Securities code: Henan Huaying Agricultural Development Co.Ltd(002321) securities abbreviation: Henan Huaying Agricultural Development Co.Ltd(002321) Announcement No.: 2022040 Henan Huaying Agricultural Development Co.Ltd(002321) 2021 annual report summary I. important tips the summary of this annual report comes from the full text of the annual report. In order to fully understand the company’s operating results, financial status and future development plan, investors should carefully read the full text of the annual report in the media designated by the CSRC. In addition to the following directors, other directors attended the meeting of the board of directors to consider the annual report in person
Name of director not present in person position of director not present in person reason for not attending the meeting name of the entrusted person
Director Liang Xianping asked Wang Kaijiang for leave on official business
Tips on non-standard audit opinions √ applicable □ not applicable Asia Pacific (Group) Certified Public Accountants (special general partnership) audited the company’s 2021 financial report and issued an unqualified audit report with highlighted items. The board of directors of the company made a special statement on the matters involved in the unqualified audit report with emphasis in 2021, and the independent directors and the board of supervisors expressed their opinions. For details, please refer to the special instructions of the board of directors on matters involved in the unqualified audit report with emphasis in 2021 disclosed on the same day. The profit distribution plan of common stock or the plan of converting accumulation fund into share capital in the reporting period reviewed by the board of directors □ applicable √ not applicable. The company plans not to distribute cash dividends, bonus shares or convert accumulation fund into share capital. Preferred stock profit distribution plan for the reporting period adopted by the board of directors □ applicable √ not applicable II. Basic information of the company 1. Company profile
Stock abbreviation ST Huaying stock code Henan Huaying Agricultural Development Co.Ltd(002321)
Shenzhen Stock Exchange
Contact person and contact information secretary of the board of directors securities affairs representative
Name: he Zhifeng, Liu Shenglong
Office address: 11 / F, West Tower, Shengrun International Plaza, 219 Jinshui Road, Zhengzhou
Fax: 037155697519
Tel: 037155697518037155697517
E-mail zhifenghe Henan Huaying Agricultural Development Co.Ltd(002321) 163.com. liushenglong Henan Huaying Agricultural Development Co.Ltd(002321) 163.com.
2. Introduction to main business or products during the reporting period
1、 Industry development in the reporting period during the reporting period, the company achieved an operating revenue of 31924578 million yuan, including 13191317 million yuan for frozen duck and deep processing, accounting for 41.32%, and 17031598 million yuan for down and related products, accounting for 53.35%.
1. Overall development of meat duck industry
According to the data released by the National Bureau of statistics, China’s poultry production in 2021 was 23.8 million tons, an increase of 0.8%, accounting for 26.78% of China’s total meat production.
Meat duck breeding and slaughtering is a major livelihood industry related to agriculture. As an important part of the poultry industry, with an annual output value of more than 100 billion yuan, it is a pillar industry of China’s animal husbandry. It plays a vital role in meeting the animal protein needs of Chinese residents, increasing farmers’ income and driving people out of poverty in poor areas.
Meat duck business is divided into white feather meat duck, hemp feather meat duck and Muscovy duck according to varieties, of which white feather meat duck is the main variety.
According to the statistics of the national waterfowl industry technology system, in 2019, there were 4.057 billion white feather meat ducks, 359 million Muscovy ducks and semi Muscovy ducks, 162 million egg ducks and 462 million Ma ducks, totaling 5.04 billion. In 2020, there will be 3.97 billion white feather meat ducks, 267 million Muscovy ducks and semi Muscovy ducks, 134 million egg ducks and 579 million Ma ducks, totaling 4.95 billion. It is absolutely the largest meat duck country in the world.
The meat duck industry chain mainly includes breeding ducks, commercial duck breeding, commercial duck slaughtering and deep processing of duck meat. After years of development, meat duck breeding has developed from family sideline free range breeding to large-scale and intensive breeding and slaughtering, and the industry has a high degree of marketization. The upstream breeding enterprises of large-scale meat ducks in China mainly produce primary products of white striped ducks, and mostly supply FMCG and cooked food processing enterprises. In recent years, with the improvement of the external environment and the upgrading of the industrial model, many breeding enterprises have vigorously extended the industrial chain and tried to expand new fields through active product research and development. The expansion direction is mainly prepared meat food and leisure duck packaged cooked food.
