Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2018 Annual Report

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Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2018 Annual Report Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2018 Annual Report Stock Code: 603609 Stock Abbreviation (English): Wellhope Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2018 Annual Report April 2019 1 / 239 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2018 Annual Report Important Statements I. The Board of Directors, Supervisory Board, Directors, Supervisors and Senior Management of Liaoning Wellhope hereby warrant that there are no false representations, misleading statements or material omissions in this annual report, jointly and severally accept full responsibility for the truthfulness, accuracy and completeness of the contents of this report. II. All the Board Directors attended the board meeting. III. Jiangsu SuyaJincheng CPA LLP has issued the auditor's report with an unqualified opinion for the Company. IV. The Company's Chairman Jin Weidong and the Director of internal audit Zhang Wenliang warrant the truthfulness, accuracy and completeness of the information presented in the financial statements in this annual report. V. The profit distribution plan for the reporting period has been deliberated by the Board of Directors. The 2018 profit distribution plan will be: based on the total share capital on the equity registration date when the 2018 annual profit distribution will be implemented, the Company will distribute cash dividends of RMB 1.8 yuan per 10 shares (tax included) to all shareholders, totalling RMB 166,014,791.28 yuan. This profit distribution plan has been deliberated and approved by the Board of Directors, pending submission to the Shareholders' Meeting. VI. Risk Statement of Forward-looking Statements The forward-looking descriptions in this report in terms of plans, development strategies and other information cannot be deemed the Company's commitment to investors. Please beware of the investment risks. VII. There has been no occurrence of the Company's non-business capital being occupied by controlling shareholders and their related parties. VIII. There has been no occurrence of the Company violating its decision-making procedure while providing external guarantees. IX. Material Risk Warning The Company describes possible risks in detail in this report. Please refer to "Possible Risks" in Section IV "Business Operations Analysis". X. This annual report has been issued in both Chinese and English versions. In case there is any discrepancy or inconsistency between the two versions, the Chinese version shall prevail. The disclosed Chinese version of 2018 Annual Report can be obtained at: www.sse.com.cn. 2 / 239 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2018 Annual Report Contents Section I Glossary ............................................................................................................. 4 Section II Company Profile and Key Financial Information ............................................... 5 Section III Business Overview ............................................................................................ 8 Section IV Business Operations Analysis .......................................................................... 25 Section V Important Disclosures ...................................................................................... 74 Section VI Changes in Common Shares and Shareholder Information .............................92 Section VII Preference Share ............................................................................................. 95 Section VIII Directors, Supervisors, Senior Management and Employees ......................... 96 Section IX Corporate Governance .................................................................................. 105 Section X Corporate Bond ............................................................................................. 107 Section XI Financial Statements ..................................................................................... 108 Section XII Reference ...................................................................................................... 