Wellhope Foods Co., Ltd. 2020 Annual Report
Stock Code: 603609 Stock Abbreviation (English): Wellhope
Wellhope Foods Co., Ltd.
March 2021
Wellhope Foods Co., Ltd. 2020 Annual Report
Important Statements
I. The Board of Directors, Supervisory Board, Directors, Supervisors and Senior Management of
Wellhope hereby warrant that there are no false representations, misleading statements or material
omissions in this annual report, jointly and severally accept full responsibility for the truthfulness,
accuracy and completeness of the contents of this report.
II. All Directors attended the Board Meeting.
III. SuyaJincheng CPA LLP has issued a standard audit report for Wellhope.
IV. Wellhope's Chairman Jin Weidong and the Director of internal audit Zhang Wenliang warrant the
truthfulness, accuracy and completeness of the information presented in the financial statements in
this annual report.
V. The dividend plan for the reporting period has been deliberated by the Board of Directors.
The plan for 2020 dividend distribution will be: based on total share capital on the equity registration
date, Wellhope plans to pay dividends of RMB 2.20 yuan per 10 shares (tax included) to all shareholders.
This dividend plan has been approved by the Board of Directors, pending submission to the
Shareholders' Meeting.
VI. Risk Statement of Forward-looking Statements
The forward-looking descriptions in this report such as plans, development strategies and other
information cannot be deemed the Company's commitment to investors. Please beware of the
investment risks.
VII. There has been no occurrence of the Company's non-business capital being occupied by
controlling shareholder and his related parties.
VIII. There has been no occurrence of the Company violating its decision-making procedure while
providing external guarantees.
IX. Material Risk Warning
Wellhope describes possible risks in detail, please refer to "Possible Risks" in Section IV "Business
Operations Analysis".
X. This annual report has been issued in both Chinese and English versions. In case there is any
discrepancy or inconsistency between the two versions, the Chinese version shall prevail. The disclosed
Chinese version of 2020 Annual Report can be obtained at: www.sse.com.cn.
Wellhope Foods Co., Ltd. 2020 Annual Report
Contents
Wellhope Foods Co., Ltd. 2020 Annual Report
Section I Glossary
I. Glossary
CSRC refers to China Securities Regulatory Commission
SSE refers to Shanghai Stock Exchange
Wellhope, refers to Wellhope Foods Co., Ltd.
the Company
Reporting Period refers to January 1, 2020-December 31, 2020
The end of the refers to
reporting period December 31, 2020
Koninklijke De Heus B.V., the parent company of De Heus
Royal De Heus refers to Mauritius Ltd., the biggest privately-owned feed company in
the Netherlands
Company Constitution refers to The Constitution of Wellhope Foods Co., Ltd.
Shareholders' Meeting refers to The Shareholders' Meeting of Wellhope Foods Co., Ltd.
Board of Directors refers to The Board of Directors of Wellhope Foods Co., Ltd.
Supervisory Board refers to The Supervisory Board of Wellhope Foods Co., Ltd.
Corporate Law refers to The Corporate Law of the People's Republic of China
Securities Law refers to The Securities Law of the People's Republic of China
Wellhope Foods Co., Ltd. 2020 Annual Report
Section II Company Profile and Key Financial Information
I. Company Information
Company name (English) Wellhope Foods Co., Ltd.
Abbreviation (English) Wellhope
Company name (Chinese) 禾丰食品股份有限公司
Abbreviation (Chinese) 禾丰股份
Legal Representative Jin Weidong
II. Contact Person
Secretary of the Board Representative of Securities Affairs
Name Zhao Xin Zhao Changqing
No. 169, Huishan Street, Shenbei New No. 169, Huishan Street, Shenbei New
Address District, Shenyang, Liaoning Province, District, Shenyang, Liaoning Province,
China China
Tel 024-88081409 024-88081409
Fax 024-88082333 024-88082333
Email hfmy@wellhope.co hfmy@wellhope.co
III. Basic Information of the Company
No. 169, Huishan Street, Shenbei New District, Shenyang,
Registered address
Liaoning Province, China
Postal code 110164
No. 169, Huishan Street, Shenbei New District, Shenyang,
Office address
Liaoning Province, China
Postal code 110164
Company website www.wellhope-ag.com
Email hfmy@wellhope.co
IV. Place where the Annual Report is Prepared
Media designated by the Company for disclosing China Securities Journal, Shanghai Securities News,
information Securities Times
Website designated by the CSRC for publishing
www.sse.com.cn
the annual report
Place where the Company prepares its
Securities Department
annual report
V. Stock Information
Stock information
Stock type Stock exchange for IPO Stock abbreviation Stock code
Shanghai Stock
A share Wellhope(禾丰股份) 603609
Exchange
Wellhope Foods Co., Ltd. 2020 Annual Report
VI. Other Information
Name SuyaJincheng CPA LLP
Accounting firm (local) Office address North Zhongshan Road, Nanjing, Jiangsu Province,
China
Name of signatory CPA Zhou Jiawen, Wang Lei
Name GF Securities
The sponsor performs GF Securities Tower, 26 Machang Road, Tianhe
Office address
the responsibility of District, Guangzhou, China
continuous supervision Name of signatory
Xu Hailin, He Yu
during the reporting representative
period Period of conducting
continuous supervision
VII. Key Accounting Data and Financial Performance Indicators in the Latest Three Years
Unit: yuan Currency: RMB
Year-on-Year
Item 2020 2019 2018
change %
Operating revenue 23,817,600,766.26 17,792,091,973.58 33.87 15,750,798,120.67
Net profit attributable to
the shareholders of the 1,235,162,151.48 1,199,347,355.96 2.99 551,928,618.35
Company
Net profit attributable to
the shareholders of the
Company deducting
extraordinary items
Net cash flow from
operating activities
As at the As at the Year-on-Year As at the
end of 2020 end of 2019 change % end of 2018
Net assets attributable to
the shareholders of the 6,752,397,489.35 5,698,139,557.54 18.50 3,851,915,758.64
Company
Total assets 11,646,508,203.99 9,149,772,043.85 27.29 6,930,694,562.43
Year-on-Year
Item 2020 2019 2018
change %
Basic earnings per share (yuan per share) 1.34 1.34 0.00 0.66
Diluted earnings per share (yuan per share) 1.34 1.34 0.00 0.66
Basic earnings per share deducting
extraordinary items (yuan per share)
Decreased 4.64
Weighted average return on equity (%) 19.93 24.57 15.30
percentage points
Weighted average return on equity deducting Decreased 4.54
extraordinary items (%) percentage points
Wellhope Foods Co., Ltd. 2020 Annual Report
VIII. Key Financial Figures by Quarters in 2020
Unit: yuan Currency: RMB
Item Q1 Q2 Q3 Q4
Operating revenue 4,457,455,800.34 5,390,924,051.94 7,009,559,518.56 6,959,661,395.42
Net profit attributable to
the shareholders of the 303,680,389.66 302,335,346.35 322,168,482.30 306,977,933.17
Company
Net profit attributable to
the shareholders of the
Company deducting
extraordinary items
Net cash flow from
-40,329,752.04 491,725,779.82 -168,590,314.05 483,139,739.30
operating activities
IX. Extraordinary Items
Unit: yuan Currency: RMB
Item 2020 2019 2018
Gains or losses on disposal of non-current
assets
Government grants charged to current gains
or losses (excl. the government grants that
are closely related to the Company's ordinary
course of business and gained constantly at
fixed quotas or amounts as per certain
standards based on the state polices)
Income generated from the investment costs
for acquiring subsidiaries, associated
companies and joint ventures being lower 1,844.71
than the fair value of the investee’s net
identifiable assets acquired by the Company
Gains or losses on debt restructuring -1,147,367.47
Gains or losses on fair-value changes in
trading financial assets and liabilities,
derivative financial assets and liabilities, and
the income from disposal of trading financial
assets and liabilities, derivative financial -148,741.92 4,418,219.50 2,821,414.45
assets and liabilities as well as other debt
investment (excl. the effective portion of
hedges that arise in the Company's ordinary
course of business)
Non-operating income and expense other
-24,964,468.42 -15,858,496.27 -3,208,527.84
than those described above
Other items that meet the definition of
deducting extraordinary items
Non-controlling interests’ effects -3,449,600.51 3,972,264.26 -590,792.81
Income tax effects -3,223,835.48 -4,200,204.18 -4,163,566.50
Total 4,484,715.62 8,371,595.45 9,469,013.61
Wellhope Foods Co., Ltd. 2020 Annual Report
X. Item Measured at Fair Value
Unit: yuan Currency: RMB
Effects on current
Item Opening balance Closing balance Change
profit
Derivative financial
assets
Total 3,912,584.30 4,725,552.30 812,968.00 -1,397,309.00
Wellhope Foods Co., Ltd. 2020 Annual Report
Section III Business Overview
I. Primary Business, Operation Model and Circumstance of Industries in the Reporting Period
Wellhope is one of the renowned large-scale enterprises across domestic agriculture and animal
husbandry industries, primary businesses cover animal feed, feed raw materials trade, broiler
integration, and swine raising, it is also involved in veterinary drug, farming equipment manufacturing,
pet clinic, etc. In 2018, Wellhope identified food business as its strategic business, which is now in full
swing implementation. Since establishment, Wellhope has always adhered to its corporate mission, i.e.,
“Through advanced technology, professional service, and high-quality products, Wellhope is devoted to
the development of China’s animal husbandry industry, resources conservation, environment
protection, as well as food security for the benefit of people", and all Wellhope people hold together to
set sights on becoming one of the world's leading enterprise across agriculture, animal husbandry, and
food industries.
During the reporting period, the primary businesses of Wellhope have not changed significantly.
Primary
Feed Broiler integration Swine raising
business
Primary Swine, poultry, ruminant,
Live broiler, broiler parts products Finisher, piglet, pig breeders
products aquatic feed
Industrial chain-covering broiler
Industrial chain-covering a
breeder raising, day old chick
complete swine breeding
hatching, feed processing,
Sales model-dealer, direct system, including great
commercial broiler rearing,
sales grandparent, grandparent
Operation slaughtering and processing,
Operation model-R&D, and parent stock, piglet, and
model further processing of prepared
purchasing, production, commercial swine
food and cooked food
marketing, service Raising model of finisher-
Raising model of commercial
own farms together with
broiler-own farms together with
contract farms(outsourcing)
contract farms(outsourcing)
Liaoning, Jilin, Heilongjiang,
Business 29 provincial-level Liaoning, Jilin, Henan, Hebei, and
Anhui, Hebei, and Henan
distribution administrative regions Shandong provinces
provinces
Wellhope produces and sells animal feed for swine, poultry, ruminant, aquatic and fur-farmed animals,
which are marketed in 29 provinces and regions across China. It has also built feed mills in Nepal,
Indonesia and the Philippines, etc. Driven by the concept of “constantly working on new products,
never following the beaten path”, Wellhope always designs tailored products for animals in different
phases, and it is committed to offering farmers integrated services such as animal raising, disease
prevention and operation management, while helping farmers achieve desirable economic returns.
The subsidiary trade companies mainly trade in feed raw materials such as fish meal, soybean meal and
co-products of corn, also engage in feed additives including amino acid, antioxidant, mold inhibitors and
vitamin. In addition, these trade companies are the sales agents of animal health products such as
Wellhope Foods Co., Ltd. 2020 Annual Report
vaccines and veterinary drugs produced by global strategic suppliers. Now the trade business is active in
the regions of Northeast, North, East, South, and Southwest regions across China, some products have
been exported to Nepal, Mongolia and other countries.
Wellhope has invested more than 50 holding and associated entities in the value chain of broiler
integration, which are mainly located in the provinces of Liaoning, Hebei, Henan, Jilin and Shandong,
etc. Wellhope's broiler integration business, with three business sectors in terms of broiler raising, meat
processing and further processing, contains all parts in the industrial chain, including broiler breeders
raising, day-old chick hatching, feed production, commercial broiler rearing, slaughtering and
processing of raw meat, further processing of prepared and cooked food. Through standardized
management and streamline operation, Wellhope, cooperating with its partners, consolidates the
controls of bio-safety, drug residue and in-process hygiene to achieve traceable food safety. Based on
the number of broilers slaughtered by holding and associated factories, Wellhope has stepped into the
first echelon of white feather broiler industry and become one of the leading suppliers of broiler
products nationwide.
Wellhope
? Broiler raising: This sector covers broiler breeder raising, day-old chick hatching, commercial broiler
rearing and feed processing. By formulating scientific and rational feeding programs, light programs and
comprehensive disease prevention systems, Wellhope provides high-quality eggs for its hatching farms.
Meanwhile, it has established thorough management systems in the hatching process and purchased
intelligent facilities that are available for hatching in batches, also equipped with high-efficient and
energy-saving hatcher and micro-environment control system for producing healthy day-old chicks.
Entering commercial broiler sector, Wellhope mainly raises broiler by self-invested farms and
contract(out-sourcing) farms under the pattern of standardized management by unifying nine aspects.
Wellhope Foods Co., Ltd. 2020 Annual Report
All these farms apply three-tier cages and automate all the processes from feed intake, water supply,
temperature to moisture control, etc. The average weight of Wellhope’s commercial broiler has reached
received wide recognitions from the cooperative farms.
?Raw meat processing: Wellhope has set up 17 holding and associated slaughtering and processing
factories, which are equipped with domestically state-of-the-art production lines that are available to
slaughter 800 million broilers per year. Driven by strict all-in and all-out inspection and quarantine as
well as drug residue detection, every single factory has established a total quality guarantee system and
traceability system to monitor all the processes. Meanwhile, Wellhope constantly strengthens
slaughtering and processing techniques by ways of systematic pre-job training and skill promotion
training as well as conducting "6S" management (i.e., Seiri, Seiton, Seiketsu, Shitsuke, Seiso, Safety),
making the killing out percentage and per capita slaughtering efficiency stand out among companies
with similar scale. Now Wellhope’s broiler parts products have entered the supply chain of Shineway
Group, Jinluo Group, Yurun Group, China’s McDonalds and KFC, Yoshinoya, Wallace, Dili Fresh Food,
Yonghui Superstores, RT-MART, other regional large food distributors, fresh markets and food
processing plants, etc. In the meantime, broiler products have also been sold to the regions of Hong
Kong and Macao, and exported to some countries such as Mongolia and Bahrain, etc.
?Further processing: Relying on the advantage of integration, Wellhope uses high-quality chicken
supplied by own slaughterhouses as raw materials and installs efficient and energy-saving equipment to
process raw meat into prepared products. At present it supplies over 100 kinds of further-processed
chicken products to central kitchens of restaurant chains, corporate and school canteens, supermarkets
and convenience stores. In terms of online marketing, Wellhope’s flagship store of food products has
been launched on Taobao and JDcom, whilst some of its independent-brand products produced by
Wellhope's subordinated companies have also been marketed via community e-commerce platforms. In
addition, due to ever-growing demand from consumers, Wellhope has been vigorously expanding its
export business of cooked products, and such products have successfully penetrated the Japanese and
Korean markets with good response.
By carefully considering industry trends and own strengthens, Wellhope has ventured swine raising
business in 2016. Through solely-invested and co-invested operations, it has built farms and expanded
businesses in some predominant regions suitable for raising swine, such as Liaoning, Jilin, Heilongjiang,
Henan, Hebei, and Anhui provinces. Among these projects, those farms located in Hebei and
Heilongjiang provinces are jointly built by Wellhope and Hunan Jiahe Agriculture and Animal Husbandry
Company, top 15 in national swine raising industry, whilst farms located in Anhui province are jointly
invested with Anhui Haoxiang Agriculture and Animal Husbandry Company, a leading enterprise in
agricultural integration in Anhui province and a member of the National Swine Joint Breeding
Wellhope Foods Co., Ltd. 2020 Annual Report
Cooperative Group, other farms are invested by Wellhope solely. At present, Wellhope's swine raising
business mainly adopts the operation model that composes of pig breeders raising and sales,
commercial piglet selling plus fattening via own farms and contract farms (such as leasing, agent
construction, cooperative farming base). At the same time, each region set up boar house to reserve
excellent boars to maintain breeding advantage. Through establishing comprehensive and strict
bio-safety systems, advanced breeding systems and scientific feeding management systems, Wellhope
is devoted to crafting an integrated chain that contains breeding, swine raising, slaughtering and
processing.
A. Building farms with high standard
Wellhope insists on constructing farms in compliance with the principle of moderate scale for every
single farm, whilst it strictly designs bio-safety systems driven by the philosophy of beginning with the
end in mind. All newly-built and under-construction projects adopt advanced production process and
farming equipment, while using intelligent feeding system, environmental control equipment, and
production management software to improve productivity and create a comfortable environment for
swine.
B. Holistic operation
a. In terms of genetic selection and breeding. Wellhope introduces high-quality pig breeders with
French, American and Danish genes to match different business areas to provide parent stock with pure
blood and clear pedigree. At the same time, by establishing scientific breeding programs, Wellhope
continuously optimizes the structures of breeding stock to ensure the source of excellent breeders, so
as to enhance its competence in swine raising industry.
b. In terms of feeding management. Wellhope has established a dynamic management system for
feeding swine. It covers feed nutrition and raw material database, feed processing and product quality
database as well as production performance database, in combination with dynamic formulation
technology, large-scale pig farm feeding management technology and bio-safety prevention technology
to provide systematic nutrition solutions for farms. Meanwhile, through continuous measures such as
data collection and analysis, result tracking, Wellhope is capable to accurately optimize nutrition
programs, refine internal management and risk warning to improve feeding performance.
c. In terms of bio-safety prevention. After more than two years of exploration and experimentation,
Wellhope Foods Co., Ltd. 2020 Annual Report
Wellhope has established the bio-safety management system that consists of small group feeding,
four-zone control, three-level disinfection, precise detection and monitoring with alarm system. For
instance, various levels of security systems, such as service centers and disinfection areas have been set
up outside the farms. Professional staff disinfect people, vehicles and materials thoroughly step by step.
Regarding inside farms, all these farms have been divided into zones with different safety levels
corresponding to quarantine and isolation remedy, with installation of AI identification and surveillance
cameras at key links and spots of bio-safety. The visualization management helps ensure enforcement
of bio-safety measures. Moreover, each business unit has set up laboratories specialized in testing
African swine fever, which apply techniques like fluorescence quantitative PCR to achieve precise
detection, discovery and elimination to safeguard pig farms.
Wellhope has obtained the honorary titles of National Leading Enterprise in Agricultural Integration
Industry, National-recognized Enterprise Technology Center, National High-Tech Enterprise. Since
completing IPO in 2014, Wellhope has been elected as Top 100 Most Valuable Corporation of Chinese
Public Companies for four times and ranked on China’s Top 500 Private Enterprise for four times.
Meanwhile, it holds a leading position in the Northeast regions of China, whilst has also become a
highly influential brand in North, East, Central and Northwest regions across China. Regarding feed
business, Wellhope is the Vice Chairman of China Feed Industry Association, and has been awarded as
National Top 10 Leading Feed Enterprise, with a higher sales volume of commercial feed in China.
Regarding broiler integration, Wellhope’s broiler integration business has been developing rapidly in
recent years. Based on the number of broilers slaughtered and processed by holding and associated
companies, Wellhope is now among the top rank of China’s white feather broiler industry.
Wellhope has analyzed the development circumstances of feed, broiler and swine raising industries
during the reporting period, which are detailed in Section IV "Business Operations Analysis" hereof.
II. Core Competence Analysis within the Reporting Period
The core competencies of Wellhope are embodied in a highly educated, loyal and enterprising
management team, integrated with rationally planned and development-oriented business strategies, a
sophisticated and advanced industrial chain, widespread adoption of a systematic and scientific-based
innovative R&D system, constantly enhanced and increasingly matured brand influence, coupled with
highly energized and dynamic corporate culture that powers the development of Wellhope.