The company is a large-scale national poultry food processing enterprise focusing on the processing of Cherry Valley Duck and integrating the series production of ancestral duck breeding, parental duck breeding, breeding chicken incubation, commercial duck / chicken breeding, slaughtering and frozen processing, cooked food processing, feed production, down processing and so on. At present, it is a national key leading enterprise in agricultural industrialization and a national key leading enterprise in poverty alleviation. In 2021, the sales volume of frozen duck products was 8608170 tons and that of cooked food was 1224950 tons.
2. Overall development of down industry
Down is a natural fiber that grows in the abdomen of geese and ducks. The flower shaped down is called feather. Down is the best natural material for human warmth preservation. After washing, drying, deodorization, grading and other processes, it is made into various down products. Compared with man-made materials, down has three times the heat preservation ability of general man-made materials.
As a large poultry breeding country in the world, China ranks first in duck and goose production in the world. Rich feather resources provide abundant resource conditions for the development of China’s down industry. More than 70% of foreign down feathers and their products are purchased in the Chinese market, and the demand for down feathers in the Chinese market is also growing.
China’s down industry has developed rapidly, and the production, sales, import and export volume of down products have increased significantly. According to the white paper on the high quality development of China’s down industry (2019) issued by China down industry association in 2019, China has an annual output of about 400000 tons of down, of which the ratio of goose down to duck down is 1:9. It has become the largest producer and consumer market of down raw materials and products in the world. At present, China’s down products enterprises have formed large-scale and industrial bases. The production areas of down raw materials are mainly distributed in Gangnan District, Guigang City, Guangxi, Wuchuan City, Guangdong, Xiaoshan District, Hangzhou City, Zhejiang, Lu’an, Anhui, Chengdu, Sichuan and other places. At the same time, three main down clothing bases, Wuchuan City, Guangdong, Guigang City, Guangxi and Xiaoshan, Hangzhou, Zhejiang, have been formed.
In the past three years (20192021), China’s exports of down and related products were US $3.923 billion, US $2.825 billion and US $3.333 billion respectively, making it the world’s largest exporter. In March 2022, the office of the U.S. trade representative announced the resumption of tariff exemption for some imported goods from China, including feathers, down and cotton pillows filled with duck down or goose down, so as to increase the output power for the export of down and down products. The dominant position of China as a major exporter of down and down products is prominent, and the future market development space of down and down products is broad.
The price trend of duck down in recent five years is as follows:
In 2021, the sales volume of down was 6644 tons. The company’s holding subsidiary Hangzhou Huaying Xintang down products Co., Ltd., the vice chairman unit of China down industry association, and its holding grandson Anhui Huaying Xintang down Co., Ltd. were among the top ten export enterprises in China’s down industry in 20202021.
2、 Main businesses engaged in during the reporting period
(I) main businesses of the company during the reporting period
The company’s main businesses are duck breeding, incubation, sales of poultry seedlings, feed production, slaughter and processing of commercial ducks, sales of frozen products, production and sales of cooked food, down and down products. During the reporting period, the company adjusted the industrial structure and suspended the chicken industry with a relatively small proportion of operating income. In addition, the company’s main business and structure have not changed significantly.
(II) main business models of the company during the reporting period
The company has established an integrated business model integrating the breeding and incubation of ancestral and parental ducks, the breeding of commercial ducks, the processing and sales of poultry products and their products, the production and sales of feed, and the production and sales of down and down products. This model effectively ensures the production and supply of all links, resists the risk of irregular price fluctuation of different products, improves the operation efficiency, and can effectively monitor the food quality and safety in all links from feed production to duck / chicken product sales, so as to ensure the quality and safety of the company’s products.
1. Business model of ancestral duck breeding
The company purchased the ancestral Cherry Valley Duck seedlings from the subordinate company of Cherry Valley Farm in China, and bred, laid eggs and hatched the parental duck seedlings in the company’s ancestral duck farm. Part of the duck seedlings planted by parents are sold at the market price, and the rest are internally supplied to the company’s duck breeding farm (breeding and hatching farm of duck bred by parents) for breeding commercial duck seedlings. The feed required for this link is provided by the company’s feed factory.
