2025-06-30-深交所-新_希_望_2024年年度报告（英文版）_509页_7mb

New Hope Liuhe Co., Ltd. 2024 Annual Report Summary

Core Content Overview

New Hope Liuhe Co., Ltd. (New Hope) released its 2024 Annual Report, highlighting key risks and strategies across the livestock and feed industry. The report outlines the company's approach to managing various operational and external risks, as well as its financial performance and strategic direction.

Main Risks and Countermeasures

I. Animal Disease and Natural Disaster Risks

Core Content:
Animal diseases, particularly swine fever, pose a significant threat to the livestock industry by causing livestock deaths, increased costs, and reduced market demand. Natural disasters such as drought, flood, and typhoon also disrupt production and raise feed ingredient prices.

Key Points:

• Swine fever outbreaks in 2018 had a major impact on the industry.
• In 2020–2021, new strains of swine disease caused more severe challenges.
• The Company has implemented standardized farms with professional staff and strict epidemic prevention measures.
• It has established animal healthcare laboratories and a nationwide system for disease monitoring and early warning.
• Upgrades to epidemic prevention facilities were made in 2023–2024, leading to better disease control and reduced farming costs.

II. Price Fluctuations of Feed Ingredients

Core Content:
Feed ingredient prices, especially corn and soybean meal, account for over 90% of the total feed production cost. Price fluctuations can significantly impact the company's operating costs, especially as the pig farming business becomes a larger portion of revenue.

Key Points:

• Feed prices rose from 2020 onwards due to global economic factors and trade dynamics.
• In 2023, prices began to fluctuate and decline, but remained high compared to pre-2020 levels.
• In 2025, prices rose again due to geopolitical and economic uncertainties.
• The Company mitigates this risk by:
  • Centralizing feed ingredient procurement.
  • Reducing costs through bonded zone processing.
  • Purchasing low-cost imported and alternative ingredients like wheat and sorghum.
  • Establishing strategic partnerships with global suppliers.
  • Engaging in supply chain finance and foreign exchange risk management.

III. Price Fluctuations of Livestock and Poultry

Core Content:
Fluctuations in livestock and poultry prices affect both the downstream breeding and upstream feed segments. The Company's pig farming business is a major contributor to its revenue and profits, making it more sensitive to price changes.

Key Points:

• In 2023, pig prices remained low due to oversupply and weak demand.
• By 2024, prices rose due to reduced production capacity, but later declined again.
• The Company has improved operational efficiency, reduced costs, and restored competitiveness.
• Its integrated business model (feed production, livestock farming, slaughtering, and meat processing) helps hedge against price volatility:
  • Lower livestock prices reduce raw material costs for slaughtering and processing.
  • High production volumes from livestock farming boost feed business profitability.

IV. Impact of Environmental Protection Policies

Core Content:
Environmental regulations have become stricter, affecting the operation and expansion of livestock and poultry farms. Non-compliant farms may be forced to shut down, which could impact the company's feed and pig supply chain.

Key Points:

• Environmental policies have intensified since 2021, especially in the pig industry.
• The Company actively supports farms that meet environmental standards.
• It promotes eco-friendly breeding models and helps farmers upgrade facilities.
• The company also develops new breeding bases in environmentally suitable areas to secure resources and ensure stability.

V. Exchange Rate Fluctuations

Core Content:
Global procurement of feed ingredients and international operations expose the company to exchange rate risks. Fluctuations in local currencies against the US dollar affect cash flow and financial planning.

Key Points:

• The company has expanded its overseas presence, increasing exposure to exchange rate changes.
• It has established an overseas commercial and trading center in Singapore.
• The company engages in international centralized procurement, foreign direct financing, and foreign exchange risk management.
• It improves its forecasting and fund management capabilities and uses hedging instruments to mitigate risks.

Key Financial Indicators (2024 vs. 2023)

Summary of Risk Management Strategies

• Animal Disease: Standardized farms, professional staff, and advanced disease monitoring systems.
• Natural Disasters: Diversified operations and emergency response mechanisms.
• Feed Prices: Centralized procurement, cost optimization, and strategic supplier partnerships.
• Livestock Prices: Integrated business model and improved operational efficiency.
• Environmental Regulations: Support for compliant farms and eco-friendly development.
• Exchange Rates: Overseas centers, financial instruments, and risk management strategies.

Other Important Information

• The company's financial statements are signed by the chairman, chief accountant, and head of the accounting organization.
• The financial advisor and sponsor institution for the reporting period are:
  • Sponsor Institution: China Merchants Securities Co., Ltd.
  • Period of Continuous Supervision: Nov. 29, 2021 to Dec. 31, 2022.
• The company has no material differences in financial indicators between quarterly reports and annual reports.
• There were no differences in net profit or net assets under Chinese and international accounting standards.
• The company distributed a cash dividend of 0.24 yuan per 10 shares in 2024, with no bonus shares or share capital increases.

Conclusion

New Hope Liuhe Co., Ltd. has effectively managed the key risks in its feed and livestock industry through a combination of operational improvements, strategic investments, and proactive risk mitigation measures. Despite challenges such as animal disease outbreaks, price volatility, and environmental regulations, the company has demonstrated resilience and adaptability, ensuring long-term stability and growth.