Talented people are the primary resources and the competitive core of Wellhope. The highly-educated
management team, led by seven cofounders, all with professional backgrounds, abundance of
experiences and practices in management and animal husbandry industries, are highly capable of
grasping the business environment accurately, formulating the development strategy scientifically, and
Wellhope Foods Co., Ltd. 2020 Annual Report
have deep insights and high recognitions of Wellhope’s core values and business philosophy. The seven
cofounders, who are praised as the "Seven Pioneers of the Industry”, have always held strong and
fought together. They are united and stable, and have been working hard at the frontline of operation
and management, making concerted efforts to move forward. Almost all the middle and senior
managers are internally selected and promoted by Wellhope, these core members have been rewarded
with various incentives, and they have a strong sense of ownership and devote themselves entirely for
the sustainable development of the Company. For the past 26 years, the management team has
managed to maintain a high degree of stability, almost none of the chief director and higher-level
managers leave the Company, less those who were reassigned to other positions due to substandard
performance. Meanwhile, newly promoted members of the management team born in the 1980s and
Program”. They love the Company, continue to forge ahead, having become the backbone force of the
management team. Wellhope also attaches great importance to the continuous learning and ability
improvement of these managers, by setting up various senior training programs such as the EDP
(Executive Development Program), leadership training camp, etc. At the same time, it also provides
opportunities to broaden managers’ horizons, such as mutual investigations and exchanges with both
domestic and overseas outstanding enterprises. The main cause of failure of some domestic companies
is due to the “unstable and disunited management team”. In contrast, the highly educated, loyal and
enterprising management team is one of Wellhope’s core competitive advantages at present and in the
future, and it is also the main reason why the Company is so confident about the future.
Continuous growth of talents and talent introduction can be attributed to Wellhope’s human resource
policy. In terms of talent introduction, Wellhope always adheres to the principle of high-standard
recruitment and upholds the core culture of "knowledge is power, unity is strength". In terms of talents
training, Wellhope formulates progressive training system with dual-channel career paths, one being
streamlined to become managers, and the other being technical experts, based on its strategic goals
and in tandem with staff’s career development and progression. In terms of talents incentives,
Wellhope continuously improves compensation policy by providing a fair, just and merit-based
environment for rewarding employees. It also utilizes a "double appraisal system (job skill appraisal and
work performance appraisal)", "performance analysis", "sudoku analysis" and other methods to assess
team members. In the meantime, driven by the concept of "sharing bumper harvest", Wellhope shares
its development achievements with staff in various ways, such as holding shares in parent company and
its subsidiaries, profit sharing and elasticity welfare. In 2018, Wellhope initiated a share incentive
program, where 372 identified core talents and key managers were granted restricted shares. Through
this program, the interests of Wellhope, its shareholders and key employees have been combined to
ensure the sustainable and stable development of the Company and ultimately achieve mutual benefits
for all. In the meantime, Wellhope has been echeloning its talents team based on corporation strategies
Wellhope Foods Co., Ltd. 2020 Annual Report
to build a more competitive and sustainable team to realize long-term goal.
Based on in-depth understanding of both domestic and global politics, economies and industries’ trends,
Wellhope has always attached great importance to its sustainable development and risk control, with
focus on operational quality and emphasis on profitable investment return from new projects. Driven
by the investment concepts of steady growth, strong sense of responsibility, healthy and sustainable
development, Wellhope, rationalizes its business layout and consolidates using a step by step approach,
instead of pushing through rash and impulsive investment, to maintain the rationality and safety of its
industrial chain and to mitigate all calculated risks faced by enterprise operations, taking the “Built to
Last” philosophy as a significant objective.
Rationally planned and development-oriented business strategies reflect in the following aspects.
A. Business divisions
Starting off with the premix business, Wellhope has been dedicated to expanding feed business over
the years, at present it has become one of the top 10 commercial feed producers nationwide. In 2008,
Wellhope entered broiler integration business after careful thinking. After 13 years of efforts, the
number of broilers processed by Wellhope’s holding and associated entities have been standing at the
forefront of the white feather broiler industry, with its management and key technical indicators
ranking top position both at home and abroad. In 2018, in order to seize market opportunities and
control operating risks, Wellhope decided to undertake swine raising as a strategic business. Since then,
it has been mastering the core competitive advantage of this business through talents cultivation,
practice accumulation and cooperating with leading companies. Meanwhile, in the year 2018, Wellhope
further recognized its development strategy in the next ten years, i.e., while unceasingly making feed
business grow stronger and larger, Wellhope would further boost broiler integration and swine raising
businesses to create an operation model powered by these two complementary engines. Such business
layout with high risks hedging will not lead the Company to the woes and ebbs due to tremendous blow
or sharp downturn suffered by one of the businesses.
B. Operation model
Wellhope has gradually formed a value chain with high competence and capability of withstanding risk
in the fields of animal feed, raising, slaughtering and further processing, which enables all business
divisions to closely connect and support each other, reduce the cost of intermediate processes, lower
trading risks, improve profit margin, and ensure food safety. Such set up has become a future direction
for agricultural companies under an increasingly complex and changing economic and industrial
environment.
C. Market expansion
Instead of expanding rapidly in the nationwide markets supported by the success of feed business in
Northeast regions and broiler integration business, Wellhope, with rich experiences in market
Wellhope Foods Co., Ltd. 2020 Annual Report
expansion, insists on exploring new markets based on overall analysis and investigations, carefully
penetrating the markets step by step in the Northeast, Northwest, Northern China, Henan, Shandong
provinces and other areas, while continuing to pursue asset-light operation, taking into account
operational efficiency and returns on investment.
D. Product mix
Wellhope offers a full range of feed products. The sales volume and development of swine, poultry,
ruminant and aquatic feed products have reached great height of achievements respectively, which in
turn could mitigate operational risks caused by sporadic animal diseases or other cases beyond the
Company’s control.
E. Financial risk control
Wellhope always attaches great importance to financial risk control. Since going public, it has gradually
improved internal control system, regulated corporate governance structure and enhanced the
awareness on risk control. It uses vertical management methods in coping with finances, such as
centralized financing and credit management, centralized funds and cash management and centralized
management of decision-making for providing guarantees. Due to its outstanding operating indicators
and risk control, Wellhope was rated as one of the Top 50 Public Companies with Healthy Financial
Position by the Data, a new media platform of China’s Securities Times, where only three enterprises
involved in agriculture and animal husbandry industries were selected.
The advantages of Wellhope’s industrial chain are mainly reflected in geographical locations and
business portfolios.
A. Geographical location
The head office of Wellhope is located at Shenyang in Liaoning province, with its primary businesses
mainly involved distribution in Northern China, especially in the Northeast regions. Northeast China is a
potential growth area for animal husbandry specially designated by the government, and is thus
suitable for agricultural companies to expand their businesses with the availability of ample high-quality
raw materials, mild climates, small stocking density and a relatively lower human resource cost. For
instance, corn produced by the Northeast regions, characterized by high bulk density, low toxicity and
low moisture, enables Wellhope to reduce purchasing costs while ensuring feed product quality.
Meanwhile, broiler production in Liaoning, Jilin, Henan, Hebei and Shandong provinces, where
Wellhope’s broiler integration businesses are mainly located in, account for over 75% of national
production, and these areas are the most important regions for developing white feather broiler
industry in China, with a strong foundation for broiler raising and more mature marketing system.
Moreover, Wellhope is actively exploring overseas markets by building feed mills in the Philippines,
Indonesia and Nepal, where animal husbandry is developing well with high potential.
Wellhope Foods Co., Ltd. 2020 Annual Report
B. Business portfolio
Centered on agriculture and animal husbandry industries, Wellhope adopts the expansion strategies of
"diversification and integration" to constantly optimize its business portfolio, which has increasingly
heightened its capacity on risk resistance and sustained profitability. In terms of diversification, while
strengthening and expanding feed business, Wellhope has been vigorously promoting broiler
integration and swine raising businesses to strive to build an operation model powered by these two
businesses. The staggered fluctuations in broiler and swine raising industries can effectively weaken
risks from any cyclical swing. In terms of integration, the integrated model is an inevitable trend for
domestic companies that are active in agriculture and animal husbandry industries. After years of
development in raw materials trading, feed production, animal raising, slaughtering and further
processing businesses, Wellhope has formed a complete industrial chain with high competitive
advantage and risk prevention capability, and it is gradually perfecting its support structure to each
business sector in the chain, boldly exploring the field of further food processing to fast complete the
industrial chain, while constantly standardizing and optimizing the division and cooperation system to
further enhance the synergies among all business sectors.
By holding fast to the corporate mission, i.e. “Through advanced technology, professional services, and
high-quality products, Wellhope is devoted to the development of China’s animal husbandry industry,
resources conservation, environmental protection, as well as food security for the benefit of the
people”, Wellhope’s R&D system always adheres to market-oriented and customer-oriented principles
as well as upholding the objective of producing “safe products, with stable quality, tailored nutrition
and being customer-centric”, constantly exploring innovative technology and working on new products.
A. Excellent R&D team
Relying on a relatively complete industrial chain, Wellhope has built a R&D team specializing in animal
raising, product formulation, manufacturing and related technologies to focus on feed, broiler
integration, swine raising, biological feed additives, etc. Wellhope’s R&D team is composed of hundreds
of master and doctorate degree holders, professors and senior experts. These experts, with profound
knowledge, have transformed many cutting-edge technologies into actual applications. In the
meantime, those experienced technicians focus on conducting trials and demonstrations projects to
validate, choose and apply the most suitable technologies. Relying on technical strengths, Wellhope has
received many national and local-level accreditations and honors, including the Nationally-recognized
Enterprise Technology Center, National and Local Joint Engineering Research Center for the
Development and Application of New Biological Feed, National R&D Branch Center of Feed Processing,
Comprehensive Trial Farm for National Swine Raising Industry Technology System, R&D Center of
Agricultural Products Further Processing and Bio-pharmaceutical Industry Cluster of Liaoning Province,
Innovation Team for Feed Technology and Safety of Liaoning Province.
Wellhope Foods Co., Ltd. 2020 Annual Report
B. Competitive R&D cooperation
In 2006, Wellhope partnered with Royal De Heus, a century-old company from the Netherlands. By
drawing on its globally advanced technological resources, leading know-how and a century of excellent
management practices, Wellhope has made successful breakthroughs and progresses in producing safe
and high-quality feed, with precise and efficient nutritional contents, and most importantly using
antibiotic-free technologies. Meanwhile, the R&D teams from both sides have maintained frequent
exchanges, which enable Wellhope to keep abreast with the world's latest technologies in R&D
achievements. By combining own 26-year’s technologies and experiences, Wellhope is committed to
providing customers with high quality products and technical service. Adding to these, it has also
established various technical cooperation and other collaborative projects with institutions of higher
learning such as the "Academician Workstation" and "Official Research Base for Postdoctoral Fellows"
to accelerate its R&D capabilities.
C. Top-class testing ability and database
Wellhope's central laboratory has been accredited as National Laboratory by CNAS (China National
Accreditation Service for Conformity Assessment), its test results are recognized in 60 countries or
regions across the world. Very few feed companies have received this accreditation. The lab has been
equipped with advanced testing equipment and divided into three functional rooms to cater for physics
and chemistry testing, microbiology testing and precision instruments testing. From micro to macro
levels, the central laboratory is able to maintain consistency in quality and plays a vital role in
implementing the concept of safety first in every step of the production processes. Wellhope is among
one of the very first companies capable of testing for prohibited additives, such as melamine.
Meanwhile, it has also established an internal raw material database and shares data resources with
the Dutch partner, using advanced regression methods to calculate the energy dynamics of raw
materials, based on animal’s growth progress and feed intake, to formulate precise nutritional contents
with the best cost-effective solutions.
D. Fruitful research and development results
Research and development power the sustainable development of an enterprise. Wellhope has made
many fruitful achievements on the road of research and development. By the end of the reporting
period, Wellhope has received 117 authorized patents, including 49 invention patents, and won 2
National Science and Technology Progress Awards, 1 National Technology Invention Award and nearly
antibiotic-free feed, Wellhope has won quite a few coveted awards, such as Top 10 Innovation
Enterprises regarding Antibiotic-free Technology and Its Alternatives, Outstanding Enterprise regarding
Antibiotic-free Feed in China’s Swine Raising Industry Ecosphere, Pioneer Award of Antibiotic-free
Creep Feed in the 9th Session of Creep Feed Development Summit Forum. Meanwhile, Wellhope's
"WIN Plus” nursery feed has won the prestigious prize of being crowned as "China’s Good Feed
Wellhope Foods Co., Ltd. 2020 Annual Report
of Antibiotic-free feed, and was highly acknowledged by farmers after it was launched into the market.
(See Section IV - Description of R&D Input for details)
Wellhope has successfully established its product and corporate brand in domestic agriculture and
animal husbandry industries for the past 26 years. With the constant transformation and upgrading of
the animal husbandry industry, its branding will be further strengthened.
A. Product brand
Relying on leading-edge technology, high quality products and continuous improvement in customer
service over the years, Wellhope’s brands have been widely accepted and trusted by customers in the
market, especially in the Northern regions of China. The branding of Wellhope can also be witnessed
from the positive growth of feed sales volume in 2020 and the rapid development of broiler integration
business. Meanwhile, the brand “Wellhope” has been recognized and honored as Liaoning Province
Famous-brand Product, Liaoning Province Famous Trademark, China Famous Brand, China’s Top 500
Most Valuable Brands, Most Influential Brand in National Animal Husbandry Industry, Trustworthy
Product in China's Feed Industry, Governor's Quality Award of Liaoning Province.
B. Corporate brand
Driven by the core values of "Integrity, Responsibility, Double-Win", some of Wellhope’s businesses are
joint ventures with partners, it has been working closely together with many partners for more than 10
or even 20 years, including a 15-year’s good relationship with Royal De Heus. These successful ventures
have proven that “Wellhope”, as a corporate brand, has been well recognized and trusted by its
partners. Meanwhile, the strength of Wellhope's brand has also been proved by long-term strategic
partnerships with various multinational and domestic suppliers, and all loans provided by financial
institutions over the years have been credit loans due to the good reputation of Wellhope. As a strong
employer brand, “Wellhope” has been recognized and favored by employees, and potential job seekers.
Wellhope has twice won the "Best Employer" based on rating by a third party Zhaopin.com. In 2020,
Wellhope won the honorary title of "Outstanding Enterprise in Corporate Culture Construction" in the
China Corporate Culture Construction Summit, and the successful holding of activities such as "Online
Recruitment" and "Wellhope Cup" Outstanding Paper Contest, all these vividly demonstrated the
strength of Wellhope's employer brand.
After 26 years of development, Wellhope has established energized and dynamic corporate culture that
has been acknowledged by all staff and powers its development. The core value of "Integrity,
Responsibility, Double-Win" and the management philosophy of "Innovation, Efficiency, Self-Discipline",
have been deeply entrenched in the thinking and behaviors of employees, and has been applied
without fail in day-to-day management, strategic planning and business decision. Common values play a
Wellhope Foods Co., Ltd. 2020 Annual Report
crucial role in improving organization efficiency, enhancing organizational cohesion and organizational
empowerment. A good corporate culture is the fundamental principle of success for corporate
operation, which powers the long-term development of Wellhope.
In 2020, Wellhope held live streaming events 3 times with the theme of “Telling Stories Experienced in
Wellhope", where over 40 employees and managers have been invited to tell their stories, and
managed to attract more than 220,000 viewers, which has successfully publicized Wellhope’s unique
culture. Meanwhile, the annual corporate culture publicity campaign by Wellhope's managers, where
good practices in daily work and leading by example have been freely shared as part of the corporate
culture dissemination efforts. Wellhope recently ushered its 25th anniversary in 2020, and utilized this
opportunity to carry out quite a number of culture promotional activities, including brand and
marketing promotion competition, physical fitness programs involving all Wellhope people, job skill
competition, essay writing, photography, calligraphy and painting activities, etc., with the purpose of
enriching the staff's leisure life and displaying their strengths. In the face of COVID-19 pandemic,
Wellhope is one of the first agricultural enterprises to resume work. In order to maintain operations
and meet customer’s demand, many managers and employees overcame difficulties to actively return
to work, doing their best to run production to ensure stable supply. Their devotions and passions have
touched other staff deeply. Wellhope, together with its managers and employees, have donated more
than RMB 12 million worth of materials and money for pandemic control efforts. All these stems from
the strength of Wellhope's culture, the sense of mission and responsibility as well as true, genuine love
for the Company. The history of Wellhope has fully proven that each time whenever Wellhope faces
difficulties and trials, the corporate culture continues to assist it to defeat the hard times and to soar
higher.
.
Wellhope Foods Co., Ltd. 2020 Annual Report
Section IV Business Operations Analysis
I. Overview
In 2020, the world economy saw a recession, international political and economic situations have
remained complicated due to COVID-19 pandemic worldwide. In addition, African swine fever has also
posed another stiff challenge. While putting in efforts in fighting the pandemic, Wellhope, driven by its
business strategy of focusing on three primary businesses, grasped market changes and opportunities
to further expand feed business, whilst vigorously developed broiler integration and swine raising
businesses supported by the advantages of brand, technology, research and development, talents team.
In 2020, Wellhope’s feed sales volume realized a year-on-year growth of 47%, the number of broilers
raised by Wellhope’s holding and associated companies increased by 33%, whilst the number of
slaughtered broilers increased by 22%. Meanwhile, the number of swine sold by holding and associated
companies rose by 152% from a year earlier. All these three primary businesses overfulfilled their
business objectives set at the beginning of the year.
Since completing IPO in 2014, both operating revenue and net profit of Wellhope have grown for 7
consecutive years, with the compound annual growth rate reaching 16% and 32% respectively. The ROE
has realized steady progress (although being declined a little bit influenced by the downward broiler
industry, it still steadily increased by nearly 20%), showing stable profitability and good growth of the
Company. The asset-liability ratio was 32.15%, remained below 40% in the past seven years, which was
remarkably better than the average level of the industry, reflecting strong ability of risk resistance.
Main accounting data and financial indicators since IPO
Wellhope Foods Co., Ltd. 2020 Annual Report
Affected by the downturn of broiler market in 2020, the profit contributed by Wellhope’s broiler
integration business declined, but the performance of animal feed, swine raising and feed raw
materials trade businesses all achieved great breakthroughs, hitting record highs.
Wellhope’s operating revenue exceeded RMB 20 billion for the first time, reaching RMB 23.818 billion
with a year-on-year increase of 33.87%, the net profit attributable to shareholders of the Company
recorded RMB 1.235 billion, increased by 2.99%, the net profit attributable to shareholders deducting
extraordinary items realized RMB 1.231 billion, rose by 3.33%, the weighted average return on equity
was 19.93%, decreased by 4.64 percentage points. At the end of the reporting period, the total assets
reached RMB 11.647 billion with a year-on-year growth of 27.29%. The owner's equity attributable to
the parent company reached RMB 6.752 billion, increasing 18.50% compared with the end of the prior
year.
A. Feed business
a. Industry overview
China's feed industry started thriving since mid-late 1970s, and in just a dozen years, China’s feed
industry has achieved what developed countries have accomplished in decades. In 2011, China's feed
production exceeded the United States for the first time, becoming the world's largest feed producer.
Comparing with the rapid development of the early stage, China’s feed industry has witnessed a
Wellhope Foods Co., Ltd. 2020 Annual Report
slowdown in the growth of production output in recent years, but it still has a huge market size. Under
the backdrop of supply-side reform that has continuously deepened, the transformation of feed
industry has been accelerated and showed remarkable polarization. Large enterprises have been rabidly
grabbing market shares supported by their technologies, costing, branding, management, capital,
logistics, and other advantages, whilst small and medium-sized companies have been gradually
squeezed out the market, the consolidation of feed industry has been unceasingly enhanced.
In 2020, with the official implementation of "ban of antibiotics" and the continuous promotion of "bulk
feed", the entry barriers of feed industry have been raised again, customers have significantly increased
their requirements on the comprehensive strength of feed suppliers, which quickened the elimination
of companies lagging behind.
In terms of supply, the production of national commercial feed in 2020 reached 252.761 million tons
with a year-on-year increase of 10.4%. Among them, swine feed increased by 16.4%, reaching 86% of
the peak production in 2018. The production of layer feed, broiler feed and ruminant feed rose by 7.5%,
production of bulk feed amounted to 58.976 million tons with a year-on-year growth of 33.6%,
accounting for 25.6% of the total output of compound feed, which increased by 4.6 percentage points
over the prior year. From the perspective of industry consolidation, there were 749 feed mills with
annual capacity over 100,000 tons, newly increased 128 producers compared with the prior year. These
feed mills totally produced 133.52 million tons of feed throughout the entire year with a year-on-year
increase of 19.8%, contributing towards 52.8% of the total national feed production, which rose by 6.2
percentage points over the previous year, indicating that the industry has been further transformed to
intensification.
