchange rate which is recognized through a systematic andrational method and which is approximate to the spot exchange rate on the transaction date.The balance in the financial statement of foreign currency translated by the above-mentioned methodsshall be listed in the owners’ equity item "Other Comprehensive Income" of consolidated balancesheet.
②The Company shall translate the financial statements of overseas operations in hyperinflationeconomy according to the following methods:
(A) The Company shall restate the balance sheet items by utilizing the general price index, restate theitems of the income statement by utilizing the variation of the general price index, and then translatethem at the spot exchange rate on the recent balance sheet date.(B) If an overseas business is no longer situated in the hyperinflationary economy, the Company shallstop the restatement and shall translate the restated financial statements at the price of the cessationdate.
③When the Company disposes any overseas operation, shall translate the balance of foreign currencyfinancial statements related to the overseas business as shown below under the owner's equity items inthe balance sheet, and the balance shall be transferred from the owner's equity items and disposed ascurrent gains and losses; When the Company disposes part of the overseas operations, shall calculatethe balance according to the proportion of the disposal of foreign currency financial statements, andrecord the balance as the current gains and losses.
9. Financial instrument
The financial instrument refers to a contract that forms the financial assets of one party and thefinancial liabilities or equity instruments of the other party.
(1) Classification of financial instruments
①Classification of financial assets
According to the business model of financial assets management and the contractual cash flowcharacteristics of financial assets, the Company classifies financial assets into the following threecategories :(A) financial assets measured at amortized cost; (B) financial assets measured at fair valueand the changes included in other comprehensive income (including financial assets designated to bemeasured at fair value and the changes are included in other comprehensive income);(C) financialassets measured at fair value and the changes recorded in current gains or losses.
②Classification of financial liabilities
According to business characteristics and risk management requirements, the Company divides thefinancial liabilities into the following two categories: (A) The financial liabilities measured at fair valueand the changes included in current gains and losses(including trading financial liabilities and thefinancial liabilities designated to be measured at fair value and of the changes included in current gainsor losses); (B) Other financial liabilities.
(2) Recognition basis and measurement method of financial instruments
①Recognition basis of financial instruments
When becoming one party of financial instrument contract, the Company shall confirm a financial assetor financial liability.
②Measurement method of financial instruments
(A)Financial assetsFinancial assets shall be measured at fair value when they are initially recognized.For financial assets measured at fair value and the changes booked into current gains or losses, relevanttransaction expenses shall be directly recorded into current gains or losses; for other financial assets,relevant transaction expenses shall be included in the initial recognized amount. Accounts receivable ornotes receivable arising from selling products or providing labor services that do not contain asignificant financing component or do not consider the financing component of contracts that do notexceed one year, shall take the amount of consideration to which it is expected to be entitled as theinitially recognized amount.(a) Financial assets measured at amortized costAfter the initial recognition, the real interest method shall be adopted to implement follow-upmeasurement of such financial assets at amortized cost. Gains or losses of financial assets measured atamortized cost and not belong to part of any hedging relationship shall be recorded into current gainsand losses when recognition is terminated, reclassified, amortized or recognized as impairmentaccording to the real interest method.(b) Financial assets measured at fair value and the changes included in other comprehensive incomeAfter the initial recognition, such financial assets shall be subsequently measured at fair value. Theimpairment loss or gain, exchange gain or loss and the interest calculated by the real interest methodshall be recorded into current gains or losses, other gains or losses shall be booked into othercomprehensive income. When the recognition is terminated, the accumulated gains or losses bookedinto other comprehensive income before shall be transferred out from other comprehensive incomeand booked into current gains or losses.Where the Company designates part of non-trading equity instrument investments as the financialassets that measured at fair value and the changes included in other comprehensive income, relevantdividend income of such financial assets shall be included in current gains or losses, and changes in fair
value shall be included in other comprehensive income. When the recognition is terminated, theaccumulated gains or losses recorded in other comprehensive income shall be transferred to retainedincome, and not recorded in current gains or losses.(c) Financial assets measured at fair value and the changes recorded in current gains and losses.Besides the financial assets measured at amortized cost and those measured at fair value and thechanges included in other comprehensive income, the Company classifies other financial assets as theassets measured at fair value and the changes included in current gains or losses.In addition, in the initial recognition, in order to eliminate or significantly reduce accountingmismatches, the Company designates some financial assets as the financial assets measured at fairvalue and the changes recorded into current gains or losses. For such financial assets, the Companyadopts fair value for follow-up measurement, and the changes in fair value are recorded into currentgains or losses.(B) Financial liabilities(a) Financial liabilities measured at fair value and the changes included in current gains or lossesTrading financial liabilities (including derivative instruments belonging to financial liabilities) shall besubsequently measured in accordance with the fair value, and the changes in fair value shall berecorded into current gains or losses except for those related to hedge accounting. For the financialliabilities that are designated to be measured at fair value and the changes included in current gains orlosses, in case the changes in the fair value of liabilities are caused by the changes in the Company'sown credit risk shall be included in other comprehensive income, and when terminates such liabilities,the accumulated changes in fair value shall be transferred to retained earnings. Other changes in fairvalue shall be booked into current gains or losses.(b) Financial liabilities measured at amortized costBesides the financial liabilities that do not meet the condition of derecognition or the financial liabilitiesformed by transferred financial assets or financial guarantee contract, other financial liabilities shall bemeasured at amortized cost, gains or losses arising from the termination of recognition or amortizationshall be booked into current gains or losses.
(3) The recognition basis and measurement method of financial assets transfer
If the Company transfers almost all the risks and rewards in the ownership of financial assets, it shallterminate to recognize the financial assets and separately recognize the rights and obligationsgenerated or retained in the transfer as assets or liabilities; if almost all the risks and rewards in theownership of financial assets are retained, the transferred financial assets shall continue to berecognized. If the Company neither transfers nor retains almost all the risks and rewards on theownership of the financial asset, it shall deal with the following situations:
① If it does not retain control of the financial asset, the recognition of the financial asset shall beterminated, and the rights and obligations generated or retained in the transfer shall be separately
recognize as assets or liabilities;
② If the control of the financial asset is retained, the relevant financial asset shall be recognizedaccording to the phases of transferred financial asset, and relevant liabilities shall be recognizedaccordingly.
(4) Terminating the recognition of financial liabilities
When the current obligation of the financial liability (or part thereof) has been discharged, theCompany shall terminate the recognition of such financial liability (or part thereof) and record thedifference between its book value and the consideration paid (including non-cash assets transferred orliabilities assumed) into the current gains or losses.
(5) Offsetting financial assets and financial liabilities
Financial assets and financial liabilities shall be listed separately in the balance sheet and shall not beoffset mutually. However, if the following conditions are met at the same time, the net offset shall beshown in the balance sheet:
①The Company has the legal right to offset recognized amount, and such legal right is currentlyenforceable.
②The Company plans to implement net settlement, or simultaneously sell off the financial assets andliquidate such financial liabilities.
(6) Equity instrument
Equity instruments are the contracts that prove the ownership of the residual equity in the Company'sassets after deducting all liabilities. Instruments issued (including refinancing), repurchased, sold orwritten off by the Company shall be taken as the disposal of changes in equity. The company does notrecognize changes in the fair value of equity instruments.Transaction expenses associated with equity transactions shall be deducted from equity.The Company shall take the distribution of equity instrument holders as profit distribution, and thestock dividends paid will not affect the total equity of shareholders.
(7) The method of recognizing the fair value of financial instruments
When implement initial recognition, if the fair value of the financial asset or financial liability isdetermined by quoting the same asset or liability in an active market or by other means other thanvaluation techniques of observable market data, the Company will defer the difference between thatfair value and the trading price. After the initial recognition, the Company recognizes the deferreddifference as the gain or loss of the corresponding accounting period based on the degree of change ofa factor in the corresponding accounting period.
(8) Impairment of financial assets
Regarding the financial assets measured at amortized cost and the debt instrument investmentmeasured at fair value and the changes recorded in other comprehensive income, the Companyrecognizes loss provision based on expected credit losses.
①Recognition method of impairment provision
(A)General methodAt each balance sheet date, the Company measures the expected credit losses of financial instrumentsat different stages. If the credit risk of the financial instrument has not significantly increased since itsinitial recognition, it is in the first stage. The Company measures the loss provision according to theexpected credit loss within the next 12 months. If the credit risk of the financial instrument hassignificantly increased since its initial recognition but no credit impairment has occurred, it is in thesecond stage, the Company measures the loss provision according to the expected credit loss of theinstrument during the whole period. If the financial instrument has experienced credit impairmentsince its initial recognition, it is in the third stage, and the Company measures the loss provisionaccording to the expected credit loss of the instrument during the whole period. For the financialinstruments (such as time deposit in commercial banks with high credit rating, financial instrumentswith external credit rating of "investment grade" or above), that have lower credit risk in the balancesheet date, assuming that the credit risk has not increased significantly since the initial recognition, theCompany measures the loss provision according to expected credit loss within the next 12 month.(B)Simplified methodFor accounts receivable and revenue-related notes receivable that do not contain a significant financingcomponent or do not consider the financing component of contracts that do not exceed one year, theCompany measures the loss provision in accordance with the expected credit loss for the entireduration.
②Criteria for determining whether credit risk has increased significantly since the initial recognitionIf the probability of default of the financial asset recognized on the balance sheet date is significantlyhigher than the probability of default at the time of initial recognition, the credit risk of the financialasset is proved to be significantly increased.No matter which way used by the Company to assess whether a significant increase in credit risk, if thecontract payment is overdue more than 30 (included), usually can presume the credit risk of financialassets increase significantly, unless rational and evidence-based information is available to be obtainedby the company at reasonable cost to prove that the credit risk does not increase significantly evenafter 30 days of delayExcept for special cases, the Company uses the change of default risk within the next 12 months as areasonable estimate of default risk in the whole duration to determine whether the credit risk hasincreased significantly since the initial recognition.
③ The combination method and determination basis of credit risk assessment based on combinationThe Company respectively evaluates the credit risks of notes receivable, accounts receivable and otherreceivables with the following characteristics. Such as: the receivables in dispute with the other party orinvolving litigation or arbitration; receivables with a clear indication that the debtor is likely to be
unable to repay.When it is impossible to evaluate the information of the expected credit loss of each financial asset at areasonable cost, the Company divides the receivables into several portfolios according to the credit riskcharacteristics and calculates the expected credit loss based on the portfolios.
| Portfolio | Accrual method |
| Bank's acceptance bill, commercial acceptance bill | For the notes receivable divided into portfolios, the expected credit loss shall be calculated based on the default risk exposure and the expected credit loss rate of the entire duration by referring to the experience of past credit losses and combining the current situation and the forecast of future economic conditions. It will not accrue the allowance for doubtful accounts of bank’s acceptance bill |
| Aging | For the accounts receivable divided into aging portfolios, the Company shall, by referring to the experience of past credit loss and combining with the current situation and the prediction of future economic situation, prepare a table comparing the aging of accounts receivable with the expected credit loss rate of the whole period to calculate the expected credit loss. |
| Other | For receivables that shall be paid by the subsidiary included in the scope of consolidation, the Company shall, by referring to the experience of past credit loss and combining with the current situation and the prediction of future economic situation, prepare a table comparing the aging of accounts receivable with the expected credit loss rate of the whole period to calculate the expected credit loss. |
price reserves
① Recognition basis of net realizable value of inventory
(A) For merchandise inventory (or finished products) for sale including materials for direct sale, duringthe normal production and operation, the net realizable value shall be recognized by the amount ofestimated sales price of the inventory deducting the estimated selling expenses and related taxes anddues.(B) The materials inventory needs to be processed, during the normal process of production andmanagement, the estimated sale price of the finished products minus the estimated costs whenfinished the works, the estimated selling expenses and related tax payments, the net realizable valuecan be recognized.(C) For the inventory hold to execute sale contract or labor contract, its net realizable value shall becalculated based on the contract price; In case inventory quantity hold by the Company is more thanthe order quantity of the sale contract, the net realizable value of the exceeding part inventory shall becalculated based on general sale price.(D) But for materials held for production, etc., if the net realizable value of finished products made fromthe materials is higher than the cost, the materials shall still be measured at the cost; If the decline ofmaterial prices indicates that the net realizable value of finished products is lower than the cost, thematerials can be measured based on net realizable value.(E) For expendable biological Assets: on the balance sheet date, the expendable biological assets shallbe measured at the lower of cost and net realizable value, and the falling price reserves shall becalculated by the same way as that for recognizing the falling price reserves of inventory. If theinfluencing factors of impairment have disappeared, the amount of write-down shall be recovered andthe amount of write-down shall be reversed back and recorded into the current gains or losses. If theCompany changes the use of consumable biological assets, the cost after the change of use shall bedetermined by the book value at the time of the change of use.
②Accrual method of inventory falling price reserves
The Company shall accrue inventory falling price reserves according to the lower of cost and netrealizable value of a single inventory item. For those inventories with large number and low unit price,the falling price reserves for inventory shall be accrued according to the categories.
(4) Inventory system
The Company adopts perpetual inventory system for the stock inventory and regularly conductsphysical inventory.
(5) The amortization method for revolving materials
① The amortization method of low-value consumption goods
The Company adopts fifty percent amortization method for ring mould and wooden pallets, andone-time amortization method for other low-value consumables.
② Amortization method of packing material
The Company shall conduct amortization by once write-off process in case of receiving packingmaterials.
14. Contract assets
The contract assets refer to the company's rights to charge consideration for product that hastransferred to the customer, and such rights shall depend on factors other than the passage of time.The Company's contract assets mainly include completed and unsettled assets, and quality retentionmoney. The contract assets and contract liabilities under the same contract shall be shown on a netamount, and the contract assets and contract liabilities under different contracts shall not be offset.
15. Available-for-sale assets
(1) Available-for-sale
① Range of non-current assets and disposal group of available-for-sale assetsWhen the Company recovers its book value mainly by selling (including the exchange of non-monetaryassets with commercial substance) rather than continuing to use non-current asset or disposal group, itclassifies the non-current asset or disposal group as holding for sale.Disposal group refers to a group of assets disposed of as a whole through sale or other means intransaction, and liabilities directly related to these assets transferred in the transaction.
② Recognition condition for non-current assets and disposal group of available-for-sale assets(A) The Company shall classify the non-current assets and the disposal group that meet the followingconditions as available-for-sale assets:
According to the usual practice of selling such assets or disposal groups in similar transactions, they canbe sold immediately in the current situation.(B) They are likely to be sold, that is, the Company has made a decision on sale plan and obtaineddefinite purchase commitment, and the sale is expected to be completed within one year. They can besold with the approval of the relevant authority or regulatory authority of the Company.
③ Accounting arrangement method and reporting for non-current assets and disposal group ofavailable-for-sale assets.The Company shall measure the book value of assets and liabilities in non-current assets or disposalgroups according to relevant accounting standards before dividing non-current assets or disposalgroups into available for sale assets for the first time.When the Company initially measures or recalculates non-current assets or disposal groups held forsale on the balance sheet date, if its book value is higher than the net amount of fair value minus sellingexpenses, the book value is written down to the net amount of fair value minus selling expenses, andthe amount written down is recognized as the loss of assets impairment, which is recorded in thecurrent gains and losses, and the provision for holding impairment of assets for sale is made. For theamount of loss of impairment of assets recognized by the disposal group held for sale, it shall firstly
offset the book value of goodwill in the disposal group, and then offset proportionally the book valueaccording to the proportion of the book value of each non-current asset in the disposal group. There isno depreciation or amortization of non-current assets held for sale.The non-current assets held for sale or assets in disposal groups held for sale shall not offset each otherwith the liabilities in the disposal group held for sale and shall be shown as current assets and currentliabilities respectively.If the Company loses control of its subsidiary Company due to the sale of its investment in subsidiaryCompany or other reasons, no matter whether the enterprise retains part of equity investment afterthe sale, when the investment in subsidiary Company to be sold meets the conditions for theclassification of categories held for sale, the investment in subsidiary Company will be divided intocategories held for sale as a whole in the individual financial statements of the parent Company , and allassets and liabilities of subsidiaries will be divided into category of available-for-sale in the consolidatedfinancial statements.
(2) Discontinuing operation
Termination of business refers to a separate component of Company that meets one of the followingconditions and has been disposed of or classified as category held for sale:
① The constituent part represents an independent principal business or a principal business region;
② The constituent part is a part intended for disposal planning of a major independent business or amain business region;
③ The constituent part is a subsidiary Company specially acquired for resale.
16. Long-term equity investment
(1) Initial investment cost recognition of long-term equity investment
① The recognition of the initial investment cost of long-term equity investment formed by businesscombination can be seen in the accounting arrangement of business combination under the samecontrol and under the different control in Note 5.
② Besides the long-term equity investment formed by business combination, the initial investmentcost of the long-term equity investment obtained by other means shall be recognized in accordancewith the following provisions:
(A) For long-term equity investment acquired through paying cash, the acquisition price actually paidshall be taken as the initial investment cost. The initial investment cost includes the expenses directlyrelated to the long-term equity investment obtained, taxes and other necessary expenses.(B) The long-term equity investment obtained by issuing equity securities (equity instruments) isregarded as its initial investment cost according to the fair value of equity securities (equity instruments)issued. If there is conclusive evidence that the fair value of long-term equity investment obtained ismore reliable than that of equity securities (equity instruments) issued, the initial investment cost isrecognized on the basis of the fair value of long-term equity investment invested by investors. If the
fees directly related to the issuance of equity securities (equity instruments), including service fees andcommissions, are reduced by the issuance premium, and if the premium is insufficient to be reduced,the surplus reserve and undistributed profits are reduced in turn. Long-term equity investmentobtained by issuing debt securities (debt instruments) shall be treated by issuing equity securities(equity instruments).(C) For the long-term equity investment obtained through debt restructuring, the Company takes thefair value of the shares enjoyed by the creditor's rights into equity as its initial investment cost.(D) For long-term equity investment acquired through non-monetary assets exchange, if non-monetaryassets exchange is of commercial substance and fair value of converted assets can be reliably measured.The Company confirms its initial investment cost on the basis of fair value of converted assets, unlessthere is solid evidence that the fair value of converted assets is more reliable. If the above-mentionedconditions cannot be met, the book value of swap-out assets and related payable taxes shall be taken asthe initial investment cost of swap-in long-term equity investments.The expenses, taxes and other necessary expenses incurred by the Company directly related to theacquisition of long-term equity investment are included in the initial investment cost of long-termequity investment.No matter how the Company acquires long-term equity investment, the cash dividends or profitsdeclared but not yet paid in actual payments or consideration shall be accounted for separately as thedividend receivable and shall not constitute the cost of long-term equity investment.
(2) The subsequent measurement and loss and profit recognition method of long-term equityinvestment
① The long-term equity investment checked and calculated by cost method
(A) The Company shall adopt method to calculate the long-term equity investment can be controlled bythe invested unit, that is, investment in subsidiaries.(B) For long-term equity investment calculated by cost method, except for cash dividends or profitswhich have been declared but not yet paid in the actual price or consideration at the time ofinvestment, the Company, regardless of whether it belongs to the net profits realized by the investedunits before and after investment, shall recognize the investment income according to the cashdividends or profits declared by the invested units.
② The long-term equity investment checked and calculated by equity method(A) A Company shall adopt the equity method to account for joint venture under the joint control of theinvested entity or joint venture with significant influence.(B) For long-term equity investment adopted equity method, if the initial investment cost is more thanthe enjoyed share of net asset fair value identified by the invested units when the investment happens,the initial investment cost of the long-term equity interest investment shall not be adjusted; If the initialinvestment cost is less than the enjoyed share of net asset fair value identified by the invested units
when the investment happens, its balance shall be included into the current gains and losses and theinitial investment cost of the long-term equity investment shall be adjusted simultaneously.(C) After obtaining a long-term equity investment, the Company shall confirm the investment losses andprofits and other comprehensive income respectively and adjust the book value of the long-term equityinvestment in terms of the due owned or borne share of the net gains or losses and othercomprehensive income achieved by the invested unit. When confirming the net loss and profit of theinvested unit that shall be owned or borne, recognition shall be conducted for the net profit of theinvested unit upon adjustment based on fair value of net identifiable assets of the invested unit whenobtaining the investment. However, if the Company is unable to reasonably confirm the fair value of theidentifiable assets of the invested unit at the time of obtaining investment, the balance between thefair value of the identifiable assets of the invested unit at the time of investment and book value issmall or it is impossible to obtain relevant information of the invested unit due to other reasons, theCompany shall directly calculate and confirm the investment gains and losses on the basis of the netbook gains and losses of the invested unit. The Company shall reduce correspondingly the book value ofthe long-term equity investment according to the deserved portion of assigning cash dividends or profitdeclared by the invested unit. As for other changes concerning owner's equity of the invested unitbesides net profit or loss, other comprehensive income and profit distribution, the Company shalladjust the book value of the long-term equity investment and include them into the owner's equity.When affirming the investment income generated by the investment of joint ventures, the Companyoffsets the unrealized internal transaction income between the Company and the joint venture whichbelongs to the Company according to the share-holding ratio, and affirms the investment gains andlosses. The internal transaction loss occurred between the Company and invested unit belongs to assetsimpairment loss, which shall be recognized in full amount. The Company shall offset the unrealizedinternal transaction gains and losses between subsidiaries incorporated into combination and jointventures in accordance with the above-mentioned principles, and confirm the investment gains andlosses.When net deficiency of the invested entity that recognized to be borne, it shall be disposed as thefollowing orders: The book value of the long-term equity investment shall be offset at first. If the bookvalue of long-term equity investment is not enough to be offset, the investment losses shall berecognized continuously according to the limit that the book value of other long-term equityinvestments substantially constitutes the net investment in the invested entity, to offset the book valueof long-term receivables. After the process above, if the Company still shall share extra duty accordingto investment contract or the agreement, confirm beforehand liabilities according to estimated dutythat shall be undertaken and include it in the current investment loss. If the invested unit realizes to beprofitable in the following period, the Company shall process it in the sequence contrary to thementioned above after deducting the contribution of loss that hasn’t been recognized, write down the
book value that has been recognized to be estimated liabilities, resume other book values thatconstitute the long-term interest and long-term equity investment of the invested unit in substance andmeanwhile confirm investment income.
(3) The basis recognized to have joint control and significant influence on the invested entity
① The basis recognized to have joint control on the invested entity
The joint control refers to the control jointly performed towards certain arrangement as per the relatedagreements, and the related activities thereof must be agreed by all the participants who share thecontrol rights before making decisions. The relevant activities generally include sale and purchase ofgoods or labor services, management of financial assets, acquisition and disposal of asset, R&Dactivities and financing activities. Joint venture refers to the joint venture arrangement that theCompany has the right to arrange the net assets of the Company. The joint venture arrangement inwhich the joint venture party enjoys assets related to arrangement and bears relevant liabilities iscooperation rather than joint venture.
② The basis recognized to have significant influence on the invested entity
The significant influence refers to having the rights to participate in the decision-making of the financialand business policies of the invested entity, but not being able to control or jointly control theformulation of these policies together with other parties. When the Company is able to exert significantinfluence on the invested entity, the invested entity shall be its associated company.
17. Fixed assets
(1). Recognition conditions
The fixed assets refer to the tangible assets held for commodity production, rendering service, lease oroperation management with a service life of more than one accounting year. The fixed assets arerecognized when the following conditions are met,
① The economic interests related to the fixed assets are likely to flow into the Company;
② The costs of the fixed assets can be calculated reliably.
(2). Method of depreciation
| Item | Method of depreciation | Period of depreciation（year） | RM value rate % | Yearly depreciation % |
| Office and buildings | straight-line depreciation | 10-40 | 3 | 2.43-9.70 |
| Machinery equipment | straight-line depreciation | 10 | 3 | 9.70 |
| Transportation equipment | straight-line depreciation | 4 | 3 | 24.25 |
| Other equipment | straight-line depreciation | 5 | 3 | 19.40 |
② Pricing method of fixed assets under finance lease
At the beginning of the lease period, the Company shall regard the lower of the fair value of leasedassets and the present value of the minimum lease payment on the lease start date and the initialdirect expenses incurred as the accounting value of the financing leased assets, the lowest leasepayment as the value of the long-term accounts payable, and the balance between the lower of the fairvalue of leased assets and the present value of the minimum lease payment on the lease start date asthe accounting value of the financing leased assets and the minimum rental payments as unrecognizedfinancing cost. Unrecognized financial charges shall be amortized to each period in lease term accordingto effective interest method.
③ Method for depreciation of fixed assets under finance lease
The Company shall adopt the depreciation policy consistent with owned fixed asset to accrue leasingasset depreciation. If it is reasonable to be certain that the lessee will obtain the ownership of theleasing asset when the lease term expires, the leasing asset shall be accrued depreciation within itsservice life. If it is not reasonable to be certain that the lessee shall obtain the ownership of the leasingasset at the expiry of the lease term, the leasing asset shall be accrued depreciation within the shorterone between the lease term and the service life of leasing asset.
18. Construction in progress
(1) Category of construction in process
Construction in process shall be calculated separately according to the approved projects
(2) The standard and time point for construction in process carried down fixed assetsAll expenditures of the construction in progress that incurred before it reaches the estimatedserviceable condition shall be regarded as entry value of the fixed assets. The self-operating engineeringshall be measured according to direct materials, direct wages, direct mechanical construction costs, etc.;Package project is measured according to the payable project price; The borrowing expenses that meetthe capitalization conditions and occur before the project under borrowing reaches its intended usablestate shall be capitalized and included in the cost of the project under construction.If the fixed assets have reached the intended usable state but have not yet completed the final accounts,the Company shall, from the date of reaching the intended usable state, determine its cost according tothe project budget, cost or actual cost of the project, as well as the estimated value, transfer it to thefixed assets, and calculate the depreciation of the fixed assets in accordance with the Company's fixedassets depreciation policy; After final account is completed, the Company shall adjust the originalprovisionally estimated value according to actual cost, but not adjust the previously accrued amount ofdepreciation.
19. Borrowing costs
(1) Range of the borrowing costs
The borrowing cost of the Company shall include interest on borrowings, amortization of discount or
premium, auxiliary expenses, and exchange balance incurred from foreign currency borrowings.
(2) Recognition principle of borrowing costs
Where the incurred borrowing cost of the Company can be directly attributable to the acquisition andconstruction or production of assets eligible for capitalization, it shall be capitalized and reckoned in thecosts of relevant assets. Other borrowing costs shall be recognized as costs on the basis of the actualamount accrued, and shall be included into current gains and losses.The term "assets eligible for capitalization" shall refer to the fixed assets, investment real estate,inventories and other assets, of which the acquisition and construction or production may take quite along time to get ready for its intended use or for sale.
