2021 Semiannual Report of New Hope Liuhe Co., Ltd
New Hope Liuhe Co., Ltd
2021 Semiannual Report
2021-99
August 2021
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
Section 1 Important Note, Table of Contents and Definitions
The board of directors, board of supervisors, directors, supervisors and
senior executives of the company warrant that the contents of this semiannual
report are true, accurate and complete and free of any false recordings,
misleading statements or significant omissions and will be jointly and severally
liable for the legal consequences.
The company’s CEO Liu Chang, chief accountant Chen Xingyao and
person in charge of accounting organization (accountant in charge) Chen Jing
state that the financial report in the semiannual report is true, accurate and
complete.
All directors of the company attended the board meeting deliberating this
report.
Investors are advised to particularly note that the annual financial budget,
business plan and business objectives of the company for 2021 don’t represent
the profit forecast of the company for 2021 and that whether they can be
realized depends on many factors such as changed market condition and level of
effort of the operating team, with huge uncertainties.
The company shall comply with the disclosure requirements set forth in
“Shenzhen Stock Exchange’s Industry Information Disclosure Guidance No.
1---Listed Companies Engaged in Livestock, Poultry and Aquaculture
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Businesses”.
I. Epidemic and natural disaster risks
The animal epidemic disease is the main risk faced in the development of
livestock industry. There are three kinds of risks arising out of the occurrence of
epidemic disease. First, the occurrence of epidemic disease is likely to result in
death of livestock, and leads directly to the reduction in yield, rising costs and
drop in prices. Second, the occurrence and prevalence of epidem ic disease on a
large scale easily influence the consumer psychology, lead to shrinking market
demand, and affect the feed production and operation. Third, after the outbreak
of some infectious epidemic diseases endangering the public health and safety,
the government will take lockdown and other measures to contain the spread of
epidemic disease. These epidemic containment measures will seriously hinder
the transportation of feed, animal healthcare products and live livestock, and the
workers returning to work, and have a great impact on the production and
operation of breeding industry. In addition, the outbreak of infectious epidemic
diseases will force most catering enterprises to close business, some agricultural
product markets to shut down, and consumers to reduce shopping activities
outdoors, resulting in reduced meat demand and consumption. For example, the
African Swine Fever (ASF) with an enormous impact on the entire industry
broke out in 2018. As the ASF is characterized by long latency and high
mortality after onset of the disease, and the effective and reliable vaccine has not
yet been developed successfully, coupled with the fact that it was also the
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concentrated outbreak on a large scale in China for the first time, both the
large-scale breeding enterprises and small farmers lacked effective containment
measures at the onset of epidemic, thereby suffering losses to varying degrees.
From the late 2020 to the first quarter of 2021, attenuated ASF virus bounced
back once again, especially hitting Hebei, Shandong, Henan and other places,
and once again causing prevalent effects to farming companies and farming
households in these areas.
The COVID-19 outbreak at the beginning of 2020 also posed daunting
challenges to the livestock and poultry breeding industry in China. The
anti-epidemic measures such as lockdown, delay in return to work, suspension of
live poultry trading, and shutdown of slaughter houses led to unavailability of
feed to farms and livestock farmers, newborn livestock nowhere to sell, inability
to slaughter livestock and poultry, and difficulties to conduct breeding
production activities normally. After entry into 2021, despite the stable epidemic
containment situation in China, scattered episodes of the epidemic across the
country and regional lockdown policies would also cause hindrances to
movement of personnel and materials related to business operations.
In terms of the natural disaster risk, the feed and slaughter are closely
related to planting and livestock breeding industry, so the natural disasters such
as temperature anomalies, drought, flood, earthquake, hail, and snow disaster
will all adversely affect the industry operation and development. The natural
disasters occurring on the production bases of the company and surrounding
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areas may cause substantial damages to production facilities or equipment, and
the natural disasters and extreme climate may also drive the prices of some feed
ingredients and meats up. For example, serious flood disasters broke out in
many places of South China in 2020, adversely affecting the planting, breeding,
farm produce logistics, project implementation and meat prices along the
industry chain to varying degrees: in terms of planting, continuous catastrophic
floods hitting some areas result in decreased output of feed ingredients, thus
impacting the feed ingredients prices, while at the same time decreasing the
quality of raw materials; in terms of breeding, flood might cause pathogenic
microorganisms buried in the land surrounding breeding farms to be exposed in
air and drinking water, and result in spread of pathogenic microorganisms and
trigger epidemic diseases. In addition, several provinces hardest hit by the floods
are major aquatic breeding areas in China, where the impact of floods not only
would destroy fishery production equipment but also is highly likely to wash off
fish-barring facilities and bring away fry and adult fishes, causing losses to
economic income of farmers and thus affecting feed ingredients sales of the
company; in terms of logistics, roads are flooded and roadbeds and road
surfaces destroyed wherever flood sweeps, forcing the freight costs of raw
materials, feed, finished products and breeding pigs to rise and the transport
capacity down, causing pressures on the supply chain of the company; in terms
of project implementation, continuous rainstorms also cause part of capital
investment construction projects of the company to suffer temporary shutdown,
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affecting the construction schedule; in terms of meat prices, flood would also
impact the meat supply and directly contributed to the rising prices of pigs,
while the gap in meat prices between affected areas and unaffected areas was
growing, thus leading to increased allocation and transport of hogs, and
resulting in spread of the pandemic to a certain extent.
Risk countermeasures: In the face of animal epidemics, the livestock farms
planned and constructed by the company’s breeding base are normalized and
standardized farms staffed with professional breeding technologists and
equipped with strict anti-epidemic measures to effectively prevent and control
the occurrence of epidemic diseases. The company has also summarized some
experience and measures responding to major epidemic diseases through years
of exploration and accumulation, which allow the company to eliminates the
impact of various epidemics by adjusting the product mix when appropriate,
improving the product quality, conducting deep market development actively
and reducing the costs. Since 2014, the company has been guiding technicians to
better serve farmers by establishing animal healthcare laboratories in various
areas, creating the cloud-based animal healthcare system, and conducting the
monitoring and warning of epidemics and diseases in real time. In view of ASF
outbreak in 2018, the company formulated all-round and system-wide
prevention and control measures, covering existing self-run pig farms, fattening
farms in cooperation with farmer households, new pig farms of the company,
swine feed production units and internal animal healthcare laboratories, with a
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view to ensuring proper prevention and control at the source of animal nutrition.
Meanwhile, actively participating in industry exchanges and exploring more
effective containment methods with peers allowed the company’s bio-safety
epidemic prevention system, pig survival rate and marketing rate to achieve
industry-leading levels. From the end of the previous year to the first quarter of
this year, a new round of attenuated ASF outbreak in many northern provin ces
is characterized by extensive outside contamination, numerous channels of
spread, long latency periods and a long phase of effect, thus posing new
challenges to the containment measures formed by the industry based on the
past two years of ASF containment at the initial stage of the outbreak. However,
the company continued summing up its experiences and upgrading containment
and decontamination methods in the containment process, including
whole-population serum double-antibody and double-screening, application of
thermal imagers, and static attenuation and disinfection of materials; and the
company added up its containment processes then subtracted so as to avoid
slackness resulting from prolonged and excessively trivial containment processes,
which helped restore normal production faster while ensuring containment, as
well as reduce bio-safety containment costs at the same time. With the aforesaid
measures, the number of ASF-affected farms at the end of the first half of the
year has been kept below 1%.
In response to the COVID-19, the company lost no time to react, formulated
and carried out various containment policies and conducted emergency
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disposition in a coordinated manner. Secondly, the company actively
communicates with the government at all levels, coordinates the transportation
of goods such as livestock products, and raw and auxiliary materials of feed and
products, secures vehicle passes, and implements the green channel policy
enacted by the government at all levels. Thirdly, the company ensures sufficient
procurement for feed plants and production supply through region-wide
coordination, strengthens internal support for poultry industry integration,
arranges its employees to return to work rapidly and orderly, contributes to the
adequate supply of daily necessities across the country, adjusts its food industry
strategy in real time and expands sales through supermarket channel and online
channel. Fourthly, in light of its business practices, the company compiled the
epidemic containment manual, published documents such as technical guidance
on employee prevention and control and quarantine and guidance on
engineering control amid epidemics, makes the epidemic prevention
arrangements in a targeted manner and strengthens employee safety protection.
In response to natural disasters, although unable to rule out the possibility
that serious natural disasters will occur in areas where its subsidiaries operate,
the company’s extensive business portfolio and presense both at home and
abroad help ensure that the company’s business will not be materially affected
when natural disasters occur in particular regions. Especially for the rainstorms
and floods in south China, which have occurred frequently in these years, the
company has accumulated a large wealth of experience, establishes proven
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contingency plans and maintains sufficient flood prevention supplies in stock at
all times, which allow the company to flexibly guide farmers through production
plan adjustments when the flood season begins in preparation for disaster relief
together. At the same time, the company can also take the advantage of its
nationwide presence to allocate funds, raw materials, equipment, and staff
timely and effectively to resume production as soon as possible and reduce the
losses caused by natural disasters.
II. Risk of price fluctuations of feed ingredients
The cost of main feed ingredients for feed production accounts for more
than 90% of total cost of feed production. In the past, the proportion of feed
business in the company’s revenue was large, but as the feed industry generally
adopts the cost-plus pricing method, the fluctuations in prices of feed ingredients
can be partly transmitted to the downstream breeding operations, to relieve the
pressure from the rising prices of feed ingredients. However, with a growing
percentage of livestock breeding business in the company’s revenue, the rising
prices of feed ingredients will have a growing impact on the company.
Since 2020, due to many influencing factors such as the COVID-19,
changed purchase and storage policies and crop yield in main grain-producing
areas of various countries, the prices of main feed ingredients such as corn and
soybean meal continuously rose, with the average market prices of corn
approaching 3,000 Yuan per ton in early 2021. Coupled with the continuous
tension between China and the US, which brings great uncertainties to the bulk
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produce trade between the two countries and international trade of feed
ingredients in the future, the risk of price fluctuations will exist in the long term.
Moreover, against the background of longtime existence of ASF in China, the
feed enterprises will reduce some high-risk feed ingredients for the safety of
animal nutrition, such as usage of corn, pig blood, and pig bone me al, so as to
make the demand for raw materials concentrate on other types of raw materials,
which will also lead to rise in prices of such alternative raw materials.
Risk countermeasures: The company is the largest domestic feed enterprise
with the scale advantages and a considerable say in the raw material purchasing.
The company started reorganizing and optimizing its raw material procurement
system in 2017, combed through its supplier system actively, established
strategic partnerships with many domestic and overseas best-run raw material
suppliers, conducted the supply chain financing of various forms actively, and
optimized its purchasing cost and related financial expenses. In 2019, the
company continued to drive transformations in terms of central purchasing of
raw materials, strategic purchasing channel optimization of partners,
acquisition of corn produced in northeast China, and purchasing model
upgrading, realizing a greater purchasing value despite the challenges. The
COVID-19 crisis in 2020 has caused phase-specific impact on the prices of feed
ingredients and feed additives, but the company applied hedging tools more to
control the ingredient price fluctuation risk, while the company’s technology,
purchasing, production and marketing departments worked closely with each
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other during the response to the pandemic, with these experiences already
summarized and applied into the daily operation management of the feed
business. In the first half of 2021, when prices of main feed ingredients such as
corn and soybean meal continuously fluctuated at high levels, the company
actively purchased imported low-price ingredients and alternative ingredients
such as wheat, sorghum and brown rice while properly anticipating the market
condition, in an effort to continually optimize ingredient costs.
III. Risk of price fluctuations of livestock and poultry
The finished products of livestock and poultry breeding business of the
company mainly include baby chick, baby duck, white -feathered chicken,
white-feathered duck, breeding pig, piglet, and hog. Especially since 2016, the
pig farming business of the company has been growing rapidly, with 8.29 million
hogs sold in 2020 and more than 500 million self-raised and outsourced
commercial generation chicken and ducks sold, which allowed the livestock and
poultry breeding to contribute greater to the entire revenue and profits of the
company. Along with the further growth of breeding volume of the company in
the future, the prices of livestock and poultry will affect the levels of revenue and
profits of the company even more remarkably.
In the first half of 2021, the domestic livestock and poultry markets saw
remarkably delinking pork prices and low-level fluctuations of poultry prices. in
the first half of 2021, the marketing rate of hogs rose 34% year-on-year, and
fixed-point monitoring results at the end of the first half of the year showed that
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the fertile sows on hand grew 30% year-on-year, hogs on hand grew 29%
year-on-year and the prices of hogs fell all the way from 36 Yuan/kg in early
2021 to the lowest point of 12 Yuan/kg in June, a decrease of over 60%, even
falling back to the low levels before this pork price cycle began ascending in
March 2019 for a time. In terms of the poultry business, the rising market
condition in 2018 and 2019 resulted in industry overcapacity, as the
grandparental breeding hens on hand, parental breeding hens on hand and sales
volume of commercial-generation baby chicken across the country in the first
half of 2021 were all sustained at the highest levels in the past six years. On the
side of consumption, the rapidly declining pork prices coupled with weakened
consumption demand caused by the COVID-19 allowed poultry meat prices to
remain low for a long period of time, making it more difficult for the poultry
business to profit.
Risk countermeasures: apart from the impact of sporadic epidemics, the
fluctuations in prices of livestock and poultry mainly depend on the periodic
increase and decrease in breeding and supply quantities. As a result, the process
of livestock and poultry prices going down itself is a process of the survival of
the fittest in the industry. Against this backdrop, the company still can generate
more revenue or suffer fewer losses than its rivals in the process of pric e decline
as long as it increases its breeding efficiency and makes its breeding costs lower
than its rivals. When some participants exit, the total supply declines and the
prices rise again, the company might gain a greater market share and a higher
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return on investment than before. In recent years, the company has been
committed to continuously increasing its breeding efficiency, and enjoying
industry leadership in terms of production of healthy young breeding poultry
and PSY and full cost of pig breeding, which will ensure that the company will
remain highly competitive during the price fall of livestock and poultry.
Although the company’s rapid scale expansion on its pig business in the past
year caused some of its competitiveness to be diluted temporarily, and some best
practices failed to be replicated in time at newly commissioned pig farms, along
with the company’s full transition to a stage of robust operation, the company is
gradually improving its business operation efficiency, reducing farming costs
and restoring its original competitiveness by enhancing its internal management
capabilities through many measures. On the other hand, unlike most of
agricultural and livestock companies, the company has slaughtering and food
processing business at the downstream part of farming and feed business at the
upstream part of farming, which happens to hedge against the farming process.
The price decline of livestock and poultry means that the cost of raw meat in the
slaughtering and processing businesses falls too and its profit margin will be
increased; the declining prices of livestock and poultry also mean the farming
volume of livestock and poultry is at high levels, which also helps increase the
profitability of feed business. Such an industry chain presence can moderately
mitigate the effects of declining prices of livestock and poultry on the company.
IV. Impact of environmental protection policies
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In 2014, China started implementing the Regulations on Pollution
Prevention for Large-scale Breeding of Livestock and Poultry, as the
government was strongly determined to keep livestock farms in line and new
regulations were enacted across the country to demolish livestock farms, ban or
restrict livestock farming activities. At the level of central government, the new
“Environmental Protection Law” was enacted in 2015; in 2016, the State Council
issued the “13th Five-Year” Ecological Environment Protection Program”, even
more specifically requiring “local governments to close or relocate livestock
farms (communities) and breeding households within the banned areas
according to law by the end of 2017”. In 2018, the first group of central
environmental protection inspectors conducted the “follow-up reexaminations”,
as the efforts to investigate pollution caused by livestock farms were intensified
across the country, ordering some breeding households to shut down for
environmental remediation or close once for all due to their livestock farming
facilities failing to meet the environmental standards or discharging wa stewater
beyond the set standards. These pressures from the environmental protection
policies will force some livestock and poultry farms failing to meet the
environmental standards to exit the market, and lead to reduced breeding
quantities, which impacted on the growth of feed business of the company and
its acquisition of hogs and poultry for slaughtering business. Some branches and
subsidiaries of the company fail to meet the environmental protection
requirements economically through hardware transformation, or no longer have
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the market basis due to being located in the banned areas, which will lead to
their shutdown. In the long run, however, the exit of these outdated capacities
for incompliance with environmental standards will allow the best-run
producers that remain in the industry to acquire higher profitability, which is
still of a positive significance to the entire industry.
Risk countermeasures: in light of the changes of the breeding market, the
company makes every effort to maintain existing customers, and strengthens its
cooperation with medium and large-sized farms and farmers that meet the
environmental standards by changing its feed marketing model and making full
use of its industrialized supporting and integrated services . While exploring a
new way of breeding, the company regards ecology, environmental protection,
efficiency and safety as primary considerations in its project design, helps
farmers remodel and build sheds and stalls that meet the higher environmental
standards, increase the profitability of breeding business and actively drive the
domestic livestock and poultry farming industry to grow healthily. On the other
hand, the company actively grows its inventories by cultivating new livestock
and poultry farming bases in environmentally suitable areas through
construction, acquisition, joint venture and cooperation using its existing
business portfolio across the country, thus ensuring the stability of its breeding
resources.
V. Risk of food safety
Food safety concerns the physical health and life safety of the general public,
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and is even a matter of life and death for food companies. Occurrence of food
safety problems or accidents would cause food companies to face claims, actions
or related penalties in a way that even affects their brands and reputations,
thereby materially adversely affecting their business, financial condition, stock
prices or business performance. The implementation of the revised “Food Safety
Law” in 2015 also means that China has brought its focus on food safety to an
unprecedented level. The outbreak of ASF in 2018 raised even more demanding
requirements for food safety control. Although the ASF itself is not a zoonotic
disease and the pork with ASF virus is not harmful at all to humans after
conventional heating and cooking, as there is not yet fully effective containment
measure against ASF at present, and the pork and its products are one of the
main vectors of the virus, more costs are required to prevent and control ASF
during the process of hog recovery and slaughter, pork transportation and
vending. In 2019, the State Council issued the “Opinions on Deepening Reforms
and Strengthening Food Safety Efforts”, making clear the need to further beef
up food safety efforts and ensure the “safety on the dining table” of the general
public with the most rigorous standards, the most stringent oversight, the most
severe penalties and the most serious accountability.
Risk countermeasures: the company has always been highly concerned
about food safety by seriously ensuring food safety in each link of its business
practices. In 2015, the company established its safety and environmental
protection department to ensure safety, health and environmental protection of
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its products, and upgraded the equipment in its “three-level” testing system,
expanded the laboratories of its branches and subsidiaries in terms of human
and material resources, guaranteed the allocation and input of funds, resources
and personnel across the food industry chain, which upgraded the food safety
organization management, equipment and facilities, process management and
key process control., So far, the company has created a food safety control chain
from feed, livestock and poultry breeding all the way to dining table. In 2014,
the “Beiyouzi” branded duck meat produced by the company was the first in
China to achieve end-to-end traceability; in 2015, Chengdu Xiwang Food Co.,
Ltd, a subsidiary of the company, became one of the second group of pilot
companies for implementation of the national standard of “food cold chain
logistics traceability management requirements”. In 2016, the company passed
the food technical standard certification by the British Retail Council (BRC),
and was elected the Vice President of the China Council at the first plenary
session of the Global Food Safety Initiative (GFSI) in China, becoming the first
Chinese private enterprise to be selected as a member of the global board of
directors of GFSI. In 2019, the 8th GFSI Focus Day China organized by the
company was held, marking the first time a private enterprise organized this
event since GFSI began holding the Focus Day China in 2012. At present, all
food businesses of the company have passed China-HACCP certification, and
more than 60 food companies are finishing the BRC and Global-GAP
certifications in succession. In addition, the company systematically explores the
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antibiotic-reducing and antibiotic-free possibilities in cooperation with multiple
parties using the GFSI platform resources, and actively drives the
popularization of antibiotic-reducing and antibiotic-free successful cases.
VI. Risk of exchange rate fluctuations
Currently, the global purchasing of raw materials for feed production is
going deeper, and the feed enterprises have been increasingly affected by the
exchange rate in terms of feed ingredients purchasing centered on foreign supply
such as corn, soybean, whey powder, fish meal and DDGS. At the same time, the
company has larger foreign operations than its Chinese peers, and in the foreign
investment and overseas operations, the cross-border capital transaction and
settlement amounts involved are growing, thus making the company more
vulnerable to exchange rate fluctuations. Since 2019, the bumpy China -US
relations caused the RMB/USD exchange rate to fluctuate frequently.
Throughout 2020, the RMB exchange rate showed a trend of fall before rise and
went down in a zigzag manner due to the impact of the COVID-19 in the first
half of the year, but a new round of rapid appreciation started as China was the
first to contain the pandemic and resumed work and business operations at a
quickened pace in the second half of the year. Such violent turbulences produced
impacts on the foreign exchange management of the company. Besides, in
certain overseas countries where the company operates, the exchange rate of
local currencies against USD depreciated remarkably due to the COVID -19,
political turbulence, and foreign exchange policy adjustments, which also
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produced an adverse impact on the company.
Risk countermeasures: In response to the growing needs for overseas raw
material purchasing and investment and operation, the company started
building its Singaporean branch into an overseas commercial and trading center
and investment and financing center in 2016, actively conduc ted international
centralized purchasing of raw materials, foreign direct financing, supply chain
finance, foreign exchange risk management and raw materials purchasing risk
management on its Singaporean platform, in order to reduce the impact of
exchange rate fluctuations on its cash flow in overseas operations. Meanwhile,
the company further strengthened its close connection and communication with
overseas financial institutions, overseas agencies of the Chinese government and
host governments to analyze the trends of local currencies’ exchange rates in
host countries in time and ease the adverse impact of exchange rate fluctuations
by means of direct investment in local currencies abroad, etc.
VII. Risk of human resources
The risk of human resources to the company is mainly manifested in the
following four aspects. First, the pig farming scale of the company is now at a
phase of leapfrog development. As at the end of the first half of 2021, the
company’s pig farming team totaled 46,000 persons, and management radius of
the company also increased as a result, therefore, there are tremendous
pressures and challenges in terms of rapidly training and retaining a large
number of qualified pig farming workers. If the personnel recruitment, training
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and retention prove inadequate, potential risks will arise for the subsequent pig
farm management and operation. Second, as the company transforms from a
traditional agricultural and animal husbandry enterprise to a agricultural,
animal husbandry and food integrated enterprise, the company will face the risk
of insufficient reserve of high-caliber operation and management personnel in
new business domains and of personnel in food retail, engineering technology, IT
and other emerging fields. Third, along with the rising human cost, employee
compensation has become an important factor in cost increase of the company.
Fourth, as a leading enterprise in China’s agricultural and animal husbandry
industry, the company has cultivated a large number of outstanding employees
in its multiyear history, but the competition for human resources is intensifying
due to the increasing competition in the industry and entry of new players of
different backgrounds into the industry over the past years, meaning the brain
drain will cause losses to the company and subsequently affect the sustainable
development of the company.
Risk countermeasures: the company has looked at talent cultivation and
organizational activation as a long-term strategic task of the company. In terms
of recruiting talented pig farmers, the company expanded its recruitment
channel beyond college graduates majored in agriculture and animal husbandry
to recruit non-specialized college graduates and veterans. In terms of pig farmer
training, the company broke down daily production processes according to
standards and internalized them using IT means. It offers specialized courses of
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different levels for general manager, farm managers all the way down to the
newly recruited frontline workers through in-house pig farming universities and
pig industry research institutes that offer high-frequency learning, training and
teaching possibilities. Moreover, through the modern apprenticeship system
inside pig farms and one-to-one mentoring and reinforcement by sophisticated
employees, the time to cultivate new employees has been greatly shortened. The
company further perfected its pig industry talent motivation system, whereby
personnel at all levels in pig industry will receive industry-leading economic
return based on their value output. In addition, in order to reduce the pressure
on human cost, the company intensified its efforts to carry out projects such as
pig farming in multistory buildings, intelligent pig farms and things of internet,
which will significantly increase its effic iency of personnel utilization.
The company also intensified its efforts to recruit talented people in
strategic, new businesses, while actively conducting cross-industry training and
learning to enrich the knowledge structure and capability structure of its
existing personnel. The company realized a continuous increase in per capita
efficiency by efficiency improvement, lean management, optimization of
industry chain design and organization flattening; created the professional
manager development channel with survival of the fittest by constructing the
competition, selection and elimination mechanisms; and creates the growth
community of employees and the company by constructing reasonable
evaluation and incentive mechanisms and value sharing mechanisms. In 2019,
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the company implemented its restricted stock and stock option incentive plan for
the first time to motivate its key technologists and key members of pig farming
teams more for increased cohesion and corporate competiveness and to fully
motivate senior management personnel a part of key employees of the company
at work.
The company plans not to distribute cash dividends or allot bonus shares or
transfer its capital reserve to share capital.
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Table of contents
Section 1 Important Note, Table of Contents and Definitions........................................................ 2
Section 2 Company Profile and Key Financial Indicators ........................................................... 26
Section 3 Manage ment Discussion and Analysis ........................................................................... 29
Section 4 Corporate Governance .................................................................................................... 72
Section 5 Environmental and Social Responsibilities ................................................................... 75
Section 6 Significant Events .......................................................................................................... 181
Section 7 Changes in Shares and Information about Shareholders .......................................... 222
Section 8 Details related to Preferred Shares .............................................................................. 232
Section 9 Details related to Corporate Bonds .............................................................................. 233
Section 10 Financial Report .......................................................................................................... 237
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List of Reference Documents
(I) Financial statements signed and stamped by the chief executive officer, person in charge of accounting and
head of accounting organization (chief accountant) of the company.
(II) Originals of all corporate documents and manuscripts of announcements publicly disclosed on China Securities
Journal, Securities Times, Shanghai Securities News and Securities Daily during the reporting period.
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Definitions
Term Refers to Definition
This company, the company, listed company,
Refers to New Hope Liuhe Co., Ltd
New Hope
CSRC Refers to Securities Regulatory Commission
Sichuan CSRC Refers to Sichuan Office of Securities Regulatory Commission
SZSE Refers to Shenzhen Stock Exchange
CSDC Refers to China Securities Depository and Clearing Co., Ltd
NAFMII Refers to National Association of Financial Market Institutional Investors
Company Law Refers to Company Law of the People’s Republic of China
Securities Law Refers to Securities Law of the People’s Republic of China
New Hope Group Refers to New Hope Group Co., Ltd
South Hope Refers to South Hope Industrial Co., Ltd
China Minsheng Bank Refers to China Minsheng Banking Corp.
New Hope Chemical Refers to New Hope Chemical Investment Co., Ltd
Lhasa Economic and Technological Development Zone Beishuo
Beishuo Investment Refers to
Investment Center (L.P.)
Finance Company Refers to New Hope Finance Co., Ltd
Liuhe Group Refers to Shandong New Hope Liuhe Group Co., Ltd
Polaris Bay Refers to Polaris Bay Co., Ltd
Hope Group Refers to Hope Group Co., Ltd
Besun Agricultural Refers to Yangling Besun Agricultural Industry Group Co., Ltd
The 2019 incentive plan Refers to The 2019 restricted stock and stock option incentive plan
The 2021 incentive plan Refers to The 2021 restricted stock incentive plan
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Section 2 Company Profile and Key Financial Indicators
I. Company Information
Stock abbreviation New Hope Stock code 000876
Stock exchange on which
Shenzhen Stock Exchange
stock is listed
Chinese name of the company 新希望六和股份有限公司
Chinese abbreviation of the
新希望
company(if any)
English name of the company
NEW HOPE LIUHE CO., LTD.
(if any)
English abbreviation of the
NEW HOPE
company (if any)
Legal representative of the
Liu Chang
company
II. Contact persons and contact details
Board secretary Securities affairs representative
Name Lan Jia Bai Xubo
11F, Block T3A, Wangjing SOHO Center, 11F, Block T3A, Wangjing SOHO Center,
Contact address No. 10, Wangjing Street, Chaoyang No. 10, Wangjing Street, Chaoyang
District, Beijing District, Beijing
Tel (010)53299899-7666 (010)53299899-7666 (028)85950011
Fax (010)53299898 (010)53299898
Email 000876@newhope.cn baixb@newhope.cn
III. Other details
1. Company’s contact details
Whether the company’s registered address, office address, post codes, company website and email address have changed during the
reporting period
□ applicable √ not applicable
There is no change to the company’s registered address, office address, post codes, company website or email address during the
reporting period, as detailed in the 2020 annual report.
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
2. Information disclosure and filing place
Whether the information disclosure and filing place have been changed during the reporting period
□ applicable √ not applicable
There was no change to the name of information disclosure newspaper selected by the company, the website address of the website
designated by CSRC for publication of semiannual reports or the filing place of the company’s semiannual reports during the
reporting period, as detailed in the 2020 annual report.
IV. Key accounting data and financial indicators
Whether the company needs to retroactively adjust or restate the accounting data of previous years
□ yes √ no
Increase or decrease in this
The same period of the
This reporting period reporting period from the same
previous year
period of the previous year
Business revenue (Yuan) 61,518,574,560.67 44,696,040,364.08 37.64%
Net profits attributable to shareholders of
-3,415,066,136.23 3,163,865,460.00 -207.94%
the listed company (Yuan)
Net profits attributable to shareholders of
the listed company after deduction of -2,304,738,918.62 3,283,676,864.54 -170.19%
non-recurring profit and loss (Yuan)
Net cash flows from operating activities
-4,596,606,685.74 658,593,331.58 -797.94%
(Yuan)
Basic earnings per share (Yuan/share) -0.79 0.76 -203.95%
Diluted earnings per share (Yuan/share) -0.78 0.75 -204.00%
Weighted average ROE -9.28% 11.16% 20.44% down
Increase or decrease at the end
End of this reporting
End of the previous year of this reporting period from
period
the end of the previous year
Total assets (Yuan) 132,387,884,782.28 109,443,465,562.15 20.96%
Net assets attributable to shareholders of
37,195,108,119.35 39,846,334,135.68 -6.65%
the listed company (Yuan)
V. Differences in accounting data under domestic and overseas accounting standards
1. Differences between the net profit and net assets disclosed in accordance with international accounting
standards and Chinese accounting standards in the financial report
□ applicable √ not applicable
The company had no difference in net profits and net assets in financial reports disclosed under both international accountin g
standards and Chinese accounting standards during the reporting period.
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
2. Differences between the net profit and net assets disclosed in accordance with overseas accounting
standards and Chinese accounting standards in the financial report
□ applicable √ not applicable
The company had no difference in net profits and net assets in financial reports disclosed under both overseas accounting standards
and Chinese accounting standards during the reporting period.
VI. Items and amounts of non-recurring profit and loss
√ applicable □ not applicable
Unit: Yuan
Item Amount
Profit and loss from disposal of noncurrent assets (including the charged-off portion of the
-845,492,806.46
accrued provision for asset impairment)
Government grants charged to current profit and loss ((excluding government grants given in
the Company’s ordinary course of business at fixed quotas or amounts as per government’s 109,067,178.52
uniform standards)
Investment costs for acquisition of subsidiaries, associates and joint venture less than gains
320,326.09
from the fair value of identifiable net assets of the investees
Except for the effective hedging activities related to the Company's ordinary activities, profit or
loss arising from changes in fair value of financial assets held for trading, derivative financial
assets, financial liabilities held for trading, and derivative financial liabilities, and investment -17,631,335.35
income from disposal of financial assets held for trading, derivative financial assets, financial
liabilities held for trading, derivative financial liabilities, and other debt investments
Reversal of impairment provision for receivables and contract assets subjected to separate
12,461,280.08
impairment test
Other non-operating incomes and expenses other than the aforesaid items -402,425,817.82
Other items of profit and loss that conform to the definition of non-recurring profit and loss. 0.00
Minus: effect of income tax 3,990,494.71
effect of minority interests (after tax) -37,364,452.04
Total -1,110,327,217.61
For non-recurring profit and loss items defined by the company according to the “Explanatory Announcement No. 1 on Information
Disclosure for Companies Offering their Secur ities to the Public– Non-recurring Profit and Loss”, and for defining the non-recurring
profit and loss items enumerated in “Explanatory Announcement No. 1 on Information Disclosure for Companies Offering their
Securities to the Public– Non-recurring Profit and Loss” as recurring profit and loss items, the reasons shall be explained.
□ applicable √ not applicable
During the reporting period, there was no circumstance in which the company defined the non-recurring items of profit and loss as
defined and enumerated in the “Explanatory Announcement No. 1 on Information Disclosure for Companies Offering their Securities
to the Public– Non-recurring Profit and Loss” as items of recurring profit and loss.
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
Section 3 Management Discussion and Analysis
I. Main operating activities of the company during the reporting period
The main businesses that the company operates include feed, white-feathered poultry, pig farming and food processing and
distribution.
(I) Feed business
Feed can be classified into three main categories, and they are premix, concentrates and compound feed according to the
nutritional ingredients contained. Premix feed is the mixture of various nutritional additives such as vitamin, mineral substa nce and
amino acid; feed concentrate is with further addition of various animal and vegetable proteins into premix feed; compound feed is the
combination of feed concentrate and additional energy-based raw materials. In terms of the final nutritional needs and formulation,
the amount of nutritional additives required is small but its per-unit value is high, and the energy-based raw materials have a low unit
value but the quantity required is signicant, while the protein-based raw materials fall between the two when it comes to per-unit
value and quantity requirement. Among 250 million tons of feeds nationwide in 2020, the premix feed only accounted for about 2.4%,
and the concentrated feed about 6%, and the compound feed more than 91%. What is produced by the vast majority of feed produc ers
is compound feed. Large companies have large demands for premix feed and concentrated feed due to their large outputs of
compound feed, so they generally would produce premix feed and concentrated feed themselves. The small and medium-sized
companies only produce compound feed due to the smaller scale of their operations, and they purchase required premix or
concentrated feed from large feed businesses or other independent premix producers. Some farmers of considerable scale would also
purchase premix or concentrated feed directly, and then blend it with protein-based and energy-based raw materials for their own use
on farm. The feed business of the company covers premix and concentrated feed as well as compound feed, of which the premix and
concentrated feed are sold directly to external customers as well as comfound feed plants that are internal to the business.
The feed can also be divided into poultry feed, swine feed, aquaculture feed, and ruminant feed according to animal species.
Among the feed yield nationwide in 2020, the poultry feed, swine feed, aquaculture feed and ruminant feed accounted for 50%, 35%,
8% and 5% respectively. The scope of the company’s feed business covers all the aforementioned categories. As the company has a
downstream business of raising white-feathered poultry and pigs, the poultry feed and swine feed produced by the company are made
available to downstream contract farmers and in-house livestock farms in addition to being sold to external customers. The
aquaculture feed and ruminant feed produced by the company are sold to external markets.