In terms of demand, the swine production has been recovering in 2020 with the rebounded inventories
and higher slaughtered weight, whilst the feed to meat ratio has been increased significantly compared
with previous years. Meanwhile, the inventories of layer reached a record high, while the inventories of
broilers keeping high level throughout the entire year. In regards to ruminant feed, due to the booming
market of cattle and sheep products, farmers were keen to replenish their stocks, which led to a rapid
increase of productions. Driven by above factors, it could be seen strong demands for feed in 2020, and
customers' requirements for product quality have been significantly enhanced.
Overall, China's feed industry has an enormous market size with a booming trend in both supply and
demand. Although the overall growth rate has slowed down, the consolidation of this industry has been
increasing. Those large groups have been growing swiftly in sales volume and market share, implying
these industry leaders increasingly enjoying remarkable scale advantages.
b. Business progress of feed business
The demands for commercial feed in 2020 presented favorable growth, supported by factors such as
continuous recovery of swine production, high inventories of poultry and prosperous supply and
Wellhope Foods Co., Ltd. 2020 Annual Report
demand of cattle and sheep products. Wellhope, as one of the domestic feed industry leaders, clung to
industry opportunities, exerted its competitive advantages in terms of brand, technology, marketing,
service, and purchasing to swiftly response to market demands, and enhance market exploitations,
pushing up feed sales volume reaching record level with the highest growth rate since completing IPO,
which further improved market share.
In 2020, Wellhope’s holding and associated companies totally produced 6.98 million tons of feed with a
year-on-year growth of 41%. Among feed entities, Wellhope has 11 feed mills with annual capacity over
Wellhope’s subsidiaries, exceeded 520,000 tons. The entities included in the consolidated financial
statements, produced 3.85 million tons of feed in 2020 with a year-on-year increase of 47.02%, hitting a
new high. The feed business contributed RMB 12.11 billion in operating revenue, increased by 55.54%
compared to the year earlier. In terms of sales regions, the feed sales volume of Northeast China
increased by 49%, accounting for 60% of total sales volume, whilst the sales volume of Central China
regions rose by 44%, accounting for 40% of the total. In terms of feed categories, the sales volume of
compound feed increased by 51.18%, concentrate feed and premix rose by 36.19% and 20.45%
respectively. In terms of feed varieties, the sales volume of swine feed increased by 71.59%, the creep
feed, nursery feed and feed for lactation sows as well as piglet feed accounted for 75% of total swine
feed. Whilst poultry feed rose by 35.64%, ruminant feed grew 40.85%. Among them, the sales volume
of beef cattle feed continuously maintained a rapid growth (y-o-y 77%). Other feed categories increased
by 8.62%. In general, Wellhope’s feed business in 2020 achieved explosive increase highlighted by three
primary feed categories including swine, poultry and ruminant, while its growth rate being far ahead of
the industry average level.
Feed sales volume of companies included in the consolidated scope in 2020
Sales volume % of total Sales volume YOY change of
Item 2020 sales 2019 YOY change national feed
(10k tons) volume (10k tons) production
Swine feed 155.99 40.53% 90.91 71.59% 16.40%
Poultry feed 144.69 37.60% 106.67 35.64% 8.16%
Ruminant feed 63.10 16.40% 44.80 40.85% 18.90%
Other feed 21.05 5.47% 19.38 8.62% -
Total 384.83 100.00% 261.76 47.02% 10.40%
Sales volume % of total Sales volume YOY change of
Category 2020 sales 2019 YOY change national feed
(10k tons) volume (10k tons) production
Concentrated
feed
Compound feed 295.67 76.83% 195.57 51.18% 9.80%
Premix 7.54 1.96% 6.26 20.45% 9.60%
Total 384.83 100.00% 261.76 47.02% 10.40%
Wellhope Foods Co., Ltd. 2020 Annual Report
During the reporting period, the main strategic actions and progresses of Wellhope's feed business
are as follows.
(a) Accelerating product development to capture market opportunities
Facing the changes of market pattern, Wellhope, relying on strong product development platform and
more than 20 years of technology accumulation, adhered to research on market demand-oriented
products, also iterated and upgraded products to seize the market opportunities and support
marketing. In response to African swine fever, Wellhope has successfully developed the line of
products named “Wellhope Immune Nutrition”, which has effectively enhanced the immunity of swine.
In response to the demand of raising large swine above 120kg, Wellhope quickly developed large swine
feed to help customers capture the opportunity of benefitting from higher swine price. Also, Wellhope
continuously developed and launched a series of high-yielding and fast-growing swine feed products.
In terms of antibiotic-free feed, Wellhope has been preparing and researching on antibiotic-free
technologies for a long time and carried out more than 100 experiments from 2013 and 2019, reserving
a variety of comprehensive solutions to completely alternate antibiotics. Wellhope has already changed
some feed products to be antibiotic-free before the ban of antibiotics being issued. By the end of June
performance, good customer feedback and high market recognition. As a result, Wellhope received the
honor of "Top 10 Technology Innovation Enterprise regarding Anti-free Feed", and the “WIN plus
(Upgraded Wellhope immune nutrition products)-Nursery Feed Product” was awarded as “China Good
Feed 2020-Pioneer Anti-free Feed Brand”.
(b) Implementing precision marketing and innovating customer service system
In 2020, Wellhope paid close attention to the market changes and implemented precision marketing
strategies in a multipronged manner. Firstly, Wellhope conducted in-depth researches on the market
and precisely positioned the demands of products. Secondly, it exactly matched customer service and
provided customers with "one-stop" services through profound cooperation with breeding farms,
bio-tech companies, equipment companies, financial institutions, insurance companies and other third
parties to enhance customer engagement. Thirdly, Wellhope increased the promotion of new products
and bestsellers to strengthen its brand image and heighten profitability. Following, Wellhope vigorously
explored new regions, new markets, and new customers to capture new profit growth points.
Thereafter, Wellhope expanded its sales force and increased the density of market development to
prepare for further exploration of market space.
Owing to the impact of COVID-19 and changes in the market environment, Wellhope constantly
innovated online service modes, actively provided efficient and accurate services to customers through
online media such as video call, live streaming, short videos, WeChat and other platforms. In the
meantime, Wellhope quickly carried out online guidance and training programs for customers, such as
"remote questioning" and "remote teaching", to solve the problems effectively via remote interactions
Wellhope Foods Co., Ltd. 2020 Annual Report
to ensure that farmers could operate their farms in an orderly manner. Also, Wellhope has built online
service platforms, which guided farmers by launching market analysis, farming skills and preventive
measures against epidemics to help farmers continuously expand their breeding knowledge and keep
abreast of market conditions. The professional and systematic service system has been praised and
highly trusted by a lot of customers.
(c) Heightening internal operation to achieve high quality, high efficiency and synergy effect
After the outbreak of COVID-19 in early 2020, Wellhope responded quickly and overcame difficulties to
resume production as soon as possible to achieve the goal of "ensuring staff safety, guaranteeing
production and supply, stabilizing sales and development”, and fulfilled the responsibilities of
safeguarding residents’ meat supply. Although facing the pressures such as labor shortage, insufficient
raw material, soaring demand and traffic control, Wellhope exerted its advantages such as strong
execution, strategic and large-scale purchasing, lean production to ensure production and supply. In
addition, Wellhope continued to improve internal operation, optimized its organizational structure to
make sure all functional departments were able to operate in a standardized, orderly and efficient
manner, which ensured that the Company’s management system could meet the needs of the growing
business scale.
(d) Seeping up business exploration to continuously expand production capacity
During the reporting period, Wellhope quickened the business exploration in new markets to increase
feed production capacity. It set up several feed mills in Liaoning, Hainan, Shanxi, Shandong, Jiangxi,
Hunan, Sichuan, Fujian provinces by way of self-building, merger and acquisition, leasing, and OEM,
which has laid a solid foundation for future rapid expansion. On the other hand, Wellhope constantly
renovated feed production equipment and factories to increase efficiency and enhance the utilization
of capacity. With the continuous generalization of bulk feed, Wellhope has increased input in bulk silo
facilities, its sales volume of bulk feed achieved 400,000 tons in 2020, with a year-on-year growth of
B. Broiler integration business
a. Industry overview
In 2020, the COVID-19 pandemic has significantly hit the supply and demand of white feather broilers,
which weighted on the supply and significantly curbed the consumption demand of chicken. Compared
with 2019, the overall profits of this industrial chain fell sharply, and the backward players have been
weeded out quickly, while these large-scale companies continuously expanding their businesses to
capture market opportunities.
Regarding supply, in the first half of the year, the COVID-19 disrupted the sales channels, whilst the
market was mandated to cut production capability by forced molting, and eliminating old broiler
breeders, which caused the inventories of molted broiler breeders declining significantly. In the second
half of the year, the number of broilers delivered for slaughter gradually recovered to a high level,
Wellhope Foods Co., Ltd. 2020 Annual Report
reaching a five-year peak in September and October, which resulted in a rapid increase in supply and
excessively low chicken prices. Thereafter, the supply of broiler decreased in November and December.
For the whole year, the inventories of in-production grandparent stock and parent stock remained high,
pushing the sales volume of commercial day-old chicks growing 8.1% compared to the year earlier, and
the number of live broilers increasing 8.4%. The outbreak of COVID-19 in the first half of the year
caused a certain obstacle to production, which in turn lowered the annual production, generating a
less-than-expected growth in the overall supply of white feather broilers in 2020.
In regard of demand, chicken consumption shrank remarkably in the first half of 2020 caused by the
COVID-19 pandemic hitting domestic consumption, especially in the first quarter. Affected by this
pandemic, the overall consumption of chicken in Q1 dropped by about 10% from a year earlier, among
which, chicken consumed by catering and group meal decreased by more than 30%. In May and June,
chicken consumption gradually recovered, but the average price of chicken products throughout the
year declined by 19% compared to the year earlier due to extremely high intermediate and terminal
inventories, coupled with the rapid growth of chicken supply in the second half of the year, and the
remarkable decline of overall consumption power of residents. The overall profit of this industrial chain
also fell significantly.
To conclude, the COVID-19 has broken the original estimate of “an increase both in production and
sales, a bloom both in supply and demand” within white feather broiler industry, both the supply and
demand sides fell short of expectations in 2020. In short term, chicken has still played the role of the
substitution for pork. Along with the economic recovery and the stabilization of the pandemic, chicken
consumption is expected to grow, but because the supply is still running at a high level, the industry
may be difficult to recover in a short time. As a result, unqualified companies will be continuously
weeded out of the market, while large-scale enterprises constantly expanding their businesses to
capture market opportunities. In long term, chicken will be becoming increasingly popular relying on its
characters of high protein, low fat and low cholesterol, whilst white feather broilers also have greater
advantages compared to swine in terms of growth rate, feeding costs, safety, and environmental
protection. Seeing the experiences of developed countries, China's per capita chicken consumption still
has large growth potential, showing a vast market space.
Note: The statistical data in above industry information come from Industry Analysis Report of www.
Boyar.cn.
b. Business progress of broiler integration business
In 2020, the broiler industry entered a downward cycle, and the COVID-19 pandemic had significantly
impacted on national economy, which remarkably dented terminal consumption and pulled down the
market environment. Under such unfavorable circumstances, Wellhope’s broiler integration business
division focused on market exploration and chose opportunities to conduct business expansion.
Meanwhile, based on the advantages of cost and efficiency formed over the years, it further heightened
Wellhope Foods Co., Ltd. 2020 Annual Report
core competencies and constantly enlarged market reach under fierce competitions, making its market
standing further enhanced. Although the performance of broiler integration business declined
compared with the prior year, it has been still one of the important contributors towards the overall
profit of Wellhope. In 2020, these holding and associated companies totally raised 561 million broilers
with a year-on-year increase of 33%, slaughtered 639 million broilers with a year-on-year growth of 22%,
whilst produced 1.68 million tons of broiler products, which increased by 26%. Meanwhile, Wellhope
totally produced 26,100 tons of prepared food and cooked food with a year-on-year growth of 20%,
including 3,010 tons of exported cooked food with an increase of 50%.
(a) Conforming to the industry trends and planning business expansion steadily
In 2020, the inventories of grandparent and parent stocks rose to high levels, boosting a sufficient
supply of commercial chicks. In view of this, Wellhope proactively slowed down the construction
progress of breeding farms, whilst strengthened the performance management of these farms.
Although the percentage of self-produced day-old chicks in total commercial broilers raised by
Wellhope declined compared with the prior year, the quality of day-old chicks has been significantly
improved. Regarding commercial broiler raising business, Wellhope, relying on the geographical
advantage of its slaughtering business, fully exerted its asset-light advantage by cooperating with
contract farms, and steadily expanded the scale of commercial broiler as planned based on the precise
control of capital investment, thus the ratio of broilers raised by Wellhope and contracted farms to
broilers slaughtered by Wellhope increased significantly, making a further enhancement of food safety
traceability of chicken product. For slaughtering and further processing business, Wellhope moderately
expanded slaughtering production capacity, all of the newly invested slaughtering projects have been
matched with food factories, and the resources of broiler integration have been deeply inclined to
further processing business.
(b) Refining internal operation and reserving talents to continuously improve operational
capabilities
In the context of downward broiler industry, Wellhope has continuously enhanced lean management in
its broiler integration business, and rationally reduced period expenses, each sector in this industrial
chain has maintained efficient and smooth operation. In terms of broiler raising, Wellhope took
measures in certain aspects including day old chick, feed production, animal health products and
equipment to constantly improve the growth performance of commercial broiler and further enhance
automation. Regarding slaughtering, Wellhope vigorously heightened production efficiency to reduce
operating costs and strengthen quality control. When new projects put into operation, Wellhope would
rapidly expand the production and sales scale to achieve profitability at the fastest speed. In respect of
finance, Wellhope stringently managed accounts receivables, reasonably arranged capital expenditures,
and continuously accelerated the inventory turnover to ensure enough cash flow. While strengthening
internal management, Wellhope gave full play to the influence of corporate culture to actively absorb
Wellhope Foods Co., Ltd. 2020 Annual Report
talents, also optimized selection and training system, broadened talents reserve, echeloned talents
team, and improved incentive policies, to lay a solid foundation for achieving long-term objectives.
(c) Focusing on market trends to valorously explore business and unhesitatingly boosting food
strategy
The domestic consumption was significantly suppressed after the outbreak of COVID-19. Wellhope
quickly responded to such changes and vigorously expanded new sales channels, also constantly
optimized product mix, developed new cost-effective product portfolios, and continuously cultivated
outstanding dealers, simultaneously improved their loyalty. Meanwhile, Wellhope continued to boost
food business strategy unhesitatingly. With the advantage of raw materials, Wellhope used multi-brand
business mode to quickly develop domestic and foreign sales channels, also focused on forging hit
products, trained sales forces, expanded sales volume and strived to improve the percentage of both
processed food and high-value products, as well as the exported cooked food, thus further improving
the ecological niche. Influenced by the pandemic, the consumption of foreign residents also shrunk, as
a result the total amount of further-processed chicken products exported to Japan and Europe
decreased significantly. Even in such an unfavorable environment, Wellhope attracted great importance
to the quality of cooked food, accelerated the exploration of new foreign customers, and rapidly
explored small package products according to customers’ demand. Meanwhile, Wellhope dynamically
adjusted production structure and rapidly entered new channels to seize new market share. In 2020,
the export volume of Wellhope’s cooked food increased by 50% compared with the prior year, and the
food strategy has achieved initial results.
C. Swine raising business
a. Industry overview
In 2020, the production capacity of China's swine industry recovered in struggle under the joint attack
from the COVID-19 and African swine fever. The price throughout the year was higher than expected,
and the swine raising industry has ushered in an ultra-long period of gaining from higher swine price.
On the supply side, benefiting from taking commercial gilts as pig breeders, the inventories of China’s
breeding sows recovered faster, with a year-on-year growth of 43% in the end of 2020, basically
approaching the numbers in 2017. However, the percentage of commercial gilts in breeding sows was
relatively high, accounting for 40%-70% in the entire year, coupled with the long-term impact of African
swine fever, resulting in a significant decline in the overall reproductivity of sows. From the perspective
of commercial swine, the number of swine delivered for slaughter in 2020 still decreased by 35%
compared with 2019. But due to the higher body weight, the decline in pork production was less, with a
year-on-year decrease of 22%. To stabilize swine production and ensure pork supply, a series of policies
have been introduced one after another, and large-scale companies constantly quickened business
expansions to capture market shares relying on the advantages of capital, technology and talents, etc.
On the demand side, dine out such as in eateries and group meals were blocked by the COVID-19, and
Wellhope Foods Co., Ltd. 2020 Annual Report
the percentage of household consumption increased, making the sales channels of slaughtering
factories change, and further processing companies began to expand new sales channels such as the
rapidly developed e-commerce live streaming. In addition to the consumption scenario, residents' meat
consumption manner also changed. High-priced pork has been already difficult to sell, the pandemic
has tremendously impacted on the economy, and apparently weakened residents' consumption power,
pushing a further drop in pork consumption. Those food processing companies have been compelled to
adjust the percentage of pork in their formulas due to cost pressure. Meanwhile, the demand for pork
alternatives increased, proving that the overall consumption habits of residents have changed.
To conclude, China's swine industry has been still presented a tight supply, pushing swine raising
industry ushering in a long profit-gaining period. The prevention of African swine fever has been still a
major problem faced by the industry as this disease becoming normal that has hampered production
recovery. With the increase of stocking density, small and medium-scale farms have been facing
pressures regarding bio-safety, whilst those large companies took the chance to vigorously conduct
strategic expansion to fast capture markets by taking advantages of their capital, talents, technology
and other resources. In addition, at this stage, both swine raising companies and slaughtering factories
have been showing their strategic intention to expand integrated businesses, which proved that the
industry integration may further accelerate.
Note: The statistical data in above industry information come from Industry Analysis Report of www.
Boyar.cn.
b. Business progress of swine raising business
In 2020, influenced by the tight supply of swine and African swine fever, the swine price has been still at
a historical high level. On the basis of making every effort to ensure safe production, Wellhope rapidly
promoted the sales business of piglets and pig breeders, whilst further expanded swine fattening
business via own farms and contract farms, overachieving the annual sales objective.
(a) Expanding swine production vigorously to gain from high prices
Swine raising industry has been witnessed an ultra-long period of benefitting from high swine prices.
Wellhope seized this opportunity to vigorously boost the increase of swine production of farms in
operation, whilst speeded up projects under construction, striving to rapidly expand swine production
in North, East and Northeast regions across China. In the meantime, Wellhope actively implemented
business expansion by leasing, out-source construction and cooperating with farms to expand available
pen areas to rapidly increase the production capacity. Wellhope also followed the market situation to
quickly adjust its sales structure, such as seizing the opportunity of higher piglet price to increase the
sales of piglet, quickening swine fattening business via contract farms to contribute to the number of
finishers to fully enjoy the industry bonus and increase the Company's profit. During the reporting
period, Wellhope's holding and associated companies totally sold 682,000 heads of swine, including
Wellhope Foods Co., Ltd. 2020 Annual Report
(b) Closing up bio-safety prevention system to make farms safety
Under the threat of African swine fever, bio-safety has become a vital factor for pig farms. During the
reporting period, Wellhope took production safety as the first priority and comprehensively reviewed
bio-safety prevention systems of feed mills, own pig farms and contract farms. Wellhope has founded
multi-level control systems and closed up the bio-safety prevention systems to guard against outside
African swine fever cases and preventing infections inside the farms. Wellhope has also built material
supplies disinfection and logistics centers, vehicle cleaning and disinfection centers, and personnel
quarantine centers in each region to control the risk of African swine fever that might be brought in by
vehicles, materials and personnel. Meanwhile, Wellhope has constantly iterated bio-safety regulations
and systems inside the farms, isolated and blocked African swine fever through strictly preventive
measures under the four-level control systems, namely red, orange, yellow and green. More frequent
inspections by professional teams have been implemented to ensure timely supervision and prompt
management. At the same time, Wellhope increased the intensity and frequency of the detection of
African swine fever and other diseases, also established regional central laboratory and "satellite"
testing laboratory to heighten the defensive monitoring and early warning of diseases, and all pig farms
comprehensively conducted closed-loop management to ensure production safety.
