LIHUA(300761)2019-04-08 16:00Financial Performance - The company's operating revenue for 2018 was ¥7,214,329,050.45, representing a 21.62% increase compared to the previous year[13]. - The net profit attributable to shareholders for 2018 was ¥1,299,693,032.69, reflecting a 64.41% increase year-over-year[13]. - The net cash flow from operating activities reached ¥1,711,516,683.96, marking a 77.93% increase from the previous year[13]. - The total assets at the end of 2018 amounted to ¥5,692,038,691.93, which is a 37.70% increase compared to the end of 2017[13]. - The company reported a basic earnings per share of ¥3.5844 for 2018, up 64.41% from ¥2.1802 in 2017[13]. - The company achieved a sales revenue of 7.214 billion yuan, representing a year-on-year growth of 21.62%[21]. - The net profit attributable to shareholders reached 1.3 billion yuan, with a year-on-year increase of 64.61%[21]. - The company's gross margin for chicken products improved to 25.45%, an increase of 7.78% year-on-year[44]. - The total comprehensive income for the year was ¥1,299,693,032.69, up from ¥790,536,957.30, reflecting a growth of 64.4%[182]. Dividend Distribution - The company plans to distribute a cash dividend of 12 RMB per 10 shares to all shareholders, based on a total of 403,880,000 shares[3]. - The company distributed a cash dividend of RMB 484,656,000 (including tax) for the fiscal year 2018, which accounts for 37.29% of the net profit attributable to ordinary shareholders[82]. - The cash dividend policy emphasizes reasonable returns to investors while ensuring the company's sustainable development[80]. - The cash flow conditions for dividend distribution were met, ensuring no impact on the company's ongoing operations[81]. - The board of directors is committed to increasing cash dividends if net profits continue to grow steadily[81]. Business Development and Strategy - The company has outlined its future development outlook in detail, which includes strategies for market expansion and new product development[2]. - The company plans to expand its yellow feather chicken and pig farming businesses, focusing on increasing market share in regions such as Henan, Guangdong, and Southwest China[69]. - The company aims to become a leading national yellow feather chicken farming enterprise while developing a complete industrial chain in pig farming, including feed production and breeding[70]. - The company plans to invest in several projects, including integrated chicken farming and feed processing facilities, with a total planned output of 1.75 million chickens per year at two sites and 36,000 tons of feed at another[76]. - The company is actively adapting to the rapid development of non-traditional sales channels, such as supermarkets, to mitigate risks associated with industry cyclicality[70]. Risk Management - The company emphasizes the importance of risk awareness regarding animal diseases, product price fluctuations, and food safety risks in its annual report[2]. - The company faces significant risks from animal diseases and natural disasters, which could lead to increased production costs and decreased operational efficiency[75]. - The company is exposed to raw material supply and price volatility risks, particularly for key feed ingredients like corn and soybean meal, which can directly impact operating costs[76]. - The company employs a cooperative farming model, which may face challenges if government policies change or if trust with partner farmers diminishes, potentially affecting growth[76]. - The company will utilize a combination of agricultural insurance and commercial insurance to mitigate and diversify risks associated with its operations[77]. Research and Development - The company has established a mature R&D system, applying for multiple technology patents in breeding and feed formulation[20]. - The company is exploring molecular-assisted selection for high-yield egg-laying geese, which is expected to enhance breeding efficiency[53]. - The company has developed a unique breeding system for yellow feather chickens, achieving domestic leadership in meat quality and breeding technology[35]. - The company has completed the breeding of 200,000 chickens in a project focused on antibiotic-free farming, achieving better cost efficiency compared to traditional methods[54]. - The company’s R&D investment in 2018 amounted to ¥15,994,698.22, representing 0.22% of total revenue, an increase from 0.18% in 2017[57]. Market Trends and Industry Insights - The yellow feather chicken market is experiencing a trend towards increased concentration and brand value enhancement due to environmental regulations and consumer quality demands[23]. - The pig farming industry is facing pressure from market fluctuations and disease outbreaks, impacting the profitability of large-scale farming enterprises[23]. - The cyclical nature of the livestock industry is influenced by supply-demand relationships, with significant impacts from factors like disease outbreaks and environmental regulations[25]. - The yellow feathered chicken consumption market is primarily concentrated in the Jiangnan region and the lower reaches of the Yangtze River, with emerging markets in the north rapidly developing[25]. Corporate Governance - The company has established a complete governance structure with a shareholder meeting, board of directors, supervisory board, and senior management, ensuring effective operation and compliance with laws and regulations[154]. - The board consists of nine members, including three independent directors, who provide valuable suggestions for the company's development[154]. - Independent directors attended all board meetings and shareholder meetings, demonstrating active involvement in governance[160]. - The company has a robust internal control system that is fully implemented, supporting effective governance[154]. - The company respects and protects the rights of all stakeholders, promoting balanced interests among society, shareholders, employees, and the company itself[154]. Social Responsibility - The company invested CNY 139.55 million in poverty alleviation efforts, helping 26 registered impoverished individuals to escape poverty[124]. - The company actively participated in social welfare, donating a total of 224,000 to local impoverished households[121]. - The company sponsored local organizations with a total of 359,543.6[121]. - The company donated 69,500 in scholarships to students from local schools[121].