Contents
Section I. Company Information and Key Financial Indicators
I. Company profile
Short form of the stock 润丰股份 Stock code 301035
Listed on Shenzhen Stock Exchange
Chinese name of the
SHANDONG WEIFANG RAINBOW CHEMICAL CO.,LTD
Company
Chinese abbreviation of the
润丰股份
Company (if any)
Name of the Company in
SHANDONG WEIFANG RAINBOW CHEMICAL CO.,LTD
English (if any)
Abbreviation of the Company
RAINBOW CHEMICAL
in English (if any)
Legal representative of the
Wicky Wang
Company
II. Contact Person and Contact Information
Secretary of the board Securities affairs representative
Name Xing Bingpeng Hu Dongju
Contact address Financial Business Center, High-tech Financial Business Center, High-tech
Zone, Jinan City, Shandong Province Zone, Jinan City, Shandong Province
Tel 0531-83199916 0531-83199916
Fax 0531-83191676 0531-83191676
E-mail rfzqb@rainbowagro.com rfzqb@rainbowagro.com
III. Other Information
Whether there is any change to the Company's registered address, office address, postal code, website and E-mail address during
the reporting period
? Applicable ? Not applicable
There is no change to the Company's registered address, office address, postal code, website and E-mail address during the
reporting period. For details, see the Company's 2022 Annual Report.
Whether there is any change to information disclosure and place of report during the reporting period
? Applicable ? Not applicable
There is no change to the website of the stock exchange, to the name of the media and its website during the reporting period,
where the Company discloses the semi-annual report. For details, see the Company's 2022 Annual Report.
Whether there is any change to the Company's registration status during the reporting period
? Applicable ? Not applicable
There is no change to the registration status of the Company during the reporting period. For details, see the Company's 2022
Annual Report.
IV. Key Accounting Data and Financial Indicators
Whether the Company needs to retroactively adjust or restate the accounting data of previous years
? Yes ? No
Year-on-year increase or
H1 2023 H1 2022
decrease
Operating income (RMB) 5,043,502,704.02 7,778,575,013.04 -35.16%
Net profit attributable to
shareholders of the Company 424,390,802.78 887,649,644.42 -52.19%
(RMB)
Net profit attributable to
shareholders of the Company
excluding non-recurring gains
and losses (RMB)
Net cash flow from operating
-410,336,682.21 686,193,459.42 -159.80%
activities (RMB)
Basic earnings per share
(RMB/Share)
Diluted earnings per share
(RMB/Share)
Weighted average return on
net assets
End of H1 2023 End of 2022 Increase or decrease
Total assets (RMB) 11,545,154,527.11 11,598,874,181.42 -0.46%
Net assets attributable to
shareholders of the Company 6,198,823,789.14 6,184,265,166.56 0.24%
(RMB)
V. Items and Amounts of Non-recurring Gains and Losses
? Applicable ? Not applicable
Unit: RMB
Item Amount Notes
Gain and loss on disposal of non-current
assets (including the write-off portion of -3,098,550.35
asset impairment provision)
Government subsidies included in
current gains and losses (closely related
to normal operational business of the 5,591,198.21
Company, excluding the continuous
government subsidies of certain amount
or quota complying with national
policies)
Gains and losses arising from changes in
the fair value of financial assets held for
trading and financial liabilities held for
trading, and the investment returns
obtained from the disposal of financial
assets held for trading, financial
liabilities held for trading, and financial
assets available for sale, other than the
effective hedging business related to the
normal operation of the Company.
Other non-operating revenue and
expenditure other than those mentioned 2,420,055.38
above
Less: affected amount of income tax 142,378.84
Affected amount of minority
-54,633.11
shareholders' equity (after tax)
Total 4,892,515.87
Other gains and losses items that meet the definition of non-recurring gains and losses:
? Applicable ? Not applicable
There are no other gains and losses items of the Company that meet the definition of non-recurring gains and losses.
Reasons for the non-recurring profit and loss items listed in Explanatory Announcement on Information Disclosure for Companies
Offering Their Securities to the Public No.1 - Non-recurring Gains and Losses recognized as recurring gains and losses items
? Applicable ? Not applicable
There is no circumstance where the non-recurring profit and loss items listed in Explanatory Announcement on Information
Disclosure for Companies Offering Their Securities to the Public No.1 - Non-recurring Gains and Losses are recognized as
recurring gains and losses items.
Section II. Discussion and Analysis of Management of the Company
I. The Main Business of the Company During the Reporting Period
I. The situation of the industry during the reporting period
The Company is categorized into the industry of chemical pesticide manufacturing (C2631) in chemical raw materials and
chemical manufacturing (C26). Pesticides are also commonly known as crop protection products in the industry, which refer to
products with a broader scope, including non-chemical pesticides (such as bio-pesticides, and bio-stimulants). Pesticides are
known as preparations for the prevention and control of crop diseases and insect pests. Pesticide products actually used are
pesticide preparations made from pesticide active compound and pesticide auxiliaries. The active compound takes effect, and it is
also called active ingredients or active constitute. In addition, depending on the targets, the pesticides can also be categorized into
herbicide, insecticide, fungicide, plant growth regulator, etc.
(I) The development and trend of crop protection industry:
From the global perspective, the crop protection industry is an existing market that has rigid demands and is steadily growing in
market shares. The demand for crop protection is closely related to the demands of humans for food and other crops. In recent
years, with the increase in the population of the world, and the continuous occurrence of pests and diseases, the scale of global
crop protection market is constantly expanding. According to the data of Phillips McDougall, a British market research company,
the global crop protection market scale increased from USD 35.575 billion to USD 69.886 billion, with annual compound growth
rate of 5% from 2006 to 2020. It is not an industry featuring rapid growth in terms of the total growth rate, and it is also an
industry that lacks change or strong growth dynamic due to the limitation of the non-linear improvement of new compound
development costs, but it still has three clear structural growth opportunities: First, the continuous expansion of the market share of
non-patented crop protection products. Second, with the continuous expansion of non-patented crop protection market share,
excellent multinational generic companies grow rapidly (such as UPL in India). Third, with the promotion of different transgenic
seeds and the resistance of different active ingredients, the prohibition policy from the government has brought about the change
of usage amount of different active ingredients (such as Glufosinate-ammonium, Diquat, Prothioconazole and Chlorantraniliprole
gained rapid growth in the global market in the past few years).
fast
With the continuous expansion of the non-patented crop protection market shares, excellent multinational non-patented crop
protection companies have grown rapidly. The most eye-catching case in the industry in past few years is how Indian company
UPL rapidly strengthened itself and expanded its market share internationally by purchasing Arysta and other companies with
strong channel brands and constantly investing in the self-production of important non-patented active ingredients. Excellent
multinational non-patented crop protection companies with high growth rate must have the following five features:
(1) Fast response and decision-making mechanism (quick response to the rapid changes in the supply-end, cost-end and market-
end globally is needed);
(2) Light structure and low-cost rate (fierce homogeneous competition in non-patented crop protection markets will make gross
profit margin of the market channels constantly decline);
(3) Diversified and complete product portfolio for providing an integrated crop solution (not relying too much on a single product);
(4) The broad global market coverage and channel, and the construction of the brand (not relying too much on a single market, and
having a good brand channel);
(5) Be able to exert the impact on a number of important active ingredients (advanced manufacturing of important active
ingredients to form a complete industrial chain from factory to farm, thus stabilizing the supply and cost advantage, and supporting
further expansion of the global market).
With the promotion of different transgenic seeds, the prohibition/ restriction policies of government, and the resistance of different
active ingredients, the usage amount is changing rapidly among different active ingredients.
(1) With the promotion of transgenic seeds, the growth rate of global use of Glufosinate-ammonium and 2,4D was significantly
higher than that of other active ingredients in the past three years.
(2) The prohibition or restriction policies of the government have a great impact on the use of different active ingredients : For
example, the prohibition of paraquat in China, Brazil, Vietnam, Thailand and other markets has prompted significant increase of
its alternatives active ingredients such as Glufosinate-ammonium and diquat; To give another example, the prohibition of
chlorpyrifos in Argentina, Vietnam, the EU, Myanmar, the United States and other markets directly has led to a significant decline
in the global use of Chlorpyrifos, and promoted the rapid growth of other alternative active ingredients; Another example is the
prohibition of Chlorothalonil in the EU directly has led to the serious excess of Chlorothalonil production.