2. Management model of parental duck breeding
The Cherry Valley Duck seedlings of the parents’ generation are kept, and the commercial generation duck seedlings are raised, bred, laid and hatched in the duck farm of the company. Some commercial duck seedlings are sold to other breeding enterprises and individuals (collectively referred to as “export”), and the rest are supplied to “base farms (households)” and “contract farms (households)” for breeding (collectively referred to as “self use”).
3. Commercial duck breeding model
The company’s commercial duck breeding is mainly divided into two types: first, the base farm (household) breeding. The company provides the self built breeding base to the farm (household), signs a contract with the farm (household), provides feed, duck seedlings, epidemic prevention drugs, etc. to the farm (household) according to the approved price, and provides technical guidance and services. The farm (household) feeds according to the standardized breeding procedures, After cultivation, the company will buy back commercial adult ducks at the price agreed in advance. Such farms (households) are called base farms (households); Second, contract farms (households) breed. Farms (households) build their own farms under the guidance of the company. The follow-up procedures are basically the same as those of base farms (households), that is, feed and duck seedlings are purchased from the company, and the company provides epidemic prevention and breeding technical guidance. Commercial adult ducks are repurchased by the company. Such farms (households) are called contract farms (households).
According to the contract, the company has the obligation to buy back the commodity adult ducks of the farm (household). The company provides duck seedlings and feed to farms (households) at a price higher than the market price, and also recovers commercial adult ducks at a price higher than the market price. The pricing policy not only ensures the reasonable profit range of the farms (households), but also encourages the farms (households) to fulfill their commitments in the sales contract and ensure the stable supply of the company’s commodity adult ducks.
The company’s commercial duck breeding is mainly distributed in Xinyang City, Henan Province, Heze City, Shandong Province and Fengcheng City, Jiangxi Province
4. Down business model
There are two main sources of raw wool of the company’s down raw materials: first, the company’s slaughterhouse collects and processes the slaughtered duck feather and internally transports it to the down processing subsidiary; second, the company’s down processing subsidiary purchases raw wool from China’s large commercial duck slaughtering enterprises. The subsidiary of down processing will carry out production and sales according to the order arrangement plan.
The company will also make comprehensive judgment and appropriately sell raw wool according to its own capacity utilization and the market situation of duck feather and down.
5. Business model of feed
The feed factory of the company purchases feed raw materials for processing, and produces different kinds of feed according to the nutritional needs of ducks at different growth stages. Most of the finished feed is supplied to the company’s breeding poultry farms, base farms (households) and contract farms (households), and the rest of the feed is exported to other breeding enterprises or farmers.
6. Business model of frozen duck
The processing plant of the company’s headquarters repurchases the qualified commercial adult ducks bred by the base farms (households) and contract farms (households) according to the approved price. In addition to their own breeding, the company also purchases a small number of adult ducks according to the changes of market price, and slaughters and processes them into frozen products and fresh products. Some frozen and fresh products are used for their own use as raw materials for cooked food production; The other part is sold to end customers through distributors or directly. At the same time, the company has the export qualification of frozen products from Japan, South Korea, the European Union and other countries and regions, and directly sells them to overseas customers according to the market conditions.
7. Business model of cooked food
Cherry Valley food company, a subsidiary of the company, purchases fresh or frozen products from the company’s processing plant for deep processing. Most of the deep-processing products, such as low-temperature quick-frozen cooked food products, are exported to Japan, South Korea, the European Union, Hong Kong, Central Asia, Africa and other regions, and other deep-processing products are sold in China.
There was no significant change in the company’s main business operation mode during the reporting period.
3、 Analysis of main business during the reporting period
During the reporting period, the company sold 8608170 tons of frozen duck products, 1224950 tons of cooked food and 664350 tons of down; The company achieved an operating income of 31924578 million yuan, an increase of 2.14% over the previous year; The net profit attributable to the shareholders of the listed company was -2538051800 yuan, a year-on-year increase of 121.89%.
The main reason for the company’s loss during the reporting period is that the company plans to dispose of non retained assets after executing the reorganization plan, so the total asset impairment of relevant assets is about 2.948 billion yuan.
In addition to the influence of external factors, the operating revenue of the company during the reporting period increased by 2.14% compared with the same period of last year, and the operating cost decreased by 11.89% compared with the same period of last year. The main business also has a strong profit level. After reorganization, the company will get rid of the burden of previous years, pack light and go into battle, and the comprehensive profitability will be greatly improved.
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