(c) Expanding the inventories of pig breeders with outstanding performance to power the rapid
development of swine raising business
Pig breeders lay a foundation of the rapid expansion of swine production. Within the reporting period,
Wellhope swiftly increased the inventories of pig breeders by ways of strengthening internal breeding
and outsourced purchasing, as well as combining the operation model of "separating farm building and
breeders raising”, which provided a solid guarantee for Wellhope to increase swine production to
maximumly seize the opportunities of this industry. Besides, Wellhope also continued to optimize and
adjust the group structure of pig breeders to maintain the advantage of sows, and ensure the stability
and sustainability of production performance. By the end of the reporting period, the percentage of
Wellhope’s commercial gilts was only 6.5%, and the feeding performance of finishers, such as the
growth rate and feed to meat ratio, has reached the advanced level nationwide. At present Wellhope
has established a complete swine breeding system including great-grandparent and grandparent stock,
etc. As at the end of 2020, the inventories of Wellhope’s sows reached 65,000 heads.
(d) Exploring slaughtering business to curb risks caused by industrial chain fluctuations
Apart from Chifeng slaughtering project that has been in operation, Wellhope actively boosted the
construction of a new project located in Anhui province, which would be engaged in swine slaughtering,
further processing of pork and cold chain logistics. It is expected to be completed and put into
operation in 2021. Wellhope is well on its way to exploring business opportunities in related
downstream industries, such as slaughtering and food processing, to continuously improve the
Wellhope Foods Co., Ltd. 2020 Annual Report
blueprint of swine raising business and enhance the ability to withstand market risks.
D. Feed raw materials trade business
In 2020, both the revenue and net profit of feed raw materials trade business increased greatly,
contributing to the performance of Wellhope.
Performance driver--Influenced by the COVID-19, bulk commodities’ inflation has intensified, which
caused the tight supply of feed raw materials, then the prices rose, bringing opportunities to
Wellhope’s trade business. Meanwhile, the prosperity of the downstream feed industry increased
strong demands of feed raw materials. With the high prices of swine and cattle, the customers’
demands for high-class animal health products have risen greatly. As Wellhope's animal health
products are top brands at home and abroad, fueling the high market demands. In terms of internal
reasons, the trade business division gave full play to its advantages, such as professional team and
information platform, to study and judge the market conditions and implement precision marketing,
which made its business operation safer and more efficient, and further enhanced profitability.
A. Strengthening research and development, heightening technology leadership
In 2020, faced with many market changes and competitive pressures, such as African swine fever, ban of
antibiotics in feed, price fluctuation of raw materials, Wellhope increased investment in R&D, focusing
on immune nutrition, antibiotic-free technology, raw materials’ substitution, and iteration of animal
raising programs. In the aspect of feed research and development, Wellhope paid close attention to the
market trends, continuously developed and upgraded marketable products, such as immune nutrition
products, fast-growing large swine feed, new-type broiler feed, and concentrate supplement for dairy
cattle, to continuously enhance product competitiveness. Regarding antibiotic-free feed, Wellhope
continued to upgrade and optimize feed products without antibiotics as well as providing customized
feeding programs to maintain the leading position and competitiveness of antibiotic-free technology. At
the same time, it guided farmers to continuously improve bio-safety and on-site management.
Regarding raw materials’ substitution, Wellhope excavated diversified raw material resources and
carried out various substitution technologies to stabilize the impact of price fluctuations of raw
materials. In regards of animal raising programs, Wellhope closely followed customer's demands to
formulate integrated programs to help them improve production performance, such as the nutrition
program for commercial gilt and large-weight finisher, and feeding programs for broiler raised by
three-tier cage. Moreover, Wellhope further strengthened the direct sales to large farms, the R&D team
provided specialized solutions through product optimization and program customization to jointly
expand large-scale farms and integration companies with the sales team. (Details of R&D progress see
"Description of R&D Input”).
B. Improving the incentive mechanism and enriching talents reserves
Driven by the core values of "Integrity, Responsibility and Double-Win", and the management
Wellhope Foods Co., Ltd. 2020 Annual Report
philosophy of "Innovation, Efficiency and Self-Discipline", Wellhope has been committed to building a
highly-competent, innovative and potential team to lay a solid foundation for long-term and healthy
development. In 2020, Wellhope continued to optimize talents selection, training, and incentive system,
also revised and promoted “Administrative Measures on Talents Appointment”. Especially in feed and
swine raising business sectors, Wellhope focused on salary design and innovated incentive policies to
select and motivate talents better. During the reporting period, the performance appraisal objectives
setting for the first lockup period (2019) stated in Wellhope’s 2018 Restricted Stock Incentive Plan have
been fulfilled, 367 managers who were awarded the incentive shares could unlock the restricted shares.
Wellhope’s performance achieved new high in 2020, the objectives for the second lockup period have
been accomplished, Wellhope has once again achieved a win-win result with employees. Meanwhile,
Wellhope also focused on the construction of talent echelon, paying close attention to the selection,
training and retention of key staff, and accurately implemented the key talent training plan. In 2020,
Wellhope recruited a large number of new staff specialized in technology, management, marketing, and
finance through various channels. All of them are either excellent university graduates (except
production line workers), or experienced and potential persons. Excellent and sufficient talents reserve
have been the most critical factor for Wellhope to achieve medium and long-term strategic objectives.
C. Accelerating IT construction to improve management efficiency
In 2020, Wellhope continuously heightened IT application and accelerated the digital transformation of
the enterprise. Wellhope reorganized information resources for head office, feed, broiler integration,
swine raising, raw materials trade business divisions to build a solid foundation for data management.
During the reporting period, Wellhope completed lean digital management and system upgrade in the
feed division, and finished system optimization in broiler integration, swine raising and trade sectors,
which boosted the development of each business. In July 2020, Wellhope received a report from the
China Academy of Information and Communication Research about the assessment of the construction
capacity of the secondary node, which concluded that Welllhope could build the secondary node of the
industrial internet identification, and was selected as a national digital business enterprise in this year.
?Fortune China 500(four years--2015, 2016, 2017, 2020)
?Top 100 Most Valuable Corporation of Chinese Public Companies(four years--2016, 2017, 2019, 2020)
?Top 100 Enterprises in China’s Light Industry, ranking 23(2016-2019)
?Top 100 National Leading Enterprise in Agricultural Integration Industry
?A Rating from the Shanghai Stock Exchange for Annual Information Disclosure
?2019 Governor’s Awards of Liaoning Province
?Outstanding Privately-owned Enterprise in Fight Against COVID-19 Pandemic
?Top 10 Technology Innovation Enterprise regarding Anti-free Feed
?2020 Outstanding Enterprise in Corporate Culture Building
Wellhope Foods Co., Ltd. 2020 Annual Report
II. Operations Analysis
As at December 31, 2020, Wellhope's total assets recorded RMB 11.65 billion, the owner’s equity
attributable to the Company reached RMB 6.75 billion, increased by 27.29% and 18.50% respectively
compared with the end of prior year. Meanwhile, the operating revenue realized RMB 23.82 billion, and
the net profit attributable to the shareholders of the Company reached RMB 1.24 billion, recorded the
growth rate of 33.87% and 2.99% respectively.
A. Analysis of changes of income and cash flow
Unit: yuan Currency: RMB
Item 2020 2019 Change %
Operating revenue 23,817,600,766.26 17,792,091,973.58 33.87
Operating costs 21,683,591,011.74 15,792,020,015.55 37.31
Sales expenses 465,307,995.89 487,217,524.04 -4.50
Administrative expenses 310,275,697.03 275,560,691.30 12.60
R&D expenses 83,587,106.40 65,209,116.65 28.18
Financial expenses 64,680,213.72 76,392,967.30 -15.33
Net cash flow from operating
activities 765,945,453.03 1,111,605,966.58 -31.10
Net cash flow from investing
-1,506,349,447.57 -874,207,823.29 Not applicable
activities
Net cash flow from financing
activities
B. Analysis of revenue and cost
During the reporting period, Wellhope achieved an operating revenue of RMB 23.82 billion with a
year-on-year growth of 33.87%, which was mainly contributed by the increased sales revenue of feed
business. The operating cost recorded RMB 21.68 billion with a growth rate of 37.31%, mainly due to
the growth of feed sales volume and the rising costs of raw materials.
a. Primary business analyzed by industries, product classification and regions
Unit: yuan Currency: RMB
Analyzed by Industries
YoY YoY YoY change of
Gross profit
Industry Operating revenue Operating cost change of change of gross profit
margin %
revenue % cost % margin %
Decreased
Feed 12,110,346,481.97 10,864,934,182.33 10.28 55.54 59.52
percentage
points
Decreased
Broiler 6.84
integration percentage
points
Raw Increased 1.60
materials 3,150,947,600.99 2,981,290,348.81 5.38 14.58 12.67 percentage
trade points
Increased 8.03
Swine
raising
points
Wellhope Foods Co., Ltd. 2020 Annual Report
Increased 0.13
Related
businesses
points
Analyzed by Product Categories
YoY YoY YoY change of
Gross profit
Product Operating revenue Operating cost change of change of gross profit
margin %
revenue % cost % margin %
Decreased
Feed 12,110,346,481.97 10,864,934,182.33 10.28 55.54 59.52
percentage
points
Decreased
Broiler 6.84
integration percentage
points
Raw Increased 1.60
materials 3,150,947,600.99 2,981,290,348.81 5.38 14.58 12.67 percentage
trade points
Increased 8.03
Swine
raising
points
Increased 0.13
Related
businesses
points
Analyzed by Regions
YoY YoY YoY change of
Gross profit
Region Operating revenue Operating cost change of change of gross profit
margin %
revenue % cost % margin %
Increased 0.35
East China 2,806,351,236.21 2,549,423,561.09 9.16 21.05 20.59 percentage
points
Decreased
North China 3,049,155,844.64 2,748,831,450.23 9.85 39.72 40.38
percentage
points
Decreased
Northeast 4.92
China percentage
points
Increased 1.15
Central and
South China
points
Increased 2.46
Southwest
China
points
Decreased
Northwest 5.51
China percentage
points
Increased 8.08
Overseas
market
points
Notes
--Analyzed by different industries and products
During the reporting period, in response to the COVID-19 pandemic and changes in the feed market,
Wellhope strengthened the ongoing research and development of feed products, market development
Wellhope Foods Co., Ltd. 2020 Annual Report
and customer services to further improve product performance and market competence. The income
of feed business increased by 55.54% compared to the year earlier. Meanwhile, Wellhope further
accelerated business and production expansion of swine raising business, the deliveries of swine
realized a significant year-on-year growth, and the income increased by 274.16%.
--Analyzed by geographical region
During the reporting period, Wellhope's sales revenue in East, North, Northeast, Central and South,
Southwest and Northwest regions across China increased by more than 20%, mainly due to the rapid
growth of feed business in the above regions. Wellhope’s overall feed sales volume realized a
year-on-year increase of 47.02%.
b. Analysis of sales volume
YoY change
Production Sales YoY change YoY change
Inventory of
Product volume volume of sales of
(10k tons) production
(10k tons) (10k tons) volume % inventory %
volume %
Feed 385.77 384.83 6.30 46.24 47.02 17.54
c. Analysis of cost
Unit: yuan Currency: RMB
% of total % of total YoY
By Industry Item 2020 2019
costs costs change %
Feed Raw material 10,104,260,157.10 96.27 6,249,372,402.87 95.14 61.68
Feed Labor cost 108,916,427.66 1.04 74,966,723.16 1.14 45.29
Feed Depreciation 88,079,837.94 0.84 79,197,047.98 1.21 11.22
Energy (electricity,
Feed 103,360,428.22 0.98 79,658,096.87 1.21 29.76
coal, steam)
Other
manufacturing
Feed expenses (energy 91,210,812.76 0.87 85,185,696.24 1.30 7.07
and depreciation
excluded)
Total production
Feed 10,495,827,663.68 100.00 6,568,379,967.12 100.00 59.79
cost
Broiler Raw material 5,926,656,581.31 82.36 5,063,037,156.10 85.28 17.06
Broiler Labor cost 333,817,293.68 4.64 229,677,924.71 3.87 45.34
Broiler Depreciation 49,577,201.22 0.69 27,153,097.83 0.46 82.58
Energy (electricity,
Broiler 79,688,980.83 1.11 48,744,698.51 0.82 63.48
coal, steam)
Other
manufacturing
Broiler expenses (energy 806,179,181.09 11.20 568,606,302.57 9.58 41.78
and depreciation
excluded)
Total production
Broiler 7,195,919,238.13 100.00 5,937,219,179.72 100.00 21.20
cost
% of total % of total YoY
By Product Item 2020 2019
costs costs change %
Feed Raw material 10,104,260,157.10 96.27 6,249,372,402.87 95.14 61.68
Feed Labor cost 108,916,427.66 1.04 74,966,723.16 1.14 45.29
Feed Depreciation 88,079,837.94 0.84 79,197,047.98 1.21 11.22
Energy (electricity,
Feed 103,360,428.22 0.98 79,658,096.87 1.21 29.76
coal, steam)
Wellhope Foods Co., Ltd. 2020 Annual Report
Other
manufacturing
Feed expenses (energy 91,210,812.76 0.87 85,185,696.24 1.30 7.07
and depreciation
excluded)
Total production
Feed 10,495,827,663.68 100.00 6,568,379,967.12 100.00 59.79
cost
Broiler Raw material 5,926,656,581.31 82.36 5,063,037,156.10 85.28 17.06
Broiler Labor cost 333,817,293.68 4.64 229,677,924.71 3.87 45.34
Broiler Depreciation 49,577,201.22 0.69 27,153,097.83 0.46 82.58
Energy (electricity,
Broiler 79,688,980.83 1.11 48,744,698.51 0.82 63.48
coal, steam)
Other
manufacturing
Broiler expenses (energy 806,179,181.09 11.20 568,606,302.57 9.58 41.78
and depreciation
excluded)
Total production
Broiler 7,195,919,238.13 100.00 5,937,219,179.72 100.00 21.20
cost
d. Top 5 customers and suppliers
The sales revenue of top 5 customers reached RMB 1.00 billion, contributing towards 4.21% of
Wellhope's total operating revenue, the sales revenue of which, arising from selling products to the
related parties reached RMB 465.19 million, accounting for 1.95% of the total annual sales.
The purchase orders of top 5 suppliers reached RMB 4.15 billion, accounting for 19.78% of Wellhope's
purchase orders during the reporting period, of which, it did not occur the orders of purchasing
products from the related parties.
--Other Explanation
Top 5 Customers
Customer Business Sales revenue (RMB) % of total operating revenue
Customer 1 Broiler 252,267,573.09 1.06
Customer 2 Broiler 229,597,833.61 0.96
Customer 3 Broiler 212,919,976.02 0.89
Customer 4 Feed 177,506,015.60 0.75
Customer 5 Feed raw material 130,285,220.51 0.55
Total 1,002,576,618.83 4.21
Top 5 Suppliers
Purchase amount
Supplier Business % of total purchase amount
(RMB)
Soybean meal,
Supplier 1 2,201,021,737.74 10.48
soybean oil, etc.
Soybean meal, soybean oil,
Supplier 2 779,245,067.38 3.71
rapeseed meal, etc.
Supplier 3 Corn 458,833,832.62 2.18
Supplier 4 Soybean meal 412,593,246.04 1.96
Supplier 5 Soybean meal 302,661,448.56 1.44
Total 4,154,355,332.34 19.78
Wellhope Foods Co., Ltd. 2020 Annual Report
C. Expense
Unit: yuan Currency: RMB
Item 2020 2019 Change %
Sales expense 465,307,995.89 487,217,524.04 -4.50
Administrative expense 310,275,697.03 275,560,691.30 12.60
R&D expense 83,587,106.40 65,209,116.65 28.18
Financial expense 64,680,213.72 76,392,967.30 -15.33
D. R&D Input
Unit: yuan Currency: RMB
Expensing R&D input 83,587,106.40
Capitalizing R&D expenditure 0
Total R&D expenditure 83,587,106.40
% of total operating revenue 0.35
R&D headcount 199
% of the Company's headcount 2.76
Percentage of capitalizing R&D expenditure 0
During the reporting period, Wellhope increased input in R&D to continuously accumulate practices
and make breakthroughs in immune nutrition technology, antibiotic-free technology, biological
fermentation technology, know-how for broiler high killing out percentage, etc. The R&D expenses
increased by 28.18% compared with the same period of prior year. The primary R&D achievements and
progresses are as follows.
A. Strengthening the development of marketable feed products to continuously enhance product
competitiveness
a. Swine feed: Faced with the circumstances of raging African Swine Fever, ban of antibiotics in feed,
price fluctuation of raw materials and higher swine price, Wellhope put efforts into product
development and upgrading in the immune nutrition, the integrated nutrition of sow and piglets, and
the low protein with balanced amino acid technology, etc., including strengthening the development of
immune nutrition products, accelerating the development and promotion of fast-growing finisher feed,
increasing investment in the products of facilitating feed intake and growth rate of weaning piglet, and
boosting the development and promotion of high-quality fast-growing swine product lines to further
adapt to market changes.
b. Broiler feed: Wellhope focused on product development to maximize the benefit of the whole broiler
integration chain. In order to improve the growth performance of broiler further, Wellhope took certain
measures, such as using unconventional feed raw materials, adjusting the database of broiler feed, and
continuously optimizing diet design and feeding program. Meanwhile, Wellhope has developed a new
shape of broiler feed, which solved the problems that the traditional shape was easy to be powdered
during bulk transportation.
c. Ruminant feed: Wellhope has researched on ruminant feed for many years. In 2020, Wellhope was
keeping on improving feed product research in the field of dairy cattle, beef cattle and mutton sheep,
and optimizing the integrated solution for farmers. For instance, Wellhope helped farms improve their
Wellhope Foods Co., Ltd. 2020 Annual Report
economic returns through launching series of concentrate supplement for dairy cattle and balancing
TMR through RENB technology, which can improve milk yield during peak of lactation by 1.0-1.8kg per
day and decrease milk manufacturing cost by RMB 0.1-0.3/kg.
d. Layer feed: In response of the market competition caused by COVID-19 pandemic and African Swine
Fever as well as the sharp increase in raw materials price, Wellhope actively developed new products,
such as launching a new type of compound feed for layer in egg producing period with higher
cost-effectiveness. Meanwhile, Wellhope has improved the premix production line, optimized and
upgraded the special poultry feed products such as laying duck and goose breeder, which has further
enhanced the product competitiveness and market share.
e. Aquatic feed: Wellhope carried on the upgrading of aquatic feed products for some important species,
such as common carp, channel catfish, loach and pacific white shrimp, making the feed conversion
efficiency of these products decreased by 0.05-0.10 compared with the prior year. At the same time,
Wellhope increased investment in research and development of feed for special aquaculture animals,
and promoted the competitiveness of high value products such as crayfish, giant freshwater prawn and
yellow catfish.
B．Improving the nutrition system of antibiotic-free feed and carrying out reducing the use of
antibiotics on farms
By the end of June 2020, all feed products of Wellhope have been successfully transitioned to be
antibiotic-free after continuous researches and explorations based on more than one hundred test
verification. The performance of the products has been proved stable, positive and been well received
by the market. In order to maintain the leading position and market competitiveness, Wellhope
constantly upgraded antibiotic-free feed products, also provided customized feeding programs to
farmers. In the meantime, Wellhope further boosted reducing the use of antibiotics on farms and
guided farmers to constantly improve bio-safety, farm management and feeding programs.
C. Exploring diversified raw material resources to cope with price fluctuations of feed raw materials
In 2020, the prices of corn, soybean meal and other raw materials have been fluctuating sharply.
Combining own accumulations and experiences of partner Royal De Heus in raw material substitution,
Wellhope has explored diversified raw material resources and adopted methods such as raw material
substitution to optimize feed formula, so as to stabilize the impact of raw materials price fluctuations.
For example, evaluating the application of unconventional raw materials, increasing the investment in
research on low-protein and eco-friendly diets, using some local raw materials to reduce the
dependence on soybean meal and control costs; selecting wheat, brown rice and other raw materials
to alternate corn, and taking the lead in developing and promoting corn-free growing-fattening swine
feed technology and related products in several regions to reserve the diet technology with a variety of
grains in the future.
Wellhope Foods Co., Ltd. 2020 Annual Report
D. Upgrading farming management programs to facilitate the development of large-scale farms
a. Technology solutions for swine raising: In 2020, Wellhope has established health monitoring
technology for breeding pig and concentrated breeding technology with different genes, also improved
the integrated high-standard nutrition system of Danbred sows and piglets to continuously strengthen
the reproductive performance of sows, as well as the livability and weaning weight of weaned piglets.