(3) Recognition of the time period for capitalization of the borrowing cost
① Recognition of the time point for capitalization of the borrowing cost
After assets expenditures and the borrowing expenses have happened, the necessary acquisition andconstruction or production activities have already started in order to reach the pre-recognized usable ormarketable state for the assets, the borrowing expenses can begin capitalization. The asset expensesshall include the cash, transferred non-cash assets or expenses that bearing debts paid for theacquisition and construction or production for assets eligible for capitalization
② Recognition of the suspending time point for capitalization of the borrowing costsIf assets eligible for capitalization is interrupted abnormally during the course of acquisition andconstruction or production, and the interruption lasts more than 3 months, the capitalization ofborrowing costs shall be suspended. The borrowing costs occurred during the interruption shall berecognized as current gains or losses, until the acquisition and construction or production activities ofthe asset restart, the capitalization of borrowing costs shall be continued. If the interruption is anecessary step for making the acquired, built or produced assets which are eligible for capitalizationreaching estimated usable and marketable status, the capitalization of the borrowing costs shall becontinued.
③ Recognition of the suspending time point for capitalization of the borrowing costsWhen the acquired, built or produced assets which are eligible for capitalization can reach estimatedusable and marketable state, shall stop capitalizing on borrowing costs; the borrowing costs incurredthereafter shall be recognized as current gains and losses according to the real amount.Where each part of the acquired, built or produced assets which are eligible for capitalization iscompleted separately, and every single part is available to use or sell during the continuing constructionof other parts, and the acquisition and construction or production activities, which are necessary tomake such part of asset reaching the estimated status of being available to use or sell, have alreadybeen completed substantially, shall stop capitalizing on the borrowing costs in relation to this part ofasset. Where each part of the acquired, built or produced assets which are eligible for capitalization iscompleted separately and but it cannot be available to use or sell till the whole construction finishing,
shall stop capitalizing on the borrowing costs when the assets can be completed entirely.
(4) The recognition of the amount of the capitalization of borrowing costs
① The recognition of the amount of the capitalization of borrowing interests
During the capitalization period, the interests' capitalization amount (including the amortization ofdiscounts or premiums) in each accounting period shall be recognized according to the followingprovisions:
(A) As for special borrowing costs arising from the acquisition and construction or production of assetswhich are eligible for capitalization, the amount shall be recognized based on the interests cost of thespecial borrowings costs occurred actually in the current period deducting the interests' income earnedfrom depositing the unused borrowing costs or the income from temporary investment.(B) If ordinary borrowings used for acquisition and construction or production of assets which areeligible for capitalization, the interests' amount of ordinary borrowings to be capitalized shall berecognized by the weighted average of the asset expenditures for cumulative capital expenditure thatexceed the capital expenditure of specific borrowings to multiply the capitalization rate of ordinaryborrowings. The capitalization rate is recognized by the calculation of the weighted average interest rateof general borrowing costs.(C) If there is any discount or premium of the borrowings, the number of discounts or premiumsamortized during each accounting period shall be recognized by the effective interest rate method, andan adjustment shall be made to the amount of interests in each period.(D) Within period of the capitalization, the interest capitalization amount of each accounting periodshall not exceed the amount of interest actually occurred to the relevant borrowings in the currentperiod.
② The recognition of the amount of the capitalization of borrowing auxiliary expenses(A) Article For the ancillary expense incurred to a specifically borrowings, those incurred before assetseligible for capitalization under acquisition, construction or production is ready for the intended use orsale shall be capitalized at the incurred amount when they are incurred, and shall be included into thecosts of the asset eligible for capitalization those incurred after a qualified asset under acquisition andconstruction or production is ready for the intended use or sale shall be recognized as expenses on thebasis of the incurred amount when they are incurred, and shall be recorded into the gains and losses ofthe current period.(B) The auxiliary expenses arising from general borrowings shall be recognized as expenses at the timeof occurrence and shall be included into the gains and losses of the current period.
③ The recognition of the amount of the capitalization of the balance of exchangeDuring the period of capitalization, the exchange balance on foreign currency specific borrowings shallbe capitalized, and shall be included in the cost of assets eligible for capitalization.
20. Biological assets
(1) Classification of biological assets
Biological assets refer to live animals and plants. The Company's biological assets are divided intoexpendable biological assets and productive biological assets.
(2) Conformation conditions of biological assets
The Company shall confirm the biological assets that satisfy the following conditions at the same time:
① The Company possesses or controls the biological asset as a result of past transaction or matter.
② The economic benefits or service potential concerning this biological asset are likely to flow into theCompany.
③ The cost of the biological asset can be measured reliably.
(3) Depreciation of productive biological assets
The Company shall depreciate the productive biological assets that have achieved the predeterminedpurposes of production and operation, and reasonably confirm their service life, estimated net residualvalue and depreciation method according to nature, usage and expected realization of the economicbenefits involved.The type, service life, anticipated net residual value and yearly depreciation of the Company'sproductive biological assets are as follows:
| Type | Service life | Anticipated net residual value | Depreciation method |
| Pig breeder | 36 months | 20.00% | Straight-line service life |
| Broiler breeder | 30 weeks | RMB 22.50 per broiler | Workload |
in payment, with financing nature in essence, the intangible assets cost shall be recognized based onthe present value of purchase price. The balance between the cost actually paid and the present valueof the purchasing cost will be included into the current gains and losses during the credit period exceptthe part that shall be capitalized.(B) Initial calculation for independently developed intangible assetsThe cost of self-developed intangible assets shall be recognized according to the total expenditureincurred from meeting the capitalization conditions to reaching the intended purpose, and theexpenditure already expended in the previous period shall not be adjusted.For the intangible assets researched and developed by the Company, the expenditure during researchstage shall be recorded into the current gains and losses as occurring; if the expenditures indevelopment stage which don't meet the conditions of capitalization shall be included into currentgains and losses when it occurs. Those meeting the condition of capitalization shall be recognized asintangible assets. When the expenditures occur during research or development stage cannot bedistinguished, all the R&D expenditures occurred shall be included into the current gains and losses.
②Subsequent measurement of intangible assets
The service life shall be analyzed and recognized by the Company when obtaining the intangible assets.The intangible assets acquired by the Company include intangible assets with finite service life andindefinite service life.(A) Subsequent calculation for intangible assets with finite service lifeFor intangible assets with limited service life, the Company will adopt the straight-line method toamortize them in phases during their service life from the time they reach their intended purpose,without reserving residual value. The amortization amount of intangible assets shall be included intocurrent gains and losses. If the economic benefits of an intangible asset are realized through product orother assets, the amortization amount shall be included into the cost of the relevant assets.The categories of intangible assets, estimated service life, estimated net residual value and annualamortization rate are listed as follows:
| Categories | Estimated service life(year) | Estimated net residual value % | Annual amortization rate % |
| Land use rights | According to the service life of land license | 0 | - |
| Computer software and other | 5-10 | 0 | 10-20 |
shall be recognized according to the limit not exceed the contractual rights or other statutory rights; Ifwhen the contract rights or other statutory rights are due, they can be extended because of renewal,and there is evidence that the Company does not need to pay a large amount of cost to renew contract,then the renewal period shall be included into the service life.(B) If the service life is not stipulated in the contract or law, the Company shall confirm the period whenintangible assets can bring economic benefits to the Company by employing relevant experts fordemonstration or comparing with those in the same industry and referring to the Company's historicalexperience.(C) In accordance with the above method, if it is still unable to reasonably confirm the time limit whenthe intangible assets can bring economic benefits for the Company, the intangible assets shall bedeemed as the intangible assets with uncertain service life.
④Arrangement of land use right
(A) The land use right acquired by the Company is usually recognized as intangible assets, but if the landuse right is used to earn rent or capital appreciation, it will be converted into investment real estate.(B) If the Company develops and constructs buildings such as factory buildings, it shall treat therelevant land use rights and buildings separately.(C) The price paid for the acquisition of land and buildings shall be allocated between the building andthe right to use the land. If they cannot be reasonably distributed, they shall be recognized as fixedassets.
(2). Accounting policies of internal R&D expenditure
①The specific standard for the partition of the research stage and development stage of the Companyinternal R&D projectAccording to the actual situation of R&D, the Company divides R&D projects into two stages: researchstage and development stage.(A) Research stageResearch stage refers to the stage for ingenious and planned investigation, research activities so as toacquire and understand new scientific or technical knowledge, etc.(B) Development stageDevelopment stage refers to before the commercial manufacture or use, the stage for the application ofresearch achievement and other knowledge to a certain plan or design to produce new or substantialimproved materials, devices or products, etc.The expenditure of the internal R&D projects at the research stage shall be included into current gainsand losses when incurred.
②The specific standards for expenditure at development stage which meet capitalizationThe expenditure of the internal R&D projects at the development stage shall be recognized as theintangible assets when meeting the following conditions simultaneously:
(A) Complete the intangible assets to make them feasible to be used or sold in technology;(B) Possess the intention to complete the intangible assets and use or sell them;(C) The ways of intangible assets to generate economic benefits include the ability to prove theexistence of the market where there are the products produced by the intangible assets or theexistence of that of the intangible assets, and prove its usefulness if intangible assets will be usedinternally;(D) There are sufficient technologies, financial resources and other resources supporting to completethe development of the intangible assets, and the Company is able to use or sell the intangible assets;(E) Expenditures that belong to the development stage of the intangible assets can be measuredreliably.
22. Impairment of long-lived assets
The impairment test shall be made to long-term equity investments, investment property measured byusing the cost model, fixed assets, projects under construction, intangible assets with finite service lifeand other long-term assets with signs of impairment on the balance sheet date. If the impairment testresult is indicated that the recoverable amount of assets is lower than its book value, it is withdrawnimpairment reserves in accordance with the balance and calculated into the impairment loss. Therecoverable amount shall be the higher one of the net amounts of the fair value of the assets deductedby the disposal expenses and the present value of the expected future cash flow of the assets. Calculateand confirm the assets impairment reserves based on single asset; shall it be difficult to estimate therecoverable amount of single asset, the recoverable amount of the asset group shall be recognizedbased on its belonging asset group. Asset group is the minimum asset portfolio that can generate cashinflow independently.Each year, the Company performs the impairment test on the goodwill and the intangible assets withuncertain service life, no matter whether there are signs of impairment or not.When the Company conducts the impairment test on business reputation, as for the book value ofgoodwill formed due to the business combination, it shall be amortized to related assets groups fromthe acquisition date according to the reasonable methods; The part that is hard to be allocated torelated assets groups shall be amortized to related combined assets groups. When apportioning thebook value of the goodwill to the relevant asset groups or combinations of asset groups, it shall beapportioned on the basis of the proportion of the fair value of each asset group or combination of assetgroups to the total fair value of the relevant asset groups or combinations of asset groups. Where it isdifficult to measure the fair value reliably, it shall be apportioned on the basis of the proportion of thecarrying value of each asset group or combination of asset groups to the total carrying value of therelevant asset groups or combinations of asset groups. When making an impairment test on therelevant asset groups or combinations of asset groups including goodwill, if any evidence shows thatthe impairment of asset groups or combinations of asset groups is possible, the Company first makes an
impairment test on the asset groups or combinations of asset groups not including goodwill, calculatethe recoverable amount, compare it with the relevant carrying value and confirm the correspondingimpairment losses. The Company makes an impairment test of the asset groups or combinations ofasset groups containing business reputation, and compares the book value of these relevant assetgroups or combinations of asset groups (including the book value of goodwill amortized thereto) andtheir recoverable amount. Where the recoverable amount of relevant assets or combinations of theasset groups is lower than the book value thereof, the depreciation of the goodwill losses shall berecognized.Once the impairment loss of above-mentioned asset is recognized, it shall not be reversed in followingaccounting periods.
23. Long-term prepaid expenses
(1) Scope of long-term prepaid expense
The long-term prepaid expense refers to an expense that has incurred but shall be amortized by thecurrent period and subsequent periods with the time limit of more than 1 year (exclusive), and includesimprovement expenditures incurred in fixed assets by way of operating lease.
(2) Initial calculation for long-term prepaid expense
The long-term prepaid expense received initial calculation based on the actual cost.
(3) Amortization of long-term prepaid expense
Long-term prepaid expenses in benefit period will be of amortization average using the straight-linemethod.
24. Contract liabilities
Recognition method of contract liabilitiesContract liabilities refer to the obligation of the Company to transfer commodities to customers as theCompany has received the consideration or needs to receive the consideration from customers. Beforethe Company transferring the commodities to the customer, if the customer has paid the contractconsideration or the Company has obtained an unconditional right to collect the accounts, theCompany shall record the accounts received or needed to receive as the contractual liabilities based onthe time when the customer actually pays the accounts or when the accounts become due. Thecontract assets and contract liabilities under the same contract shall be recorded on a net basis, and thecontract assets and contract liabilities under different contracts shall not be offset.
25. Employee remuneration
(1). The accounting arrangement method of short-term remuneration
Short-term remuneration refers to employee remuneration that needs to be paid in full amount within12 months after the end of annual report period that the employee provides related service, except forthe remuneration given for labor relation removing with the employee.Short-term remuneration includes: Employee salary, bonus, allowance and subsidy, employee welfare
expenses, medical insurance premiums, industrial injury insurance premium, birth insurance premiumand other social insurance premiums, housing accumulation fund, labor union expenditure andemployee education expenditure, short-term compensated absence, short-term profit-sharing plan,non-monetary welfare and other short-term remunerations.The Company shall confirm the actual short-term remuneration accrued as liabilities and include it intocurrent gains and losses or related asset cost during the accounting period of services provided by staff.
(2). The accounting arrangement method of post-employment welfare
The Company participates in the establishment of withdrawal plans, which include basic pensioninsurance premiums, unemployment insurance premiums and enterprise annuity payments foremployees in accordance with relevant regulations. The amount due for deposit shall be recognized asthe debt of employee remuneration on the balance sheet date in order to exchange for the serviceprovided by employees during accounting period, and include into the current gains and losses orrelevant asset cost.
(3). Accounting arrangement method of dismissal welfare
Dismissal welfare refers to the remuneration for the employee when the Company terminates the laborrelationship with the employee before the labor contract expires or when the Company encourages theemployee to receive layoff voluntarily. If the Company provides dismissal welfare for staffs, the staffremuneration liability generating from confirming dismissal welfare on the earlier one of the followingtwo dates shall be included into current gains and losses:
① When the Company cannot unilaterally withdraw the dismissal welfare provided by laborrelationship relief plan or reduction suggestion.
② When the Company confirms cost or expense relevant to the restructuring involved in payingdismissal welfare.
(4). Accounting arrangement method of other long-term employee benefitsOther long-term employee welfare refers to other welfares of all employees other than short-termremuneration, welfare after demission and dismisses welfare. At the end of report period, staffremuneration cost generating from other permanent staff welfare shall be recognized to the followingconstituent parts:
① Cost to serve.
② Net interest amount of net liabilities or net asset of other permanent staff welfares.
③ The change generating from the recalculation of net liability or net asset of other permanent staffwelfares.In order to simplify the relevant accounting arrangements, the total net amount of above items isrecorded into current gains and losses or relevant asset costs.
26. Estimated liabilities
(1) Recognition principles of estimated liabilities
When the external guarantees, pending litigation or arbitration, product quality assurance, loss ofcontract, the obligation of restructuring matters or the relevant business meet three of the followingconditions, it shall be recognized as estimated liabilities:
① That obligation is a current obligation undertaken by the Company;
② It is likely to cause the economic benefit to flow out of the Company due to the performance of theobligation;
③ The amount of the obligation can be measured reliably.
(2) Calculated method for estimated liabilities
The amount of the estimated liability is measured in accordance with the best estimate of theexpenditure required for the contingency.
① If there is a sequent range for the necessary expenses and if all the outcomes within this range areequally likely to occur, the best estimate shall be recognized in accordance with the middle estimatewithin the range.
② In other cases, the best estimate shall be disposed according to the following cases respectively:
(A) If the contingencies involve a single item, it shall be recognized according to the most likelyoutcome.(B) If the contingencies involve two or more items, the best estimate shall be calculated and recognizedaccording to all possible outcomes and the relevant probabilities.
27. Share-based payment
The share-based payments shall consist of equity-settled share-based payments and cash-settledshare-based payments.
(1) Accounting arrangement on the grant date
In addition to share-based payments of the immediate vesting, regardless of equity-settled share-basedpayment or cash-settled share-based payment, the Company shall not accept accounting arrangementon the grant date.
(2) Accounting arrangement on each balance sheet date in the waiting periodIn the waiting period of each balance sheet date, services acquired in hiring employees or other partiesshall be included in the cost, and the owner's equity or liabilities shall be recognized.As for share-based payments with market conditions, as long as employees meet all other non-marketconditions, the acquired service shall be recognized. When the performance conditions are non-marketconditions, after the waiting period is fixed, if the subsequent information indicates that the estimationof feasible rights needs to be adjusted, the earlier estimate shall be modified.As for equity-settled share-based payment involving employees, according to fair value of equityinstruments in the grant date, it shall be included in cost and capital reserve (other capital reserve), andits subsequent changes of fair value shall not be recognized. As for cash-settled share-based paymentinvolving employees, it shall be recounted according to fair value of equity instruments at each balance
sheet date to recognize the cost and payable employee remuneration.On each balance sheet date within the waiting period, the Company shall make the best estimatesaccording to the newly obtained changes in exercisable right staff number variation and other follow-upinformation, and amend the number of equity instruments of expected exercisable right.According to the fair value of the above-mentioned equity instruments and the number of equityinstruments with predicted feasible rights, the cumulative cost and expense amount that shall berecognized up to the current period is calculated, with the cumulative recognized amount in theprevious period subtracted, as the cost and expense amount that shall be recognized in the currentperiod.
(3) Accounting Arrangement on the Vesting Date
① As for equity-settled share-based payment, after vesting date, the recognized cost and the totalowner equity shall no longer be adjusted. On the vesting date, the Company shall confirm the sharecapital and share premium according to the exercise situation, and the capital reserve (other capitalreserve) in the waiting period shall be carried forward at the same time.
② As for cash-settled share-based payment, after the vesting date, the Company shall no longerconfirm the cost, and changes in fair value of liabilities (staff remuneration) shall be included in currentgains and losses (changes of profit or loss in fair value).
(4) Accounting arrangement for using repurchased share as incentive stock option for staff Where theCompany rewards its employees in the form of share repurchase, when it repurchases shares, it shalltreat all the expenditures of the share repurchase as stock shares, and make a record. On each balancesheet date during the waiting period, according to the fair value of equity instruments on the grantingdate, the obtained staff services are included in the cost and expenses, and the capital reserve (othercapital reserve) is increased. When the employee's right to purchase shares of Company receives theprice, the cost of the stocks in stock delivered to the employee and the accumulated amount of capitalreserve (other capital reserve) during the waiting period shall be resold, and the capital reserve (equitypremium) shall be adjusted according to its balance.
28. Revenue
The revenues mainly consist of the income of selling goods, providing labor services, and transferringthe right to use assets. And the principles of income recognition shall be driven as below:
(1) Confirming principle of the revenue for selling products
The main risks and rewards of the property in the commodities have been transferred to the acquireeby the Company; The Company retains neither continuing management right related with theownership nor effective control over the products sold; The amount of revenue can be measured in areliable way; The relevant economic interests may be flowed into the Company; When the relevant costincurred or to incur can be measured reliably, it shall be recognized as the realization of product salesincome. The Company's sales revenue, mainly includes feed products, feed raw materials, poultry
products and raising business. The revenue shall be recognized after receipt of payment or completionof credit procedures and delivery of products.
(2) Confirming principle of the revenue for providing labor services
① Principle of recognition of labor income is to provide labor transactions in the case of reliableestimationOn the balance sheet date, when the labor service transaction results rendered can be reliablyestimated, the Company shall confirm the revenue from providing labor service by thepercentage-of-completion method.When the amount of income can be reliably measured, the relevant economic benefits may flow intothe Company, the completion schedule of the transaction can be reliably recognized, and the costs thathave occurred and will occur in the transaction can be reliably measured, the results of the labortransaction can be reliably estimated.
②Recognition principle of labor income under the condition that provide labor transactions in thecase of unreliable estimationOn the balance sheet date, when the labor service transaction results provided by the Company cannotbe reliably measured, it shall confirm labor services income by the following three kinds of condition.(A) If labor service cost incurred is estimated to be compensated in full amount, provision of laborservice income shall be recognized according to the amount that has been regained or can be regainedby estimation and carry forward the labor service cost that has accrued;(B) If the labor cost estimation that has occurred can be compensated partly, the labor revenue shall berecognized to provide as the labor cost amount that has occurred or can be compensated, and theoccurred labor cost will be carried over;(C) If the cost of labor services incurred is expected not to be compensated, the cost incurred shall beincluded into current gains and losses (main business cost), and no income from the provision of laborservices will be recognized.
(3) Recognition principles of transferring the right to use assets
When the trade-related economic interest is likely flow into this Company, and the relevant revenuethat can be reliably calculated, the realization of the revenue from transferring the right to use assetsshall be recognized.
29. Contract costs
Contract costs can be divided into contract performance costs and contract acquisition costs.Costs incurred by the Company in the performance of a contract shall be recognized as an asset whenthe following conditions are met.
(1) Such costs are directly related to a current or anticipated contract
(2) Such costs increase the Company's resources that will be used in the future to meet performanceobligations.
(3) Such costs are expected to be recovered
Assets related to contract costs are amortized on the same basis as the revenue recognition ofcommodities or services related to such assets. However, if the amortization period of the contractacquisition costs is less than one year, the Company shall record such amortization into current gains orlosses when it is incurred.If the book value of the assets related to the contract costs is higher than the difference between thefollowing two items, the Company will make provision for impairment of the excess part and recognizeit as impairment loss of the assets.
(1) The remaining consideration that is expected to be obtained as a result of transferring thecommodities or services related to such assets.
(2) The estimated costs that will be incurred due to transfer such commodities or services.
30. Government grant
(1) Category of government grant
Government grant refers to the monetary assets or non-monetary assets that the Company obtainsfrom the government free of charge, including the government grant related to assets and income.The government grants pertinent to assets refer to the government assets that are obtained byenterprises used for purchase or construction, or forming the long-term assets by other ways.The government grants related to earnings refer to the government grants besides the governmentgrants related to assets.
(2) Recognition principle and recognition time-point of government grant
Recognition principle of government grant
① The Company can meet all attached conditions for governmental grant.
② The Company is able to receive governmental grant.
Government grant may be recognized on condition that it meets the above conditions simultaneously.
(3) Measurement for government grant
① If the government grants belong to monetary assets, shall be calculated according to the receivedor receivable amount.
② Non-monetary assets of government grants shall be measured by the fair value; if the fair valuecannot be obtained reliably, it shall be measured according to the nominal amount (the nominalamount is RMB 1).
(4) Accounting arrangement method for government grants
① The government grant related to assets shall, when acquired, be deducted with the book value ofthe relevant assets or recognized as deferred income. If it is recognized as deferred income, it shall bedivided into gains and losses in stages according to a reasonable and systematic method during theservice life of the relevant assets. The governmental grants calculated according to the nominal amountshall be directly included in the current gains and losses.
② Government grant related to the incomes shall be disposed separately according to the conditions:
(A) If the grants are used to compensate for related expenses or losses in the later period of theCompany, it shall be recognized as deferred income and included in the current gains and losses duringrecognition of relevant expenses or loss(B) Those used for compensating the related expenses or losses have been incurred shall be included incurrent gains and losses directly or relevant offset cost as obtaining.
③ If government grants that include both asset-related and revenue-related parts can be distinguished,they are treated separately in different parts. If it is difficult to distinguish, it shall be wholly recognizedas government grants related to incomes.
④ Government grants related to the day-to-day operation of the Company shall be accounted for asother benefits or deducted with relevant costs in accordance with the nature of its economicoperations. Government grants unrelated to the daily activities of enterprise are included in the incomeand expenditure of non-business activities. If the finance allocates the discount funds directly to theCompany, the Company will deduct the relevant borrowing costs from the corresponding discount.
⑤ If it is necessary to return governmental grants which have been recognized, it shall be disposedrespectively according to the following conditions:
(A) If the book value of the relevant assets is deducted at the time of initial recognition, the book valueof the assets shall be adjusted.(B) If there is the deferred income concerned, the book balance of the deferred income shall be offsetagainst, but the excessive part shall be included in the current gains and losses.(C) In other circumstances, it shall be directly included in the gains and losses of the current period.
31. Deferred income tax assets or deferred income tax liabilities
The Company adopts the balance sheet debt method to calculate the income tax.
(1) Recognition of the deferred income tax assets and the deferred income tax liabilities
① When the Company obtains the assets or liabilities, it shall determine its tax basis. On the balancesheet date, the Company analyses and compares the book value of assets and liabilities with their taxbasis, and the book value of assets and liabilities with their tax basis. If there is temporary balancebetween the book value of assets and liabilities and their tax basis, the Company shall recognizedeferred income tax liabilities or deferred income tax assets respectively for taxable temporary balanceor deductible temporary balance if the relevant temporary balance occurs in the current period andmeets the recognition conditions. Tax assets.
② Recognition basis of deferred income tax assets
(A) The Company shall confirm the deferred income tax assets arising from a deductible temporarybalance to the extent of the amount of the taxable income which it is likely to obtain and which can bededucted from the deductible temporary balance. The amount of taxable income likely to be obtainedin the future period includes the amount of taxable income realized in normal production and
operation activities in the future period, and the amount of taxable income increased due to the returnof temporary balance of taxable income during the period of deductible temporary balance.(B) As for any deductible losses and tax deduction that can be carried over to the next years, thecorresponding deferred income tax assets shall be recognized to the extent that the amount of futuretaxable income to be offset for the deductible loss and tax to be likely obtained.(C) On the balance sheet date, the book value of deferred income tax assets shall be re-checked. If it isunlikely to obtain sufficient taxable income to deduct from the benefit of the deferred income tax asset,the carrying amount of the deferred income tax assets shall be written down. The write-down amountshall be reversed when it is likely that the sufficient taxable income is available.
③ Recognition basis of the deferred income tax liabilities
The Company shall confirm the current or past taxable temporary balance that shall be paid but is notpaid as deferred income tax liabilities. But it doesn’t include goodwill and transaction formed by non-business combination and the temporary balance neither affects the accounting profit nor taxableincome when transaction incurred.
(2) Measurement for the deferred income tax assets and the deferred income tax liabilities
① On the balance sheet date, the deferred income tax assets and deferred income tax liabilities shallbe measured at the applicable tax rate of the period during which the assets are expected to berecovered or the liabilities are expected to be settled.
② If the applicable tax rate varies, the deferred income tax assets and deferred income tax liabilitieswhich have been recognized are re-measured, excluding the deferred income tax assets and deferredincome tax liabilities arising from any transactions or events directly recognized as the owners' equities,the amount affected by them shall be included into the income tax expenses of the current periodduring which the change occurs.
③ When measuring deferred income tax assets and deferred income tax liabilities, the Companyadopts tax rates and tax basis consistent with the expected way of recovering assets or paying off debts.