(3) The resistance changes of different active ingredients require the mixed use of several alternatives for the same target diseases,
insects and weeds: For example, countries such as Vietnam and Pakistan in South Asia have habitually used a single insecticide
frequently and intensively, resulting in the rapid rise of its insecticide resistance and the frequent changes of different active
ingredients; For another example, the fungicide resistance of Brazil to prevent soybean Asian rust changes rapidly, and it needs to
be used alternately or mixed among different active ingredients.
The rapid change in such different active ingredients enables manufacturers who are relying too much on a single active
ingredients to face significant opportunities or major crises.
different, and emerging markets are growing rapidly.
In the past five years, the growth rate of the crop protection products market in different regions of the world has been different,
and the growth rate in emerging markets is faster, which is represented as follows:
(1) The Latin American region continues to grow rapidly: Latin America has become an increasingly important source of
agricultural production and supply in the world. In the past five years, Latin America has sustained rapid growth, especially in
Brazil.
(2) The growth rate in the Northern American market slows down: The market size of the United States and Canada is relatively
stable, and with the increase in the market share of non-patented crop protection products, competition has intensified;
(3) Steady and slow growth of the Asia-Pacific market: India, Indonesia, Bangladesh, Vietnam and other markets in the region are
growing relatively fast;
(4) The growth rate in Africa is accelerating: With the development of economy, countries in Africa increase investment in
agriculture, and the market scale of crop protection products grows rapidly;
(5) Accelerated growth of Eastern European market: The growth rate of Russia and Ukraine, in the region, is very obvious,
especially Russia, which has become the seventh largest crop protection product market in the world;
(6) The size of the EU market is stable and slightly decreased: The EU's policy of prohibiting and restricting more and more active
ingredients, and the high product registration and maintenance costs to meet regulatory requirements have made this market less
attractive due to the high risk of registration investment and high amortization cost of intangible assets, despite its high gross profit
margin. The market size in this region is stable and continues to decline slightly, but the market for bio-pesticide and bio-stimulant
will become a growth point.
adjusted and increasingly strict
To enter the market of any country, crop protection products need to obtain a product registration certificate in that country in
accordance with relevant laws and regulations of that country,. Obtaining a product registration in country A does not mean that it
can be sold in country B. That is, even the same product also needs to be sold in accordance with relevant laws and regulations of
each country, to obtain the product registration certificate in the target country. The management regulations and policies for crop
protection products in various countries around the world are frequently adjusted and increasingly strict, mainly in the following
aspects:
(1) Changes in registration policies or approval fees have increased the registration costs of individual products in various
countries: For example, the adjustment of the registration policy of the imported product of India in 2017, has made the
registration fee of a single imported technical drug directly rise from 20,000 USD to around 400,000 USD to 800,000 USD now.
In China, with the implementation of the new pesticide management regulations issued in 2017, the registration cost of a single
original drug of the old variety has increased from about RMB 200,000 to about RMB 5 million now.
(2) Registration policies are being adjusted towards high data standardization and complication, making registration more difficult:
Even countries with very loose requirements are increasingly changing from accepting public data to requiring GLP experiments
reports. The types of reports required are more and more complex, which increases the types of data required for the registration of
a single product, improves the standard, and increases the preparation time of data, and some of the data is extremely difficult to
prepare professionally.
(3) The declining of efficiency in the approval and certification by governments around the world: For example, the government
departments in countries such as Argentina, Bangladesh, Sri Lanka and Malaysia, have limited the annual number of submissions
or the number of approved products of each company, resulting in slow process with prolonged cycle for new product certification.
Many countries, such as Argentina, Bangladesh, Malaysia, and Algeria, have even introduced policies to limit the number of
product registration applications per applicant per year.
(4) The registration process in important crop protection product markets generally takes a long time: The process takes long in the
world's important crop protection product markets such as Brazil, Argentina, Mexico, Russia, India, China, the EU and etc. In
Brazil, it generally takes 5-8 years; in Russia, India, and the EU, it generally takes 4-6 years; in Argentina, Mexico, and China, it
generally takes 3-5 years; in the United States, it generally takes 2-3 years.
The above-mentioned changes in industry management regulations and policies are very beneficial to those companies that have a
registration team that registers KNOW-HOW in various markets around the world, have efficient decision-making and
organizational coordination mechanisms, and have a large number of registrations in various markets around the world.
(II) Global crop protection market environment in H1 of 2023
and the planting area of agricultural products has not decreased, indicating that the rigid consumption demand of end consumers
for pesticides is still there.
cycle over the past three years has accelerated the expansion and release of pesticide production capacity in China and India.
Coupled with the panic stockpiling in various market channels due to the global supply and logistical malfunction over the past
two years, prices of most crop-protecting active ingredients have continued to weaken since the fourth quarter of 2022, basic
manufacturers for different active ingredients, generally under pressure. The Sino-Agri price index for pesticide active ingredients
on July 2, 2023 was 87.17, a year-on-year drop of 39.3%. Among the hundreds of products tracked, 93% saw a price drop
compared to last year. Large-tonnage active ingredients such as Glyphosate (-59.69%), Glufosinate-ammonium (-74.00%), Diquat
(-56.90%), 24D (-53%), Imidacloprid (-41.94%), Azoxystrobin (-35.38%) and other products have dropped significantly in price
and have all fallen to or set new historical lowest level.
ingredients and high inventories in the channels of major markets, particularly the United States and Brazil, have led to a general
destocking period, and even markets with low inventory levels have generally delayed new demand as much as possible to avoid
the risk of price cuts.
(III) Global Crop Protection Market Outlook for H2 of 2023
prices of most active ingredients saw a rapid and continued decline. Prices of many active ingredients have even hit new historic
lows. However, due to the expansion and release of pesticide production capacity in China and India in the past three years, most
active ingredients will continue to be in a situation of oversupply, which means that the prices of most active ingredients will
continue to consolidate at the bottom.
demand will continue to pick up. Most market destocking has now ended, with destocking in the Brazil and Argentina markets
expected to end in the fourth quarter of this year, and destocking in the U.S. market not expected to end until the first half of 2024.
Inventory levels in most other important markets are back to or below normal level. Given that the prices of most active
ingredients are at the bottom, for those markets where the inventory level is back to or below the normal level, once the
procurement season comes, the buyers are bound to take advantage of the low price and increase inventory, thus causing the
overall demand to pick up.
inventory management and market strategy based on accurate decision-making and rapid response particularly important. Many
major manufacturers are under pressure because their prices are at or even lower than previous historical lows, so they will
naturally seek various opportunities to push up prices in order to improve their performance. Once pushed up, prices will
inevitably rise rapidly, but given the background of oversupply of production capacity, the prices tend to last for a short time and
then fall back quickly. In the future, short-term price fluctuations of different active ingredients will become frequent. This has
brought challenges to the inventory management and market strategy adjustment of companies. It is particularly important to
respond quickly and make accurate decisions based on a thorough understanding of the whole industrial chain from factory to farm.
II. Company operations during the reporting period
Rainbow's present medium-term strategic plan(2020-2024) was drawn under the guiding principle of "Persisting in doing the
difficult but correct work, moving towards the forefront of industrial value chain, and building a complete industrial chain". On
basis of this medium-term strategic plan, the Company will continue focusing on R&D and innovation-backed advanced
manufacturing and improving the global marketing network. Following is the summary of progresses made in these two aspects in
the first half of this year.
(I) R&D and innovation-backed advanced manufacturing
experienced professionals, adding 16 members to the technical team. The overall R&D capability had been further improved.
Meanwhile, with a wide expertise network build through years in the international market and an international vision, the
Company has actively integrated top experts in segmented domains and further improved R&D processes. So far, the Company
has preliminarily built an international technology team with top expertise and a science-based, rigorous, effective and systematic
work flow which provides strong support o successful construction and stable operation of programs in the Company planning.
in sharp market sensitivity and full transparent industrial chain, the Company has selected systematic, rigorous and targeted
products for medium-term product planning. In terms of manufacturing active ingredients, important active ingredients with
expired patents or with soon-to-expire patents were in the process of being handled by different project teams in steady progress.
processing technologies of manufacturing important active ingredients based on goals of automation, continuity and environmental
protection to make the processing more refined and chemical-based. During the reporting period, a first-of-its-kind single-line
multi-product project is in trial production. Two projects for full-chain continuity transformation of active ingredients have been
completed and are ready for implementation. Two active ingredients are expected to complete development in the second half of
The successful execution and stable operation of each project in the medium-term strategic planning will gradually improve the
whole industrial chain of Rainbow and provide strong support to the expansion of the global market.