The main parts of feed business operations include technology development, raw material procurement, production and
processing, and sales service, usually simply referred to as “technology, procurement, production and sales” . The interaction between
technology and procurement is the closest. This is because the raw material cost of feed products accounts for 80-90% of selling
price, and the ability to procure raw materials at a competitive cost is one of key success factors. However, the raw material
procurement should take the nutritional needs into account, rather than only considering the cost. There are hundreds of raw material
types, resulting in thousands of combinations and feed formulae. Companies need to design the most cost-effective formula that
meets the specific nutritional needs according to the nutrient contents and costs of different raw materials at a given time, thereby
making appropriate procurement decisions. The production and processing parts mainly focus on production efficiency and product
quality. The sales service part mainly focuses on business development and maintenance, sells customized products to different
customer groups, helps farmer households enhance the breeding performance through additional services, optimizes the cost and
efficiency of the distribution process, and feeds back customer needs and product problems to the technology research and
development department in time to form good interactions.
In recent years, the domestic feed industry has entered the mature stage, as the growth rate of national feed yield from 2015 to
2020 was 1.4%, 4.5%, 5.9%, 2.8% and -3.7% and 10.4% respectively on a year-on-year basis. With the steadily growing total
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
quantity, the feeds for different animal species would show different growth trends due to different impacts of long-term,
intermediate term as well as short industry-specific cycles. The long cycle refers to the cycle of industrial upgrading and technical
progress, for example, the poultry feed with a higher degree of downstream large scale farming, a higher pene tration rate of
compound feed and relatively more mature technology has slower overall growth than the swine feed and aquaculture feed in recent
years. The intermediate term cycle refers to the cycle of supply-demand relation and price changes of livestock and poultry products,
as the periodic increase and decrease in breeding quantity of a particular type of animal downstream will affect the increase and
decrease of sales volume of the corresponding feed type upstream. The short cycle refers to the natural disasters and animal
epidemics that affect specific animals. For example, H7N9 flu affected poultry feed in the first half year of 2017, and African swine
fever (ASF) has a significant impact on swine feed from the mid-2018 up to now. Another good example is natural disaster including
the rainstorms and floods in the southern China that affected the aqua feed market in 2017, and. In 2019, under the influence of ASF,
the swine feed output nationwide decreased by 26.6% year-on-year. In 2020, the Chinese government actively encouraged the
recovery of pig farming and swine feed output rose again as, by 16.4% year-on-year, reaching 86% of the level of 2018. In the first
half of 2021, swine feeds bounced back across the board, rising by more than 70% year-on-year and beyond the pre-ASF levels.
The competition has become increasingly fierce as the industry matures. On one hand, each company has a solid position in
their existing business and specialty and strives to innovate. On the other hand, they are extending their business across the industry
chain to optimize their strategic positioning. In terms of technology research and development, has given rise to the development of
bio-environmentally friendly feeds, while aquaculture feed is being upgraded from sinking granulated feed to floating expanded feed.
In other feed categories, more specialised feed types and formulae have emerged that are specific to the various phases of feeding. In
terms of raw materials procurement, companies continuously explore new raw materials and are looking to achieve a more
diversified mix. While for the traditional commodity type of materials , businesses, through various means including strategic
partnership, equity investment and in-house operations, to secure the production capacity of their upstream production sites, and the
procurement of those materials is also aided with big data, futures and other financial instruments to improve efficiency and precision,
particularly when it comes to timing. In terms of production and processing, more efficient and agile logistics can support the
transportation of a larger radius, thus giving rise to more and more feed factories with larger capacities. Companies then improve
efficiency through more centralized large-scale production, while at the same time enhancing the quality through specialized
workshops or production lines. In terms of sales service, companies provide various types of value-added services to farmers in
addition to selling feed products. Some good examples are technical guidance, animal healthcare & veterinarian services, financing
support, information & insights service, and livestock and poultry sales. The value-added services help strengthen the customer
relationship, shorten the sales & distribution process, increase the ratio of direct supply, and increase the breeding efficiency and
income.
In terms of the upstream and downstream extension of the industry chain, companies can expand towards upstream operations
like raw material planting and trade , while some expand downstream to incorporate breeding, slaughter or food processing. Due to
the difference between pig and poultry industries (see the description in the white-feathered poultry business for details), many of the
poultry feed producers extends downstream to include poultry breeding and slaughtering a while back. In comparison to poultry,
swine feed producers extends to the pig breeding and slaughtering much later. But in the recent two pork price cycles, such extension
is becoming more common, especially in the wake of the ASF. Such extension to the downstream reflects the desire of feed producers
to control the downstream breeding and consumer needs, so that they can gain the profits from the downstream while ensuring the
upstream feed capacities can be fully utilized. The reason behind this lies in the shift of supply-demand relation across the industry
and gradual scale-up of the downstream breeding operations, as the focus of industry value gradually changes from the feed
operations in the past to the downstream breeding and food production.
Be it the enhancement and innovation of existing business or extension of the upstream and downstream of industry chain, they
all need to be supported by the overall competence of companies. Due to greater comprehensive strength, large companies tend to
have increasingly obvious advantages in the competition and growing market shares, thus leading to gradual increase in the market
concentration. From 2013 to 2019, the toal number of feed producers nationwide dropped to more than 7,800 from more than 10,000,
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
while the number of producers with larger per-plant output continuously grew. The total number of producers with annual output of
more than 0.1 million tons per plant in 2020 was 749, and is 128 more than the total number in 2019. The combined output of the
large produces accounted for 52.8% of the industry’s production, with a year-on-year growth rate of 19.8%, which is above the
industry growth rate. The ASF in 2019 had further accelerated the reshuffle and consolidation of the industry. Compared with the
large companies, small and medium-sized feed producers are weak in terms of technology, bio-safety and other aspects, and sell their
products mostly to family farms and small-scale free-ranging households, the latter of which are more affected by ASF, so that the
small and medium-sized feed producers are more affected than their large counterparts. Large companies will face more market
spaces after surviving the impact of ASF.
The feed business of the company has been the largest in the domestic feed industry for many years, with the poultry feed
business ranking first nationwide, swine feed and aquaculture feed ranking among top three nationwide, and ruminant feed also holds
a leading position nationwide. The company leads the industry to embrace the changes by relying on its leading position, and
strengthens its product power, purchasing power, productivity and service ability constantly, by launching biological
environment-friendly feed and antibiotic-free feed, eliminating the outdated capacities, and building high-output benchmarking
plants. On this basis, it actively pursues business extension accross industry chain and explores transformation and upgrading of its
business model. On one hand, we make full use of the downstream industry chain foundation, actively develop the integrated projects
of feed – breeding – slaughter, actively invest in and acquire food-related operations, and they have steadily promote our
transformation from a feed producer to a breeder and food producer. On the other hand, the company was the first in the industry to
launch the project of “everything flourishing” (poultry flourishing, pig flourishing, fish flourishing, cattle flourishing, s heep
flourishing) to provide technical and financial services to farmers, as well as the swine managemenet service targeting large pig
farms. We set up breeding training management companies or breeding service companies to facilitate the direct engagement wit h
large farms or farmers, and in the meantime, we also develop our financing guarrantee services steadily, and the two operations
jointly promote the development of feed business.
(II) White-feathered poultry business
The white-feathered poultry refers to large white-feathered broilers and white-feathered meat ducks, characterized by short
growth cycle and high feed conversion ratio. More than 4 billion white-feathered broilers and about 3 billion white-feathered meat
ducks are slaughtered in China every year, and with another 3 billion yellow-feathered broilers, they make up the main source of
poultry meat consumption in China. The white-feathered poultry business includes breeding poultry propagation, commercial
generation poultry breeding, poultry slaughter, and processed poultry meat. As the large-scale and industrial development of
white-feathered poultry industry started early and is now highly mature in China, coupled with the fact that the number of single
slaughtering batch of white-feathered poultry bred is large, it generally needs to work with the large-scale slaughter operations.
Therefore, numerous companies tend to fully intergrate the end-to-end industry chain in their operations, “poultry feed – commercial
poultry breeding – poultry slaughter” or what it is called in the market, “a fully integrated model”. A small number of large
companies would also further extend in the breeding poultry upstream and prepared poultry meat downstream respectively, so as to
form a more complete industry chain.
The breeding poultry propagation operations can be divided into breeding and breeder farming. Breeding refers to selective
breeding of high intergenerational good stock, while breeding poultry farming refers to expanding propagation of good breeds
selected, and output of commercial generation baby chicks and baby ducks. The breeding part has very high technological
complexity and needs long-term research and development accumulation. At present, it is mostly controlled by foreign pountry
breeding techonology companies, although some domestic leading companies have made breakthroughs in recent years, by
developing chickens and duck breeds that are of their own proprietary intellectual property. It is much more technologically
sophisticated than the commercial breeding, and it requires significant capital investment, particularly when it comes to breeding
poultry farms and breeding egg hatcheries, so it is generally invested and accomplished by companies instead of individual farmers.
As for the domestic white-feathered poultry industry, in terms of breeding poultry, great grandparent is introduced mostly from
foreign specialized breeding poultry companies, before carrying out the expanding propagation of grandparents and parents in China,
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
and then outputting the commercial generation baby chicks and baby ducks. However, as for particular companies, it mainly consists
of two categories. Most companies still focus on the downstream of the industry, especially the commercial generation breedin g and
slaughter, and extend the upstream breeding poultry cultivation only to the parent generation, and output the commercial generation
baby chicks and baby ducks for self use, although some of them will further extend to the grandparent generations for breeding. A
small number of specialized breeding poultry companies lay particular emphasis on the upstream, focus on introducing fine varieties
from abroad, and sell the baby chicks and baby ducks after expanding propagation in China, without getting involved in the
commercial generation breeding.
There are two main models involved in the commercial generation breeding, i.e., integrated company-run breeding and breeding
through cooperation between company and farmer households. The integrated company-run breeding means the commercial
generation chicken and duck breeding is run by a company itself, who ultimately slaughters and sells the chicken and ducks; the
breeding through cooperation between company and farmer households means a company provides or sells commercial generation
baby chicken and ducks to farmer households and ultimately recovers the adult chickens and ducks for slaughtering. According to the
settlement mode and the ownership of chickens and ducks as agreed in the contract, i.e. whether chickens and ducks are owned by
the company or farmer households, or whether the baby chicken and ducks are provided or sold by the company to farmer
households, the company-farmer cooperative breeding can be further divided into traditional contract breeding model and outsourced
breeding model. Whether a company chooses to run the commercial generation breeding on its own or not is related to the technical
attributes of this operation. Due to shorter growth cycle and faster turnover speed of the poultry than those of pigs, the fa rming
technology for the poultry is less technically difficult than pig farming, and the single-farm investment threshold is also relatively low.
Thus, the domestic poultry farming industry started earlier and is more mature and larger than the pig farming industry. As a result,
during the process of commercial ge neration breeding alone, there is usually no obvious difference in technology and efficiency
between companies and farmer households. The significance of companies choosing to operate commercial generation breeding
alone lie more in higher requirements raised by the downstream food industry, i.e. the upstream breeding operations are controllable
from the beginning to end so as to ensure the food safety. However, in recent years, stricter environmental regulation has br ought
new changes, as some commercial generation breeding companies or farmer households have to limit or stop production activities or
even exit the industry due to being located in banned areas or incompliance with environmental standards despite being locate d in
areas restricted or suitable for breeding. Therefore, the existing participants or new entrants in the industry must first ensure they
operate in the areas suitable for breeding, and then need to input more resources in the sheds, environmental protection and other
aspects. In order to adopt new environment-friendly technologies and sheds, even those companies sticking to the “company +
farmer” cooperative breeding model also need to build some sheds, adopt new technology and then play a demonstrative role by
running breeding operations themselves before popularizing them to farmers.
The capital investment in the poultry slaughter part is huge and is generally accomplished by companies. As described earlier ,
most poultry slaughtering plants would form the industry chain complementation with the upstream poultry breeding and even
poultry feed operations, focus on or preferentially recover the commercial generation chickens or ducks raised by themselves alone
or in cooperation with farmer households, but in some areas, the commercial generation chickens or ducks bred and sold by
independent farmers in the market would also be flexibly recovered in consideration of reducing the raw material costs and operating
costs based on the market quotations. At the same time, there are some poultry slaughter companies in the industry who possess no
breeding facilities and feed upstream, but purely rely on recovering the commercial generation chickens or ducks in the marke t for
slaughtering, thus making profits by acquiring at a low price and selling at a high price, and by taking advantage of the incomplete
synchronization between the quotations of commercial generation chicken and duck markets and those of chicken and duck meat
markets. But such business model is unstable, and many companies often suffer great losses due to misjudgment of market
quotations.
As poultry farming in China is more mature and large-scaled than pig farming, the poultry industry did not see apparent trends
of greater corporate investment in place of household farming in recent years like the pig industry did. What’s more commonly seen
is the normal industry cycle or ups and downs caused by unexpected epidemic factors, leading to capacity expansion and reduct ion of
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
companies and large-scaled farmer households to varying degrees, but the overall industry structure and market shares of leading
players remain stable compared with the pig industry. An effect that materially affected the industry structure in recent ye ars is the
strict environmental regulation in summer of 2017, where demolition of a large number of breeding sheds for substandard
environmental protection facilities and drastically reduced capacities of poultry breeding resulted in the capacity shortage of poultry
breeding since 2018 and the rising prices and profit recovery in terms of poultry breeding. The shortage of pork caused by ASF drove
the alternative supply of poultry meat since the beginning of 2019. Although the poultry breeding quantities have been at a h igher
level than the past years, the poultry industry was in a booming state with high prices and profitability throughout the year. But along
with the gradual stabilization of the ASF situation, the hog capacities nationwide bounced back gradually, which, coupled with the
weakened demand due to the COVID-19, caused the poultry cycle to show apparent downward trends faster than pork price cycle, as
the prices of commercial generation baby chicken and baby ducks started falling remarkably after peaking for recent two years in
2019, by 64% and 72% respectively in 2020,and the prices of baby chicken and baby ducks showed different situations in the first
half of 2021 by falling by 5.73% year-on-year and rising by 101% year-on-year respectively, as opposed to a 8% and 13% increase in
prices of non-slaughtered chicken and ducks year-on-year. Therefore, the white-feathered poultry industry still needs to improve all
parts of the industry chain in order to overcome the impact of cyclic fluctuations of poultry. In the short run, the important
opportunities for the industry is to accommodate the requirements of environmental protection upgrading and actively control
commercial generation breeding bases that meet the environmental requirements, starting with environment-friendly renovations and
shed upgrading, thereby realizing control over supply quantity and cost, food safety and production rhythm of commercial generation
breeding operations; in the long run, the industry still needs the synergy between breeding and slaughtering operations, so a s to
realize the channel upgrading on the sales end and enable high-standard input in the breeding operations to obtain a higher-premium
return in the poultry meat sales.
In terms of breeding poultry propagation, the company is the largest supplier of parental baby ducks and the second largest
supplier of commercial generation baby chicks and baby ducks in , enjoying industry leading technologies especially in the field of
breeding duck propagation. The company cooperates with the Chinese Academy of Agricultural Sciences, and elaborately selected
and bred the “Zhongxin” Beijing Duck in view of the characteristics of domestic consumption of ducks, which received the
certificate of new breed of livestock and poultry (complete set line) issued by China National Commission of Animal Genetic
Resources in April 2019, followed by official marketing. Part of baby chicks of the company are sold to other vendors, and the other
part are used for its downstream commercial generation breeding. The baby ducks are mainly used for the downstream commer cial
generation breeding of the company. In the first half of 2021, the company furthered its digital management of breeding poultry and
continued enhancing its industry competitiveness in cost, quality and technology research and development of baby chickens and
baby ducks.
In terms of commercial generation breeding, the company currently focuses on the “company + farmer household” cooperative
breeding model, and is upgrading from the traditional contract breeding model to the outsourced breeding model, while gradually
intensifying its efforts of in-house, integrated commercial generation breeding in areas where conditions permit. The ownership of
commercial generation chickens and ducks in the outsourced breeding model and in-house integrated breeding model belongs to the
company and is charged to its production and sales volume of poultry breeding. The total quantity of commercial generation ch icken
and ducks bred in the aforesaid two models has exceeded 440 million. In terms of the source of baby poultry, the outsourced breeding
and in-house integrated breeding operations would first choose the baby poultry produced by the company, while the company also
purchases baby poultry from other vendors in the traditional contract breeding model.
In term of poultry slaughter, the company has been ranking first in the industry for many years with its annual slaughtering
quantity of about 750 million poultries and poultry meat production and sales volume of about 2 million tons every year. The “Liuhe”
branded poultry meat under the flag of the company was the designated poultry meat for Shanghai World Expo 2010 and the Qingdao
Summit of Shanghai Cooperation Organization Qingdao 2018, enjoying a strong brand influence. Due to large production and sales
volumes, the poultry meat slaughtered and produced by the company has been sold mainly through the traditional trade mode of
wholesale markets for a long time. The wholesale market channel can help digest the enormous yields upstream, but is detrimental to
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
establishing the brand image and gaining a larger value space for the poultry meat products of the company in the long run. Therefore,
the company has been vigorously advancing the poultry slaughter business to implement the strategic transformation since 2014, by
intensifying the short-distance fresh product sales, and expanding the connection with multiple emerging channels such as
downstream food processors, supermarket chains, and restaurant chains, reducing its dependence on wholesale market channel, a nd
promoting the channel upgrading.
(III) Pig farming business
The pig farming has much in common with poultry breeding in various intergenerational production processes, i.e. division of
work between domestic and overseas companies. The pig farming business includes breeding pig propagation and commercial pig
fattening. The breeding pig propagation can be subdivided into breeding and breeding pig farming. Breeding specifically refer s to
selection and breeding of high intergenerational good stock, while breeding pig farming refers to further expanding propagation of
original breeding pigs, and output of boar semen, sows, and commercial generation piglets. The breeding of pigs also needs
long-term research and development accumulation due to very high technological complexity. At present, it is mostly controlled by
foreign specialized breeding pig companies, although some leading companies in China have made breakthroughs in recent years.
However, most domestic companies only introduce the great grandparental pigs from foreign suppliers and carry out the expanding
propagation of grandparents and parents in China, without setting foot in the upstream breeding operations. In this regard, some of
them are specialized breeding pig companies, who directly sell the breeding pigs and piglets to other companies after expanding
propagation of great grandparental pigs introduced abroad, without setting foot in the commercial generation breeding. Some other
cases are extension made by large commercial generation pig companies towards the breeding pig cultivation operations upstream in
order to ensure in-house availability of breeding pigs and piglets, with the parental breeding pigs and commercial generation piglets
produced for their own use. To ensure availability of piglets to themselves, some farmer households would also participate in the
parental breeding operations, i.e. they purchase the parental sows and boar semen from companies and then propagate piglets
themselves. This is different from the fact that the farmer households only breed the commercial generation poultry in the poultry
farming, instead of breeding poultry. Even so, more and more farmer households are exiting from the parental breeding operations
gradually. This is mainly because the large companies engage in large-scale and intensive piglet production along with development
of the breeding technologies, demonstrating obvious efficiency differences compared with the piglet breeding by farmer households
themselves. This is embodied in the most common indicator PSY in the industry. In years before the ASF outbreak, the average PSY
of the entire industry was about 17, PSY of large companies is generally over 20, and the average PSY of self propagation and self
breeding by farmer households is about 15. After the ASF outbreak, due to the impacts of the epidemic and extensive use of ternary
sows resulting from rapid recovery of production, the PSY of the entire industry in the past two years decreased a whole, but the
difference in this regard between major companies and farmer households still exists. During the fattening process of commercial
pigs, companies are also considerably different from with the farmers in technology and efficiency, but such difference in ef ficiency
is not as large as it is in the piglet production operations. Coupled with the fact that self-built fattening farms also require additional
huge investments of fixed assets, which are detrimental to rapid asset-light expansion, large companies engaged in breeding and
piglet production and farmer households focused on the fattening process constitute an allocation with the optimal efficiency formed
so far in the industry.
There are also two main models in the commercial pig fattening process, i.e., in-house integrated breeding and “company +
farmer household” cooperative breeding. The in-house integrated breeding means the commercial generation pig fattening is run
entirely by a company itself. The “company + farmer household” cooperative breeding means a company provides or sells
commercial generation piglets to farmer households, who fatten the piglets. This is somewhat different from poultry breeding, i.e. it
focuses on outsourced breeding model under the “company + farmer household” cooperative model, whereby piglets are provided t o
farmer households by a company, and the ownership of piglets and hogs remains with the company, which recovers the hogs after
completion of the fattening process. Or alternatively, a company directly sells commercial generation piglets to farmer house holds,
but is not responsible for hog recovery, i.e. the traditional contract breeding model of selling baby chicks and baby ducks and then
recovering in the poultry breeding exists less. Similarly, the question of whether companies choose to operate the commercial pig
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
fattening process themselves or not is related to the technical attribute of this operation. During the process of commercial pig
fattening, the difference in efficiency between companies and farmers is not as large as it is in the piglet production effic iency at the
present stage. Meanwhile, the large investment in in-house fattening affects the return on investment. Therefore, when numerous
companies invested in the pig farming industry in recent years, especially at the early stage where they compete for market s hares,
the vast majority of them first chose the “company+ farmer household” cooperative farming mode l, i.e, they invested first in
breeding capacities instead of fattening capacities, although the fully integrated in-house fattening model is still less frequently used
at the current stage. On the other hand, influenced by the ASF epidemic in recent years, numerous free -range farming households
find it relatively difficult to achieve good containment results due to limited access to equipment and facilities, thus posing a higher
bio-safety risk. Best-run companies using the integrated in-house farming model in the industry can realize epidemic containment
better than household farming to a certain extent through fine management of the in-house fattening operations. Although companies
adopting the “company + farmer household” cooperative farming model would help cooperative households with equipment and
facility upgrading to varying degrees, such upgrading is after all not as convenient as that of self-run fattening farms; moreover, there
are a growing number of automated and IT-enabled equipment emerging that can help reduce costs in long term, these new
equipment and technologies are easier to adopt and implement in company-run fattening farms than in cooperative fattening farms of
farmer households. Coupled with the gradual elapse of the early stage of competition for market shares and gradual stabilizat ion of
the industry structure, major companies shifted their attention again to continuously reducing costs in the long run. These factors
made major companies generally willing to subsequently increase the ratio of in-house fattening operations.
The biggest difference between pig breeding and poultry breeding is the degree of vertical integration towards the downstream
slaughtering operations. Due to the smaller batches of pigs to be slaughtered than those of poultry to be slaughtered, the small
slaughtering houses are capable to do the job, resulting in little motivation to develop pig breeding business in para llel with
large-scale industrial pig slaughtering business at the early stage of development. Regardless of whether purchasing sows from pig
breeding companies for self propagation and self breeding or directly purchasing piglets, farmer households can choose to contact pig
vendors for sale after completion of fattening, before pig vendors sell to slaughtering plants or small slaughter houses. Eve n though
the ratio of large-scale breeding has been increasing in recent years, the annual slaughter scale of breeding clusters of large
companies mostly ranges from 300,000 to 500,000 pigs, as opposed to the annual capacity of at least 1 million pigs of large -scale
slaughtering plants. At present, after fattening of commercial pigs, large companies still have to se ll a large proportion of pigs to pig
vendors, although they can sell a limited number of pigs directly to slaughtering plants. Thus, most of the domestic pig bree ding
companies and pig slaughter companies develop their business independently nowadays.
Due to the longer cycle of pig breeding, the pig breeding has more obvious and stable cyclic characteristics than poultry
breeding. A “pork price cycle” is generally 3-5 years, which has been gradually extended as pig breeding companies and farming
households have been growing in size over the past years and became more capable to sustain their business during the trough period.
Since 2006, China experienced three complete cycles and is currently experiencing the fourth cycle. The present cycle started in the
mid-2018, and in the first half of 2018, the entire industry saw the lowest pork prices since 2011 due to the capacity expansion in the
previous pork price cycle. In the second half of 2018, the serious ASF broke out in, causing losses to both pig breeding companies
and farmers to varying degrees. Under the dual impact of depressed market and epidemics, this round of expansion investment has
been slowing down, with some companies even stopping expanding. In 2019, when the ASF remained rampant and relevant va ccines
and effective treatments are still not available in the industry so far, companies and small and medium-sized farming households
continued exiting the industry and only those large companies with good bio-safety track records were capable to expand their
business, which led to a sharp reduction in the industry capacity. The swine livestock on hand at the end of 2019 fell by 27. 5%, and
the number of hogs marketed in 2019 fell by 21.6%. After the hog prices exceeded a historic high of 40 Yuan/kg in the second half of
2019, the prices remain relatively high above 30 Yuan/kg for a long period of time. Since 2020, while accumulating certain bio-safety
control experience, companies pursued large-scale capacity expansions, further recovering the basic production capacity in the hog
industry. By the end of 2020, the hogs and fertile sows in stock across the country increased remarkably from the end of the previous
year, as hogs in stock reached 407 million, 31.0% up from the end of 2019, and fertile sows in stock reached 41.61 million, 35.1% up
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
from the end of 2019. In the first half of 2021, hog supply continued rising remarkably, as the marketing rate of hogs grew by 34%
year-on-year in the first half of the year and fixed-point monitoring results of the first half of the year showed that the fertile sows in
stock grew by 30% year-on-year and hogs in stock grew by 29% year-on-year, to 439 million. The increased supply drove the prices
to fall remarkably, as the hog prices fell all the way from 36 Yuan/kg in early 2021 to the lowest point of 12 Yuan/kg in June, a
decrease of over 60%, even falling back to the low levels before this pork price cycle began ascending in March 2019 for a time.
The company started late in the pig farming business, but has been insist ing on business development to high standards since
starting its pig farming business. Using a highly automated and intensive production mode, the 1 million swine production pro ject
financed and implemented by the company in Xiajin of Shandong since 2013 is dedicated to establishing a benchmark in the
domestic pig farming industry. In February 2016, the board of directors of the company deliberated and passed the Strategic P lan for
Pig Farming Business, starting to greatly develop its pig farming business. Over the past two years, the company invested heavily in
pig farming business in order to capitalize on the opportunities arising in the wake of the ASF outbreak. By the end of 2020, the
company realized and reserved a capacity portfolio of over 70 million pigs nationwide, in-house fattening capacities of nearly 4
million pigs in stock and live hog sales of 8.29 million pigs throughout the year, allowing the company to maintain its spot among the
top listed companies in the country.
1. Farming model of the company’s pig farming business
In terms of breeding of breeding pigs, the company has established the PIC and Hypor dual-system breeding pig architecture to
select pig breeds suitable for regional markets according to the differences between the markets in north and south.. Meanwhile, the
company conducts differentiated allocation of its resources according to market regions, and actively establishes its presenc e in
regions where it has comprehensive strengths in terms of consumption, land, environment and logistics to preferentially build pig
breeding farms for piglet production. Over the past years, the average PSY of the company’s normal two-way cross-bred sow
production has been above 24, an industry-leading figure. In the fattening process of commercial generation, the company gradually
built fattening farms according to specific conditions of different regions and projects, and nowadays still focuses on the "company +
farmer household" cooperative farming model, supported by in-house integrated farming practices. In 2021, the company’s ratio of
integrated in-house farming to cooperative free-range farming was about 1:4. Along with gradual commencement and commissioning
of in-house fattening capacities in the second half of 2020, the ratio of integrated in-house farming will gradually increase in the
future and the company will realize a business presence centered on integrated in-house farming and supported by “company+ farmer
household” cooperative farming. In regions where the comprehensive advantages are not obvious but the company operates swine
feed business or has plans to build breeding pig farms but hopes to have suitable cooperative fattening farms that match its free -range
farming requirements once commissioned, the company would purchase piglets from other large pig raising companies or specialized
breeding pig companies phase by phase, while at the same time adopting cooperative farming mode l, thus achieving collaborative
development of its feed business and pig farming business or early development of cooperative farming households. But as the
company’s breeding pig farm construction and areas of presence gradually expanded and improved, the company’s piglet acquisit ion
business has now fully stopped and piglets used have all been replaced by homegrown piglets.
2. Division of duties in cooperative farming
In the cooperative farming, the company and farmers respectively invest different production factors, assume different duties ,
and share different earnings and risks. In terms of input of production factors, the company is responsible for the input of piglets,
feed, veterinary drugs, vaccines, etc., while farmers provide the input of fixed assets such as piggery. In addition, farmers need to pay
a breeding deposit and bear the costs of labor, water, electricity and fuel on fattening farms. In terms of division of duties, the
company is responsible for piglet supply, feed production, epidemic disease prevention and treatment, breeding technology guidance,
collection and sales, while farmers are only responsible for daily feeding and cleaning. In terms of earnings and risks, the company
bears the market price risk and enjoys the opportunity profit, while farmers neither bear the market risk nor enjoy the oppor tunity
profit. The returns are relative ly stable and not directly related to the market prices, but closely related to the breeding results. In
addition, from the perspective of the company, there is a risk that farmers don’t abide by the contract or the company’s guidance, and
sell pigs or use medication without authorization. However, as the scale of cooperative farming has been growing and cooperative
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
period became longer in recent years, in case of the aforesaid breaches, farmers will bear huge risk of bad faith, and the co mpany will
retain the breeding deposit and sue to the court for breach of contract. Therefore, such breaches are becoming increasingly less in real
life.
3. Pricing and settlement of the cooperative farming
When the company signs the contract of cooperative farming with farmers, a basic unit price is first formed according to the
market conditions at that time, which would change appropriately according to the latest market changes at the time of pig re covery
and settlement. When fattened pigs reach the marketable weight, they are weighed, and the basic price is formed by the base unit
price multiplying the average weight, before the settlement price is adjusted according to the specific weight of each pig that exceeds
or fails to reach the ideal weight range, marketing rate (i.e., the survival rate), rate of conforming products, feeding days, total weight
gain, end-to-end ratio of feed to pork, daily average weight gain, excessive consumption of feed and the other production indicators,
thus deriving the final breeding service fee.
4. Number and structure of cooperative farmers and their changes
Before the 2021 Semiannual Report was published, there were 1,975 free-range farming households with pigs on hand in
cooperation with the company, 11.83% less than that at the end of 2020. In the farming cooperation in 2021, the company continued
optimizing small-sized farmer households and replaced them with larger farmer households for upgrading. Therefore, although the
total number of cooperative farmer households fell somewhat from the end of 2020, the average size and quality of farmer
households further improved. From the perspective of scale of livestock on hand, farmers each with less than 500 pigs accounted for
about 0.76%, 14.24% less than that at the end of 2020; farmers each with 501-1,000 pigs accounted for 24.96%, 11.04% down from
that at the end of 2020; farmers each with more than 1,001 pigs accounted for 74.28%, 25.28% higher than that at the end of 2020.
From the perspective of farmers' regional distribution, according to the five regions divided by the Ministry of Agriculture for
ASF containment, farmers in the north region accounted for about 19%, 3% down from that at the end of 2020; farmers in the ea st
region accounted for about 24%, 14% down from that at the end of 2020; farmers in the south central region accounted for about
33%, 15% higher than that at the end of 2020; farmers in the southwest region accounted for about 14%, 2% higher than that at the
end of 2020; farmers in the northwest region accounted for about 10%, unchanged from that at the end of 2020.
(IV) Food Business
The company classified poultry slaughtering as white-feathered poultry business so as to strengthen its interaction with upstream
breeding operations. Therefore, its food business only includes pig slaughtering, processed meat products, central kitchen and other
segments.
Food business is the last stage before the value of agriculture and animal husbandry is embodied on the side of consumption in
the form of meat products. Among them, slaughtering, as a typical manufacturing industry, has developed for a long time towards
maturity in China. Moreover, due to the slow growth of the downstream meat consumption demand, there is a serious overcapacity of
slaughtering for a long time, as the average capacity utilization of slaughter houses of considerable size nationwide is merely about
30%. As previously explained in the description of pig farming business, there is little motivation to develop pig farming business in
parallel with large-scale industrial pig slaughtering business at the early stage of the industry Despite the increased ratio of
large-scaled farming in recent years, pig farming businesses and pig slaughtering businesses have been developing independently in
most cases. From the perspective of slaughtering plants, which often need to collect pigs through pig vendors, they would also face
the pressures of short-term shortage of pigs or overcapacity. The government's protection of the production motivation of the
breeding industry in rural areas and the stabilization of the consumer prices in urban areas also make the slaughtering industry face
the implicit dual price restriction in the upstream acquisition and downstream sales. The occasional happening of livestock a nd
poultry epidemics would also cause periodic fear of meat shortage and bring a negative impact to the industry. In addition, as a
labor-intensive processing industry, the rising cost of labor further squeezes the profit margin of slaughterhouses. Therefore, the new
growth opportunities of the pig slaughtering industry in recent years are to continuously optimize the process to improve the
production efficiency and gradually introduce automatic and semi-automatic equipment to replace labor force, when looked at from
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
within the industry. From the external perspective, on the one hand, the premium can be increased by improving the product mix,
including extending from slaughter and cutting with raw and fresh meat as the final product to the further processing of meat
products and even the production of prepared dishes with higher added value, and the shift from sales of frozen meat to that of the
chilled fresh meat; on the other hand, it is to improve the sales channels, that is, shifting from the traditional multilevel wholesale
channels to direct supply channels of supermarket chains, chain restaurants, food processing enterprises and other key accounts; the
opportunities also lie in cooperating with product optimization and channel optimization to strengthen brand building, promote the
transformation of unbranded meat into branded meat, and seek a greater presence in sales channels so as to obtain brand premium. In
addition, the gradual development of the cold chain logistics industry in China in recent years is also conducive to the sales and direct
supply of meat products in a fresher state to supermarkets, restaurants and other channels.
The processed meat products and the central kitchen are the downstream parts of slaughtering process, representing the
extension from simple slaughter and cutting to the conditioning and processing operations with a higher added value. Compared with
the slaughtering part, the processed meat products and central kitchen have higher gross profit rates and relatively stable prices, and
have been growing fast in recent years. However, due to longtime habits of Chinese consumers, the purchase of raw meat by Chinese
consumers still accounts for a very large proportion, while the ratio of meat products purchased remains relatively small. This means
the current overall market space for processed meat products is still limited. In recent years, the focus of food processing companies
has been on constantly developing new product forms, changing the consumption structure dominated by ham sausage in the past,
creating new consumption scenarios, stimulating more consumer demand for meat products, and expanding the overall market spac e.