Meanwhile, Wellhope has established the nutrition supporting programs and implementation measures
for commercial gilts and large-weight finishers under the backdrop of the "post African Swine Fever era",
which has successfully settled the problems faced by swine raising industry, such as low feed intake
during lactation period of commercial gilts, lower weaning weight of piglets, serious backfat loss after
weaning and difficulty in oestrus.
b. Technology solutions for beef cattle and mutton sheep: Wellhope continued to implement the way of
nutritionists cooperating with product managers to enhance farm benefits through providing on-site
guidance, such as developing reasonable diet formulas and feeding programs that matched with feed
model.
c. Broiler raising and slaughtering technology: Wellhope further exerted the advantages of three tier
cage system for broilers and combined different types and combinations of feeding programs to
improve feed conversion rate, reduce mortality and culling rate, promoting the full growth potential of
broiler. Meanwhile, Wellhope vigorously improved slaughtering know-how to enhance the killing-out
percentage and meat quality, such as reducing broken wing percentage, and increasing skin water
keeping ability, helping increase the profitability of the Company’s overall value chain.
E. Introducing and reserving excellent talents to enhance the competence of the R & D system
Wellhope has been always insisting on introducing and reserving key technological talents through
various ways. In 2020, it introduced nearly 50 professional talents to work on market research, product
development, technical support and other positions in the fields of swine, poultry, ruminant, etc. Some
of them are doctors and post-doctors from both domestic and overseas agricultural universities, such as
China Agricultural University, Nanjing Agricultural University, Wageningen University and the University
of Queensland. The R&D team has been growing stronger, boosting Wellhope's R&D strength constantly
enhancing.
Wellhope Foods Co., Ltd. 2020 Annual Report
Honors and Patents
Patents granted in 2020
Patent for Number of Patent for
Number of invention authorized invention
authorized patents patents as at the
Patent for utility period end Patent for utility
models models
Circumstances of Wellhope participating in the formulation of national or community standards and undertaking
sci-tech projects in 2020
Formula Feeds for Starter and Growing-finishing Swine (issued on September 29, 2020,
implemented on April 1, 2021)
National standards
Formula Feeds for Layer and Broiler (issued on September 29, 2020, implemented on
April 1, 2021)
Seven community standards, including Fermented Feed by Microbial with Enzyme for
Community standards Dairy Cow, organized by Beijing Bio-feed Industry Technology Innovation Strategic
Alliance (Implemented)
Precision Nutrition and Feeding Program for Sow--Shenyang Sci-tech Planning Project in
Sci-tech projects that 2020
Wellhope undertook and
presided Selecting and Raising Outstanding Livestock and Poultry Strains of Liaoning Province
and Researching on Key Technologies of Integration Chain Project
Honors regarding technology research and development in 2020
Outstanding Antibiotic-Free Feed Enterprise of China Swine Industry Chain Ecosystem
Top 10 Enterprise with Innovative Technology of Antibiotic-free and Alternatives in
China’s Animal Husbandry and Feed Industry in 2020
Pioneer Award of Antibiotic-free Creep Feed in the 9th Session of National Creep Feed
Development Summit Forum in 2020
Honors
Wellhope's WIN plus (Upgraded Wellhope immune nutrition products)-Nursery Feed
Product was awarded as China Good Feed 2020-Pioneer Anti-free Feed Brand
Establishment and Application of Piglet Intestinal Steady Nutrition Technical System
cooperated with Jilin Agricultural University won the First Prize for Progress in Science
and Technology of Jilin Province
E. Cash flow
Unit: yuan Currency: RMB
Item 2020 2019 Change %
Cash inflow of operating activities 24,607,049,169.74 18,665,159,099.25 31.83
Cash outflow of operating activities 23,841,103,716.71 17,553,553,132.67 35.82
Net cash flow from operating activities 765,945,453.03 1,111,605,966.58 -31.10
Cash inflow of investing activities 504,590,930.16 348,000,132.83 45.00
Cash outflow of investing activities 2,010,940,377.73 1,222,207,956.12 64.53
Not
Net cash flow from investing activities -1,506,349,447.57 -874,207,823.29
applicable
Cash inflow of financing activities 2,555,443,020.39 2,365,290,378.12 8.04
Cash outflow of financing activities 2,136,010,143.82 1,986,335,207.32 7.54
Net cash flow from financing activities 419,432,876.57 378,955,170.80 10.68
Net cash flow -322,192,838.64 619,185,607.71 -152.03
Wellhope Foods Co., Ltd. 2020 Annual Report
Unit: yuan Currency: RMB
% of total Closing balance of % of total
Item Closing balance of 2020 YoY change % Explanation
assets 2019 assets
Notes
receivable
Prepayments 364,401,520.23 3.13 222,064,368.55 2.43 64.10 Prepayment of purchasing increased
Other
receivables
Raw materials purchasing increased, stockpiles
Inventory 2,473,827,570.38 21.24 1,568,373,133.15 17.14 57.73 increased due to raw materials price
fluctuations
Contract assets 4,301,418.29 0.04 - Implemented new revenue standard
Other equity
Newly increased other equity instruments
instruments 20,847,697.96 0.18 5,760,839.23 0.06 261.89
investment
investment
Fixed assets of broiler integration and swine
Fixed assets 2,860,162,059.91 24.56 2,023,113,939.02 22.11 41.37
raising businesses increased
Construction in Increased project investments for broiler
progress integration and swine raising businesses
Biological asset 221,654,027.17 1.9 94,826,312.88 1.04 133.75 Pig breeders increased
Other
The number of contract farms increased,
non-current 531,140,679.24 4.56 337,463,267.56 3.69 57.39
prepaying feeding fees increased
assets
Notes payable 4,000,000.00 0.03 - Bank acceptance payable increased
Accounts
payable
Implemented new revenue standard, recorded
Advance
receipt
liability in the contract liabilities
Implemented new revenue standard, advance
Contract
liabilities
increased
Wellhope Foods Co., Ltd. 2020 Annual Report
Payroll 92,456,475.56 0.79 62,549,364.12 0.68 47.81 Salaries increased
Non-current
Long-term borrowings due within one year
liabilities due 121,896,906.66 1.05 70,593,717.62 0.77 72.67
increased
within one year
Other current Implemented new revenue standard, tax to be
liabilities transferred increased
Long-term
borrowings
Long-term
payables
Deferred income generated from receiving
Deferred
income
increased
Deferred
Deferred income tax liability recognized as
income tax 1,936,853.23 0.02 396,995.58 0.00 387.88
taxable temporary difference increased
liabilities
Wellhope Foods Co., Ltd. 2020 Annual Report
As at December 31, 2020, the balance of Wellhope's long-term equity investment recorded RMB 2.42
billion, increased by 17.14% compared with the end of prior year. For details, please refer to notes to
the items of Consolidated Financial Statements--long-term equity investment.
Wellhope Foods Co., Ltd. 2020 Annual Report
Unit: 10k yuan
Registered
Company Primary business Total assets Net assets Net profit
capital
Xi'an Wellhope Feed Sci-Tech Company Feed production and selling 500.00 21,705.60 16,858.58 5,245.17
Beijing Sanyuan Wellhope Agri-Tech Company Feed production and selling 1,000.00 26,925.89 22,753.59 2,850.09
Shenyang Wellhope Agri-Tech Company Feed production and selling 8,210.00 26,823.22 16,751.45 3,598.78
Tai’an Jiuguhe Agriculture Development
Broiler raising and feed processing 1,060.00 47,640.93 22,578.66 -4,206.71
Company
Huludao Jiuguhe Feed Mill Broiler raising and feed processing 1,085.00 25,650.36 3,138.64 -4,417.99
Broiler slaughtering, processing and
Anshan Jiuguhe Food Company 4,320.00 71,420.94 43,428.53 15,344.57
selling
Broiler slaughtering, processing and
Huludao Jiuguhe Food Company 7,370.00 30,552.66 22,306.21 7,195.25
selling
Feed processing, broiler breeder raising,
Beipiao Hongfa Food Company day old chick hatching, broiler raising 3,000.00 209,838.54 144,635.40 22,928.36
and slaughtering
Feed processing, broiler breeder raising,
Dalian Heyuan Agri-Tech Company day old chick hatching, broiler raising 10,000.00 152,874.84 86,706.58 7,367.84
and slaughtering
Dalian Chengsan Animal Husbandry Company Broiler raising and feed processing 1,008.61 194,200.43 157,571.42 14,274.68
Liaoning Wellhope Agriculture and Animal
Swine raising 5,000.00 69,019.75 15,913.59 11,839.60
Husbandry Development
Feed production and selling, swine
Anhui Wellhope Agri-Tech Company 16,000.00 52,938.23 24,997.23 9,407.67
raising
Wellhope Foods Co., Ltd. 2020 Annual Report
III. Outlook on the Company's Future Development
China is a large agricultural producer with a population of 1.4 billion. In China, agriculture has always
been regarded as a strategic industry that provides security and stability to residents and lays a
foundation for national economy. This is not only because agriculture is the source of food and clothing
for mankind and the basis of survival, but also because it is the pillar of the independence and
development of other industries.
China has always paid great attention to the development of agriculture. Along with latest changes in
international trade, resources and environment, technological circumstance, industrial structure,
policies and regulations and other factors, the development of agriculture has also ushered in a new
phase. In 2019, the No. 1 Central Document put forward that downward pressure on the economy has
been mounting and profound changes have been taking place in the external environment, it was of
special importance to do intensive work related to agriculture, rural areas and farmers. In 2020, the No.
successful conclusion on the battle against poverty and building a moderately prosperous society in
rural areas. The No. 1 Central Document of 2021 also further emphasizes that rural revitalization is
necessary for national rejuvenation. This document is based on the present and takes into account the
future, puts forward clear requirements for comprehensively promoting rural revitalization and
accelerating agricultural and rural modernization.
Under the backdrop of deepening reform on the supply-side and industrial transformation and
upgrading, the animal husbandry industry in which Wellhope is active has also ushered in a new
development opportunity despite numerous challenges.
A. Edging out less qualified players, the consolidation of feed industry is increasingly heightened
Along with fierce competitions taking place in the feed industry, extra-large companies are constantly
expanding their businesses, medium-sized producers are seeking business opportunities, whilst small
producers are gradually squeezed out of the market. For large companies, they enjoy their strengths
and advantages in technology, cost, brand, management, capital and logistics to continuously improve
their total factor productivity, rapidly expand production scale and seize market shares through mergers
and acquisitions as well as embarking on new projects. Those small and medium-sized feed producers
have been gradually edged out in the increasingly fierce competitions due to their lower technical level,
higher comprehensive costs, weaker brand reputation, lack of management skills, and bigger financial
pressure. In addition, with the formal implementation of ban of antibiotics, and the continuous
promotion of bulk feed, the entry barriers of feed industry have been raised yet again, customers have
also increased their requirements on the comprehensive strength of feed suppliers significantly, which
will speed up the elimination of backward players. In 2020, there were 749 large-scale feed mills with
annual capacity over 100,000 tons, increased 128 plants compared to the prior year. These feed mills
Wellhope Foods Co., Ltd. 2020 Annual Report
have produced 133.52 million tons of feed with a year-on-year increase of 19.8%, which contributed
towards 52.8% of China’s total feed production, rising by 6.2 percentage points. The feed industry has
been further transformed to become more large-scale and intensive.
B. Vertical integration of resources and continuous extension of industrial chain
Animal husbandry industry consists of several industries such as feed production, animal health product,
livestock and poultry raising, slaughtering and processing, etc., where the upstream activities are more
related to crop planting, whilst the downstream activities focus more on agricultural and sideline food
processing industries, with a mixture of other related industries in between to form an organic whole.
As competition has intensified to edge out less qualified players, large-scale companies are continuously
expanding their business scale. For reasons of risk control, profit growth, food safety and other needs,
apart from engaging in mergers and acquisitions, these giants involved in animal husbandry industry
gradually integrate resources during this phase, while continuously expanding their businesses in both
upstream and downstream industries in order to break through the industrial chain and establish strong
competitive advantages as well as develop better anti-risk capabilities. Under the development trend of
integration, the industrial divisions of large enterprises in agricultural and animal husbandry industries
have been gradually weakened, while seizing the resources of the whole industrial chain has become
the theme of the development of animal husbandry industry.
C. Constantly strengthened environment protection promoting the concept of green development
being practiced
In recent years, China has put forward a series of regulations on environmental protection, such as the
revision of the Environmental Protection Law, the promulgation of the Environmental Protection Tax
Law, and the release of the Regulations on Pollution Prevention of Large-scale Raising of Livestock and
Poultry and the Action Plan for Pollution Abatement of Agriculture and Rural Areas, etc. These
successively launched policies have showed China's determination to increase supervision on
environmental protection in animal husbandry industry, local governments have also issued certain new
regulations related to farm removal, ban of raising and restriction of farms, which will further edge out
less qualified players and reframe animal husbandry industry.
D. Increasingly stringent supervisions on food safety highlighting the advantages of large-scale
companies
In recent years, food safety in China has been improving, but at present the circumstances of the
small-scale, and fragmented food industry with low entry barriers have not been changed much, and
the farm-to-table industrial chain is too long and too large with many risk points. In October 2019,
Premier Li Keqiang issued a Decree of State Council and released the new edition on Food Safety
Regulation of the People’s Republic of China, which not only provided clear regulatory initiatives to
address specific issues, but also strengthened the penalties for violations of the law through the policy
of "implementing penalties to individuals". The Regulation came into force from December 1, 2019 and
Wellhope Foods Co., Ltd. 2020 Annual Report
the market has since been the most heavily regulated. In the future, more attention will be paid to the
normalization of food safety and industrial system. Stringent food safety supervision will further
squeeze out less qualified players, at the same time highlighting the strengths and advantages of large
integrated companies.
E. Bio-safety becoming a key factor, the prevention of African swine fever becoming normal
Disease has always been one of the major risks faced by animal raising industry. In August 2018, China’s
first case of African swine fever was identified, soon spread to more than 20 provincial-level
administrative regions within the next six months, which has severely hit swine raising industry.
Affected by this epidemic, China's swine inventories fell sharply in 2019, the key factor of bio-safety has
raised the entry barriers of swine raising industry, the living space of small and medium-sized back-yard
farms were continuously compressed, whilst large group companies took the chance to vigorously
expand their businesses to capture markets supported by their massive capital, talents, technology and
other resources. In 2020, the prevention of African swine fever has become normal, boosting swine
raising industry entering a prolonged period of gaining from high swine prices. However, the prevention
of African swine fever remained the primary issue faced by the industry. African swine fever has
restricted domestic swine stocking density, and the recovery of China's swine production will be
hampered for a long time until a safe and reliable vaccine can be developed.
F. High pork prices curbing consumer demand, accelerating the adjustment of meat consumption
structure
In 2019, African swine fever has hit China’s swine industry particularly hard, with severe production
capacity losses and a remarkable increase in swine and pork prices, which fueled the prices of livestock
and poultry products to record highs. In 2020, the outbreak of COVID-19 has severely attacked the
national economy and significantly weakened the consumption power of residents. It has been already
quite difficult to sell high-priced pork, the COVID-19 has once again reduced pork consumption, pork
purchases from the group meal dropped remarkably and food producers were forced to shift raw
materials to chicken and vegetarian food, which quickened the adjustment of consumption structure of
domestic meat products, and the overall consumption habits of residents have begun to change. In
addition, characterized by high protein, low fat and cholesterol levels, chicken has been well accepted
by residents as a viable alternative to pork, and white feather broilers have a big advantage over swine
such as growth rate and raising cost, etc. Seeing the experiences of developed countries, China's per
capita chicken consumption still has great growth potential and a broad market.
Wellhope’s long-term development objective is to become the world's leading enterprise across
agriculture, animal husbandry and food industries. In the next three years, Wellhope will vigorously
develop feed business, accelerate the pace of integration, complete the phased layout of food business
to form a regional food brand, and finally become an enterprise with leading-edge quality and
Wellhope Foods Co., Ltd. 2020 Annual Report
efficiency across agriculture, animal husbandry and food industries (2021-2023).
According to the three-year plan, and the analysis and judgment of the economic and industrial
development trend in 2021, Wellhope has determined its business strategy for 2021, i.e., by upholding
the core values of “integrity, responsibility, double-win”, and the management philosophy of
“innovation, high efficiency, and self-discipline”, Wellhope will further heighten systemic management
and the core competences, whilst improve the synergy management among all business divisions,
strengthen brand building and risk control, innovate incentive mechanism, enhance talents’ echelon,
research and development, and information platform, aiming at building competitive and aggressive
front platform(including product power, service ability, financial strength, marketing force),
cost-efficient middle platform(including production, purchasing, quality assurance, technology), and
energized back-end platform(including HR, finance, technology, R&D, purchasing, IT, corporate culture).
While further strengthening and expanding feed business, Wellhope will also vigorously develop broiler
integration and swine raising businesses, forming an integrated business mode that drives by broiler
integration and swine raising businesses. Meanwhile, Wellhope will also speed up food business to lay a
solid foundation for becoming a leading-edge enterprise with high quality and efficiency across
agriculture, animal husbandry and food industries.
Although coping with unprecedented challenges in 2020, such as prices of feed raw materials rising
sharply, broiler industry entering a downward cycle, the COVID-19 inhibiting consumption, and African
swine fever hindering the recovery of swine production, all Wellhope people put in efforts to move
forward. In 2020, Wellhope’s operating revenue achieved a year-on-year growth of 33.87%, the net
profit attributable to shareholders increased by 2.99%, realizing the seventh consecutive increase in
revenue and profit after 2014-2019.
three primary businesses to strive to achieve better operating results. In addition, driven by the target
of heightening core competences in the fierce competition, Wellhope will make efforts to build
competitive and aggressive front platform(including product power, service ability, financial strength,
marketing force), cost-efficient middle platform(including production, purchasing, quality assurance,
technology), and energized back-end platform(including HR, finance, technology, R&D, purchasing, IT,
corporate culture). It will also further research on the markets to grasp industrial trends to boost
production expansion step by step and reserve talents to support future development.
A. Feed business
Wellhope will exert the strength of know-how to center on enhancing product power and constantly
improve the power of service, financing, and marketing to build competitive and aggressive front
platform. At the same time, Wellhope will further strengthen the coordination among purchasing,
technology, marketing, and production, and simultaneously further deepen benchmarking
Wellhope Foods Co., Ltd. 2020 Annual Report
management based on data analysis and comparison, while centering on cost and efficiency to dig
deeper into potential profit margin of each feed category and each feed mill to continuously improve
the core capabilities of feed business. In addition, Wellhope will comply with the trend of the feed
industry to embrace the era of bulk feed. Supported by the advantages of technology, finance, scale,
branding and logistics services, Wellhope will swiftly increase the input of bulk feed such as equipment
introduction and upgrading, pelleting technique improvement to seize the opportunities brought by
industrial changes and grab market shares at the time of backward companies being eliminated. In 2021,
regarding feed business in Northeastern provinces (Liaoning, Jilin, Heilongjiang), Wellhope will continue
to heighten the advantages of management system and brand image to steadily improve market shares,
and forward explore the potential profit growth margin. Other than the Northeastern provinces,
Wellhope will vigorously seek for new markets to expand market reach rapidly. To conclude, Wellhope
aims to achieve a growth rate of more than 20% regarding feed business in 2021.
B. Broiler integration business
In 2021, the inventories of grandparent and parent stock are expected to be at high level as well, which
will increase the production capacity, thus the broiler industry is expected to remain a downward cycle.
Under such unfavorable situations, Wellhope will implement the ideology of “guarding safety,
controlling the pace of investment, cutting costs, heightening efficiency and increasing benefits” to
further enhance internal operation, and guarantee safety margin. Meanwhile, Wellhope will also
expand production capacity step by step to preempt market shares in such downward cycle, so that it
can gain excess returns at the time of broiler industry entering an upward cycle. Regarding breeding
business, Wellhope will slow down the expansion of production capacity, strengthen the management
of self-produced day-old chicks and optimize production performance indicators, whist it will also
enhance the selection of outsourced chicks to ensure quality. Regarding broiler raising sector, Wellhope
will give full play to the advantage of asset-light operation by cooperating with large farms, steadily
expand the scale of commercial broiler raising according to plans and continue to improve the
production performance based on precise control of capital input. Regarding slaughtering sector,
Wellhope will moderately enlarge the production scale, constantly improve internal operation,
strengthen the sales system and explore marketing channels. Regarding processed food sector,
Wellhope will push the progress of new projects, rapidly expand the scale of production and marketing,
and improve the capacity to take down large orders. Besides, Wellhope will also strengthen the
research and development to launch hit products, increase sales channels, train the marketing team,
and continuously strengthen core abilities and branding. The resources of the Company will focus more
on food business in the future. In addition, Wellhope will further accelerate the selection, cultivation
and reserve of talents, and speed up the construction of talents’ echelon. In 2021, Wellhope plans to
raise 610 million broilers and slaughter 720 million (including holding and associated companies).