(II) Improvement of the global marketing network
universities and colleges, social recruitment and local recruitment in different countries. Especially after enhancing recruitment of
local staff in foreign countries, the set-up and management of international teams has become more systematic and mature. With
more young staff joining the team, the Company has further enriched and optimized the marketing and registration training
scheme and serial training materials. It has successfully organized 4-month Training course for new staff recruited at universities
and colleges and an annual 1-week marketing training camp for on-the-job staff, which achieved the goal of improving unity,
sharing lessons learned at work and educating methodologies of success.
deepening the business in existing target markets, the team has continuously expanded new market and accelerated construction of
the global marketing network.
(1) The Company has newly completed in-depth surveys in the United States, Canada, Mali, Guinea, Moldova, Mongolia and
other markets;
(2) The Company has newly established wholly-owned or joint venture subsidiaries or offices in Australia, New Zealand, Turkey,
Guyana, Ghana, Dominica, Tunisia, Algeria, etc.;
(3) The Company has newly established wholly-owned or joint venture local teams in Turkey and Cambodia to start the local ToC
channel construction and brand sales.
accelerates the global registration layout.
(1) Expanded the global registration team rapidly, from 169 team members in 2022 to 180 at present.
(2) The Company has completed registrations for the first time in Poland, Tunisia, Armenia, Zimbabwe, Togo, Madagascar,
Botswana and other countries.
(3) As of June 30, 2023, the Company has over 300 registration items in China and about over 5,400 registration items overseas.
The Company is accelerating the construction of global marketing network comprehensively and orderly according to the mid-
term strategic planning.
(3) Semi-annual operation analysis for 2023
Each task has been implemented and completed according to the medium-term strategic plan and annual work plan, but looking
forward, there are still obvious gap in the Company capacity.
implemented according to the medium-term strategic plan and annual work plan. Both the progress and quality of each critical task
meet the expectation.
the market. Based on a thorough understanding of the information of the whole industrial chain from factory to farm, the Company
responds quickly and makes accurate decisions, effectively reduces and controls the business risks, and achieves good business
performance against the background of the industry's downturn cycle, highlighting the Company's unique competitive advantages.
of market development and business model upgrading, especially Model C, are encouraging. The Company has a solid foundation
and good momentum for sustained, healthy, and stable growth.
the advanced manufacturing of important active ingredients supported by R&D and innovation, the globalized operation capability
based on an adapted management system and the capability to build an excellent end-to-end process system in line with Rainbow
Agrosciences' business, and guarantee the implementation of processes.
(IV) Operational outlook for the second half of 2023
Along with the end of de-stocking and rebound of demand in various markets, as well as the orderly and smooth progress of the
key tasks in the medium-term strategic plan, the Company has a solid foundation and good momentum for sustained, healthy and
stable growth. The future performance will show a quarter-by-quarter upturn, and it is expected that the overall performance in the
second half of the year will be better than that in the first half of the year.
II. Analysis of Core Competitiveness
China to Globalization of Chinese Brands''
In the early years after the Company's establishment, relying on the experience accumulated by the founding team in the crop
protection product industry, it participated in the global pesticide industry chain as an active compound manufacturer and supplier.
It achieved rapid growth and initial accumulation with the help of the rapid development of the global crop protection products
market and the wave of industrial transfer to emerging countries such as China.
With the changes in the global economic environment, the global crop protection industry is also undergoing changes. Especially
after the outbreak of the financial crisis in 2008, affected by the decline in overall market demand, the overcapacity problem of
domestic manufacturing industry was more and more prominent due to years of continuous low-level repeated production. Many
products were oversupplied and generated vicious price competition, which adversely affected the profitability of enterprises in the
industry. In response to the challenges brought about by changes in domestic and foreign economic and market environments, the
Company responded quickly. Since the second half of 2008, it began to explore and plan for the optimization and upgrading of the
its sales model and development route. The Company has gradually formed a global marketing network with
"Team+Platform+Innovation" as the basic elements, combining the traditional export mode of crop protection products with the
independent overseas registration mode, and featuring a "Quick Market Access Platform".
The core of the "Quick Market Access Platform" is to obtain the registration of a rich and complete product portfolio in each target
country and to adhere to the concept of open platform. The rich and complete product portfolio registration can provide growers
with integrated crop solutions, and the concept of open platform enables the Company to build its own local team based on the
target country platform, to carry out the B-C business model of its own brand. In addition, the Company adopts flexible way to
open the platform to other excellent partners to carry out B-B operation. Based on this open platform, the Company can rapidly
expand market share through multiple channels including the Company's self-built team and cooperation with industry partners.
In each target country, the Company adheres to the combination of the traditional export model of crop protection products and the
overseas self-registration model. The Company can flexibly adjust and switch between different market roles such as suppliers,
brand owners and service providers according to changes in market scenarios and product differences. Two models promote and
complement each other. The traditional export model provides a solid customer base and market awareness for business expansion
under the overseas self-registration model. The abundant overseas self-registration not only greatly improves the Company's brand
awareness, but also can better meet customer needs with more various products and improve the intimacy with customers, which is
more conducive to the development of the Company's traditional export business.
At present, the Company's traditional export business model still accounts for a considerable proportion of revenue. In future, with
the continuous increase of the Company's overseas self-registration quantities and the continuous improvement of the construction
of the global marketing network characterized by "Quick Market Access Platform", the proportion of revenue of the overseas self-
registration model and the proportion of B-C revenue of self-owned brands will be further increased. In addition, the Company's
profitability and capabilities to maintain sustainable and stable growth and operation will be significantly improved, so as to
achieve stable, sustainable and rapid growth in performance.
According to the mid-term strategic plan, the Company is speeding up and increasing the investment in overseas self-registration
to enrich the product portfolio in each target country, and starting the construction of a "Quick Market Access Platform" in more
target countries. In the meanwhile, the Company also adheres to the characteristics of "light structure and rapid response" to
accelerate the development of its own brand B-C business in each target country. With its own strength and China's strong supply
chain, the Company is striving to achieve "From Made in China to Globalization of Chinese Brands".
In 2019, based on the BLM model, with the participation of all core team members, the Company reached a consensus and
determined the mid-term strategic plan for 2020-2024 after in-depth and sufficient discussions. The mid-term strategic plan was
formulated based on the guidelines of "Persisting in doing the difficult but correct JOB, moving toward the forefront of industrial
value chain, and building a complete industrial chain".
After the mid-term strategic plan is completed, the Company organizes an annual review and update in the middle of each year to
ensure that the key tasks formulated around the plan keep pace with the times. Based on the mid-term strategic plan, the Company
formulates the annual business plan, annual department work plan and personal PBC. After decoding level by level, it forms a
strategic plan implementation map, summarizes, reviews and comments on the implementation every quarter, and proposes the
next improvement plan to ensure that all staff focus on strategic planning and annual work plans, and work together to achieve the
goals.
The Company has nurtured a stable operation team. For more than 20 years, the operation team led by founding shareholders,
Wicky Wang, Sun Guoqing, Qiu Hongbing, Yuan Liangguo and Liu Yuanqiang, has focused on the sector of crop protection
products. They have a profound expertise and rich hands-on experiences with insights into segmented markets and development
trends globally.
The Company's vision is "To be a Global Leading Crop Protection Company" and its mission is "All about Growing". The core
values of the Company are "Customer Oriented; Rapid Response; Constant Effort; Open and Inclusive; Together We Work;
Together We Win". With the guidance of the vision, mission and core values, and by practicing them, the Company builds cultural
identities and unity of team members. Through continuously improving positions, salaries and benefits, performances and training
systems, the Company builds an international team to facilitate global business expansion.