Central kitchen is a typical direction in the exploration of these new forms and new scenarios. With prepared dishes as the main
products and catering companies as the main customers, it helps explore new growth opportunities through such product forms a nd
consumption scenarios which are more easily accepted by consumers. Of course, compared with the ordinary processed meat
products, central kitchen is more complex in product form, processing technology, preservation technology and supporting logistics,
and poses more demanding requirements for business management of companies. In recent years, although numerous companies,
especially catering companies, invested in central kitchen, many of them are poorly run and have created excess capacity in this
market segment in the short term. On the contrary, food manufacturers can gain unique advantages in the field of central kitchen with
their rich experience in factory management and lean production.
As hog is the main cost of pig slaughtering, and fresh meat is the main cost of processed meat products and central kitchen, the
selling prices of food business would change in the same direction as the prices of hogs, However, due to the alternative consumption
of meat food and the government’s efforts to stabilize consumer prices, the price elasticity of meat food is usually smaller than that of
hogs. When market prices go up, the food business will also, to a certain degree, bear the pressure of increased slaughtering cost (i.e.,
purchase prices of hogs) and raw meat cost; especially when the market prices peak, it means hogs are most undersupplied on the
markets and not only the slaughtering costs are the highest but also the amortized overheads due to low outputs. From 2017 to 2020,
the hogs in stock nationwide at the end of each year were 433 million, 428 million, 310 million and 407 million respectively. So, the
entire year of 2020 saw the lowest level of hogs in stock nationwide in recent years, causing considerable cost pressures to
downstream industries. The pig slaughtering industry, processed meat products and central kitchen industries still need to flexibly
control the inventories and reduce costs in a lean manner. In particular, the slaughtering industry also need to properly acquire hogs
while there are minimum hogs on hand, while at the same time paying close attention to the containment of ASF in pork and meat
products, in order to really make profits in the seemingly booming market.
The company's food business has a certain influence in China, and enjoys a leading position in specific regions. The company's
"Kinghey" branded pork was the designated supplier of the 2008 Beijing Olympic Games, the annual sales of "Meihao" branded pork
products’ rank the second in four southwest provinces, "Liuhe" branded poultry meat products are sold across the country and the
Porridge Jiahe central kitchen business is one of the largest central kitchens in Beijing market. Over the past years, the company
gradually opened a segment market of hotpot catering by starting with “Xiao-Su-Rou”deep fried pork slices and other products.
Overall, the company's food business and poultry slaughtering business are facing the same challenges of product upgrading and
channel upgrading, but unlike its poultry slaughtering business, which is the largest in , the food business also faces the c hallenge of
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
cross-regional market development. In these years, the company will also make full use of the existing capacity portfolio and
channels of white-feathered poultry, combined with the planned pig farming business, to drive its food business to grow in a larger
domestic market and help the company's food brand gradually grow from a local brand to a national one.
The company shall comply with the disclosure requirements set forth in “Shenzhen Stock Exchange’s Industry Information
Disclosure Guidance No. 1---Listed Companies Engaged in Livestock, Poultry and Aquaculture Businesses”.
II. Analysis of core competitiveness
(I) The company's core competitiveness in the feed business: Technological legacy coupled with innovative organization and
products allows the company to rapidly enhance its scientific research capabilities and bio-safety and performance of products so as
to meet the upgraded demand for breeding with a greater power of product. On the basis of scale barrier, the company moves towards
specialization and industrialization, while the efficiency increase and cost reduction brought about by accumulated strength are
beyond the reach of its competitors, making the moat wider and deeper.
1. Strong bargaining power and resource integration capabilities brought by the largest scale. The larger the scale of feed factory,
the lower the production cost per ton, which ensures decreased purchase cost of raw materials, therefore, scale is one of the m ost
essential competitive factors in the feed industry. The company's feed sales rank the first in China and the second in the world, and
feed production and sales now cover 25 provinces, municipalities and autonomous regions in China. The industry-leading production
and sales volume and the extensive market coverage enable the company to connect with domestic and foreign grain busine ss
magnates and large channels of the same magnitude, bringing strong bargaining power by virtue of its scale advantage. At the same
time, as the largest feed producer in China and one of the largest in the world, the company has easy access to cooperation with
multinational magnates, leading companies in other industries and local governments at all levels in various forms, suggesting a
salient advantage of resource integration.
2. The technological legacy plus organizational innovation allows the company to continuously improve its scientific research
capabilities. Through many years of accumulation, the company now has established the industry's largest feed nutrition and
ingredient database, works closely with several raw material suppliers at home and abroad, keeps track of information about quality
of feed ingredients nationwide, allowing the company to formulate the optimal combination of nutrition and cost in a timely manner
and reduce the negative impact brought by price fluctuation of raw materials. The company's feed research institute now has 69
bachelors, 184 masters and 36 doctors. The company has cutting-edge near infrared detection technology, and has created near
infrared databases comprising over 0.46 million sample spectrums, established near infrared analysis models covering 43 categories
of feed ingredients, 85 types of complete feed, 26 categories of vitamin premixed feed and 3 types of animal fat. In recent years, the
company won 6 national science and technology awards, 20 ministerial, provincial and municipal science and technology awards,
and owns 5 national key laboratories or centers, 4 provincial key laboratories or centers and 2 academician (postdoctoral)
workstations. The company has successively undertaken over 100 national, provincial and municipal key research and development
projects, including “13th five-year plan” key R&D projects of “Construction and Demonstration of China-EU Food Safety Process
Control System based on Digital Information Technology”, “Application and Demonstration of Green, Efficient and Safe Breeding
Technology for Aquatic Birds” and “Regulation and Mechanism formed by Daily Ration Composition and Feeding System for
Healthy and High-quality Meat of Livestock and Poultry”, and presided over Shandong Province’s key research and development
project of "Key Technology Research and Industrialization Promotion of Environment-Friendly Antibiotic-free Feed for Swine and
Poultry", earning the first prize of Shandong provincial animal husbandry science and technology award 2020 for its safe, efficient
and innovative technology research and pilot application of feed ingredient fermentation. “Development and Application of Key
Technologies of Feed Nutrition for High-quality Pork Production” was awarded the first prize of the 2020-2021 Shen Nong China
Agricultural Science and Technology Award, and the “Key Technologies of Healthy and Efficient Farming of Broilers and their
Application” was awarded the second prize of Shen Nong China Agricultural Science and Technology Award. In recent years, the
company applied for 2,158 patents and was granted 1.423 patents. In 2020, the company applied for 295 patents, including 93
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
invention patents. In the first half of 2021, the company applied for 152 patents, including 27 invention pa tents.
3. The procurement model is constantly upgraded, and the specialized procurement capabilities are continuously improved.
Since 2014, the company has further taken stock of and optimized its raw material procurement system, strengthened the centra lized
procurement at different levels in various forms, actively sorted out its supplier system through a new management platform, and
established strategic partnerships with COFCO, Sinograin, Jilin Wine, Xiangyu, Cargill, Bunge, Yihai, DaChan and other excellent
raw materials suppliers at home and abroad, which allow the company to access reliable, cost effective raw material supply upstream.
In the past two years, due to the China-US trade war and ASF, etc, the changes of the raw material market were intricate, but the feed
supply chain system has rapidly strengthened the raw materials market price research center, significantly improving the spec ialized
procurement capabilities and continuously upgrading the procurement models for corn, soybean meal and by-products. In terms of
corn procurement, as the number of the company’s factories licensed to import corn increases, the cost-reduction effect brought by
choosing low-price imported ingredients at the right time became increasingly apparent. In terms of soybean meal procurement, the
purchase was concentrated on leading companies to give full play to the advantages of centralized procurement, while reducing costs
through protein price difference, cross-regional arbitrage, bulk cargo logistics and precise dosing. In the first half of 2021, the
centralized procurement rate at the headquarters level reached 72%, 20% up from the previous year, the centralized procurement rate
of key varieties was as high as 95%, and the turnover rate of ingredient was also increased steadily. Meanwhile, the company actively
carried out supply chain financing business, significantly reduced financial costs, and realized the cumulative financing proceeds of
about 67.43 million Yuan in the first half of 2021, over 100% up year-on-year. In addition, the company will create an end-to-end
procurement operation system guided by digitization with a view to constructing a digital supply chain ecosystem for continuously
improving its core competitiveness in procurement.
4. Fully serving farmers, and maintaining closer relationship with downstream customers. Relying on its strong strength, the
company launched the "pig flourishing" project to provide small and medium-sized farmer households with comprehensive
supporting services such as technical and financial services through various forms of cooperation to help them continue pig farming.
The "everything flourishing" project, an extension from the "pig flourishing" project, was also tried out for other feed varieties such
as aquaculture feed, ruminant feed and so on, with satisfactory results, for example, fish flourishing, cattle flourishing, sheep
flourishing, etc. Through these projects, the company’s service and support to farmers greatly improved the service experienc e of
farmers and further solidified the partnership between farmers and the company.
5. The expansion of farming business makes the product structure more balanced. The large scale of farming increases the
bargaining power in the breeding operations, which means that it is increasingly important for feed companies to control the farming
operations. Since 2016, the company has gradually increased its pig farming business by adopting the "company + large farmers "
cooperation, etc. In the times of ASF, farming volume has rapidly increased in recent years due to strong bio-safety technologies in
the hands of major farming companies. Moreover, the company has also gradually increased the in-house feeding and outsourced
feeding of commercial generation table poultry in its white-feathered poultry business, and directly controls farmers through
multiyear co-breeding contracts. The company's feed business has strengthened the control over the farming operations through the
aforesaid extension of industry chain, while the synergistic effects of feed and farming have improved the profitability of the feed
business, with the product structure more balanced and the competitiveness greatly enhanced.
(II) The company's core competitiveness in the white-feathered poultry business: the company masters the proprietary core
technology of breeding, seeks continuous innovation in farming facility upgrading and data utilization and strengthens its control
over the market through rapid production and sales by leveraging its bargaining power on supply and sale.
1. In terms of breeding of breeding poultry, the company enjoys a remarkable leadership position at home with respect to
production technology management, cost management, production efficiency, and product quality, and the company has formed
systematic technology and management capabilities. The company's breeding hens each remained producing over 115 healthy
chickens in the past two years, and each breeding duck remained producing over 220 healthy ducklings, which are at the domest ic
leading level. Especially in terms of selection of breeding ducks, the company cooperated with the Institute of Animal Sciences of
CAAS to breed "Zhongxin" ducks with complete intellectual property rights, which broke the monopoly of foreign varieties and
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
filled the gap of domestic white-feathered meat duck breeding industry. Consumption-wise, "Zhongxin" ducks are characterized by
"high lean meat ratio, low sebum ratio and good meat quality". The ratio of breast and leg meat is as high as 28%, and the se bum
ratio is lower than 22%, which addressed the difficult problem that duck meat of some foreign varieties is "too fat and fishy" and not
suitable for Chinese taste. Farming-wise, "Zhongxin" Beijing ducks are characterized by fast growth, high feed conversion rate,
strong resistance to stress, easy feeding and high survival rate, as the ratio of feed to weight reaches 1.9:1 after 40 days of feeding,
with all production indicators reaching the international advanced level.
2. In terms of farming of commercial poultry, the company always maintains continuous innovation to go beyond traditional
farming bottlenecks in terms of farming model, equipment and management support, leading the industry development as an examp le.
In 2021, a total of 144 patents were filed, including 20 invention patents and 84 patents granted. The company built a digital farming
system to bring all production management process data from farms onto cloud to form a big data center in a way that bases onsite
management on evidence, while equipping farms wit automatic data acquisition and automatic equipment control systems, in an
effort to replace traditional experience-based farming with digital intelligent farming. The company set up large-scaled stage-wise
broiler breeding and fattening farms equipped with cages, feeding, heating and transit systems dedicated for the breeding and
fattening phases as well as bio-safety, feeding management, epidemic disease control and other field management schemes, a farming
model proven feasible through farming of 5 batches of nearly 1.00 million broilers, capable to effectively increase the shed operation
efficiency by 70%. To resolve issues with traditional manual duck harvesting such as difficult access to labor, low efficienc y, high
attrition rate and high costs, the company developed an automatic duck harvesting system that increases the efficiency by 150%,
reduces costs by 60% and lowers the attrition rate by 80%. Meanwhile, the company compiled 10-odd farming standards such as
“Equipment Maintenance and Servicing Standard”, “Standard Operating Technique for Three-dimensional Farming of
White-feathered Meat Ducks”, “Bio-safety Management Standard for Farms” and “Commercial Poultry Farming SOP”, which are
used to guide efficient production onsite.
3. In terms of poultry slaughtering, the company has the largest share of the white-feathered poultry slaughtering market in
China, enjoying a leadership position especially in the field of white-feathered meat duck, where it has a strong bargaining power
when facing the downstream markets. In terms of raw materials supply, as the main producing areas are concentrated in Shandong
and surrounding provinces such as Henan, Hebei, Shanxi, Liaoning, coupled with the fact that the company continued increasing the
ratio of in-house breeding of commercial generation in recent years, the company has strong bargaining power in poultry farming
contracts or market poultry acquisition in those regional markets. In terms of slaughtering and processing operations, the co mpany
presided over the formulation and revision of the industry standard "Operating Procedures for Livestock and Poultry Slaughtering -
Duck" by virtue of its largest scale of duck slaughtering in China and the leading technology level; In recent years, throug h
construction and transformation, the company increased the automatic and intelligent levels of its slaughtering plants, and also
strengthened the standardization and SOP development, while all of its plants constantly improve and optimize existing operat ions
and process standards in light of reality, thus resulting in remarkably increased flexible manufacturing capabilities and product
premiumization capabilities, and enhanced ability of fast production and fast sale. In terms of sales, the company further pr omotes
the policy of “setting sales targets by consumption, setting production targets by sales, and fast production and fast sale", which
allows the inventory turnover rate of products to remain at a high level, and overcame the adverse impact of cyclic fluctuations of
agricultural product prices on the company's operations to a certain extent.
(III) The company's core competitiveness in pig farming business
1. The clustered, integrated pig farming model highlights the cost advantage
The holistically planned clustered, integrated pig farming model at least configures grandparental farms and parental farms
within a cluster and will also configure fattening farms at the same time in the upgraded version of cluster called “Xiaolong” model,
thus achieving the aggregation of full matching of pig breeding process, talent sharing, environment-friendly technology optimization
and industry chain, with higher production efficiency and lower cost than the traditional farming model.
First, the industry-leading pig farm construction capabilities and advanced production technology help effectively reduce the
bio-safety risks of pig farms and ensure the healthy production of pig herds. The production technology and process are more in line
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
with the principle of whole-in, whole-out, pigsty matching, separate production of sows and weaned pigs, automatic regulation of
shed environment and reasonable planning of excrement and urine storage and transportation.
Second, the production efficiency is high, and each indicator is at the industry leading level. In terms of production of breeding
pigs, the company now cooperates with the best-run international breeding pig companies of PIC and Hypor to establish a
dual-system breeding pig architecture , which allows selecting suitable pig breeds according to the market differences between the
south and north China; in terms of breeding capabilities, the company adopts multi-angle combination of algorithm technology,
dynamic core group management technology and full-automatic breeding pig determination technology, all of which are the most
advanced breeding technologies in the world. Through cooperation with breeding experts in universities of the US and China, the
algorithm is constantly optimized, and the intensity of breeding is improved. In the clustered model, each cluster has its own core
propagation group, thus ensuring the bio-safety of breeding boars and the efficient production of piglets. In 2020, the total number of
piglets per pigsty, the number of piglets per pigsty and number of weaned piglets per pigsty of self-reproduced sows at the company
were all industry-leading.
Last, through systematic application of production and management technologies, the cost of fattening pigs has been
continuously reduced. In recent years, the company orderly implemented application and practice of various new technologies in the
industry, and formed a complete set of production management technologies. By standardizing the costing items and methods of all
branch companies and refining the weight gain cost mode l to realize the comparison of cost management, the company quickly
identified each branch's key indicators of cost control. Through the nine-stage scientific nutrition formulation of self-made feed for
precise feeding, coupled with the comfortable growth environments provided by best-run, automatic, intelligent and transparent pig
farms, the full cost of fattening of the company’s self-produced piglets has been kept at the industry-leading level. In the future, along
with further construction of the company’s self-raising fattening farms, the ratio of self-raising fattening will increase gradually.
2. Industry-leading bio-safety control technologies
After two years of exploration, 65 research results in 10 categories have been obtained in the field of ASF c ontainment. With the
closed-loop bio-safety containment system, the company won the battle of defense against ASF by stages, as the survival rate of
fattening has restored to nearly 90% from the ASF outbreak in the mid-2018 to the end of 2020, an industry-leading figure.
As for the ASF containment for pig farms operated by the company, the company has effectively contained the ASF through
transformation of physical facilities and establishment of a scientific ASF management system. In terms of physical facilities, the
original breeding pig farms have been actively transformed; all newly-built breeding pig farms were built according to the latest
safety standards for ASF containment, with a four-level containment system of red, orange, yellow and green zones in pig farms put
into use to effectively isolate ASF virus. In terms of management system, the company established an ASF containment organiza tion,
formulated the bio-safety management standards and management processes at all levels, established a complete set of scientific
containment work mechanisms and containment programs, set up a multilevel management system from the HQ to echelons and then
to frontline business unit, whereby the HQ directs the containment efforts across the board, the echelons provide daily tracking
reports, and all feed mills, breeding pig farms and slaughterhouses act in strict accordance with the standard ASF containment
policies. This, coupled with flight inspections, point inspections and video monitoring guided by the HQ, and the one-level
supervisory system for monitoring the execution process and verifying the results, fully realize implementation of unified standards
from top to bottom. Although the attenuated ASF outbreak at the end of 2020 and in early 2021 brought new challenges to the
original containment technologies, the company was still able to rapidly respond and timely adjust and upgrade its solutions, thus
rapidly reducing the impacts of the epidemic and keeping the overall containment level stable.
For the ASF containment on fattening farms centered on the cooperative breeding model, the company also carried out more
strict management according to the containment standards to ensure the safe production of hogs and production interests of farmers.
Firstly, the company subsidizes and assists farmers to complete the renovation and upgrading of sheds, so that the farming conditions
meet the ASF containment standards. Secondly, the ASF detection and monitoring was carried out throughout the fattening proce ss of
the family farms, including site test before providing piglets, transport vehicle test, feed plant test and materials test, with a timely
reporting policy formed in place. Thirdly, for biological assets and production safety, veterinary medicine management,
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
environmental management and other standards, comprehensive upgrade has been made according to requirements for ASF
containment, farmers are repeatedly trained, and the standards are fully implemented. The cooperative farmer's understanding of ASF
has been effectively deepened through a series of measures, and farmers were enabled to gradually act in accordance with the
standards through "communication, assistance, mentoring and inspection", thus effectively guaranteeing safe production of hogs.
3. Leading pigsty design capabilities for the future
The company has been following the concept of "meeting the needs of pigs, the needs of pig farmers, and the needs of
sustainable development" in the design of pig farms, so as to create scientific and automated, intelligent and transparent modern pig
farms both for the present use and the future needs, which are the starting point of comprehensive operational capabilities of
successful business. The present use means paying attention to the details of production requirements, scientific planning, and
eliminating waste. For example, the functional areas, pigstys and pens that match with the established production model; clea rly
defining the pig, material and other flows in a way that meet the efficiency and bio-safety requirements at the same time; meeting the
environmental needs of pigs in different climates and at different stages. Facing the future means focusing on sustainable
development needs. For example, intensive construction of pigsties in response to the scarcity of land; zero emissions of pigsty
construction; the intelligent and automated design of piggeries in response to increased labor cost.
4. Industry-leading environment-friendly treatment capabilities
The environment-friendly treatment at the plants consists of sewage treatment, solid manure treatment and treatment of sick or
dead pigs. In all treatment processes, the company has made available a separate odor treatment method in order to achieve the
environmental objectives that fully meet the national standar ds, and industry-leading environment-friendly treatment capabilities. In
terms of sewage treatment, the company adopts the "pre-treatment + UASB + two-stage A/O process", so that the effluents reach the
standard of farmland irrigation and allow direct discharge to farmland. The company's treatment method for returning biogas slurry to
farmland can make the sow bearing capacity of 1 mu of land reach 30 sows, far more than the industry average of no more than 3
sows, meaning the company only needs 400-500 mu of land to build a sow farm accommodating 12,000 sows. In terms of solid
manure treatment, the company adopts the method of vertical fermentation tank, which is closed throughout the process and occ upies
a small area. Solid manure produced by a farm of 12,000 sows can be treated in only 10-15 days; at the same time, it meets the
national discharge standards, and the fermentation process can reach a high temperature of 60-70℃, which can effectively kill the
pathogenic microorganisms in feces and avoid the spread of diseases. In addition, the vertical fermentation tank can also deal with
sick and dead pigs arising in the plant, thus enhancing the bio-safety and containment capabilities.
5. Continuously innovating in sales method and increasing the sales efficiency across the board
The company's self-raised commercial pigs are sold completely according to the holistically planned pig sales method, so as to
ensure the optimal prices of large pigs on the market. Apart from a small portion of hogs which can be transported to the
company-owned slaughtering plants for slaughter, other marketable hogs are sold through the "easy pig trading" and “Jubaozhu”,
both being hog trading platforms developed by the company. After more than one year's accumulation, the system of this trading
platform is becoming increasingly mature in algorithm and trading data, guiding pig sales through the generated pork price index,
forming regional price comparison and monitoring, and helping increase the company's average pig sales prices.
Although the company’s rapid scale expansion in the past year weakened its competitive power, and some good practices failed
to be replicated at newly-bulit pig farms, the company now takes a full transition to a stage of robust operation. The company is
gradually improving its business operation efficiency, reducing farming costs and restoring its original competitiveness by enha ncing
its internal management capabilities through many measures.
(IV) The company's core competitiveness in the food business: high-quality resources across the industry chain, traceability of
food safety, and gradual upgrading of brands and sales channels
1. In the terms of products: Safety, precise research and development, and flexible production across the industry chain. Relying
on the company's whole farming industry chain, the company’s food business can acquire safe raw livestock and poultry that is
controlled in the upstream operations of feed, breeding and farming, and truly achieve food safety from farmland to table through the
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
safe production in slaughtering and food processing operations, which allows the safest and most trusted fresh chilled meat to reach
dining tables of consumers. In 2018, the company established its food industry research institute and set up an excellent food research
and development team for product development. The strong research and development capabilities support the company to develop a
variety of To B and To C products for customers and consumers at the food end. The company is capable of standardized and
efficient production, has participated in the formulation of " GBT 9959.1-2019 Fresh or Frozen Pork and Pork By-products: Part 1:
Pork Slices" and other national standards, and constantly raises the level of automated and intelligent operations through construction
and transformation in recent years. The company also constantly strengthens standardization and SOP development, while its
factories constantly improve and optimize the existing operations and process standards in light of reality, re sulting in significantly
increased flexible processing capabilities and product premiumization capabilities.
2. In the terms of branding: a strong combination of parent and subsidiary brands created. In the context of consumption upgrade,
the food business is being established fast in a brand new manner. The "New Hope Food", as the parent brand, is supported by
high-quality resources across the agriculture and animal husbandry industry chain whether on the To B end "New Hope Liuhe" or To
C end "New Hope Food" , which makes the parent brand more viable. Meanwhile, “Kinghey”, “Liuhe”, “Meihao” and “Porridge
Jiahe”, as the subsidiary brands, have also been recognized by the customers and partners in the industry for many years. In recent
years, the company, relying on product development and channel promotion in a series of segment markets, created a whole new
brand positioning “Meihao exclusive for hotpot” and officially launched a high-end western-style low-temperature meat product
brand “Le matre charcutier" created with a European farming industry leader Cooperl in early 2021, which gradually won the heart
and mind of catering customers and consumers and will also help the company open new spaces for its food business.
3. In the terms of sales channels: The advantages of traditional channels are solid, while the emerging channels are growing
rapidly. The company has been operating the whole farming and food industry chains for many years, further consolidates and
strengthens its traditional circulation channels such as wholesale markets, farm markets and raw materials processing, while
synchronously upgrading and moving forward new channels in the context of intensified market competition and consumption
upgrade. At the To B end, the company focuses on the catering market, establishes specialized sales service teams, and provides
long-term services to Haidilao Hotpot, Kungfu Fastfood, Yunhaiyao Restaurant, Yuanjiyun Dumplings and other catering companies,
winning the honor of high-quality supplier many times. At the To C end, the company has made good progress in the supermarket
and e-commerce channels. In the terms of supermarket, we have established presence in Wal-Mart, RT-Mart, Yonghui, Carrefour,
Hema, Wumart, Metro and other national supermarket KAs, covering a total of over 5,000 stores. In terms of e-commerce, the
company has deeply penetrated JD and Tmall platforms. In 2021, “Meihao” won the first place in the category of quick dishes on
Tmall.com’s “618” shopping festival and “Meihao Homemade Deep Fried Pork Slices” ranked first on the list of repeat purchase
list and the top-rated list. Meanwhile, the company made quick entry into socia l media e-commerce platforms such as Pinduoduo and
Weimob, as well as content e-commerce platforms such as Kuaishou and Tik Tok to jointly fuel the rapid growth of “Meihao” brand in
the first half of the year. The company actively reached out into new reta il and new business formats, and carried out full cooperation
with Ali Retail System, JD New Channel and other emerging channel customers to make continuous innovation and upgrading of
products and supply chain. Relying on operations across the whole industry chain, the company will continue to optimize and
upgrade its channel structure, provide good value-added services through integration of internal and external resources, constantly
improve the premiumization capabilities for products and services, and build barriers to competition.
III. Analysis of main business
Overview
In recent years, the company has been adhering to the medium-and long-term strategy of "strengthening the feed business,
expanding pig business, refining meat and poultry business, providing excellent food, and deepening overseas operations", creating a
balanced portfolio of inter-industry livestock and poultry diversification and integration of agriculture and food in the industry. The
company is committed to becoming a high-quality blue-chip enterprise with stable growth, a modern enterprise that leads the
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
industry’s scientific and technological innovation, the vanguard of international operations for Chinese farming and food companies,
an investor-friendly company, and a wonderful company that actively fulfills social responsibility.
In the first half of 2021, when upheavals were seen in domestic farming industry, especially the pig farming industry, an ove rall
situation arose, where pig and poultry farming business worsened but feed an d food business turned favorable. In terms of pig
business, on the one hand, the industry supply continued rising dramatically. According to the Ministry of Agriculture statis tics, hogs
marketed in the first half of the year grew by 34% year-on-year and the fixed-point monitoring results of the first half of the year
showed fertile sows in stock grew by 30% year-on-year and hogs in stock grew by 29% year-on-year. The increased supply drove
the prices to fall remarkably, as the hog prices fell all the way from 36 Yuan/kg in early 2021 to the lowest point of 12 Yuan/kg in
June, a decrease of over 60%, even falling back to the low levels before this pork price cycle began ascending in March 2019 for a
time. On the other hand, the changed industry environment in recent years also caused remarkably increased cost of the pig farming
industry. According to related industry statistics, in the first half of 2021, compared with 2018, the pig raising cost generally
increased by 4.5 Yuan/kg due to rising prices of feed ingredients, increased input in ASF containment and increased input in manure
treatment; from the end of the previous year to the first quarter of this year, a new round of attenuated ASF outbreak in man y
northern provinces caused prevalent effects to farming companies and farming households in these areas; according to the MoA
statistics, from March to June of this year, the cost of mass-farmed hogs nationwide was 2,700-2,900 Yuan/pig, or about 22.5-24
Yuan/kg, while the cost of free-ranging pigs was 2,600-3,000 Yuan/pig, or about 22-25 Yuan/kg, meaning the whole industry has
begun suffering losses in May and June.
In terms of the poultry business, the rising market condition in 2018 and 2019 resulted in industry overcapacity, as the
grandparental breeding hens on hand, parental breeding hens on hand and sales volume of commercial-generation baby chicken
across the country in the first half of 2021 were all sustained at the highest levels in the past six years. On the side of c onsumption,
the rapidly declining pork prices coupled with weakened consumption demand caused by the COVID-19 allowed poultry meat prices
to remain low for a long period of time, making it more difficult for the poultry business to make profits.
In the feed business, the whole industry’s swine feed output increased by 71% year-on-year in the first half of 2021 along with
the rapidly recovering hogs marketed and on hand; In the feed business, the volume of swine feed produced in the industry increased
by 71% year-on-year in the first half of 2021 due to the rapidly recovering pig farming industry. Poultry feed sales stopped growing
in this year due to poultry farming volume having reached a historic high in the previous year, with a 6% year -on-year decrease in
poultry feed throughout the industry in the first half of the year. Stimulated by rapidly rising fish prices, the whole industry’s
aquaculture feed output grew by 10% year-on-year in the first half of the year, but there is structured difference among different
category segments, with decreased demands for ordinary aquaculture feeds and increased demands for famous, high-quality and
specialty categories. At the side of feed ingredients, the prices of corn, which is a major ingredient in feed, remained high , thus
continuously exerting pressure on the cost of the feed industry. Overall, the company faced more opportunities than risks on its feed
business in the first half of the year.
In its food business, the increased marketed hogs also drove the slaughtering business to grow, as the slaughtering volume of
designated pig slaughterhouses above a designated size grew by 45% year-on-year and pork production increased by 36%
year-on-year in the first half of 2021. Increased production helps slaughterhouses increase their capacity utilizat ion rate and reduce
costs, but pork prices also went down synchronously with pork prices. According to the MoA statistics, the average wholesale price
of pork nationwide fell from the highest point of 47 Yuan/kg in early 2021 to 19 Yuan/kg, an almost 60% decrease. This situation
contributed little to the profitability increase of slaughterhouses, but was beneficial to deep-processed meat products using raw and
fresh meat as ingredients to a certain extent.
Policy-wise, along with the full victory won in China’s decisive battle against poverty in late 2020, the No.1 central government
document issued in early 2021 reflected an overall shift of policy focus from the work related to “agriculture, rural areas, and
farmers” in the past two years to rural revita lization, as “accelerating resumption of hog production” that once appeared as a separate
section in the previous year’s No. 1 document went back into a subsection thereof this year, i.e., “accelerating the construc tion of a
modern farming system, protecting the basic production capacities of hogs and perfecting the long-acting mechanism for steady and
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
orderly development of the hog industry.” However, as the prices once again fell after resumption of capacities in the first half of the
year, causing losses to part of pig farms (farmers), the Ministry of Agriculture and other related ministries and commissions once
again jointly issued the “Opinion on Promoting Sustainable and Healthy Development of Hog Industry” in early August, laying down
a development objective of “substantially forming a new pattern of high-quality development of hog industry featuring efficient
output, product safety, resource conservation, environmental friendliness and effective regulation within the next 5-10 years to
significantly increase the industry competitiveness, remarkably enhance the epidemic and disease prevention and control abilities,
substantially perfect the policy assurance system and effectively alleviate the cyclic fluctuations of markets.” Under the guidance of
this policy, China’s farming enterprises will pay more attention to increasing their core competitiveness in the future and work to
achieve healthy growth through true high-quality development, instead of suffering P/L fluctuations simply following the cyclic
fluctuations of markets.
Despite the suddenly changed external environments that caused tremendous pressures, the company still copes with them
calmly while seeking changes actively. On every line of its business, the company continuously advanced organizational
optimization and upgrading, and further enhanced the construction of its middle office on its pig business in order to accomm odate
the remarkable and rapid expansion of its management scale previous year; in its feed business, the company set up a corporate-level
feed business management committee, which is also equipped with related middle office functions to make overall planning for its
domestic and overseas feed units and feed plants run as part of its pig business and poultry business, so as to more adequately
leverage the scale economy of its total volume of internal and external feed sales that exceed 20.00 million tons each year, as well as
level the management capabilities of each feed unit upwards; in its food business, the company continued advancing the operation of
its food business headquarters, enhanced the interaction between food business and poultry business on meat food sales and
collaboration among other regional and channel teams, while strengthening its middle office of food bus iness by starting with
“seeking, research, manufacture and promotion”. In terms of capital management, the company’s 8.15 billion-Yuan convertible
corporate bond project launched in the second half of the previous year was approved by CSRC in late April; the company also
successfully completed issue of 1.0 billion-Yuan renewable corporate bonds in early June, thus becoming the only private company
to successfully issue renewable corporate bonds since 2020 and also the first agricultural product manufacturer to successfully do so,
which helped the company broaden its financing channels, enhanced its short-term solvency and provided stable medium and
long-term funding support for it to survive the difficult period of the current bottoming of pork prices. Faced with fluctuations of the
company’s stock price and phase-specific operational difficulties, the company’s board of directors and management remain
confident in that the company once again launched a new round of repurchase in late January after completing a 800 million-Yuan
repurchase in early January that was started in the second half of the previous year, with nearly 230 million-Yuan repurchases
completed so far; the company’s management also started a plan in early May to hold additional shares in the company through
contractual PE fund, with nearly 160 million Yuan-worth additional shareholding completed so far.
Within the reporting period, the company achieved business revenue of 61.519 billion Yuan, 16.823 billion Yuan more
year-on-year, registering a growth rate of 37.64%; due to the rapidly declining pork prices, rising prices of feed ingredients,
attenuated ASF outbreak and depressed market condition of the poultry business, the company’s pig business suffered losses, c ausing
the net profits attributable to shareholders of the listed company in this reporting period to be 3.415 billion Yuan in deficits, but these
deficits included impairment loss accrued on various assets by the company according to the enterprise accounting standards a nd
prudent requirements, which had a total effect of a 1.080 billion Yuan decrease in current net profits.
(I) Feed business: organizational adjustment provides precise empowerment, with sales margin growing steadily.
The feed business is still a major pillar of the company, which can provide a stable profit base for the company in the fluctuating
price cycle of swine and poultry. In the first half of 2021, the company improved its customer service of the feed business, especially
of those key accounts. Despite the price of raw materials stay high, the company consistently adjusts its feed formulas to keep
competitive in price while meeting the dietary needs of the animals. The company also further optimized its organization, fully
leveraged its resource superiority, promoted business collaboration, and precise empowerment by establishing a feed business
management committee.
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
1. Strengthen customer service and perfect supporting infrastructure for both upstream and downstream of the industry chain.
The ASF significantly accelerated the process of livestock and poultry farming going big, and the demands of farming customers for
feed suppliers also gradually transitioned from a single source of feed supply to one-stop solutions. To seize the opportunities, the
company worked on increasing the sales volume to group and large customers as a main thrust of its feed business development,
advanced construction of bio-safe high-standard plants, formed more professionally capable “marketing + technology” team to
approach customers, actively matched customers with seedlings and animal healthcare resources of every major category of farming
while establishing many animal healthcare testing labs and providing customers with support in terms of bio-safety and epidemic
containment, etc.
2. Collaboration between procurement and R&D for optimized formula cost. In the first half of the year, the continuous zigzag
high levels of prices of corn and soybean meal as main feed ingredients exerted pressure on the cost of the company’s feed business.