Wellhope Foods Co., Ltd. 2020 Annual Report
C. Swine raising business
African swine fever has become normal in China. Due to the continuous impact of the epidemic, swine
prices are higher than expected, the period of gaining profit is expected to be prolonged. At the same
time, with the recovery of production capacity, the stocking density has been constantly increased,
which stresses on the prevention of this epidemic. Owning to above circumstances, the prevention of
African swine fever will be still the first priority in 2021. Thereby, Wellhope will continue to put
bio-safety in the first place, such as constantly improving the professional skills of staff in pig farms,
innovating preventive measures, further heighten the reward and punishment rules to ensure that the
team can always maintain a high sense of responsibility and awareness. Under the premise of fully
safeguarding the farms, Wellhope will take advantage of the structures of sows to rapidly expand swine
production to maximumly grasp market opportunities. On the other hand, it will strive to build the core
competences of swine raising business by heightening production performance, strengthening the
quality of internal operation, and reducing comprehensive costs. In 2021, Wellhope plans to sell 1.2
million to 1.5 million heads of swine (including holding and associated companies).
This business plan can’t be deemed as the Company's performance commitment to investors, please
maintain sufficient risk awareness.
A. Risks of fluctuations in raw material prices
Most costs of the feed business come from raw materials. Factors in terms of production changes in
producing areas, import policies, purchasing, storage, and grants, exchange rate fluctuations, logistics
costs, etc., may cause fluctuations in the raw material market, which will affect the Company's feed
business costs and gross profit margins. With deepened globalization of the trade of agricultural
products in recent years, the supply-demand relationship and trading price of raw materials have been
affected by market conditions such as spot and futures at home and abroad, and the price trend has
become more complex followed by increasingly fierce fluctuations, which further increases the
difficulties of the Company’s cost management. In addition, the fluctuations of COVID-19, Sino-US
relations, international political and economic environment, and other factors have also made the
purchase price of raw materials more variable.
Solutions
a. Wellhope has established strategic partnerships with many leading domestic and overseas raw
material suppliers. Meanwhile, it adopts three-level purchasing mode that includes centralized
purchasing of head office, bidding purchasing of different business regions and local subsidiary
purchasing to clarify the role of purchasing.
b. Wellhope combines its raw material trading business with purchasing management, i.e., the
professional and practical raw materials’ purchasing team conducts targeted forward-looking
researches and real-time tracking on the market to strategically reduce the purchasing price, such as
Wellhope Foods Co., Ltd. 2020 Annual Report
uniformly managing different variety of raw materials, adopting spot purchasing and futures together.
c. The purchasing team works closely with the R&D team to further optimize the purchasing cost by
way of re-formulating the feeds i.e., changing the composition of the feed to use cheaper alternative
raw materials while achieving the same results.
d. Wellhope and Royal De Heus have set up an information sharing channel, which enables the two
sides to timely share the market trends of raw materials and additives. In addition, the two sides may
carry out joint purchasing cooperation in the future, which will greatly enhance the overall bargaining
power.
B. Risks of fluctuations in livestock and poultry prices
Animal husbandry industry is a typical cyclical industry, and the hysteretic adjustment of supply causes
the prices fluctuating periodically. At present, China's animal husbandry industry is still dominated by
back yard farms and small-scale farms, these farm owners show the character of non-rational
decision-making with an obvious “herd effect”, which further aggravates the cyclical fluctuations in the
market price.
Solutions
a. Wellhope always keeps high attention of upstream and downstream product price fluctuations,
continues to deepen market research to accurately predict industry trends and adjust business
strategies. Meanwhile, Wellhope’s three primary businesses share resources and boost business layout
as planned to effectively control the risk of price fluctuations from the strategic level.
b. Wellhope's broiler integration business has established an industrial chain from broiler breeder
raising, day-old chick hatching, feed production, commercial broiler raising, slaughtering, processing to
further processing of prepared food and cooked food. In the meantime, Wellhope’s swine raising
business has also been entering downstream industries, such as the smooth development of
slaughtering business. The continuous improvement of the industry chain makes the price fluctuations
of each sector in the chain can be fully hedged, which maximumly mitigate the price fluctuations of the
whole industry chain.
c. Wellhope has always been committed to improving the production standard of each sector,
constantly innovating the practical operation technology and management mode of various businesses,
reducing overall operating costs indirectly by optimizing the production indicators and improving per
capita efficiency. Costs advantage can mitigate the negative impacts of downward industry on the
Company while improving the overall profitability when facing a booming market.
C. Risks of serious animal epidemic
Feed and animal raising are Wellhope's two core businesses. Epidemic is one of the main risks faced by
animal raising companies. Once an animal epidemic happens, it will certainly cause panic in the market,
which will reduce the demands, then lessen the production, the income shrinks and the cost rises. The
feed industry mainly serves downstream animal raising industry, thus, the downstream market will
Wellhope Foods Co., Ltd. 2020 Annual Report
directly affect the performance of feed business. As an unpredictable emergency, an explosive epidemic
will undoubtedly have a strong impact on the Company's operations.
Solutions
a. Wellhope attaches great importance to regional distribution and business structure, which is the
most direct way to divert the risk of animal epidemic.
b. Wellhope continues to improve the prevention technology of major epidemics, completes the
early warning system and strives to control epidemics effectively before spreading.
c. When the epidemic comes, the speed of response is particularly critical, the faster to response, the
less to loss. Wellhope has set an emergency command system for major epidemics to minimize losses
when they occur.
d. Wellhope has been continuously conducting post-epidemic analysis and researches. Meanwhile, it
has been constantly strengthening the ability to prevent epidemics from multiple aspects such as
animal nutrition and veterinary services.
e. For African swine fever, Wellhope has formed a relatively complete prevention system from
product researches to farm management. Specific preventive measures have been detailed in Section IV
hereof-Swine raising business.
D. Risks of the industrial pattern adjustment caused by environmental protection policies
China has put forward some environmental protection regulations in recent years, such as
Environmental Protection Tax Law, etc., which show the government's determination to increase
supervision on environmental protection in animal husbandry industry, whilst the local governments
have also issued certain new regulations regarding farm demolition, prohibition or restriction of animal
raising. It can be seen that the continuously strengthened environmental protection is the trend of the
industry, also an inevitable reality, which will further weed out unqualified players and reframe the
industry.
Solutions
During the start-up period, Wellhope had input "saving resources, being committed to environmental
protection" as part of its Mission. During the past 26 years, Wellhope has always considered saving
resources and protecting environment as its important mission, taking strict compliance with laws and
regulations, and implementing environmental protection requirements as key performance appraisal
indicators for managers.
a. In the face of increasingly strict environmental protection requirements, all Wellhope’s subordinated
entities have carried out a comprehensive identification of environmental risk points, and formulated
emergency plans for emergent environmental incident based on actual circumstances and the
requirements of local governments at all levels. In view of the key pollutant discharge entity, Wellhope
has made a complete self-monitoring program to identify problems timely and eliminate hidden
dangers, it also constantly increases personnel, capital investment in environmental protection to
Wellhope Foods Co., Ltd. 2020 Annual Report
ensure that the key pollutant discharge entities always meet the national standards.
b. Wellhope has always performed all environmental standards of the state with the most rigorous
attitude, established complete control measures for waste gas, noise, wastewater, solid waste and other
pollution generated during the production process. Meanwhile, it uses eco-friendly raw materials and
additives in feed formulas, and continuously develops safe diet to reduce the emissions of heavy metals,
nitrogen and phosphorus.
E. Risks of exchange-rate fluctuations
Wellhope's international business started early and has been developed rapidly, which can be affected
by exchange-rate fluctuations in raw material purchasing, product export, overseas investment,
including the following aspects.
Firstly, international development has made the global purchasing of raw materials becoming normally,
therefore, the risk of exchange-rate fluctuations is particularly acute for raw materials that are largely
supplied from abroad. Secondly, Wellhope’s export business of broiler parts products is growing rapidly
with customers from many countries and regions across the world, and the exchange-rate fluctuations
are inevitably caused by the settlements of multiple currencies. Finally, due to the large overseas
investment and overseas operations, the cross-border capital transactions and settlements will also be
affected by exchange-rate fluctuations.
Solutions
a. Wellhope closely focuses on the dynamic international foreign exchange market, whilst enhances the
awareness of foreign exchange risk, and improves the researching and forecasting capabilities of the
foreign exchange market.
b. Wellhope continues to improve the bargaining power in foreign trade transaction by enhancing the
competitiveness of products and using RMB for settlement, while reducing the exchange rate risks by
adding insured value clause and the exchange-rate risk allocation clause in the contract.
c. By making full use of foreign exchange forwards, swaps and options (portfolios) and other
instruments to maintain the exchange-rate for foreign exchange exposure.
d. According to specific conditions of different countries, based on the principle of "using foreign
currencies in foreign trade", Wellhope reasonably matches the income and debts to control the
exchange-rate risks.
F. Risks of food safety
In recent years, there have been some food safety incidents in China, which affected consumers'
confidence in food safety. China has continuously improved the legislation on food safety and food
sources, conducted forceful measures on handling food violations. Once the food safety incident
happens, it will directly damage the interests of consumers and cause panic, which may greatly impact
the downstream demands, affect the brand and performance of the enterprises.
Wellhope Foods Co., Ltd. 2020 Annual Report
Solutions
Since its establishment, Wellhope has always attached great importance to the issues of food safety and
quality assurance, adhering to implement the quality policy of "six never" with the most rigorous
attitude--Never accept unqualified raw material, Never use abnormal equipment, Never allow
nonstandard operation, Never produce substandard product, Never ignore unsatisfied customer, Never
tolerate imperfect service. Wellhope’s head office has set up Food and Quality Safety Management
Committee, whilst all business sectors and corresponding subsidiaries have established food and quality
safety management group to ensure that the team always maintains a high sense of responsibility and
awareness.
a. Wellhope has established a three-level quality management mechanism and testing system that
compose of head office, regional center and subsidiary. By adopting international standards such as
ISO9001, ISO22000 and ISO-IEC17025, and thoroughly implementing a series of quality standards such
as the "Feed Quality and Safety Management Practice" and "Veterinary Drug Production Quality
Management Practice" issued by the Ministry of Agriculture and Rural Affairs, Wellhope has controlled
the whole production process and established the traceability system. Meanwhile, it vigorously
popularizes near-infrared detection technology, improves detection efficiency to timely share data and
quickly realize risk early warning. Wellhope also focuses on the detection and monitoring of heavy
metals, harmful microorganisms, mycotoxins, which provides an important guarantee for the safety of
feed products. In addition, by learning from the technical experiences of antibiotic-free feed in Europe,
coupled with the current situation of China’s animal raising industry, Wellhope has achieved a leading
advantage in the field of antibiotic-free feed, and now all the feed products have successfully transited
to be antibiotic-free.
b. In terms of production management, Wellhope strictly monitors and checks the drug selection and
drug residue control in broiler integration and swine raising businesses. Whilst it constantly strengthens
the quality management in slaughtering and processing, earnestly implements the inspection and
quarantine as well as drug residue detection. Regarding business model, Wellhope's broiler integration
business has formed an industrial chain including broiler breeder raising, day-old chick hatching, feed
production, commercial broiler rearing, slaughtering and processing of raw meat, further processing of
prepared and cooked food. The integrated operation ensures sufficient supply of raw materials in each
sector of the chain, and strictly controls the whole process of food and quality safety from the source.
Through standardized management and streamline operation, Wellhope consolidates the controls of
bio-safety, drug residue and in-process hygiene to achieve traceable food safety.
Wellhope Foods Co., Ltd. 2020 Annual Report
Section V Important Disclosures
I. Common Stock Profit Distribution or Capital Reserve Converted into Share Capital
Driven by the goal of realizing long-term and sustainable development, Wellhope has established a
sustainable, stable and scientific profit distribution system for investors based on considering its actual
operation, shareholders’ need, social factors such as capital costs, external financing environment,
current and future profitability, cash flow, project investment and capital demand, bank credit and debt
financing environment, etc.
Wellhope held the 2nd meeting of the 7th Session of Board of Directors to formulate and deliberate the
Shareholders’ Dividend Plan for the Next Three Years (2020-2022), which will be submitted to its 2020
Annual Shareholders’ Meeting. At least every three years, Wellhope re-reviews its Shareholders’
Dividend Return Plan for the Next Three Years to evaluate on-going profit distribution policy and make
necessary modifications according to the opinions of shareholders (especially non-controlling
shareholders), independent directors and supervisors, and determines the Shareholders’ Dividend Plan
for that period.
During the reporting period, according to the Proposal of 2019 Profit Distribution Plan approved by
Wellhope's 2019 Annual Shareholders’ Meeting on April 20, 2020: based on the total share capital on
the equity registration date, Wellhope paid cash dividends of RMB 2.20 per 10 shares (tax included) to
all shareholders, amounted to RMB 202,853,177.12. The dividends had been paid in June 2020.
Wellhope's 2020 profit distribution plan will be: based on the total share capital on the equity
registration date, it plans to pay cash dividends of RMB 2.20 per 10 shares (tax included) to all
shareholders. This profit distribution plan is pending to be submitted to 2020 Annual Shareholders'
Meeting.
During the reporting period, Wellhope's planned cash dividends accounted for less than 30% of the net
profit attributable to shareholders of the Company in the current year, reasons are listed as follows.
Feed, broiler integration, and swine raising are Wellhope’s three primary businesses. Feed industry has
a huge market size with increasing industry consolidation, and the leaders are expanding rapidly. Broiler
industry now enters a downward cycle, those leading companies conduct business expansion under
such circumstance to steadily expand. Swine raising industry is under the phase of production recovery,
large groups are actively expanding production to seize market share. In 2020, these three primary
businesses have all exceeded the objectives set at the beginning of the year, the operating revenue and
net profit attributable to shareholders of the Company have realized growth for the seventh
consecutive year, with the compound growth rate reaching 16% and 32% respectively. Wellhope is now
in the stage of rapid development and expansion.
Wellhope has been always focusing on returns to investors. The formulation of profit distribution plan is
a reasonable arrangement based on the goal of sustainable development and taking into full
Wellhope Foods Co., Ltd. 2020 Annual Report
consideration of many factors such as the development stage of the industry, the growth cycle of the
Company, future strategic planning and capital plan, so as to ensure the continuity and stability of profit
distribution for investors in the future. The retained profits will be mainly used for the expansion of the
primary businesses, while taking into account the capital needs to deal with external risks, so as to
provide a solid guarantee for long-term planning.
capital in the latest three years
Unit: yuan Currency:RMB
The net profit
Percentage of net profit
attributable to the
Dividend per attributable to the
Amount of cash common
Year dividends shareholders of the
(yuan, tax the Company in the
(tax included) Company in the year
included) consolidated
of distributing cash
statements %
dividend
Wellhope Foods Co., Ltd. 2020 Annual Report
II. Execution of Commitment
Background Date of making Whether Whether
Type of Commitment
of making Content commitment there is a performs
commitment party
commitment and validity time limit strictly
Nature
I warrant and commit that I will not directly or indirectly develop,
person
Handling operate or assist in the operation or participate in or engage in any
shareholders March 2, 2011,
horizontal activity that is competitive with the business of Wellhope, if Wellhope Yes Yes
holding more long-term valid
competition will increase any business scope after the date of signing this
than 5% of
commitment, I promise to give up the business.
the shares
Legal person
Our company warrants and commits that our company will not
shareholders
directly or indirectly develop, operate or assist in the operation or
Handling holding more
participate in or engage in any activity that is competitive with the March 2, 2011,
related party than 5% of Yes Yes
business of Wellhope, if Wellhope will increase any business scope long-term valid
Commitment transaction the
after the date of signing this commitment, our company promises to
relating to shares-Heli
give up the business.
IPO Investment
Jin Weidong,
The controlling shareholder Jin Weidong and persons acting in
Wang Fengjiu,
concert with him undertake that there are no false records,
Shao Caimei,
Other misleading statements or material omissions in the prospectus of IPO Long-term valid Yes Yes
Wang
and its abstract, and shall bear individual and joint legal liabilities for
Zhongtao,
its authenticity, accuracy and completeness.
Ding Yunfeng
The Company undertakes that there are no false records, misleading
statements or material omissions in the prospectus of IPO and its
Other Wellhope Long-term valid Yes Yes
abstract, and it shall bear individual and joint legal liabilities for its
authenticity, accuracy and completeness.
Commitment December 15,
relating to Dividend Wellhope Shareholder’s Dividend Plan for the Next Three Years (2017-2019) 2017, three Yes Yes
re-Financing years
Wellhope Foods Co., Ltd. 2020 Annual Report
III. Changes in Accounting Policies and Estimates made by the Company
For details, please refer to Financial Report- Significant Accounting Policies and Estimates, Changes in
Significant Accounting Policies and Estimates.
IV. Accounting Firm Engaged by the Company
Unit: 10k yuan Currency: RMB
Accounting Firm (Local) SuyaJincheng CPA LLP
Payment 110
Length of Service 10 years
Name Payment
Accounting Firm of Internal
SuyaJincheng CPA LLP 35
Control
Sponsor Xu Hailin, He Yu
V. Major litigation and Arbitration Matters
Non
VI. Statement of the Integrity of the Company, its Controlling Shareholder and Actual Controller
during the Reporting Period
During the reporting period, there is no occurrence of the Company's controlling shareholder and
actual controller failing to perform the effective judgment of the court, needing to pay a large amount
of unliquidated debt due.
VII. Employee Equity Incentive Plan, Stock Ownership Plan or Other Incentive Measures and Impacts
Overview Query URLs
On March 27, 2020, Wellhope’s 14th meeting of
the 6th Session of Board of Directors and the 12th
meeting of the 6th Session of Supervisory Board
approved the proposals of Unlocking Restricted
Shares after Achieving the Performance Objective
Stated in 2018 Restricted Stock Incentive Plan,
Adjusting the Repurchase Price of Restricted
Shares, Repurchasing and Writing off Part of
Locked Restricted Shares
million restricted shares. Details can be obtained at www.sse.com.cn,
restricted share had been adjusted as RMB 2020-023
Hua, Ma Dongmei, Zhang Peng, Wang Haibin)
leaving the Company, they were no longer
eligible for the incentive rules. 31 managers
did not meet the conditions of unlocking
restricted shares due to their work
performance appraisal, 244,500 shares held
by these 36 individuals would be repurchased
and written off by the Company.
Wellhope Foods Co., Ltd. 2020 Annual Report
On April 3, 2020, Wellhope disclosed the
announcement of Listing and Circulation of Details can be obtained at www.sse.com.cn,
Restricted Shares in the First Lockup Period, 4.233 announcement disclosed on April 3, 2020, No.
million restricted shares could be exchanged on 2020-026
April 9, 2020.
On May 15, 2020, Wellhope disclosed the
announcement of the Implementation of
Repurchasing and Writing off Part of Restricted Details can be obtained at www.sse.com.cn,
Shares. 244,500 shares held by 36 individuals had announcement disclosed on May 15, 2020, No.
been repurchased and written off by the 2020-040
Company. On May 19, 2020, these shares were
written off.