To fully implement the core value of "Together We Win", the Company has launched a restricted share incentive plan for excellent
core members of the operational team other than the founding shareholders in 2021. This will be an integral part of the Company’s
efforts in continuously improving positions, salaries and benefits, performances and training systems with an aim to build a united
international team who will pay collective efforts towards shared goals.
Since the financial crisis in 2008, under the influence of decreasing demands on the market and with aggravated over-productivity
due to continuous low-level repeated construction in the domestic manufacturing sector for years, the domestic market has seen
excessive supplies of the crop protection products and vicious price competition which exerts negative influences on the profits of
the companies in the industry. In response to the challenges brought by the domestic & foreign economic environment and
changes in the market, the operation team determined to invest limited resources in business expansion and deepening of the
global market between 2008 to 2019 after analysis and discussion, and built a global marketing network which features as "Quick
Market Access Platform".
At this stage, matching with the strategic planning, the Company mostly concentrates its R&D and innovation resources on
development of differentiated preparations oriented by the pain points of the end market. So far, the Company has set up
technologies and a R&D team to facilitate rapid development of preparations of all specifications in need of clients around the
world. The development features as rapid, cost-effective compliant with laws and regulations of varied countries and globally
leading.
Since 2017, with the improvement of national security and environmental protection management requirements and law
enforcement, non-compliant and technologically outdated production capacity in the domestic crop protection manufacturing
industry has been cleared out. Large compliant active ingredient manufacturers have gotten into a favorable development and
growth cycle. During this cycle, more and more active ingredients single products are seeking technological breakthroughs in
automatic production, continuity, environmental protection and other aspects to meet the requirements of laws& regulations and
stable production. Once they achieve the breakthroughs, they can expand the production into larger scale as to dominate the global
market in that product.
The Company has spotted this trend on the active ingredient manufacturing earlier, and thus shifted its resources of R&D and
innovation to the advanced manufacturing of active ingredients single product in 2019. To achieve large-scale production of active
ingredients by utilizing globally leading technologies, on basis of the network built in the course of the long-term international
market expansion and the Company’s international vision, the Company has actively gathered top experts from varied segmented
domains and optimized the R&D work flow. So far, the Company has set up an international technology team with globally
leading expertise and a science-based, rigorous, efficient and systematic work flow. That has given strong support to the successful
execution and stable operation of the active components synthesis program in the long-term planning.
According to the Company’s medium-term planning, the main measures and focus of the Company in R&D and innovation are as
follows:
(1) Select from expired patents the target products that are instrumental for expanding into multiple markets on the globe and that
have the potential to create a huge market. Another crucial factor is that these products must offer a large room for technological
improvement. The Company refuses to engage in low-level repeated production and never advances prematurely in blind pursuit
of quantity. The Company only invests in active ingredient products when it is confident that it can take the lead in terms of
techniques and production scale of the niche markets worldwide for these products.
(2) Select active ingredients that are instrumental for the Company's market expansion and that have great market potential from
soon-to-expire patents and be the first to start planning for those ingredients worldwide. The Company is determined to become
the leader in exploring the market of such active ingredients in their post-patent period.
(3) Research, develop and launch differentiated preparations with the guidance of the pain points of end markets around the globe.
This type of program has seen considerable success in many target markets. The Company has summarized the methodology from
the practice and paid full efforts in implementing the methodology.
The Company's business covers the world, with five manufacturing bases in Wei Fang, Qingdao (Shandong Province, China),
Pingluo (Ningxia Province, China), Argentina and Spain. The Company has set up over 90 subsidiaries overseas with its
businesses in over 90 countries. With strong global registration capabilities, the Company is expanding its global marketing
network at high speed.
According to the Company's medium-term strategic plan (updated in 2022), in terms of the construction of ''Quick Market Access
Platform'', the Company will complete the preliminary stage of the project in all major markets except the United States, Canada
and Japan by 2024. In addition, the Company will complete the project in all major markets between 2025 and 2029 to achieve the
construction of "Quick Market Access Platform". In terms of running self-branded business-to-customer by setting up local teams,
the Company will implement this plan in no less than 25 new target countries by the end of 2024.
Company originates from China and serves the world with the advantages of "light structure, and fast
response".
The Company has built a complete industrial chain from factory to farm involving research and development of active ingredients
and preparations, manufacturing, branding towards the global market, trading channels, sales and services. The Company also has
a thorough understanding of the whole industrial chain and can make values in each section. By leveraging its own productivity,
strong supply chain in China and a global marketing network, the Company responds to changes on the supply side, cost side and
global market rapidly, which features as "light structure, and fast response". It originates from China and serves the world.
The global marketing network enables the Company to gain insights in the market dynamics and advert risks of blind investment
in R&D and manufacturing side.
The global vision, international professional team and its core values of "Open and Inclusive, Together We Win" also help the
Company successfully integrate the upstream side and downstream side of the global industrial chain as well as to grow rapidly in
the capital market.
III. Analysis on main businesses
Overview
See related content in "I. The Main Business of the Company During the Reporting Period".
Year-on-Year Changes of Key Financial Data
Unit: RMB
Year-on-year
H1 2023 H1 2022 Reason for change
increase or decrease
Mainly due to the decline
in product prices, high
Operating income 5,043,502,704.02 7,778,575,013.04 -35.16% inventories in some major
markets, and delayed
purchases by customers
Mainly due to cost
reductions as a result of
Operating cost 3,994,055,439.67 6,135,158,335.89 -34.90%
lower prices for most of the
active ingredient
Sales expenses 150,264,768.24 124,826,972.72 20.38%
Management expenses 228,737,334.76 199,428,267.71 14.70%
Financial expenses -145,565,636.90 -158,696,072.32 8.27%
Mainly due to the decrease
Income tax expenses 66,302,826.32 126,584,766.47 -47.62%
in profits this year
Mainly due to the year-on-
Net cash flow from year decrease in cash
-410,336,682.21 686,193,459.42 -159.80%
operating activities received for selling goods
and providing services
Mainly due to investment
Net cash flow in expenditures for new and
-425,349,554.24 -202,457,537.94 -110.09%
investment activities continued construction
projects
Mainly due to the increase
Net cash flow from
financing activities
loans
Net increase in cash
-415,720,363.05 -506,131,558.04 17.86%
and cash equivalents
Significant changes occurred in the composition or source of profits during the reporting period
? Applicable ? Not applicable
No significant change occurred in the composition or source of profits during the reporting period.
Circumstances where products or services accounting for more than 10%
? Applicable ? Not applicable
Unit: RMB
Year-on-year
Year-on-year Year-on-year
Gross profit change of
Operating income Operating cost change of change of gross
margin operating
operating cost profit margin
income
By product or service
Major product-
Herbicide
Ⅳ. Analysis on Non-core Businesses
? Applicable ? Not applicable
Unit: RMB
Proportion of total Whether it is
Amount Causes
profits sustainable
Mainly due to investment
Investment returns -138,011,157.94 -26.64% losses from disposal of No
derivative financial assets
Mainly due to changes in the
Profits and losses of
-29,696,287.71 -5.73% fair value of derivative No
changes in fair values
financial assets
Mainly due to the reversal of
the provision for inventory
Asset Impairment -3,911,947.90 -0.76% No
price declines during the
reporting period
Mainly due to incomes from
Non-operating income 6,288,109.44 1.21% No
scrapping non-current assets
Non-operating Mainly due to losses from
expenses scrapping non-current assets
Mainly due to the accounts
Credit impairment 7,648,337.17 1.48% receivable credit impairment No
loss
V. Analysis on Assets and Debts
Unit: RMB
End of H1 2023 End of 2022 Increase/
Notes on
Decrease
Proportion in Proportion in significant
Amount Amount in
changes
total assets total assets proportion
Mainly due to the
decrease in the
Monetary funds 3,018,411,282.62 26.14% 3,793,952,509.17 32.71% -6.57%
deposit for bank
acceptance bills
Accounts
receivable
Inventory 1,976,775,097.38 17.12% 1,657,230,533.12 14.29% 2.83%
Investment real
estate
Long-term
equity 1,445,053.58 0.01% 1,669,386.12 0.01% 0.00%
investment
Fixed assets 1,869,545,419.38 16.19% 1,691,830,176.47 14.59% 1.60%
Construction in
progress
Assets with
rights of use
Mainly due to the
increase in short-
Short-term loan 876,089,187.53 7.59% 404,206,509.66 3.48% 4.11%
term loans in the
current period
Contract
liability
Long-term loan 13,310,070.68 0.12% 17,176,777.87 0.15% -0.03%
Lease liability 8,130,954.80 0.07% 8,595,962.05 0.07% 0.00%
? Applicable ? Not applicable
? Applicable ? Not applicable
Unit: RMB
Changes of
Changes in Impairment
gain or loss in Purchase Sales amount
accumulative accrued
fair values amount during during the Other
Item Opening balance fair values that during the Ending Balance
during the the reporting reporting changes
are counted reporting
reporting period period
into equity period
period
Financial assets
financial
assets
(derivative 8,542,688.56 2,542,688.56 6,000,000.00
financial
assets
excluded)
Account
s
receiva 6,334,400.0
ble 0
financi
ng
The 5,654
above ,400.
