2022-05-30-深交所-海大集团_2021年年度报告（英文版_418页_5mb

Guangdong Haid Group Co., Limited 2021 Annual Report Summary

Core Content Overview

Guangdong Haid Group Co., Limited (Haid Group) is a leading company in the feed industry, listed on the Shenzhen Stock Exchange with the stock code 002311. The annual report was approved for publication on 10 April 2022 and includes detailed information on the company's operations, financial performance, and risk management strategies.

Key Financial Indicators

Main Risks and Risk Control Measures

1. Risk of Periodical Fluctuation in the Feed Industry

• Cause: Abnormal weather and animal diseases affect livestock and aquaculture inventory, leading to changes in feed demand.
• Examples: African swine fever (2018), PRRSV-mediated pig diseases, shrimp-relevant EMS, and poultry-relevant H7N9 diseases.
• Risk Control:
  • Company has expanded regional manufacturing and local markets across China and Southeast Asia.
  • Diversified feed product lines (pig, chicken, duck, goose, fish, shrimp) provide comprehensive risk relief.

2. Risk of Drastic Fluctuation in Main Ingredient Materials' Price

• Cause: Fluctuations in agricultural product prices (corn, soybeans, etc.) due to global market conditions, policies, and trade relations.
• Risk Control:
  • Materials are categorized for centralized purchasing and regional procurement.
  • Company invests in a procurement research system and uses financial instruments like futures hedging and options to manage risks.
  • Strong R&D team focuses on animal nutrition and feed formulation to adapt to material price changes.

3. Risk of Environmental Protection Laws and Policies

• Cause: Environmental regulations restrict production in key water source areas, leading to adjustments in the animal industry's scale and layout.
• Impact: May affect the feed industry's market share, pricing power, and business model.
• Risk Control:
  • Enhances service capability to large-scale farmers.
  • Shares production lines across different feed types to quickly adjust production layout.
  • Expands operations in permitted areas and invests in R&D for microbial fermented feed and antibiotic substitutes.

4. Risk of Exchange Rate Fluctuations

• Cause: Increased global procurement and overseas investments lead to exposure to currency exchange rate changes.
• Risk Control:
  • Structurally manages settlement currencies to balance regional inflows and outflows.
  • Uses financial instruments such as forward contracts, swaps, and options to lock in exchange rates and control costs.

Non-recurring Gains or Losses

• The company reported no non-recurring gains or losses during the reporting period.
• Non-recurring items included government grants, asset disposals, and other non-operating income/expenses, but none were defined as recurring.

Other Key Information

• Company Profile:

  • Full name: Guangdong Haid Group Co., Limited
  • Registered address: Room 701, Building 2, Haid Mansion, No. 42, Road 4, Wangbo, Nancun Town, Panyu Dist, Guangzhou, China.
  • Legal representative: Mr. Hua Xue
  • Website: www.haid.com.cn
  • Email: zqbgs@haid.com.cn

• Independent Auditor: Grant Thornton China (Special General Partnership)

• CPAs: Wenyuan Guan and Shuxia Zhang

• Sponsor: China Merchants Securities Co., Ltd. (Supervision period: 16 April 2020 to 31 December 2021)

Industry Situation

• The feed industry is a crucial link in the agricultural industry chain, accounting for over 70% of farming costs.
• The industry has shifted from quantity growth to high-quality development over the past decade.
• Feed Industry: Output reached 290 million tons in 2021, up 16.1% year-on-year, with output value of 1,223.41 billion yuan, up 29.30%.
• Animal Healthcare Products: Market demand has grown rapidly, especially for healthy, safe, and green farming.
• Poultry Farming: Highest degree of industrialization, with over 70% of large-scale farms.
• Pig Farming: Output value of about 1.5 trillion yuan, moving towards large-scale, intensive, and industrialized development.
• Aquaculture: Output value also exceeds 1 trillion yuan, with policies like the marine summer fishing moratorium influencing its development.

Summary of Key Financial Highlights

• The company experienced a significant increase in operating income, but net profit declined due to non-recurring items and market conditions.
• Net cash flows from operating activities surged by over 500% in 2021, indicating improved operational efficiency.
• The company's focus on R&D and diversified production strategies helps mitigate risks from raw material price fluctuations and environmental regulations.