Wellhope Foods Co., Ltd. 2020 Annual Report
VIII. Related Party Transaction
Matters do not disclose in the Company's extraordinary announcement
Unit: 10k yuan Currency: RMB
Transaction Transaction Transaction
Related Party Relationship Pricing principle Settlement mode
type content amount
Associated Selling Comparable uncontrolled
Anshan Fengsheng Food Company Live broiler 21,292.00 Transfer of account
company product price
Associated Selling Comparable uncontrolled
Anshan Jiuguhe Food Company Live broiler 9,081.05 Transfer of account
company product price
Associated Selling Comparable uncontrolled
Beipiao Hongfa Food Company Feed raw material 468.53 Transfer of account
company product price
Dalian Chengsan Animal Husbandry Associated Selling Comparable uncontrolled
Feed raw material 639.11 Transfer of account
Company company product price
Dandong Wellhope Chengsan Associated Selling Comparable uncontrolled
Feed raw material 666.75 Transfer of account
Agri-Tech Company company product price
Associated Selling Comparable uncontrolled
Guangzhou Yikun Trading Company Feed raw material 284.64 Transfer of account
company product price
Associated Selling Comparable uncontrolled
Huludao Jiuguhe Food Company Feed 1,032.72 Transfer of account
company product price
Associated Selling Comparable uncontrolled
Linghai Jiuguhe Feed Mill Feed raw material 5,026.09 Transfer of account
company product price
Associated Selling Comparable uncontrolled
Nepal Wellhope Agri-tech Pvt. Ltd. Feed 256.35 Transfer of account
company product price
Qingdao Shenfeng Agri-Tech Associated Selling Comparable uncontrolled
Feed raw material 5,621.83 Transfer of account
Company company product price
Shihaipu (Beijing) Technology and Associated Selling Comparable uncontrolled
Other 128.63 Transfer of account
Trade Co., Ltd. company product price
Tai’an Jiuguhe Agriculture Associated Selling Comparable uncontrolled
Feed raw material 7,828.30 Transfer of account
Development Company company product price
Associated Selling Comparable uncontrolled
Dalian Sida Food Company Live broiler 25,226.76 Transfer of account
company product price
Associated Selling Comparable uncontrolled
Shandong Fengkang Food Company Live broiler 595.42 Transfer of account
company product price
Associated Purchasing Comparable uncontrolled
Anshan Jiuguhe Food Company Broiler product 2,184.86 Transfer of account
company product price
Dalian Chengsan Animal Husbandry Associated Purchasing Live broiler Comparable uncontrolled 18,601.81 Transfer of account
Wellhope Foods Co., Ltd. 2020 Annual Report
Company company product price
Gongzhuling Corn Purchasing and Associated Purchasing Comparable uncontrolled
Feed raw material 247.28 Transfer of account
Storing Company company product price
Associated Purchasing Comparable uncontrolled
Huludao Jiuguhe Food Company Broiler product 25.58 Transfer of account
company product s price
Associated Purchasing Comparable uncontrolled
Jinzhou Jiufeng Food Company Broiler product 1,397.27 Transfer of account
company product price
Associated Purchasing Comparable uncontrolled
Linghai Jiuguhe Feed Mill Other 2,725.27 Transfer of account
company product price
Qingdao Shenfeng Agri-Tech Associated Purchasing Comparable uncontrolled
Feed 2,863.80 Transfer of account
Company company product price
Shenyang Zhongwenjia Bio-Tech Associated Purchasing Animal medicine, Comparable uncontrolled
Company company product vaccines price
Shihaipu (Beijing) Technology and Associated Purchasing Comparable uncontrolled
Other 228.25 Transfer of account
Trade Co., Ltd. company product price
Tai’an Jiuguhe Agriculture Associated Purchasing Comparable uncontrolled
Feed 20,835.70 Transfer of account
Development Company company product price
Total / 127,258.30 /
Large amount sales return Non
Wellhope and its associated companies know each other better and
have maintained long-term cooperation relationships, which can
strengthen the trust of products produced by partners, reduce
transaction cost, improve working efficiency and avoid trading
disputes. Meanwhile, purchasing raw materials from related parties
can ensure quality of products. Moreover, by participating in the
management and exerting influence on related companies can help
Explanation of related party transaction
them to maintain a long-term and stable supply, also help them reduce
the marketing pressure. The purpose of conducting related party
transactions is to satisfy the needs of Wellhope's production and
operation, the purchasing or selling price is determined according to
the market price of similar products. Such transactions do not violate
relevant laws, Company Constitution, etc., and do not damage the
rights and interests of shareholders.
Wellhope Foods Co., Ltd. 2020 Annual Report
IX. The Circumstance of Entrusting others to Manage Cash Assets
Unit: 10k yuan Currency: RMB
Type Source of fund Amount Undue balance
Wealth investment
Idle raised funds 36,000 10,000
product of bank
Unit: 10k yuan Currency: RMB
Source
Maturity Annualized Actual Whether
Bank Type Amount Start date of Interest
date return return recover
fund
Capital
China Idle
Structured October 9, January guaranteed
Minsheng 4,000 raised 1.5%-3.7% 37.30 Yes
deposit 2019 9, 2020 floating
Banking Corp funds
income
Industrial
Capital
and Idle
Structured January 2, April 3, guaranteed
Commercial 10,000 raised 1.3%-4.2% 102.65 Yes
deposit 2020 2020 floating
Bank of funds
income
China
Shanghai Capital
Idle
Pudong Structured January 3, April 3, guaranteed
Development deposit 2020 2020 floating
funds
Bank income
Capital
Idle
Shengjing Structured May 11, August guaranteed
Bank deposit 2020 11, 2020 floating
funds
income
Shanghai Capital
Idle
Pudong Structured May 11, August, guaranteed
Development deposit 2020 9, 2020 floating
funds
Bank income
Idle Recovered
Shengjing Certificate August 11, February Fixed on
Bank of deposit 2020 8, 2021 income February
funds
Industrial
Capital
and Idle
Structured September April 1, guaranteed Has yet to
Commercial 5,000 raised 1.5%-3.2%
deposit 29, 2020, 2021 floating recover
Bank of funds
income
China
Wellhope Foods Co., Ltd. 2020 Annual Report
X. Circumstance of Social Responsibilities
A. Targeted poverty alleviation
The 19th National Congress of the Communist Party of China has put forward to take targeted poverty
alleviation as one of the three major challenges that must be fought to secure a decisive victory in
building a moderately prosperous society in all respects. The year 2020 was a decisive year to win the
battle against poverty and finish building a moderately prosperous society in all respects. In respect to
poverty alleviation, President Xi Jinping noted, "Resolutely overcoming the impact of COVID-19 and
uncompromisingly winning the comprehensive victory in the battle against poverty". Wellhope
positively responds to the call and requirements of the Party Central Committee and the government at
all levels for targeted poverty alleviation. Driving by the principle of contributing to the society, it has
formulated poverty alleviation programs and work plans regarding to agricultural industry to facilitate
targeted poverty alleviation.
B. Overview of targeted poverty alleviation
In terms of poverty alleviation through industry development, Wellhope signed the agreement of
“Targeted Poverty Alleviation by Industry Development” with Woniushan Village of Dongliu Town of
Zhangwu County in Fuxin City of Liaoning Province. Wellhope invested the funds of RMB 117,600 as the
collective assets into the cattle raising cooperation of this village, those registered poverty-stricken
households would receive dividends based on their shareholdings. Meanwhile, Jiaozuo Wellhope Feed
Mill, one of the subsidiaries of Wellhope, positively participated in the new poverty alleviation model,
which was named "capital to households and equity to households" in Chongyi Town of Qingyang City,
and paid RMB 50,000 as poverty alleviation funds in 2020. In terms of social poverty alleviation, in
order to help Beipiao city to fight against poverty, Liaoning Wellhope Food Company, one of the
subsidiaries of Wellhope, donated RMB 100,000 to the government of Beipiao City for poverty
alleviation.
With regard to poverty alleviation contributed by Wellhope’s associated entities, Lankao Duck Company,
responds to the call of LanKao County Party Committee and county government by launching a duck
integration project for targeted poverty alleviation in Lankao County, which has implemented the
operating mode of rearing ducks by the company and contract farms. In line with the principle of
mutual benefit, Lankao Duck Company signs contracts with farmers and adopts unified supply of
ducklings, feed, medicine, technical service and repurchasing, farmers are not required to prepare
working capital. It also provides uniform subsidies for farmers, such as veterinary drugs, coal subsidy in
winter and cooling subsidy in summer. In 2020, Lankao Duck Company repurchased 18.98 million ducks
with veterinary subsidy of RMB 3.80 million and other subsidies of RMB 0.90 million.
Wellhope Foods Co., Ltd. 2020 Annual Report
C. Figures of targeted poverty alleviation
Unit: 10k yuan Currency: RMB
Index Details
Funds invested for poverty alleviation 26.76
A. Poverty alleviation through industry development
a. The number of projects invested for poverty
alleviation through industry development
b. Funds invested 16.76
B. Society poverty alleviation
Funds invested for targeted poverty alleviation 10.00
D. Follow-up targeted poverty alleviation
Wellhope will vigorously respond to the call for targeted poverty alleviation. Based on further
developing current poverty alleviation projects, Wellhope will exert its strengths to innovate poverty
alleviation methods, optimize poverty alleviation channels, and increase poverty alleviation efforts to
contribute to the goal of building a moderately prosperous society in all respects.
As an important intermediate part in the agricultural industry chain, the upstream industries of animal
husbandry connect crop and feed industry, whilst the downstream industries serve slaughtering and
food processing industries. The animal husbandry industry is related to the national economy and
people's livelihood, such as food supply and farmers' income. At the start-up period, Wellhope
announced its Declaration and Mission inside and outside the industry, indicating and admonishing all
employees that while developing business, Wellhope should also bear social responsibilities at the
same time. Over the years, Wellhope has been strictly fulfilling its commitment and practicing
corporate responsibilities. In 2018 it further refined its core values characterized by "Integrity,
Responsibility, Double-win", once again stressed the importance of social responsibilities.
A. Responsibilities to society and industry
a. Practice of Wellhope Mission. “Through advanced technology, professional service, and
high-quality products, Wellhope is devoted to the development of China’s animal husbandry industry,
resources conservation, environment protection, as well as food security for the benefit of people”, this
has been taken as the mission and ultimate goal of Wellhope since its establishment.
Saving resources. China needs to use only 7% of the world's land to feed 22% of the world's population.
In response to increasingly shortage of natural resources and under the backdrops of the
implementation of ban of antibiotics and food safety, Wellhope has been exploring new products and
optimizing products based on the original intention of saving food and resources. Meanwhile, it reduces
the use of corn, soybean meal and other grains in feed by transitioning from simple to complex
diversified diet technology, and fully exploits the application of various raw materials. In terms of
animal raising technology, Wellhope helps farmers apply energy-saving technologies to improve
Wellhope Foods Co., Ltd. 2020 Annual Report
resource utilization. In terms of broiler slaughtering, Wellhope equips high-efficient equipment and
constantly refines technologies, also conducts lean management to heighten slaughtering operation,
which has achieved efficient killing-out percentage and energy saving.
Environment protection. By reason of animal husbandry having certain pollutions to the environment,
Wellhope has been always utilizing various ways such as technological innovation and equipment input
to protect environment to achieve the sustainable development. In terms of technological innovation,
Wellhope continuously researches on safe and eco-friendly feed. Through the application of enzyme
preparation and the design of feed formula with low phosphorus and low protein, the nitrogen and
phosphorus from animal feed have been greatly reduced. In terms of animal raising and slaughtering,
Wellhope automates production lines and continuously strengthens the recycles wastes and combines
planting with animal raising to realize environmental protection.
Food safety. Wellhope has never forgotten social responsibility since its establishment. In 2018, it set
long-term development objective as "being committed to becoming the world's leading enterprise
across agriculture, animal husbandry and food industries, and becoming a manufacturer of safe and
high-quality meat product", unswervingly pursuing the quality and safety of feed processing and food
production. Wellhope’s central laboratory has been equipped with advanced testing equipment and
always conducted strict quality control of raw materials and products to ensure safety of feed. For the
broiler business, Wellhope takes stringent control of supply, production, sale process, and through the
“nine unified” operation mode to combine biosafety, drug residue control and in-process hygiene to
achieve traceable food safety. Meanwhile, Wellhope has always attached importance to the research
and development of antibiotic-free technology, all of the feed products have been successfully
transitioned to be antibiotic-free, the effect of the alternative programs has been stable with favorable
feedback, which has been further enhanced the product power. With years of focuses of providing
high-quality, stable and safe products, Wellhope ranked the 7th in "2020 China Food Green Credit Index
Top 50 Report" with a "Green Credit Index" score of 86.3. In the future, Wellhope will continue to pay
attention to food safety and provide safe and high-quality products with global perspectives.
Contributing to public charity giving. Wellhope has always persisted in the principle of contributing to
its motherland by operating excellent businesses and giving back to the society. Over the years,
Wellhope has donated to disaster areas, disabled aid projects and related educational institutions
directly or through the Red Cross. Since the outbreak of COVID-19, Wellhope’s holding and associated
companies, some managers and employees, have raised funds of RMB 12 million to support national
and local-level government offices to defeat the disease, which included the donation of 18 ambulances
to several regions. Wellhope also actively devotes to educational public welfare undertakings. In recent
years, Wellhope has been working with a supplier to participate in donation activities on World Egg Day
by providing high-quality eggs to poor pupils to care for their healthy growth. Moreover, Wellhope
provides awards and bursary supports to many college students nationwide, it also holds the “Wellhope
Wellhope Foods Co., Ltd. 2020 Annual Report
Cup” regularly, this is a postgraduate scientific and technological paper competition, which aims to
encourage the innovation of postgraduates in related fields and offers them opportunities to attend in
internships and field trips. Moreover, the holding and associated companies of Wellhope vigorously
participate in charity activities organized by local-level governments. The managers of Wellhope also
devote themselves to the public charity in different forms.
b. Offering job opportunities
Talented person is the foundation of the development of an enterprise. According to the needs,
Wellhope holds job fair and campus recruitment every year, creating job opportunities for the society
while developing ourselves. In 2020, under the grim employment situation caused by the downward
pressure on the economy, Wellhope quickly carried out online recruitment via live broadcast to offer
opportunities for job seekers, it has recruited a large number of middle and junior staff from the society
through variety channels, and also introduced more than 500 undergraduates, masters and doctors
from several universities and provided systematic trainings to help them grow rapidly.
B. Responsibilities to shareholders
Information disclosure complying with laws and regulations. Wellhope always adheres to the code of
conduct of honesty and trustworthiness, and improves corporate governance to ensure the internal
operation complying with laws and regulations. In 2020, in strict accordance with the regulations of
China Securities Regulatory Commission, Shanghai Stock Exchange, the Company Constitution and
other internal regulations, Wellhope continued to consciously standardize the information disclosure to
guarantee that all disclosed information was true, accurate, complete and timely. During the reporting
period, Wellhope honestly and normatively disclosed 65 extraordinary announcements and 4 periodic
reports via designated media. Moreover, its annual information disclosure was appraised as A-level by
Shanghai Stock Exchange. Entering 2021, Wellhope will constantly practice the principle of honest
operation and protect the legitimate rights and interests of the non-controlling shareholders.
Return to shareholders. In line with the principle of "sharing the results", besides carefully
implementing the development strategy and continuously improving internal operation, Wellhope
spares no efforts to return to investors and share the operating results. Since completing IPO in 2014,
its average dividend payout ratio was 20% with accumulated cash dividends of RMB 646 million. All the
funds raised from IPO have been returned to investors by cash dividends.
C. Responsibilities to staff
Adhering to “sharing bumper harvest”. Driven by the philosophy of “sharing bumper harvest”,
Wellhope shares its achievements with employees by way of optimizing the remuneration system and
diversifying incentive methods. In 2018, 372 identified key managers were awarded with restricted
shares. During the reporting period, these manages have unlocked the restricted shares of the first
lockup period. This plan has achieved positive effects indeed based on the profit of the Company and
other evaluations in 2020, achieved a win-win situation.
Wellhope Foods Co., Ltd. 2020 Annual Report
Powering career development of staff. In strict accordance with national laws and regulations,
Wellhope provides social assurance and additional welfare to employees and also benefits their families.
Wellhope also expands the scope of welfare through internal resource sharing, and pilot flexible
benefits to improve employees’ happiness. In the meantime, Wellhope continues to upgrade its
three-level training system, by using Wellhope E-Learning College and external resource to provide
more training resources to promote the growth and value enhancement of employees. In the aspect of
career development, Wellhope has created a “H-shaped” dual-channel career path for employees to
make every single one can choose suitable career development according to their strengths, aiming to
help them fully display potential abilities to achieve career goals.
Caring about employees’ life. The “Wings of Love” charitable foundation, established by Wellhope in
admitted to the universities, encouraging employees to cultivate talents for the society. In the
meantime, it also provides financial assistance to the families of employees in difficulty, helping them
tide over hard time. Since the foundation being established, it has donated RMB 4.16 million to
employees. Moreover, every year Wellhope organizes different forms of activities to continuously
enrich the life of employees.
D. Responsibilities to customers
Continuously providing superior quality products. Wellhope conducts businesses honestly and controls
product quality strictly. Through integrated operation, high-quality raw material purchasing, scientific
formula design, professional quality management and intelligent production, etc., Wellhope provides
superior quality products to the society, and constantly develops new products to meet the needs of
customers for product safety.
Constantly improving technical services. Driven by the concept of progressing together with customers,
Wellhope is dedicated to providing comprehensive technical services. In terms of animal raising,
Wellhope offers farmers systematic services such as raising methods, feeding programs, disease
diagnosis and latest market information, also provides them trainings and farm management solutions
to improve their technology level and operation skills. In respect to African swine fever, Wellhope has
vigorously built technical team to render services in terms of preventive measures and solutions to
resume production, etc. Meanwhile, Wellhope actively conducts on-line services and management
guidance, including holding live streaming and experts on line to help customers prevent African swine
fever and reduce losses, making progress together with customers.
Wellhope Foods Co., Ltd. 2020 Annual Report
A. Information of pollution discharge
Puyang Wellhope Food Company (hereinafter referred to as "Puyang Wellhope"), a subsidiary of Wellhope, has been listed as the company with pollution
discharging of Puyang City. Dalian Zhongjia Wellhope Food Company (hereinafter referred to as "Zhongjia Food") and Dalian Huakang Xinxin Food Company
(hereinafter referred to as "Dalian Huakang"), subsidiaries of Wellhope, have been listed as the company with pollution discharging of Dalian City. Kaifeng
Wellhope Meat Food Company (hereinafter referred to as "Kaifeng Wellhope"), a subsidiary of Wellhope, has been listed as the company with pollution discharging
of Kaifeng City. Shenyang Huakang Broiler Company (hereinafter referred to as "Shenyang Huakang"), a subsidiary of Wellhope, has been listed as the company
with pollution discharging of Shenyang City. Pingyuan Wellhope Food Processing Company (hereinafter referred to as "Pingyuan Wellhope"), a subsidiary of
Wellhope, has been listed as the company with pollution discharging of Handan City. Changchun Wellhope Food Company (hereinafter referred to as "Changchun
Wellhope"), a subsidiary of Wellhope, has been listed as the company with pollution discharging of Changchun City. Chifeng Wellhope Fuxinyuan Food Company
(hereinafter referred to as "Chifeng Wellhope"), a subsidiary of Wellhope, has been listed as the company with pollution discharging of Chifeng City. Shandong
Heyuan Food Company (hereinafter referred to as "Shandong Heyuan"), a subsidiary of Wellhope, has been listed as the company with pollution discharging of
Weihai City. Details are presented as follows.
