2022-04-14-深交所-新_和_成_2021年年度报告（英文版）_178页_3mb

Summary of Zhejiang NHU Co., Ltd. 2021 Annual Report

Core Content

Zhejiang NHU Co., Ltd. (stock code: 002001) is a national high-tech enterprise primarily engaged in the production and sales of fine chemicals, including nutrition, flavor and fragrance, new polymer materials, and APIs. The company operates under the Shenzhen Stock Exchange and is committed to transparency, accuracy, and completeness in its financial reporting.

Key Financial Indicators

2021 Financial Highlights

• Operating Revenue: 14,797,989,091.20 yuan (up 43.47% YoY)
• Net Profit Attributable to Shareholders: 4,324,150,263.31 yuan (up 21.34% YoY)
• Net Profit After Non-recurring Items: 4,147,933,364.84 yuan (up 21.63% YoY)
• Net Cash Flows from Operating Activities: 5,837,878,051.57 yuan (up 86.94% YoY)
• Basic EPS: 1.68 yuan/share (up 21.74% YoY)
• Diluted EPS: 1.68 yuan/share (up 21.74% YoY)
• Weighted Average ROE: 21.07% (up 1.44 percentage points YoY)

2021 vs. 2020 and 2019

Quarterly Financial Highlights

Main Business Overview

1. Nutrition

• Market Position: Strong market share and brand advantages in the global nutrition industry.
• Key Products: Vitamin E, A, C, D3, methionine, biotin, coenzyme Q10, carotenoids.
• Applications: Feed additives, food and beverage nutrition supplements, health foods.
• Development Strategy: Focus on serialized and differentiated development, optimization of production lines, and R&D for key technologies.
• Projects: Second phase of 250,000 tons/year methionine project with 100,000-ton equipment operational and 150,000-ton equipment under construction.

2. Flavor and Fragrance

• Market Position: Competitive in the global market with a high market share.
• Key Products: Linalool, citral, cis-3-hexenol, methyl dihydrojasmonate, raspberry ketone, ligustral.
• Applications: Personal care, cosmetics, and food industry.
• Development Strategy: Continuous enrichment of product varieties based on chemical synthesis and biological fermentation.
• Projects: 5,000-ton menthol project completed on schedule.

3. New Polymer Materials

• Focus: High molecular polymers and key intermediates.
• Key Products: PPS (Polyphenylene sulfide), PPA (Poly phthalamide).
• Applications: Electronic and electrical, automotive, environmental protection.
• Development Strategy: Integration and serialization, downstream application development.
• Projects: Third-phase 7,000-ton PPS project under construction.

4. APIs (Active Pharmaceutical Ingredients)

• Focus: Vitamins and antibiotics.
• Key Products: Moxifloxacin hydrochloride, vitamin A, vitamin D3.
• Applications: Pharmaceutical preparations.
• Development Strategy: Maintaining international production technology standards, focusing on export and processing.

Business Models

(1) Procurement Model

• Principle: Fairness, transparency, and optimal cost.
• Approach: Combines long-term strategic cooperation with open competitive procurement.
• Efforts: Reduces intermediate links in the supply chain, implements transparent procurement systems (procurement platform, supplier and bidding management), and improves supply chain efficiency and stability.

(2) Production Model

• Strategy: Production and sales coordination, efficient operation, excellent quality, and cost leadership.
• Approach: Balances production with market demand, responds to epidemic waves and power cuts, and implements reasonable production plans.
• Efforts: Continuously innovates production models, optimizes internal potential, and improves production processes to achieve safe, green, and efficient manufacturing.

(3) Sales Model

• Strategy: Customer-centric and market-oriented.
• Approach: Divides business lines by application fields and establishes sales models that suit market needs.
• Sales Methods: Mainly direct sales to end customers, with indirect sales through selected agents or distributors.

Risks and Future Outlook

• Risks:
  • Rising costs and limited procurement channels due to the "double carbon target" and dual control system.
  • Project approval and power supply challenges.
• Future Outlook:
  • The company expects to maintain its competitive position through innovation, green production, and efficient supply chain management.
  • The fine chemical industry is expected to grow steadily, especially in emerging markets.
  • The company is positioned to benefit from the global demand for vitamins, methionine, and other functional chemicals.
  • The development of new materials is anticipated to be a significant growth driver, supported by national policies and technological advancements.

Profit Distribution Proposal

• Dividend Distribution: 7 yuan (tax included) per 10 shares.
• Bonus Shares: No bonus shares.
• Capital Reserve Conversion: 2 shares per 10 shares.
• Total Shares Basis: Based on 2,563,842,524 shares as of March 31, 2022.
• Adjustment Basis: Distribution ratio will be adjusted if the total share capital changes due to factors like convertible bond conversion, share repurchase, equity incentives, etc.

Governance and Compliance

• Guarantees: The Board of Directors, Supervisors, and senior executives guarantee the authenticity and completeness of the report.
• Accounting Firm: Pan-China Certified Public Accountants LLP.
• Certified Public Accountants: Teng Peibin, Zhu Lili.
• Regulatory Compliance: The report is an English translation of the Chinese version, with the Chinese version prevailing in case of discrepancies.

Conclusion

Zhejiang NHU Co., Ltd. is a leading player in the fine chemical industry, with a diversified product portfolio and a strong focus on innovation and sustainable development. The company's financial performance in 2021 showed significant growth, driven by increased demand in nutrition, flavor and fragrance, and new materials sectors. Despite challenges related to the "double carbon target" and environmental regulations, the company is actively addressing these through green production, supplier development, and technological upgrades. The company's strategic positioning and market-oriented approach are expected to support continued growth in the coming years.