CHINA PUTIAN FOOD HOLDING LIMITED 中國普甜食品控股有限公司 (Incorporated in the Cayman Islands with Limited Liability) (於開曼群島註冊成立之有限公司) Stock Code 股份代號:1699 報 年 ANNUAL REPORT
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CHINA PUTIAN FOOD HOLDING LIMITED 中國普甜食品控股有限公司 (Incorporated in the Cayman Islands with limited liability) (於開曼群島註冊成立之有限公司) Stock Code 股份代號:1699 年 報 ANNUAL REPORT CHINA PUTIAN FOOD HOLDING LIMITED 中國普甜食品控股有限公司 年報 Room 3312, 33/F., West Tower, Shun Tak Centre, ANNUAL 168−200 Connaught Road Central, Hong Kong. REPORT 香港干諾道中168至200號信德中心西座33樓3312室 2014 Tel 電話:(852) 3582-4666 Fax 傳真:(852) 3582-4567 2014 China Putian Food Holding Limited LEADING VERTICALLY INTEGRATED PORK PRODUCTS SUPPLIER 中國普甜食品控股有限公司 領先的垂直一體化豬肉供應商 CONTENTS 02 Corporate Information 03 Financial Highlights 04 Chairman’s Statements 08 Management Discussion and Analysis 17 Biographical Details of Directors and Senior Management 21 Corporate Governance Report 37 Report of the Directors 45 Independent Auditors’ Report Consolidated Statement of Profit or Loss and Other 47 Comprehensive Income China Putian Food Holding Limited Consolidated Statement of Financial Position LEADING VERTICALLY INTEGRATED 48 PORK PRODUCTS SUPPLIER 50 Statement of Financial Position 51 Consolidated Statement of Changes in Equity 52 Consolidated Statement of Cash Flows 54 Notes to the Consolidated Financial Statements 118 Five Years Financial Summary Corporate Information DIRECTORS REGISTERED OFFICE Executive Directors Cricket Square, Hutchins Drive Mr. Cai Chenyang (Chairman and Chief Executive Officer) PO Box 2681 Mr. Cai Haifang Grand Cayman, KY1-1111 Ms. Cai Shengyin Cayman Islands Independent Non-Executive Directors Mr. Wu Shiming PRINCIPAL PLACE OF BUSINESS IN Mr. Cai Zirong HONG KONG Mr. Wang Aiguo No. 3312, 33rd Floor, West Tower Shun Tak Centre No. 168–200 Connaught Road AUDIT COMMITTEE Central, Hong Kong Mr. Wu Shiming (Committee Chairman) Mr. Cai Zirong Mr. Wang Aiguo HEAD OFFICE AND PRINCIPAL PLACE OF BUSINESS IN THE PRC REMUNERATION COMMITTEE Hualin Road, Hualin Industrial Zone Chengxiang District Mr. Cai Zirong (Committee Chairman) Putian City, Fujian Province Mr. Wu Shiming the PRC Mr. Wang Aiguo CAYMAN ISLANDS PRINCIPAL SHARE NOMINATION COMMITTEE REGISTRAR AND TRANSFER OFFICE Mr. Wang Aiguo (Committee Chairman) Codan Trust Company (Cayman) Limited Mr. Wu Shiming Cricket Square, Hutchins Drive Mr. Cai Zirong PO Box 2681 Grand Cayman, KY1-1111 Cayman Islands COMPANY SECRETARY Mr. Ku Kin Shing, Ignatius HKICPA, CPA (Aust.) HONG KONG BRANCH SHARE REGISTRAR AND TRANSFER OFFICE LEGAL ADVISOR Tricor Investor Services Limited Cheung Tong & Rosa Solicitors Level 22, Hopewell Centre 183 Queen’s Road East Hong Kong AUDITORS HLB Hodgson Impey Cheng Limited COMPANY WEBSITE Certified Public Accountants www.putian.com.hk PRINCIPAL BANKER STOCK CODE Bank of China No. 156, Dongda Road 1699 Chengxiang District Putian City Fujian Province, the PRC 02 China Putian Food Holding Limited Financial Highlights Year 2012 Year 2013 Year 2014 RMB ’000 RMB ’000 RMB ’000 Revenue 580,158 626,127 624,006 Gross profit 149,949 161,877 143,697 Net profit 105,105 106,423 60,397 Revenue by products — Retail of pork 301,812 334,900 320,967 — Wholesale of pork 278,346 291,227 297,880 — Retail of frozen pork — — 5,159 Annual Report 2014 03 Chairman’s Statements Dear Shareholders, On behalf of the board of directors (the “Board”) of China Putian Food Holding Limited (the “Company”), I am pleased to present the annual results for the year ended 31 December 2014 (the “Reporting Period”) of the Company and its subsidiaries (the “Group”) to all shareholders. BUSINESS REVIEW According to certain news coverages made during 2014, imported pork from the United States was found to contain In 2014, we witnessed various milestones of the Group that Ractopamine, an additive commonly known as highlighted the expansion of the business layout of Putian by Beta-adrenergic agonist which is banned in China. This adhering to our definite strategies. resulted in a loss of domestic consumer confidence in imported pork. According to the statistics updated from In recent years, the urbanization of China has contributed to www.feedtrade.com.cn, the information provider on feed the gradual increase of its per capita income. Meanwhile, industry, during the period from January to October, 2014, the government has taken measures to promote food safety the imported hog products amounted to 1.139 million tons, and Chinese consumers have been increasingly more representing a year-on-year decrease of 1.9%. Consumers concerned about the product quality in pork consumption, have changed to prefer domestic quality products rather resulting in a favorable operating environment for Putian than imported pork, which can further promote the growth which focuses on the supply of quality pork. of the target market of the Group. 