total 00
Financial 122,183,523 226,167,54 4,230,705, 152,824,431
debts .97 0.00 900.00 .47
Other changes
N/A
Whether there is any significant change to the Company's main asset measurements during the reporting period
? Yes ? No
Item Closing book value Reasons for restrictions
Monetary funds 1,358,068,859.88 Acceptance bills, loans, letters of credit
and other deposits
Accounts receivable 518,011,038.98 Pledge financing
Fixed assets 287,572,474.10 Mortgage financing
Intangible assets 65,237,064.93 Mortgage financing
Total 2,228,889,437.89
VI. Registration Form for Survey, Discussion, Interview and Other Activities During the
Report Period
? Applicable ? Not applicable
Main content of
the discussion
Activity Index for details of
Time Site Guest type Guest and the
type the activity
information
provided
Northeast Securities, For details of the
Tianfeng Securities, Orient meeting, see the
performance
Securities, CITIC Securities, Record of the
forecast,
CICC Securities, Guosheng Investor Relations
January Online industry
Other Organization Securities, CITIC Activity on January
Construction, Minsheng 31, 2023 disclosed
the Company's
Securities, and many other by the Company on
private
organizations, totaling more February 1, 2023 on
placement, etc.
than 150 investors www.cninfo.com.cn.
Topsperity Securities, For details of the
Business
Southwest Securities, Orient reception, see the
situation in
Securities, GF Securities, "Record of Investor
Guotai Junan Securities, Relations Activities
April 27, Online situation in the
Other Organization Industrial Securities, Sealand on April 27, 2023"
Securities, Founder disclosed by the
Securities, and many other Company on
developments,
organizations, totaling more www.cninfo.com.cn
etc.
than 150 investors on April 27, 2023.
Business
For details of the
situation in
reception, see the
"Record of Investor
Company's
June 9, Online Relations Activities"
Other Other Online investors strategic
planning,
Company on
industry
www.cninfo.com.cn
development
on June 9, 2023.
prospects, etc.
Section III Company Governance
I. Information About the Annual and Extraordinary General meetings of Shareholders
Held During the Reporting Period
Investor
Meeting No. Meeting type participation Meeting date Disclosure date Meeting resolution
ratio
The first For details, see Notice of
extraordinary Extraordinary Resolution of the First
January 12, January 12,
general meeting of general 75.49% Extraordinary General Meeting of
shareholders in meeting 2023 (2023-002) published by the
For details, see the Company's
Annual general
Announcement of Resolutions of
meeting of Annual general
shareholders of meeting
www.cninfo.com.cn.
whose voting rights have been restored
? Applicable ? Not applicable
II. Changes of directors, supervisors and senior management
? Applicable ? Not applicable
There is no change to the Company's directors, supervisors and senior management during the reporting period, as detailed in the
III. The Company's Profit Distribution and Conversion of Capital Reserve Fund into Share
Capital During the Reporting Period
? Applicable ? Not applicable
The Company did not plan to pay cash dividends, give out bonus shares, or convert capital reserve into share capital in the first
half the year.
IV. Implementation of the Company's equity incentive plan, employee stock ownership plan
or other employee incentive measures
? Applicable ? Not applicable
On October 14, 2021, the Company held the 25th meeting of the third Board of Directors, deliberated and approved the Proposal
on the Company's Incentive Plan (Draft) for Restricted Shares (2021) and Its Abstract, the Proposal on Measures for the
Administration of Implementation Assessment of the Company's Incentive Plan for Restricted Shares (2021), as well as other
proposals. As the Company revised part of relevant contents in the original draft of incentive plan, on October 20, 2021, the
Company held the 26th meeting of the third Board of Directors of the Company, which deliberated and approved the Proposal on
the Company's Incentive Plan (Revised Draft) for Restricted Shares (2021) and Its Abstract, the Proposal on Measures for the
Administration of Implementation Assessment of the Company's Incentive Plan for Restricted Shares (2021) (Revised Draft), as
well as other proposals. On November 1, 2021, the Company held the 7th extraordinary shareholders' meeting of 2021, which
deliberated and approved the Proposal on the Company's Incentive Plan (Revised Draft) for Restricted Shares (2021) and Its
Abstract, the Proposal on Measures for the Administration of Implementation Assessment of the Company's Incentive Plan for
Restricted Shares (2021) (Revised Draft), and the Proposal on Requesting the Shareholders' Meeting to Authorize the Board of
Directors to Handle Matters Associated with Equity Incentives, as well as other proposals.
On November 3, 2021, the Company held the 28th meeting of the third Board of Directors, deliberated and approved the Proposal
on Granting Restricted Shares to Incentive Objects for the First Time, consenting to grant 4.9319 million Restricted Shares II to
On October 27, 2022, the Company held the 3rd meeting of the 4th Board of Directors and the 3rd meeting of the 4th Board of
Supervisors. They deliberated and adopted the Proposal to Grant Reserved Restricted Stock to the Target Employees of the
Incentive, the Proposal on the Adjustment of the Price of the Initial Grant of Restricted Stock in 2021 Incentive Plan, the Proposal
to Void Some of the Restricted Stock That Has Granted and Not Yet Vested, and the Proposal on the Performance Objectives to Be
Achieved to Meet the Vesting Condition for the First Vesting Period of the Initial Grant of the Company's 2021 Restricted Stock
Incentive Plan. The Board of Directors agreed to reserve 0.5449 million Restricted Shares II to 34 eligible employees at the price
of RMB 49.70/share on October 27, 2022 as the reservation grant date. It agreed to adjust the initial grant price of 2021 Restricted
Stock Incentive Plan to RMB 24.227/share (25.06-0.833) due to the Company's 2021 equity distribution. It agreed to cancel the
restricted shares that have been granted but have not been vested to the target employees who have left the Company or failed the
performance assessment, and the number of canceled shares is 211,116. It agreed that the Company shall handle matters related to
the vesting of the first vesting period of the initial grant in accordance with the relevant provisions of the 2021 Restricted Stock
Incentive Plan. As of November 2, 2022, 146 employees have deposited their vested funds into the RMB account opened by the
Company in Weifang Branch of Industrial and Commercial Bank of China, with a total amount of RMB 22,670,360.71. On
November 3, 2022, Shangkuai Certified Public Accountants (Special General Partnership) issued the capital verification report
(SKSBZ (2022) No. 10496), which examined the contribution of the employees that met the vesting conditions in the first vesting
period of the initial grant of the Company's 2021 Restricted Stock Incentive Plan. The Company has gone through the registration
procedures of the vested restricted shares in Shenzhen Branch of China Securities Depository and Clearing Co., Ltd. The vested
restricted shares have been listed and circulated since November 11, 2022.
? Applicable ? Not applicable
? Applicable ? Not applicable
Section IV. Financial Report
I. Audit Report
Whether the Half-Year Report is audited
? Yes ? No
The Company's Half-Year Report has not been audited.
II. Financial Statements
The currency of the statements in the financial notes is: RMB
Prepared by: Shandong Weifang Rainbow Chemical Co., Ltd.