While properly purchasing domestic ingredients, the company increased the purchasing ratio of low-price imported ingredients when
appropriate by leveraging the market condition research center’s ability to anticipate the price trends of ingredients, so as to cope
with the continuous high levels of domestic corn prices. The company also leveraged its technical expertise to continuously iterate
and promote daily ration formulas comprising low-price alternative ingredients such as wheat, sorghum and brown rice, and launched
a variety of formula categories such as non-corn hybrid daily ration, wheat-based daily ration and brown-rice-based daily ration
while satisfying animal nutrition requirements, allowing the company to rapidly and flexibly adjust its formulas and keep its cost
competitive even when ingredient prices fluctuate. In addition, the company developed a proprietary feed formula system in the first
half of the year, which was commissioned in early August and will make the company’s feed formulation more efficient and faster
and promote data sedimentation and multisystem interconnectivity.
3. Build a feed middle-office to aggregate organization capabilities. In the first half of the year, the company set up a feed
business management committee at the company’s headquarter to make overall planning for its domestic and oversea feed plants,
including those run as part of the company’s pig and poultry businesses. The committee is responsible for formulating strateg ic
direction, market panning, pricing mechanism and other related policies for externally-sold feeds. By setting up various middle-office
departments under the committee, the committee helps raise the level of specialized operation of various parts of the feed business
and intensifies the interaction among various parts so as to more adequately leverage the scale economy of total volume of internal
and external feed sales that exceed 20.00 million tons per year. In the first half of 2021, the centralized procurement rate at the
headquarters level reached 72%, 20% higher than the previous year, and the centralized procurement rate of key varieties was as high
as 95%. Meanwhile, the company actively carried out measures in the supply chain financing business, significantly reduced
financial costs, and realized the cumulative financing proceeds of about 67.43 million Yuan in the first half of 2021, an over 100%
year-on-year increase.
During the reporting period, the company sold 13.53 million tons of various feed products in total, 3.01 million tons more
year-on-year, or 29% up; 10.11 million tons of feeds were sold externally, 27% up year-on-year (a year-on-year growth of 21% in
national total feed output). Among them,2.65 million tons of swine feed were sold externally, 98% up year-on-year (a year-on-year
growth of 71% in national swine feed output); 6.54 million tons of poultry feed were sold externally, 10% up year-on-year (-8% up
year-on-year in national poultry feed output); 0.64 million tons of aquaculture feeds were sold, 29% up year-on-year (9% up
year-on-year in national aquaculture feed output) ;0.21 million tons of ruminant feeds were sold, 42% up year-on-year (18% up
year-on-year in national ruminant feed output); the company achieved business revenue of 32.827 billion Yuan, 10.241 billion Yuan
more and 45.34% up year-on-year.
(II) White-feathered table poultry business: holding fast to strategic marketing transformation and building up internal strength
for efficiency increase and cost reduction.
The white-feathered table poultry business is an important cornerstone of the company’s business growth and also an important
part of the company’s extension towards the downstream end of food. Since the beginning of 2021, the rapid recovery of hog
capabilities nationwide coupled with the impact of the COVID-19 resulted in weakened demands for poultry meat consumption and
caused the poultry price cycle to begin going down faster than the pork price cycle. In view of this, the company held fast to its
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
strategic direction, actively explored the best possible industry development model, optimized its channel structure on the sales side,
increased the percentage of key accounts and actively pursued marketing transformation to broaden the room for profitability, while
ensuring lean operations in terms of internal management and continuously improving operating efficiency.
1. Firmly advancing marketing transformation on the side of poultry meat and pursuing automation and digitalization on the side
of slaughtering for improved operating efficiency. In the first half of the year, the rapidly declining pork prices caused by continuous
expensing of pork production capabilities caused tremendous impacts on the consumption of poultry meat. The company
continuously pursued marketing transformation and channel sinking strategy by making greater efforts to develop various channels
such as food processors, restaurants, malls and supermarkets and new retail outlets and intensifying efforts to develop fresh products
and customized products for differentiated needs of the aforesaid channels on the one hand. Of them, in terms of sideline poultry
products typified by duck blood, the company has become the most essential supplier to major hotpot chain brands in China suc h as
Haidilao, and the “golden duck webs” that the company worked hard building also realized over 70.00 million Yuan in sales in the
first half of the year, now on its way to become a year-round 100 million-Yuan-worth single item as planned; on the other hand, the
company intensified its efforts to acquire nearby customers, reach nearby outlets, increase premium and make its poultry meat
products more profitable. The sales volumes from the aforesaid advantageous channels grew by 12% year-on-year. The company
created customer-hierarchical differentiated management standards and differentiated marketing and service strategies for its
integrated business units following the “whole chain”, “semi-chain” and “efficiency first” development models, while accelerating
automation upgrading and transformation efforts for its business units that match advantageous channels.
2. Solidly developing bases on the farming side to increase the ratio of direct supply and optimize launch cost. In order to match
its development strategies involving three models of “whole cha in”, “semi-chain” and “efficiency first”, and stabilize supply of
non-slaughtered chicken and duck ingredients, the company held fast to developing its self-run farming bases. In the first half of the
year, the company completed leasing, trusteeship and construction of 10 in-house commercial generation farms with additional
capacities equivalent to annual output of about 30.00 million birds. Facing the existing company-farmer cooperation system, the
company further optimized the ratio of direct supply in the first half of the year to sustain 100% in case of chicken business and rise
to 92% in case of duck business, 12% up from the end of the previous year.
3. Optimizing the seeding output rhythm on the side of breeding birds for strictly controling farming cost In the first half of the
year, faced with the fluctuating prices of chicken and duck seedlings, in terms of seedling output rhythm, the company optimized the
seedling output rhythm and controlled the best possible sale timing through agile operation sc heduling; in terms of cost control, the
company increased its operating efficiency through optimizing operation processes, increased the seedling survival rate by bu ilding
provenance health databases, optimized labor and energy costs by adopting and increasing the application of automated equipment
(automatic feeding, closed environmental control, automatic egg collection system, farming shed thermal energy recovery devic e and
other advanced technological equipment), and optimized its selling cost by selling seedlings via online digital marketing platforms.
During the reporting period, the company sold a total of 264 million baby chicks and baby ducks, 11 million more and 4% up
year-on-year, 220 million commodity chicks and ducks were sold, 21 million more and 11% up year-on-year; 352 million adult
chicks and ducks were slaughtered, unchanged year-on-year, indicating a further increased matching ratio of commercial generation
farming and slaughtering business; 0.8640 million tons of chicken and duck meats were sold, 40,900 tons less and 5% down
year-on-year; the company achieved business revenue of 9.209 billion Yuan, 130 million Yuan more and 1.43% up year-on-year.
(III) Pig farming business: building up internal strength for stabilized operation and adjusting paces to start a new journey
With the operation scale constantly expanding,, pig farming has become a core business that affects the company’s profitability
most. In the first half of 2021, the drastically dropping pork prices, rising prices of feed ingredients and a new round of attenuated
ASF outbreak affecting many northern provinces from the end of the previous year to the first quarter of this year all causedour pig
farming business to encounter extremely terriable external environments. Meanwhile, the company’s pig business managed over 200
subsidiaries with independent accountability in 2020, increasing 100% year-on-year. We managed nearly 1.20 million fertile sows,
three times more year-on-year; employees approached 45,000, 3.5 times more year-on-year. Such a leapfrog development, on the one
hand,seized the window of dual opportunity of market and policy in the last two years thus increasing the market share, formi ng a
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
balanced presence across advantageous regions of the country, facilitating the production resumption and supply assurance of hogs
across the country and laying a foundation for the next stage of operations; on the other hand, it also posed new requirements and
challenges to the management capabilities of the company. From the beginning of 2021, the company also fully shifted from a stage
of rapid expansion in the past two years to a stage of robust operation, where the company enhanced its internal management
capabilities through many measures, improved business operation efficiency, gradually reducing farming costs and survived the
difficult period of cyclic bottoming.
1. Adjusting the pace of development and controlling capital expenditure. By the end of the first half of this year, the bree ding
pigs on hand ,at breeding pig farms , exceeded 1.60 million, and the stock scale of fattening farms built in place also reached 6.00
million. Besides, fattening farms of 3.90 million pigs is currently under construction or to be built. On this basis, the capacity
portfolio also further improved, as the marketing rate of hogs accounted for nearly 20% of the total in the central and south region in
the first half of the year, increasing 100% form last year. The aforesaid capacities are sufficient to meet the needs for piglet
production and auxiliary in-house fattening operations for the next two years, so the company has now slowed down the construction
of new breeding pig farms.And the company flexibly scheduled the construction progress of fattening farms,based on the availa bility
of supporting facilities for fattening capacities in the regions where it operates.Also, we changed the previous self-built fattening
farms ,which temporarily used for breeding farms, now adjusted back to the fattening purpose according to production rhythm. The
company’s capital spending in the first half of the year fell by 46% from the second half of the previous year, and the Q2 capita l
spending also fell by 45% from the first quarter; The company’s startup cost in the first half of the year fell by 18% from the second
half of the previous year, and the Q2 startup cost also fell by 56% from the first quarter, with both the capital spending and startup
cost expected to be further decreased in subsequent periods.
2. Iterating containment measures to fight the attenuated ASF outbreak. From the end of the previous year to the first quarter of
this year, a new round of attenuated ASF outbreak in many Northern provinces caused prevalent effects to farming companies and
farming households. This round of attenuated ASF outbreak is characterized by extensive outside contamination, numerous
channels of spread, long latency periods and a long phase of effect, thus posing new challenges to the containment measures. Around
the Spring Festival, all officers of the company’s pig business unit including senior executives conducted field surveys in order to
strengthen the ASF containment efforts, to comfort the frontline employees.Meanwhile, at the levels of the head and teams, key
person were assigned to do ASF task ,they are supposed to provide prioritized assistance in those ] challenging regions In this
process, the company continuously summed up its experience and upgraded containment and decontamination methods, including
whole-population serum double-antibody and double-screening, application of thermal imagers and static attenuation and disinfection
of materials; and first added up its containment processes before subtracting in a way that avoids slackness resulting from prolonged
and excessively trivial containment processes, which helped restore normal production faster while ensuring containment, as well as
reduce bio-safety containment costs at the same time. With the aforesaid measures, the number of ASF-affected farms at the end of
the first half of the year has been kept below 1%.
3. Optimizing the organizational structure and assigning capable individuals back to production. As the company rapidly
expanded in the past two years, its pig farming team also continuously split up and expanded. As a result, many vertical teams
separately organized and managed. And managers of frontline units are responsible for development, construction and public af fairs.
When the company fully transitioned to a stage of robust operation, HR arrangements were also adjusted accordingly to focus
organizational strengths on production and emphasize more concentration and aggregation, thereby helping unified standards and
systems realize a full coverage both horizontally and vertically and facilitating rapid replication and adoption of best practices inside
the company. First of all, at the corporate level, with five middle offices of the swine business that started being built in late 2020, the
company further refined and strengthened the HQ function of pig business by, for example, spinning off a feed supply department
from the feed nutrition department in order for the former to focus on nutrition formula and feeding methods and for the latter to
focus on production and quality control of feed plants affiliated to the pig business, as well as conduct centralized procurement and
logistics in collaboration with the companywide feed system; the company also planned to extend a bio-safety route from its health
management department in order for the former to focus on technology research and development for epidemic prevention and
49
2021 Semiannual Report of New Hope Liuhe Co., Ltd
testing and treatment and for the latter to focus on supervising and guiding the implementation of containment measures. Sec ondly,
on the levels of vertical teams and operating regions, one the one hand, corresponding routes and jobs were added in conjunction
with the HQ function refining to ensure related work can be carried out level by level; on the other hand, the duties of deve lopment
and construction and public affairs that largely preoccupied general managers of various levels at the previous stage of development
were reallocated to the counterpart departments of the HQ for vertical management so as to allow general managers of various levels
to focus more on production and operations inside pig farms. Last, on frontline production units, skill certification was further
pursued, as the HQ enacted 73 standards and 15 certificates covering 5 work sections as well as supporting section-specific learning
hand cards in a unified manner to conduct online and onsite theoretical exams for more than 20,000 frontline production workers as
well as onsite operation certification inside pig farms. Exams and certifications are used to drive all employees to refresh themselves
on basic production skills and link the certification results to job adjustment and grade change, with a work permit system adopted to
help motivate teams and optimize the workforce structure. As the next step, the company will also extend its skill certificat ion efforts
from production units to health management, sales and other functional areas, and encourage all senior managers in its pig business
to participate in certification for an increased understanding of frontline practice.
4. Building up information systems and working hard on planning and operational control. For a long time, the company
maintained high production indicators, effective ASF containment and low cost. But after rapid expansion of management scale, the
former management model that relied too much on the elites couldn’t ensure various standard systems and good practices, formed in
the past, effectively replicating inside the company. In the second quarter of the year, the company started a project of building a
planning and operation management system, which, oriented towards the frontline production units, can generate daily plans based
on the scientific full-load rhythmical production requirements and pig population allocation inside pig farms, and then push and
distribute assignments to employees before work based on the production action specification and standards of each work section,
provide early warning and prompts for undesirably scheduled tasks in work and form evaluations timely based on work results a fter
work to help employees review and improve, so as to help the line managers increase their management efficiency and ensure orderly
conduct of production. Meanwhile, this system can also form data dashboard timely from the aforesaid plans and achievement da ta in
order for management teams at various levels to perfor m backend analysis, adjustment and deviation correction and to reduce the
deviations between plans and actual operation results. Currently, this system has completed the phase I test of business processes
related to producing sows in the pilot unit and he lped the pilot unit significantly increase production achievements and plan
attainment rates, expected to proceed with system development and test gradually for reserve sows, piglets and fattening pigs , in
addition to rollout to other units after stabilization proven through tests.
During the reporting period, the company sold a total of 0.5634 million breeding pigs and piglets and 3.8977 million hogs,
totaling 4.4611 million pigs, 2.3382 million more and 110% up year-on-year; the company achieved business revenue of 10.182
billion Yuan, 3.234 billion Yuan more and 46.55% up year-on-year。 Despite the rapidly falling prices, rising prices of feed
ingredients, the attenuated ASF outbreak and phase-specific management effectiveness dilution after the rapid expansion, which
affected the profitability of the company together, With the aforesaid adjustment and optimization measures, the company’s
production indicators in various aspects all showed apparent improvement; 35-day conception rate, matching and farrowing rate,
marketing rate and rate of acceptable products all rose gradually, the number of healthy piglets per pigsty and the number of weaned
piglets per pigsty reached 10 and 9.4 respectively in June, the average piglet weaning cost fell to 470 Yuan/pig in July, and the
average piglet weaning cost in several operating regions already fell below 350 Yuan/pig, all these improvements to be embodied
gradually in fat pigs to be marketed in the second half of the year.
(IV) Food business: Continuously expanding the product mix and actively developing KA channels
Food business is the direction of the company's long-term transformation and development. After entry into 2021, the company
continued expanding its product mix and its hotpot food material business has formed a sequence of orderly growth, with new
product series such as beef slice and meatball growing in succession under the trendsetting effect of deep fried pork slice. Meanwhile,
the company established its presence primarily in KA channels, as a newly-formed Catering Supply Chain team actively acquired
leading high-quality customers in the fields of hotpot restaurant chains, food manufacturers, KA supermarkets and new retail outlets,
50
2021 Semiannual Report of New Hope Liuhe Co., Ltd
etc.
1. Launch new hotpot food SKUs and get the product-line formed:The deep fried pork slice series has become an industry
benchmark in this category and continuously grew fast, with a 180% increase in sales revenue in the first half of this year. A series of
food ingredients suitable for hotpot scenarios such as beef slice, large-particle shrimp meatballs and luncheon meat developed well
once launched, which, together with pot-stewed and meat roll series products, formed an echelon sequence of benign progression,
thus solidifying a whole-new brand positioning “Meihao exclusive for hotpot”, gradually wining the heart and mind of catering
customers and consumers and greatly facilitating the development of hotpot chain customers. The company will continue reusin g
its channel resources accumulated from its hotpot ingredient business to replicate a growth model and develop “Meihao Kebab” and
other BBQ food ingredient products in an orderly fashion. In addition, the company officially launched a high-end western-style
low-temperature meat product brand “Le matre charcutier" created with a European farming industry leader Cooperl in early 2021,
which further enriched its product line and helped develop high-end channels.
2. To improve market penetration in Sichuan and to enter into more regions nationwide: On the one hand, the company
endeavors to penetrate throughout markets in Sichuan, stabilize its dominant presence at its stronghold, leverage its existing
customers in Sichuan to further penetrate sales outlets at county and township levels, and concentrate its marketing resources at
critical sales outlets to provide consumers with more valuable product mixes. On the other hand, the company continued accele rating
its expansion to the rest of the country, strengthened region-by-region management of sales teams, further divided markets outside
Sichuan into six operating regions of south, northeast and central China, Henan and Anhui, northwest and east China, set their sales
targets and fully empowered teams. In the first half of the year, the company established a food business marketing department to
help sales teams and distributors open markets through a series of measures such as pre-season tour of market and tasting events, as a
result of which 2,112 tier-2 downstream customers were newly acquired within half a year and revenue contribution of top 50
distributors were helped to increase by 14.5% year-on-year. In addition, the company continued expanding into tier-1 cities of
Beijing, Shanghai, Guangzhou and Shenzhen across the board by intensifying cooperation with leading KA supermarkets.
3. Focus on KA acquisition and emerging channels development:In 2021, we identified KA development as an important
driving force behind the channel transformation plan. At the beginning of the year, the company established a Catering Supply Chain
team in response to the industry trends, which has won bids for several important projects within half a year and fully leveraged the
advantageous supply capabilities of the company that maintain presence across the industry chain and primary focus on food sa fety.
In the future, the company will also build a food material supply chain system catering for more types of customers such as schools,
hospitals, major companies and special channels with safe, high-quality food ingredient services.
With deep fried pork slices as the “pacesetter”, the company brought hotpot food materials to over 90 of top 100 hotpot chains
nationwide. For its raw and fresh meat business, the company further expanded its KA pool by newly contracting with food and
catering companies such as Yuanjiyun Dumplings. In terms of C-end retail channels, the company established a dedicated KA
supermarket sales team to make overall planning for mall and supermarket business of its business units and make deal with national
KA malls and supermarkets such as Fresh Herma, RT-Mart, Wulmart, Walmart and Metro. In the first half of the year, sales of
processed food to KA supermarket channel grew by 220% year-on-year, and fresh meat sales grew by 29% year-on-year, showing
good growth momentums. In terms of e-commerce and new retail channels, the company won the first place in the category of quick
dishes on Tmall.com’s “618” shopping festival and Meihao homemade deep fried pork slices ranked first on the list of repeat
purchase list and the top-rated list. “Meihao” has become the 7th-level (the highest leve l) vendor on Tmall.com, and the company
also actively establishes its presence on many platforms such as pinduoduo.com, chengxinyouxuan.com and xsyxsc.com in order to
jointly fuel the rapid development of “Meihao” brand in new retail channels. In order to ensure rapid scale-up in e-commerce
channels, the company also further intensified cooperation with third-party specialized cold chain logistics companies such as SF
Express, Jiuye Supply Chain and Fresh Life Style Supply Chain Management to build up its presence in frontend warehouses
nationwide and continuously strengthen its supply chain distribution capabilities.
During the reporting period, the company sold 123,000 tons of pork products, 19,400 tons more and 19% up year-on-year; the
company sold 121,500 tons of various deep-processed meat products and prepared dishes, 26,300 tons more and 28% up
51
2021 Semiannual Report of New Hope Liuhe Co., Ltd
year-on-year, with a further increased ratio of deep-processed product sales; the company’s food business realized business revenue
of 4.474 billion Yuan, 339 million Yuan more and 8.18% up year-on-year.
Year-on-year changes in key financial data
Unit: Yuan
Year-on-year
The same period of
This reporting period increase or Reasons for change
the previous year
decrease
Mainly due to remarkable growth in
Business revenue 61,518,574,560.67 44,696,040,364.08 37.64% business revenue from feed, pig and
trade businesses of the company.
Mainly due to increased business
Operating costs 59,181,012,728.29 38,883,226,717.75 52.20% revenue and consequential increased
operating cost of the company.
Mainly due to increased size, business
Marketing expenses 886,165,806.70 645,291,464.41 37.33% revenue and consequential increased
costs of the company.
Mainly due to increased size and
Management expenses 2,071,241,942.81 1,620,715,240.33 27.80% consequential increased costs of the
company.
Mainly due to increased interest
Financial expenses 753,564,042.97 431,355,596.36 74.70% expense resulting from increased debt
financing scale of the company.
Mainly due to remarkably increased
profits from feed business and
Income tax expense 255,813,436.08 171,269,538.95 49.36%
consequential increased income tax
expense of the company.
Mainly due to increased R&D input
R&D input 147,076,799.89 103,889,170.64 41.57%
from the company.
Mainly due to decreased current
Net cash flows from operating profits and increased
-4,596,606,685.74 658,593,331.58 -797.94%
operating activities inventory and receivables of the
company.
Mainly due to decrease in net input of
long-term assets in the pig business of
Net cash flows from
-10,459,350,214.73 -15,567,369,290.18 32.81% the company in this period compared
investing activities
with the same period of the previous
year.
Net cash flows from
17,916,417,332.72 19,232,700,766.30 -6.84%
financing activities
52
2021 Semiannual Report of New Hope Liuhe Co., Ltd
Mainly due to effects of a large
Net increase in cash
2,839,612,152.66 4,323,226,543.31 -34.32% increase in borrowings acquired by the
and cash equivalents
company in the corresponding period.
Due to increased insurance contract
Net insurance liability
14,883,920.78 9,814,421.35 51.65% reserve accrued by the guarantee
reserve accrued
company
Mainly due to increased stamp duty
Taxes and surcharges 103,141,924.10 77,628,934.48 32.87% resulting from additional loan contracts
and lease contracts of the company.
Due to increased current income of the
Other income 107,232,509.12 66,064,040.01 62.32%
company from government subsidies.
Income on change in Mainly due to changes in fair va lue of
-11,086,791.11 -4,111,949.63 -169.62%
fair value financial products of the company.
Mainly due to increased accounts
Credit impairment receivable and consequential increased
-77,108,559.38 -47,300,672.93 -63.02%
loss credit impairment loss accrued of the
company.
Mainly due to increase in impairment
Asset impairment loss -1,002,396,508.13 -2,555,550.61 -39,124.29% loss of consumptive biological assets
accrued.
Mainly due to effects of loss suffered
Income from asset by the company from disposal of
22,936,727.98 -65,147,148.15 135.21%
disposal productive biological assets in the
corresponding period.
Mainly due to increased revenue of the
Non-business revenue 53,491,540.63 31,392,988.99 70.39%
company from insurance indemnities.
Mainly due to increase in destruction,
Non-business scrapping and interim loss of
1,330,740,961.06 143,494,162.87 827.38%
expenditure productive biological assets of the
company.
Material changes in composition or source of profits of the company in the reporting period
□ applicable √ not applicable
There were no material changes in composition or source of profits of the company in the reporting period.
Composition of business revenue
Unit: yuan
This reporting period The same period of the past year
Year-on-year
Proportion of Proportion of
Amount Amount increase or decrease
business revenue business revenue
Total business
61,518,574,560.67 100% 44,696,040,364.08 100% 37.64%
revenue
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
By industry
Feeds 32,826,596,340.18 53.36% 22,585,863,819.30 50.54% 45.34%
Poultry business 9,208,733,591.23 14.97% 9,078,957,817.31 20.31% 1.43%
Pig business 10,181,674,908.62 16.55% 6,947,750,208.95 15.54% 46.55%
Food 4,473,503,994.85 7.27% 4,135,206,512.58 9.25% 8.18%
Commerce and trade 4,509,825,357.68 7.33% 1,721,078,828.70 3.85% 162.03%
Others 318,240,368.11 0.52% 227,183,177.24 0.51% 40.08%
By product
Feeds 32,826,596,340.18 53.36% 22,585,863,819.30 50.54% 45.34%
Poultry business 9,208,733,591.23 14.97% 9,078,957,817.31 20.31% 1.43%
Pig business 10,181,674,908.62 16.55% 6,947,750,208.95 15.54% 46.55%
Food 4,473,503,994.85 7.27% 4,135,206,512.58 9.25% 8.18%
Commerce and trade 4,509,825,357.68 7.33% 1,721,078,828.70 3.85% 162.03%
Others 318,240,368.11 0.52% 227,183,177.24 0.51% 40.08%
By region
Overseas 6,681,133,536.17 10.86% 4,696,266,485.34 10.51% 42.26%
Domestic 54,837,441,024.50 89.14% 39,999,773,878.74 89.49% 37.09%
Industries, products or regions that account for more than 10% of the company’s business revenue or operating profits
√ applicable □ not applicable
Unit: Yuan
Increase or Increase or Increase or
decrease in decrease in decrease in
business revenue operating cost gross margin
Business revenue Operating costs Gross margin
from the same from the same from the same
period of the period of the period of the
previous year previous year previous year
By industry
Feeds 32,826,596,340.18 30,555,569,387.68 6.92% 45.34% 46.85% -0.95%
Poultry
9,208,733,591.23 8,752,300,644.50 4.96% 1.43% 1.76% -0.30%
business
Pig business 10,181,674,908.62 10,840,863,115.86 -6.47% 46.55% 171.85% -49.07%
Food 4,473,503,994.85 4,421,045,486.02 1.17% 8.18% 20.58% -10.17%
By product
Feeds 32,826,596,340.18 30,555,569,387.68 6.92% 45.34% 46.85% -0.95%
Poultry
9,208,733,591.23 8,752,300,644.50 4.96% 1.43% 1.76% -0.30%
business
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
Pig business 10,181,674,908.62 10,840,863,115.86 -6.47% 46.55% 171.85% -49.07%
Food 4,473,503,994.85 4,421,045,486.02 1.17% 8.18% 20.58% -10.17%
By region
Overseas 6,681,133,536.17 5,665,190,394.40 15.21% 42.26% 42.34% -0.04%
Domestic 54,837,441,024.50 53,515,822,333.89 2.41% 37.09% 53.33% -10.33%
Data about main business of the company after the most recent adjustment according to the statistical specification at the end of
reporting period if the statistical specification of main business data of the company was adjusted during the reporting period
□ applicable √ not applicable
Remarks on causes of more than 30% year-on-year change in related data
√ applicable □ not applicable
The company’s business revenue from its feed business increased by 45.34% year-on-year, mainly due to remarkably increased feed
sales volume thanks to the greater efforts of the company to intensify feed product research and development and pursue digital
marketing transformation.
The company’s business revenue from its pig business increased by 46.55% year-on-year, mainly due to remarkably increased
volume of hogs marketed by the company.
The company’s gross margin on its pig business decreased by 49.07% year-on-year, mainly due to remarkably decreased selling
prices of hogs in this period compared with the corresponding period.
IV. Analysis of non-main business
√ applicable □ not applicable
Unit: Yuan
Percentage of total Remarks on reasons for Whether sustainable or
Amount
profits formation not
Mainly consisting of
investment income accounted
for and recognized under the
Investment income 1,176,596,066.35 -43.58% Yes
equity method due to holding
of equities in China Minsheng
Bank
Profit and loss from
-11,086,791.11 0.41%
change in fair value
Asset impairment -1,079,505,067.51 39.99%
Non-business revenue 53,491,540.63 -1.98%
Non-business
1,330,740,961.06 -49.29%
expenditure
55
2021 Semiannual Report of New Hope Liuhe Co., Ltd
V. Analysis of assets and liabilities
1. Significant changes in asset composition
Unit: Yuan
The end of this reporting period The end of the previous year Increase or
Percentage of total Percentage of total decrease in
Amount Amount
assets assets proportion
Cash at bank and
11,674,800,886.30 8.82% 8,799,264,356.20 8.04% 0.78%
on hand
Accounts
1,504,568,263.46 1.14% 865,340,970.83 0.79% 0.35%
receivable
Contract assets 0.00% 0.00% 0.00%
Inventories 19,654,525,975.42 14.85% 15,649,735,402.26 14.30% 0.55%
Investment
174,306,520.36 0.13% 364,645.04 0.00% 0.13%
properties
Long-term equity
23,538,638,058.14 17.78% 22,702,080,340.55 20.74% -2.96%
investments
Fixed assets 32,537,004,193.25 24.58% 28,861,009,355.16 26.37% -1.79%
Construction in
15,962,053,442.98 12.06% 11,006,466,489.26 10.06% 2.00%
progress
Right-of-use
6,324,700,984.83 4.78% 0.00% 4.78%
assets
Short-term
19,010,984,011.32 14.36% 10,399,072,204.60 9.50% 4.86%
borrowings
Contract
2,248,863,709.87 1.70% 2,285,698,452.30 2.09% -0.39%
liabilities
Long-term
32,294,983,344.43 24.39% 22,901,808,635.67 20.93% 3.46%
borrowings
Lease liabilities 5,113,375,251.89 3.86% 3.86%
Productive
9,722,917,996.68 7.34% 11,797,596,610.49 10.78% -3.44%
biological assets
2. Major overseas assets
□ applicable √ not applicable
3. Assets and liabilities measured at fair value
√ applicable □ not applicable
56
2021 Semiannual Report of New Hope Liuhe Co., Ltd
Unit: Yuan
Accumulat
Current
Current profit ed fair Othe
provision Current
Beginning and loss from value Current sales r
Item for purchase Ending amount
amount change in fair changes amount chan
impairmen amount
value charged to ges
t
equities
Financial
assets
1.
Held-for-tradi
ng financial
assets
2,196,760.08 6,050,516.72 125,330,769.56 102,671,409.46 22,076,125.34
(excluding
derivative
financial
assets)
4.
Investments
in other 320,276,827.48 320,276,827.48
equity
instruments
Subtotal of
financial 322,473,587.56 6,050,516.72 0.00 125,330,769.56 102,671,409.46 342,352,952.82
assets
Total of the
322,473,587.56 6,050,516.72 0.00 0.00 125,330,769.56 102,671,409.46 342,352,952.82
above
Financial
16,850,229.73 -17,137,307.83 17,137,307.83
liabilities
Contents of other changes
Whether the measurement attributes of major assets of the company changed significantly during the reporting period
□ yes √ no
4. Restrictions on asset rights as of the end of the reporting period
Item Ending book value (Yuan) Cause of restrictions
Cash at bank and on hand 325,969,835.08 Margin
Used as collaterals for long and
Fixed assets 294,033,430.25
short-term borrowings
Used as collaterals for long and
Intangible assets 50,831,208.80
short-term borrowings
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
Used as pledges for short-term
Accounts receivable 11,012,274.60
borrowings
Used as collaterals for short-term
Consumptive biological assets 150,000,000.00
borrowings
Used as pledges for long-term
Long-term equity investments 837,091,597.65
borrowings
Total 1,668,938,346.38
VI. Analysis of Investments
1. General condition
√ applicable □ not applicable
Invested amount during the reporting Invested amount during the same period of
Extent of change
period (Yuan) the previous year (Yuan)
23,905,100,494.03 22,732,259,166.94 5.16%
2. Significant equity investments acquired during the reporting period
□ applicable √ not applicable
3. Ongoing significant non-equity investments during the reporting period
□ applicable √ not applicable
4. Investments in financial assets
(1) Investments in securities
□ applicable √ not applicable
The company had no investments in securities during the reporting period.
(2) Investments in derivatives
√ applicable □ not applicable
Unit: 10,000 Yuan
Name Rela Whe Initi Amount Endin Percenta Amount
Type of Purchase Sales
of ted-p ther al of g ge of of actual
derivativ Beginning amount amount
operat arty relat amo impairm investe ending profit and
es Start date End date invested within the within the
or of relati ed-p unt ent d invested loss
investme amount reporting reporting
derivat onsh arty of provisio amoun amount during
nt period period
ives ip trans deri n t in net the
58
2021 Semiannual Report of New Hope Liuhe Co., Ltd
invest actio vativ accrued assets of reporting
ment n or es (if any) the period
not inve compan
stme y at the
nt end of
reportin
g period
Future
s Non- Futures
broker relat and October January
No -627.17 12,533.08 11,667.52 0 -64.89 0.00% -1,759.69
age ed option 12, 2020 31, 2022
compa party contracts
nies
Interest
rate
Non- swap
Comm
relat and May 22, January
ercial No -838.18 0 -1,400.39 0 558.77 0.00% -3.44
ed foreign 2020 19, 2022
banks
party exchang
e
forwards
Total 0 -- -- -1,465.35 12,533.08 10,267.13 0 493.88 0.00% -1,763.13
Source of funding for
Self financed
derivatives investments
Involvement in litigations
Not applicable
(if any)
Date on which the board August 31, 2018
approval of derivatives
investment is announced August 31, 2020
and disclosed (if any)
Remarks on risk analysis and control measures of derivatives positions during the reporting
period (including but not limited to market risk, liquidity risk, credit risk, operational risk and legal
Remarks on risk analysis risk)
and control measures of I. Risk analysis
derivatives positions during Commodity futures hedging operation can effectively manage the purchase price risk of raw
the reporting period materials, especially reduce the impact of falling price loss caused by high inventories on the
(including but not limited to company when raw materials fall sharply, but there will also be certain risks:
market risk, liquidity risk, 1. Risk of abnormal price fluctuations: In theory, the futures market prices and the spot market
credit risk, operational risk prices of all the trade categories at the closing date will return to the same level. In the rare cases of
and legal risk) irrational market, the futures prices and spot prices might still not return at the closing date, thus
giving rise to a systemic risk event, which in turn affects hedging operation scheme of the company,
even causing losses.
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
2. Capital risk: If the amount of investment in futures trading is too large according to the
operating instructions issued by the company, it may lead to capital liquidity risk, or even result in
actual losses caused by forced liquidation due to insufficient time to supplement the margin.
3. Technical risk: Technical risk may be caused by incomplete computer systems.
In order to prevent the adverse impact of exchange rate and interest rate fluctuations on the
company's profits and shareholders' equity, the company needs to conduct capital transaction business
of value-preserved exchange rate and interest rate to reduce the risk exposure of foreign exchange and
interest rate, but at the same time there are certain risks:
1. Market risk: The difference between the contract exchange rate / interest rate and the actual
exchange rate / interest rate at maturity date will generate investment gains and losses in the
value-preserved capital transaction business; During the duration of the value-preserved capital
transaction business, there will be revaluation gains and losses in each accounting period, and the
cumulative value of the revaluation gains and losses at maturity date is equal to the gains and losses
on investment.