04 China Putian Food Holding Limited Chairman’s Statements (continued) During the Reporting Period, the construction of the black Apart from entering the nationwide high-end pork markets pig farming base in Xuanhua, Hebei has turned a new page with kick-off from Beijing, regarding the existing businesses, for the Group’s high-end pork product business. In August, the Group expanded our sales network in a stable pace. For 2014, the Group entered into an investment agreement with an instance, the wholesale of pork of the Group has the People’s Government in Xuanhua County, Hebei successfully extended coverage beyond Fujian Province into Province, and then immediately embarked on the the Hangzhou market. construction of the black hog farming house with site area of approximately 2,000 mu. The Group intended to invest Regarding the retail business, the Group continued the RMB 1 billion in 5 years to create an integrated base of intensive collaboration with the globally largest supermarket China local black pig production chain for protection, and those with chain stores throughout China. As at 31 breeding, development and utilization of local pigs. The December, 2014, the Group has a total of 79 supermarket maximum annual production capacity of the integrated base retail counters in various locations including the newly-added is expected to be 500,000 black pigs, securing the adequate Beijing New World supermarket and Beijing C.P. Lotus supply for the onset of high-end pork sales business catering Corporation and the existing counters in supermarkets and to the markets of Beijing and peripheral areas. department stores with regional influence such as Fujian New Hua Du, Walmart, China Resources Vanguard, Century In addition, in October, 2014, the Group’s high-end black Lianhua, RT-Mart and Rainbow. Our outlets have also pork products were officially launched in New World spanned across the coastal regions in eastern Fujian province supermarket in Beijing and the high customer affinity brand including Ningde, Fuzhou, Putian, Quanzhou and of “Putian Black Pearl” was available to consumers, paving Zhangzhou. Meanwhile, the Group also has 27 direct sales the way for the brand of “Putian Black Pearl” evolving as a retail outlets of our own, which are mainly located in Putian popular household brand. In general, the black pig products and Fuzhou. During the Reporting Period, the retail of pork are at least at threefold price of ordinary pork products. As generated approximately RMB320,967,000 of revenue for such, the operation of this business segment will be a driver our Group, representing a year-on-year decrease of to the gross profit margin of the Group. approximately 4.2%, accounted for approximately 51.4% of the total revenue of the Group. Annual Report 2014 05 Chairman’s Statements (continued) The pork wholesaling segment has continued to generate construction of the new hog farm project in Putian (360,000 steady and considerable revenue for the Group. Since the hogs moving out of the curtain-barns) will be completed in slaughterhouse of the Group commenced operation in early July of 2015. The number of gilts on hand is projected August 2009, the wholesale of pork, which comprised to be 2,400 during the first phase of the hog farm. They will primarily of whole hog carcasses, heads, intestines and be introduced in late July and are expected to be moved out internal organs has been generating considerable revenue of the curtain-barns for sale in the fourth quarter of 2016, for the Company. The Group’s wholesale customers mainly targeting for an annual capacity of 45,000 hogs, which comprised individual pork product traders within the would be served as complementing the number of the province and in the Yangtze River Delta Region. As of 31 Group’s self-bred and self-raised hogs to be moved out of December 2014, the Group has entered into contracts with the curtain-barns. 4 individual pork product traders, thus generating a stable source of revenue for the Group. During the Reporting Period, the wholesale of pork generated approximately PROSPECTS RMB297,880,000 of revenue for our Group, representing a year-on-year growth of approximately 2.3%, accounted for China is the world’s largest pork consumption market. Nearly 47.7% of the total revenue of the Group. 700 million hogs are slaughtered in China every year, representing a market size of more than RMB1 trillion. During the Reporting Period, the Group made adjustments However, China’s pork industry is still in the preliminary and new attempts in sales strategies and constantly stage of development as compared to the development in expanded comprehensive and diverse sales channels in order Europe and the United States. The industry in China is highly to further enhance the Group’s popularity within the fragmented, with more than 70% of market hogs being industry. Regarding frozen pork as the innovative sales raised by small farms, resulting in cyclical volatility in pork product, the Group has entered into memorandum of price and difficulty in quality control. To tackle this, in recent understanding in partnership with the renowned meat and years, the Chinese government vigorously promoted food processing company in Fujian during the Reporting upstream integration and encourage the capable enterprises Period. Also, the Group vigorously developed black pig to build modern large-scale hog farming bases.