June 30, 2023
Unit: RMB
Item June 30, 2023 Sunday, January 1, 2023
Current assets:
Monetary funds 3,018,411,282.62 3,793,952,509.17
Deposit reservation for balance
Lending to banks and other financial
institutions
Financial assets held for trading 6,000,000.00 8,542,688.56
Derivative financial assets
Notes receivable 5,912,000.00 59,112,584.14
Accounts receivable 3,287,524,818.96 3,201,703,461.53
Receivables financing 6,334,400.00 680,000.00
Pre-payments 146,609,647.23 75,294,804.30
Premium receivable
Re-insurance accounts receivable
Reserves for re-insurance contract
receivable
Other receivables 38,487,138.08 33,525,890.70
Including.: interest receivable
Dividends receivable
Financial assets purchased under
resale agreement
Inventory 1,976,775,097.38 1,657,230,533.12
Contracted assets
Assets held for sale
Non-current assets that mature within
one year
Other current assets 243,827,667.90 184,823,557.40
Total current assets 8,729,882,052.17 9,014,866,028.92
Non-current assets:
Disbursed loans and advances
Debt investments
Other debt investment
Long-term receivables
Long-term equity investment 1,445,053.58 1,669,386.12
Other equity instrument investment
Other non-current financial assets
Investment real estate 8,824,263.39 9,136,334.57
Fixed assets 1,869,545,419.38 1,691,830,176.47
Construction in progress 353,971,956.88 360,840,138.91
Productive biological assets
Oil and gas assets
Assets with rights of use 19,554,548.38 15,379,959.49
Intangible assets 224,590,805.08 226,245,165.26
Development expenditure
Goodwill 94,866,025.56 94,866,025.56
Long-term deferred expenses 27,936,332.15 31,898,939.40
Deferred income tax assets 91,500,093.08 82,525,991.91
Other non-current assets 123,037,977.46 69,616,034.81
Total non-current assets 2,815,272,474.94 2,584,008,152.50
Total assets 11,545,154,527.11 11,598,874,181.42
Current liabilities:
Short-term loan 876,089,187.53 404,206,509.66
Borrowings from the central bank
Borrowing from banks and financial
institutions
Financial liabilities held for trading
Derivative financial liabilities 152,824,431.47 122,183,523.97
Notes payable 2,640,518,227.50 3,367,152,536.58
Accounts payable 952,970,793.78 753,042,513.89
Advance receipts 254,920.26
Contract liability 61,745,776.50 46,035,630.83
Financial assets sold for repurchase
Deposits and interbank deposits
received
Amount received from agency trading
of securities
Amount received from agency
underwriting of securities
Payroll payable 148,315,681.67 191,738,722.30
Taxes payable 108,299,806.49 106,896,314.07
Other payables 49,868,036.50 43,899,535.81
Including: Interests payable
Dividends payable
Charges and commissions payable
Re-insurance accounts payable
Liabilities held for sale
Non-current liabilities due within one
year
Other current liabilities 9,982,526.09 59,862,778.90
Total current liabilities 5,018,777,111.87 5,116,672,888.67
Non-current liabilities:
Provision for insurance contracts
Long-term loan 13,310,070.68 17,176,777.87
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liability 8,130,954.80 8,595,962.05
Long-term payables
Long-term payroll payable
Accrued liabilities
Deferred income 12,734,728.21 13,755,569.25
Deferred income tax liabilities 57,815,289.02 55,449,975.77
Other non-current liabilities
Total non-current liabilities 91,991,042.71 94,978,284.94
Total liabilities 5,110,768,154.58 5,211,651,173.61
Owner’s equity:
Share capital 277,115,744.00 277,115,744.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 2,325,170,983.98 2,301,293,600.92
Less: Treasury stock
Other comprehensive income 12,636,477.48 5,821,782.13
Special reserve 30,725,411.73 19,551,007.62
Surplus reserve 158,674,657.07 158,674,657.07
General risk reserve
Undistributed profit 3,394,500,514.88 3,421,808,374.82
Total owners' equity attributed to parent
company
Minority shareholder’s interest 235,562,583.39 202,957,841.25
Total owner’s equity 6,434,386,372.53 6,387,223,007.81
Total liabilities and owners’ equity 11,545,154,527.11 11,598,874,181.42
Legal Representative: Chief Accountant in Charge: Chief of Accounting Institution:
Wicky Wang Xing Bingpeng Zhang Baolin
Unit: RMB
Item June 30, 2023 Sunday, January 1, 2023
Current assets:
Monetary funds 1,733,906,250.08 2,592,754,067.74
Financial assets held for trading
Derivative financial assets
Notes receivable 6,434,400.00 74,053,690.88
Accounts receivable 3,129,360,255.67 3,001,894,514.80
Receivables financing 600,000.00
Pre-payments 79,651,212.49 43,980,754.21
Other receivables 1,181,912,625.41 991,789,825.67
Including.: interest receivable
Dividends receivable
Inventory 494,302,755.59 622,588,496.95
Contracted assets
Assets held for sale
Non-current assets that mature within
one year
Other current assets 61,399,944.80 47,282,239.64
Total current assets 6,686,967,444.04 7,374,943,589.89
Non-current assets:
Debt investments
Other debt investment
Long-term receivables
Long-term equity investment 618,371,260.53 613,683,635.19
Other equity instrument investment
Other non-current financial assets
Investment real estate
Fixed assets 859,870,724.17 763,503,751.45
Construction in progress 232,381,612.63 216,753,391.79
Productive biological assets
Oil and gas assets
Assets with rights of use 11,403,579.17 12,297,044.43
Intangible assets 40,388,041.35 41,495,120.64
Development expenditure
Goodwill
Long-term deferred expenses
Deferred income tax assets 41,074,471.53 40,034,826.92
Other non-current assets 50,899,043.76 38,667,219.91
Total non-current assets 1,854,388,733.14 1,726,434,990.33
Total assets 8,541,356,177.18 9,101,378,580.22
Current liabilities:
Short-term loan 463,838,842.02 147,040,732.40
Financial liabilities held for trading
Derivative financial liabilities 113,947,521.60 116,668,962.10
Notes payable 2,015,942,310.08 2,722,206,699.86
Accounts payable 879,961,539.21 669,901,497.16
Advance receipts 3,984.00
Contract liability 25,495,280.37 42,531,647.79
Payroll payable 97,979,811.16 127,910,809.91
Taxes payable 17,841,744.65 28,993,999.52
Other payables 139,241,838.63 172,095,494.72
Including: Interests payable
Dividends payable
Liabilities held for sale
Non-current liabilities due within one
year
Other current liabilities 3,403,181.31 74,169,590.61
Total current liabilities 3,774,939,064.70 4,121,054,238.57
Non-current liabilities:
Long-term loan 3,813,993.66
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liability 3,167,273.07 6,794,107.92
Long-term payables
Long-term payroll payable
Accrued liabilities
Deferred income 1,677,406.70 1,880,107.78
Deferred income tax liabilities 36,875,360.10 35,125,488.43
Other non-current liabilities
Total non-current liabilities 41,720,039.87 47,613,697.79
Total liabilities 3,816,659,104.57 4,168,667,936.36
Owner’s equity:
Share capital 277,115,744.00 277,115,744.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 2,332,189,054.34 2,307,349,954.34
Less: Treasury stock
Other comprehensive income
Special reserve 7,812,108.54
Surplus reserve 158,674,657.07 158,674,657.07
Undistributed profit 1,948,905,508.66 2,189,570,288.45
Total owner’s equity 4,724,697,072.61 4,932,710,643.86
Total liabilities and owners’ equity 8,541,356,177.18 9,101,378,580.22
Unit: RMB
Item First half year of 2023 First half year of 2022
I. Gross Operating Income 5,043,502,704.02 7,778,575,013.04
Including: Operating income 5,043,502,704.02 7,778,575,013.04
Interest income
Premium earned
Handling charges and
commissions income
II. Total Operating Costs 4,366,319,713.41 6,556,877,860.64
Including: Costs of business 3,994,055,439.67 6,135,158,335.89
Interest expenses
Handling charges and
commission expenses
Surrender value
Net payments for insurance
claims
Net withdrawal of reserve for
insurance responsibility contracts
Expenditures of policy
dividend
Re-insurance expense
Taxes and surcharges 12,172,999.44 12,667,931.96
Sales expenses 150,264,768.24 124,826,972.72
Management expenses 228,737,334.76 199,428,267.71
R&D expenditures 126,654,808.20 243,492,424.68
Financial expenses -145,565,636.90 -158,696,072.32
Including: Interest expenses 18,521,750.06 8,019,680.18
Interest income 25,979,037.84 22,929,043.59
Add: Other incomes 5,541,198.21 4,590,599.65
Income from investment (“－”
-138,011,157.94 15,566,659.92
for loss)
Including: Income from
