Guangdong Haid Group Co., Limited
2021 Annual Report
Stock Code: 002311
Date of Approval for Publication: 10 April 2022
Section I. Important Notes, Table of Contents and Definitions
The board of directors (the "Board"), the supervisory committee, the directors,
the supervisors and the senior management of Guangdong Haid Group Co.,
Limited (the "Company") hereby warrant the truthfulness, accuracy and
completeness of the information presented in this report, guarantee that there
are no misrepresentations, misleading statements or material omissions
contained in this annual report, and are individually and collectively responsible
for the authenticity, accuracy and completeness of the information contained in
this report.
Mr. Hua Xue, head of the Company, and Mr. Shaolin Yang, head in charge of
accounting work and head of the accounting department (Accounting Officer),
declare that they warrant the truthfulness, accuracy and completeness of the
financial statements in the annual report.
All directors were present in person at the Board meeting to consider and
approve this annual report.
The Report contains forward-looking statements such as future plans, which do
not constitute any specific undertakings by the Group to its investors. Investors
are advised to pay attention to investment risks.
Risk Warning:
1.Risk of periodical fluctuation of feed industry affected by abnormal weather
and animal diseases
The feed industry is mainly served for the downstream breeding industry. The
abnormal changes of temperature, precipitation and typhoon may lead to the
fluctuation of livestock and aquaculture inventory, even the large-scale outbreak
of diseases, further impacting the demand for feed and likely causing the risk of
periodic and regional fluctuations of feed industry. Animal epidemic diseases
may also occur frequently owing to the environmental changes and the
expansion of large-scale animal industry. For instance, African swine fever
broke out in August 2018 and spread across China, and PRRSV-mediated pig
diseases, shrimp-relevant EMS epidemic diseases and poultry-relevant H7N9
diseases occurred recently. The outbreak of animal diseases directly holds up the
scale of breeding and reduces the demand for feed in the short term. Major
animal epidemic diseases may also reduce the demand of end-consumers,
leading to the downturn of the animal breeding and further the demand of feed
products, resulting in adverse effects on the production and operation of feed
enterprises.
Risk control methods: (1) The company is currently fully deploying
manufacturers and local markets in major areas of Southern China, Central
China, Eastern China and Northern China and overseas markets in Southeast
Asia, etc. The expansion of regional distribution can effectively decrease the risk
of weather anomalies and natural disasters in local areas. (2) The feed products
cover pig, chicken, duck, goose, fish, shrimp feeds and other livestock and
aquatic feeds. The variety of products and well-balanced structure can
effectively mitigate the risk of single species disease with strong comprehensive
risk-relieve capability.
2. Risk of the drastic fluctuation of main ingredient materials’price
The feed ingredients consist of staple agricultural products such as corn and
soybeans (soybean meal) et al. In recent years, the domestic and international
markets of agricultural product have been closely linked. The changes of the
planting area size and the harvest amount in these major grain-producing
countries, purchasing and storage and subsidy policies, import and export
policies, political conflicts between countries, international trade relations,
logistics capacity and conditions of shipping and exchange rates result in great
fluctuations of agricultural products’ price, bringing certain impact on the cost
of feed and animal industry. With the strengthening of the international trade of
agricultural products, the factors affecting the prices of agricultural products
have become more complicated, and the fluctuation of price therefore increased.
Failing to understand the changes of feed raw materials in a timely manner and
promptly implement strategic management, the company may face the risk of
the rising procurement costs.
Risk control methods: (1) The materials were divided into different categories
such as centralized purchasing staple category and local procurement of
regional varieties category. It not only guarantees the advantages of large-scale
raw material procurement, but also makes best use of localization advantages
from rapid response in respect of regional procurement. (2) The raw material
procurement research system was continuously invested and constructed. The
members of team are professional and familiar with raw material information.
It can effectively control the procurement risk through real-time tracking,
studying and judging the market trend in domestic and foreign bulk raw
mat
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