④ The Company shall not discount any deferred income tax asset and deferred income tax liability.
32. Lease
(1) Accounting arrangement method of operating lease
A tenant includes the rental payment of operation lease into the relevant cost of assets or current gainsand losses according to the straight-line method in each period of the lease term. The initial direct costsaccrued to the Company shall be included into current gains or losses. The contingent rental shall beincluded into the current gains or losses when it is actually accrued.A lessor includes the assets subject to operating lease in relevant items of its balance sheets in light ofthe nature of the asset. The rent in operating lease shall be recognized as current gains and lossesduring each lease term according to straight-line method. The initial direct costs accrued to theCompany shall be included into current gains and losses. The depreciation of fixed assets in the
operation lease assets shall be withdrawn by adopting depreciation policy of similar asset; otheroperation lease assets shall be amortized adopting systematic and reasonable method. The contingentrental shall be included into gains and losses of the current period when it is actually accrued.
(2) Accounting arrangement methods of financial lease
As tenant, on the commencement date of the lease term, the lower one between fair value of leasedasset and present value of minimum lease payments as account record value of leased asset, and regardthe minimum lease payments as account record value of long-term payables, and their balance shall betreated as the unrecognized financing costs. The initial direct costs such as commissions, attorney's feesand traveling expenses, stamp duties, etc. directly attributable to the leased item incurred during theprocess of lease negotiating and signing the leasing agreement shall be included into the rent assetvalue. The unrecognized financing costs shall be amortized during each lease term, and the currentfinancing costs shall be recognized adopting real interest method. The contingent rental shall beincluded into gains and losses of the current period when it is actually accrued.On the commencement date of the lease term, a lessor recognizes the sum of the minimum leasereceipts on the lease commencement date and the initial direct costs as the entry value in an accountof the finance lease values receivable, and record the un-guaranteed residual value at the same time.The balance between the sum of the minimum lease collection amount, the initial direct expenses andthe non-guaranteed residual value, and the sum of their present values shall be recognized as theunrealized financing income. The unrealized financing income shall be allocated to each period duringthe lease term. The lessor shall calculate and recognize the financing income at the current period byadopting the effective interest rate method. The contingent rental shall be included into the gains andlosses of the current period when it is actually accrued.
33. Changes of important accounting policies and estimates
A. Significant changes in accounting policies
| Content and reason for the changes of accounting policies | Approval procedure | Explanation (items in the financial statements that are materially affected) |
| On July 5, 2017, the Ministry of Finance issued the revised Accounting Standards for Business Enterprises No. 14-Revenue. The revised standard stipulates that when the enterprise implements the new standards at the first time, it shall adjust the retained earnings and other related items in the financial statements at the beginning of that year according to the cumulative influence number, without adjusting the information for comparable periods. Wellhope has implemented the new standards since January 1, 2020, and adjusted related items in accordance with relevant provisions. | Wellhope held the 16th meeting of the 6th Session of Board of Directors on July 17, 2020 to deliberate and approve the proposal of Changing Accounting Policies | Non |
B. Adjustment of financial statements when firstly implementing the new revenue standard and newleasing standard
Consolidated balance sheet
Unit: yuan Currency: RMB
| Item | Dec. 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 | |
| Other equity instruments investment | 5,760,839.23 | 5,760,839.23 | |
| 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 | 4,879,960.48 | -204,649,288.20 |
| Contract liabilities | 203,523,445.03 | 203,523,445.03 | |
| Payroll | 62,549,364.12 | 62,549,364.12 | |
| Taxes and surcharges | 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 one year | 70,593,717.62 | 70,593,717.62 | |
| Other current liabilities | 1,125,843.17 | 1,125,843.17 | |
| 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 payables | 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 | |
| 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 owners’ equity attributable to the of parent company | 5,698,139,557.54 | 5,698,139,557.54 | |
| Non-controlling interests | 801,351,905.45 | 801,351,905.45 | |
| Total owners' equity (or shareholders' equity) | 6,499,491,462.99 | 6,499,491,462.99 | |
| Total liabilities and owners' equity (or shareholders' equity) | 9,149,772,043.85 | 9,149,772,043.85 |
Consolidated balance sheet of parent company
Unit: yuan Currency: RMB
| Item | Dec. 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 investment | 5,539,369.92 | 5,539,369.92 | |
| 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 | |
| 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 | 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 | |
| Non-current liabilities due within one year | 52,000,000.00 | 52,000,000.00 |
| 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 (or shareholders' equity) | 4,284,515,928.19 | 4,284,515,928.19 | |
| Total liabilities and owners' equity (or shareholders' equity) | 6,460,726,394.10 | 6,460,726,394.10 |
| Categories | Taxation basis | Tax rate |
| Value-added tax | Output VAT--deductible input VAT | 1%、9%、13% |
| Urban maintenance and construction tax | Turnover tax payable | 1%、5%、7% |
| Corporate income tax | Income tax payable | 15%、20%、25% |
| Extra charges of education funds | Turnover tax payable | 3% |
| Extra charges of local education funds | Turnover tax payable | 2% |
| Taxpayer | Income tax rate |
| Wellhope Foods Co., Ltd., Beijing Sanyuan Wellhope Agri-Tech Company, Beijing Helai Sci-Tech Company, Xi'an Wellhope Feed Sci-Tech Company, Gansu Wellhope Agri-Tech Company, Guangzhou Xiangshun Livestock Equipment Company, Chongqing Dahong Agriculture and Animal Husbandry Equipment Company, Shenyang Fame Bio-Tech Company, Yangling Wellhope Agriculture and Animal Husbandry Company, Yunnan Wellhope Feed Mill | 15% |
| Dalian Huakang Xinxin Food Company, Kaifeng Wellhope Meat Products Company, Puyang Wellhope Food Company, Dalian Heyuan Agri-Tech Company, Wafangdian Yifeng Agri-Tech Company, Shandong Heyuan Food Company, Shandong Heyuan Agri-Tech Company, Pingyuan Wellhope Food Processing Company, Fuyu Wellhope Taolaizhao Poultry Raising Company, Puyang Wellhope Agri-Tech Company, Changchun Wellhope Food Company, Dehui Wellhope Agri-Tech Company, Tongliao Wellhope Tianyi Prataculture Company, Kaifeng Wellhope Agriculture and Animal Husbandry Company, Shenyang Huakang Broiler Company, Shenyang Huakang Agriculture and Animal Husbandry Company, Tangshan Hejia Agriculture and Animal Husbandry Company, Shenyang Wellhope Poultry Industry Company, Fushun Wellhope Agriculture and Animal Husbandry Company, Anhui Wellhope Haoxiang Agricultural Development Company, Suizhong Renhe Fishery Company, Lixin Xiangfeng Agriculture and Animal Husbandry Company, Lixin Hongfeng Agriculture and Animal Husbandry Company, Shulan Fengtai Agriculture and Animal Husbandry Company, Shulan Fengtai Farming Company, Hebei Deheng Farming Company, Dalian Hongtu Agri-tech Company, Liaoning Wellhope Agriculture and Animal Husbandry Development, Luoyang Wellhope Agriculture and Animal Husbandry Company, Tongxu Wellhope Agriculture and Animal Husbandry Company, Gongzhuling Wellhope Swine Farmig Company, Lishu Wellhope Ecological Farming Company, Anyang Wellhope Agriculture and Animal Husbandry Company, Hebei Taihang Wellhope Food Company, Hebei Taihang Wellhope Agri-Tech Company, Yixian Dingli Hesheng Livestock and Poultry Feeding Company, Yixian Weijing Livestock and Poultry Feeding Company, Yixian Hekang Agri-Tech Company, Hebei Hetai Livestock and Poultry Farming Company, Anhui Wellhope Haoxiang Swine Breeding Company, Nanyang Wellhope Cattle Sci-Tech Company, Daqing Wellhope Food Company, Zhumadian Wellhope Agricultural Development Company, Datong Hejia Agriculture and Animal Husbandry Company, Shijiazhuang Hejia Agriculture and Animal Husbandry Company, Fuxin Wellhope Agriculture and Animal Husbandry Company , Dalian Zhongjia Food Company, Wafangdian Huinong Poultry Industry Company, Shenyang Wellhope Extruded Feed Mill , Jilin Hefeng Swine Breeding Company, Dunhua Fengda Agriculture and Animal Husbandry Development Company | Enterprises that engaged in primary processing of agricultural products, livestock and poultry raising businesses exempt from levying corporate income tax |
| Russia Wellhope Agri-Tech Company | 20% |
| Other companies | 25% |
the tax rates shall be adjusted to 13% and 9% respectively.According to the announcement issued by the General Tax Bureau of the Ministry of Finance regardingVAT policy for supporting work resumption of privately or individually-owned companies, during theoutbreak of the COVID-19 pandemic, VAT shall be levied at a rate of 1% for small-scale taxpayers.B. Income taxThe Company and related subsidiaries, which are suitable to related government policies, such asreceiving the certificates of High-Tech enterprise, the applicable corporate income tax rate is 15% in thevalid period.VII. Notes to the Items of Consolidated Financial Statements
1. Monetary capital
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Cash on hand | 401,767.96 | 693,912.75 |
| Cash at bank | 1,185,795,875.08 | 1,507,696,568.93 |
| Other monetary capital | 11,525,156.12 | 46,390,842.45 |
| Total | 1,197,722,799.16 | 1,554,781,324.13 |
| including: total amount of funds deposited abroad | 1,192,917.73 | 719,833.99 |
| Item | Closing balance | Opening balance |
| Financial assets measured at fair value and the changes recorded in current profits and losses | 50,000,000.00 | 40,000,000.00 |
| including | ||
| Wealth management products | 50,000,000.00 | 40,000,000.00 |
| Total | 50,000,000.00 | 40,000,000.00 |
| Item | Closing balance | Opening balance |
| Futures | 4,725,552.30 | 3,912,584.30 |
| Total | 4,725,552.30 | 3,912,584.30 |
4. Notes receivable
A. Classification
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Bank's acceptance bill | 12,601,548.00 | 3,696,180.25 |
| Commercial acceptance bill | 1,598,999.87 | |
| Total | 14,200,547.87 | 3,696,180.25 |
| Item | Opening balance | Changes in 2020 | Closing balance | ||
| Accruing | Collected or recovered | Charged-off or written-off | |||
| Commercial acceptance bill | 32,632.65 | 32,632.65 | |||
| Total | 32,632.65 | 32,632.65 | |||
| Aging | Closing book balance |
| Within 1 year | 417,907,003.42 |
| 1-2 years | 38,203,816.82 |
| 2-3 years | 27,862,300.81 |
| Over 3 years | 93,507,385.47 |
| Total | 577,480,506.52 |
B. Categorized by bad debt accrual method
Unit: yuan Currency: RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Percentage % | Amount | Accruing percentage % | Amount | Percentage % | Amount | Accruing percentage % | |||
| Accruing bad debt provision individually | 39,061,704.31 | 6.76 | 39,061,704.31 | 100.00 | 38,365,146.19 | 8.12 | 35,941,019.04 | 93.68 | 2,424,127.15 | |
| Accruing bad debt provision by grouping | 538,418,802.21 | 93.24 | 88,248,057.76 | 16.39 | 450,170,744.45 | 434,053,298.76 | 91.88 | 74,416,623.53 | 17.14 | 359,636,675.23 |
| including | ||||||||||
| Aging group | 538,418,802.21 | 93.24 | 88,248,057.76 | 16.39 | 450,170,744.45 | 434,053,298.76 | 91.88 | 74,416,623.53 | 17.14 | 359,636,675.23 |
| Total | 577,480,506.52 | / | 127,309,762.07 | / | 450,170,744.45 | 472,418,444.95 | / | 110,357,642.57 | / | 362,060,802.38 |
? Accruing bad debt provision individually
Unit: yuan Currency: RMB
| Name | Closing balance | |||
| Book balance | Bad debt provision | Accruing percentage % | Reason | |
| Customer 1 | 23,998,355.83 | 23,998,355.83 | 100.00 | uncollectible |
| Customer 2 | 4,734,285.00 | 4,734,285.00 | 100.00 | uncollectible |
| Customer 3 | 2,942,919.70 | 2,942,919.70 | 100.00 | uncollectible |
| Customer 4 | 927,022.22 | 927,022.22 | 100.00 | uncollectible |
| Customer 5 | 807,150.00 | 807,150.00 | 100.00 | uncollectible |
| Other bad debt provision accrued individually | 5,651,971.56 | 5,651,971.56 | 100.00 | uncollectible |
| Total | 39,061,704.31 | 39,061,704.31 | 100.00 | / |
| Aging | Closing balance | ||
| Account receivable | Bad debt provision | Accruing percentage % | |
| Within 1 year | 417,904,828.42 | 13,652,486.00 | 3.27 |
| 1-2 years | 37,632,060.73 | 5,644,809.11 | 15.00 |
| 2-3 years | 27,862,300.81 | 13,931,150.40 | 50.00 |
| Over 3 years | 55,019,612.25 | 55,019,612.25 | 100.00 |
| Total | 538,418,802.21 | 88,248,057.76 | / |
| Category | Opening balance | Changes in 2020 | Closing balance | ||
| Accruing | Charged off or written off | Other changes | |||
| Accounts receivable | 110,357,642.57 | 20,584,815.87 | 3,693,968.37 | 61,272.00 | 127,309,762.07 |
| Total | 110,357,642.57 | 20,584,815.87 | 3,693,968.37 | 61,272.00 | 127,309,762.07 |
| Item | Write-off amount |
| Actual write-off of accounts receivable | 3,693,968.37 |
| Name | Nature | Written off amount | Reason | Whether generated by related party transactions |
| Customer 1 | Payment for products | 790,882.40 | uncollectible after filing of a lawsuit | No |
| Customer 2 | Payment for products | 453,168.40 | exempted by mutual consultation | No |
| Customer 3 | Payment for products | 360,000.00 | uncollectible after filing of a lawsuit | No |
| Customer 4 | Payment for products | 285,720.30 | uncollectible after filing of a lawsuit | No |
| Customer 5 | Payment for products | 234,878.95 | this enterprise no longer exists | No |
| Total | / | 2,124,650.05 | / | / |
E. Top 5 accounts receivable
Unit: yuan Currency: RMB
| Debtor | Closing balance | Percentage of the closing balance of total accounts receivable % | Bad debt provision |
| 1 | 28,795,589.27 | 4.99 | 1,279,558.93 |
| 2 | 24,051,313.84 | 4.16 | 481,026.28 |
| 3 | 23,998,355.83 | 4.16 | 23,998,355.83 |
| 4 | 14,904,096.71 | 2.58 | 298,081.93 |
| 5 | 12,590,379.98 | 2.18 | 251,807.60 |
| Total | 104,339,735.63 | 18.07 | 26,308,830.57 |
| Aging | Closing balance | Opening balance | ||
| Amount | Percentage % | Amount | Percentage % | |
| Within 1 year | 355,432,049.57 | 97.54 | 217,146,116.15 | 97.79 |
| Over 1 year | 8,969,470.66 | 2.46 | 4,918,252.40 | 2.21 |
| Total | 364,401,520.23 | 100.00 | 222,064,368.55 | 100.00 |
| Company | Closing balance | Percentage of the closing balance of total prepayments % |
| 1 | 56,847,157.50 | 15.60 |
| 2 | 22,425,145.75 | 6.15 |
| 3 | 19,365,551.87 | 5.31 |
| 4 | 11,891,198.32 | 3.26 |
| 5 | 11,129,128.31 | 3.05 |
| Total | 121,658,181.75 | 33.37 |
| Item | Closing balance | Opening balance |
| Interest receivable | ||
| Dividends receivable | 49,123,722.11 | 25,353,722.11 |
| Other receivables | 71,919,754.34 | 60,247,089.64 |
| Total | 121,043,476.45 | 85,600,811.75 |
| Item | Closing balance | Opening balance |
| Dividends from long-term investment under the equity method | 49,123,722.11 | 25,353,722.11 |
| Total | 49,123,722.11 | 25,353,722.11 |
B. Other receivablesa. Presenting by aging
Unit: yuan Currency: RMB
| Aging | Closing book balance |
| Within 1 year | 44,269,894.64 |
| 1-2 years | 5,143,511.56 |
| 2-3 years | 1,767,472.00 |
| Over 3 years | 37,214,088.10 |
| Total | 88,394,966.30 |
| Nature | Closing book balance | Opening book balance |
| General operating receivables | 24,394,151.68 | 18,445,739.40 |
| Guarantee deposit | 24,067,394.92 | 14,096,016.42 |
| Disposal of investment receivables | 2,764,218.95 | 28,471,800.00 |
| Other | 37,169,200.75 | 30,141,206.46 |
| Total | 88,394,966.30 | 91,154,762.28 |
| Bad debt provision | First stage | Second stage | Third stage | Total |
| Expected credit losses over the next 12 months | Expected credit loss for the entire duration (no credit impairment occurred) | Expected credit loss for the entire duration (credit impairment occurred) | ||
| Balance on January 1, 2020 | 26,950,938.36 | 3,956,734.28 | 30,907,672.64 | |
| -recorded in the second stage | ||||
| - recorded in the third stage | -2,462,387.69 | 2,462,387.69 | ||
| -recovered in the second stage | ||||
| - recovered in the first stage | ||||
| Accrued in the reporting period | -15,709,121.54 | 1,276,660.86 | -14,432,460.68 | |
| Balance on December 31, 2020 | 8,779,429.13 | 7,695,782.83 | 16,475,211.96 |
d. Bad debt provision
Unit: yuan Currency: RMB
| Category | Opening balance | Changes in 2020 | Closing balance | |
| Accruing | Collected or recovered | |||
| Other receivables | 30,907,672.64 | -14,432,460.68 | 16,475,211.96 | |
| total | 30,907,672.64 | -14,432,460.68 | 16,475,211.96 | |
| Company | Nature | Closing balance | Aging | Percentage of closing balance of total other receivables % | Closing balance of bad debt provision |
| 1 | Temporary borrowing | 27,300,253.00 | over 3 years | 30.88 | 5,441,847.95 |
| 2 | Government grant | 5,000,000.00 | less than 1 year | 5.66 | |
| 3 | Guarantee deposit | 4,920,000.00 | 1-2 year | 5.57 | 231,000.00 |
| 4 | Security deposit | 4,400,000.00 | less than 1 year | 4.98 | 88,000.00 |
| 5 | Temporary borrowing | 4,350,000.00 | less than 1 year | 4.92 | 87,000.00 |
| Total | / | 45,970,253.00 | / | 52.01 | 5,847,847.95 |
| Name | Government subsidy project | Closing balance | Aging at period-end | Estimated receiving time, amount and basis |
| Shenyang Big Data Administration Bureau | The secondary nodes of industrial internet identification and resolution | 5,000,000.00 | less than 1 year | Receiving on January 29, 2021 |
| Item | Closing balance | Opening balance | ||||
| Book balance | Falling price reserve or provision for impairment of contract performance costs | Book value | Book balance | Falling price reserve or provision for impairment of contract performance costs | Book value | |
| Raw material | 1,067,170,395.01 | 2,756,874.79 | 1,064,413,520.22 | 651,999,952.04 | 2,852,699.42 | 649,147,252.62 |
| Low value consumbles | 20,586,560.21 | 20,586,560.21 | 13,182,022.60 | 13,182,022.60 | ||
| Product in process | 36,745,830.86 | 653,313.59 | 36,092,517.27 | 55,837,226.60 | 653,313.59 | 55,183,913.01 |
| Finished product | 627,279,262.38 | 5,323,922.07 | 621,955,340.31 | 585,118,896.60 | 9,725,789.76 | 575,393,106.84 |
| Consumptive biological assets | 713,091,097.93 | 12,069,247.10 | 701,021,850.83 | 274,774,516.57 | 19,595,499.74 | 255,179,016.83 |
| Wrappage | 18,861,661.78 | 18,861,661.78 | 15,557,821.25 | 15,557,821.25 | ||
| Engineering construction | 6,428,157.96 | 6,428,157.96 | 4,730,000.00 | 4,730,000.00 | ||
| Products in transit | 4,467,961.80 | 4,467,961.80 | ||||
| Total | 2,494,630,927.93 | 20,803,357.55 | 2,473,827,570.38 | 1,601,200,435.66 | 32,827,302.51 | 1,568,373,133.15 |
| Item | Opening balance | Increased amount | Decreased amount | Closing balance |
| Accrued | Recovered or charged off | |||
| Raw material | 2,852,699.42 | 95,824.63 | 2,756,874.79 | |
| Product in process | 653,313.59 | 653,313.59 | ||
| Finished product | 9,725,789.76 | 24,379,358.14 | 28,781,225.83 | 5,323,922.07 |
| Consumptive biological assets | 19,595,499.74 | 10,705,750.65 | 18,232,003.29 | 12,069,247.10 |
| Total | 32,827,302.51 | 35,085,108.79 | 47,109,053.75 | 20,803,357.55 |
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Guarantee deposit | 4,389,202.33 | 87,784.04 | 4,301,418.29 | |||
| Total | 4,389,202.33 | 87,784.04 | 4,301,418.29 | |||
| Item | Accrued in current period | Recovered in current period | Charged off or written off | Reason |
| Guarantee deposit | 87,784.04 | |||
| Total | 87,784.04 |
| Item | Closing balance | Opening balance |
| Available for deducting VAT and prepaid tax | 109,698,865.94 | 121,711,175.93 |
| total | 109,698,865.94 | 121,711,175.93 |
11. Long-term equity investment
Unit: yuan Currency: RMB
| Investee | Opening balance | Changes in the current period | Closing balance | Closing balance of impairment provision | ||||
| Additional investment | Gains or losses on investments recognized under the equity method | Adjustment of other comprehensive income | Declared payment of dividends or profits | Other | ||||
| 1. Joint Venture | ||||||||
| Unphung Joint Venture Company | 4,167,616.44 | 4,167,616.44 | ||||||
| Nepal Wellhope Agri-tech Pvt. Ltd. | 7,501,575.10 | 7,501,575.10 | ||||||
| NEXUS WELL-HOPE AGRITECH INTERNATIONAL LIMITED | 17,900,000.00 | |||||||
| Subtotal | 11,669,191.54 | 11,669,191.54 | 17,900,000.00 | |||||
| 2. Associated Company | ||||||||
| Qingdao Shenfeng Agri-Tech Company | 13,573,648.97 | 2,135,792.71 | 3,000,000.00 | 12,709,441.68 | ||||
| Anshan Jiuguhe Food Company | 152,438,428.77 | 65,128,535.91 | 37,397,700.00 | 180,169,264.68 | ||||
| Tai’an Jiuguhe Agriculture Development Company | 111,292,888.94 | -17,857,734.59 | 93,435,154.35 | |||||
| Linghai Jiuguhe Feed Mill | 62,403,210.81 | -6,876,608.46 | 55,526,602.35 | |||||
| Huludao Jiuguhe Food Company | 70,721,671.34 | 27,341,931.42 | 13,300,000.00 | 84,763,602.76 | ||||
| Dandong Wellhope Chengsan Food Company | 52,614,814.23 | 17,615,422.86 | 2,000,000.00 | 68,230,237.09 | ||||
| Dandong Wellhope Chengsan Agri-Tech Company | 112,253,275.58 | 3,669,492.40 | 2,000,000.00 | 113,922,767.98 | ||||
| Haicheng New Hongzunda Agri-Tech Company | 12,850,037.83 | 2,203,643.38 | 1,470,000.00 | 13,583,681.21 | ||||
| Beipiao Hongfa Food Company | 442,144,638.08 | 80,249,254.71 | 16,170,000.00 | 506,223,892.79 | ||||
| Beijing Dahong Hengfeng Agri-Tech Company | 20,087,982.12 | 5,243,999.15 | 25,331,981.27 | |||||
| Tai'an Jiufeng Agri-Tech Company | 5,951,804.50 | 309,724.00 | -3,185,467.28 | 3,076,061.22 | ||||
| Shihaipu (Beijing) Technology and Trade Co., Ltd. | 1,270,877.77 | 300,450.44 | 1,571,328.21 | |||||
| Shenyang Wenjie Bio-Tech Company | 12,442,904.99 | 565,381.10 | 13,008,286.09 | |||||
| Huludao Jiuguhe Feed Mill | 42,015,223.35 | -16,788,373.83 | 13,300,000.00 | 11,926,849.52 | ||||
| Jinzhou Jiufeng Food Company | 48,476,492.49 | 29,991,524.63 | 78,468,017.12 | |||||
| Zhangjiakou Jiahe Agriculture and Animal Husbandry Company | 68,145,308.99 | 44,466,778.68 | 112,612,087.67 | |||||
| Tai'an Fengjiu Agri-Tech Company | 37,837,537.89 | 9,763,110.34 | 7,600,000.00 | 40,000,648.23 | ||||
| Anshan Fengsheng Food Company | 30,430,304.76 | 4,177,778.00 | 18,716,829.02 | 53,324,911.78 | ||||
| Dalian Chengsan Animal Husbandry Company | 353,954,231.89 | 21,924,264.83 | 375,878,496.72 | |||||
| Tailai Jiahe Agriculture and Animal Husbandry Company | 27,134,553.62 | 60,174,013.06 | 87,308,566.68 | |||||
| Gongzhuling Corn Purchasing and Storing Company | 61,494,603.43 | 122,491.94 | 61,617,095.37 | |||||
| Lankao Skyland Duck Company | 49,841,895.84 | -6,166,074.01 | 43,675,821.83 | |||||
| Hainan Nongken Wenfeng Wenchang Chicken Industry(Group)Company | 1,071,542.40 | 4,900,000.00 | -353,962.52 | 5,617,579.88 | ||||
| Dunhua Wellhope Agri-Tech Company | 4,178,671.25 | 322,972.85 | -4,501,644.10 | |||||
| Dunhua Fengda Agriculture and Animal | 2,986,597.14 | 4,716,399.70 | -7,702,996.84 |
| Husbandry Company | ||||||||
| PT SEKAR GOLDEN HARVESTA INDONESIA | 38,998,739.72 | 678,021.37 | -2,475,988.86 | 37,200,772.23 | ||||
| GOLDEN HARVESTA INC. | 104,931,225.82 | 1,119,949.36 | -1,328,489.14 | 104,722,686.04 | ||||
| PT. Mulia Harvest Agritech | 47,617,462.51 | 2,413,279.66 | -3,267,043.86 | 46,763,698.31 | ||||
| Shulan Fengtai Organic Fertilizer Company | 1,500,000.00 | 772,206.00 | 2,272,206.00 | |||||
| Shenyang Zhongwenjia Bio-Tech Company | 4,060,534.77 | 1,162,002.17 | 5,222,536.94 | |||||
| Liaoning Mubang Animal Husbandry Equipment Manufacturing Company | 1,791,476.38 | 1,520,000.00 | 7,785,460.14 | 11,096,936.52 | ||||
| Anshan Yufeng Feed Mill | -193,154.81 | 5,700,000.00 | -2,160,121.26 | 3,346,723.93 | ||||
| Weifang Wellhope Xinhesheng Feed Mill | 5,337,855.68 | 169,208.08 | 5,507,063.76 | |||||
| Dunhua Fengda Broiler Breeding Company | 6,000,000.00 | -215,914.95 | 5,784,085.05 | |||||
| Tai’an Huijun Biomass Energy Company | 3,257,800.00 | -460,920.67 | 2,796,879.33 | |||||
| Dazhou Wellhope Bio-Tech Company | 5,000,000.00 | -28,918.10 | 4,971,081.90 | |||||
| Anshan Jiujianhe Paper Packaging Company | 2,516,209.00 | 488,253.97 | 3,004,462.97 | |||||