investment in associated enterprises and -224,332.54 -254,676.13
joint ventures
Income recognized at
termination of financial assets measured
at amortized cost
Foreign exchange gain ("-" fro
loss)
Net exposure hedging income ("-
" for loss)
Income from changes in fair
-29,696,287.71 -99,157,570.00
value ("-" for loss)
Credit impairment losses ("-" for 7,648,337.17 -98,767,238.19
loss)
Asset impairment losses ("-" for
-3,911,947.90 774,443.37
loss)
Gains from asset disposal ("-" for
-442,817.59
loss)
III. Operating Profit ("-" for loss) 518,310,314.85 1,044,704,047.15
Add: Non-operating income 6,288,109.44 8,616,238.16
Less: Non-operating expenses 6,560,502.52 19,900,077.04
IV. Total Profit Before Tax (“-” for total
losses)
Less: Income tax expenses 66,302,826.32 126,584,766.47
V. Net Profit ("-" for net loss) 451,735,095.45 906,835,441.80
(I) Classification by business
continuity
operations (“-” for net loss)
operations (“-” for net loss)
(II) Classification by ownership
shareholders of the parent company (net 424,390,802.78 887,649,644.42
loss marked with "-")
shareholders (net loss marked with "-")
VI. Net Amount after Tax of Other
Comprehensive Income
Net amount of other comprehensive
income after tax attributed to the owners 6,814,695.35 4,515,189.87
of parent company
(I) Other comprehensive income
that cannot be reclassified into profit or
loss
measurement on defined benefit plan
that cannot be converted into profit and
loss under the equity method
equity instrument investments
credit risk of the enterprise
(ii) Other comprehensive income
that will be reclassified into profit and 6,814,695.35 4,515,189.87
loss
that can be converted to profit or loss
under the equity method
investment on bonds
reclassified into other comprehensive
income
of other creditor's rights investment
financial statement translation
Net amount of other comprehensive
income after tax attributed to minority 8,472,097.51 101,480.21
shareholders
VII. Total Comprehensive Income 467,021,888.31 911,452,111.88
Total comprehensive income
attributed to parent company owners
Total comprehensive income
attributed to minority shareholders
VIII. Earnings per Share:
(i) Basic earnings per share 1.53 3.21
(ii) Diluted earnings per share 1.52 3.19
For business combination under the same control in the current period, the net profit of the merged party before the business
combination is RMB , and the net profit of the merged party in the previous period is RMB.
Legal Representative: Chief Accountant in Charge: Chief of Accounting Institution:
Wicky Wang Xing Bingpeng Zhang Baolin
Unit: RMB
Item First half year of 2023 First half year of 2022
I. Operating income 3,752,460,171.54 6,414,486,718.24
Less: operating cost 3,176,969,600.08 5,191,428,307.39
Taxes and surcharges 4,240,898.12 2,548,683.71
Sales expenses 73,912,445.93 69,525,789.04
Management expenses 101,070,285.87 109,163,204.00
R&D expenditures 106,993,024.19 213,486,818.39
Financial expenses -76,293,760.31 -167,574,330.91
Including: Interest expenses 5,146,390.60 6,357,100.62
Interest income 19,349,574.45 19,057,187.42
Add: Other incomes 1,683,129.45 4,306,552.29
Income from investment (“－”
-130,089,232.64 16,120,580.19
for loss)
Including: Income from
investment in associated enterprises and -224,332.54 -254,676.13
joint ventures
Income recognized at
termination of financial assets measured
at amortized cost
Net exposure hedging income ("-
" for loss)
Income from changes in fair
value ("-" for loss)
Credit impairment losses ("-" for
-1,199,960.04 -53,508,563.24
loss)
Asset impairment losses ("-" for
loss)
Gains from asset disposal ("-" for
loss)
II. Operating profit (loss marked with "-
")
Add: Non-operating income 2,352,570.26 1,280,365.61
Less: Non-operating expenses 3,167,383.13 13,295,880.00
III. Total profit (total loss marked with "-
")
Less: Income tax expenses 27,555,811.19 126,123,765.94
IV. Net profit (Net loss marked with "-") 211,033,882.93 786,665,140.03
(I) Net profit from continuing
operations (net loss marked with "-")
(II) Net profit from discontinued
operations (net loss marked with "-")
V. Other comprehensive income, net of
taxes
(I) Other comprehensive income
that cannot be reclassified into profit or
loss
measurement on defined benefit plan
that cannot be converted into profit and
loss under the equity method
equity instrument investments
credit risk of the enterprise
(ii) Other comprehensive income
that will be reclassified into profit and
loss
that can be converted to profit or loss
under the equity method
investment on bonds
reclassified into other comprehensive
income
of other creditor's rights investment
financial statement translation
VI. Total comprehensive income 211,033,882.93 786,665,140.03
VII. Earnings per share:
(i) Basic earnings per share
(ii) Diluted earnings per share
Unit: RMB
Item First half year of 2023 First half year of 2022
I. Cash Flows Generated from Operating
Activities:
Cash received from sales of goods and
services
Net increase in deposit from customers
and interbank
Net increase in borrowing from central
bank
Net increase in borrowings from other
financial institutions
Cash receipts from premiums under
direct insurance contracts
Net cash receipts from re-insurance
business
Net cash receipts from policyholders'
deposits and investments
Cash receipts from interest, handling
fees and commissions
Net increase in capital borrowed from
banks and other financial institutions
Net increase in repurchase business
capital
Net cash received from securities
trading brokerage
Cash receipts from tax refunds 366,285,872.74 504,323,580.24
Cash received relating to other
operating activities
Subtotal of cash inflow in business
activities
Cash payments for goods acquired and
services received
Net increase in customer loans and
advances
Net increase in deposits in central
bank and interbank
Cash payments for original insurance
contract claims
Net increase in lending funds from
banks and other financial institutions
Cash payments for interest, fee and
commission
Cash payments for insurance
policyholder dividends
Cash payments to employees and on
behalf of employees
Cash payments for taxes 153,361,010.96 261,291,821.04
Other cash payments relating to
operating activities
Subtotal of cash outflow in business
activities
Net cash flow from operating activities -410,336,682.21 686,193,459.42
II. Cash Flows from Investing Activities:
Cash receipts from investment
withdrawal
Cash receipts from return on
investments
Net cash receipts from disposals of
fixed assets, intangible assets and other 1,512,492.93 4,292,092.61
long-term assets
Net cash receipts from disposal of
subsidiary or any other business unit
Other cash receipts relating to
investing activities
Subtotal of cash inflow in investment
activities
Cash payments to acquire or construct
fixed assets, intangible assets and other 292,265,778.15 203,631,593.67
long-term assets
Cash payments for investment 6,000,000.00
Net increase in pledged loans
Net cash payments to acquire
subsidiary and other business units
Other cash payments relating to
investment activities
Subtotal of cash outflow in investment
activities
Net cash flow in investment activities -425,349,554.24 -202,457,537.94
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Including: Cash received from
investment of minority shareholder from 2,554,868.00
subsidiary
Cash receipts from borrowings 643,103,333.82 562,562,107.20
Other cash receipts relating to
financing activities
Subtotal of cash inflow in financing
activities
Cash repayments of borrowings 155,414,609.48 501,277,641.68
Cash payments for distribution of
dividends, profits, or cash payments for 432,063,416.99 199,032,814.94
interest expenses
Including: Dividends and profits paid
to minority shareholders by subsidiaries
Other cash paid related to financing
activities
Subtotal of cash outflow in financing
activities
Net cash flow from financing activities 423,248,244.58 -970,572,681.73
IV. Effect of Exchange Rate Changes on
-3,282,371.18 -19,294,797.79
Cash and Cash Equivalents
V. Net Increase in Cash and Cash
-415,720,363.05 -506,131,558.04
Equivalents
Add: Beginning balance of cash and
cash equivalents
VI. Closing Balance of Cash and Cash
Equivalents
Unit: RMB
Item First half year of 2023 First half year of 2022