2. Liquidity risk: The value-preserved foreign exchange capital transaction business is based on
the company's foreign exchange revenue and expenditure budget, and matches the actual foreign
exchange revenue and expenditure to ensure that the company has sufficient capital for clearing at the
time of closing, or selects the derivatives for close-out netting to reduce the cash flow requirements at
maturity date; The value-preserved interest rate capital transaction business will all be closed based on
the net amount of interest rate difference.
3. Performance risk: The counterparties of the company in value-preserved capital transaction
business are all banks with good credit standing and maintaining long-term business relations with the
company, for which there is substantially no performance risk.
4. Other risks: When conducting business, if the operators fail to follow the prescribed
procedures for the operation of value-preserved capital transaction business or to fully understand the
derivatives information, the operational risks will occur; If the terms of the transaction contract are
not clear, the legal risks will be likely to occur.
II. Risk management strategies
Risk management strategies for commodity futures hedging:
1. Match the hedging business with the company's production and operation, and strictly control
the futures position.
2. Strictly control the capital scale of hedging, reasonably plan and use the margins, issue
operating instructions in strict accordance with the company's policies on futures trading
management, and conduct operations only after approval according to the regulations.
3. The company has established the Derivatives Investment Management Policy and the Futures
Management Policy, making clear provisions for hedging business, and set up a dedicated futures
operation team, dedicated futures operation monitoring team and corresponding business processes
for control through implementation of authorization and post constraints, internal audit and other
measures.
4. The warning mechanism for medium and long-term trends of major varieties has been
established. According to the monitoring mechanism of market price trends, the futures operation and
monitoring team of the company regularly predicts the future trends of major varieties in a certain
period, so as to ensure timely judgment and disposition of futures varieties in case of abnormal
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
fluctuations.
Risk management strategies for value-preserved capital transaction business
1. The company conducts value-preserved capital transaction business for the purpose of
reducing the impact of exchange rate fluctuations on the company, and prohibits any risky
speculations; The amount of the company's value-preserved capital transaction business may not
exceed the upper limit of the authorized amount approved by the board of directors or the general
meeting; the company may not engage in any leveraged capital transactions.
2. The business working group of the company shall conduct risk analysis on transactions before
carrying out the capital transaction business, and formulate and submit the transaction plans
(including capital transaction variety, term, amount, trading bank, etc.) and feasibility analysis reports
to the business leadership group.
3. The value-preserved capital transaction business contracts of the company shall be executed
after the business working group submits them to and obtain approval from the chief f inancial officer,
president and chairman.
4. The company shall sign contracts with trading banks with accurate and clear terms, and strictly
implement the risk management system to prevent legal risks.
5. The finance department of the company shall timely track the changes in open market prices
or fair value of capital transaction contracts, timely assess the changes in risk exposure of the traded
contracts, and regularly report to the risk control committee of the board of directors; if any abnormal
situation is found, it shall be reported to the risk control committee of the board of directors to prompt
the business working group to implement emergency measures.
6. The company's internal audit department shall conduct compliance audit on capital transactio n
contracts on a regular basis.
Changes in market prices or
product fair value of
derivatives that the
company has invested in
The hedging transaction variety of the company is the value-preserved capital transaction business for
during the reporting period,
the prevalent varieties in the domestic futures markets, for which the market transparency is high and
with the analysis of fair
the transactions are active, and the transaction prices and the intraday settlement unit price fully
value of derivatives to
reflect the fair value of derivatives.
disclose the specific
methods used and setting of
related assumptions and
parameters.
Remarks on whether the
accounting policies and
The accounting policies and accounting principles related to the company's derivatives transactions
accounting principles of the
have been implemented in accordance with the relevant provisions of the “Enterprise Accounting
company for derivatives
Standards—Recognition and Measurement of Financial Instruments” and the “Enterprise Accounting
during the reporting period
Standards—Hedging” issued by the Ministry of Finance of the People's Republic of China, without
changed significantly
any changes.
compared with the previous
reporting period.
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
The company has the Securities Investment Management Policy in place and the company’s
investments in securities are conducted while ensuring the security of the company’s investments,
daily operation and funds and will not affect the company’s normal turnover of funds or normal
conduct of its main business. While making investments in securities, the company should
continuously improve its business policies, further specify the control procedures for key moving
Special opinions of parts of investment and financing operations from authorization, execution, supervision to
independent directors on information disclosure, strengthen obligations and duties of directors, supervisors and senior
derivatives investments and executives and establish internal accountability system to enhance funds management of the
risk control of the company company’s investment and financing activities. The Company’s derivatives investments for the
purpose of hedging have been assessed by designated related department in terms of investment risk.
To put an end to speculation in the investment process, the company has established the Derivatives
Investment Management Policy and the Futures Management Policy. While conducting derivatives
business, the company should continue to enhance the professional competency and capabilities of
operating personnel and strengthen supervision.
VII. Sales of significant assets and equities
1. Sales of significant assets
□ applicable √ not applicable
The company did not sell any significant assets during the reporting period.
2. Sales of significant equities
□ applicable √ not applicable
VIII. Analysis of major subsidiaries and minority-owned companies
√ applicable □ not applicable
Major subsidiaries and minority-owned companies that have an impact on the company's net profits of more than 10%
Unit: Yuan
Company Compan Registered Total Business Operating
Main business Net assets Net profits
name y type capital assets revenue profits
Feeding, sale and slaughter of
pigs; agricultural science research
and experimental development;
Tibet promotion and training of related
Xinhao Subsidia technologies; production, 500,000,0 73,685,14 3,990,491,6 9,233,642, -3,709,202 -4,845,521,
Technology ry processing and sale of animal 00.00 0,113.88 04.96 280.25 ,388.43 443.14
Co., Ltd farming equipment; production,
processing and sale of compound
feed, concentrated feed and
concentrate supplements (the
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
aforesaid items and terms are
subject to license): import and
export business: project
investment and management;
science and technology exchange
and promotion services
Venture investment, investment
management, financial advisory,
New Hope wealth management consulting,
Liuhe Subsidia business reorganization 576,555,6 20,918,98 20,918,989, 1,108,947, 1,108,947,1
0.00
Investment ry consulting, market survey, credit 00.00 9,197.10 197.10 153.79 53.79
Co., Ltd investigation, technology
development and transfer,
technical consulting services.
Import and export business: sale
Shandong
of medicated feed additives;
New Hope Subsidia 3,458,823, 24,471,13 6,843,232,9 31,259,63 336,087,3 260,432,51
dealing in feed ingredients;
Liuhe Group ry 529.00 6,805.85 73.28 6,215.16 82.74 5.07
enterprise management consulting
Co., Ltd
services, etc.
Feed research and development:
Sichuan
wholesale and retail of feed
New Hope
Subsidia ingredients and feed-related 800,000,0 13,489,52 2,601,926,2 12,191,86 170,527,7 -22,613,16
Liuhe
ry products; planting of cereals and 00.00 6,482.74 33.63 0,541.89 24.71 6.70
Farming
other crops; sale of veterinary
Co., Ltd
drugs, etc.
Acquisition and disposal of subsidiaries during the reporting period
√ applicable □ not applicable
Way of acquisition and disposal of Effects on overall production,
Company name
subsidiaries during the reporting period operation and performance
Jiangsu Suxinyuan Feed Co., Ltd Share purchase Losses of 161,333.21 Yuan
Puyang New Hope Feed Co., Ltd Share purchase Profits of 435.15 Yuan
Changxing Heping Huatong Livestock Co., Ltd Share purchase Profits of 16,332.41 Yuan
Changxing Huatong Livestock Co., Ltd Share purchase Losses of 41,963.56 Yuan
Zhangjiajie Xinruixing Feed Co., Ltd Share purchase Profits of 2,232,065.98 Yuan
Hezhou Jiuding Farming Co., Ltd Share purchase Losses of 106,418.85 Yuan
Huzhou Haihuang Biotechnology Co., Ltd Share purchase Losses of 590,409.36 Yuan
Zibo Xinmu Mechanical Technology Co., Ltd Share transfer Profits of 6,494,745.48 Yuan
Qingdao New Hope Xinrong Technology Group
Established by investment Losses of 615,857.93 Yuan
Co., Ltd
Shen County Xinliu Farming Co., Ltd Established by investment No effects
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
Yingshan Xinyue Farming Technology Co., Ltd Established by investment No effects
Rongxian Xinyue Farming Technology Co., Ltd Established by investment No effects
Sichuan New Hope Liuhe Swine Breeding
Established by investment No effects
Technology Co., Ltd
Laibin New Hope Liuhe Farming Technology Co.,
Established by investment Profits of 38,278.55 Yuan
Ltd
New Hope Liuhe (Zibo) Agricultural Technology
Established by investment Profits of 34,014.63 Yuan
Development Co., Ltd
Wuwei New Hope Liuhe Feed Co., Ltd Established by investment Losses of 27,504.11 Yuan
Sishui Dasheng Breeding Co., Ltd Established by investment No effects
Qingdao Xinjia Biotechnology Co., Ltd Established by investment Profits of 95,562.91 Yuan
Guiyang Xinhao Farming Co., Ltd Established by investment No effects
New Hope Animal Nutrition Bangladesh Co., Ltd Established by investment Losses of 64,855.11 Yuan
Dingzhou Xinhao Feed Co., Ltd Established by investment Losses of 72,396.15 Yuan
Yulin Guoxiong Feed Co., Ltd Established by investment Losses of 851,169.11 Yuan
Huizhou Liuhe Feed Co., Ltd Established by investment Losses of 731,888.47 Yuan
Jiangmen Xinhui District Liuhe Biotechnology Co.,
Established by investment Losses of 199,191.31 Yuan
Ltd
Wushan New Hope Boar Breeding Technology Co.,
Established by investment No effects
Ltd
Heishan New Hope Feed Co., Ltd Established by investment Losses of 510.2 Yuan
Guangzhou Xinhe Biological Feed Co., Ltd Established by investment Profits of 527.71 Yuan
Fenxi New Hope Liuhe Food Co., Ltd Established by investment Losses of 9,683,649.81 Yuan
Guangxi Xinwang Supply Chain Management Co.,
Established by investment No effects
Ltd
Hainan New Hope Liuhe Supply Chain Technology
Established by investment No effects
Co., Ltd
Shandong Xiangan Livestock & Poultry Breeding
Established by investment Losses of 445.37 Yuan
Co., Ltd
Ziyang New Hope Feed Co., Ltd Established by investment No effects
Shibing New Hope Agricultural Technology Co.,
Established by investment No effects
Ltd
Ya’an New Hope Feed Co., Ltd Established by investment No effects
New Hope Davao Agriculture Inc. Established by investment No effects
Qingdao New Hope Herun Biotechnology Co., Ltd Established by investment Losses of 1,240 Yuan
Zouping Xinmu Meat Duck Breeding Co., Ltd Established by investment No effects
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
Lvliang New Hope Liuhe Farming Co., Ltd Established by investment No effects
Shandong New Hope Liuhe Farming Technology
Established by investment Profits of 661.83 Yuan
Co., Ltd
Zhecheng Liuhe Xingnong Feed Co., Ltd Deregistered Losses of 123.73 Yuan
Weiyuan Xinliu Farming Technology Co., Ltd Deregistered No effects
Fei County Liuhe Feed Co., Ltd Deregistered Losses of 5,460 Yuan
Kaili Xinyue Farming Technology Co., Ltd Deregistered No effects
MSFX Food Technology (Beijing) Co., Ltd Deregistered Losses of 41.99 Yuan
Julu Xinhao Farming Co., Ltd Deregistered No effects
Beichuan Xinchangle Farming Co., Ltd Deregistered Profits of 202.89 Yuan
Hainan Danzhou Xinliu Farming Technology Co.,
Deregistered No effects
Ltd
Sishui Dasheng Breeding Co., Ltd Deregistered No effects
Haiyang Xinhao Livestock Co., Ltd Deregistered No effects
Linqing Xinliu Farming Technology Co., Ltd Deregistered No effects
Remarks on major majority-owned and minority-owned companies
IX. Structured entities controlled by the company
□ applicable √ not applicable
X. Risks facing the company and countermeasures
I. Epidemic and natural disaster risks
The animal epidemic disease is the main risk faced in the development of livestock industry. There are three kinds of risks
arising out of the occurrence of epidemic disease. First, the occurrence of epidemic disease is likely to result in death of livestock,
and leads directly to the reduction in yield and drop in prices. Second, the occurrence and prevalence of epidemic disease on a large
scale easily influence the consumer psychology, lead to shrinking market demand, and also affect the feed production and operation.
Third, after the outbreak of some infectious epidemic diseases endangering the public health and safety, the government will take
lockdown and other measures to contain the spread of epidemic disease. These epidemic containment measures will seriously hinder
the transportation of feed, animal healthcare products and live livestock, and the workers returning to work, and have a great impact
on the production and operation of breeding industry. In addition, the outbreak of infectious epidemic diseases will force most
catering enterprises to stop doing business, some agricultural product markets to shut down, and consumers to reduce shopping
activities outdoors, resulting in reduced meat demand and consumption. For example, the African Swine Fever (ASF) with an
enormous impact on the entire industry broke out in 2018. As the ASF is characterized by long latency and high mortality after onset
of the disease, and the effective and reliable vaccine has not yet been developed successfully, coupled with the fact that it was also
the concentrated outbreak on a large scale in China for the first time, both the large-scale breeding enterprises and small farmers
lacked effective containment measures at the onset of epidemic, thereby suffering losses to varying degrees. From the late 20 20 to the
first quarter of 2021, attenuated ASF bounced back once again, especially hitting Hebei, Shandong and Henan and once again
causing prevalent effects to farming companies and farming households in these areas.
The COVID-19 outbreak at the beginning of 2020 also posed daunting challenges to the livestock and poultry breeding industry
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
in Chhina. The anti-epidemic measures such as lockdown, delay in return to work, suspension of live poultry trading, and shutdown
of slaughter houses led to unavailability of feed to farms and livestock farmers, newborn livestock nowhere to sell, inability to
slaughter livestock and poultry, and difficulties to conduct breeding production activities normally. After entry into 2021, despite the
stable epidemic containment situation at home overall, scattered episodes of the epidemic across the country and regional lockdown
policies would also cause hindrances to movement of personnel and materials related to business operations..
In terms of the natural disaster risk, the feed and slaughter are closely related to plant ing and livestock breeding industry, so the
natural disasters such as temperature anomalies, drought, flood, earthquake, hail, and snow disaster will all adversely affec t the
industry operation and development. The natural disasters occurring on the production bases of the company and surrounding areas
may cause substantial damages to production facilities or equipment, and the natural disasters and extreme climate may also drive the
prices of some feed ingredients and meats up. For example, serious flood disasters broke out in many places of South China in
summer of 2016, adversely affecting the planting, breeding, farm produce logistics, project implementation and meat prices along the
industry chain to varying degrees; in terms of planting, continuous catastrophic floods hitting some areas will result in decreased
output of feed ingredients, thus impacting the feed ingredients prices, while at the same time decreasing the quality of raw materials;
in terms of breeding, flood might cause pathogenic microorganisms buried in the land surrounding breeding farms to be exposed in
air and drinking water, and will result in spread of pathogenic microorganisms and trigger epidemic diseases. In addition, se veral
provinces hardest hit by the floods are major aquatic breeding areas in China, where the impact of floods not only would destroy
fishery production equipment but also is highly likely to wash off fish-barring facilities and bring away fish fries and adult fishes,
causing losses to economic income of farmers and thus affecting feed ingredients sales of the company; in terms of logistics, roads
are flooded and roadbeds and road surfaces destroyed wherever flood sweeps, forcing the freight costs of raw materials, feed,
finished products and breeding pigs to rise and the transport capacity down, causing pressures on the supply chain of the company; in
terms of project implementation, continuous rainstorms will also cause part of capital investment construction projects of the
company to suffer temporary shutdown, affecting the construction schedule; in terms of meat prices, flood would also impact the
meat supply and directly contributed to the rising prices of pigs, while the gap in meat prices between affected areas and unaffected
areas was growing, thus leading to increased allocation and transport of hogs, and resulting in spread of the pandemic to a certain
extent.
Risk countermeasures: In the face of animal epidemics, the livestock farms planned and constructed by the company’s breeding
base are normalized and standardized farms staffed with professional breeding technologists and equipped with strict anti-epidemic
measures to effectively prevent and control the occurrence of epidemic diseases. The company has also summarized some experie nce
and measures responding to major epidemic diseases through years of exploration and accumulation, which allow the company to
eliminates the impact of various epidemics by adjusting the product mix when appropriate, improving the product quality, cond ucting
deep market development actively and reducing the costs. Since 2014, the company has been guiding technicians to better serve
farmers by establishing animal healthcare laboratories in various areas, creating the cloud-based animal healthcare system and
conducting the monitoring and warning of epidemics and diseases in real time. In particular, in view of ASF outbreak in 2018, the
company formulated all-round and system-wide prevention and control measures, covering existing self-run pig farms, fattening
farms in cooperation with farmer households, new pig farms of the company, swine feed production units and internal animal
healthcare laboratories, with a view to ensuring proper prevention and control at the source of animal nutrition. Meanwhile, actively
participating in industry exchanges and exploring more effective containment methods with peers allowed the company’s bio-safety
epidemic prevention system, pig survival rate and marketing rate to achieve industry-leading levels. From the end of the previous
year to the first quarter of this year, a new round of attenuated ASF outbreak in many northern provinces is characterized by
extensive outside contamination, numerous channels of spread, long latency periods and a long phase of effect, thus posing ne w
challenges to the containment measures formed by the industry based on the past two years of ASF containment at the initial stage of
the outbreak. However, the company continued summing up its experiences and upgrading containment and decontamination
methods in the containment process, including whole-population serum double-antibody and double-screening, application of
thermal imagers and static attenuation and disinfection of materials; and first added up its containment processes before subtracting
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
in a way that avoids slackness resulting from prolonged and excessively trivial containment processes, which helped restore normal
production faster while ensuring containment, as well as reduce bio-safety containment costs at the same time. With the aforesaid
measures, the number of ASF-affected farms at the end of the first half of the year has been kept below 1%.
In response to the COVID-19, the company lost no time to react, formulated and carried out various containment policies and
conducted emergency disposition in a coordinated manner. Secondly, the company actively communicates with the government at all
levels, coordinates the transportation of goods such as livestock products, and raw and auxiliary materials of feed and products,
secures vehicle passes, and implements the green channel policy enacted by the government at all levels. Thirdly, the company
ensures sufficient procurement from feed plants and production supply through region-wide coordination, strengthens internal
support for poultry industry integration, arranges its employees to return to work rapidly and orderly, contributes to the adequate
supply of daily necessities across the country, adjusts its food industry strategy in real time and expands sales through supermarket
channel and online channel. Fourthly, in light of its business practices, the company compiled the epidemic containment manual,
published documents such as technical guidance on employee prevention and control and quarantine and guidance on engineering
control amid epidemics, makes the epidemic prevention arrangements in a targeted manner and strengthens employee safety
protection.
In response to natural disasters, although unable to rule out the possibility that serious natural disasters will occur in areas where
its subsidiaries operate, the company’s extensive business portfolio and presense both at home and abroad help ensure that the
company’s business as a whole will not be materially affected when natural disasters occur in particular regions. Especially for the
rainstorms and floods in south China, which have occurred frequently in these years, the company has accumulated a large wealth of
experience, established proven contingency plans and maintains sufficient flood prevention supplies in stock at all times, wh ich allow
the company to flexibly guide farmers through production plan adjustments when the flood season begins in preparation for disaster
relief together. At the same time, the company can also take the advantage of its nationwide presence to allocate funds, raw materials,
equipment, and staff timely and effectively to resume production as soon as possible and reduce the losses caused by natural
disasters.
II. Risk of feed ingredient price fluctuations
The cost of main feed ingredients for feed production accounts for more than 90% of total cost of feed production. In the past,
the proportion of feed business in the company’s revenue was large, but as the feed industry generally adopts the cost-plus pricing
method, the fluctuations in prices of feed ingredients can be partly transmitted to the downstream breeding operations, so as to relieve
the pressure from the rising prices of feed ingredients. However, with a growing percentage of livestock breeding business in the
company’s revenue, the rising prices of feed ingredients will have a growing impact on the company as a whole.
Since 2020, due to many influencing factors such as the COVID-19, changed purchase and storage policies and crop yield in
main grain-producing areas of various countries, the prices of main feed ingredients such as corn and soybean meal continuously rose,
with the average market prices of corn even approaching 3,000 Yuan/t in early 2021. Coupled with the continuous tension betwe en
China and the US, which brings great uncertainties to the bulk produce trade between the two countries and international trade of
feed ingredients in the future, the risk of price fluctuations will exist in the long term. Moreover, against the background of longtime
existence of ASF in China, the feed enterprises will reduce some high-risk feed ingredients for the safety of animal nutrition, such as
usage of corn, pig blood, and pig bone meal, so as to make the demand for raw materials concentrate on other types of raw materials,
which will also lead to rise in prices of such alternative raw materials.
Risk countermeasures: The company is the largest domestic feed enterprise with the scale advantages and a considerable say in
the raw material purchasing. The company started reorganizing and optimizing its raw material procurement syste m in 2017, combed
through its supplier system actively, established strategic partnerships with many domestic and overseas best-run raw material
suppliers, conducted the supply chain financing of various forms actively, and optimized its purchasing cost and related financial
expenses. In 2019, the company continued to drive transformations in terms of central purchasing of raw materials, strategic
purchasing channel optimization of partners, acquisition of corn produced in northeast and purchasing model upgrading, realizing a
greater purchasing value despite the challenges. The COVID-19 crisis in 2020 has caused phase-wise impact on the prices of feed
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
ingredients and feed additives, but the company intensified application of hedging tools to control the raw material price fluctuation
risk, while the company’s technology, purchasing, production and marketing departments worked closely with each other during the
response to the pandemic, with these experiences already summarized and applied into the daily opera tion management of the feed
business. In the first half of 2021, when prices of main feed ingredients such as corn and soybean meal continuously fluctuated at
high levels, the company actively purchased imported low-price ingredients and alternative ingredients such as wheat, sorghum and
brown rice while properly anticipating the market condition, in an effort to continually optimize ingredient costs.
III. Risk of price fluctuations of livestock and poultry
The finished products of livestock and poultry breeding business of the company mainly include baby chick, baby duck,
white-feathered chicken, white-feathered duck, breeding pig, piglet, and hog. Especially since 2016, the pig farming business of the
company has been growing rapidly, with 8.29 million hogs sold in 2020 and more than 500 million self-raised and outsourced
commercial generation chicken and ducks sold, which allowed the livestock and poultry breeding to contribute greater to the e ntire
revenue and profits of the company. Along with the further growth of breeding volume of the company in the future, the prices of
livestock and poultry will affect the levels of revenue and profits of the company even more remarkably.
In the first half of 2021, the domestic livestock and poultry markets saw remarkably delinking pork prices and low-level
fluctuations of poultry prices as a whole. in the first half of 2021, the marketing rate of hogs rose 34% year-on-year, and fixed-point
monitoring results at the end of the first half of the year showed that the fertile sows on hand grew 30% year-on-year, hogs on hand
grew 29% year-on-year and the prices of hogs fell all the way from 36 Yuan/kg in early 2021 to the lowest point of 12 Yuan/kg in
June, a decrease of over 60%, even falling back to the low levels before this pork price cycle began ascending in March 2019 for a
time. In terms of the poultry business, the rising market condition in 2018 and 2019 resulted in industry overcapacity, as the
grandparental breeding hens on hand, parental breeding hens on hand and sales volume of commercial-generation baby chicken
across the country in the first half of 2021 were all sustained at the highest levels in the past six years. On the side of c onsumption,
the rapidly declining pork prices coupled with weakened consumption demand caused by the COVID-19 allowed poultry meat prices
to remain low for a long period of time, making it more difficult for the poultry business to make profits.
Risk countermeasures: apart from the impact of sporadic epidemics, the fluctuations in prices of livestock and poultry mainly
depend on the periodic increase and decrease in breeding and supply quantities. As a result, the process of livestock and pou ltry
prices going down itself is a process of the survival of the fittest in the industry. Against this backdrop, the company still can generate
more revenue or suffer fewer losses than its rivals in the process of price decline as long as it increases its breeding efficiency and
makes its breeding costs lower than its rivals. When some partic ipants exit, the total supply declines and the prices rise again, the
company might gain a greater market share and a higher return on investment than before. In recent years, the company has bee n
committed to continuously increasing its breeding efficiency, and enjoying industry leadership in terms of production of healthy
young breeding poultry and PSY and full cost of pig breeding, which will ensure that the company will remain competitive during
the price fall of livestock and poultry. Although the company’s rapid scale expansion on its pig business in the past year caused some
of its competitiveness to be diluted phase by phase, and some best practices formed failed to be replicated in time at newly
commissioned pig farms, along with the company’s full transition to a stage of robust operation, the company is gradually improving
its business operation efficiency, reducing farming costs and restoring its original competitiveness by enhancing its interna l
management capabilities through many measures. On the other hand, unlike most of agricultural and livestock companies, the
company has slaughtering and processing business at the downstream part of farming and feed business at the upstream part of
farming, which happens to hedge against the farming process. The price decline of livestock and poultry means that the cost of raw
meat in the slaughtering and processing businesses falls too and its profit margin will be increased; the declining prices of livestock
and poultry also mean the farming volume of livestock and poultry is at high levels, which also helps increase the profitability of feed
business. Such an industry chain presence can moderately mitigate the effects of declining prices of livestock and poultry on the
company as a whole.
IV. Impact of environmental protection policies
In 2014, China started implementing the Regulations on Pollution Prevention for Large-scale Breeding of Livestock and Poultry,
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
as the government was strongly determined to keep livestock farms in line and new regulations we re enacted across the country to
demolish livestock farms, ban or restrict livestock farming activities. At the level of central government, the new “Environmental
Protection Law” was enacted in 2015; in 2016, the State Council issued the “13th Five-Year” Ecological Environment Protection
Program”, even more specifically requiring “local governments to close or relocate livestock farms (communities) and breeding
households within the banned areas according to law by the end of 2017”. In 2018, the first grou p of central environmental protection
inspectors conducted the “follow-up reexaminations”, as the efforts to investigate pollution caused by livestock farms were
intensified across the country, ordering some breeding households to shut down for environmental remediation or close once for all
due to their livestock farming facilities failing to meet the environmental standards or discharging wastewater beyond the se t
standards. These pressures from the environmental protection policies will force some livestock and poultry farms failing to meet the
environmental standards to exit the market, and lead to reduced breeding quantities, which will produce a certain impact on the
growth of feed business of the company and its acquisition of hogs and poultry for slaughtering business. Some branches and
subsidiaries of the company fail to meet the environmental protection requirements economically through hardware transformation,
or no longer have the market basis due to being located in the banned areas, which will lead to their shutdown. In the long run,
however, the exit of these outdated capacities for incompliance with environmental standards will allow the best-run producers that
remain in the industry to acquire higher profitability, which is still of a positive significance to the entire industry.
Risk countermeasures: in light of the changes of the breeding market, the company makes every effort to keep its stock under
control, makes full use of its industrialized supporting and integrated services by changing its feed marketing model, and strengthens
its cooperation with medium and large-sized farms and farmers that meet the environmental standards. While exploring a new way of
breeding, the company regards ecology, environmental protection, efficiency and safety as primary considerations in its project
design, helps farmers remodel and build sheds and stalls that meet the higher environmental standards, increase the profitability of
breeding business and actively drive the domestic livestock and poultry farming industry to grow healthily. On the other hand, the
company actively grows its inventories by cultivating new livestock and poultry farming bases in environmentally suitable are as
through construction, acquisition, joint venture and cooperation using its existing business portfolio across the country, thus ensuring
the stability of its breeding resources.
V. Risk of food safety
Food safety concerns the physical health and life safety of the general public, and is even a matter of life and death for food
companies. Occurrence of food safety problems or accidents would cause food companies to face claims, actions or related penalties
in a way that even affects their brands and reputations, thereby materially adversely affecting their business, financial con dition,
stock prices or business performance. The implementation of the revised “Food Safety Law” in of 2015 also means China has
brought its focus on food safety to an unprecedented level. The outbreak of ASF in 2018 raised even more demanding requirements
for food safety control. Although the ASF itself is not a zoonotic disease and the pork with ASF virus is not harmful at all to humans
after conventional heating and cooking, as there is not yet fully effective containment measure against ASF at present, and the pork
and its products are one of the main vectors of the virus, more costs are required to prevent and control ASF during the proc ess of
hog recovery and slaughter, pork transportation and vending. In 2019, the State Council issued the “Opinions on D eepening Reforms
and Strengthening Food Safety Efforts”, making clear the need to further beef up food safety efforts and ensure the “safety o n the
dining table” of the general public with ht most rigorous standards, the most stringent oversight, the most severe penalties and the
most serious accountability.
Risk countermeasures: the company has always been highly concerned about food safety by seriously ensuring food safety in
everything it does. In 2015, the company established its safety and environmenta l protection department to ensure safety, health and
environmental protection of its products, and upgraded the equipment in its “three-level” testing system, expanded the laboratories of
its branches and subsidiaries in terms of human and material resources, guaranteed the allocation and input of funds, resources and
personnel across the food industry chain, which upgraded the food safety organization management, equipment and facilities, process
management and key process control., So far, the company has created a food safety control chain from feed, livestock and poultry
breeding all the way to dining table. In 2014, the “Beiyouzi” branded duck meat produced by the company was the first in China to
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
achieve end-to-end traceability; in 2015, Chengdu Xiwang Food Co., Ltd, a subsidiary of the company, became one of the second
group of pilot companies for implementation of the national standard “food cold chain logistics traceability management
requirements”. In 2016, the company passed the food technical standard certification by the British Retail Council (BRC), and was
elected the Vice President of the China Council at the first plenary session of the Global Food Safety Initiative (GFSI) in , becoming
the first Chinese private enterprise to be selected as a member of the global board of directors of GFSI. In 2019, the 8th GFSI Focus
Day China organized by the company was held, marking the first time a private enterprise organized this event since GFSI bega n
holding the Focus Day China in 2012. At present, all food enterprises under the flag of the company have passed China-HACCP
certification, and more than 60 food companies are finishing the BRC and Global-GAP certifications in succession. In addition, the
company systematically explores the antibiotic-reducing and antibiotic-free possibilities in cooperation with multiple parties using
the GFSI platform resources, and actively drives the popularization of antibiotic-reducing and antibiotic-free successful cases.
VI. Risk of exchange rate fluctuations
Currently, the global purchasing of raw materials for feed production is going deeper, and the feed enterprises have been
increasingly affected by the exchange rate in terms of feed ingredients purchasing centered on foreign supply such as corn, soybean,
whey powder, fish meal and DDGS. At the same time, the company has larger foreign operations than its Chinese peers, and in the
foreign investment and overseas operations, the cross-border capital transaction and settlement amounts involved are growing, thus
making the company more vulnerable to exchange rate fluctuations. Since 2019, the bumpy China -US relations caused the
RMB/USD exchange rate to fluctuate frequently. Throughout 2020, the RMB exchange rate showed a trend of fall before rise as a
whole and went down in a zigzag manner due to the impact of the COVID-19 in the first half of the year, but a new round of rapid
appreciation started as China was the first to contain the pandemic and resumed work and business operations at a quickened pace in
the second half of the year. Such violent turbulences produced impacts on the foreign exchange management of the company. Besides,
in certain overseas countries where the company operates, the exchange rate of local currencies against USD depreciated remar kably
due to the COVID-19, political turbulence and foreign exchange policy adjustments, which also produced an adverse impact on the
company.
Risk countermeasures: In response to the growing needs for overseas raw material purchasing and investment and operation, the
company started building its Singaporean branch into an overseas commercial and trading center and investment and financing c enter
in 2016, actively conducted international centralized purchasing of raw materials, foreign direct financing, supply chain finance,
foreign exchange risk management and raw materials purchasing risk management on its Singaporean platform, in order to reduce
the impact of exchange rate fluctuations on its cash flow in overseas operations. Meanwhile, the company further strengthene d its
close connection and communication with overseas financial institutions, overseas agencies of the Chinese government and host
governments to analyze the trends of local currencies’ exchange rates in host countries in time and ease the adverse impact of
exchange rate fluctuations by means of direct investment in local currencies abroad, etc.
VII. Risk of human resources
The risk of human resources to the company is mainly manifested in the following four aspects. First, the pig farming scale of
the company is now at a phase of leapfrog development. As at the end of the first half of 2021, the company’s pig farming team
totaled 46,000 persons, and management radius of the company also increased as a result, therefore, there are tremendous pres sures
and challenges in terms of rapidly training and retaining a large number of pig raisers. If the personnel recruitment, training and
retention proves inadequate, potential risks will arise for the subsequent pig farm management and operation; second, as the company
transforms from a traditional agricultural and animal husbandry enterprise to a agricultural, animal husbandry and food integrated
enterprise, the company will face the risk of insufficient reserve of high-caliber operation and management personnel in new business
domains and of personnel in food retail, engineering technology, IT and other emerging fields; third, along with the rising human cost,
employee compensation has become an important factor in cost increase of the company; fourth, as a leading enterprise in China’s
agricultural and animal husbandry industry, the company has cultivated a large number of outstanding employees in its multiye ar
history, but the competition for human resources is intensifying due to the increasing competition in the industry and entry of new
players of different backgrounds into the industry over the past years, meaning the brain drain will cause losses to the company and
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
subsequently affect the sustainable development of the company.
Risk countermeasures: the company has looked at talent cultivation and organizational activation as a long-term strategic task of
the company. In terms of recruiting talented pig farmers, the company expanded its recruitment channel beyond college graduates
majored in agriculture and animal husbandry to recruit non-specialized college graduates and veterans. In terms of pig farmer
training, the company broke down its daily production processes according to standards and internalized them using IT means. It
offers specialized courses of different levels for general manager, farm managers all the way down to the newly recruited frontline
workers through in-house pig farming universities and pig industry research institutes that offer high-frequency learning, training and
teaching possibilities. Moreover, through the modern mentoring system inside pig farms and one-to-one mentoring and
intensification by sophisticated employees, the time to cultivate new employees has been greatly shortened. The company further
perfected its pig industry talent motivation system, whereby personnel at all levels in pig industry will receive industry-leading
economic return based on their value output. In addition, in order to reduce the pressure on human cost, the company intensif ied its
efforts to carry out projects such as pig farming in multistory buildings, intelligent pig farms and things of internet, which will
significantly increase its efficiency of personnel utilization.