| Anshan Antai Plastic Products Company | 1,824,000.00 | 340,615.90 | 2,164,615.90 | |||||
| Bei’an Nongken Shengda Pasture Specialized cooperative | 7,830,000.00 | 590,847.40 | 8,420,847.40 | |||||
| Dalian Wellhope Fishery Company | 5,724,448.41 | 3,225,410.74 | 8,949,859.15 | |||||
| Liaoning Petmate Bio-Tech Company | 5,576,080.92 | -841,671.82 | 4,734,409.10 | |||||
| Guangzhou Yikun Trading Company | 108,257.73 | 1,245,288.49 | 1,353,546.22 | |||||
| Jilin Hengfeng Animal Health Products Company | 1,832,880.70 | 881,022.35 | 2,713,903.05 |
| Shenyang Wanlitian Agriculture and Animal Husbandry Company | 2,247,702.24 | 2,000,000.00 | 1,737,906.72 | 5,985,608.96 | ||||
| Daqing Supply and Marketing Agri-Tech Company | 3,527,190.48 | 1,018,859.02 | 4,546,049.50 | |||||
| Heilongjiang Zhongyi Ranch Information Technology Service Company | 442,305.46 | 8,024.79 | 450,330.25 | |||||
| Indonesia Max Animal Husbandry Technology Company | 1,460,475.96 | -51,703.20 | 1,408,772.76 | |||||
| Dalian Sida Food Company | 35,802,062.02 | 5,462,556.70 | 41,264,618.72 | |||||
| Shandong Fengkang Food Company | 64,000,000.00 | -7,493,887.15 | 56,506,112.85 | |||||
| Henan Jinhezhong Cattle Industry Company | 70,000.00 | -6,409.60 | 63,590.40 | |||||
| Subtotal | 2,058,378,690.97 | 109,105,511.00 | 361,315,137.75 | -7,123,225.06 | 96,237,700.00 | -12,204,640.94 | 2,413,233,773.72 | |
| Total | 2,070,047,882.51 | 109,105,511.00 | 361,315,137.75 | -7,123,225.06 | 96,237,700.00 | -12,204,640.94 | 2,424,902,965.26 | 17,900,000.00 |
12. Other equity instruments Investment
A. Other equity instruments Investment
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| China-Russia Friendship Association of Liaoning Province | 10,000.00 | 10,000.00 |
| Hengshui Hejia Agriculture and Animal Husbandry Company | 1,454,281.94 | 1,454,281.94 |
| Xi'an Micro Monkey E-commerce Company | 175,087.98 | |
| Xinji Jiayu Agriculture and Animal Husbandry Company | 900,000.00 | 900,000.00 |
| Shenze Jiahe Agriculture and Animal Husbandry Company | 3,020,978.16 | 1,500,000.00 |
| Dalian Xuelong Heniu Import and Export Company | 14,766,447.34 | 1,500,000.00 |
| Henan Shanghui Feed Development Company | 140,621.00 | 127,230.32 |
| Shenyang Bononveit Animal Health Products Company | 155,369.52 | 61,696.77 |
| Beijing Haobang Swine Artificial Insemination Service Company | 32,542.22 | |
| Gansu Judinghe Agriculture and Animal Husbandry | 400,000.00 | |
| Total | 20,847,697.96 | 5,760,839.23 |
| Item | Dividend income recognized in the current period | Cumulative gains | Cumulative losses | Amount of other comprehensive income transferred into retained earnings |
| China-Russia Friendship Association of Liaoning Province | ||||
| Hengshui Hejia Agriculture and Animal Husbandry Company | 145,718.06 | |||
| Xi'an Micro Monkey E-commerce Company | 340,000.00 | |||
| Xinji Jiayu Agriculture and Animal Husbandry Company | ||||
| Shenze Jiahe Agriculture and Animal Husbandry Company | 1,520,978.16 | |||
| Dalian Xuelong Heniu Import and Export Company | 233,552.66 | |||
| Henan Shanghui Feed Development Company | 359,379.00 | |||
| Shenyang Bononveit Animal Health Products Company | 75,369.52 | |||
| Beijing Haobang Swine Artificial Insemination Service Company | 66,535.00 | 66,535.00 | ||
| Total | 1,596,347.68 | 1,145,184.72 | 66,535.00 |
13. Fixed assets
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Fixed assets | 2,860,162,059.91 | 2,023,113,939.02 |
| Disposal of fixed assets | ||
| Total | 2,860,162,059.91 | 2,023,113,939.02 |
| Item | Buildings and structures | Machinery equipment | Transportation vehicle | Other equipment | Total |
| 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 amount | 554,194,283.26 | 471,192,352.98 | 32,908,452.02 | 27,292,622.46 | 1,085,587,710.72 |
| a. Purchased | 234,075,404.05 | 235,685,225.99 | 28,437,592.23 | 21,431,564.09 | 519,629,786.36 |
| b. Construction in progress transferred in | 238,935,701.37 | 182,075,762.58 | 3,715,229.27 | 4,676,476.34 | 429,403,169.56 |
| c. Increased by business combination | 81,183,177.84 | 53,431,364.41 | 755,630.52 | 1,184,582.03 | 136,554,754.80 |
| C. Decreased amount | 6,972,813.38 | 13,325,312.92 | 5,444,693.34 | 927,446.46 | 26,670,266.10 |
| a. Disposed or scrapped | 6,972,813.38 | 13,325,312.92 | 5,444,693.34 | 927,446.46 | 26,670,266.10 |
| b. Decreased by business combination | |||||
| D. Closing balance | 2,264,368,233.02 | 1,689,614,442.85 | 135,390,993.87 | 100,110,657.56 | 4,189,484,327.30 |
| 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 amount | 61,978,531.66 | 148,565,911.20 | 20,875,151.91 | 12,384,224.87 | 243,803,819.64 |
| a. Accruing | 49,383,347.96 | 136,000,553.88 | 20,709,035.09 | 11,778,301.54 | 217,871,238.47 |
| b. Increased by business combination | 12,595,183.70 | 12,565,357.32 | 166,116.82 | 605,923.33 | 25,932,581.17 |
| C. Decreased amount | 4,086,044.94 | 9,672,415.08 | 4,761,441.20 | 850,512.48 | 19,370,413.70 |
| a. Disposed or scrapped | 4,086,044.94 | 9,672,415.08 | 4,761,441.20 | 850,512.48 | 19,370,413.70 |
| b. Decreased by business combination |
| D. Closing balance | 428,632,943.67 | 640,093,339.55 | 96,410,042.57 | 63,272,145.09 | 1,228,408,470.88 |
| 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 amount | 1,525,673.82 | 1,025,837.04 | 12,558.00 | 13.35 | 2,564,082.21 |
| a. Disposed or scrapped | 1,525,673.82 | 1,025,837.04 | 12,558.00 | 13.35 | 2,564,082.21 |
| D. Closing balance | 58,435,648.93 | 41,878,702.66 | 191,830.73 | 407,614.19 | 100,913,796.51 |
| 4. Book value | |||||
| A. Closing book value | 1,777,299,640.42 | 1,007,642,400.64 | 38,789,120.57 | 36,430,898.28 | 2,860,162,059.91 |
| B. Opening book value | 1,286,444,983.44 | 687,643,019.66 | 27,426,514.60 | 21,599,421.32 | 2,023,113,939.02 |
| Item | Closing balance | Opening balance |
| Construction in progress | 322,895,206.90 | 240,012,874.86 |
| Engineering material | ||
| Total | 322,895,206.90 | 240,012,874.86 |
| Item | Closing balance | Opening balance | ||
| Book balance | Book value | Book balance | Book value | |
| Hebei Taihang Wellhope-broiler slaughtering and processing | 87,767,632.25 | 87,767,632.25 | ||
| Hainan Wellhope-feed production line with 200,000 tons per year | 51,058,543.76 | 51,058,543.76 | 13,326,858.52 | 13,326,858.52 |
| Lingyuan Wellhope-pig farm construction | 49,003,226.94 | 49,003,226.94 | 2,119,531.03 | 2,119,531.03 |
| Yangling Wellhope-plant construction and renovation | 13,336,130.05 | 13,336,130.05 | ||
| Dalian Zhongjia-the second phase of chicken processing and slaughtering project | 12,688,431.38 | 12,688,431.38 | 2,226,208.39 | 2,226,208.39 |
| Shenyang Wellhope Poultry- the first phase of layer factory | 12,147,049.98 | 12,147,049.98 | ||
| Daqing Wellhope Food-production workshop construction | 11,723,775.64 | 11,723,775.64 | ||
| Liaoning Wellhope- construction of raw material warehouse | 9,457,098.75 | 9,457,098.75 | ||
| Lixin Xiangfeng-pig farm construction | 9,425,339.00 | 9,425,339.00 | ||
| Qingyuan Wellhope-feed production line with 400,000 tons per year | 9,143,447.15 | 9,143,447.15 | ||
| Changchun Wellhope Food-factory area reconstruction | 4,726,334.17 | 4,726,334.17 | ||
| Fushun Agriculture and Animal Husbandry-pig farm construction | 890,360.00 | 890,360.00 | 81,582,306.27 | 81,582,306.27 |
| Dalian Heyuan-Dayao hatching farm | 25,304,688.50 | 25,304,688.50 | ||
| Jilin Hefeng-pig farm construction | 4,607,316.99 | 4,607,316.99 | ||
| Shulan Fengtai Agriculture and Animal Husbandry- broiler house construction | 55,672,411.04 | 55,672,411.04 | ||
| Puyang Wellhope- broiler house construction | 6,345,004.05 | 6,345,004.05 | ||
| Shenyang Huakang Broiler Company-workshop renovation | 8,929,925.91 | 8,929,925.91 | ||
| Lankao Wellhope-premix project | 8,510,622.36 | 8,510,622.36 | ||
| Other constructions | 51,527,837.83 | 51,527,837.83 | 31,388,001.80 | 31,388,001.80 |
| Total | 322,895,206.90 | 322,895,206.90 | 240,012,874.86 | 240,012,874.86 |
B. Changes of important constructions in progress
Unit: yuan Currency: RMB
| Project | Budget | Opening balance | Increased amount | Amount transferred in fixed assets | Closing balance | Percentage of accumulated input accounting for the budget % | Construction progress | Source of funds |
| Hebei Taihang Wellhope-broiler slaughtering and processing | 400,000,000.00 | 87,767,632.25 | 87,767,632.25 | 21.00 | 16% | Self-raised | ||
| Hainan Wellhope-feed production line with 200,000 tons per year | 85,000,000.00 | 13,326,858.52 | 53,690,582.03 | 15,958,896.79 | 51,058,543.76 | 78.84 | 79% | Self-raised |
| Lingyuan Wellhope-pig farm construction | 70,000,000.00 | 2,119,531.03 | 46,883,695.91 | 49,003,226.94 | 70.00 | 70% | Self-raised | |
| Yangling Wellhope- plant construction and renovation | 23,000,000.00 | 13,336,130.05 | 13,336,130.05 | 57.98 | 58% | Self-raised | ||
| Dalian Zhongjia-the second phase of chicken processing and slaughtering project | 250,000,000.00 | 2,226,208.39 | 15,564,929.32 | 5,102,706.33 | 12,688,431.38 | 7.12 | 8% | Self-raised |
| Shenyang Wellhope Poultry- the first phase of layer factory | 15,000,000.00 | 12,147,049.98 | 12,147,049.98 | 80.98 | 81% | Self-raised | ||
| Daqing Wellhope Food-production workshop construction | 12,000,000.00 | 11,723,775.64 | 11,723,775.64 | 97.70 | 100% | Self-raised | ||
| Liaoning Wellhope- construction of raw material warehouse | 30,000,000.00 | 9,457,098.75 | 9,457,098.75 | 31.52 | 32% | Self-raised | ||
| Lixin Xiangfeng-pig farm construction | 30,000,000.00 | 9,425,339.00 | 9,425,339.00 | 31.42 | 32% | Self-raised | ||
| QingyuanWellhope-feed production line with 400,000 tons per year | 70,000,000.00 | 9,143,447.15 | 9,143,447.15 | 13.06 | 10% | Self-raised |
| Changchun Wellhope Food-factory area reconstruction | 97,300,000.00 | 4,726,334.17 | 4,726,334.17 | 4.86 | 10% | Self-raised | ||
| Fushun Agriculture and Animal Husbandry-pig farm construction | 300,300,000.00 | 81,582,306.27 | 58,099,549.97 | 138,791,496.24 | 890,360.00 | 98.12 | 98% | Self-raised |
| Dalian Heyuan-Dayao hatching farm | 50,000,000.00 | 25,304,688.50 | 23,466,469.50 | 48,771,158.00 | 97.54 | 100% | Self-raised | |
| Jilin Hefeng-pig farm construction | 54,000,000.00 | 4,607,316.99 | 6,799,693.49 | 11,407,010.48 | 96.00 | 100% | Self-raised | |
| Shulan Fengtai Agriculture and Animal Husbandry-broiler house construction | 67,256,185.00 | 55,672,411.04 | 13,975,985.86 | 69,648,396.90 | 100.00 | 100% | Self-raised | |
| Puyang Wellhope- broiler house construction | 21,000,000.00 | 6,345,004.05 | 2,209,097.00 | 8,554,101.05 | 100.00 | 100% | Self-raised | |
| Shenyang Huakang Broiler Company- workshop renovation | 12,741,491.00 | 8,929,925.91 | 3,088,993.08 | 12,018,918.99 | 94.33 | 100% | Self-raised | |
| Lankao Wellhope- premix project | 29,870,000.00 | 8,510,622.36 | 19,290,705.20 | 27,801,327.56 | 93.06 | 100% | Self-raised | |
| Total | 1,617,467,676.00 | 208,624,873.06 | 400,796,508.35 | 338,054,012.34 | 271,367,369.07 | / | / |
15. Productive biological asset
Productive biological assets using cost measurement model
Unit: yuan Currency: RMB
| Item | Animal husbandry | Total | |
| Broiler breeder | Pig breeder | ||
| 1. Original value | |||
| A. Opening balance | 52,264,742.77 | 67,953,454.22 | 120,218,196.99 |
| B. Increased amount | 61,150,663.85 | 195,455,652.41 | 256,606,316.26 |
| a. Externally purchased | 22,601,238.14 | 95,939,394.62 | 118,540,632.76 |
| b. Breeding by own farm | 38,549,425.71 | 99,516,257.79 | 138,065,683.50 |
| C. Decreased amount | 55,042,535.39 | 58,327,405.14 | 113,369,940.53 |
| a. Disposed | 55,042,535.39 | 58,327,405.14 | 113,369,940.53 |
| D. closing balance | 58,372,871.23 | 205,081,701.49 | 263,454,572.72 |
| 2. Accumulated depreciation | |||
| A. Opening balance | 22,090,264.89 | 3,301,619.22 | 25,391,884.11 |
| B. Increased amount | 42,020,630.00 | 23,918,175.89 | 65,938,805.89 |
| a. Accruing | 42,020,630.00 | 23,918,175.89 | 65,938,805.89 |
| C. Decreased amount | 41,981,506.81 | 7,904,160.60 | 49,885,667.41 |
| a. Disposed | 41,981,506.81 | 7,904,160.60 | 49,885,667.41 |
| D. Closing balance | 22,129,388.08 | 19,315,634.51 | 41,445,022.59 |
| 3. Impairment provision | |||
| 4. Book value | |||
| A. Closing book value | 36,243,483.15 | 185,410,544.02 | 221,654,027.17 |
| B. Opening book value | 30,174,477.88 | 64,651,835.00 | 94,826,312.88 |
| Item | Land use rights | Computer software and other | Total |
| 1. Original value | |||
| A. Opening balance | 283,885,270.01 | 12,795,928.14 | 296,681,198.15 |
| B. Increased amount | 54,877,628.75 | 337,213.42 | 55,214,842.17 |
| a. Purchased | 44,262,441.04 | 337,213.42 | 44,599,654.46 |
| b. Increased by business combination | 10,615,187.71 | 10,615,187.71 | |
| C. Decreased amount | 25,700.00 | 83,660.29 | 109,360.29 |
| a. Disposed | 25,700.00 | 83,660.29 | 109,360.29 |
| b. Decreased by business combination | |||
| D. closing balance | 338,737,198.76 | 13,049,481.27 | 351,786,680.03 |
| 2. Accumulated amortization | |||
| A. Opening balance | 45,817,866.76 | 5,299,164.00 | 51,117,030.76 |
| B. Increased amount | 7,501,178.60 | 1,462,162.25 | 8,963,340.85 |
| a. Accruing | 6,423,665.41 | 1,462,162.25 | 7,885,827.66 |
| b. Increased by business combination | 1,077,513.19 | 1,077,513.19 | |
| C. Decreased amount | 79,144.73 | 79,144.73 | |
| a. Disposed | 79,144.73 | 79,144.73 | |
| b. Decreased by business combination | |||
| D. Closing balance | 53,319,045.36 | 6,682,181.52 | 60,001,226.88 |
| 3. Impairment provision | |||
| 4. Book value | |||
| A. Closing book value | 285,418,153.40 | 6,367,299.75 | 291,785,453.15 |
| B. Opening book value | 238,067,403.25 | 7,496,764.14 | 245,564,167.39 |
| Invested entity or matters forming goodwill | Opening balance | Increased amount | Decreased amount | Closing balance |
| Formed by business combination | Disposal | |||
| Dalian Zhongjia Food Company | 290,425.67 | 290,425.67 | ||
| Total | 290,425.67 | 290,425.67 |
| Item | Opening balance | Increased amount | Amortized amount | Closing balance |
| Broiler cages | 82,161,315.11 | 55,649,585.76 | 26,511,729.35 | |
| Land lease fee | 30,526,112.57 | 62,453,539.61 | 7,141,321.20 | 85,838,330.98 |
| Fixed assets improvement | 16,377,506.34 | 11,657,431.82 | 6,099,381.47 | 21,935,556.69 |
| Other | 5,439,283.78 | 7,783,564.99 | 3,562,903.50 | 9,659,945.27 |
| Total | 134,504,217.80 | 81,894,536.42 | 72,453,191.93 | 143,945,562.29 |
| Item | Closing balance | Opening balance | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Provision for the impairment of assets | 153,343,633.52 | 31,735,760.20 | 156,147,402.07 | 30,646,841.04 |
| Unrealized profit of internal transaction | 33,006,690.27 | 6,521,452.04 | 23,895,127.90 | 4,804,391.92 |
| Equity incentive expenses | 1,331,842.67 | 199,776.40 | 3,243,114.20 | 508,474.55 |
| Deferred income | 500,000.00 | 125,000.00 | ||
| Changes in fair value | 1,397,540.92 | 209,642.73 | 112,115.92 | 28,028.98 |
| Total | 189,579,707.38 | 38,791,631.37 | 183,397,760.09 | 35,987,736.49 |
| Item | Closing balance | Opening balance | ||
| Taxable temporary differences | Deferred income tax liabilities | Taxable temporary differences | Deferred income tax liabilities | |
| Book value of assets greater than the tax base | 9,692,077.59 | 1,936,853.23 | 1,611,908.32 | 396,995.58 |
| Total | 9,692,077.59 | 1,936,853.23 | 1,611,908.32 | 396,995.58 |
C. Details of unrecognized deferred income tax asset
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Deductible temporary difference | 56,201,873.58 | 51,189,855.72 |
| Deductible losses | 224,930,527.78 | 207,837,022.11 |
| Total | 281,132,401.36 | 259,026,877.83 |
| Year | Closing balance | Opening balance |
| 2021 | 31,438,117.74 | 37,833,545.02 |
| 2022 | 30,172,825.95 | 38,752,564.40 |
| 2023 | 31,966,243.00 | 40,585,903.64 |
| 2024 | 64,133,240.00 | 77,825,369.67 |
| 2025 | 49,578,245.70 | |
| 2026 | 611,959.34 | |
| 2027 | 4,420,084.90 | 2,082,969.89 |
| 2028 | 8,255,571.42 | 6,715,140.33 |
| 2029 | 4,278,584.70 | 4,041,529.16 |
| 2030 | 75,655.03 | |
| Total | 224,930,527.78 | 207,837,022.11 |
| Item | Closing balance | Opening balance | ||
| Book balance | Book value | Book balance | Book value | |
| Prepayments of long-lived assets | 51,380,357.44 | 51,380,357.44 | 44,490,695.92 | 44,490,695.92 |
| Prepayments of fees to contract farms | 474,836,821.82 | 474,836,821.82 | 277,650,038.27 | 277,650,038.27 |
| Prepayments of house rent | 4,923,499.98 | 4,923,499.98 | 15,322,533.37 | 15,322,533.37 |
| Total | 531,140,679.24 | 531,140,679.24 | 337,463,267.56 | 337,463,267.56 |
| Item | Closing balance | Opening balance |
| Guaranteed loan | 220,517,679.61 | 109,638,205.81 |
| Credit loan | 889,153,690.88 | 941,240,000.00 |
| Accrued interest | 1,001,498.91 | |
| Total | 1,110,672,869.40 | 1,050,878,205.81 |
22. Notes payable
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Bank acceptance | 4,000,000.00 | |
| Total | 4,000,000.00 |
| Item | Closing balance | Opening balance |
| Accounts payable related to purchasing and expenses | 934,645,438.88 | 613,009,029.34 |
| Accounts payable related to long-lived assets | 134,323,150.97 | 46,207,454.50 |
| Total | 1,068,968,589.85 | 659,216,483.84 |
| Item | Closing balance | Opening balance |
| Proceeds from sale | 15,522,362.13 | 4,879,960.48 |
| Total | 15,522,362.13 | 4,879,960.48 |
| Item | Closing balance | Opening balance |
| Proceeds from sale | 365,124,817.02 | 203,523,445.03 |
| Total | 365,124,817.02 | 203,523,445.03 |
| Item | Opening balance | Increased amount | Decreased amount | Closing balance |
| 1. Short-term benefits | 61,001,277.97 | 769,318,440.11 | 738,934,262.02 | 91,385,456.06 |
| 2. Post-employment benefits- defined contribution plan | 1,548,086.15 | 9,886,142.79 | 10,363,209.44 | 1,071,019.50 |
| 3. Dismission welfare | 366,124.79 | 366,124.79 | ||
| 4. Other benefits due within one year | ||||
| Total | 62,549,364.12 | 779,570,707.69 | 749,663,596.25 | 92,456,475.56 |
| Item | Opening balance | Increased amount | Decreased amount | Closing balance |
| 1. Wages, bonuses, allowances and subsidies | 59,658,147.63 | 675,333,006.96 | 645,101,381.20 | 89,889,773.39 |
| 2. Staff benefits expenses | 56,009,173.15 | 56,009,173.15 | ||
| 3. Social insurance charges | 454,499.01 | 23,692,331.55 | 23,558,640.76 | 588,189.80 |
| including: Medical insurance premiums | 375,466.19 | 21,924,774.30 | 21,786,402.25 | 513,838.24 |
| Occupational injury insurance premium | 52,072.13 | 647,288.74 | 658,251.96 | 41,108.91 |
| Birth insurance premium | 26,960.69 | 1,120,268.51 | 1,113,986.55 | 33,242.65 |
| 4. Housing provident fund | 139,516.00 | 9,849,159.89 | 9,782,246.21 | 206,429.68 |
| 5. Employee labor union dues, employee education expense | 749,115.33 | 4,434,768.56 | 4,482,820.70 | 701,063.19 |
| 6. Short-term paid absences | ||||
| 7. Short-term profit-sharing plan | ||||
| Total | 61,001,277.97 | 769,318,440.11 | 738,934,262.02 | 91,385,456.06 |
| Item | Opening balance | Increased amount | Decreased amount | Closing balance |
| Basic endowment insurance | 1,499,516.44 | 9,559,614.82 | 10,021,631.51 | 1,037,499.75 |
| Unemployment insurance expense | 48,569.71 | 326,527.97 | 341,577.93 | 33,519.75 |
| Enterprise annuity | ||||
| Total | 1,548,086.15 | 9,886,142.79 | 10,363,209.44 | 1,071,019.50 |
| Item | Closing balance | Opening balance |
| Value-added tax | 1,562,198.72 | 1,351,995.42 |
| Corporate income tax | 40,452,996.63 | 32,731,646.44 |
| Individual income tax | 2,172,312.75 | 729,362.56 |
| City maintenance and construction tax | 117,653.05 | 109,286.49 |
| Extra charges of education funds | 87,641.61 | 74,513.94 |
| House property tax | 802,901.94 | 697,937.54 |
| City and town land use tax | 1,289,546.55 | 1,343,282.00 |
| Stamp tax | 811,721.16 | 462,741.13 |
| Other | 293,823.12 | 180,188.32 |
| Total | 47,590,795.53 | 37,680,953.84 |
| Item | Closing balance | Opening balance |
| Interest payable | 1,528,201.39 | |
| Dividends payable | 1,500,000.00 | 1,434,027.14 |
| Other payables | 279,173,085.07 | 339,277,132.75 |
| Total | 280,673,085.07 | 342,239,361.28 |
A. Interest payable
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Interests of long-term loan that pay interests periodically and repay the principal due at maturity | 237,583.33 | |
| Interest payable of short-term borrowings | 1,290,618.06 | |
| Total | 1,528,201.39 |
| Item | Closing balance | Opening balance |
| Common stock dividends | 1,500,000.00 | 1,434,027.14 |
| Total | 1,500,000.00 | 1,434,027.14 |
| Item | Closing balance | Opening balance |
| Operational payables related to expenses and transactions | 227,177,270.07 | 204,082,682.75 |
| Investment related payables | 6,300,000.00 | 64,505,700.00 |
| Repurchasing obligations of non-restricted stock | 45,695,815.00 | 70,688,750.00 |
| Total | 279,173,085.07 | 339,277,132.75 |
| Item | Closing balance | Opening balance |
| Long-term borrowings due within 1 year | 102,845,470.70 | 52,000,000.00 |
| Long-term payables due within 1 year | 19,051,435.96 | 18,593,717.62 |
| Total | 121,896,906.66 | 70,593,717.62 |
| Item | Closing balance | Opening balance |
| Short-term bonds payable | ||
| Refunds payable | ||
| Unamortized output VAT | 3,386,523.00 | 1,125,843.17 |
| Total | 3,386,523.00 | 1,125,843.17 |
| Item | Closing balance | Opening balance |
| Credit loan | 573,789,000.00 | 174,330,000.00 |
| Interest payable | 1,091,271.67 | |
| Total | 574,880,271.67 | 174,330,000.00 |
32. Long-term payables
Unit: yuan Currency: RMB
| Item | Closing balance | Opening balance |
| long-term payable | 15,458,230.92 | 11,025,000.09 |
| Total | 15,458,230.92 | 11,025,000.09 |
| Item | Opening balance | Closing balance |
| Accrued financial lease outlay | 15,458,230.92 | 11,025,000.09 |
| Item | Opening balance | Increased amount | Decreased amount | Closing balance | Reason |
| Government grant | 31,841,250.00 | 17,461,277.47 | 7,063,654.72 | 42,238,872.75 | |
| total | 31,841,250.00 | 17,461,277.47 | 7,063,654.72 | 42,238,872.75 | / |
Projects receiving government grants
Unit: yuan Currency: RMB
| Liability item | Opening balance | Amount of newly increased grant | Amount recorded in other income | Other changes | Closing balance | Related to assets or related to income |
| Lingyuan Wellhope 100,000 tons ruminant feed project | 3,500,000.00 | 500,000.00 | 3,000,000.00 | related to asset | ||
| Lingyuan Wellhope corn purchasing and storage barn | 2,400,000.00 | 300,000.00 | 2,100,000.00 | related to asset | ||
| Shenyang city central industrial transformation and upgrading funds | 8,651,250.00 | 1,620,000.00 | 1,282,500.00 | 8,988,750.00 | related to asset | |
| Lingyuan Wellhope 50,000 tons organic fertilizer project | 2,700,000.00 | 300,000.00 | 2,400,000.00 | related to asset | ||
| 2019 provincial sic-tech major special project funds | 2,180,000.00 | 3,220,000.00 | 2,700,000.00 | 2,700,000.00 | related to asset | |
| Project funds related to benefit farming policy | 4,310,000.00 | 4,310,000.00 | 3,879,000.00 | related to asset | ||
| 2019 Central Government’s development funds for high-quality development of manufacturing industry (green manufacturing) | 8,100,000.00 | 8,100,000.00 | 7,290,000.00 | related to asset | ||
| 2020 Liaoning province industrial internet innovation and development special project funds | 5,000,000.00 | 5,000,000.00 | related to asset | |||
| Provincial Research Funds for Corn Major Special Project Collaborators | 1,000,000.00 | 1,000,000.00 | related to income |
| White feather broiler green platform construction project | 945,000.00 | 945,000.00 | related to asset | |||
| Epidemic low-interest loans government subsidies | 1,076,277.47 | 740,154.72 | 336,122.75 | related to income | ||
| Jilin province science and technology special funds in 2020 | 500,000.00 | 500,000.00 | related to income | |||
| Funding for the Hebao pig project | 4,100,000.00 | 4,100,000.00 | related to asset | |||
| Total | 31,841,250.00 | 17,461,277.47 | 6,323,500.00 | 740,154.72 | 42,238,872.75 | / |
34. Share capital
Unit: yuan Currency: RMB
| Opening balance | Changes (increase or decrease) | Closing balance | |||
| Issuing new shares | Other | Subtotal | |||
| Total shares | 922,304,396.00 | -244,500.00 | -244,500.00 | 922,059,896.00 | |
| Item | Opening balance | Increased amount | Decreased amount | Closing balance |
| Capital premium (share capital premium) | 853,610,605.56 | 853,610,605.56 | ||
| Other capital reserves | 29,112,460.73 | 5,436,850.36 | 34,549,311.09 | |
| Total | 882,723,066.29 | 5,436,850.36 | 888,159,916.65 |
| Item | Opening balance | Increased amount | Decreased amount | Closing balance |
| Repurchase of restricted stock | 70,688,750.00 | 24,992,935.00 | 45,695,815.00 | |
| Total | 70,688,750.00 | 24,992,935.00 | 45,695,815.00 |
37. Other comprehensive income
Unit: yuan Currency: RMB
| Item | Opening balance | Amount in current period | Closing balance | |||