I. Cash Flows Generated from Operating
Activities:
Cash received from sales of goods and
services
Cash receipts from tax refunds 282,124,895.16 355,797,866.11
Cash received relating to other
operating activities
Subtotal of cash inflow in business
activities
Cash payments for goods acquired and
services received
Cash payments to employees and on
behalf of employees
Cash payments for taxes 53,248,479.32 90,670,075.58
Other cash payments relating to
operating activities
Subtotal of cash outflow in business
activities
Net cash flow from operating activities -416,023,979.02 513,453,677.67
II. Cash Flows from Investing Activities:
Cash receipts from investment
withdrawal
Cash receipts from return on
investments
Net cash receipts from disposals of
fixed assets, intangible assets and other 2,468,815.63 2,090,117.35
long-term assets
Net cash receipts from disposal of
subsidiary or any other business unit
Other cash receipts relating to
investing activities
Subtotal of cash inflow in investment
activities
Cash payments to acquire or construct
fixed assets, intangible assets and other 211,451,033.47 127,255,705.50
long-term assets
Cash payments for investment
Net cash payments to acquire 6,684,696.80
subsidiary and other business units
Other cash payments relating to
investment activities
Subtotal of cash outflow in investment
activities
Net cash flow in investment activities -338,847,117.94 -124,638,954.63
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Cash receipts from borrowings 461,930,020.30 537,298,543.01
Other cash receipts relating to
financing activities
Subtotal of cash inflow in financing
activities
Cash repayments of borrowings 155,066,307.66 484,121,908.51
Cash payments for distribution of
dividends, profits, or cash payments for 424,716,774.32 186,164,085.10
interest expenses
Other cash paid related to financing
activities
Subtotal of cash outflow in financing
activities
Net cash flow from financing activities 235,633,403.87 -960,986,546.16
IV. Effect of Exchange Rate Changes on
Cash and Cash Equivalents
V. Net Increase in Cash and Cash
-505,361,352.11 -530,228,660.81
Equivalents
Add: Beginning balance of cash and
cash equivalents
VI. Closing Balance of Cash and Cash
Equivalents
Amount in the current period
Unit: RMB
First half year of 2023
Equity attributed to owners of the parent company
Minority shareholder's
Total owner's equity
Other equity
Other comprehensive
Less: Treasury stock
General risk reserve
Undistributed profit
instruments
Surplus reserve
Special reserve
Capital reserve
Share capital
interest
Item
Preferred shares
Perpetual bonds
Subtotal
income
Other
Other
Other
control
income
(“-” for
policies
(I) Total
Business
decrease)
by owners
by owners
(II) Capital
errors from
II. Opening
current year
contribution
combination
I. Balance at
Correction of
in accounting
and reduction
the end of the
balance of the
previous year:
Add: Changes
Current Period
III. Changes in
under common
comprehensive
shares invested
previous period
To be a Global Leading Crop Protection Company
contributed
from other
equity
instrument
holders
share-based
payments
recognized in
owners' equity
-451,698,662.72
-451,698,662.72
-3,211,648.04
-454,910,310.76
(III) Profit
distribution
Appropriation
of surplus
reserve
Appropriation
of general risk
reserve
-451,698,662.72
-451,698,662.72
-3,211,648.04
-454,910,310.76
to owners (or
shareholders)
(IV) Internal
carry-over of
owners' equity
reserve
converted into
capital (or share
capital)
reserve
converted into
capital (or share
capital)
losses by
surplus reserves
retained
earnings from
defined benefit
plan changes
retained
earnings from
other
comprehensive
income
(V) Special
reserves
in the current
period
-9,292,455.13
-9,292,455.13
-177,574.85
-9,470,029.98
current period
(VI) Other
IV. Balance at
the end of the
current period
Amount of 2022
Unit: RMB
First half year of 2022
Equity attributed to owners of the parent company
Minority
sharehol
owner's
interest
equity
Item
Total
der's
Other equity
Shar
Subt
Trea
Less
preh
bute
inco
Und
com
sury
prof
plus
capi
Gen
stoc
ensi
Cap
rese
rese
rese
istri
otal
Oth
risk
Oth
eral
Sur
rese
rve
rve
rve
ital
me
Spe
cial
tal
ve
er
er
rve
it
k
d
e
:
instruments
Other
control
income
(“-” for
policies
(I) Total
Business
decrease)
by owners
(II) Capital
errors from
II. Opening
current year
contribution
combination
I. Balance at
Correction of
in accounting
and reduction
the end of the
balance of the
previous year:
Add: Changes
Current Period
III. Changes in
under common
comprehensive
previous period
Preferred shares
Perpetual bonds
Other
To be a Global Leading Crop Protection Company
shares invested
by owners
contributed
from other
equity
instrument
holders
share-based
payments
recognized in
owners' equity
-230,057,940.00
-230,057,940.00
-230,057,940.00
(III) Profit
distribution
Appropriation
of surplus
reserve
Appropriation
of general risk
reserve
-230,057,940.00
-230,057,940.00
-230,057,940.00
to owners (or
shareholders)
(IV) Internal
carry-over of
owners' equity
reserve
converted into
capital (or share
capital)
reserve
converted into
capital (or share
capital)
losses by
surplus reserves
retained
earnings from
defined benefit
plan changes
retained
earnings from
other
comprehensive
income
(V) Special
reserves 357,717.98
in the current
period
-12,922,403.98
-12,922,403.98
-279,306.85
-13,201,710.83
current period
(VI) Other
-1,875,565.59
IV. Balance at
the end of the
current period
Amount in the current period
Unit: RMB
Other
income
(“-” for
policies
(I) Total
decrease)
by owners
Item
(II) Capital
errors from
II. Opening
current year
contribution
I. Balance at
Correction of
in accounting
and reduction
the end of the
balance of the
previous year:
Add: Changes
Current Period
III. Changes in
comprehensive
previous period
Preferred shares
Perpetual bonds
instruments
Other equity
Other
Less: Treasury stock
Other comprehensive
income
First half year of 2023
Other
To be a Global Leading Crop Protection Company
shares invested
by owners
contributed
from other
equity
instrument
holders
share-based
payments
recognized in
owners' equity
-451,698,662.72
-451,698,662.72
(III) Profit
distribution
Appropriation
of surplus
reserve -451,698,662.72
-451,698,662.72
to owners (or
shareholders)
(IV) Internal
carry-over of
owners' equity
reserve
converted into
capital (or share
capital)
reserve
converted into
capital (or share
capital)
losses by
surplus reserves
retained
earnings from
defined benefit
plan changes
retained
earnings from
other
comprehensive
income
(V) Special
reserves
in the current
period
-5,870,661.81
-5,870,661.81
current period
(VI) Other
IV. Balance at
the end of the
current period
Amount in the previous period
Unit: RMB
and
year
year:
Add:
Other
period
owners
policies
(I) Total
previous
Item
the end of
in Current
ve income
balance of
the current
accounting
Period (“-”
Changes in
(II) Capital
errors from
II. Opening
contribution
the previous
III. Changes
I. Balance at
reduction by
comprehensi
for decrease)
Correction of
Preferred shares
Perpetual bonds
instruments
Other equity
Other
Less: Treasury stock
Other comprehensive
income
First half year of 2022
Other
To be a Global Leading Crop Protection Company
shares
invested by
owners
contributed
from other
equity
instrument
holders
of share-
based
payments
recognized in
owners'
equity
-230,057,940.00
-230,057,940.00
(III) Profit
distribution
Appropriatio
n of surplus
reserve
-230,057,940.00
-230,057,940.00
Distribution
to owners (or
shareholders)
(IV) Internal
carry-over of
owners'
equity
reserve
converted
into capital
(or share
capital)
reserve
converted
into capital
(or share
capital)
of losses by
surplus
reserves
retained
earnings
from defined
benefit plan
changes
retained
earnings
from other
comprehensi
ve income
(V) Special
reserves
Withdrawal
in the current
period
-7,476,139.29
-7,476,139.29
current
period
(VI) Other
IV. Balance
at the end of
the current
period
In the case of any deviation from the explanations presented hereof, the 2022 Annual Report in Chinese
version shall prevail.
Company name: Shandong Weifang Rainbow Chemical Co., Ltd.
Legal representative:
Wicky Wang
Date of signature: September 5, 2023
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