New Hope Liuhe Co., Ltd.
Semiannual Report 2023
2023-78
[August 31, 2023]
Section 1 Important Note, Table of Contents and Definitions
The board of directors, board of supervisors, directors, supervisors and
senior executives of the company warrant that the contents of this semiannual
report are true, accurate and complete and free of any false recordings,
misleading statements or significant omissions, and that they will be jointly
and severally liable for the legal consequences.
The company’s board chairman Liu Chang, chief accountant Chen
Xingyao and the person in charge of accounting organization (accountant in
charge) Su Xiaodan state that the financial report in this semiannual report is
true, accurate and complete.
All directors of the company attended the board meeting deliberating this
semiannual report.
The company is required to comply with disclosure requirements set forth
in the Self-regulatory Guideline No.3 of Shenzhen Stock Exchange for Listed
Companies - Industry Information Disclosure with respect to “livestock, poultry
and aquaculture related businesses”.
I. Animal disease and natural disaster risks
Animal disease is the main risk faced in the development of livestock
industry. There are three kinds of risks arising out of the occurrence of
epidemic disease. First, the occurrence of epidemic disease is likely to result in
death of livestock, directly resulting in reduced yield, increased costs, and
lower prices. Second, the occurrence and prevalence of animal disease on a
large scale easily influence the consumer psychology, leading to a contraction
in market demand, and also affecting the feed production and operation. For
example, the first outbreak of African Swine Fever in China in middle 2018
caused a huge shock to the whole industry. Although the industry initially
explored the prevention, control and treatment methods of comprehensive bio-
safety prevention and control combined with precise elimination in 2019 and
2020, ASF experienced a weakened mutation at the turn of winter and spring
between the end of 2020 and beginning of 2021, making it more spread
channels, longer incubation time, and more difficult to detect and eliminate. In
recent years, ASF has gradually become normal, especially in winter and early
spring when the temperature is low, the impact is particularly serious in the
north of China. Since 2022, avian influenza outbreaks have continued in
Europe, North America and South America, which have had a major impact
on poultry production and natural birds. Although the current round of avian
influenza epidemic has not been large-scale outbreak in China, it still affects
the introduction of grandparental breeding chickens in China.
In terms of the natural disaster risk, the feed and slaughter are closely related
to planting and livestock breeding industry. Therefore the natural disasters,
such as temperature anomalies, drought, flood, earthquake, hail, and snow
disaster will adversely affect the industry operation and development. Natural
disasters occurring in and around the company’s production facilites may
result in substantial damages to production infrastructure or equipment.
Furthermore, natural disasters and extreme weather events can also drive up
prices for certain feed ingredients and meat. For example, in 2022, several
provinces in central and southwestern China experienced prolonged periods of
high temperatures and reduced rainfall, leading to the continuous development
of drought conditions in some regions. This, in turn, triggered power shortages
in multiple southern provinces, affecting various aspects of the industry chain,
including cultivation and livestock farming to varying degrees. In terms of
planting, certain areas affected by drought experienced reduced yields of
feedstock crops, thereby impacting feedstock prices, and the quality of the raw
materials also declined. In terms of livestock farming, for example,
aquaculture faced to oxygen deplention due to high temperature, which
affected the feeding and growth of fish, shrimps and crabs, and led to
production decrease. Additionally, due to the drought, water shortage and
power restriction, the use of breeding facilities and equipment was limited to a
certain extent, causing losses to livestock enterprises and farmers, and
affecting the feed sales of the company.
Risk countermeasures: in the face of animal disease, the livestock farms
planned and constructed by the company’s breeding base are normalized and
standardized farms staffed with professional breeding technologists and
equipped with strict anti-epidemic measures to effectively prevent and control
the occurrence of epidemic diseases. The company has also summarized
experience and measures responding to major animal diseases through years
of exploration and accumulation, which allow the company to eliminates the
impact of various animal diseases by adjusting the product mix when
appropriate,
查看PDF原文