| Pre-tax | Deduct: Transfer to retained earnings in the current period from prior periods charged to other comprehensive income | After-tax, attributable to parent company | After-tax, attributable to non-controlling interest | |||
| 1. Other comprehensive income that cannot be reclassified into gains or losses | -760,192.18 | 1,220,323.73 | -66,535.00 | 1,240,959.08 | 45,899.65 | 480,766.90 |
| Changes in the fair value of other equity instruments | -760,192.18 | 1,220,323.73 | -66,535.00 | 1,240,959.08 | 45,899.65 | 480,766.90 |
| 2. Other comprehensive income that will be reclassified into gains or losses | 6,883,027.48 | -11,523,776.14 | -9,521,296.99 | -2,002,479.15 | -2,638,269.51 | |
| including: other comprehensive income that can be transferred in gains or losses under the equity method | 5,932,621.40 | -7,123,225.06 | -7,100,475.65 | -22,749.41 | -1,167,854.25 | |
| Translation balance of foreign currency financial statements | 950,406.08 | -4,400,551.08 | -2,420,821.34 | -1,979,729.74 | -1,470,415.26 | |
| Total other comprehensive income | 6,122,835.30 | -10,303,452.41 | -66,535.00 | -8,280,337.91 | -1,956,579.50 | -2,157,502.61 |
| Item | Opening balance | Increased amount | Closing balance |
| Statutory surplus reserve | 352,059,456.90 | 65,311,049.43 | 417,370,506.33 |
| Total | 352,059,456.90 | 65,311,049.43 | 417,370,506.33 |
| Item | 2020 | 2019 |
| Undistributed profit at the end of prior period before adjustment | 3,605,618,553.05 | 2,651,462,525.08 |
| Adjusting total undistributed profit at the beginning of current period | 91,554.12 | |
| Undistributed profit at the beginning of current period after adjustment | 3,605,618,553.05 | 2,651,554,079.20 |
| add: Net profit attributable to the owners of the parent company in current period | 1,235,162,151.48 | 1,199,347,355.96 |
| deduct: Extraction of statutory surplus reserve | 65,311,049.43 | 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 | 4,572,660,487.98 | 3,605,618,553.05 |
| Item | 2020 | 2019 | ||
| Revenue | Cost | Revenue | Cost | |
| Primary businesses | 23,795,661,737.11 | 21,669,041,137.36 | 17,783,082,417.36 | 15,788,139,269.90 |
| Other businesses | 21,939,029.15 | 14,549,874.38 | 9,009,556.22 | 3,880,745.65 |
| Total | 23,817,600,766.26 | 21,683,591,011.74 | 17,792,091,973.58 | 15,792,020,015.55 |
| Item | 2020 | 2019 |
| City maintenance and construction tax | 1,224,844.77 | 1,137,929.68 |
| Extra charges of education funds | 897,418.84 | 807,658.13 |
| House property tax | 8,012,204.63 | 6,831,387.45 |
| Land use tax | 11,188,806.30 | 10,819,153.17 |
| Stamp tax | 8,325,020.40 | 5,826,905.19 |
| Other | 1,652,569.59 | 1,087,449.43 |
| Total | 31,300,864.53 | 26,510,483.05 |
| Item | 2020 | 2019 |
| Payroll | 230,455,048.50 | 205,619,077.91 |
| Travelling expense | 118,203,610.39 | 114,195,701.76 |
| Transportation and handling expense and vehicle expense | 14,268,844.17 | 79,208,314.37 |
| Service fee | 18,440,888.50 | 15,968,067.70 |
| Business entertainment expense | 21,382,773.93 | 20,982,184.66 |
| Business advertising expense | 17,886,211.01 | 13,494,317.66 |
| Lease expense | 5,224,564.43 | 6,181,904.43 |
| Meeting expenditure | 4,749,542.89 | 4,368,050.10 |
| Sales service charge | 10,265,689.03 | 4,927,406.41 |
| Office and communication fee | 5,887,049.55 | 5,134,153.70 |
| Subtotal of other items | 18,543,773.49 | 17,138,345.34 |
| Total | 465,307,995.89 | 487,217,524.04 |
43. Administration expense
Unit: yuan Currency: RMB
| Item | 2020 | 2019 |
| Payroll | 141,131,861.94 | 112,439,535.70 |
| Depreciation | 35,401,179.38 | 40,847,499.96 |
| Office and communication fee | 18,549,111.05 | 16,797,136.59 |
| Travelling expense | 8,412,870.03 | 9,014,660.58 |
| Repair charge | 14,761,977.62 | 11,342,686.18 |
| Lease expense | 6,254,489.04 | 5,146,925.10 |
| Amortization of intangible assets | 8,617,015.70 | 7,683,509.63 |
| Business entertainment expense | 8,907,262.28 | 7,482,966.92 |
| Water and electricity | 5,143,990.72 | 4,299,424.06 |
| Service fee | 16,921,076.32 | 9,642,037.71 |
| Heating fee | 4,750,298.48 | 6,817,865.20 |
| Subtotal of other items | 41,424,564.47 | 44,046,443.67 |
| Total | 310,275,697.03 | 275,560,691.30 |
| Item | 2020 | 2019 |
| Payroll | 24,857,318.54 | 25,431,025.81 |
| Design and experiment fee | 36,616,357.05 | 17,512,053.59 |
| Material and appliance charge | 14,439,616.57 | 10,743,283.02 |
| Travel expense | 2,130,998.14 | 3,941,624.57 |
| Depreciation and amortization expense | 3,253,286.96 | 3,058,470.18 |
| Subtotal of other items | 2,289,529.14 | 4,522,659.48 |
| Total | 83,587,106.40 | 65,209,116.65 |
| Item | 2020 | 2019 |
| Interest expenditure | 75,771,816.48 | 77,508,278.78 |
| deduct: Interest income | -14,953,268.10 | -9,696,477.31 |
| add: Exchange loss (deduct income) | 413,230.21 | 5,689,613.00 |
| add: Service charge | 3,448,435.13 | 2,891,552.83 |
| Total | 64,680,213.72 | 76,392,967.30 |
| Item | 2020 | 2019 |
| Government grant recorded in | 23,500,036.20 | 11,495,398.41 |
| Total | 23,500,036.20 | 11,495,398.41 |
| Item | 2020 | 2019 |
| Income from long-term equity investment measured by the equity method | 361,315,137.75 | 629,093,604.62 |
| Income from disposal of long-term equity investment | 3,624,691.43 | |
| Investment income from financial assets held for trading | 2,828,562.02 | 3,545,198.63 |
| Dividend income from other equity instrument investments during | 100,000.00 |
| the holding period | ||
| Investment income from disposal of trading financial assets | -1,579,994.94 | 195,571.87 |
| Income from disposal of other equity instrument investments | 100,000.00 | |
| After losing control, gain or loss generated by the re-measurement of the residual equity according to fair value | 820,378.27 | |
| Total | 362,563,704.83 | 637,479,444.82 |
| Source of income from changes in fair value | 2020 | 2019 |
| Trading financial assets | -1,397,309.00 | 577,449.00 |
| including: Income from fair value changes generated by derivative financial instruments | -1,397,309.00 | 577,449.00 |
| Total | -1,397,309.00 | 577,449.00 |
| Item | 2020 | 2019 |
| Bad debt loss of notes receivable | -32,632.65 | |
| Bad debt loss of accounts receivable | -20,584,815.87 | -9,898,584.12 |
| Bad debt loss of other receivables | 14,432,460.68 | -16,445,616.93 |
| Total | -6,184,987.84 | -26,344,201.05 |
| Item | 2020 | 2019 |
| Loss of inventory falling price and loss of impairment of contract performance cost | -35,085,108.79 | -40,242,301.07 |
| Impairment loss on fixed assets | -58,216,968.82 | |
| Impairment loss on contract assets | -87,784.04 | |
| Total | -35,172,892.83 | -98,459,269.89 |
| Item | 2020 | 2019 |
| Gain or loss from disposal of fixed assets | 624,443.26 | 1,177,420.87 |
| Gain or loss from disposal of productive biological asset | 2,544,898.80 | -605,269.52 |
| Total | 3,169,342.06 | 572,151.35 |
| Item | 2020 | 2019 | Amount included in current extraordinary items |
| Total gains or losses from disposal of non-current assets | 317,175.57 | 54,984.56 | 317,175.57 |
| Government grants | 8,861,828.97 | 10,868,297.38 | 8,861,828.97 |
| Other | 3,694,824.63 | 2,483,254.32 | 3,694,824.63 |
| Total | 12,873,829.17 | 13,406,536.26 | 12,873,829.17 |
Government grants recorded in current gains and losses
Unit: yuan Currency: RMB
| Item | 2020 | 2019 | Related to assets or related to income |
| Tax subsidy from Food and Drug Office | 3,000,000.00 | related to income | |
| Moderate scale operation project | 1,925,960.00 | related to income | |
| Award for resumption of production during the COVID-19 | 720,000.00 | related to income | |
| Award for production increment from Finance Bureau of Daxing District, Beijing | 500,000.00 | related to income | |
| Subtotal for other projects under RMB 500,000 | 2,715,868.97 | 2,433,497.38 | related to income |
| Special funds for foreign trade industry development | 3,884,800.00 | related to income | |
| Incentive fund for China's top 500 private enterprises | 2,000,000.00 | related to income | |
| Special fund for financial development in 2019 | 2,000,000.00 | related to income | |
| Support fund for enterprise development | 550,000.00 | related to income | |
| Total | 8,861,828.97 | 10,868,297.38 | / |
| Item | 2020 | 2019 | Amount included in current extraordinary items |
| Total losses from disposal of non-current assets | 14,460,992.11 | 7,397,933.97 | 14,460,992.11 |
| External donations | 3,281,079.38 | 3,782,783.00 | 3,281,079.38 |
| Extraordinary loss | 9,972,261.57 | 13,449,568.40 | 9,972,261.57 |
| Amercement outlay | 1,203,665.89 | 924,253.69 | 1,203,665.89 |
| Other | 58,469.67 | 183,300.79 | 58,469.67 |
| Total | 28,976,468.62 | 25,737,839.85 | 28,976,468.62 |
| Item | 2020 | 2019 |
| Current income tax expense | 152,918,204.68 | 90,037,145.50 |
| Deferred income tax expense | -1,264,037.23 | -5,330,616.57 |
| Total | 151,654,167.45 | 84,706,528.93 |
| Item | 2020 |
| Total profit | 1,509,233,130.92 |
| Income tax expenses calculated at statutory or applicable tax rates | 226,384,969.64 |
| Effects of subsidiaries that are subject to different tax rates | 27,672,741.86 |
| Effects of adjusting the income tax on previous periods | -2,874,146.23 |
| Effects of non-taxable income | -97,051,440.04 |
| Effects of non-deductible costs, expenses and losses | 4,558,827.90 |
| Effects of using deductible losses of deferred income tax assets that have not been recognized in previous period | -8,278,079.94 |
| Effects of deductible temporary differences or deductible losses on deferred income tax assets that have not been recognized in current period | 12,169,821.68 |
| Calculation and deduction of R&D expenditure | -5,930,394.68 |
| Other | -4,998,132.74 |
| Income tax expense | 151,654,167.45 |
| Item | 2020 | 2019 |
| Government grants | 38,499,642.64 | 33,951,978.38 |
| Interest income | 14,953,268.10 | 9,696,477.31 |
| Subtotal of transactions and other | 46,320,016.55 | 74,276,495.00 |
| Total | 99,772,927.29 | 117,924,950.69 |
| Item | 2020 | 2019 |
| Travelling expense | 128,747,478.56 | 127,151,986.91 |
| Transportation and handling expense | 14,268,844.17 | 79,208,314.37 |
| R&D expenditure | 51,055,973.62 | 32,777,996.09 |
| Business entertainment expense | 21,382,773.93 | 28,465,151.58 |
| Office and communication fee | 24,436,160.60 | 21,931,290.29 |
| Service fee | 35,361,964.82 | 22,863,995.41 |
| Other operating expenses paid | 60,209,885.08 | 76,106,845.41 |
| Transactions and other paid | 46,659,223.54 | 42,979,843.73 |
| Total | 382,122,304.32 | 431,485,423.79 |
| Item | 2020 | 2019 |
| L/C Guarantee deposits decreased | 1,778,735.87 | 28,220,000.81 |
| Futures margin decreased | 33,086,950.46 | |
| Net cash received from acquiring subsidiaries | 10,990,093.41 | 7,131,060.28 |
| Total | 45,855,779.74 | 35,351,061.09 |
| Item | 2020 | 2019 |
| Futures margin increased | 34,912,964.17 | |
| Net cash paid for disposal of subsidiaries | 237,407.44 | 3,122,032.62 |
| Cash paid for providing funds | 4,350,000.00 | |
| Total | 4,587,407.44 | 38,034,996.79 |
E. Cash received from other activities related to financing
Unit: yuan Currency: RMB
| Item | 2020 | 2019 |
| Subsidiaries receive capital increase from non-controlling shareholders in advance | 19,499,680.00 | |
| Cash received from disposal of subsidiaries' shareholdings | 6,056,251.57 | |
| Total | 6,056,251.57 | 19,499,680.00 |
| Item | 2020 | 2019 |
| Parent company repurchased shares that did not meet the unlocking conditions | 1,185,825.00 | |
| Finance lease fee | 854,460.00 | |
| Cash paid for buying non-controlling interests of subsidiaries | 6,433,985.36 | |
| Total | 2,040,285.00 | 6,433,985.36 |
| Further information | 2020 | 2019 |
| 1. Adjusting net profit to cash flow from operating activities | ||
| Net profit | 1,357,578,963.47 | 1,497,464,315.81 |
| add: Assets impairment provision | 35,172,892.83 | 98,459,269.89 |
| Credit impairment losses | 6,184,987.84 | 26,344,201.05 |
| Depreciation of fixed assets, depletion of oil and gas assets, depreciation of productive biological assets | 283,705,778.71 | 208,991,452.47 |
| Amortization of intangible assets | 7,883,410.95 | 6,977,214.30 |
| Amortization of long-term unamortized expense | 71,796,049.07 | 61,409,487.93 |
| Losses on disposal of fixed assets, intangible assets and other long-lived assets | -3,169,342.06 | -572,151.35 |
| Losses on retirement of fixed assets | 14,143,816.54 | 20,792,517.81 |
| Losses due to changes in fair value | 1,397,309.00 | -577,449.00 |
| Financial expense | 76,993,537.15 | 82,145,120.02 |
| Investment losses | -362,563,704.83 | -637,479,444.82 |
| Decrease of deferred income tax assets | -2,803,894.88 | -5,727,612.15 |
| Increase of deferred income tax liabilities | 1,539,857.65 | 396,995.58 |
| Decrease of inventory | -923,577,752.02 | -200,278,163.60 |
| Decrease of operating receivables | -460,716,561.45 | -223,764,950.58 |
| Increase of operating payables | 688,456,892.10 | 195,376,635.14 |
| Other | -26,076,787.04 | -18,351,471.92 |
| Net cash flow from operating activities | 765,945,453.03 | 1,111,605,966.58 |
| 2. Net changes in cash and cash equivalents | ||
| Closing balance of cash | 1,186,197,643.04 | 1,508,390,481.68 |
| 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 | -322,192,838.64 | 619,185,607.71 |
B. Net cash paid for acquiring subsidiaries
Unit: yuan Currency: RMB
| Amount | |
| Cash or cash equivalents paid for business combinations occurred in current period | 115,107,050.87 |
| including: Yangling Wellhope Agri-Tech Company | 42,000,000.00 |
| Yixian Dingli Hesheng Livestock and Poultry Feeding Company | 20,526,500.00 |
| Yixian Weijing Livestock and Poultry Feeding Company | 8,250,200.00 |
| Yixian Hekang Agri-Tech Company | 26,020,000.00 |
| Hebei Hetai Livestock and Poultry Farming Company | 15,159,200.00 |
| Dunhua Wellhope Agri-Tech Company | 3,151,150.87 |
| deduct: Cash and cash equivalents held by the subsidiary on the acquiring date | 67,559.02 |
| including: Yangling Wellhope Agri-Tech Company | |
| Yixian Dingli Hesheng Livestock and Poultry Feeding Company | |
| Yixian Weijing Livestock and Poultry Feeding Company | 2,967.79 |
| Yixian Hekang Agri-Tech Company | 2,008.44 |
| Hebei Hetai Livestock and Poultry Farming Company | 792.32 |
| Dunhua Wellhope Agri-Tech Company | 61,790.47 |
| add: Cash or cash equivalents paid for business combinations occurred in previous periods | |
| Net cash paid for acquiring subsidiaries | 115,039,491.85 |
| Item | Closing balance | Opening balance |
| 1. Cash | 1,186,197,643.04 | 1,508,390,481.68 |
| including: Cash on hand | 401,767.96 | 693,912.75 |
| Bank deposits available for payment at any time | 1,185,795,875.08 | 1,507,696,568.93 |
| 2. Cash equivalent | ||
| 3. Closing balance of cash and cash equivalents | 1,186,197,643.04 | 1,508,390,481.68 |
| Item | Closing book value | Reason for restriction |
| Monetary capital | 11,524,011.55 | Futures margin |
| Monetary capital | 1,144.57 | L/C guarantee deposit |
| Total | 11,525,156.12 | / |
| Item | Closing balance of foreign currency | Translating exchange rate | Closing balance translated into RMB |
| Monetary capital | 5,515,874.94 | ||
| including: US dollar | 418,763.54 | 6.5249 | 2,732,390.22 |
| Euro | 82.90 | 8.0250 | 665.27 |
| HK dollar | 1,889,051.99 | 0.8416 | 1,589,901.72 |
| Ruble | 13,602,254.62 | 0.0877 | 1,192,917.73 |
| Accounts receivable | 8,676,049.58 | ||
| including: US dollar | 994,755.99 | 6.5249 | 6,490,683.34 |
| HK dollar | 2,596,557.01 | 0.8416 | 2,185,366.24 |
| Short-term borrowing | 89,517,679.61 |
| including: US dollar | 13,719,394.87 | 6.5249 | 89,517,679.61 |
| Accounts payable | 2,571,424.38 | ||
| including: US dollar | 1,609.22 | 6.5249 | 10,500.00 |
| Ruble | 29,200,962.14 | 0.0877 | 2,560,924.38 |
| Prepayment | 165,954.31 | ||
| including: US dollar | 25,434.00 | 6.5249 | 165,954.31 |
| Other payables | 2,508,003.06 | ||
| including: Ruble | 28,597,526.34 | 0.0877 | 2,508,003.06 |
| Name | Business place abroad | Recording currency | Currency selection basis |
| Russia Wellhope Agri-Tech Company | Russia | Ruble | Local currency |
| Category | Amount | Present item | Amount recorded in current gains or losses |
| Tax Subsidy from Food and Drug Office | 3,000,000.00 | non-operating income | 3,000,000.00 |
| Job Stabilization Allowance | 2,335,393.68 | other income | 2,335,393.68 |
| Subsidies for livestock and poultry projects | 2,200,000.00 | other income | 2,200,000.00 |
| Subsidy from Agriculture Bureau | 2,000,000.00 | other income | 2,000,000.00 |
| Moderate scale operation project | 1,925,960.00 | non-operating income | 1,925,960.00 |
| Special funds for agricultural development | 1,430,000.00 | other income | 1,430,000.00 |
| Award for resumption of production during COVID-19 | 720,000.00 | non-operating income | 720,000.00 |
| High-tech enterprise subsidy for the year 2017 from Guangzhou Science and Technology Innovation Commission | 600,000.00 | other income | 600,000.00 |
| Work allowance | 524,400.00 | other income | 524,400.00 |
| The second batch of project allocations for the 2020 Science and Technology Plan | 500,000.00 | other income | 500,000.00 |
| Incentive funds from Shenyang Municipal Bureau of Industry and Information Technology on the allocation of national and provincial green manufacturing system demonstration enterprises | 500,000.00 | other income | 500,000.00 |
| Award for production increment from Finance Bureau of Daxing District, Beijing | 500,000.00 | non-operating income | 500,000.00 |
| Subtotal for other grants under RMB 500,000 | 7,086,742.52 | other income | 7,086,742.52 |
| Subtotal for other grants under RMB 500,000 | 2,715,868.97 | non-operating income | 2,715,868.97 |
| Deferred income transferred in current period | 6,323,500.00 | other income | 6,323,500.00 |
| Deferred income transferred in current period | 740,154.72 | financial expense | 740,154.72 |
| Total | 33,102,019.89 | / | 33,102,019.89 |
VIII. Change of Consolidation Scope
1. Business combination under different control
A. Business combination under different control occurred in current period
Unit: yuan Currency: RMB
| Investee | Time of acquiring equity | Acquisition cost | Shareholding % | Way of acquisition | Acquisition date | Basis for determining acquisition date | Investee's income from acquisition date to the period end | Investee's net profit from acquisition date to the period end |
| Yangling Wellhope Agri-Tech Company | May 12, 2020 | 42,000,000.00 | 100.00 | Cash | May 12, 2020 | Control right shifting | 6,789,720.16 | -2,675,110.82 |
| Yixian Dingli Hesheng Livestock and Poultry Feeding Company | Aug. 24, 2020 | 20,526,500.00 | 100.00 | Cash | Aug. 24, 2020 | Control right shifting | 3,548,120.65 | -1,478,497.51 |
| Yixian Weijing Livestock and Poultry Feeding Company | Aug. 24, 2020 | 8,250,200.00 | 100.00 | Cash | Aug. 24, 2020 | Control right shifting | 5,223,513.22 | -401,914.26 |
| Dunhua Wellhope Agri-Tech Company | Jul. 3, 2020 | 3,151,150.87 | 21.00 | Cash | Jul. 3, 2020 | Control right shifting | 105,495,162.01 | 1,116,755.75 |
| Dunhua Fengda Agriculture and Animal Husbandry Development Company | Jul. 2, 2020 | 5,392,097.79 | 21.00 | Cash | Jul. 2, 2020 | Control right shifting | 183,846,473.86 | 1,624,092.27 |
| Yixian Hekang Agri-Tech Company | Sep. 22, 2020 | 26,020,000.00 | 100.00 | Cash | Sep. 22, 2020 | Control right shifting | 5,613,540.58 | -339,115.81 |
| Hebei Hetai Livestock and Poultry Farming Company | Dec. 29, 2020 | 15,159,200.00 | 100.00 | Cash | Dec. 29, 2020 | Control right shifting | -3,200.56 |
B. Combined cost and goodwill
Unit: yuan Currency: RMB
| Combined cost | Yangling Wellhope Agri-Tech Company | Yixian Dingli Hesheng Livestock and Poultry Feeding Company | Yixian Weijing Livestock and Poultry Feeding Company | Dunhua Wellhope Agri-Tech Company | Dunhua Fengda Agriculture and Animal Husbandry Development Company | Yixian Hekang Agri-Tech Company | Hebei Hetai Livestock and Poultry Farming Company |
| Cash | 42,000,000.00 | 20,526,500.00 | 8,250,200.00 | 3,151,150.87 | 5,392,097.79 | 26,020,000.00 | 15,159,200.00 |
| Fair value of the equity, which held prior to the acquiring date, on the acquisition date | 4,501,644.10 | 7,702,996.84 | |||||
| Total combined costs | 42,000,000.00 | 20,526,500.00 | 8,250,200.00 | 7,652,794.97 | 13,095,094.63 | 26,020,000.00 | 15,159,200.00 |
| deduct: Fair value share of identifiable net assets obtained | 42,000,000.00 | 20,526,500.00 | 8,250,200.00 | 7,652,794.97 | 13,095,094.63 | 26,020,000.00 | 15,159,200.00 |
| Goodwill or combined cost is less than the amount of the fair value share of the identifiable net assets obtained |
| Yangling Wellhope Agri-Tech Company | Yixian Dingli Hesheng Livestock and Poultry Feeding Company | Yixian Weijing Livestock and Poultry Feeding Company | Dunhua Wellhope Agri-Tech Company | Dunhua Fengda Agriculture and Animal Husbandry Development Company | Yixian Hekang Agri-Tech Company | Hebei Hetai Livestock and Poultry Farming Company | ||||||||
| Fair value on acquisition date | Book value on acquisition date | Fair value on acquisition date | Book value on acquisition date | Fair value on acquisition date | Book value on acquisition date | Fair value on acquisition date | Book value on acquisition date | Fair value on acquisition date | Book value on acquisition date | Fair value on acquisition date | Book value on acquisition date | Fair value on acquisition date | Book value on acquisition date | |
| Assets | 4,200.00 | 3,705.59 | 2,052.65 | 2,049.58 | 826.35 | 824.91 | 2,068.03 | 2,068.03 | 3,728.01 | 3,728.01 | 2,607.00 | 2,604.23 | 2,042.92 | 2,039.90 |
| Monetary capital | 0.30 | 0.30 | 6.18 | 6.18 | 1,638.22 | 1,638.22 | 0.20 | 0.20 | 0.08 | 0.08 | ||||
| Account receivable | 1,104.33 | 82.29 | 82.29 | |||||||||||
| Prepayment | 0.23 | 0.23 | 868.95 | 868.95 | ||||||||||
| Other receivables | 11.62 | 11.62 | 4.81 | 4.81 | 52.64 | 52.64 | ||||||||
| Inventory | 5.08 | 5.08 | 838.98 | 838.98 | 498.34 | 498.34 | 2.92 | 2.92 | ||||||
| Other current assets | 105.50 | 105.50 | ||||||||||||
| Fixed assets | 3,246.23 | 3,246.23 | 2,035.95 | 2,032.88 | 825.82 | 824.38 | 37.72 | 37.72 | 280.08 | 280.08 | 2,603.88 | 2,601.11 | 2,042.84 | 2,039.82 |
| Construction in progress | 19.96 | 19.96 | ||||||||||||
| Intangible assets | 953.77 | 459.36 | ||||||||||||
| Long-term prepaid expense | 76.01 | 76.01 | 182.03 | 182.03 | ||||||||||
| Liabilities | 1.33 | 1.33 | 567.48 | 567.48 | 1,160.34 | 1,160.34 | 5.00 | 5.00 | 527.00 | 527.00 | ||||
| Accounts payable | 1.33 | 1.33 | 541.14 | 541.14 | 489.18 | 489.18 | ||||||||
| Advance receipt | 553.65 | 553.65 | ||||||||||||
| Payroll | 3.83 | 3.83 | 5.63 | 5.63 | ||||||||||
| Taxes and surcharges | 11.68 | 11.68 | 0.76 | 0.76 | ||||||||||
| Other payables | 10.83 | 10.83 | 111.12 | 111.12 | 5.00 | 5.00 | 527.00 | 527.00 | ||||||
| Net assets | 4,200.00 | 3,705.59 | 2,052.65 | 2,049.58 | 825.02 | 823.58 | 1,500.55 | 1,500.55 | 2,567.67 | 2,567.67 | 2,602.00 | 2,599.23 | 1,515.92 | 1,515.92 |
| deduct: Non-controlling interests | 735.27 | 735.27 | 1,258.16 | 1,258.16 | ||||||||||
| Net assets acquired | 4,200.00 | 3,705.59 | 2,052.65 | 2,049.58 | 825.02 | 823.58 | 765.28 | 765.28 | 1,309.51 | 1,309.51 | 2,602.00 | 2,599.23 | 1,515.92 | 1,515.92 |
D. Gain or loss arising from remeasuring the equity held prior to the acquisition date by fair value
Unit: yuan Currency: RMB
| Investee | Book value of the equity, which held prior to the acquiring date, on the acquisition date | Fair value of the equity, which held prior to the acquiring date, on the acquisition date | Gain or loss arising from remeasuring the equity held prior to the acquisition date by fair value | Determination method and main assumptions of fair value on the acquisition date |
| Dunhua Wellhope Agri-Tech Company | 4,501,644.10 | 4,501,644.10 | Reference transaction price | |
| Dunhua Fengda Agriculture and Animal Husbandry Development Company | 7,702,996.84 | 7,702,996.84 | Reference transaction price |
| Subsidiary | Disposal price | Percentage of disposed shareholding % | Disposal way | Date of losing control | Basis for determining loss of control |
| Xi’an Linfeng Shengyi Trading Company | 2,000,000.00 | 100.00 | Transferred | November 24, 2020 | Lossing control |
IX. Equity in other Entities
1. Equity in subsidiaries
A. Composition of the Company
| Subsidiary | Business site | Registered site | Business type | Shareholding % | Way of acquisition | |
| Direct | Indirect | |||||
| Haicheng Xinzhongxin Wellhope Feed Mill | Haicheng city | Haicheng city | production | 51.00 | investment | |
| Dalian Huakang Xinxin Food Company | Dalian city | Dalian city | production | 65.00 | investment | |
| Changchun Hengfeng Agriculture and Animal Husbandry Company | Changchun city | Changchun city | trading | 51.00 | investment | |