The company also intensified its efforts to recruit talented people in strategic, new businesses, while actively conducting
cross-industry training and learning to enrich the knowledge structure and capability structure of its existing personnel. The company
realized a continuous increase in per capita efficiency by efficiency improvement, lean management, optimization of industry chain
design and organization flattening; created the professional manager development channel with survival of the fittest by cons tructing
the competition, selection and elimination mechanisms; and creates the growth community of employees and the company by
constructing reasonable evaluation and incentive mechanisms and value sharing mechanisms. In 2019, the company implemented its
restricted stock and stock option incentive plan for the first time to motivate its key technologists and key members of pig farming
teams more for increased cohesion and corporate competiveness and to fully motivate senior management personnel an part of ke y
employees of the company at work.
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
Section 4 Corporate Governance
I. Details of annual general meeting of shareholders and interim general meeting of
shareholders held within the reporting period
1. General meetings of shareholders during this reporting period
Ratio of
Session Meeting type participating Date held Date disclosed Meeting resolutions
investors
As detailed in the
“Announcement of the 2021 First
Interim General Meeting
Resolutions” (announcement No:
The 1st interim
Interim general 2021-22) published by the
general meeting 56.51% January 29, 2021 January 30, 2021
meeting company on China Securities
of 2021
Journal, Securities Times,
Shanghai Securities News,
Securities Daily on January 30,
2021.
As detailed in the
“Announcement of the 2020
Annual General Meeting
Resolutions” (announcement No:
2020 annual Annual general 2021-79) published by the
56.36% May 28, 2021 May 29, 2021
general meeting meeting company on China Securities
Journal, Securities Times,
Shanghai Securities News,
Securities Daily on May 29,
2021.
2. Interim general meetings of shareholders requested by preferred shareholders with voting rights
restored
□ applicable √ not applicable
II. Changes in directors, supervisors, and senior manage ment
√ applicable □ not applicable
Name Position held Type Date Reason
Chen Xingyao Vice president, CFO Appointed January 10, 2021 Appointed by board of
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
directors
Board secretary, chief strategic Appointed by board of
Lan Jia Appointed January 25, 2021
investment officer directors
Director of human resources Appointed by board of
Gao Li Appointed February 9, 2021
(chief HR officer) directors
Wang Shuhua Vice president, CFO Dismissed January 8, 2021 Personal reasons
Hu Ji Board secretary Dismissed January 8, 2021 Personal reasons
III. Profit distribution and converting capital reserves into share capital for the reporting
period
□ applicable √ not applicable
The company plans not to distribute cash dividends or allot bonus shares or transfer its capital reserve to share capital in the first half
of the year.
IV. Imple mentation of equity incentive plans, employee stock ownership plans or other
employee incentives
√ applicable □ not applicable
1. The 19th meeting of the 8th board of directors of the company, the 10th meeting of the 8th board of supervisors and the 1st
interim general meeting of shareholders of 2020 deliberated and approved the “Proposal regarding Cancellation of Part of Stock
Options and Repurchase and Cancellation of Part of Restricted Stocks”, agreeing to cancel a total of 105,000 stock options currently
granted to but not yet approved to be exercised by 2 incentive recipients who failed to meet the appraisal standards, with the currently
granted restricted stocks totaling 22,500 shares.
The 28th meeting of the 8th board of directors of the company, the 15th meeting of the 8th board of supervisors and the 1st
interim general meeting of 2021 deliberated and approved the “Proposal regarding Cancellation of Part of Stock Options and
Repurchase and Cancellation of Part of Restricted Stocks”, agreeing to cancel a total of 2,835,000 stock options granted to but not yet
exercised by 7 incentive recipients who separated from the company, repurchasing and cancelling a total of 1,215,000 shares of
restricted stocks already granted but not yet unlocked.
The company completed the repurchase and cancellation formalities for stock options and restricted stocks with CSDC
Shenzhen Branch on May 18, 2021, of which cancelled stock options totaled 2,940,000 and repurchased and cancelled restricted
stocks totaled 1,237,500 shares.
2. The 28th meeting of the 8th board of directors of the company, the 15th meeting of the 8th board of supervisors and the 1st
interim general meeting of 2021 deliberated and approved the “Proposal regarding the 2021 Restricted Stock Incentive Plan (Draft)
and its Summary” respectively, and the company publicized the list of incentive recipients under the 2021 stock incentive plan inside
the company, which was verified by the board of supervisors who made remarks on the publication of the list. The company’s
independent directors expressed related independent opinions, and legal firm and other intermediaries also issued reports.
The 34th meeting of the 8th board of directors and the 17th meeting of the 8th board of supervisors of the company deliberate d
and passed the “Proposa l regarding Adjustments to the List of Incentive Recipients and Quantities Granted under the 2021 Restricted
Stock Incentive Plan” and the “Proposal regarding First Grant of Restricted Stocks to Incentive Recipients” respectively, whe reby
given that 5 incentive recipients in the company’s 2021 restricted stock incentive plan voluntarily waived subscription for all
restricted stocks to be granted for personal reasons, the number of the first group of grantees under this incentive plan was adjusted
from 161 to 156, the quantity of restricted stocks for the first grant was adjusted from 29.63 million shares to 29.34 million shares,
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
and the quantity of reserved restricted stocks was adjusted from 1.724366 million shares to 2.014366 million shares. The firs t grant
date under this incentive plan is March 30, 2021 and 29.34 million shares of restricted stocks were granted to 156 incentive recipients
for the first time.
The 38th meeting of the 8th board of directors of the company and the 20th meeting of the 8th board of supervisors deliberated
and approved the “Proposal regarding Termination of <2021 Restricted Stock Incentive Plan (Draft)> and Related Proposals”,
whereby the company’s medium and long-term strategic objectives of growing and strengthening its pig farming business remain
unchanged, but along with the changed external environments this year, the company decided to terminate the implementation of its
2021 incentive plan and continue using repurchased shares for stock incentive of its core team in the future.
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
Section 5 Environmental and Social Responsibilities
I. Major environmental issues
Whether the listed company and its subsidiaries are key emitters announced by the environmental protection department
√ Yes □ No
Name Name of key Way Numb Distri Emission Pollutant emission Total Appro Exces
of pollutant and of er of bution concentration standards emissi ved sive
comp characteristic discha discha of implemented ons total disch
any or pollutant rge rge discha emissi arge
subsi outlets rge ons
diary outlets
Linyi Waste gases: Waste 6 (5 Waste COD:450mg/L Meat Processing COD: COD: None
Liuhe nitrogen oxides, gas: for gases: Total nitrogen: Industry Water 486t/a 486t/a
Food particulates, sulfur directl waste east 50mg/L Pollutant Discharge ; ;
Co., dioxide, hydrogen y gases, side of Ammonia Standard GB ammo ammo
Ltd sulfide, ammonia, discha 1 for the nitrogen:35mg/L 13457-92 nia nia
odor concentration rge waste factor Total phosphorus: Agreements with nitrog nitrog
after water) y 6mg/L sewage treatment en: en:
wastewater: treatm premis pH:6-8.5 plants 37.82t 37.82t
chemical oxygen ent es Suspended solids: Malodorous /a /a
demand, ammonia waste waste 200mg/L Pollutant Discharge
nitrogen, total water: water: BOD5:120mg/L Standard GB
nitrogen, total indire south Animal and 14554-93,
phosphorus, pH ct side of vegetable oils: Boiler Air Pollutant
value, five-day discha the 50mg/L Discharge Standard
biochemical oxygen rge west Nitrogen oxides : GB 13271-2014,
demand, animal and gate 150mg/Nm3 Emission Standard
vegetable oils, Sulfur dioxide: for Boiler Air
suspended solids, 50mg/Nm3 Pollutants DB37
coliform bacteria. Fumes: 2374-2018
10mg/Nm3
Qiuxi Waste gases (sulfur Waste 7 Waste 100 mg/m3 of "Boiler Air COD COD1 None
an dioxide, nitrogen gas: (disch gases: sulfur dioxide, Pollutant Standard” 11.18t 1.18t/
Liuhe oxides) directl arge east 400 mg/m3 of (GB13271-2001) /a, a,
Kang wastewater (COD, y outlets side of nitrogen oxides, Class II Time ammo ammo
yuan ammonia nitrogen, discha of the PH6-9, Period nia nia
Food five-day rge origin factor SS70mg/L, third level standard nitrog nitrog
Co., biochemical oxygen after al 3t/d y COD300mg/L, in Table 3 of the en en
Ltd demand, treatm boiler, premis animal and “Meat Processing 0.5t/a 0.5/a,
particulates, animal ent discha es vegetable oils Industry Water , sulfur
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
and vegetable oils, waste rge waste 100mg/L, Pollutant Discharge sulfur dioxid
SS, pH value) water: outlets water: ammonia nitrogen Standard” dioxid e
indire of 3 south 25mg/L, BOD5 (GB13457-92), e 0.222
ct photo side of 100mg/L while meeting the 0.222t 2t/a,
discha oxidat the incoming water /a, nitrog
rge ion factor quality requirements nitrog en
machi y of Qiu County en oxides
nes, premis Sewage Treatment oxides 1.207t
additi es Plant 1.207 /a
onal t/a
discha
rge
outlets
of 6t/d
boiler
and 1
discha
rge
outlet
for
duck
feathe
r
drying
)
Lanli Waste gas: Waste 4 (3 East Ammonia Boiler Air Pollutant COD COD None
ng ammonia (ammonia gas: for side of nitrogen <5mg/L, Emission Standard 13.1t/ 13.1t/
New gas), hydrogen directl waste the COD<50mg/L; DB37 2374-2018, a, a,
Hope sulfide, odor y gases, factor Malodorous ammo ammo
Liuhe concentration, discha 1 for y Boiler<50mg/Nm Pollutant Emission nia nia
Hongj sulfur dioxide, rge waste premis 3, odor Standard GB nitrog nitrog
un nitrogen oxides, after water) es concentration 14554-93 en en
Food particulates, treatm 2000mg/Nm3, Notice on Approval 1.3t/a 1.3t/a
Co., Ringelmann ent and Publication of
Ltd blackness waste the Modification
Wastewater: COD, water: Forms for four
pH value, dissolved indire standards including
total solids, ct the Comprehensive
ammonia nitrogen discha Emission Standard
(NH3-N), total rge of Water Pollutants
nitrogen (N), total Along the
phosphorus (P), South-to-North
suspended solids, Water Transfer
BOD5, flow rate, Project of Shandong
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
animal and Province
vegetable oil, total (Luzhijianbiaofa
coliform groups. [2011] 35),
Meat Processing
Industry Water
Pollutant Emission
Standard GB
13457-92
Pingy Waste gas: Waste 3 (2 Waste Ammonia Boiler Air Pollutant CODc CODc None
i ammonia (ammonia gas: for gas: nitrogen 45mg/l Emission Standard r r
Refri gas), hydrogen directl waste north COD 500mg/l DB372374 -2018, 11.8t/a 11.8t/a
gerati sulfide, odor y gases, west Total phosphorus Malodorous Amm Amm
on concentration, discha 1 for side of 8mg/l Pollutant Emission onia onia
Plant sulfur dioxide, rge waste the Total nitrogen Standard GB nitrog nitrog
of nitrogen oxides, after water) factor 70mg/l 14554-93 en en
Shand particulates, treatm y Water Quality 0.23t/ 0.23t/
ong Ringelmann ent premis Standard for a a
New blackness waste es and Sewage Discharged Total Total
Hope Wastewater: COD, water: within into Urban Sewers phosp phosp
Liuhe pH value, dissolved indire the GB/T 31962-2015, horus horus
Grou total solids, ct factor Meat Processing 5.29t/ 5.29t/
p Co., ammonia nitrogen discha y Industry Water a a
Ltd (NH3-N), total rge premis Pollutant Emission Total Total
nitrogen (N), total es of Standard GB nitrog nitrog
phosphorus (P), the 13457-92 en en
suspended solids, compa 46.3t/ 46.3t/
BOD5, flow rate, ny a a
animal and waste
vegetable oil, total water:
coliform groups. northe
ast
side of
the
compa
ny
Qingd Waste gas: Waste 3 (2 Waste COD 50mg/l, Catering Industry CODc CODc None
ao ammonia (ammonia gas: for gas: ammonia nitrogen Oil Fume Emission r r
Tianr gas), hydrogen directl waste northe 5mg/l, total Standard 112.75 112.75
un sulfide, odor y gases, ast phosphorus 1mg/l, GB18483-2001, t/a t/a
Food concentration, discha 1 for side of total nitrogen Shandong Amm Amm
Co., sulfur dioxide, rge waste the 20mg/l, pH6-9 Provincial Boiler onia onia
Ltd nitrogen oxides, after water) factor Air Pollutant nitrog nitrog
particulates, dyeing treatm y Emission Standard en en
and finishing fumes ent premis No. 2 Modification 18.79 18.79
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
Wastewater: COD, waste es and Form for Ultralow 2t/a 2t/a
pH value, dissolved water: within Emission Total Total
total solids, indire the Luzhijianbiaofa nitrog nitrog
ammonia nitrogen ct factor [2016] No. 46, en en
(NH3-N), total discha y Malodorous 46.98t 46.98t
nitrogen (in N), rge premis Pollutant Emission /a /a
total phosphorus (in es of Standard GB
P), suspended the 14554-93
solids, BOD5, flow compa Comprehensive
rate, animal and ny Emission Standard
vegetable oil, waste of Water Pollutants
coliform groups water: in the Peninsula
north Basin of Shandong
west Province
side of DB37/676-2007,
the Water Pollutant
factor Emission Standard
y for Meat Processing
premis Industry GB
es 13457-92
Xiaoy Waste gas: Direct 4 (3 Waste Ammonia Boiler Air Pollutant CODc CODc None
i New ammonia (ammonia discha for gas: nitrogen:5 Emission Standard r r
Hope gas), hydrogen rge waste northe COD:50 GB 13271-2014, 9.358t 9.358t
Liuhe sulfide, odor after gases, ast Malodorous /a /a
Food concentration, treatm 1 for side Pollutant Emission Amm Amm
Co., sulfur dioxide, ent waste and Standard GB onia onia
Ltd nitrogen oxides, water) south 14554-93, nitrog nitrog
particulates, dyeing west Comprehensive Air en en
and finishing fumes side of Pollutant Emission 0.936t 0.936t
Wastewater: COD, the Standard /a /a
pH value, dissolved factor GB16297-1996,
total solids, y Surface Water NOx NOx
ammonia nitrogen premis Environmental 0.37t/ 0.37t/
(NH3-N), total es of Quality Standard a a
nitrogen (in N), the GB3838-2002,
total phosphorus (in compa Pollutant Emission
P), suspended ny Standard for Urban
solids, BOD5, flow waste Sewage Treatment
rate, animal and water: Plants GB
vegetable oil, Xiaoh 18918-2002
coliform groups e
discha
rge
outlet
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
south
of
factor
y
premis
es
Yishu Waste gas: Waste 1 North Malodorous CODc CODc None
i New ammonia (ammonia gas: west COD:500mg/L Pollutant Discharge r r
Hope gas), odor directl side of Total nitrogen: Standard GB 139.5 139.5
Liuhe concentration, y the 70mg/L 14554-93, 9t/a 9t/a
Food hydrogen sulfide discha factor Ammonia Water Quality Amm Amm
Co., Wastewater: COD, rge y nitrogen:45mg/L Standard for onia onia
Ltd pH value, dissolved after premis Total phosphorus: Sewage Discharged nitrog nitrog
total solid, ammonia treatm es 8mg/L into Urban Sewers en en
nitrogen (NH3-N), ent pH:6-8.5 GB/T 31962-2015, 2.8t/a 2.8t/a
total nitrogen (in waste Suspended solids: Meat Processing Total Total
N), total phosphorus water: 200mg/L Industry Water nitrog nitrog
(in P), suspended indire BOD5:250mg/L Pollutant Discharge en en
matter, BOD5, flow ct Animal and Standard GB 73.58t 73.58t
rate, animal and discha vegetable oils: 13457-92 /a /a
vegetable oil, rge 50mg/L Total Total
coliform groups phosp phosp
horus horus
8.41t/ 8.41t/
a a
Guant Waste gas: Waste 8 (2 North Discharge Standard CODc CODc None
ao ammonia (ammonia gas: boiler west COD:50 mg/L for Urban Sewage r r
Liuhe gas), odor directl discha side of BOD5:10mg/L Treatment Plants 8.115t 8.115t
Food concentration, y rge the Ammonia (GB18918-2002), /a /a
Co., hydrogen sulfide, discha outlets factor nitrogen:5mg/L Meat Processing Amm Amm
Ltd fumes rge ,4 y SS:10mg/L Industry Water onia onia
Wastewater: COD, after odor premis Animal and Pollutant Discharge nitrog nitrog
pH value, dissolved treatm discha es vegetable oils: Standard en en
total solids, ent rge 1mg/L (GB13457-92), 0.812t 0.812t
ammonia nitrogen waste outlets Farmland Irrigation /a /a
(NH3-N), total water: ,1 Water Quality SO2: SO2:
nitrogen (in N), indire fume Standard 2.276t 2.276t
total phosphorus (in ct outlet (GB5084-2005), /a /a
P), suspended discha and 1 Boiler Air Pollutant NOx: NOx:
matter, BOD5, flow rge waste Emission Standard 6.829t 6.829t
rate, animal and water (GB13271-2014), /a /a
vegetable oils, discha Catering Industry
coliform groups rge Oil Fume Emission
Standard (trial)
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
outlet) (GB18483-2001)
Binzh Waste gas: Waste 4 (3 Waste Malodorous COD No None
ou ammonia (ammonia gas: for gas: COD:50 mg/L Pollutant Emission 11.85t total
Liuhe gas), hydrogen directl waste east BOD5:10mg/L Standard GB /a quanti
Long sulfide, odor y gases, side of Ammonia 14554-93 ty
da concentration, discha 1 for the nitrogen:5mg/L Boiler Air Pollutant Amm requir
Farmi particulate matter, rge waste factor SS:10mg/L Emission Standard onia ement
ng sulfur dioxide, after water) y Animal and (DB37/2374-2018) nitrog s
Co., Ringelmann treatm premis vegetable oils: Boiler Air Pollutant en
Ltd blackness, nitrogen ent es 1mg/L Emission Standard 0.65t/
oxide waste Waste (GB13271-2014) a
Wastewater: COD, water: water: Meat Processing
pH value, dissolved indire west Industry Water
total solids, ct side of Pollutant Emission
ammonia nitrogen discha the Standard GB
(NH3-N), total rge factor 13457-92
nitrogen (in N), y Water Quality
total phosphorus (in premis Standard for
P), suspended es Sewage Discharged
solids, BOD5, flow into Urban Sewers
rate, animal and GB/T 31962-2015
vegetable oils,
coliform groups
Wudi Waste gas: odor Waste 1 South COD:500mg/L Malodorous CODc CODc None
Liuhe concentration, gas: of the Total nitrogen: Pollutant Emission r r
Xinya hydrogen sulfide, directl factor 70mg/L Standard GB 189t/a 189t/a
ng ammonia (ammonia y y Ammonia 14554-93 Amm Amm
Food gas) discha premis nitrogen:45mg/L Water Pollutant onia onia
Co., Wastewater: COD, rge es pH:6-8.5 Emission Standard nitrog nitrog
Ltd ammonia nitrogen after Suspended solids: for Meat Processing en en
(NH3-N), total treatm 300mg/L Industry GB 17.01t 17.01t
nitrogen (in N), ent BOD5:250mg/L 13457-92 /a /a
BOD5, pH value, waste Animal and Total Total
suspended solids, water: vegetable oils: nitrog nitrog
coliform groups, indire 50mg/L en en
animal and ct 26.46t 26.46t
vegetable oils discha /a /a
rge
Zoupi Waste gas: Waste 1 Sewag COD:500mg/L Malodorous COD: No None
ng hydrogen sulfide, gas: e Total nitrogen: Pollutant Discharge 18t/a, total
Liuhe ammonia (ammonia directl discha 70mg/L Standard GB Amm quanti
Livest gas), odor y rge Ammonia 14554-93 onia ty
ock concentration discha outlet nitrogen:45mg/L Water Quality nitrog requir
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2021 Semiannual Report of New Hope Liuhe Co., Ltd
Co., Wastewater: COD, rge at the Total phosphorus: Standard for en: ement
Ltd ammonia nitrogen after northe 8mg/L Sewage Discharged 2.6t/a, s
(NH3-N), total treatm ast pH:6-8.5 into Urban Sewers Total
nitrogen (in N), pH ent corner Suspended solids: GB/T 31962-2015, phosp
value, animal and waste of the 200mg/L Meat Processing horus:
vegetable oils, water: compa BOD5:250mg/L Industry Water 0.3t/a,
BOD5, suspended indire ny Animal and Pollutant Discharge Total
solids, coliform ct vegetable oils: Standard GB nitrog
groups discha 50mg/L 13457-92 en:
rge 4.8t/a
Shanx Waste gas: Waste 4 (3 Waste COD:500mg/L Boiler Air Pollutant COD: COD: None
ian ammonia (ammonia gas: for gas: Total nitrogen: Emission Standard 405t/a 405t/a
Liuhe gas), hydrogen directl waste north 70mg/L DB37 2374-2018, , ,
Feed sulfide, odor y gases, west Ammonia Malodorous Amm Amm
Co., concentration, discha 1 for side of nitrogen:21mg/L Pollutant Emission onia onia
Ltd sulfur dioxide, rge waste the Total phosphorus: Standard GB nitrog nitrog
Food nitrogen oxides, after water) factor 8mg/L 14554-93, en: en:
Branc particulates, treatm y pH:6-8.5 Shandong 28.35t 28.35t
h Ringelmann ent premis Suspended solids: Provincial Boiler /a, /a,
blackness waste es 300mg/L Air Pollutant Total Total
Wastewater: COD, water: waste BOD5:250mg/L Emission Standard nitrog nitrog
pH value, dissolved indire water: Total salt content: "Ultra-low en: en:
total solids, ct northe 1600mg/L Emission Standard 94.5t/ 94.5t/
ammonia nitrogen discha ast No. 2 Modification a a
(NH3-N), total rge side of Form
nitrogen (N), total the Luzhijianbiaofa
phosphorus (P), factor [2016] No. 46,
suspended solids, y Comprehensive Air
BOD5, flow rate, premis Pollutant Emission
animal and es Standard
vegetable oil, total GB16297-1996
coliform groups. Water Quality
Standard for
Sewage Discharged
into Urban Sewers
GB/T 31962-2015,
Notice on the
Approval and
Publication of the
Modification List of
Four Standards,
Including the
Comprehensive
Discharge Standard
81
2021 Semiannual Report of New Hope Liuhe Co., Ltd
for Water Pollutants
Along the
South-to-North
Water Transfer
Project of Shandong
Province,
Luzhijianbiaofa
[2011] No. 35,
Notice on the
Approval and
Issuance of the
modification list of
four standards
including the
Comprehensive
Discharge Standard
for Water Pollutants
along the
South-to-North
Water Transfer
Project of Shandong
Province, adding the
limits of total salt
content indicator,
Luzhijianbiaofa
[2014] No. 7
Caoxi Waste gas: Waste 1 West COD:300mg/L Malodorous COG1 COD1 None
an hydrogen sulfide, gas: side of Ammonia Pollutant Discharge 5.84T/ 6T/a;
Liuhe odor concentration, directl the nitrogen:21mg/L Standard GB a Amm
Food ammonia (ammonia y factor pH:6-8.5 14554-93 Amm onia
Co., gas) discha y Suspended solids: Water Quality onia nitrog
Ltd Wastewater: COD, rge premis 300mg/L Standard for nitrog en
ammonia nitrogen after es BOD5:250mg/L Sewage Discharged en 8T/a
(NH3-N), treatm Animal and into Urban Sewers 7.04T/
suspended solids, ent vegetable oils: GB/T 31962-2015, a
BOD5, animal and waste 50mg/L Meat Processing
vegetable oils, total water: Industry Water
coliform groups indire Pollutant Discharge
ct Standard GB
discha 13457-92
rge
Jiaxia Waste gas: odor Waste 5 (4 Waste COD230mg/L, Malodorous COD COD None
ng concentration, gas: for gas: ammonia nitrogen Pollutant Emission 41.36t 45.56t
New ammonia (ammonia directl waste south 8mg/l, total Standard GB /a, /a
82
2021 Semiannual Report of New Hope Liuhe Co., Ltd
Hope gas), hydrogen y gases, and nitrogen 11mg/L 14554-93 ammo Amm
Liuhe sulfide, particulate discha 1 for east Comprehensive Air nia onia
Food matter, malodorous rge waste sides Pollutant Emission nitrog nitrog
Co., Wastewater: COD, after water) of the Standard en en
Ltd ammonia nitrogen treatm factor GB16297-1996, 2.8t/a, 3.96t/
(NH3-N), total ent y Meat Processing total a
nitrogen (in N), waste premis Industry Water nitrog Total
total phosphorus (in water: es Pollutant Emission en nitrog
P), pH value, indire Waste Standard GB 76t/a en
suspended matter, ct water: 13457-92, 88.83
BOD5, animal and discha west Water Quality t/a
vegetable oils, rge side of Standard for
coliform groups the Sewage Discharged
factor into Urban Sewers
y GB/T 31962-2015,
premis Comprehensive
es Sewage Discharge
Standard
GB8978-1996
Yunc Waste gas: odor Waste 2 (1 Waste COD 34.4mg/I, Boiler Air Pollutant COD COD None
heng concentration, gas: for gas: ammonia nitrogen Emission Standard 6.5 t/a 32.4
Liuhe ammonia (ammonia directl waste north 1.03 mg/I DB37 2374-2018, Amm t/a
Food gas), hydrogen y gases, side of Malodorous onia Amm
Co., sulfide, particulate discha 1 for the Pollutant Emission nitrog onia
Ltd matter, malodorous rge waste factor Standard GB en nitrog
Wastewater: COD, after water) y 14554-93, 0.5t/a en
ammonia nitrogen treatm premis Comprehensive Air 5.4t/a
(NH3-N), total ent es Pollutant Emission
nitrogen (in N), waste Waste Standard GB
total phosphorus (in water: water: 16927-1996
P), pH value, indire west Comprehensive
suspended matter, ct side of Emission Standard
BOD5, animal and discha the for Water Pollutants
vegetable oils, rge factor Along the
coliform groups y South-to-North
premis Water Transfer
es Project in Shandong
Province DB37/
599-2006,
Modification Forms
DB37/599-2006 for
four standards
including the
Comprehensive
83
2021 Semiannual Report of New Hope Liuhe Co., Ltd
Emission Standard
of Water Pollutants
Along the
South-to-North
Water Transfer
Project in Shandong
Province, adding the
limit of total
nitrogen
Ansh Waste gas: Waste 2 (1 Waste Suspended solids: Boiler Air Pollutant COD COD None
an particulate matter, gas: for gas: 300mg/L Emission Standard 153 153
Liuhe sulfur dioxide, directl waste north Coliform groups: GB 13271-2014, t/a t/a
Food nitrogen oxides, y gases, west 10000 /L Malodorous Amm Amm
Co., smoke blackness, discha 1 for side of Ammonia Pollutant Emission onia onia
Ltd mercury and its rge waste the nitrogen Standard GB nitrog nitrog
compounds, after water) factor (NH3-N): 14554-93, en en
hydrogen sulfide, treatm y 30mg/L Comprehensive Air 15.3t/ 15.3t/
odor concentration, ent premis BOD5:250mg/L Pollutant Emission a a
ammonia waste es pH value:6.0-8.5 Standard
Wastewater: pH water: Waste Total dissolved GB16297-1996
value, COD, total indire water: solids:2000mg/L Comprehensive
dissolved solids, ct east Animal and Sewage Discharge
flow rate, ammonia discha side of vegetable oils: Standard DB
nitrogen (NH3-N), rge the 50mg/L 21/1627-2008,
suspended solids, factor COD: 300mg/L Meat Processing
BOD5, animal and y Industry Water
vegetable oils, premis Pollutant Emission
coliform groups es Standard GB
13457-92,
Water Quality
Standard for
Sewage Discharged
into Urban Sewers
GB/T 31962-2015.