239 3 / 239 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2018 Annual Report Section I Glossary I. Glossary CSRC refers to China Securities Regulatory Commission SSE refers to Shanghai Stock Exchange Wellhope, Liaoning refers to Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. Wellhope, the Company Reporting refers to January 1st, 2018-December 31st, 2018 Period De Heus Mauritius Ltd., established in Port Louis, Mauritius, De Heus refers to one of the shareholders of Wellhope Koninklijke De Heus B.V., the parent company of De Heus Royal De Heus refers to Mauritius Ltd., the biggest feed company in the Netherlands Shenyang Wellhope Heli Investment Ltd., one of the Heli Investment refers to shareholders of Wellhope Company The Constitution of Liaoning Wellhope Agri-Tech Joint Stock refers to Constitution Co., Ltd. Shareholders' The Shareholders' Meeting of Liaoning Wellhope Agri-Tech refers to Meeting Joint Stock Co., Ltd. Board of The Board of Directors of Liaoning Wellhope Agri-Tech Joint refers to Directors Stock Co., Ltd. Supervisory The Supervisory Board of Liaoning Wellhope Agri-Tech Joint refers to Board Stock Co., Ltd. Corporate Law refers to The Corporate Law of the People's Republic of China Securities Law refers to The Securities Law of the People's Republic of China Also known as additive premix, it is a well-proportioned mixture prepared by two or more than two kinds of feed Premix refers to additives and carrier or diluents according to appropriate proportion. It is a general name for compound premix, microelement premix and vitamin premix. It is a well-proportioned mixture consisted of protein feed, Concentrate mineral feed and feed additives according to appropriate refers to Feed proportion, it can be made into compound feed by mixing with energy feed in a specified proportion. Based on the nutritional needs of animals, more feed raw Compound materials and feed additives are industrially processed refers to Feed according to feed formula, it can be directly used for feeding animals. 4 / 239 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2018 Annual Report Section II Company Profile and Key Financial Information I. Company Information Company Name(English) Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. Abbreviation(English) Wellhope Company Name(Chinese) 辽宁禾丰牧业股份有限公司 Abbreviation(Chinese) 禾丰牧业 Legal Representative Jin Weidong II. Contact Person Secretary of the Board Representative of Securities Affairs Name Zhao Xin Yang Guolai No. 169, Huishan Street, Shenbei No. 169, Huishan Street, Shenbei Address New District, Shenyang, Liaoning, New District, Shenyang, Liaoning, P. R. of China P. R. of China Tel 024-88082015 024-88080789 Fax 024-88082333 024-88082333 Email [email protected] [email protected] III. Basic Information of the Company No. 169, Huishan Street, Shenbei New District, Registered Address Shenyang, Liaoning, P. R. of China Postal Code 110164 No. 169, Huishan Street, Shenbei New District, Office Address Shenyang, Liaoning, P. R. of China Postal Code 110164 Company Website www.wellhope-ag.com Email [email protected] IV. Place where the Annual Report is prepared Media Designated by the Company for China Securities Journal,Shanghai Securities Disclosing Information News ,Securities Times Website Designated by the CSRC for www.sse.com.cn Publishing the Annual Report Place where the Company prepares its Securities Department of the Company Annual Report V. Stock Information Stock Information Stock Exchange for Stock Type Stock Abbreviation Stock Code Listing Shanghai Stock A Share Wellhope(禾丰牧业) 603609 Exchange 5 / 239 Liaoning Wellhope Agri-Tech Joint Stock Co., Ltd. 2018 Annual Report VI. Other Information Name Jiangsu SuyaJincheng CPA LLP 21st-23rd F, Central International Plaza, No.105-6 North Office Address Accounting Firm ( Local) Zhongshan Road, Nanjing, Jiangsu Province, China Name of Zhou Jiawen, Wang Jin Signatory CPA VII. Key Accounting Data and Financial Performance Indicators in the Latest Three Years 1. Key Accounting Data Unit: yuan Currency: RMB Year-on-Year Item 2018 2017 2016 Change % Operating revenue 15,750,798,120.67 13,695,843,458.67 15.00 11,870,578,122.31 Net profit attributable to the shareholders of the 551,928,618.35 471,024,473.92 17.18 426,978,443.55 Company Net profit attributable to the shareholders of the Company deducting 542,459,604.74 389,607,877.28 39.23 399,573,783.81 non-recurring gains and losses Net cash flow from 501,404,915.59 611,390,370.75 -17.99 204,935,490.07 operating activities As at the As at the Year-on-Year As at the end of 2018 end of 2017 Change % end of 2016 Net assets attributable to the shareholders of the 3,851,915,758.64 3,390,304,242.88 13.62 3,006,170,941.93 Company Total assets 6,930,694,562.43 5,985,861,995.54 15.78 5,169,472,910.89 2. Key Financial Performance Indicators Year-on-Year Item 2018 2017 2016 Change % Basic earnings per share (yuan per share) 0.66 0.57 15.79 0.51 Diluted earnings per share (yuan per share) 0.66 0.57 15.79 0.51 Basic earnings per share deducting 0.65 0.47 38.30 0.48 non-recurring gains and losses (yuan per share) Increased 0.58 Weighted average return on equity (%) 15.30 14.72 15.10 percentage points Weighted average return on equity deducting Increased 2.87 15.04 12.17 14.13 non-recurring gains and losses (%) percentage points VIII. Key Financial Figures by Quarters in 2018 Unit: yuan Currency: RMB Item Q1 Q2 Q3 Q4 Operating revenue 3,129,332,297.72 3,720,883,404.77 4,628,867,760.81 4,271,714,657.37
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