| Jinan Xinweita Trading Company | Jinan city | Jinan city | trading | 76.00 | investment | |
| Henan Wellhope Agri-Tech Company | Kaifeng city | Kaifeng city | production | 100.00 | investment | |
| Zhengzhou Wellhope Agri-Tech Company | Zhengzhou city | Zhengzhou city | production | 70.00 | investment | |
| Zhumadian Wellhope Agri-Tech Company | Zhumadian city | Zhumadian city | production | 90.00 | investment | |
| Jiaozuo Wellhope Feed Mill | Jiaozuo city | Jiaozuo city | production | 98.30 | investment | |
| Nanyang Wellhope Feed Mill | Nanyang city | Nanyang city | production | 70.00 | investment | |
| Zhangwu Wellhope Agriculture Development Company | Zhangwu county | Zhangwu county | production | 60.00 | investment | |
| Xifeng Qianyue Planting Company | Xifeng county | Xifeng county | production | 100.00 | investment | |
| Sanjiang Wellhope Agri-Tech Company | Jixian county | Jixian county | production | 100.00 | investment | |
| Jixian Expert Trading Company | Jixian county | Jixian county | trading | 65.00 | investment | |
| Gongzhuling Wellhope Agri-Tech Company | Gongzhuling city | Gongzhuling city | production | 100.00 | investment | |
| Shenyang Expert Trading Company | Shenyang city | Shenyang city | trading | 100.00 | investment | |
| Liaoning Skyland Livestock Equipment Company | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Shenyang Wellhope Ruminant Feed Mill | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Shenyang Wellhope Extruded Feed Mill | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Shenyang Wellhope Aquatic Feed Mill | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Shenyang Jiahe Tianfeng Commerce and Trade Company | Shenyang city | Shenyang city | trading | 100.00 | investment | |
| Liaoning Wellhope Food Company | Beipiao city | Beipiao city | production | 60.00 | investment | |
| Haicheng Wellhope Agri-Tech Feed Mill | Haicheng city | Haicheng city | production | 100.00 | investment | |
| Tai'an Wellhope Feed Mill | Tai'an county | Tai'an county | production | 100.00 | investment | |
| Lingyuan Wellhope Agri-Tech Company | Lingyuan city | Lingyuan city | production | 90.50 | investment | |
| Beijing Helai Sci-Tech Company | Beijing city | Beijing city | production | 100.00 | investment | |
| Beijing Wellhope Agri-Tech Company | Beijing city | Beijing city | trading | 100.00 | investment | |
| Beijing Sanyuan Wellhope Agri-Tech Company | Beijing city | Beijing city | production | 70.00 | investment | |
| Jilin Wellhope Agri-Tech Company | Jilin city | Jilin city | production | 100.00 | investment | |
| Jilin Hefeng | Gongzhuling | Gongzhuling | production | 100.00 | investment |
| Swine Breeding Company | city | city | ||||
| Harbin Weierhao Trading Company | Harbin city | Harbin city | trading | 51.00 | investment | |
| Daqing Wellhope Bayi Nongda Animal Sci-Tech Company | Daqing city | Daqing city | production | 70.00 | investment | |
| Mudanjiang Wellhope Agri-Tech Company | Mudanjiang city | Mudanjiang city | production | 100.00 | investment | |
| Jinzhou Wellhope Agri-Tech Company | Jinzhou city | Jinzhou city | production | 100.00 | investment | |
| Gongzhuling Wellhope Ruminant Feed Mill | Gongzhuling city | Gongzhuling city | production | 100.00 | investment | |
| Heilongjiang Wellhope Agri-Tech Company | Harbin city | Harbin city | production | 100.00 | investment | |
| Tangshan Wellhope Feed Mill | Tangshan city | Tangshan city | production | 85.00 | investment | |
| Cangzhou Helai Sci-Tech Company | Cangzhou city | Cangzhou city | production | 70.00 | investment | |
| Xi'an Wellhope Feed Sci-Tech Company | Xi'an city | Xi'an city | production | 80.00 | investment | |
| Gansu Wellhope Agri-Tech Company | Wuwei city | Wuwei city | production | 100.00 | investment | |
| Jining Wellhope Agri-Tech Company | Jining city | Jining city | production | 70.00 | investment | |
| Shanghai Wellhope Feed Mill | Shanghai city | Shanghai city | production | 65.00 | investment | |
| Shanghai Hehong Trading Company | Shanghai city | Shanghai city | trading | 32.00 | 42.00 | investment |
| Zhejiang Pinghu Wellhope Agri-Tech Company | Pinghu city | Pinghu city | production | 85.00 | investment | |
| Huai'an Wellhope Feed Mill | Huai'an city | Huai'an city | production | 100.00 | investment |
| Qingdao Wellhope Agri-Tech Company | Pingdu city | Pingdu city | production | 95.00 | investment | |
| Guangzhou Xiangshun Livestock Equipment Company | Guangzhou city | Guangzhou city | production | 56.00 | investment | |
| Hainan Wellhope Agri-Tech Company | Chengmai county | Chengmai county | production | 60.00 | investment | |
| Fuyu Wellhope Agri-Tech Company | Fuyu city | Fuyu city | production | 97.00 | investment | |
| Fuyu Wellhope Taolaizhao Poultry Raising Company | Fuyu city | Fuyu city | production | 97.00 | investment | |
| Changchun Wellhope Feed Mill | Nong'an county | Nong'an county | production | 98.00 | investment | |
| Lankao Wellhope Agri-Tech Company | Lankao county | Lankao county | production | 100.00 | investment | |
| Tongliao Wellhope Tianyi Prataculture Company | Tongliao city | Tongliao city | production | 51.00 | investment | |
| Liaoning Wellhope Purchasing and Trading Company | Shenyang city | Shenyang city | trading | 100.00 | investment | |
| Shenyang Wellhope Agri-Tech Company | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Liaoning Expert Trading Company | Shenyang city | Shenyang city | trading | 100.00 | combined under the same control | |
| Shenyang Fame Bio-Tech Company | Shenyang city | Shenyang city | production | 100.00 | combined under the same control | |
| Shenyang Pufeng Commerce and Trade Company | Shenyang city | Shenyang city | trading | 100.00 | combined under the same control | |
| Shenyang Huawei Pharmaceutical Company | Shenyang city | Shenyang city | production | 51.00 | combined under the same control | |
| Liaoning | Shenyang | Shenyang | production | 100.00 | combined under |
| Wellhope Agriculture and Animal Husbandry Development | city | city | different control | |||
| Puyang Wellhope Food Company | Puyang city | Puyang city | production | 49.81 | combined under different control | |
| Jingzhou Wellhope Agricultural Sci-Tech Company | Jingzhou city | Jingzhou city | trading | 86.00 | investment | |
| Dalian Heyuan Agri-Tech Company | Dalian city | Dalian city | production | 51.00 | investment | |
| Shenyang Nongda Wellhope Feed Mill | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Dalian Wellhope Feed Mill | Dalian city | Dalian city | production | 100.00 | investment | |
| Xingcheng Wellhope Feed Mill | Xingcheng city | Xingcheng city | production | 100.00 | investment | |
| Yunnan Wellhope Feed Mill | Kunming city | Kunming city | production | 97.00 | investment | |
| Liaoning Godaji E-commerce Company | Shenyang city | Shenyang city | trading | 100.00 | investment | |
| Anhui Wellhope Agri-Tech Company | Haozhou city | Haozhou city | production | 70.00 | investment | |
| Shanxi Wellhope Agri-Tech Company | Yuanping city | Yuanping city | production | 100.00 | investment | |
| Pingyuan Wellhope Food Processing Company | Handan city | Handan city | production | 100.00 | investment | |
| Shenyang Huaweida Animal Health Products Company | Shenyang city | Shenyang city | trading | 100.00 | investment | |
| Dalian Zhongjia Food Company | Dalian city | Dalian city | production | 100.00 | combined under different control | |
| Wellhope Food(Shenyang) Company | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Changchun Wellhope Food Company | Changchun city | Changchun city | production | 85.00 | investment |
| Pingyuan Wellhope Agri-Tech Company | Handan city | Handan city | production | 100.00 | investment | |
| Puyang Wellhope Agri-Tech Company | Puyang city | Puyang city | production | 100.00 | investment | |
| Chongqing Dahong Agriculture and Animal Husbandry Equipment Company | Chongqing city | Chongqing city | production | 50.00 | combined under different control | |
| Beijing Brilliant Dragon Commerce and Trade Company | Beijing city | Beijing city | trading | 51.00 | investment | |
| Tangshan Hejia Agriculture and Animal Husbandry Company | Tangshan city | Tangshan city | production | 65.00 | investment | |
| Tangshan Wellhope Sci-Tech Company | Tangshan city | Tangshan city | production | 70.00 | combined under different control | |
| Shenyang Huakang Xinxin Food Company | Shenyang city | Shenyang city | production | 85.00 | investment | |
| Kaifeng Wellhope Meat Products Company | Kaifeng city | Kaifeng city | production | 100.00 | investment | |
| Shenyang Huakang Broiler Company | Shenyang city | Shenyang city | production | 85.00 | investment | |
| Kaifeng Wellhope Agriculture and Animal Husbandry Company | Kaifeng city | Kaifeng city | production | 100.00 | investment | |
| Fushun Wellhope Agriculture and Animal Husbandry Company | Fushun city | Fushun city | production | 100.00 | investment | |
| Shenyang Wellhope Poultry Industry Company | Shenyang city | Shenyang city | production | 100.00 | investment | |
| Shenyang Huakang | Shenyang city | Shenyang city | production | 100.00 | investment |
| Agriculture and Animal Husbandry Company | ||||||
| Dehui Wellhope Agri-Tech Company | Dehui city | Dehui city | production | 100.00 | investment | |
| Chongqing Wellhope Agri-Tech Company | Chongqing city | Chongqing city | production | 65.00 | investment | |
| Dahong Agriculture and Animal Husbandry Technology Research Institute Chongqing Branch | Chongqing city | Chongqing city | production | 100.00 | investment | |
| Russia Wellhope Agri-Tech Company | Overseas | Overseas | production | 55.00 | investment | |
| Suizhong Renhe Fishery Company | Suizhong county | Suizhong county | production | 95.00 | combined under different control | |
| Harbin Baoweikang Bio-Tech Company | Harbin city | Harbin city | production | 100.00 | combined under different control | |
| Shulan Fengtai Agriculture and Animal Husbandry Company | Shulan city | Shulan city | production | 70.00 | investment | |
| Shulan Fengtai Farming Company | Shulan city | Shulan city | production | 51.00 | investment | |
| Linxi Helai Agri-Tech Company | Linxi city | Linxi city | production | 100.00 | investment | |
| Nanchang Wellhope Agri-Tech Company | Nanchang city | Nanchang city | production | 65.00 | investment | |
| Hengyang Wellhope Agri-Sci-Tech Company | Hengyang city | Hengyang city | production | 78.50 | investment | |
| Anhui Wellhope Haoxiang Agricultural Development Company | Lixin county | Lixin county | production | 100.00 | investment | |
| Lixin Xiangfeng | Lixin county | Lixin county | production | 100.00 | investment |
| Agriculture and Animal Husbandry Company | ||||||
| Lixin Hongfeng Agriculture and Animal Husbandry Company | Lixin county | Lixin county | production | 100.00 | investment | |
| Guangzhou Dashang Trading Company | Guangzhou city | Guangzhou city | trading | 51.00 | investment | |
| Shandong Heyuan Food Company | Weihai city | Weihai city | production | 65.00 | investment | |
| Wafangdian Yifeng Agri-Tech Company | Wafangdian city | Wafangdian city | production | 51.00 | investment | |
| Hebei Deheng Farming Company | Handan city | Handan city | production | 100.00 | combined under different control | |
| Dahongda Construction Engineering Chongqing Company | Chongqing city | Chongqing city | production | 100.00 | investment | |
| Zhangwu Jiufeng Trading Company | Zhangwu city | Zhangwu city | production | 100.00 | combined under different control | |
| Yangling Wellhope Agriculture and Animal Husbandry Company | Xianyang city | Xianyang city | production | 100.00 | combined under different control | |
| Yixian Dingli Hesheng Livestock and Poultry Feeding Company | Yixian county | Yixian county | production | 100.00 | combined under different control | |
| Yixian Weijing Livestock and Poultry Feeding Company | Yixian county | Yixian county | production | 100.00 | combined under different control | |
| Hebei Hetai Livestock and Poultry Farming Company | Yuanshi county | Yuanshi county | production | 100.00 | combined under different control | |
| Yixian Hekang Agri-Tech Company | Yixian county | Yixian county | production | 100.00 | combined under different control | |
| Dunhua Wellhope Agri-Tech Company | Dunhua city | Dunhua city | production | 51.00 | combined under different control |
| Dunhua Fengda Agriculture and Animal Husbandry Development Company | Dunhua city | Dunhua city | production | 51.00 | combined under different control | |
| Anhui Wellhope Haoxiang Swine Breeding Company | Lixin county | Lixin county | production | 100.00 | investment | |
| Anhui Wellhope Food Company | Lixin county | Lixin county | production | 100.00 | investment | |
| Anyang Wellhope Agriculture and Animal Husbandry Company | Anyang city | Anyang city | production | 100.00 | investment | |
| Hebei Taihang Wellhope Food Company | Baoding city | Baoding city | production | 62.00 | investment | |
| Hebei Taihang Wellhope Agri-Tech Company | Baoding city | Baoding city | production | 62.00 | investment | |
| Shenyang Xiangmai Electronic Commerce Company | Shenyang city | Shenyang city | trading | 65.00 | investment | |
| Chifeng Wellhope Fuxinyuan Food Company | Chifeng city | Chifeng city | production | 70.00 | investment | |
| Hongkong Expert Trading Company | Hongkong | Hongkong | trading | 100.00 | investment | |
| Hainan Expert Trading Company | Chengmai county | Chengmai county | trading | 100.00 | investment | |
| Liaoning Qingyuan Wellhope Agriculture and Animal Husbandry Company | Fushun city | Fushun city | production | 95.00 | investment | |
| Nanyang Wellhope Cattle Industry Sci-Tech Company | Nanyang city | Nanyang city | production | 100.00 | investment | |
| Fuzhou Wellhope Xingyuan Animal | Fuzhou city | Fuzhou city | production | 60.00 | investment |
| Husbandry Development Company | ||||||
| Tianjin Fullyond Supply Chain Company | Tianjin city | Tianjin city | other | 100.00 | investment | |
| Daqing Wellhope Food Company | Daqing city | Daqing city | production | 51.00 | investment | |
| Zhumadian Wellhope Agricultural Development Company | Zhumadian city | Zhumadian city | production | 100.00 | investment | |
| Datong Hejia Agriculture and Animal Husbandry Company | Datong city | Datong city | production | 65.00 | investment | |
| Shijiazhuang Hejia Agriculture and Animal Husbandry Company | Shijiazhuang city | Shijiazhuang city | production | 65.00 | investment | |
| Fuxin Wellhope Agriculture and Animal Husbandry Company | Fuxin city | Fuxin city | production | 94.00 | investment | |
| Dalian Hongtu Agri-tech Company | Dalian city | Dalian city | production | 51.00 | investment | |
| Shandong Heyuan Agri-tech Company | Weihai city | Weihai city | production | 51.00 | investment | |
| Wafangdian Huinong Poultry Industry Company | Wafangdian city | Wafangdian city | production | 52.94 | investment | |
| Luoyang Wellhope Agriculture and Animal Husbandry Company | Luoyang city | Luoyang city | production | 100.00 | investment | |
| Tongxu Wellhope Agriculture and Animal Husbandry Company | Tongxu county | Tongxu county | production | 100.00 | investment | |
| Gongzhuling Wellhope Swine Farmig | Gongzhuling city | Gongzhuling city | production | 65.00 | investment |
| Company | ||||||
| Lishu Wellhope Ecological Farming Company | Siping city | Siping city | production | 65.00 | investment | |
| Kaifeng Jiufeng Agriculture and Animal Husbandry Company | Kaifeng city | Kaifeng city | production | 100.00 | investment |
| Subsidiary | Shareholding of non-controlling interests % | Gain or loss attributable to non-controlling interests | Declared dividends to non-controlling interests | Closing balance of non-controlling interests |
| Dalian Heyuan Agri-Tech Company | 49.00 | 30,310,693.02 | 14,700,000.00 | 443,860,747.65 |
| Xi'an Wellhope Feed Sci-Tech Company | 20.00 | 10,490,331.28 | 3,000,000.00 | 33,717,168.90 |
| Beijing Sanyuan Wellhope Agri-Tech Company | 30.00 | 8,550,259.84 | 68,260,772.50 | |
| Tangshan Wellhope Feed Mill | 15.00 | 327,517.44 | 10,810,026.90 |
C. Financial figures of important non-wholly owned subsidiary
Unit: yuan Currency: RMB
| Subsidiary | Closing balance | Opening balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Dalian Heyuan Agri-Tech Company | 546,490,938.69 | 982,257,433.76 | 1,528,748,372.45 | 640,206,189.94 | 21,476,424.14 | 661,682,614.08 | 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 |
| Xi'an Wellhope Feed Sci-Tech Company | 120,322,073.99 | 96,733,892.61 | 217,055,966.60 | 47,740,872.83 | 729,249.25 | 48,470,122.08 | 120,990,215.88 | 40,503,567.21 | 161,493,783.09 | 25,655,577.75 | 25,655,577.75 | |
| Beijing Sanyuan Wellhope Agri-Tech Company | 246,088,391.98 | 23,170,506.34 | 269,258,898.32 | 41,722,989.99 | 41,722,989.99 | 203,102,041.98 | 25,669,497.12 | 228,771,539.10 | 30,470,419.37 | 30,470,419.37 | ||
| Tangshan Wellhope Feed Mill | 49,796,904.64 | 70,971,898.77 | 120,768,803.41 | 48,701,957.40 | 48,701,957.40 | 50,349,221.33 | 73,444,222.46 | 123,793,443.79 | 53,986,003.46 | 53,986,003.46 | ||
| Subsidiary | 2020 | 2019 | ||||||
| Operation revenue | Net profit | Total comprehensive income | Cash flow from operating activities | Operation revenue | Net profit | Total comprehensive income | Cash flow from operating activities | |
| Dalian Heyuan Agri-Tech Company | 3,009,916,643.94 | 73,678,408.86 | 73,678,408.86 | 250,624,697.64 | 2,558,885,564.63 | 422,116,992.52 | 422,116,992.52 | 546,194,647.16 |
| Xi'an Wellhope Feed Sci-Tech Company | 813,590,370.97 | 52,451,656.41 | 52,451,656.41 | 39,790,872.05 | 507,204,197.17 | 36,885,419.43 | 36,885,419.43 | 49,487,674.37 |
| Beijing Sanyuan Wellhope Agri-Tech Company | 622,849,853.79 | 28,500,866.12 | 28,500,866.12 | 24,049,956.56 | 372,855,922.14 | 11,032,817.68 | 11,032,817.68 | 27,252,191.23 |
| Tangshan Wellhope Feed Mill | 239,765,031.08 | 2,183,449.58 | 2,183,449.58 | 7,615,415.84 | 161,847,154.96 | -1,522,374.99 | -1,522,374.99 | 15,383,862.25 |
2. Transactions that change the share of owner's equity of the Company in subsidiaris but theCompany still controls the subsidiaryA. Circumstance of the change of owner's equityDuring the current period, the Company transferred 5.00% of shareholdings of Xi'an Wellhope FeedSci-Tech Company and 15.00% of Shenyang Xiangmai E-commerce Company.B. The impact of the transaction on non-controlling interests and the equity attributable to the
owners of parent company
Unit: yuan Currency: RMB
| Xi'an Wellhope Feed Sci-Tech Company | Shenyang Xiangmai E-commerce Company | |
| Cost of acquisition/disposal considerations | ||
| --Cash | 5,897,962.10 | 158,289.47 |
| Total cost of acquisition or disposal considerations | 5,897,962.10 | 158,289.47 |
| deduct: Share of net assets in the subsidiary calculated according to the percentage of acquired or disposed shareholdings | 5,791,910.27 | 158,289.47 |
| Balance | 106,051.83 | |
| including: Adjusting capital reserve | 106,051.83 |
| Company | Business site | Registered site | Business type | Shareholding % | Accounting arrangement method | |
| Direct | Indirect | |||||
| Beipiao Hongfa Food Company | Beipiao city | Beipiao city | production | 35.00 | equity method | |
| Anshan Jiuguhe Food Company | Tai'an county | Tai'an county | production | 41.55 | equity method | |
| Tai’an Jiuguhe Agriculture Development Company | Tai'an county | Tai'an county | production | 41.55 | equity method | |
| Dalian Chengsan Animal Husbandry Company | Dalian city | Dalian city | production | 20.00 | equity method | |
B. Financial figures of important joint ventures or associated companies
Unit: yuan Currency: RMB
| 2020 | 2019 | |||||||
| Beipiao Hongfa Food Company | Anshan Jiuguhe Food Company | Tai’an Jiuguhe Agriculture Development Company | Dalian Chengsan Animal Husbandry Company | Beipiao Hongfa Food Company | Anshan Jiuguhe Food Company | Tai’an Jiuguhe Agriculture Development Company | Dalian Chengsan Animal Husbandry Company | |
| Current assets | 1,168,043,370.14 | 609,389,600.57 | 431,665,980.03 | 1,428,082,960.71 | 808,320,727.52 | 433,236,440.94 | 225,516,906.39 | 1,467,906,023.75 |
| Non-current assets | 930,342,071.44 | 104,819,843.90 | 44,743,283.32 | 513,921,361.13 | 720,803,998.40 | 102,408,547.67 | 191,500,344.01 | 448,345,020.68 |
| Total assets | 2,098,385,441.58 | 714,209,444.47 | 476,409,263.35 | 1,942,004,321.84 | 1,529,124,725.92 | 535,644,988.61 | 417,017,250.40 | 1,916,251,044.43 |
| Current liabilities | 554,891,462.18 | 279,627,361.90 | 250,447,113.47 | 360,773,992.52 | 242,424,331.42 | 162,491,901.70 | 148,906,962.33 | 498,609,123.11 |
| Non-current liabilities | 97,140,000.00 | 296,802.00 | 175,500.00 | 5,516,103.07 | 23,430,000.00 | 2,313,480.78 | 256,500.00 | 5,851,807.11 |
| Total liabilities | 652,031,462.18 | 279,924,163.90 | 250,622,613.47 | 366,290,095.59 | 265,854,331.42 | 164,805,382.48 | 149,163,462.33 | 504,460,930.22 |
| Non-controlling interests | 278,638,348.12 | 224,864,512.85 | ||||||
| Equity attributable to shareholders of parent company | 1,446,353,979.40 | 434,285,280.57 | 225,786,649.88 | 1,297,075,878.13 | 1,263,270,394.50 | 370,839,606.13 | 267,853,788.07 | 1,186,925,601.36 |
| Share of net assets calculated by shareholdings | 506,223,892.79 | 180,445,534.08 | 93,814,353.03 | 259,415,175.62 | 442,144,638.08 | 154,083,856.35 | 111,293,248.94 | 237,385,120.27 |
| Adjustment | -276,269.40 | -379,198.68 | 116,463,321.10 | -1,645,427.58 | -360.00 | 116,569,111.62 | ||
| --Goodwill | 116,569,111.62 | 116,569,111.62 | ||||||
| --Unrealized profit of internal transaction | -276,269.40 | -379,198.68 | -105,790.52 | -1,645,427.58 | ||||
| --Other | -360.00 | |||||||
| Book value of equity investment in associated company | 506,223,892.79 | 180,169,264.68 | 93,435,154.35 | 375,878,496.72 | 442,144,638.08 | 152,438,428.77 | 111,292,888.94 | 353,954,231.89 |
| Operating revenue | 2,292,683,638.44 | 1,911,611,455.64 | 1,927,678,342.45 | 3,326,764,958.59 | 3,147,988,768.25 | 2,268,540,275.94 | 1,962,268,400.56 | 3,203,777,482.74 |
| Net profit | 229,283,584.90 | 153,445,674.44 | -42,067,138.19 | 142,746,792.02 | 574,147,650.00 | 140,590,100.91 | 124,064,948.67 | 604,777,510.19 |
| Total comprehensive income | 229,283,584.90 | 153,445,674.44 | -42,067,138.19 | 142,746,792.02 | 574,147,650.00 | 140,590,100.91 | 124,064,948.67 | 604,777,510.19 |
| Dividends received from associated company | 16,170,000.00 | 37,397,700.00 | 10,780,000.00 | 4,986,360.00 | 4,986,360.00 | 10,780,000.00 |
C. Financial information of unimportant joint ventures and associated companies
Unit: yuan Currency: RMB
| 2020 | 2019 | |
| Joint venture | ||
| Book value of investment | 11,669,191.54 | 11,669,191.54 |
| The following items were calculated according to the shareholdings | ||
| --Net profit | 7,622,329.52 | 7,181,908.21 |
| --Other comprehensive income | -3,301,098.09 | 53,833.62 |
| --Total comprehensive income | 4,321,231.43 | 7,235,741.84 |
| Associated company | ||
| Book value of investment | 1,257,526,965.18 | 998,548,503.29 |
| The following items were calculated according to the shareholdings | ||
| --Net profit | 211,870,816.89 | 216,479,052.22 |
| --Other comprehensive income | -7,123,225.06 | 7,238,557.02 |
| --Total comprehensive income | 204,747,591.83 | 223,717,609.24 |
2. Credit risk
The maximum credit risk exposure that may cause financial losses to the Company mainly comes fromfinancial 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 ofaccounts receivable, and only deals with recognized and reputable third parties. In accordance with theCompany's policies, it is necessary to conduct credit audit and approval, carefully confirm the creditlimit, 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 itsoperation demand, and to reduce the influence caused by cash flow fluctuation. The management ofthe Company supervises the usage circumstances of bank loans and ensures the Company complyingwith the agreement of loan.XI. Disclosure of fair value
1. Fair value of assets and liabilities in the end of period
Unit: yuan Currency: RMB
| Item | Closing fair value | |||
| The first level of fair value measurement | The second level of fair value measurement | The third level of fair value measurement | Total | |
| Continuous fair value measurement | ||||
| 1. Trading financial assets | 50,000,000.00 | 50,000,000.00 | ||
| Financial assets measured at fair value and changes recorded into current gains or losses | 50,000,000.00 | 50,000,000.00 | ||
| 2. Derivative financial assets | 4,725,552.30 | 4,725,552.30 | ||
| 3. Other equity instrument investment | 20,847,697.96 | 20,847,697.96 | ||
| Total assets continuously measured at fair value | 4,725,552.30 | 70,847,697.96 | 75,573,250.26 | |
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 theCompany in the period.