Panji Waste gas: Waste 2 (1 Waste Suspended solids: Boiler Air Pollutant COD COD None
n particulate matter, gas: for gas: 20mg/L Emission Standard 45t/a, 45t/a,
Liuhe sulfur dioxide, directl waste north Coliform groups: GB 13271-2014, Amm Amm
Farmi nitrogen oxides, y gases, west 10000 /L Malodorous onia onia
ng smoke blackness, discha 1 for side of BOD5:10mg/L Pollutant Emission nitrog nitrog
Co., mercury and its rge waste the Ammonia Standard GB en en
Ltd compounds, after water) factor nitrogen 14554-93 7.2t/a 7.2t/a
hydrogen sulfide, treatm y (NH3-N): Comprehensive Total Total
odor concentration, ent premis 8mg/L Sewage Discharge nitrog nitrog
ammonia waste es COD:50mg/L Standard DB en: en:
84
2021 Semiannual Report of New Hope Liuhe Co., Ltd
Wastewater: pH water: waste Animal and 21/1627-2008, 13.5t/ 13.5t/
value, COD, total indire water: vegetable oils: Meat Processing a a
dissolved solids, ct northe 20mg/L Industry Water
flow rate, ammonia discha ast pH value:6.0-8.5 Pollutant Emission
nitrogen (NH3-N), rge side of Total nitrogen(in Standard GB
suspended solids, the N):15mg/L 13457-92
BOD5, animal and factor
vegetable oils, y
coliform groups premis
es
Dong Waste gas: Waste 2 (1 Waste Ammonia Malodorous Cod:1 No None
e particulate matter, gas: for gas: nitrogen 4.32 Pollutant Emission 3.100 total
Liuhe sulfur dioxide, directl waste northe mg/L, Standard GB 000t/a quanti
Lvjia nitrogen oxides, y gases, ast COD 14554-93, ; ty
Food smoke blackness, discha 1 for side of concentration: Notice on the ammo requir
Co., mercury and its rge waste the 49mg/L Implementation of nia ement
Ltd compounds, after water) factor Odor:724 Special Emission nitrog s
hydrogen sulfide, treatm y Limits of Air en:
odor concentration, ent premis Pollutants in 1.300
ammonia waste es Beijing-Tianjin-Heb 000t/a
Wastewater: pH water: Waste ei Air Pollution ; total
value, COD, total indire water: Transmission phosp
dissolved solids, ct northe Channel Cities horus:
flow rate, ammonia discha ast (Ministry of 0.200
nitrogen (NH3-N), rge side of Environmental 000t/a
suspended solids, the Protection Notice ; total
BOD5, animal and factor No. 9, 2018) nitrog
vegetable oils, y Notice on Approval en:
coliform groups premis and Issue of the 13.50
es Modification Forms 0000t/
for four standards a
including the
Comprehensive
Emission Standard
for Water Pollutants
along the
South-to-North
Water Transfer
Project of Shandong
Province,
Luzhijianbiaofa
[2011] No. 35,
Water Pollutant
Discharge Standard
85
2021 Semiannual Report of New Hope Liuhe Co., Ltd
for Meat Processing
Industry GB
13457-92
Liaoc Waste gas: Waste 2 (1 Waste CODcr≤300mg/L, Malodorous COD: COD: None
heng particulate matter, gas: for gas: BOD5≤150mg/L, Pollutant Discharge 708.7 708.7
Liuhe sulfur dioxide, directl waste east SS≤200mg/L, Standard GB 5t/a 5t/a
Rong nitrogen oxides, y gases, side of NH3-N≤20mg/L, 14554-93, Amm Amm
da smoke blackness, discha 1 for the TP≤5mg/L, Announcement on onia onia
Farmi mercury and its rge waste factor TN≤45mg/L the Implementation nitrog nitrog
ng compounds, after water) y of Special Air en: en:
Co., hydrogen sulfide, treatm premis Pollutant Emission 63.78 63.78
Ltd odor concentration, ent es Limits for Cities in 75 75
ammonia waste Waste Beijing-Tianjin-Heb
Wastewater: pH water: water: ei Air Pollution
value, COD, total indire east Transmission
dissolved solids, ct side of Channel
flow rate, ammonia discha the Meat Processing
nitrogen (NH3-N), rge factor Industry Water
suspended solids, y Pollutant Discharge
BOD5, animal and premis Standard GB
vegetable oils, es 13457-92,
coliform groups Water Quality
Standard for
Sewage Discharged
into Urban Sewers
GB/T 31962-2015
Shenx Waste gas: Waste 4 (3 Waste CODcr 50mg/L, Malodorous COD: COD: None
ian particulate matter, gas: for gas: BOD5 10mg/L, Pollutant Emission 25.2t/ 25.2t/
New sulfur dioxide, directl waste within NH3-N 5mg/L, Standard GB a a
Hope nitrogen oxides, y gases, the Animal and 14554-93 Amm Amm
Liuhe smoke blackness, discha 1 for factor vegetable oils DB/372376-2013 onia onia
Qings mercury and its rge waste y 3mg/L Shandong nitrog nitrog
izhai compounds, after water) premis Provincial en: en:
Food hydrogen sulfide, treatm es Comprehensive Air 2.52t/ 2.52t/
Co., odor concentration, ent Waste Pollutant Emission a a
Ltd ammonia waste water: Standard No. 2
Wastewater: pH water: north Modification Form
value, COD, total indire side of Luzhijianbiaofa
dissolved solids, ct the (2016) No. 46
flow rate, ammonia discha factor Down Industry
nitrogen (NH3-N), rge y Water Pollutant
suspended solids, premis Emission Standard
BOD5, animal and es GB 21901-2008,
vegetable oils, Notice on Approval
86
2021 Semiannual Report of New Hope Liuhe Co., Ltd
coliform groups and Issue of
Modification Forms
for four standards
including the
Comprehensive
Emission Standard
for Water Pollutants
Along the
South-to-North
Water Transfer Line
of Shandong
Province "
Luzhijianbiaofa[201
1] 35,
Water Pollutant
Discharge Standard
for Meat Processing
Industry GB
13457-92
Yang Waste gas: Waste 3 (2 Waste Ammonia Malodorous COD: COD: None
gu ammonia (ammonia gas: for gas: nitrogen:5mg/L. Pollutant Emission 24.6t/ 24.6t/
Liuhe gas), hydrogen directl waste northe COD: 40mg/L. Standard GB a a
Luxin sulfide, odor y gases, ast of Total nitrogen: 14554-93, Amm Amm
Food concentration, discha 1 for the 15mg/L. Comprehensive Air onia onia
Co., particulate matter, rge waste factor Total phosphorus: Pollutant Emission nitrog nitrog
Ltd nitrogen oxide, after water) y 0.5mg/L Standard en: en:
sulfur dioxide, treatm premis GB16297-1996, 1.04t/ 1.04t/
Ringelmann ent es Notice on the a a
blackness waste Waste Implementation of
Wastewater: pH water: water: Special Air
value, COD, BOD5, indire northe Pollutant Emission
suspended matter, ct ast Limits in
ammonia nitrogen discha side of Beijing-Tianjin-Heb
(NH3-N), total rge the ei Air Pollution
nitrogen (in N), factor Transmission
total phosphorus (in y Channel Cities
P), animal and premis (Ministry of
vegetable oils, es Environmental
coliform groups, Protection Notice
anionic surfactant No. 9, 2018)
Notice on Approval
and Issue of the
Modification Forms
for Four Standards
87
2021 Semiannual Report of New Hope Liuhe Co., Ltd
including the"
Comprehensive
Emission Standard
for Water Pollutants
Along the
South-to-North
Water Transfer
Project of Shandong
Province"
Luzhijianbiaofa
[2011] 35,
Comprehensive
Discharge Standard
for Water Pollutants
along the
South-to-North
Water Transfer
Project in Shandong
Province: DB37/
599--2006,
Meat Processing
Industry Water
Pollutant Discharge
standard GB
13457-92,
Down Industry
Water Pollutant
Discharge Standard
GB 21901 -2008
Weifa Waste gas: Waste 2 (1 Waste COD 500mg/L , Shandong COD: COD: None
ng particulate matter, gas: for gas: Ammonia Provincial 225t/a 225t/a
Tianh hydrogen sulfide, directl waste north nitrogen 45mg/L, Comprehensive Amm Amm
ui ammonia (ammonia y gases, side Total phosphorus Emission Standard onia onia
Food gas), odor discha 1 for within 8mg/L, for Regional Air nitrog nitrog
Co., concentration, rge waste the Total nitrogen Pollutants en: en:
Ltd sulfur dioxide, after water) factor 8mg/L, DB37/2376-2013, 20.25t 20.25t
nitrogen oxides, treatm y Malodorous /a /a
Ringelmann ent premis Pollutant Emission Total Total
blackness waste es Standard GB nitrog nitrog
Wastewater: COD, water: Waste 14554-93, en: en:
ammonia nitrogen indire water: Boiler Air Pollutant 31.5t/ 31.5t/
(NH3-N), total ct south Emission Standard a a
nitrogen (in N), discha side DB37 2374-2018
total phosphorus (in rge within Water Pollutant
88
2021 Semiannual Report of New Hope Liuhe Co., Ltd
P), pH value, the Emission Standard
BOD5, suspended factor for Meat Processing
solids, animal and y Industry GB
vegetable oils, premis 13457-92,
coliform groups, es Water Quality
anionic surfactant Standard for
Sewage Discharged
into Urban Sewers
GB/T 31962-2015
Weifa Waste gas: Waste 5 (4 Waste COD 70mg/L , Malodorous COD: COD: None
ng ammonia (ammonia gas: for gas: Ammonia Pollutant Emission 667.7t 667.7t
Heshe gas), hydrogen directl waste north nitrogen 10mg/L, Standard GB /a /a
ngyua sulfide, odor y gases, west 14554-93, Amm Amm
n concentration, discha 1 for side of Catering Industry onia onia
Food fumes, Ringelmann rge waste the Oil Fume Emission nitrog nitrog
Co., blackness, after water) factor Standard DB37/ en: en:
Ltd particulate matter, treatm y 597-2006, 60.09 60.09
sulfur dioxide, ent premis Boiler Air Pollutant 3t/a 3t/a
nitrogen oxides waste es, Emission Standard Total Total
Wastewater: COD, water: east DB37 2374-2018 nitrog nitrog
ammonia nitrogen indire side Water Pollutant en: en:
(NH3-N), total ct inside Emission Standard 93.47 93.47
nitrogen (in N), discha the for Meat Processing 8t/a 8t/a
total phosphorus (in rge factor Industry GB
P), pH value, y 13457-92,
suspended solids, premis Water Quality
BOD5, coliform es Standard for
groups, animal and Waste Sewage Discharged
vegetable oil water: into Urban Sewers
northe GB/T 31962-2015
ast
side of
the
factor
y
premis
es
Luoy Waste gas: Waste 2 (1 Waste COD:70mg/L Catering Industry COD: COD: None
ang ammonia (ammonia gas: for gas: Ammonia Oil Fume Emission 10t/a 10t/a
Liuhe gas), odor directl waste east nitrogen:15mg/L Standard Amm Amm
Huiqu concentration, y gases, side of pH:6-8.5 GB18483-2001, onia onia
an hydrogen sulfide, discha 1 for the Total phosphorus: Malodorous nitrog nitrog
Food fumes rge waste factor 0.5mg/L Pollutant Emission en: en:
Co., Wastewater: COD, after y Suspended solids: Standard GB 2.43t/ 2.43t/
89
2021 Semiannual Report of New Hope Liuhe Co., Ltd
Ltd ammonia nitrogen treatm water) premis 60mg/L 14554-93 a a
(NH3-N), total ent es BOD5:25mg/L Meat Processing
phosphorus (in P), waste Waste Animal and Industry Water
pH value, BOD5, water: water: vegetable oils: Pollutant Emission
suspended solids, indire south 15mg/L Standard GB
animal and ct west Coliform groups: 13457-92,
vegetable oils, discha side of 5000 /L Comprehensive
coliform groups. rge the Fumes: Sewage Discharge
factor 2.0mg/Nm Standard
y GB8978-1996
premis
es
Hebi Waste gas: odor Waste 1 North COD45mg/L, COD350mg/L, COD1 COD6 None
Liuhe concentration, gas: east ammonia nitrogen ammonia nitrogen 4.641 4.123
Zhizh ammonia (ammonia directl corner 0.5mg/L,total 35mg/L,total 5t/a, 2t/a,
en gas), hydrogen y of the phosphorus phosphorus 4mg/L, ammo ammo
Food sulfide discha factor 4mg/L,total total nitrogen nia nia
Co., Wastewater: COD, rge y nitrogen 35mg/L, 45mg/L, nitrog nitrog
Ltd ammonia nitrogen after premis en en
(NH3-N), pH value, treatm es 1.335 10.68
suspended solids, ent 9t/a 72t/a
BOD5, animal waste
and vegetable oils, water:
coliform groups, indire
total nitrogen(in N), ct
total phosphorus (in discha
P) rge
Laiw Waste gas: sulfur Waste 7 (6 Waste COD:500mg/L Malodorous COD: COD: None
u dioxide, nitrogen gas: for gas: Ammonia Pollutant Discharge 675t/a 675t/a
New oxides, soot, directl waste north nitrogen:45mg/L Standard GB Amm Amm
Hope ammonia (ammonia y gases, side of Total nitrogen: 14554-93, onia onia
Liuhe gas), hydrogen discha 1 for the 70mg/L " Provincial Boiler nitrog nitrog
Food sulfide, odor rge waste factor pH:6.5-9.5 Air Pollutant en: en:
Co., concentration after water) y Total phosphorus: Emission Standard 60.75t 60.75t
Ltd Wastewater: COD, treatm premis 8mg/L "Ultra-low /a /a
ammonia nitrogen ent es Suspended solids: Emission Standard Partic Partic
(NH3-N), pH value, waste Waste 400mg/L No. 2 Modification ulate ulate
BOD5, total water: water: BOD5:350mg/L Form matter matter
nitrogen (in N), indire north Animal and Luzhijianbiaofa : :
total phosphorus (in ct side of vegetable oils: [2016] No. 46, 0.2t/a 0.2t/a
P), animal and discha the 100mg/L Water Quality SO2:0 SO2:0
vegetable oils, rge factor Nitrogen oxides: Standard for .1t/a .1t/a
suspended solids y 200mg/Nm3 Sewage Discharged NOx:0 NOx:0
premis Sulfur dioxide: into Urban Sewers .406t/ .406t/
90
2021 Semiannual Report of New Hope Liuhe Co., Ltd
es 50mg/Nm3 GB/T 31962-2015 a a
Fumes:
10mg/Nm3
Dezh Waste gas: sulfur Waste 3 (2 Waste COD:500mg/L Boiler Air Pollutant COD: COD: None
ou dioxide, nitrogen gas: for gas: Ammonia Emission Standard 23.3t 23.3t
Liuhe oxides, soot, directl waste north nitrogen:45mg/L DB372374 -2018,
Zhika ammonia (ammonia y gases, side of Total nitrogen: Boiler Air Pollutant
ng gas), hydrogen discha 1 for the 70mg/L Emission Standard
Food sulfide, odor rge waste factor pH:6.0-8.5 GB 13271-2014,
Co., concentration after water) y Total phosphorus: Malodorous
Ltd Wastewater: COD, treatm premis 8mg/L Pollutant Emission
ammonia nitrogen ent es Suspended solids: Standard GB
(NH3-N), pH value, waste Waste 300mg/L 14554-93
BOD5, total water: water: BOD5:250mg/L Water Quality
nitrogen (in N), indire north Animal and Standard for
total phosphorus (in ct side of vegetable oils: Sewage Discharged
P), animal and discha the 50mg/L into Urban Sewers
vegetable oils, rge factor Ringelmann GB/T 31962-2015,
suspended solids y blackness:level 1 Meat Processing
premis Nitrogen oxides: Industry Water
es 150mg/Nm3 Pollutant Emission
Sulfur dioxides: Standard GB
50mg/Nm3 13457-92
Fumes:
10mg/Nm3
Feixia Waste gas: odor Indire 1 South COD:50mg/L Malodorous COD: COD: None
n concentration, ct side of Ammonia Pollutant Discharge 11.6t/a 11.6t/a
Liuhe ammonia (ammonia discha the nitrogen:5mg/L Standard GB Amm Amm
Huah gas), hydrogen rge factor Total phosphorus: 14554-93, onia onia
ai sulfide y 0.3mg/L Notice on Approval nitrog nitrog
Food Wastewater: COD, premis pH:6-8.5 and Issue of the en: en:
Co., ammonia nitrogen es Suspended solids: Modification Forms 1.16t/ 1.16t/
Ltd (NH3-N), pH value, 20mg/L for Four Standards a a
suspended solids, Total nitrogen: Including the Total Total
BOD5, animal 20mg/L Comprehensive nitrog nitrog
and vegetable oils, BOD5:10mg/L Discharge Standard en: en:
coliform groups, Animal and for Water Pollutants 14t/a 14t/a
total nitrogen(in N), vegetable oils: Along the Total Total
total phosphorus (in 3mg/L South-to-North phosp phosp
P) Coliform groups: Water Transfer horus: horus:
10000 /L Project of Shandong 0.63t/ 0.63t/
Province a a
Luzhijianbiaofa
[2011] No. 35,
91
2021 Semiannual Report of New Hope Liuhe Co., Ltd
Water Pollutant
Emission Standard
for Meat Processing
Industry GB
13457-92,
Comprehensive
Discharge Standard
for Water Pollutants
Along the
South-to-North
Water Transfer
Project in Shandong
Province DB37/
599-2006,
Modification Forms
DB37 / 599-2006
for Four Standards
including the
Comprehensive
Discharge Standard
for Water Pollutants
along the
South-to-North
Water transfer
Project in Shandong
Province, adding the
limit of total
nitrogen.
Fuxin Waste gas: nitrogen Waste 3 (2 Waste COD:300mg/L Boiler Air Pollutant CODc CODc None
Liuhe oxides, fume gas: for gas: Ammonia Emission Standard r: r:
Farmi blackness, directl waste north nitrogen:30mg/L GB 13271-2014, 78.61t 78.61t
ng particulate matter, y gases, west pH:6-8.5 Malodorous /a /a
Co., sulfur dioxide, discha 1 for and Suspended solids: Pollutant Emission Amm Amm
Ltd ammonia (ammonia rge waste south 300mg/L Standard GB onia onia
Food gas), hydrogen after water) side of BOD5:250mg/L 14554-93 nitrog nitrog
Branc sulfide, odor treatm the Animal and Water Pollutant en:7.8 en:7.8
h concentration ent factor vegetable oils: Emission Standard 6t/a 6t/a
Wastewater: COD, waste y 50mg/L for Meat Processing
suspended solids, water: premis Industry GB
ammonia nitrogen indire es 13457-92,
(NH3-N), pH value, ct Waste Comprehensive
BOD5, animal and discha water: Sewage Discharge
vegetable oils, rge west Standard DB
coliform groups side of 21/1627-2008
92
2021 Semiannual Report of New Hope Liuhe Co., Ltd
the
factor
y
premis
es
Taiqia Waste gas: Waste 4 (3 Waste NOx: 150mg/m3 Boiler Air Pollutant COD None None
n ammonia (ammonia gas: for gas SO2: 50mg/m3 Emission Standard 236t/a
New gas), hydrogen directl waste discha Fume particles: GB 13271-2014, ;
Hope sulfide, odor y gases, rge 20mg/m3 Provincial Amm
Liuhe concentration, discha 1 for outlet: Benchmark Program for onia
Luxin particulate matter, rge waste at the oxygen content: Integrated Boiler nitrog
Food nitrogen oxides, after water) sewag 3.5% Renovation 2019 en
Co., sulfur dioxide, treatm e Fume blackness: Malodorous 2.3t/a
Ltd Ringelmann ent treatm level 1 Pollutant Emission
blackness waste ent Standard GB
Wastewater: COD, water: plant 14554-93
ammonia nitrogen indire in the Water Pollutant
(NH3-N), total ct north Emission Standard
phosphorus (in P), discha west for Meat Processing
pH value, BOD5, rge corner Industry GB
suspended solids, of the 13457-92
animal and factor
vegetable oils, y
coliform groups premis
es
Waste
water
discha
rge
outlet
Laoti Waste gas: Waste 4 (2 Waste COD 500mg/L Malodorous COD: COD: None
ng ammonia (ammonia gas: for gas Ammonia Pollutant Emission 9.31t/ 9.31t/
Liuhe gas), hydrogen directl waste discha nitrogen 45mg/L Standard GB a a
Xinm sulfide, odor y gases, rge Total phosphorus 14554-93 Amm Amm
eizi concentration discha 1 for outlet: 8mg/L Water Quality onia onia
Food wastewater: COD, rge waste sewag pH6-8.5mg/L Standard for nitrog nitrog
Co., ammonia nitrogen, after water) e Suspended solids Sewage Discharged en: en:
Ltd total nitrogen, treatm treatm 300mg/L into Urban Sewers 5.87t/ 5.87t/
animal and ent ent Total nitrogen: GB/T 31962-2015, a a
vegetable oils, waste plant 70mg/L Meat Processing Total Total
suspended solids, water: in the BOD5 250mg/L Industry Water nitrog nitrog
fecal coliform, indire north Animal and Pollutant Emission en(in en(in
BOD5 ct west vegetable oils Standard GB N): N):
discha corner 40.5t/ 40.5t/
93
2021 Semiannual Report of New Hope Liuhe Co., Ltd
rge of the 50mg/L 13457-92 a a
factor
y
premis
es,
and
produ
ction
shops
Waste
water
discha
rge
outlet:
sewag
e
treatm
ent
plant
Qixia Waste gas: Waste 4 (3 Waste Ammonia Malodorous COD: COD: None
Refri ammonia (ammonia gas: for gas nitrogen: 5m/L Pollutant Emission 14.4t/ 14.4t/
gerati gas), hydrogen directl waste discha COD 50mg/l Standard GB a a
on sulfide, odor y gases, rge pH: 6-9 14554-93 Amm Amm
Plant concentration discha 1 for outlet: Boiler Air Pollutant onia onia
of wastewater: COD, rge waste sewag Discharge Standard nitrog nitrog
Shand ammonia nitrogen, after water) e DB37 2374-2018 en: en:
ong total nitrogen, treatm treatm Comprehensive 1.5t/a 1.5t/a
New animal and ent ent Emission Standard
Hope vegetable oils, waste plant of Water Pollutants
Liuhe suspended solids, water: in the in the Peninsula
Grou fecal coliform, indire northe Basin of Shandong
p Co., BOD5 ct ast Province
Ltd discha corner DB37/676-2007,
rge of the Water Pollutant
factor Emission Standard
y for Meat Processing
premis Industry GB
es, 13457-92
and
produ
ction
shops
Waste
water
94
2021 Semiannual Report of New Hope Liuhe Co., Ltd
discha
rge
outlet:
sewag
e
treatm
ent
plant
Laiya Waste gas: odor Waste 2 (1 Waste COD 30mg/l, Shandong CODc
ng concentration, gas: for gas: ammonia nitrogen Provincial Boiler r None None
Tiany ammonia (ammonia directl waste north 1.5mg/l, total Air Pollutant 112.75
e gas), hydrogen y gases, side of phosphorus Emission Standard t/a
Food sulfide, sulfur discha 1 for the 0.5mg/l, total No. 2 Modification Amm
Co., dioxide, nitrogen rge waste factor nitrogen 15mg/l, Form onia
Ltd oxides, particulates, after water) y pH6-9 (Luzhijianbiaofa nitrog
fume blackness treatm premis [2016] No. 46, en
(Ringelmann ent es and Malodorous 3.02t/
blackness, scale) waste within Pollutant Emission a
Wastewater: COD, water: the Standard GB Total
ammonia nitrogen indire factor 14554-93 nitrog
(NH3-N), pH value, ct y Comprehensive en
suspended solids, discha premis Emission Standard 3.32t/
BOD5, animal and rge es of of Water Pollutants a
vegetable oils, the in the Peninsula total
coliform groups, compa Basin of Shandong phosp
total nitrogen (in ny Province horus
N), Waste DB37/676-2007, 0.016t
water: Water Pollutant /a
west Emission Standard
side of for Meat Processing
the Industry GB
compa 13457-92
ny
Tai’an Waste gases: Waste 6 (5 Waste COD:350mg/L Water Quality COD: COD: None
Tai nitrogen oxides, gas: for gases: Total nitrogen: Standard for 533.0 533.0
sha particulates, sulfur directl waste west 70mg/L Sewage Discharged 5t/a; 5t/a;
n dioxide, hydrogen y gases, side of Ammonia into Urban Sewers ammo ammo
Liu sulfide, ammonia, discha 1 for the nitrogen:45mg/L GB/T 31962-2015, nia nia
he odor concentration, rge waste compa Total phosphorus: Meat Processing nitrog nitrog
Fo Ringelman after water) ny’s 8mg/L Industry Water en: en:
od blackness treatm factor pH:6-8.5 Pollutant Discharge 45.69t 45.69t
Co. Wastewater: ent y Suspended solids: Standard GB /a /a
, chemical oxygen waste premis 256mg/L 13457-92
demand, ammonia water: es, BOD5:150mg/L Malodorous
95
2021 Semiannual Report of New Hope Liuhe Co., Ltd
Ltd nitrogen, total indire inside Animal and Pollutant Discharge
nitrogen, total ct the vegetable oils: Standard GB
phosphorus, pH discha compa 50mg/L 14554-93
value, five-day rge ny Hydrogen sulfide: DB/372376-2013
biochemical oxygen waste 0.1mg/nm3 Shandong
demand, animal and water: Ammonia: Provincial
vegetable oils, west 2mg/nm3 Comprehensive Air
suspended solids, side of Particles: Pollutant Emission
coliform bacteria the 10mg/nm3 Standard No. 2
count, anionic west Sulfur dioxide: Modification Form
surfactant gate 50mg/nm3 Luzhijianbiaofa
of the nitrogen oxides: (2016) No. 46,
compa 100mg/nm3 Boiler Air Pollutant
ny Emission Standard
DB37/2374-2018
Shand Waste gas: Waste 3 (2 Waste Ammonia Boiler Air Pollutant CODc CODc None
ong ammonia (ammonia gas: for gases: nitrogen 45mg/l Emission Standard r r
New gas), hydrogen directl waste east COD 500mg/l DB372374 -2018, 8.68t/ 8.68t/
Hope sulfide, odor y gases, side of Total phosphorus Malodorous a a
Liuhe concentration, discha 1 for the 8mg/l Pollutant Emission Amm Amm
Grou sulfur dioxide, rge waste compa Total nitrogen Standard GB onia onia
p Co., nitrogen oxides, after water) ny’s 70mg/l 14554-93 nitrog nitrog
Ltd particulates, treatm factor Water Quality en en
Linyi Ringelmann ent y Standard for 0.68t/ 0.68t/
Branc blackness waste premis Sewage Discharged a a
h Wastewater: COD, water: es into Urban Sewers Total Total
pH value, dissolved indire Waste GB/T 31962-2015, phosp phosp
total solids, ct water: Meat Processing horus horus
ammonia nitrogen discha southe Industry Water 0.88t/ 0.88t/
(NH3-N), total rge ast Pollutant Emission a a
nitrogen (N), total side of Standard GB Total Total
phosphorus (P), the 13457-92 nitrog nitrog
suspended solids, compa en en
BOD5, flow rate, ny 4.1t/a 4.1t/a
animal and
vegetable oil, total
coliform groups.
Qingd Waste gases: Waste 7 (6 Waste Fumes: Boiler Air Pollutant COD: COD: None
ao nitrogen oxides, gases: for gases: 1.5mg/Nm3 Emission Standard 18.45t 18.45t
Liuhe sulfur dioxide, directl waste west COD:500mg/L DB37 2374-2018 /a /a
Wanf hydrogen sulfide, y gases, side of Ammonia Shandong Amm Amm
u fumes, Ringelman discha 1 for the nitrogen:45mg/L Provincial Fume onia onia
Food blackness, ammonia rged waste factor Total nitrogen: Emission Standard nitrog nitrog
Co., (ammonia gas), after y 70mg/L for Catering en: en:
96
2021 Semiannual Report of New Hope Liuhe Co., Ltd
Ltd hydrogen sulfide, treatm water) premis pH:6.5-9.5 Industry 1.75t/ 1.75t/
odor concentration, ent es Total phosphorus: DB37/597-2006 a a
Wastewater: COD, Waste 8mg/L Malodorous Partic Partic
ammonia nitrogen water: Waste Suspended solids: Pollutant Emission ulate ulate
(NH3-N), pH value, discha water: 400mg/L Standard GB matter matter
BOD5, total rged south BOD5:350mg/L 14554-93, : :
nitrogen (as N), into west Animal and Shandong 10.5t/ 10.5t/
total phosphorus, sewag side of vegetable oils: Provincial a a
animal and e the 100mg/L Comprehensive SO2:1 SO2:1
vegetable oils, treatm factor Nitrogen oxides: Emission Standard .8t/a .8t/a
suspended solids, ent y 200mg/Nm3 for Regional Air NOx:8 NOx:8
coliform bacteria plant premis Sulfur dioxide: Pollutants .55t/a .55t/a
count after es 50mg/Nm3 DB37/2376-2019,
treatm Soot: 10mg/Nm3 Comprehensive Air
ent. Pollutant Emission
Standard
GB16297-1996,
Water Quality
Standard for
Sewage Discharged
into Urban Sewers
GB/T 31962-2015
Fenxi Waste gases: Waste 4 (3 Waste COD 40mg/l, Boiler Air Pollutant COD: COD: None
New nitrogen oxides, gases: for gas ammonia nitrogen Emission Standard 2.90t/ 2.90t/
Hope sulfur dioxide, directl waste discha 2mg/l, total GB 13271-2014, a a
Liuhe particles y gases, rge phosphorus Malodorous Amm Amm
Food Wastewater: COD, discha 1 for outlets 0.4mg/l, total Pollutant Emission onia onia
Co., suspended solids, rged waste : nitrogen 2mg/l, Standard GB nitrog nitrog
Ltd ammonia nitrogen after water) boiler pH6-9 14554-93 en: en:
(NH3-N), pH value, treatm rooms Water Pollutant 0.70t/ 0.70t/
BOD5, animal and ent and Emission Standard a a
vegetable oils, Waste produ for Meat Processing
coliform bacteria water: ction Industry GB
count directl shops 13457-92,
y in Comprehensive
discha north Sewage Discharge
rged west Standard DB
after and 21/1627-2008
treatm south
ent. west
of the
factor
y
premis
97
2021 Semiannual Report of New Hope Liuhe Co., Ltd
es.
Waste
water
discha
rge
outlet:
sewag
e
treatm
ent
plant
Beijin Waste gas: Waste 4 (3 Waste Non methane Comprehensive COD: COD: None
g hydrogen sulfide, gas: for gas hydrocarbons Water Pollutant 186.1 186.1
Kingh odor concentration, directl waste discha (rendering shop): Discharge Standards 5t/a; 5t/a;
ey ammonia (ammonia y gases, rge 50mg/m3 (DB11/307-2013) ammo ammo
Food gas), particulate discha 1 for outlets Non methane nia nia
Co., matter, non-methane rge waste : hydrocarbons: Comprehensive Air nitrog nitrog
Ltd total hydrocarbons, after water) cantee 10mg/m3; Pollutant Discharge en: en:
particulates, treatm ns, Fumes: Standard DB11/ 18.61 18.61
nitrogen oxides, ent render 1mg/Nm3; 501—2017 5t/a 5t/a
sulfur dioxide, waste ing PM10:5mg/Nm3
fume, sulfur water: shops COD: 220mg/L, Catering Industry
dioxide, nitrogen indire Waste ammonia Oil Fume Emission
oxides, Ringelmann ct water nitrogen: 35mg/L, Standard(Trial)
blackness discha discha total phosphorus 6 GB18483-2001
Wastewater: pH, rge rge mg/L, total
COD, BOD5, outlets nitrogen 50mg/L
suspended solids, : south
ammonia nitrogen side of
(NH3-N), animal the
and vegetable oils, sewag
total phosphorus (in e
P), total nitrogen (in treatm
N), coliform groups ent
station
.
Hebei Waste gas: Indire 6 (5 Waste Odor: 2000 Comprehensive COD: COD: None
Kingh hydrogen sulfide, ct for gas Non methane Water Pollutant 23.63t 23.63t
ey ammonia (ammonia discha waste discha hydrocarbons Emission Standard /a; /a;
Meat gas), odor rge gases, rge (rendering shop): (DB11/307-2013), ammo ammo
Indust concentration, 1 for outlets 80mg/m3 Industrial VOC nia nia
ry non-methane total waste : Emission Control nitrog nitrog
Co., hydrocarbons, water) cantee COD: 120mg/L, Standard en: en:
particulates, ns, ammonia nitrogen DB13/2322-2016 2.29t/ 2.29t/
98
2021 Semiannual Report of New Hope Liuhe Co., Ltd
Ltd nitrogen oxides, render 25mg/L, total Malodorous Odor a a
sulfur dioxide ing phosphorus Pollutant Emission
Wastewater: COD, shops, 8mg/L, total Standard GB
ammonia nitrogen, waitin nitrogen 75mg/L, 14554- 93
total nitrogen, total g BOD: 60mg/L,
phosphorus, pH, pens, total suspended
BOD5, suspended deslim solids: 120mg/L
solids, animal and ing
vegetable oils, rooms
coliform groups, ,
phosphate. floatat
ion
tank
North
side of
the
sewag
e
treatm
ent
station
Liaon Waste gas: Waste 1 Outlet COD:300 ㎎/L, Comprehensive COD: COD: None
ing ammonia (ammonia gas: of the ammonia Sewage Discharge 462t/a 462t/a
Kingh gas), odor directl sewag nitrogen:30 ㎎/L, Standard DB ; ;
ey concentration, y e total phosphorus 5 21/1627-2008 ammo ammo
Food sulfur dioxide, discha treatm ㎎/L,total Water Pollutant nia nia
Co., hydrogen sulfide, rge ent nitrogen 50 ㎎/L, Emission Standard nitrog nitrog
Ltd nitrogen oxides, after station BOD:250mg/L, for Meat Processing en: en:
particulates treatm (north total suspended Industry GB 46.2t/ 46.2t/
Wastewater: COD, ent east solids:300mg/L 13457-92 a a
ammonia nitrogen waste corner Malodorous
(NH3-N), total water: of the Pollutant Emission
nitrogen (in N), indire factor Standard GB
total phosphorus (in ct y 14554-93,
P), pH, BOD5, discha premis Comprehensive Air
suspended solids, rge es) Pollutant Emission
animal and Standard
vegetable oils, GB16297-1996
coliform groups,
flow rate.
Chen Waste water: COD, Waste 4 Waste COD: 500mg/L Boiler Air Pollutant COD: None None
gdu BOD5, ammonia water: gas Ammonia Discharge Standard 11.9t/a
Hope nitrogen, total discha discha nitrogen: 45mg/L GB13271-2014 total
Food phosphorus, total rged rge total nitrogen: Water Quality nitrog
99
2021 Semiannual Report of New Hope Liuhe Co., Ltd
Co., nitrogen, suspended into outlet: 70mg/L Standard for en:
Ltd solids, pH, animal urban east of pH: 6.0-8.5 Sewage Discharged 6.3t/a
and vegetable oils, sewag the Total phosphorus: into Urban Sewers ammo
coliform groups e low-te 8mg/L GB/T 31962-2015, nia
Waste gas: nitrogen treatm mpera Suspended solids: Meat Processing nitrog
oxides, sulfur ent ture 400mg/L Industry Water en:
dioxide, plant plant, BOD5: 300mg/L Pollutant Emission 3.7t/a
particulates, after south Animal and Standard GB total
Ringelmann treatm west vegetable oils: 13457-92 phosp
blackness, hydrogen ent of the 60mg/L horous
sulfide, ammonia, Waste high-t Ringelman :
odor gas: emper blackness: level 1 0.3t/a
directl ature Nitrogen oxides nitrog
y plant 150mg/Nm3 en
discha Waste Sulfur dioxide: oxides
rged water 50mg/Nm3 :
discha Particulate matter 0.7t/a
rge 20mg/Nm3 sulfur
outlet: dioxid
south e:
west 0.2t/a
of the
low-te
mpera
ture
plant,
south
of
high-t
emper
ature
plant
Zheji Waste gases: Waste 1 COD:450mg/L Meat Processing COD: COD: None
ang nitrogen oxides, gas: waste Total nitrogen: Industry Water 16.63t 16.63t
Xindo particulates, sulfur directl water Waste 50mg/L Pollutant Discharge /a; /a;
ngwa dioxide, hydrogen y discha water: Ammonia Standard GB ammo ammo
n sulfide, ammonia, discha rge off-sit nitrogen:35mg/L 13457-92 nia nia
Agric odor concentration rge outlet e Total phosphorus: Agreements with nitrog nitrog
ultura wastewater: after enviro 6mg/L sewage treatment en: en:
l chemical oxygen treatm nment pH:6-8.5 plants 2.49t/ 2.49t/
Devel demand, ammonia ent al Suspended solids: Malodorous a a
opme nitrogen, total waste protec 200mg/L Pollutant Discharge
nt nitrogen, total water: tion BOD5:120mg/L Standard GB
Co., phosphorus, pH indire station Animal and 14554-93,
100
2021 Semiannual Report of New Hope Liuhe Co., Ltd
Ltd value, five-day ct of the vegetable oils: Boiler Air Pollutant
biochemical oxygen discha compa 50mg/L Discharge Standard
demand, animal and rge ny Nitrogen oxides : GB 13271-2014,
vegetable oils, 150mg/Nm3 Emission Standard
suspended solids, Sulfur dioxide: for Boiler Air
coliform bacteria. 50mg/Nm3 Pollutants DB37
Fumes: 2374-2018
10mg/Nm3
Hang Waste gases: Waste 1 COD:450mg/L Meat Processing COD: COD: None
zhou nitrogen oxides, gas: waste Waste Total nitrogen: Industry Water 16.63t 16.63t
Guan particulates, sulfur directl water water: 50mg/L Pollutant Discharge /a; /a;
glv dioxide, hydrogen y discha off-sit Ammonia Standard GB ammo ammo
Breed sulfide, ammonia, discha rge e nitrogen:35mg/L 13457-92 nia nia
ing odor concentration rge outlet enviro Total phosphorus: Agreements with nitrog nitrog
Co., wastewater: after nment 6mg/L sewage treatment en: en:
Ltd chemical oxygen treatm al pH:6-8.5 plants 2.49t/ 2.49t/
demand, ammonia ent protec Suspended solids: Malodorous a a
nitrogen, total waste tion 200mg/L Pollutant Discharge
nitrogen, total water: station BOD5:120mg/L Standard GB
phosphorus, pH indire of the Animal and 14554-93,
value, five-day ct compa vegetable oils: Boiler Air Pollutant
biochemical oxygen discha ny 50mg/L Discharge Standard
demand, animal and rge Nitrogen oxides : GB 13271-2014,
vegetable oils, 150mg/Nm3 Emission Standard
suspended solids, Sulfur dioxide: for Boiler Air
coliform bacteria. 50mg/Nm3 Pollutants DB37
Fumes: 2374-2018
10mg/Nm3
Ruian Waste gases: Waste One COD:380mg/L Meat Processing COD: COD: None
New nitrogen oxides, gas: waste Total nitrogen: Industry Water 2.64t/ 2.64t/
Hope particulates, sulfur directl water Waste 40mg/L Pollutant Discharge a; a;
Liuhe dioxide, hydrogen y discha water: Ammonia Standard GB ammo ammo
Farmi sulfide, ammonia, discha rge off-sit nitrogen:70mg/L 13457-92 nia nia
ng odor concentration rge outlet e Total phosphorus: Agreements with nitrog nitrog
Co., wastewater: after enviro 7mg/L sewage treatment en: en:
Ltd chemical oxygen treatm nment pH:6-8 plants 0.26t/ 0.26t/
demand, ammonia ent al Suspended solids: Malodorous a a
nitrogen, total waste protec 160mg/L Pollutant Discharge
nitrogen, total water: tion BOD5:140mg/L Standard GB
phosphorus, pH indire station Animal and 14554-93,
value, five-day ct of the vegetable oils: Boiler Air Pollutant
biochemical oxygen discha compa 0.16t/a Discharge Standard
demand, animal and rge ny Nitrogen oxides: GB 13271-2014,
vegetable oils, 150mg/Nm3 Emission Standard
101
2021 Semiannual Report of New Hope Liuhe Co., Ltd
suspended solids, Sulfur dioxide: for Boiler Air
coliform bacteria. 50mg/Nm3 Pollutants DB37
Fumes: 2374-2018
10mg/Nm3
Ningb Waste gases: Waste One COD:300mg/L Water Quality COD: COD: None
o nitrogen oxides, gas: waste Total nitrogen: Standard for 2.64t/ 2.64t/
New particulates, sulfur directl water Waste 40mg/L Farmland Irrigation a; a;
Hope dioxide, hydrogen y discha water: Ammonia GB5084-2005, ammo ammo
Liuhe sulfide, ammonia, discha rge off-sit nitrogen:70mg/L Malodorous nia nia
Farmi odor concentration rge outlet e Total phosphorus: Pollutant Emission nitrog nitrog
ng wastewater: after enviro 7mg/L Standard GB en: en:
Co., chemical oxygen treatm nment pH:6-8 14554-93, 0.26t/ 0.26t/
Ltd demand, ammonia ent al Suspended solids: Boiler Air Pollutant a a
nitrogen, total waste protec 200mg/L Emission Standard
nitrogen, total water: tion BOD5:150mg/L GB13271-2014
phosphorus, pH indire station Animal and Boiler Air Pollutant
value, five-day ct of the vegetable oils: Emission Standard
biochemical oxygen discha compa 0.16t/a DB37/2374-2018
demand, animal and rge ny Nitrogen oxides:
vegetable oils, 150mg/Nm3
suspended solids, Sulfur dioxide:
coliform bacteria. 50mg/Nm3
Fumes:
10mg/Nm3
Zhen Waste gases: Waste One COD:300mg/L Water Quality COD: COD: None
gjiang nitrogen oxides, gases: waste Total nitrogen: Standard for 73.36t 73.36t
Yihai particulates, sulfur directl water Waste 70mg/L Farmland Irrigation /a; /a;
Agric dioxide, hydrogen y discha waters Ammonia GB5084-2005, ammo ammo
ultura sulfide, ammonia, discha rge : north nitrogen:30mg/L Malodorous nia nia
l odor concentration rged outlet side of Total phosphorus: Pollutant Emission nitrog nitrog
Devel wastewater: after the 7mg/L Standard GB en: en:
opme chemical oxygen treatm enviro pH:6-8 14554-93, 7.34t/ 7.34t/
nt demand, ammonia ent nment Suspended solids: Boiler Air Pollutant a a
Co., nitrogen, total Waste al 200mg/L Emission Standard
Ltd nitrogen, total water: protec BOD5:150mg/L GB13271-2014
phosphorus, pH directl tion Animal and Boiler Air Pollutant
value, five-day y station vegetable oils: Emission Standard
biochemical oxygen discha of the 0.16t/a (DB37/2374-2018)
demand, animal and rged compa Nitrogen oxides:
vegetable oils, after ny 150mg/Nm3
suspended solids, treatm Sulfur dioxide:
coliform bacteria. ent. 50mg/Nm3
Fumes:
102
2021 Semiannual Report of New Hope Liuhe Co., Ltd
10mg/Nm3
Construction and operation of pollution control facilities
Name of
pollution Treatment Operation
Company name Treatment process Time commissioned
control capacity status
facility
Sewage
Linyi Liuhe Food Co., Anaerobic + aerobic 1,200 cubic Commissioned in Running
treatment
Ltd (A/O process) meters/day 2015 normally
system
Sewage Hydrolytic
Qiuxian Liuhe 1000 cubic Commissioned in Running
treatment acidification + A/O
Kangyuan Food Co., Ltd meters/day 2014 normally
system process
Lanling New Hope Sewage
Anaerobic + aerobic 600 cubic Commissioned in Running
Liuhe Hongjun Food treatment
(A/O process) meters/day 2013 normally
Co., Ltd system
Acquired in 1997,
Pingyi Refrigeration
Sewage operated using the
Plant of Shandong New Biological contact 1,200 cubic Running
treatment original tanks, further
Hope Liuhe Group Co., oxidation process meters/day normally
system improved in
Ltd
2002/2004.