| Company | Relationship |
| Unphung Joint Venture Company | joint venture |
| Nepal Wellhope Agri-tech Pvt. Ltd. | joint venture |
| Anshan Fengsheng Food Company | associated company |
| Anshan Jiuguhe Food Company | associated company |
| Beipiao Hongfa Food Company | associated company |
| Dalian Chengsan Animal Husbandry Company | associated company |
| Dalian Wellhope Fish Meal Company | associated company |
| Daqing Supply and Marketing Agri-Tech Company | associated company |
| Dandong Wellhope Chengsan Agri-Tech Company | associated company |
| Gongzhuling Corn Purchasing and Storing Company | associated company |
| Guangzhou Yikun Trading Company | associated company |
| Haicheng New Hongzunda Agri-Tech Company | associated company |
| Huluodao Jiuguhe Food Company | associated company |
| Huluodao Jiuguhe Feed Mill | associated company |
| Jinzhou Jiufeng Food Company | associated company |
| Lankao Skyland Feed Milll | associated company |
| Lankao Skyland Duck Company | associated company |
| Linghai Jiuguhe Feed Mill | associated company |
| Qingdao Shenfeng Agri-Tech Company | associated company |
| Shenyang Wenjie Bio-Tech Company | associated company |
| Shihaipu (Beijing) Technology and Trade Company | associated company |
| Tai'an Fengjiu Agri-Tech Company | associated company |
| Tai'an Jiufeng Agri-Tech Company | associated company |
| Tai'an Jiuguhe Agriculture Development Company | associated company |
| Tailai Jiahe Agriculture and Animal Husbandry | associated company |
| Zhangjiakou Jiahe Agriculture and Animal Husbandry Company | associated company |
| Beijing Dahong Hengfeng Agri-Tech Company | associated company |
| Shenyang Zhongwenjie Bio-Tech Company | associated company |
| Liaoning Mubang Animal Husbandry Equipment Manufacturing Company | associated company |
| Dunhua Fengda Agriculture and Animal Husbandry Company | subsidiary |
| Dunhua Wellhope Agri-Tech Company | subsidiary |
| Heilongjiang Zhongyi Ranch Information Technology Service Company | associated company |
| Dalian Sida Food Company | associated company |
| Shulan Fengtai Organic Fertilizer Company | associated company |
| Bei’an Nongken Shengda Pasture Specialized Cooperative | associated company |
| Shangdong Fengkang Food Company | associated company |
| Anshan Jiuguhe Paper Packaging Company | associated company |
| Anshan Antai Plastic Products Company | associated company |
2. Snapshot of other related parties
| Related party | Relationship |
| Associated natural persons | Controlling shareholder, natural person shareholders who hold more than 5% shares of the Company, board directors, supervisory board directors, senior managers and their relatives |
| Wulian Heli Equity Investment Partnership (Limited Partnership) | Shareholder who holds more than 5% shares of the Company |
| Relate party | Transaction | 2020 | 2019 |
| Dalian Wellhope Fish Meal Company | Feed raw material | 114,840,387.56 | 74,187,322.55 |
| Anshan Jiuguhe Food Company | Broiler product | 21,848,636.14 | 19,156,542.50 |
| Dalian Chengsan Animal Husbandry Company | Live broiler | 186,018,137.63 | 186,973,531.46 |
| Huludao Jiuguhe Food | Broiler product | 255,807.60 | 3,516,670.71 |
| Shihaipu (Beijing) Technology and Trade Company | Other | 2,282,511.69 | 1,959,646.55 |
| Guangzhou Yikun Trading Company | Feed raw material | 12,029,615.50 | |
| Tai'an Fengjiu Agri-Tech Company | Day old chick | 23,206,491.02 | 21,997,336.14 |
| Zhangjiakou Jiahe Agriculture and Animal Husbandry Company | Piglet | 64,133,190.90 | 9,975,239.60 |
| Tai’an Jiuguhe Agriculture Development Company | Feed, live broiler | 208,356,995.30 | 98,668,970.35 |
| Haicheng New Hongzunda Agri-Tech Company | Feed | 658,306.00 | |
| Shenyang Wenjie Bio-Tech Company | Other | 6,435,070.50 | 13,150,075.20 |
| Jinzhou Jiufeng Food Company | Broiler product | 13,972,659.17 | 6,513,833.00 |
| Daqing Supply and Marketing Agri-Tech Company | Feed raw material | 41,483,415.84 | 36,588,085.03 |
| Linghai Jiuguhe Feed Mill | Feed, live broiler | 27,252,715.36 | |
| Gongzhuling Corn Purchasing and Storing Company | Feed raw materials | 2,472,800.71 | 360,872.66 |
| Qingdao Shenfeng Agri-Tech Company | Feed | 28,638,011.49 | 11,539,082.78 |
| Dandong Wellhope Chengsan Agri-Tech Company | Live broiler | 1,230,045.91 | |
| Lankao Skyland Duck Company | Feed | 6,060,071.37 | 301,315.88 |
| Liaoning Mubang Animal Husbandry Equipment Manufacturing Company | Farming equipment | 14,861,627.35 | |
| Shenyang Zhongwenjie Bio-Tech Company | Animal medicine | 3,000.00 | 18,000.00 |
| Anshan Yufeng Feed Mill | Feed raw material | 71,923.00 | |
| Anshan Jiuguhe Paper Packaging Company | Other (packaging materials) | 4,854,918.60 | |
| Anshan Antai Plastic Products Company | Other (packaging materials) | 1,249,245.12 |
| Dunhua Fengda Broiler Breeding Company | Day old chick | 750,730.00 | |
| Jilin Hengfeng Animal Health Products Company | Animal medicine, vaccine | 1,451,194.85 | |
| Shenyang Wanlitian Agriculture and Animal Husbandry Company | Animal medicine, vaccine | 2,644,678.27 | |
| Total | 758,282,592.12 | 513,686,119.17 |
| Relate party | Transaction | 2020 | 2019 |
| Nepal Wellhope Agri-tech Pvt. Ltd. | Feed | 2,563,464.22 | |
| Linghai Jiuguhe Feed Mill | Feed raw material | 50,260,931.83 | 52,588,895.71 |
| Tai’an Jiuguhe Agriculture Development Company | Feed raw material | 78,282,971.50 | 98,035,082.01 |
| Anshan Jiuguhe Food Company | Live broiler | 90,810,505.77 | 189,619,141.00 |
| Qingdao Shenfeng Agri-Tech Company | Feed raw material | 56,218,315.02 | 29,083,613.37 |
| Beipiao Hongfa Food Company | Feed raw material | 4,685,260.00 | 5,593,402.11 |
| Huludao Jiuguhe Food Company | Feed | 10,327,169.62 | 481,301.83 |
| Haicheng New Hongzunda Agri-Tech Company | Feed raw material | 97,778,241.34 | 38,303,436.30 |
| Dandong Wellhope Chengsan Agri-Tech Company | Feed raw material | 6,667,470.38 | 7,160,969.75 |
| Tai'an Jiufeng Agri-Tech Company | Feed raw material | 1,460,623.81 | 1,248,972.58 |
| Huludao Jiuguhe Feed Mill | Feed raw material | 25,323,351.66 | 30,081,192.14 |
| Shihaipu (Beijing) Technology and Trade Company | Other | 1,286,272.58 | 705,596.51 |
| Zhangjiakou Jiahe Agriculture and Animal Husbandry Company | Feed | 22,521,186.33 | 23,746,562.54 |
| Dalian Wellhope Fish Meal Company | Feed raw material | 301,061.95 | 165,589.72 |
| Guangzhou Yikun Trading Company | Feed raw material | 2,846,401.98 | 198,682,941.12 |
| Jinzhou Jiufeng Food Company | Live broiler | 3,002,040.00 | |
| Anshan Fengsheng Food Company | Live broiler | 212,919,976.02 | 204,582,154.82 |
| Dalian Chengsan Animal Husbandry Company | Feed raw material | 6,391,128.72 | 3,777,282.46 |
| Tailai Jiahe Agriculture and Animal Husbandry Company | Feed | 29,224,805.65 | 14,596,398.75 |
| Daqing Supply and Marketing Agri-Tech Company | Feed raw material | 51,521,554.90 | 34,314,134.88 |
| Lankao Skyland Duck Company | Feed raw material | 5,707,315.21 | |
| Dunhua Wellhope Agri-Tech Company | Feed raw material | 4,759,518.19 | |
| Dunhua Fengda Agriculture and Animal Husbandry Development Company | Live broiler | 857,264.00 | |
| Heilongjiang Zhongyi Ranch Information Technology Service Company | Feed | 113,959.73 | |
| Anshan Yufeng Feed Mill | Broiler product | 781,937.43 | |
| Dunhua Fengda Broiler Breeding Company | Feed | 4,093,061.21 | |
| Shangdong Fengkang Food Company | Live broiler | 5,954,219.87 | |
| Dalian Sida Food Company | Live broiler | 252,267,573.09 | |
| Total | 1,020,194,800.09 | 941,499,449.52 |
B. Related party guaranteeThe Company acted as the guarantor
Unit: yuan Currency: RMB
| Guaranteed party | Amount of guarantee | Guarantee date | Guarantee maturity date | Whether the guarantee has finished performance |
| Chongqing Dahong Agriculture and Animal Husbandry Equipment Company | 15,000,000.00 | October 7, 2020 | October 6, 2023 | No |
| Lixin Xiangfeng Agriculture and Animal Husbandry Company | 25,000,000.00 | May 21, 2020 | May 20, 2021 | No |
| Lingyuan Wellhope Agri-Tech Company | 20,000,000.00 | May 25, 2020 | May 25, 2021 | No |
| Puyang Wellhope Food Company | 49,000,000.00 | March 21, 2020 | March 21, 2021 | No |
| Kaifeng Wellhope Meat Products Company | 30,000,000.00 | March 24, 2020 | March 24, 2021 | No |
| Liaoning Expert Trading Company | 250,000,000.00 | April 24, 2020 | February 23, 2021 | No |
| Liaoning Expert Trading Company | 200,000,000.00 | April 24, 2020 | February 21, 2021 | No |
| Liaoning Expert Trading Company | 248,710,000.00 | May 21, 2020 | May 20, 2021 | No |
| Related party | Borrowings | Starting date | Due date | Note |
| Lankao Skyland Duck Company | 27,300,253.00 | This was the borrowings of Lankao Skyland Duck Company from Wellhope, Lankao Duck became an associated company after the loss of control. | ||
| Bei’an Nongken Shengda Pasture Specialized Cooperative | 4,350,000.00 | Bei’an Nongken Shengda Pasture Specialized Cooperative is an associated company of Wellhope. Each member of the cooperative provides funds to the cooperative according to the proportion of shares held in accordance with the agreement. |
| Item | 2020 | 2019 |
| Remuneration for key management | 622.96 | 563.64 |
4. Related party receivables and payables
A. Receivables
Unit: yuan Currency: RMB
| Item | Related party | Closing balance | Opening balance | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Accounts receivable | Linghai Jiuguhe Feed Mill | 4,530,820.00 | 90,616.40 | ||
| Accounts receivable | Tai’an Jiuguhe Agriculture Development Company | 4,797,382.00 | 424,247.64 | ||
| Accounts receivable | Anshan Jiuguhe Food Company | 24,051,313.84 | 481,026.28 | 21,356,822.76 | 1,067,841.14 |
| Accounts receivable | Zhangjiakou Jiahe Agriculture and Animal Husbandry Company | 3,905,319.96 | 390,532.00 | 3,618,629.61 | 180,931.48 |
| Accounts receivable | Beipiao Hongfa Food Company | 416,558.00 | 8,331.16 | ||
| Accounts receivable | Huludao Jiuguhe Feed Mill | 2,942,700.00 | 58,854.00 | ||
| Accounts receivable | Anshan Fengsheng Food Company | 10,460,846.84 | 209,216.94 | 6,249,082.04 | 312,454.10 |
| Accounts receivable | Dalian Chengsan Animal Husbandry Company | 1,163,071.00 | 26,551.42 | 523,200.00 | 26,160.00 |
| Accounts receivable | Tailai Jiahe Agriculture and Animal Husbandry Company | 2,334,516.84 | 46,690.34 | 2,695,169.64 | 134,758.48 |
| Accounts receivable | Lankao Skyland Duck Company | 78,000.00 | 1,560.00 | ||
| Accounts receivable | Nepal Wellhope Agri-tech Pvt. Ltd. | 92,310.95 | 1,846.22 | ||
| Accounts receivable | Daqing Supply and Marketing Agri-Tech Company | 1,296,750.34 | 25,935.01 | 525,195.44 | 26,259.77 |
| Accounts receivable | Guangzhou Yikun Trading Company | 24,042,357.79 | 1,202,117.89 | ||
| Accounts receivable | Haicheng New Hongzunda Agri-Tech Company | 234,200.00 | 11,710.00 | ||
| Accounts receivable | Tai'an Jiufeng Agri-Tech Company | 218,159.00 | 10,907.95 | ||
| Accounts receivable | Heilongjiang Zhongyi Ranch Information Technology Service Company | 43,174.50 | 2,158.73 | ||
| Accounts receivable | Dalian Sida Food Company | 2,316,560.24 | 46,331.20 | ||
| Other receivables | Lankao Skyland Duck Company | 27,300,253.00 | 5,441,847.95 | 27,067,493.00 | 10,826,997.20 |
| Other receivables | Bei’an Nongken Shengda Pasture Specialized Cooperative | 4,350,000.00 | 87,000.00 | ||
| Other receivables | Weifang Wellhope Xinhesheng Feed Mill | 3,035,880.00 | 151,794.00 | ||
| Prepayment | Linghai Jiuguhe Feed Mill | 138,554.00 | 0.00 | ||
| Prepayment | Liaoning Mubang Animal Husbandry Equipment Manufacturing Company | 514,333.00 | 7,624,669.60 | ||
| Prepayment | Dunhua Fengda Agriculture and Animal Husbandry Company | 5,000,000.00 | |||
| Prepayment | Guangzhou Yikun Trading | 4,997,400.00 | |||
| Company | |||||
| Prepayment | Dalian Wellhope Fish Meal Company | 914,705.00 |
| Item | Related party | Closing book balance | Opening book balance |
| Accounts payable | Tai’an Jiuguhe Agriculture Development Company | 23,002,101.15 | 7,077,312.65 |
| Accounts payable | Qingdao Shenfeng Agri-Tech Company | 5,776,665.31 | |
| Accounts payable | Zhangjiakou Jiahe Agriculture and Animal Husbandry Company | 15,100,000.00 | |
| Accounts payable | Shenyang Wenjie Bio-Tech Company | 854,324.00 | 2,593,516.64 |
| Accounts payable | Dalian Chengsan Animal Husbandry Company | 3,447,455.47 | 4,749,094.21 |
| Accounts payable | Anshan Jiuguhe Paper Packaging Company | 230,852.87 | |
| Accounts payable | Anshan Antai Plastic Products Company | 823,525.36 | |
| Accounts payable | Dalian Wellhope Fish Meal Company | 9,137,325.56 | 2,716,351.95 |
| Accounts payable | Jilin Hengfeng Animal Health Products Company | 323,205.00 | |
| Accounts payable | Shenyang Wanlitian Agriculture and Animal Husbandry Company | 1,055,021.00 | |
| Accounts payable | Daqing Supply and Marketing Agri-Tech Company | 594,676.70 | 457,060.50 |
| Accounts payable | Anshan Jiuguhe Food Company | 1,049,646.00 | |
| Accounts payable | Tai’an Fengjiu Agri-Tech Company | 138,708.74 | |
| Accounts payable | Jinzhou Jiufeng Food Company | 1,617,740.00 | |
| Accounts payable | Liaoning Mubang Animal Husbandry Equipment Manufacturing Company | 11,284,184.00 | |
| Accounts payable | Shenyang Zhongwenjie Bio-Tech Company | 18,000.00 | |
| Advance receipt | Dunhua Fengda Broiler Breeding Company | 348,450.06 | |
| Contract liability | Linghai Jiuguhe Feed Mill | 1,317,500.00 | 7,860.00 |
| Contract liability | Tai’an Jiuguhe Agriculture Development Company | 4,421,611.30 | 281,300.00 |
| Contract liability | Qingdao Shenfeng Agri-Tech Company | 77,911.69 | |
| Contract liability | Haicheng New Hongzunda Agri-Tech Company | 708,806.00 | |
| Contract liability | Huludao Jiuguhe Feed | 771,500.00 | 564,892.50 |
| Contract liability | Nepal Wellhope Agri-tech Pvt. Ltd. | 38,700.00 | 38,700.00 |
| Contract liability | Dunhua Wellhope Agri-Tech Company | 323,000.00 | |
| 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 |
| Other payables | Liaoning Mubang Animal Husbandry Equipment Manufacturing Company | 5,932,500.00 |
| Total amount of exercised equity instruments | 4,233,000 |
| Total amount of expired equity instruments | 244,500 |
| Arrangement of unlocking restricted shares | Time of unlocking shares | Percentage of unlocking shares |
| The first lockup period | The first trading day after 12 months from the date of finishing the registration of granted shares to the last trading day within 24 months from the date of finishing the registration of granted shares | 30.00% |
| The second lockup period | The first trading day after 24 months from the date of finishing the registration of granted shares to the last trading day within 36 months from the date of finishing the registration of granted shares | 30.00% |
| The third lockup period | The first trading day after 36 months from the date of finishing the registration of granted shares to the last trading day within 48 months from the date of finishing the registration of granted shares | 40.00% |
| Recognition method of fair value of equity instrument at | Closing price at the grant date |
| the grant date | |
| Basis for determining the number of exercised equity instrument | It is expected that in case the conditions of unlocking restricted shares can be met, each individual can exercise the equity. |
| Accumulated amount of equity-settled share-based payment that recorded into capital reserve | 35,440,193.42 |
| Total expenses recognized by equity-settled share-based payment | 10,659,188.79 |
| Period | Lease payable (RMB 10k) |
| The first year after the balance sheet date | 2,720.44 |
| The second year after the balance sheet date | 2,507.25 |
| The third year after the balance sheet date | 2,150.98 |
| After the third year after the balance sheet date | 11,657.06 |
| Profit or dividend planned to be paid | 202,853,177.12 |
| Declared profit or dividend after receiving internal approval | 202,853,177.12 |
| Aging | Closing book balance |
| Within 1 year | 17,159,415.70 |
| 1-2 years | 2,788,762.98 |
| 2-3 years | 2,256,147.70 |
| Over 3 years | 25,206,660.47 |
| Total | 47,410,986.85 |
B. Categorized by bad debt provision method
Unit: yuan Currency: RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Percentage% | Amount | Accruing % | Amount | Percentage% | Amount | Accruing % | |||
| Accruing bad debt provision on an individual basis | 686,300.00 | 1.45 | 686,300.00 | 100.00 | ||||||
| Accruing bad debt provision by grouping | 46,724,686.85 | 98.55 | 26,639,128.72 | 57.01 | 20,085,558.13 | 43,173,647.52 | 100.00 | 29,541,957.07 | 68.43 | 13,631,690.45 |
| including: | ||||||||||
| Aging portfolio | 46,724,686.85 | 98.55 | 26,639,128.72 | 57.01 | 20,085,558.13 | 43,173,647.52 | 100.00 | 29,541,957.07 | 68.43 | 13,631,690.45 |
| Total | 47,410,986.85 | / | 27,325,428.72 | / | 20,085,558.13 | 43,173,647.52 | / | 29,541,957.07 | / | 13,631,690.45 |
| Aging | Closing balance | |||
| Book balance | Bad debt provision | Accruing percentage % | Reason for accruing | |
| Customer 1 | 312,000.00 | 312,000.00 | 100.00 | uncollectible |
| Customer 2 | 200,000.00 | 200,000.00 | 100.00 | uncollectible |
| Customer 3 | 174,300.00 | 174,300.00 | 100.00 | uncollectible |
| Total | 686,300.00 | 686,300.00 | 100.00 | / |
| Aging | Closing balance | ||
| Accounts receivable | Bad debt provision | Accruing percentage % | |
| Within 1 year | 17,159,415.70 | 572,379.95 | 3.34 |
| 1 -2 year | 2,788,762.98 | 418,314.45 | 15.00 |
| 2-3 years | 2,256,147.70 | 1,128,073.85 | 50.00 |
| Over 3 years | 24,520,360.47 | 24,520,360.47 | 100.00 |
| Total | 46,724,686.85 | 26,639,128.72 | / |
C. Bad debt provision
Unit: yuan Currency: RMB
| Category | Opening balance | Changes in current period | Closing balance |
| Accruing | |||
| Aging | 29,541,957.07 | -2,216,528.35 | 27,325,428.72 |
| Total | 29,541,957.07 | -2,216,528.35 | 27,325,428.72 |
| Debtor | Closing balance | Percentage of total accounts receivable % | Bad debt provision |
| 1 | 7,350,239.71 | 15.50 | 7,350,239.71 |
| 2 | 7,053,335.00 | 14.88 | 7,053,335.00 |
| 3 | 6,530,783.00 | 13.77 | 4,681,532.20 |
| 4 | 2,997,425.00 | 6.32 | 866,447.10 |
| 5 | 2,349,365.50 | 4.96 | 2,171,487.00 |
| Total | 26,281,148.21 | 55.43 | 22,123,041.01 |
| Item | Closing balance | Opening balance |
| Interests receivable | ||
| Dividends receivable | 57,747,209.35 | 33,977,209.35 |
| Other receivables | 1,313,618,107.93 | 986,808,467.11 |
| Total | 1,371,365,317.28 | 1,020,785,676.46 |
| Item | Closing balance | Opening balance |
| Dividends from long-term investment under cost method | 8,623,487.24 | 8,623,487.24 |
| Dividends from long-term investment under equity method | 49,123,722.11 | 25,353,722.11 |
| Total | 57,747,209.35 | 33,977,209.35 |
B. Other receivablesa. Categorized by aging
Unit: yuan Currency: RMB
b. Categorized by nature
Unit: yuan Currency: RMB
| Nature | Closing book balance | Opening book balance |
| Operating receivables | 539,013.85 | 665,830.66 |
| Cash pledge and guarantee deposit | 457,900.00 | 259,200.00 |
| Related party- fund transfer | 1,279,343,229.93 | 950,230,259.11 |
| Disposal of investment receivables | 2,764,218.95 | 28,471,800.00 |
| Other | 36,650,253.00 | 30,103,373.00 |
| Total | 1,319,754,615.73 | 1,009,730,462.77 |
| Bad debt provision | First stage | Second stage | Third stage | Total |
| Expected credit losses over the next 12 months | Expected credit loss for the entire duration (no credit impairment occurred) | Expected credit loss for the entire duration (credit impairment occurred) | ||
| Balance on January 1, 2020 | 22,921,995.66 | 22,921,995.66 | ||
| -recorded in the second stage | ||||
| - recorded in the third stage | -259,254.66 | 259,254.66 | ||
| -recovered in the second stage | ||||
| - recovered in the first stage | ||||
| Accrued in the reporting period | -16,783,717.32 | -1,770.54 | -16,785,487.86 | |
| Balance on December 31, 2020 | 5,879,023.68 | 257,484.12 | 6,136,507.80 |
| Aging | Closing book balance |
| Within 1 year | 565,870,306.87 |
| 1-2 years | 724,476,680.79 |
| 2-3 years | 95,372.00 |
| Over 3 years | 29,312,256.07 |
| Total | 1,319,754,615.73 |
d. Bad debt provision
Unit:yuan Currency: RMB
| Category | Opening balance | Changes in current period | Closing balance | ||
| Accruing | Collected or recovered | Charged off or written off | |||
| Aging | 22,921,995.66 | -16,785,487.86 | 6,136,507.80 | ||
| Total | 22,921,995.66 | -16,785,487.86 | 6,136,507.80 | ||
| Company | Type | Closing balance | Aging | % of closing balance of total other receivables | Closing balance of bad debt provision |
| 1 | account current | 289,577,149.62 | within 1 year | 21.94 | |
| 2 | account current | 113,042,339.25 | within 1 year | 8.57 | |
| 3 | account current | 82,223,563.56 | within 1 year | 6.23 | |
| 4 | account current | 81,468,740.37 | within 1 year | 6.17 | |
| 5 | account current | 71,637,365.51 | within 1 year | 5.43 | |
| Total | / | 637,949,158.31 | / | 48.34 |
| Item | Closing balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Investment in subsidiaries | 2,689,274,041.59 | 2,689,274,041.59 | 2,113,924,536.04 | 2,113,924,536.04 | ||
| Investment in associates and joint ventures | 2,312,858,926.16 | 17,900,000.00 | 2,294,958,926.16 | 2,021,291,294.06 | 17,900,000.00 | 2,003,391,294.06 |
| Total | 5,002,132,967.75 | 17,900,000.00 | 4,984,232,967.75 | 4,135,215,830.10 | 17,900,000.00 | 4,117,315,830.10 |
| Company | Jan. 1, 2020 | Increase in 2020 | Decrease in 2020 | Dec. 31, 2020 |
| Haicheng Wellhope Feed Mill | 12,620,515.83 | 46,127.19 | 12,666,643.02 | |
| Tai'an Wellhope Feed Mill | 33,059,905.41 | 19,219.66 | 33,079,125.07 | |
| Shenyang Wellhope Ruminant Feed Mill | 6,050,115.42 | 242,167.72 | 6,292,283.14 | |
| Liaoning Wellhope Agriculture and Animal Husbandry Company | 47,541,089.95 | 335,959.67 | 47,877,049.62 | |
| Shenyang Nongda Wellhope Feed Mill | 44,593,664.17 | 126,387.15 | 44,720,051.32 | |
| Xingcheng Wellhope Feed Mill | 82,799,527.09 | 134,537.62 | 82,934,064.71 | |
| Dalian Wellhope Feed Mill | 42,390,969.16 | 130,693.69 | 42,521,662.85 | |
| Jinzhou Wellhope Agri-Tech Company | 17,265,295.42 | 119,161.90 | 17,384,457.32 |
| Changtu Wellhope Feed Mill | 3,000,000.00 | 3,000,000.00 | - | |
| Shenyang Wellhope Extruded Feed Mill | 33,042,789.58 | 19,219.66 | 33,062,009.24 | |
| Shenyang Wellhope Aquatic Feed Mill | 15,290,969.17 | 130,693.69 | 15,421,662.86 | |
| Shenyang Wellhope Agri-Tech Company | 83,036,592.50 | 353,641.75 | 83,390,234.25 | |
| Shenyang Wellhope Poultry Industry Company | 68,463.33 | 30,751.46 | 99,214.79 | |
| Gongzhuling Wellhope Agri-Tech Company | 35,513,807.92 | 250,469.28 | 35,764,277.20 | |
| Jilin Wellhope Agri-Tech Company | 16,248,947.92 | 88,561.85 | 16,337,509.77 | |
| Gongzhuling Wellhope Ruminant Feed Mill | 5,085,579.17 | 38,439.32 | 5,124,018.49 | |
| Sanjiang Wellhope Agri-Tech Company | 21,214,420.81 | 8,301.89 | 21,222,722.70 | |
| Mudanjiang Wellhope Agri-Tech Company | 23,286,612.96 | 15,375.73 | 23,301,988.69 | |
| Heilongjiang Wellhope Agri-Tech Company | 120,876,334.58 | 392,081.07 | 121,268,415.65 | |
| Beijing Helai Sci-Tech Company | 25,473,427.09 | 226,791.99 | 25,700,219.08 | |
| Beijing Wellhope Agri-Tech Company | 5,094,470.00 | 5,094,470.00 | ||
| Huai'an Wellhope Feed Mill | 30,265,295.42 | 57,648.26 | 30,322,943.68 | |
| Gansu Wellhope Agri-Tech Company | 40,117,754.58 | 38,439.32 | 40,156,193.90 | |
| Henan Wellhope Agri-Tech Company | 52,849,621.66 | 158,215.24 | 53,007,836.90 | |
| Lankao Wellhope Agri-Tech Company | 43,085,579.17 | 38,439.32 | 43,124,018.49 | |
| Henan Wellhope Agri-Tech Company Kaifeng Branch | 193,757.50 | 108,858.15 | 302,615.65 | |
| Shenyang Huaweida Animal Health Product Company | 77,021.25 | -46,269.78 | 30,751.47 | |
| Jilin Hefeng Swine Breeding Company | 15,000,000.00 | 15,000,000.00 | ||
| Shenyang Expert Trading Company | 30,000,000.00 | 21,679.78 | 30,021,679.78 | |
| Shenyang Jiahe Tianfeng Commerce and Trade Company | 10,146,170.00 | 65,346.85 | 10,211,516.85 | |
| Liaoning Expert Trading Company | 73,899,932.50 | 173,012.81 | 74,072,945.31 | |
| Shenyang Pufeng Commerce and Trade | 15,499,788.72 | 15,499,788.72 |
| Company | ||||
| Liaoning Wellhope Purchasing & Trading Company | 30,282,411.25 | 128,057.71 | 30,410,468.96 | |
| Liaoning Skyland Livestock Equipment Company | 28,669,810.83 | 54,117.87 | 28,723,928.70 | |
| Shenyang Fame Bio-Tech Company | 20,500,521.85 | 169,133.01 | 20,669,654.86 | |
| Pingyuan Wellhope Food Processing Company | 147,540,969.17 | 130,693.69 | 147,671,662.86 | |
| Pingyuan Wellhope Agri-Tech Company | 273,853.33 | 123,005.83 | 396,859.16 | |
| Kaifeng Wellhope Meat Product Company | 100,000,000.00 | 100,000,000.00 | ||
| Wellhope Food (Shenyang) Company | 5,160,191.67 | 5,160,191.67 | ||
| Liaoning Godaji E-commerce Company | 10,497,690.83 | 238,323.79 | 10,736,014.62 | |
| Linxi Helai Agri-Tech Company | 9,023,617.50 | 11,042,283.25 | 20,065,900.75 | |
| Xi'an Linfeng Shengyi Commerce and Trade Company | 2,000,000.00 | 2,000,000.00 | - | |
| Lingyuan Wellhope Agri-Tech Company | 16,915,295.41 | 119,161.90 | 17,034,457.31 | |
| Haicheng Xinzhongxin Feed Mill | 6,004,151.48 | 49,971.12 | 6,054,122.60 | |
| Fuyu Wellhope Agri-Tech Company | 46,602,789.58 | 19,219.66 | 46,622,009.24 | |
| Changchun Wellhope Feed Mill | 84,604,867.91 | 142,225.49 | 84,747,093.40 | |
| Daqing Wellhope Bayi Nongda Animal Sci-Tech Company | 13,896,289.17 | 9,880,722.57 | 23,777,011.74 | |
| Beijing Sanyuan Wellhope Agri-Tech Company | 8,808,814.58 | 733,922.48 | 9,542,737.06 | |
| Tangshan Wellhope Feed Mill | 43,441,837.54 | 69,830.40 | 43,511,667.94 | |
| Cangzhou Helai Sci-Tech Company | 3,533,898.75 | 11,531.80 | 3,545,430.55 | |
| Shanxi Wellhope Agri-Tech Company | 40,042,789.58 | 19,219.66 | 40,062,009.24 | |
| Tangshan Hejia Agriculture and Animal Husbandry Company | 19,636,926.67 | 61,502.91 | 19,698,429.58 | |
| Tangshan Wellhope Sci-Tech Company | 21,034,231.67 | 15,375.73 | 21,049,607.40 | |
| Shanghai Wellhope Feed Mill | 2,302,930.84 | 176,146.43 | 2,479,077.27 |
| Pinghu Wellhope Agri-Tech Company | 1,029,716.25 | 80,722.57 | 1,110,438.82 | |
| Anhui Wellhope Agri-Tech Company | 70,165,675.08 | 42,046,127.19 | 112,211,802.27 | |
| Xi'an Wellhope Feed Sci-Tech Company | 4,962,363.33 | 295,982.77 | 250,000.00 | 5,008,346.10 |
| Zhengzhou Wellhope Agri-Tech Company | 4,044,926.67 | 69,804.80 | 4,114,731.47 | |
| Zhumadian Wellhope Agri-Tech Company | 9,061,961.67 | 11,531.80 | 9,073,493.47 | |
| Nanyang Wellhope Feed Mill | 11,125,637.39 | 42,283.25 | 11,167,920.64 | |
| Jiaozuo Wellhope Feed Mill | 49,209,905.42 | 30,751.46 | 49,240,656.88 | |
| Jingzhou Wellhope Agri-Sci-Tech Company | 21,443,959.42 | 127,152.59 | 21,571,112.01 | |
| Qingdao Wellhope Agri-Tech Company | 28,893,664.16 | 176,820.88 | 29,070,485.04 | |
| Jining Wellhope Agri-Tech Company | 19,751,300.83 | 23,063.59 | 19,774,364.42 | |
| Yunnan Wellhope Feed Mill | 24,284,231.67 | 38,439.32 | 24,322,670.99 | |
| Fuyu Wellhope Taolaizhao Poultry Raising Company | 5,660,231.67 | 11,069.18 | 5,671,300.85 | |
| Harbin Weierhao Trading Company | 3,970,817.50 | 62,730.96 | 4,033,548.46 | |
| Changchun Hengfeng Agriculture and Animal Husbandry Company | 239,621.66 | 107,630.10 | 347,251.76 | |
| Beijing Brilliant Dragon Commerce and Trade Company | 222,505.83 | 71,949.70 | 294,455.53 | |
| Shanghai Hehong Trading Company | 1,191,063.75 | 55,337.55 | 1,246,401.30 | |
| Jinan Xinweita Trading Company | 171,158.33 | 55,345.92 | 226,504.25 | |
| Zhangwu Wellhope Agriculture Development Company | 1,800,000.00 | 1,800,000.00 | ||
| Tongliao Wellhope Tianyi Prataculture Company | 10,200,000.00 | 10,200,000.00 | ||
| Chongqing Dahong Agriculture and Animal Husbandry Equipment Company | 119,810.83 | 53,815.05 | 173,625.88 | |
| Guangzhou Xiangshun Livestock Equipment Company | 3,001,347.50 | 23,063.59 | 3,024,411.09 | |
| Dalian Huakang Xinxin Food Company | 11,709,361.25 | 588,121.61 | 12,297,482.86 |
| Dalian Heyuan Agri-Tech Company | 51,710,307.08 | 319,046.36 | 52,029,353.44 | |
| Dalian Zhongjia Food Company | 196,832.08 | 11,531.80 | 208,363.88 | |
| Shenyang Huakang Broiler Company | 2,152,531.67 | 230,635.93 | 2,383,167.60 | |
| Shenyang Huakang Xinxin Food Company | 1,973,853.33 | 123,005.83 | 2,096,859.16 | |
| Shenyang Huakang Agriculture and Animal Husbandry Company | 770,212.50 | 345,953.89 | 1,116,166.39 | |
| Changchun Wellhope Food Company | 8,671,158.33 | 76,878.64 | 8,748,036.97 | |
| Dehui Wellhope Agri-Tech Company | 51,347.50 | 23,063.59 | 74,411.09 | |
| Puyang Wellhope Food Company | 20,213,947.92 | 96,098.30 | 20,310,046.22 | |
| Puyang Wellhope Agri-Tech Company | 51,347.50 | 23,063.59 | 74,411.09 | |
| Kaifeng Wellhope Agriculture and Animal Husbandry Company | 51,347.50 | 23,063.59 | 74,411.09 | |
| Liaoning Wellhope Food Company | 30,045,198.33 | 92,254.37 | 30,137,452.70 | |
| Chongqing Wellhope Agri-Tech Company | 1,500,000.00 | 730,000.00 | 2,230,000.00 | |
| Nanchang Wellhope Agri-Tech Company | 3,250,000.00 | 3,250,000.00 | ||
| Hengyang Wellhope Agri-Sci-Tech Company | 4,600,000.00 | 4,600,000.00 | ||
| Shulan Fengtai Agriculture and Animal Husbandry Company | 6,000,000.00 | 50,000,000.00 | 56,000,000.00 | |
| Shulan Fengtai Farming Company | 5,100,000.00 | 5,100,000.00 | ||
| Hainan Agri-Tech Company | 38,164,884.20 | 9,000,000.00 | 47,164,884.20 | |
| Russia Wellhope Agri-Tech Company | 11,700,000.00 | 11,700,000.00 | ||
| Luoyang Wellhope Agriculture and Animal Husbandry Company | 50,000,000.00 | 50,000,000.00 | ||
| Anyang Wellhope Agriculture and Animal Husbandry Company | 48,000,000.00 | 48,000,000.00 | ||
| Hainan Expert Trading Company | 1,000,000.00 | 1,000,000.00 | ||
| Tianjin Fullyond Supply Chain Company | 4,500,000.00 | 4,500,000.00 | ||
| Zhumadian Wellhope Agriculture and Animal Husbandry | 10,000,000.00 | 10,000,000.00 |
| Development Company | ||||
| Chifeng Wellhope Fuxinyuan Food Company | 125,000,000.00 | 125,000,000.00 | ||
| Shenyang Xiangmai E-commerce Company | 800,000.00 | 150,000.00 | 650,000.00 | |
| Hebei Taihang Wellhope Food Company | 74,400,000.00 | 74,400,000.00 | ||
| Dunhua Wellhope Agri-Tech Company | 7,652,794.97 | 7,652,794.97 | ||
| Dunhua Fengda Agriculture and Animal Husbandry Development Company | 13,095,094.63 | 13,095,094.63 | ||
| Heibei Taihang Agri-Tech Company | 74,400,000.00 | 74,400,000.00 | ||
| Nanyang Wellhope Cattle Sci-Tech Company | 10,000,000.00 | 10,000,000.00 | ||
| Liaoning Qingyuan Wellhope Agriculture and Animal Husbandry Company | 19,000,000.00 | 19,000,000.00 | ||
| Fuzhou Wellhope Xingyuan Agri-Tech Development Company | 3,600,000.00 | 3,600,000.00 | ||
| Daqing Wellhope Food Company | 7,650,000.00 | 7,650,000.00 | ||
| Shandong Heyuan Food Company | 76,878.64 | 76,878.64 | ||
| Total | 2,113,924,536.04 | 580,749,505.55 | 5,400,000.00 | 2,689,274,041.59 |
B. Investment in associated companies and joint ventures
Unit: yuan Currency: RMB
| Company | Opening balance | Changes in 2020 | Closing balance | Closing balance of impairment provision | ||||
| Additional investment | Gains or losses on investments recognized under equity method | Adjustment of other comprehensive income | Declaring of paying dividend or profit | Other | ||||
| 1. Joint Venture | ||||||||
| Unphung Joint Venture Company | 4,167,616.44 | 4,167,616.44 | ||||||
| Nepal Wellhope Agri-tech Pvt. Ltd. | 7,501,575.10 | 7,501,575.10 | ||||||
| NEXUS WELL-HOPE AGRITECH INTERNATIONAL LIMITED | 17,900,000.00 | |||||||
| Subtotal | 11,669,191.54 | 11,669,191.54 | 17,900,000.00 | |||||
| 2. Associated Company | ||||||||
| Dunhua Wellhope Agri-Tech Company | 4,178,671.25 | 322,972.85 | -4,501,644.10 | |||||
| Dunhua Fengda Agriculture and Animal Husbandry Development Company | 2,986,597.14 | 4,716,399.70 | -7,702,996.84 | |||||
| Qingdao Shenfeng Agri-Tech Company | 13,573,648.97 | 2,280,790.09 | 3,000,000.00 | 12,854,439.06 | ||||
| Zhangjiakou Jiahe Animal Husbandry Company | 68,145,308.99 | 50,730,981.24 | 118,876,290.23 | |||||
| Tailai Jiahe Animal Husbandry Company | 27,134,553.62 | 60,174,013.06 | 87,308,566.68 | |||||
| Gongzhuling Corn Purchasing and Storing Company | 49,602,919.46 | 122,491.94 | 49,725,411.40 | |||||
| Beijing Dahong Hengfeng Sci-Tech Company | 20,087,982.12 | 5,243,999.15 | 25,331,981.27 | |||||
| Shihaipu (Beijing) Technology and Trade Company | 1,270,877.77 | 300,450.44 | 1,571,328.21 | |||||
| GOLDEN HARVESTA INC. | 104,931,225.82 | 1,119,949.36 | -1,328,489.14 | 104,722,686.04 | ||||
| PT SEKAR GOLDEN HARVESTA INDONESIA | 38,998,739.72 | 678,021.37 | -2,475,988.86 | 37,200,772.23 | ||||
| Hainan Nongken Wenfeng Wenchang Chicken (Group) Company | 1,071,542.40 | 4,900,000.00 | -353,962.52 | 5,617,579.88 | ||||
| Tai’an Jiuguhe Agriculture Development Company | 111,292,888.94 | -17,478,535.91 | 93,814,353.03 | |||||
| Linghai Jiuguhe Feed Mill | 62,403,210.81 | -6,586,977.85 | 55,816,232.96 | |||||
| Dandong Wellhope Chengsan Food Company | 52,614,814.23 | 17,615,422.86 | 2,000,000.00 | 68,230,237.09 | ||||
| Anshan Jiuguhe Food Company | 152,438,428.77 | 65,404,805.31 | 37,397,700.00 | 180,445,534.08 | ||||
| Beipiao Hongfa Food Company | 442,144,638.08 | 80,249,254.71 | 16,170,000.00 | 506,223,892.79 | ||||
| Haicheng New Hongzunda | 12,850,037.83 | 2,203,643.38 | 1,470,000.00 | 13,583,681.21 |
| Agri-Tech Company | ||||||||
| Huludao Jiuguhe Food Company | 70,721,671.34 | 27,341,931.42 | 13,300,000.00 | 84,763,602.76 | ||||
| Dandong Wellhope Chengsan Agri-Tech Company | 112,253,275.58 | 3,669,492.40 | 2,000,000.00 | 113,922,767.98 | ||||
| Tai'an Jiufeng Agri-Tech Company | 5,951,804.50 | 309,724.00 | -3,185,467.28 | 3,076,061.22 | ||||
| Shenyang Wenjie Bio-Tech Company | 12,442,904.99 | 565,381.10 | 13,008,286.09 | |||||
| Shenyang Zhongwenjie Bio-Tech Company | 4,060,534.77 | 1,162,002.17 | 5,222,536.94 | |||||
| Huludao Jiuguhe Feed Mill | 42,015,223.35 | -16,788,373.83 | 13,300,000.00 | 11,926,849.52 | ||||
| Jinzhou Jiufeng Food Company | 48,476,492.49 | 29,991,524.63 | 78,468,017.12 | |||||
| Dalian Chengsan Animal Husbandry Company | 353,954,231.89 | 22,030,055.35 | 375,984,287.24 | |||||
| Tai'an Fengjiu Agri-Tech Company | 37,837,537.89 | 9,763,110.34 | 7,600,000.00 | 40,000,648.23 | ||||
| Anshan Fengsheng Food Company | 30,430,304.76 | 4,177,778.00 | 19,224,686.26 | 53,832,769.02 | ||||
| Lankao Skyland Duck Industry Company | 52,618,773.55 | -6,166,074.01 | 46,452,699.54 | |||||
| PT. Mulia Harvest Agritech | 47,617,462.51 | 2,413,279.66 | -3,267,043.86 | 46,763,698.31 | ||||
| Shulan Fengtai Organic Fertilizer Company | 1,500,000.00 | 772,206.00 | 2,272,206.00 |
| Weifang Wellhope Xinhesheng Feed Mill | 4,517,477.41 | 169,208.08 | 4,686,685.49 | |||||
| Liaoning Mubang Animal Husbandry Equipment Manufacturing Company | 1,791,476.38 | 1,520,000.00 | 7,785,460.14 | 11,096,936.52 | ||||
| Anshan Yufeng Feed Mill | -193,154.81 | 5,700,000.00 | -2,160,121.26 | 3,346,723.93 | ||||
| Dunhua Fengda Broiler Breeding Company | 6,000,000.00 | -215,914.95 | 5,784,085.05 | |||||
| Dazhou Wellhope Bio-Tech Company | 5,000,000.00 | -28,918.10 | 4,971,081.90 | |||||
| Tai’an Huijun Biomass Energy Company | 3,257,800.00 | -460,920.67 | 2,796,879.33 | |||||
| Anshan Jiuguhe Paper Packaging Company | 2,516,209.00 | 488,253.97 | 3,004,462.97 | |||||
| Anshan Antai Plastic Products Company | 1,824,000.00 | 340,615.90 | 2,164,615.90 | |||||
| Bei’an Nongken Shengda Pasture Specialized Cooperative | 7,830,000.00 | 590,847.40 | 8,420,847.40 | |||||
| Subtotal | 1,991,722,102.52 | 43,035,511.00 | 364,045,983.90 | -7,071,521.86 | 96,237,700.00 | -12,204,640.94 | 2,283,289,734.62 | |
| Total | 2,003,391,294.06 | 43,035,511.00 | 364,045,983.90 | -7,071,521.86 | 96,237,700.00 | -12,204,640.94 | 2,294,958,926.16 | 17,900,000.00 |
4. Operating revenue and cost
Unit: yuan Currency: RMB
| Item | 2020 | 2019 | ||
| Revenue | Cost | Revenue | Cost | |
| Revenue from primary businesses | 965,806,575.48 | 668,088,252.26 | 649,240,507.19 | 439,956,536.80 |
| Revenue from other businesses | 3,296,062.34 | 537,023.75 | 3,933,237.72 | 572,078.38 |
| Total | 969,102,637.82 | 668,625,276.01 | 653,173,744.91 | 440,528,615.18 |
| Item | 2020 | 2019 |
| Income from long-term equity investments under cost method | 82,745,583.97 | 71,426,000.00 |
| Income from long-term equity investments under equity method | 364,045,983.90 | 625,627,992.53 |
| Income from disposal of long-term equity investments | 3,451,323.42 | -4,079,999.00 |
| Income from disposal of trading financial assets | -2,036,868.25 | 2,735,905.66 |
| Income from disposal of other equity instrument investments | 100,000.00 | |
| Income from trading financial assets during the holding period | 2,828,562.02 | 3,545,198.63 |
| Total | 451,034,585.06 | 699,355,097.82 |
| Item | Amount | Note |
| Gains or losses from disposal of non-current assets | 3,169,342.06 | |
| 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 constantly at fixed quotas or amounts as per certain standards based on the state polices) | 33,102,019.89 | |
| 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 and liabilities as well as other debt investment (excl. the effective portion of hedges that arise in the Company's ordinary course of business) | -148,741.92 | |
| Non-operating income and expense other than those described above | -24,964,468.42 | |
| Income tax effects | -3,223,835.48 | |
| Non-controlling interests effects | -3,449,600.51 | |
| Total | 4,484,715.62 |
2. Return on equity and earnings per share
| Profit in 2020 | Weighted average ROE % | Earnings per share | |
| Basic EPS | Diluted EPS | ||
| Net profit attributable to shareholders who hold common stock | 19.93 | 1.34 | 1.34 |
| Net profit attributable to common shareholders deducting extraordinary items | 19.86 | 1.33 | 1.33 |
Section XII Reference
| Reference file directory | Financial statements with the signature and seal of the legal representative, the person taking charge of accounting and the person taking charge of the accounting department. |
| Reference file directory | The original audit report with the seal of the accounting firm and the signature and seal of the CPA. |
| Reference file directory | During the reporting period, all the original documents and original announcements of the Company that have been publicly disclosed on the websites designated by the CSRC. |