SBR system was
Sewage
Qingdao Tianrun Food SBR process + A/O 2000 cubic commissioned in Running
treatment
Co., Ltd process meters/day 2005, followed by normally
system
A/O process in 2009
Commissioned in
Sewage
Xiaoyi New Hope Liuhe Anaerobic + aerobic 1600 cubic 2012, process Running
treatment
Food Co., Ltd (A/O process) meters/day improved in 2016, normally
system
with bio-filters added
Commissioned in
Sewage 2010, and further
Yishui New Hope Liuhe Anaerobic + aerobic 1800 cubic Running
treatment improved in 2014
Food Co., Ltd (A/O process) meters/day normally
system through sewage
treatment system
Sewage Commissioned in
Guantao Liuhe Food Anaerobic + aerobic 3400 cubic Running
treatment 2009, and further
Co., Ltd (A/O process) meters/day normally
system improved in 2017
Sewage
Binzhou Liuhe Longda SBR process + A/O 500 cubic Commissioned in Running
treatment
Farming Co., Ltd process meters/day 2008 normally
system
Sewage
Wudi Liuhe Xinyang SBR process + A/O 1000 cubic Running
treatment 2006
Food Co., Ltd process meters/day normally
system
103
2021 Semiannual Report of New Hope Liuhe Co., Ltd
Sewage Commissioned in
Zouping Liuhe Anaerobic + aerobic 1000 cubic Running
treatment 2004 and transformed
Livestock Co., Ltd (A/O process) meters/day normally
system and upgraded in 2012
Sewage
Shanxian Liuhe Feed Hydrolytic 1300 cubic Commissioned in Running
treatment
Co., Ltd Food Branch acidification + BRN meters/day 2012 normally
system
Sewage
Caoxian Liuhe Food 1400 cubic Commissioned in Running
treatment FBR process
Co.,Ltd meters/day 2007 normally
system
Sewage
Jiaxiang New Hope Anaerobic + aerobic 3000 cubic Running
treatment September 2017
Liuhe Food Co., Ltd (A/O process) meters/day normally
system
Commissioned in
Sewage
Yuncheng Liuhe Food Anaerobic + aerobic 800 cubic 2006, and upgraded Running
treatment
Co., Ltd (A/O process) meters/day in 2011 and 2017 normally
system
respectively.
Sewage
Anshan Liuhe Food Co., Anaerobic + aerobic 2000 cubic Commissioned in Running
treatment
Ltd (A/O process) meters/day 2007 normally
system
Sewage
Panjin Liuhe Farming Biological contact 1,200 cubic Commissioned in Running
treatment
Co., Ltd oxidation process meters/day 2011 normally
system
Sewage
Dong’e Liuhe Lvjia Anaerobic + aerobic 600 cubic Commissioned in Running
treatment
Food Co., Ltd (A/O process) meters/day 2010 normally
system
High efficiency air
Liaocheng Liuhe Sewage floatation + Commissioned in
2500 cubic Running
Rongda Farming Co., treatment hydrolytic 2013 and accepted in
meters/day normally
Ltd system acidification (A/O May 2015
process)
Combined air
Shenxian New Hope Sewage floatation and Commissioned in
2000 cubic Running
Liuhe Qingsizhai Food treatment biological contact December 2013 and
meters/day normally
Co., Ltd system oxidation (A/O accepted in July 2014
process)
The contact oxidation
Sewage process was put into
Yanggu Liuhe Luxin Anaerobic + aerobic 3000 cubic Running
treatment operation in 2009,
Food Co., Ltd (A/O process) meters/day normally
system followed by the A/O
process in 2015
The contact oxidation
Sewage
Weifang Tianhui Food Contact oxidation 700 cubic process was put into Running
treatment
Co., Ltd process + SBR meters/day operation in 2007 and normally
system
SBR in 2009
104
2021 Semiannual Report of New Hope Liuhe Co., Ltd
Sewage
Weifang Heshengyuan Anaerobic + aerobic 5700 cubic Commissioned in Running
treatment
Food Co., Ltd (A/O process) meters/day 2018 normally
system
Sewage Commissioned in
Luoyang Liuhe Huiquan Anaerobic + aerobic 1000 cubic Running
treatment 2008, and further
Food Co., Ltd (A/O process) meters/day normally
system improved in 2015
Sewage Commissioned in
Hebi Liuhe Zhizhen Anaerobic + aerobic 2000 cubic Under
treatment 2011 and upgraded in
Food Co., Ltd (A/O process) meters/day testing
system 2015
Sewage
Laiwu New Hope Liuhe Anaerobic + aerobic 3000 cubic Running
treatment 2014
Food Co., Ltd (A/O process) meters/day normally
system
Sewage Commissioned in
Dezhou Liuhe Zhikang Anaerobic + aerobic 1000 cubic Running
treatment 2008 and system
Food Co., Ltd (A/O process) meters/day normally
system improved in 2020
Commissioned in
Sewage 2013, and further
Feixian Liuhe Huahai Anaerobic + aerobic 2000 cubic Running
treatment improved in 2016
Food Co., Ltd (A/O process) meters/day normally
system through sewage
treatment system
Sewage
Fuxin Liuhe Farming Anaerobic + aerobic 1500 cubic Commissioned in Running
treatment
Co., Ltd Food Branch (A/O process) meters/day 2007 normally
system
Taiqian New Hope Sewage
Anaerobic + aerobic 2000 cubic Running
Liuhe Luxin Food Co., treatment 44105
(A/O process) meters/day normally
Ltd system
Sewage
Laoting Liuhe Xinmeizi Anaerobic + aerobic 1500 cubic Commissioned in Running
treatment
Food Co., Ltd (A/O process) meters/day 2016 normally
system
Qixia Refrigeration
Sewage
Plant of Shandong New Anaerobic + aerobic 1,200 cubic Commissioned in Running
treatment
Hope Liuhe Group Co., (A/O process) meters/day 2012 normally
system
Ltd
Commissioned in
Sewage 2008, and further
Laiyang Tianye Food 1,200 cubic Running
treatment A/O process improved in 2016
Co., Ltd meters/day normally
system through sewage
treatment system
Sewage
Tai’an Taishan Liuhe Anaerobic + aerobic 1500 cubic Commissioned in Running
treatment
Food Co., Ltd (A/O process) meters/day 2015 normally
system
Shandong New Hope Sewage Commissioned in
Anaerobic + aerobic 1500 cubic Running
Liuhe Group Co., Ltd treatment 2013, and further
(A/O process) meters/day normally
Linyi Branch system improved in 2019
105
2021 Semiannual Report of New Hope Liuhe Co., Ltd
through sewage
treatment system
Sewage
Qingdao Liuhe Wanfu 800 cubic Commissioned in Running
treatment SBR process
Food Co., Ltd meters/day 2012 normally
system
Commissioned in
Sewage 2011, and further
Fenxi New Hope Liuhe 1000 cubic Running
treatment A/O process improved in 2018
Food Co., Ltd meters/day normally
system through sewage
treatment system
Sewage
Beijing Kinghey Food Biological contact 1500 cubic Commissioned in Running
treatment
Co., Ltd oxidation process meters/day 2004 normally
system
Sewage
Hebei Kinghey Meat 1500 cubic Commissioned in Running
treatment A/O process
Industry Co., Ltd meters/day 2006 normally
system
The first phase was
Sewage Biological contact
Liaoning Kinghey Food 3000 cubic commissioned in Running
treatment oxidation process,
Co., Ltd meters/day 2006, followed by the normally
system A/O process
second phase in 2019
Sewage
Chengdu Xiwang Food Anaerobic + aerobic 1400 cubic Commissioned in Running
treatment
Co., Ltd (A/O process) meters/day 2010 normally
system
Zhejiang Xindongwan Sewage
Aerobic aeration 1500 cubic Not
Agricultural treatment Not commissioned
process meters/day operated
Development Co., Ltd system
Pooled into Zhejiang
Xindongwan
Sewage
Hangzhou Guanglv Agricultural
treatment
Breeding Co., Ltd Development Co.,
system
Ltd for sharing of one
system.
Sewage
Ruian New Hope Liuhe UASB+ two-level 430 cubic Not
treatment Not commissioned
Farming Co., Ltd AO meters/day operated
system
Zhejiang Yihai Sewage
UASB+ two-level 670 cubic Commissioned in
Agricultural treatment Rectification
AO meters/day 2021
Development Co., Ltd system
Sewage
Ningbo New Hope UASB+ two-level 731 cubic Commissioned in Running
treatment
Liuhe Farming Co., Ltd AO meters/day 2021 normally
system
Environmental impact assessment of construction projects and other administrative licenses for environmental protection
Company name Document name Approving Date approved Approval No
106
2021 Semiannual Report of New Hope Liuhe Co., Ltd
authority
Dezhou City
Bureau of
Approval of environmental impact Environment
Dehuanyan
assessment report of Linyi Liuhe Food al December 24, 2010
(2010) No. 65
Co., Ltd Protection,
Shandong
Province
Linyi Liuhe
Linyi
Food Co., Ltd
County
Bureau of
Acceptance Test Report on
Environment Linhuanjianzi
Environmental Protection of Completed June 2017
al 2017 YS06-07
Construction Project
Protection,
Shandong
Province
Approval of Environmental Impact
Qiu County
Assessment Report on the 20 million
Bureau of Qiuhuanshu
white-feathered meat duck farming and February 02, 2012
Enviornment [2012] No. 1
processing project of Hebei Kangyuan
al Proetction
HALAL Food Co., Ltd
Supplement to the 20 million Qiu County
white-feathered meat duck farming and Bureau of Qiuhuanshu
December 23, 2013
processing project of Hebei Kangyuan Enviornment [2013] No. 4
HALAL Food Co., Ltd al Proetction
Qiuxian Liuhe Qiu County
The 20 million white-feathered meat
Kangyuan Food Bureau of Qiuhuanyan
duck farming and processing project of 2013
Co., Ltd Enviornment [2013] No.07
Hebei Kangyuan Islamic Food Co., Ltd
al Proetction
Qiu County
Duck feather drying and processing Bureau of Qiushenhuanbia
2019
project Administrati o 【2019】No.11
ve Approval
Construction project environmental
Filed by the
impact registration form for UV light October 15, 2018 2018130400000
company
oxygen deodorization environmental (time filed) 0054
online
protection project
Approval of Environmental Impact
Linyi City
Assessment Report on the 15 million/a
Lanling New Bureau of Linhuanfa
meat duck slaughtering and food April 10, 2013
Hope Liuhe Environment 【2013】No. 53
processing project of Cangshan County
Hongjun Food al Protection
Hongjun Food Co., Ltd
Co., Ltd
Acceptance Opinions on the Linyi City Linhuanpingha
August 20, 2018
Completion Acceptance of Bureau of n (2014) No.
107
2021 Semiannual Report of New Hope Liuhe Co., Ltd
Environmental Protection for the 15 Environment 341
million/a meat duck slaughtering and al Protection
food processing project of Lanling New
Hope Liuhe Hongjun Food Co., Ltd
Written Reply regarding the Approval Linyi City
Linhuanhan
Opinions on the Second Phase of Bureau of
Pingyi December 07, 2001 【2001】No.
Broiler Slaughtering Line Project of Environment
Refrigeration 103
Pingyi Liuhe Co., Ltd al Protection
Factory of
Acceptance Opinions on the
Shandong New Linyi City
Completion Acceptance of
Hope Liuhe Bureau of Pinghuanshenzi
Environmental Protection of the Second June 02, 2003
Group Co., Ltd Environment (2008)No. 41
Phase of Broiler Slaughtering Line
al Protection
Project of Pingyi Liuhe Co., Ltd
Jiehua
“Environmental Impact Report on Environment
Poultry Slaughterhouse Expansion al Feberuray 2020 1581306565000
Project” Technology
Co., Ltd
Qingdao Pingdu City
Environmental Impact Report on the 6
Tianrun Food Bureau of Pinghuanjianzi
million/a Meat Duck Processing Plant 2015-01-18
Co., Ltd Environment (2005) No. 20
Project
al Protection
Acceptance Opinions on Completion Pingdu City
Acceptance of Environmental Bureau of Pinghuanjianzi
2006-12-19
Protection of the Meat Duck Processing Environment (2003) No. 53
Plant Project al Protection
Approval of Environmental Impact
Lvliang City
Assessment Report on the proposed Lvhuanxingshe
Bureau of
60,000 t/a chicken cutting production 2010-12-09 n [2010]No.
Environment
line project of Xiaoyi Daxiang Farming 335
al Protection
Xiaoyi New & Food Co., Ltd
Hope Liuhe Acceptance Opinions on Completion
Food Co., Ltd Acceptance of Environmental Lvliang City
Protection of the proposed 60,000 t/a Bureau of Xiaohuanhan
2017-09-30
chicken cutting production line project Environment [2017] No. 167
of Xiaoyi Daxiang Farming & Food al Protection
Co., Ltd
Approval of Environmental Impact
Linyi City
Assessment Report of the proposed Linhuanhan
Bureau of
Yishui New 90,000 t/a poultry meat and food May 04, 2009 【2009】No.
Environment
Hope Liuhe processing plant project of Yishui Liuhe 245
al Protection
Food Co., Ltd Kailida Food Co., Ltd
Approval of Application for Linyi City Linhuanhan
August 21, 2010
Commissioning of the new 90,000 t/a Bureau of 【2010】No.
108
2021 Semiannual Report of New Hope Liuhe Co., Ltd
poultry meat and food processing plant Environment 596
project of Yishui Liuhe Kailida Food al Protection
Co., Ltd
Approval of Environmental Impact Linyi City
Linhuanhan
Assessment Report on the Sewage Bureau of
June 24, 2011 【2011】No.
Treatment Improvement Project of Environment
330
Yishui Liuhe Kailida Food Co., Ltd al Protection
Approval of Application for Linyi City
Linhuanhan
Commissioning of the Sewage Bureau of
October 12, 2012 【2012】No.
Treatment Improvement Project of Environment
554
Yishui Liuhe Kailida Food Co., Ltd al Protection
Approval of Environmental Impact Handan City
Assessment Report on the Broiler Bureau of
March 04, 2009 [2009] No. 36
Slaughtering and Cutting Project of Environment
Guantao Liuhe Food Co., Ltd al Protection
Acceptance Opinions on Completion
Handan City
Acceptance of Environmental
Guantao Liuhe Bureau of Hanhuanyan
Protection of the Broiler Slaughtering December 02, 2010
Food Co., Ltd Environment [2010] No. 89
and Cutting Project of Guantao Liuhe
al Protection
Food Co., Ltd
Handan City
Meat packing and sewage treatment Bureau of Huanguanbiao
May 22, 2017
project of Guantao Liuhe Food Co., Ltd Environment 【2017】No. 9
al Protection
Binzhou
City Bureau
The 0.90 million/a broiler and duck of Binchenghuanb
slaughtering and cutting plant project of Environment March 16, 2007 iao [2007] No.
Binzhou Longda Food Co., Ltd al Protection 11
Binzhou Liuhe Bincheng
Longda Branch
Farming Co., Binzhou
Ltd City Bureau
of
Huanyan [2008]
Acceptance opinions Environment September 20, 2008
No.1-15
al Protection
Bincheng
Branch
Binzhou
Wudi Liuhe The 40,000/a broiler slaughtering plant City Bureau
Binhuanzi
Xinyang Food project of Binzhou Qinghe Fushi Food of February 26, 2007
[2007] No. 30
Co., Ltd Co., Ltd Environment
al Protection
Zouping Liuhe Approval of Environmental Impact Zouping September 08, 2009 Zouhuanuanzi
109
2021 Semiannual Report of New Hope Liuhe Co., Ltd
Livestock Co., Assessment Report on the 0.90 County (2009) No.72
Ltd million/a broiler slaughtering line Bureau of
project of Zouping Liuhe Farming Co., Environment
Ltd al Protection
Acceptance Opionios on Completion Zouping
Acceptance of Environmental County
Zouhuanyanbia
Protection of the 0.90 million/a broiler Bureau of December 07, 2010
o (2010) No. 13
slaughtering line project of Zouping Environment
Liuhe Farming Co., Ltd al Protection
The 30 million/a meat duck Heze City
slaughtering and processing plant Bureau of Hehuanshen
June 11, 2012
project of Shanxian Liuhe Feed Co., Ltd Environment [2012] No. 46
Shanxian Liuhe Food Branch al Protection
Feed Co., Ltd Completion Acceptance of
Heze City
Food Branch Enviornmental Protection of the 30
Bureau of Huanyan [2017]
million/a meat duck slaughtering and September 30, 2017
Environment No. 108
processing plant project of Shanxian
al Protection
Liuhe Feed Co., Ltd Food Branch
Cao County
The 20 million/a duck slaughtering and
Bureau of Caohuanshen
processing plant project of Caoxian April 11, 2007
Environment [2007] No. 44
Liuhe Food Co., Ltd
al Protection
Caoxian Liuhe
Completion acceptance of
Food Co.,Ltd Cao County
environmental protection of the 20
Bureau of Caohuanshen
million/a duck slaughtering and June 10, 2008
Environment [2008] No. 26
processing plant project of Caoxian
al Protection
Liuhe Food Co., Ltd
Jiaxiang
Jiaxiang New The meat poultry slaughtering and County
Jiahuanshen
Hope Liuhe packing plant project of Jiaxiang New Bureau of August 17, 2016
[2016] No. 02
Food Co., Ltd Hope Liuhe Food Co., Ltd Environment
al Protection
Yuncheng
Approval of the Environmental Impact
County
Assessment Report on Wastewater Yunhuanshen
Bureau of July 25, 2010
Treatment Improvement Project of 【2010】No. 62
Environment
Yuncheng Yuncheng Liuhe Food Co., Ltd
al Protection
Liuhe Food Co.,
Yuncheng
Ltd
Completion Acceptance Form for the County
Yunhuanpingha
Wastewater Treatment Improvement Bureau of October 13, 2014
n (2018) No.6
Project Environment
al Protection
Anshan Liuhe The 15 million/a meat duck Tai’an Taihuanshenzi
May 11, 2007
Food Co., Ltd slaughtering and packing plant project County [2007] No. 8
110
2021 Semiannual Report of New Hope Liuhe Co., Ltd
of Liaoning Honglu Agricultural Bureau of
Development Co., Ltd Environment
al Protection
Acceptance Opinions on Completion
Tai’an
Acceptance of Environmental
County
Protection of the 15 million/a meat duck Taihuanyanzi
Bureau of June 29, 2008
slaughtering and packing plant project [2008] No. 6
Environment
of Liaoning Honglu Agricultural
al Protection
Development Co., Ltd
Approval of Environmental Impact
Panjin City
Assessment Report on the Meat Duck
Bureau of Panhuanfa
Cutting, Processing and Refrigeration December 30, 2010
Environment [2010] No. 350
Plant Project of Panjin Liuhe Farming
al Protection
Panjin Liuhe Co., Ltd
Farming Co., Acceptance Opinions on Completion
Ltd Acceptance of Environmental Panjin City
Protection of the Meat Duck Cutting, Bureau of Panhuanhan
November 29, 2012
Processing and Refrigeration Plant Environment [2012] No. 117
Project of Panjin Liuhe Farming Co., al Protection
Ltd
Donge
The 0.90 million/a poultry slaughtering County
Dongjibei
and refrigeration plant project of Donge Bureau of July 15, 2008
[2008 ] No. 55
Liuhe Lvjia Food Co., Ltd Environment
Dong’e Liuhe
al Protection
Lvjia Food Co.,
Acceptance Opinions on Completion Donge Environmental
Ltd
Acceptance of the 0.90 million/a County Protection
poultry slaughtering and refrigeration Bureau of December 29, 2010 Report on
plant project of Donge Liuhe Lvjia Environment Construction
Food Co. Ltd al Protection Project
Approval of Environmental Impact Gaotang
Assessment Report on the Meat Duck County
Gaohuanyan
Slaughtering Production Line Project of Bureau of February 24, 2012
[2012] No. 02
Liaocheng Liaocheng Liuhe Rongda Farming Co., Environment
Liuhe Rongda Ltd al Protection
Farming Co., Gaotang
Ltd Acceptance Opinions on Environmental County
Gaohuanyan
Protection of Completed Construction Bureau of July 21, 2017
[2017] No. 10
Project Environment
al Protection
Shenxian New Approval of Environmental Impact Shen County
Hope Liuhe Assessment Report on the 48 million/a Bureau of Shenhuanshen
May 28, 2013
Qingsizhai Duck Slaughtering Plant Project of Environment 【2013】No. 43
Food Co., Ltd Shenxian New Hope Liuhe Qingsizhai al Protection
111
2021 Semiannual Report of New Hope Liuhe Co., Ltd
Food Co., Ltd
Acceptance Opinions on Completion
Acceptance of Environmental Shen County
Protection of the 48 million/a Duck Bureau of Shenhuanyan
July 28, 2014
Slaughtering Plant Project of Shenxian Environment 【2014】No. 12
New Hope Liuhe Qingsizhai Food Co., al Protection
Ltd
Yanggu
Yanggu Liuhe Opinions on Filing of the 32 million/a County
Yanghuanhan
Luxin Food Meat Duck Slaughtering Plant Project Bureau of December 28, 2016
[2016] No. 123
Co., Ltd of Yanggu Liuhe Luxin Food Co., Ltd Environment
al Protection
Approval of Environmental Impact Shouguang
Assessment Report on the Duck Product City Bureau
Shouhuanshenz
Food Processing Industrialization of March 30, 2007
i (2007) No. 2
Demonstration Project of Weifang Environment
Weifang
Tianhui Food Co., Ltd al Protection
Tianhui Food
Shouguang
Co., Ltd Acceptance Opinions on the Duck
City Bureau
Product Processing Packing
of October 2007 None
Industrialization Demonstration Project
Environment
of Weifang Tianhui Food Co., Ltd
al Protection
Anqiu City
Modern White-feathered Broiler
Bureau of Anhuanzi
Industry Integrated Development September 09, 2016
Environment [2016] No. 58
Weifang Project, Anqiu, Weifang City
al Protection
Heshengyuan
Anqiu City
Food Co., Ltd
Pollution Control Facilities Acceptance Bureau of Anhuanyanzi
January 2019
Form (Trial) Environment [2019] No. 034
al Protection
Luoyang
Review Opinions on New Broiler City Bureau
Luoshihuan
Processing Project of Luoyang Liuhe of July 30, 2008
(2008) No. 226
Huiquan Food Co., Ltd Environment
al Protection
Luoyang Liuhe Approval of Environmental Impact Provincial
Huiquan Food Assessment Report on the New Broiler Bureau of Yuhuanshen
November 14, 2008
Co., Ltd Processing Project of Luoyang Liuhe Environment (2008) No. 262
Huiquan Food Co., Ltd al Protection
Acceptance Opinions on Environmental Provincial
Protection of the New Broiler Bureau of Luohuanjianyan
October 15, 2010
Processing Project of Luoyang Liuhe Environment [2010] No. 52
Huiquan Food Co., Ltd al Protection
Hebi Liuhe Status Quo Environmental Impact Without Status Quo
112
2021 Semiannual Report of New Hope Liuhe Co., Ltd
Zhizhen Food Assessment Report retroactively filed in official Environmental
Co., Ltd 2016 written Impact
replies Assessment
Report
Laicheng
Environmental Impact Assessment
District
Report on the Meat Poultry Processing Laihuanju
Bureau of August 19, 2011
Industrialization Project of Laiwu New 【2011】No. 82
Laiwu New Environment
Hope Liuhe Food Co., Ltd
Hope Liuhe al Protection
Food Co., Ltd Laiwu City
Environmental Impact Report on Air Laihuanbaogao
Bureau of
Pollution Control of Laiwu New Hope November 14, 2018 biao {2018}
Environment
Liuhe Food Co., Lt No. 11142
al Protection
Acceptance Monitoring Report on Ling County
Environmental Protection of the Environment
Linghuanjianzi
Completed 30,000/d Meat Duck al Testing December 01, 2009
2009 No. 39
Slaughtering Plant Project of Dezhou Station,
Dezhou Liuhe Liuhe Zhikang Food Co., Ltd Dezhou City
Zhikang Food Acceptance Opinions on Environmental
Co., Ltd Protection of on Environmental Ling County
Protection of the Completed 30000/d Bureau of Linghuanyan
May 10, 2010
Meat Duck Slaughtering Plant Project Environment 【2010】No. 3
of Dezhou Liuhe Zhikang Food Co., al Protection
Ltd
Approval of Environmental Impact
Linyi City
Feixian Liuhe Assessment Report on the 20 million/a
Bureau of Linhuanfa
Huahai Food Broiler Slaughtering and Processing April 27, 2012
Environment (2012)No. 51
Co., Ltd Plant Project of Feixian Liuhe Huahai
al Protection
Food Co., Ltd
Fuxin City
Approval of Environmental Impact Bureau of
Fuhuantaishens
Assessment Report on the 25 million/a Environment
January 10, 2017 hu [2017] No.
Broiler Slaughtering Plant Project of al Protection
Fuxin Liuhe 01
Fuxin Liuhe Farming Co., Ltd Taiping
Farming Co.,
Branch
Ltd Food
Approval of Completion Acceptance of
Branch Fuxin City
Environmental Facilities for the 15
Bureau of Fuhuanfa
million/a White-feathered Broiler March 10, 2010
Environment [2010] No. 49
Slaughtering Plant Project of Fuxin
al Protection
Liuhe Farming Co., Ltd Food Branch
Taiqian New Environmental impact report for Puyang City
Taihuangongjia
Hope Liuhe approval of 120,000 meat ducks/d Bureau of
July 27, 2020 nban (2019)
Luxin Food slaughterhouse project of Taiqian New Ecological
No. 26
Co., Ltd Hope Liuhe Luxin Food Co., Ltd Environment
113
2021 Semiannual Report of New Hope Liuhe Co., Ltd
Leting
Broiler processing food production line
County
project of Leting New Hope Liuhe Lehuanshu
Bureau of September 21, 2012
Zhaotai Food Co., Ltd constructed by 【2012】No. 08
Environment
Leting Shengxiang Trade Co., Ltd
al Protection
Tangshan
City Bureau
Leting Liuhe
of
Xinmeizi Food
Ecological
Co., Ltd
Environment
Broiler processing food production line Lehuanpingbiao
Leting September 25, 2020
upgrading and transformation project 【2020】No. 49
CountyEnvir
onment
Leting
County
Branch
Qixia Approval of environmental impact
Refrigeration report on the factory building Qixia City
Factory of renovation and sewage plant Bureau of
2012-12-18 None
Shandong New reconstruction and expansion project of Environment
Hope Liuhe Qixia Refrigeration Plant of Shandong al Protection
Group Co., Ltd New Hope Liuhe Group Co., Ltd
Yantai City
Bureau of
Environmental protection acceptance
Ecological
and monitoring report on completion of
Environment Laihuanfa
20 million /a broiler slaughtering and May 01, 2020
Laiyang [2020]No. 12
processing line of Laiyang Tianye Food
Branch,
Co., Ltd
Shandong
Laiyang Tianye Province
Food Co., Ltd Yantai City
Bureau of
Ecological
Environment Laihuanfa
Acceptance opinions May 01, 2020
Laiyang [2020] No. 12
Branch,
Shandong
Province
Taian Taishan
Liuhe Food Co., None None
Ltd
Shandong New Approval of Environmental Impact Linyi City
Linhuanfa
Hope Liuhe Report of Shandong Dazhong Food Co., Bureau of July 07, 2007
【2007】No. 73
Group Co., Ltd Ltd on Relocation, Rebuilding and Environment
114
2021 Semiannual Report of New Hope Liuhe Co., Ltd
Linyi Branch Expansion of 30,000t/a Poultry al Protection
Slaughtering, Cutting and Processing
Plant
Environmental Acceptance Opinion on
Shandong Dazhong Food Co., Ltd’s Linyi City
Project of Relocation, Rebuilding and Bureau of Linhuanyan
December 08, 2008
Expansion of 30,000t/a Poultry Environment 【2008】No.82
Slaughtering, Cutting and Processing al Protection
Plant
Environmental Impact Report and
Water Environmental Impact Report on
Ocean
20,000t/a Meat Product and Quick
University 2011-05-12 HDHP112137
Frozen Vegetable Processing Plant
of China
Project of Qingdao Liuhe Wanfu Food
Co., Ltd
Approval of Environmental Impact
Report and Water Environmental Laixi City
Impact Report on 20,000t/a Meat Environment Xihuanshen
2011-06-03
Product and Quick Frozen Vegetable al Protection [2011]No. 43
Processing Plant Project of Qingdao Bureau
Qingdao Liuhe
Liuhe Wanfu Food Co., Ltd
Wanfu Food
Completion Environmental Protection
Co., Ltd Laixi City
Acceptance and Testing Form for
Environment
20,000t/a Meat Product and Quick Xiyanjianzi
al 2014.1
Frozen Vegetable Processing Plant (2013) No. 027
Monitoring
Project of Qingdao Liuhe Wanfu Food
Station
Co., Ltd
Letter regarding Completion
Environmental Protection Acceptance Laixi City
Opinion on 20,000t/a Meat Product Environment Xihuanyan
2015-02-27
and Quick Frozen Vegetable Processing al Protection [2015] No. 9
Plant Project of Qingdao Liuhe Wanfu Bureau
Food Co., Ltd
Approval of Environmental Impact
Linfen City
Fenxi New Report on Broiler Breeding and
Environment Linhuanshenfa
Hope Liuhe Slaughtering and Feed Processing 2010-11-17
al Protection [2010] No. 16
Food Co., Ltd Project of Fenxi Hongchang Breeding
Bureau
Co., Ltd
Approval of Beijing Pinggu District Pinggu
Bureau of Environmental Protection District
Beijing Jingpinghuanpi
regarding Environmental Impact Report Bureau of
Kinghey Food 2014 ngshen [2014]
on Project of Processing of Quick Environment
Co., Ltd No. 450
Frozen Food, Meat Products and al
Supporting Facilities Protection,
115
2021 Semiannual Report of New Hope Liuhe Co., Ltd
Pinggu
District
Bureau of Pinghuanyan
Acceptance opinions 2015
Environment [2015] No. 71
al
Protection,
Approval of Environmental Impact Provincial
Report on Pig Slaughtering and Meat Bureau of Jihuanguan
2004
Packing Project of Beijing Kinghey Environment [2014] No. 193
Food Co., Ltd in Nangong al Protection
Hebei Kinghey
Hebei
Meat Industry
Provincial
Co., Ltd
Department Jihuanyan
Acceptance opinions 2010
of (2010) No. 006
Environment
al Protection
Shenyang
City Bureau
of
Shennonghuanb
Pig Slaughtering Project of Liaoning Environment
2005 aoshenzi [2005]
Kinghey Food Co., Ltd al Protection
No. 7
Puhe New
Town
Liaoning
Branch
Kinghey Food
Shenyang
Co., Ltd
City Bureau
of
Environment Puhuanfenyan
Acceptance opinions 2010
al Protection [2010] No. 71
Puhe New
Town
Branch
Xinjin
Environmental protection acceptance County of
Xinhuanyan
application registration card for Bureau of September 08, 2009
[2009] No. 17
completion of construction project Environment
al Protection
Chengdu Hope Xinjin
Food Co., Ltd Environmental protection acceptance County of
Xinhuanyan
application registration card for Bureau of September 08, 2009
[2009] No. 18
completion of construction project Environment
al Protection
Low-temperature meat product Xinjin Xinhuanjian
October 14, 2008
processing plant (phase I and II) County of (2008)No. 79
116
2021 Semiannual Report of New Hope Liuhe Co., Ltd
construction project Bureau of
Environment
al Protection
Xinjin
High-temperature meat product County of
Xinhuanjian
processing plant (phase III) construction Bureau of N