Number of Whether discharge
Way of Distribution of Total amount of Total approved
Company Primary pollutants discharge Emission concentration Pollutant discharge standards excessive
discharge outlets discharge emissions
outlet pollutants
emission
outlet located
Waste water (COD,
in the
ammonia nitrogen, total Waste
southeast COD--45mg/L,
phosphorus, PH, gas—direct
corner of the ammonia nitrogen --4.19mg/L, Discharge Standard of Water Pollutants for
suspended solids, discharge after 1 outlet for
sewage total phosphorus --1.74mg/L, Meat Processing Industry (GB 13457-1992). COD--5.358t/a, COD--15.58t/a,
Puyang biochemical oxygen treatment, waste gas, 1
monitoring total nitrogen --7.97mg/L, Boiler Air Pollutant Emission Standard (GB ammonia nitrogen ammonia nitrogen No
Wellhope demand, animal and plant waste water-- for waste
station, 1 SO2--0mg/m3, 13271-2014) --0.218t/a --2.95t/a
oil, total coliform, total indirect water
waste gas nitric oxide --19mg/m3,
nitrogen). Waste gas (SO2, discharge
exhaust outlet particulate matter --2.8mg/m3
nitric oxide, particulate
distributed in
matter)
the boiler
room in the
northeast
Wellhope Foods Co., Ltd. 2020 Annual Report
corner of the
factory
Waste water
enters the
Waste water (COD, sewage plant COD--41.35mg/L,
Waste
ammonia nitrogen, total through the ammonia nitrogen--1.98mg/L, Comprehensive Wastewater Discharge
gas—direct
phosphorus, PH, 1 outlet for pump; the total nitrogen--21.46mg/L, Standard of Liaoning Province (GB
discharge after
Zhongjia suspended solids, waste gas, 1 exhaust gas total phosphorus-- 2.64mg/L, 21/1627-2008). Simplified management of
treatment, Non No
Food biochemical oxygen for waste outlet is PH--7.27, Boiler Air Pollutant Emission Standard (GB no emissions
waste water--
demand, total nitrogen). water distributed in particulate matter--22.9mg/m?, 13271-2014)
access to sewage
Waste gas (SO2, nitric the boiler sulfur dioxide--209mg/m?,
works
oxide, particulate matter) house on the nitric oxide--132mg/m?
north side of
the company
Wastewater
discharge
outlet is
distributed in
the southeast
Waste water (COD, Waste water--
corner of the Comprehensive Wastewater Discharge Waste water enter the
ammonia nitrogen, total put into the pipe COD--112mg/L,
phosphorus, PH, network after ammonia nitrogen--2.26mg/L,
Dalian waste gas, 1 sewage 21/1627-2008). discharge.
suspended solids, total treatment, smoke--30.5mg/m?, Non No
Huakang for waste treatment Boiler Air Pollutant Emission Standard (GB Smoke--531KG,
nitrogen). waste sulfur dioxide—113mg/?,
water workshop; 13271-2014) sulfur dioxide--1976KG,
Waste gas (SO2, nitric gas—direct nitric oxide—147mg/?
exhaust gas nitric oxide--2570KG
oxide, particulate matter) discharge
outlet is
located on the
roof of the
company's
boiler house
Wastewater
discharge
Waste water (COD,
outlet is
ammonia nitrogen, total
distributed in
phosphorus, PH, Waste water— Level 2 standard of Discharge Standard of
the northeast COD--3.43t/a, COD--3.6t/a,
Kaifeng suspended solids, indirect 1 outlet for COD--43mg/L, Water Pollutants for Meat Processing
corner of the ammonia ammonia No
Wellhope biochemical oxygen discharge waste water ammonia nitrogen--6.5mg/L Industry (GB 13457-1992)
company's nitrogen--0.77t/a nitrogen--0.79t/a
demand, animal and plant
sewage
oil, total coliform, total
monitoring
nitrogen)
infrastructure
station
Wellhope Foods Co., Ltd. 2020 Annual Report
Wastewater
COD--40mg/m3,
discharge
suspended matter--8mg/m3,
outlet is
Waste water (coliform ammonia Discharge Standard of Water Pollutants for
distributed in
group, 5 days biochemical Waste nitrogen--25.915mg/m3, Meat Processing Industry (GB 13457-1992).
the southeast
oxygen demand, gas—direct 5 days biochemical oxygen Comprehensive Wastewater Discharge
corner of the
suspended matter, animal discharge after demand--4.3mg/m3, Standard (GB 21/1627-2008).
company's
and plant oil, ammonia treatment, 1 outlet for total phosphorus--4.05mg/m3, Boiler Air Pollutant Emission Standard (GB
sewage COD--6.5556t/a, COD--84t/a,
Shenyang nitrogen, PH, chemical waste water-- waste gas, 1 animal and plant 13271-2014)
monitoring ammonia ammonia No
Huakang oxygen demand, total put into the for waste oil--5.33mg/m3, Integrated Emission Standard of Air
base station. nitrogen--0.984t/a nitrogen--13.44t/a
phosphorus). Waste gas municipal pipe water coliform group<20MPN/L, Pollutants (GB 16297-1996).
The exhaust
(particulate matter, sulfur network after particulate matter--26.9mg/m3, Emission Standards for Odor Pollutants (GB
gas outlet is
dioxide, nitrogen oxides, treatment sulfur dioxide--9mg/m3, 14554-92)
located at the
smoke blackness, mercury nitrogen oxides--133mg/m3,
boiler house in
and its compounds) mercury and its
the northeast
compounds<0.003ug/m3,
corner of the
ringelman emittance
company
Wastewater
discharge
outlet is
distributed in
Waste water (COD, COD--100mg/L,
Waste the north of
ammonia nitrogen, total ammonia nitrogen--20mg/L,
gas—direct the company Discharge Standard of Water Pollutants for
phosphorus, PH, PH--6-9,
discharge via sewage Meat Processing Industry (GB 13457-1992) COD--39.45t/a,
suspended matter, 2 outlets for suspended matter--200mg/L, COD--13t/a,
natural gas monitoring and inlet water quality requirements of ammonia
Pingyuan biochemical oxygen waste gas, 1 biochemical oxygen ammonia nitrogen--2.6t/a,
boiler, base station Linzhang County. nitrogen--2.724t/a, No
Wellhope demand, animal and plant for waste demand—60, SO2--0t/a,
waste house, the Boiler Air Pollutant Emission Standard (GB SO2--2.31t/a,
oil, total coliform group, water animal and plant oil--20mg/L, nitric oxide--0.8t/a
water—indirect exhaust gas 13271-2014) nitric oxide--2.36t/a
total nitrogen). SO2--0mg/Lm?,
discharge outlets are
Waste gas (SO2, nitric nitric oxide--21mg/Lm?,
distributed in
oxide, particulate matter) particulate matter--2.8mg/Lm?
the boiler
house on the
east side of
the company
Waste water (COD, Waste water-- Wastewater COD--14mg/L,
ammonia nitrogen, total discharge after discharge suspended matter--8mg/L,
Level 2 standard of Discharge Standard of COD--3.487t/a, COD--12.619t/a,
Changchun phosphorus, PH, entering the 1 outlet for outlet is coliform group—non,
Water Pollutants for Meat Processing ammonia ammonia No
Wellhope suspended matter, sewage waste water distributed in PH--7.96mg/L,
Industry (GB 13457-1992) nitrogen--0.104t/a nitrogen--2.524t/a
biochemical oxygen treatment the company's ammonia nitrogen--0.587mg/L,
demand, total nitrogen). station sewage 5 days biochemical oxygen
Wellhope Foods Co., Ltd. 2020 Annual Report
monitoring demand--2.7mg/L,
station animal and plant oil--0.17mg/L
Wastewater
outlet is
distributed in
Waste water (COD, the east side Discharge Standard of Water Pollutants for
ammonia nitrogen, total Waste of the Meat Processing Industry (GB 13457-1992).
phosphorus, PH, gas—direct company's Integrated Emission Standard of Air
suspended solids, discharge after 1 outlet for sewage Pollutants (GB 16297-1996).
COD--100mg/L, COD--0.92t/a, COD--40.6t/a,
Chifeng biochemical oxygen treatment, waste gas, 1 monitoring Emission Standards for Odor Pollutants (GB
ammonia nitrogen--20mg/L, ammonia ammonia No
Wellhope demand, animal and plant waste water-- for waste base 14554-93).
PH--6-8.5 nitrogen--0.034t/a nitrogen--6.28t/a
oil, total coliform group, indirect water station.The Boiler Air Pollutant Emission Standard (GB
total nitrogen). discharge exhaust gas 13271-2014)
Waste gas (SO2, nitric outlet is
oxide, particulate matter) located on the
north side of
the boiler
house
Wastewater
outlet is
distributed in
the southeast
Waste water (chemical
side of the
oxygen demand,
sewage pool
suspended matter,
Waste water— of the
coliform group, anionic Chemical oxygen Comprehensive Discharge Standard for COD--0.048t/a,
discharge after company's
surfactant, ammonia 1 outlet for demand--32mg/L, Water Pollutants in Peninsula Watershed of ammonia
entering the sewage
Shandong nitrogen, PH, total waste gas, 1 ammonia nitrogen--1mg/L, Shandong Province (DB37/676-2007). nitrogen--0.002t/a,
sewage treatment Non No
Heyuan nitrogen, total for waste total nitrogen--12mg/L, Emission Standard for Air Pollutants from total nitrogen--0.018t/a,
treatment plant station, the
phosphorus, PH, 5 days water total phosphorus--0.2mg/L, Boilers (DB 37/2374-2018) total
exhaust gas
biochemical oxygen PH--6-8.5 phosphorus--0.0003t/a
outlet is
demand). Waste gas
distributed in
(particulate matter, sulfur
the boiler
dioxide, nitrogen oxides)
house on the
northwest side
of the
company
Wellhope Foods Co., Ltd. 2020 Annual Report
B. Circumstance of building and operating pollution control facilities
Puyang Wellhope
a. Sewage treatment: Puyang Wellhope has a 2,000-tons-per-day sewage treatment station, which
adopts the treatment process of "pretreatment-oil separation-A2O-disinfection" to treat the
wastewater. Its environmental protection facilities are running normally, and the pollutant emission
indexes all meet the required standards.
b. Waste gas treatment: Gas generated by the waste water pool of the sewage treatment station is
collected and purified by alkali washing tower and activated carbon adsorption and then discharged
through the 21-meter-high chimney in accordance with related standard. The waste gas of the
slaughtering shed and broiler suspension platform can be collected and treated by alkali washing tower
and activated carbon adsorption and purification. After that, the waste gas can be discharged through
the 15-meter-high chimney. The traditional coal-fired boilers are replaced by gas-fired boilers, and the
company carried out low nitrogen upgrading, all kinds of pollutants meet the emission standards.
Kaifeng Wellhope
Sewage treatment: Kaifeng Wellhope has a 1,500-tons-per-day sewage treatment station, which adopts
the treatment process of "air floatation-A2O" to treat the wastewater. Its environmental protection
facilities are running normally, and the pollutant emission indexes all meet required standards.
Zhongjia Food
a. Sewage treatment: Zhongjia Food has a 1,200-tons-per-day sewage treatment station, which adopts
the treatment process of "mechanical barrier-oil separator-regulation pool-hydrolysis pool- catalytic
oxidation pool-sedimentation pool-sand filter" to treat the wastewater.
b. Waste gas treatment: Dedusting smoke and dust by wet method and conducting desulfurization by
magnesium oxide. Discharging gas by a 25-meter-high chimney to effectively met related standards.
Shenyang Huakang
Sewage treatment: Shenyang Huakang has a 2,220-tons-per-day sewage treatment station, which
adopts the treatment process of "pretreatment-oil separation-A2O-secondary sedimentation tank-
flocculation dephosphorization sedimentation tank (advanced treatment process)" to treat wastewater.
Its environmental protection facilities are running normally, and the pollutant emission indexes have
reached all required standards.
Dalian Huakang
a. Sewage treatment: Dalian Huakang has a 300-tons-per-day sewage treatment station that adopts the
treatment process of "mechanical barrier-oil separator-regulation pool-air flotation-hydrolysis
pool-A2O-sedimentation pool-advanced treatment pool-clean water pool", which can achieve required
standards.
b. Waste gas treatment: Dedusting the smoke and dust by wet method and conducting desulfurization
by magnesium oxide, then discharging gas by a 16-meter-high chimney. Gas emission meet all required
Wellhope Foods Co., Ltd. 2020 Annual Report
standards.
Pingyuan Wellhope
a. Sewage treatment: Pingyuan Wellhope has a 1,000-tons-per-day sewage treatment station, which
adopts AO treatment process to dispose wastewater. Its environmental protection facilities are running
normally, and the pollutant emission indexes have reached all required standards.
b. Waste gas treatment: Gas generated by the waste water pool of the sewage treatment station is
collected and purified by activated carbon adsorption and then discharged through the 15-meter-high
chimney. The traditional coal-fired boilers are replaced by gas-fired boilers with low carbon, all kinds of
pollutants meet the emission standards. Discharging gas by a 12-meter-high chimney.
Changchun Wellhope
Sewage treatment: Changchun Wellhope has a 1,000-tons-per-day sewage treatment station, which
adopts the treatment process of “air flotation-A2O” to dispose wastewater. Its environmental
protection facilities are running normally, and the pollutant emission indexes have reached all required
standards.
Chifeng Wellhope:
Wastewater treatment: Chifeng Wellhope has a 2,400-tons-per-day sewage treatment station, which
adopts the treatment process of A?/0. The equipment and facilities are running normally, which can
automatically monitor the COD, ammonia nitrogen, PH and flow of wastewater discharge, and it is
networked with the Municipal Natural Environmental Protection Bureau. The company has also
constructed a biogas project with a daily output of 8,000 m?, which can ferment waste water and
manure, etc., marsh gas can be used for boiler production, biogas residue and slurry used as fertilizer to
grain.
Waste gas treatment: Chifeng Wellhope has taken certain measures to lessen the waste gas, such as,
stopping feeding swine and broilers when enter the factory and slaughtering the animals on the same
day, washing the houses in time, building closed waiting houses and installing fan exhaust to enhance
ventilation, etc.
Shandong Heyuan
a. Sewage treatment: Shandong Heyuan has a 2,000-tons-per-day sewage treatment station, which
adopts AO treatment process to dispose wastewater. Its environmental protection facilities are running
normally, and the pollutant emission indexes have reached all required standards.
b. Waste gas treatment: Gas generated by the waste water pool of the sewage treatment station is
collected and purified by activated carbon adsorption and then discharged through the 15-meter-high
chimney. The traditional coal-fired boilers are replaced by gas-fired boilers, all kinds of pollutants meet
the emission standards. Discharging gas by a 10-meter-high chimney.
Wellhope Foods Co., Ltd. 2020 Annual Report
C. Environmental impact assessment of construction projects and other administrative permits for
environmental protection
During the reporting period, all the construction projects of the Company met the requirements of
environmental impact assessment and other environmental protection administrative licenses. The
Company has strictly implemented related environmental protection requirements.
D. Emergency plan for environmental incident
According to the requirements of environmental protection authorities and relevant laws and
regulations, each factory of the Company has identified the site with potential environmental risk and
formulated the emergency plans for environmental incident. Meanwhile, related companies conducted
emergency exercises to improve self-rescue ability and continued to identify the hidden danger to
ensure normal operations.
E. Self-monitoring program for environment
In accordance with requirements of self-monitoring environment and information disclosure, the
pollutant discharging entities of the Company have formulated self-monitoring programs to monitor
environment and disclose information as scheduled.
Wellhope Foods Co., Ltd. 2020 Annual Report
Section VI Changes in Common Shares and Shareholder Information
I. Changes in Common Shares
Increase or decrease
Before changing After changing
in 2020
Issuing
Shares Percentage % Subtotal Shares Percentage %
new shares
shares
A. Shares held by
the state
B. Shares held by
state-owned
corporation
C. Shares held by
other domestic 88,831,340 9.63 -73,375,136 -73,375,136 15,456,204 1.68
investors
including:
Shares held by
domestic 54,133,857 5.87 -54,133,857 -54,133,857
non-state-owned
corporation
Shares held by
domestic natural 34,697,483 3.76 -19,241,279 -19,241,279 15,456,204 1.68
person
D. Shares held by
foreign investor
including: shares
held by foreign 2,296,587 0.25 2,296,587 0.25
corporation
Shares held by
foreign natural
person
shares
A. RMB common
shares
shares
Explanation of changes in shares
Wellhope held the 14th meeting of the 6th Session of Board of Directors on March 27, 2020, and held
Repurchasing and Writing off Part of Locked Restricted Shares. 244,500 shares held by 36 individuals
had been repurchased and written off by the Company on May 19, 2020. The total number of shares of
Wellhope decreased from 922,304,396 to 922,059,896.
Wellhope Foods Co., Ltd. 2020 Annual Report
Number of Decrease of
unlocking restricted Restricted
Opening Date of
shares in shares in shares in Reason for
Name of shareholder restricted unlocking
the the the period lockin
shares shares
reporting reporting end
period period
Sinosafe Property
and Asset
Management-
Industrial and
Commercial Bank
non-public
of China- April, 24,
Stably Increasing 2020
stock
Profit
No. 12 Collective
Asset
Management
Product
non-public
Shenzhen Galaxy Investment April, 24,
Co., Ltd. 2020
stock
Zhongyi Asset Management-
China Minsheng Banking
non-public
Corp- April, 24,
Zhongyi Asset-Non-public 2020
stock
Offering Selection No. 103
Asset Management Product
non-public
April, 24,
Wu Ying 14,763,779 14,763,779 0 issuing
stock
Within 12,
months
Employees who were granted equity after
restricted shares(totalling) incentive completing
restricted
stock
registration
non-public
April, 25,
Jin Weidong 3,062,117 3,062,117 issuing
stock
non-public
April, 25,
DE HEUS MAURITIUS 2,296,587 2,296,587 issuing
stock
non-public
April, 25,
Ding Yunfeng 1,531,058 1,531,058 issuing
stock
non-public
April, 25,
Wang Zhongtao 765,529 765,529 issuing
stock
Total 91,127,927 73,130,636 244,500 17,752,791 / /
Wellhope Foods Co., Ltd. 2020 Annual Report
II. Shareholder and Actual Controller
Total number of shareholders as at December 31, 2020 39,757
Total number of shareholders at the end of February 2021 41,574
reporting period
Unit: share
Shareholding of top ten shareholders
Total shares Pledged or Frozen
Changes in Restricted Nature of
Name of shareholder held at the %
period-end
Domestic
Jin Weidong 149,549,498 16.22 3,062,117 Pledged 55,375,000 natural
person
Foreign
DE HEUS MAURITIUS 82,303,939 8.93 2,296,587 Non
legal person
Domestic
Ding Yunfeng 81,929,558 8.89 1,531,058 Pledged 47,620,000 natural
person
Domestic
Shao Caimei 49,773,878 5.40 Non natural
person
Domestic
Zhang Tiesheng 48,360,000 5.24 Pledged 6,600,000 natural
person
Wulian Heli Equity Domestic
Investment non-State-
Partnership (Limited owned legal
Partnership) person
Domestic
Wang Fengjiu -1,181,600 47,964,602 5.20 Pledged 5,190,000 natural
person
Domestic
Wang Zhongtao 46,625,229 5.06 765,529 Non natural
person
Sinosafe Property
and Asset
Management-
Industrial and
Commercial Bank
-11,877,413 17,650,146 1.91 Unknown Other
of China-
Stably Increasing
Profit No. 12
Collective Asset
Management Product
Zhongyi Asset
Management- China
Minsheng Banking
Corp-Zhongyi
-5,268,500 14,416,539 1.56 Unknown Other
Asset-Non-public
Offering Selection No.
Management Product
Wellhope Foods Co., Ltd. 2020 Annual Report
Top ten shareholders holding unrestricted shares
Unrestricted shares Shares by type
Name of shareholder
held Type Shares
Jin Weidong 146,487,381 RMB common stock 146,487,381
Ding Yunfeng 80,398,500 RMB common stock 80,398,500
DE HEUS MAURITIUS 80,007,352 RMB common stock 80,007,352
Shao Caimei 49,773,878 RMB common stock 49,773,878
Zhang Tiesheng 48,360,000 RMB common stock 48,360,000
Wulian Heli Equity Investment Partnership
(Limited Partnership)
Wang Fengjiu 47,964,602 RMB common stock 47,964,602
Wang Zhongtao 45,859,700 RMB common stock 45,859,700
Sinosafe Property and Asset Management-
Industrial and Commercial Bank of China-
Stably Increasing Profit No. 12 Collective
Asset Management Product
Zhongyi Asset Management-China Minsheng Banking
Corp-Zhongyi Asset-Non-public Offering Selection 14,416,539 RMB common stock 14,416,539
No. 103 Asset Management Product
Wang Zhongtao act in concert.
Relationship of above shareholders or statement made 2. Jin Weidong is the actual controller of Wulian Heli Equity
by the parties acting in concert Investment Partnership.
shareholders.
Top ten shareholders holding restricted shares
Unit: share
Public trading of restricted
shares
Newly
Restricted shares increased Restriction
No. Name of shareholder Date
held number of condition
available for
share
public trading
available for
public trading
Lockup period-
Lockup period-
Lockup period-
Lockup period-
Relationship of above
shareholders or statement made
by the parties acting in concert
Wellhope Foods Co., Ltd. 2020 Annual Report
III. Controlling Shareholder and Actual Controller
A. Natural person
Name Jin Weidong
Nationality China
Whether acquire the right of abode
No
in other countries or regions
Major occupation and position Chairman of Wellhope Foods Co., Ltd.
B. A block diagram of the property rights and controlling relationship between the Company and its
controlling shareholder
Note: As at the end of the reporting period, Jin Weidong directly held 149,549,498 shares of the
Company, accounting for 16.22% of the total share capital. He controlled 5.24% of the voting rights of
the Company through holding Wulian Heli Investment, and controlled 24.55% of the voting rights of the
Company through signing the Agreement of Acting in Concert with Ding Yunfeng(shareholding 8.89%),
Wang Fengjiu(shareholding 5.20%), Shao Caimei(shareholding 5.40%) and Wang Zhongtao(shareholding
Company’s voting rights.
A. Natural person
Name Jin Weidong
Nationality China
Whether acquire the right of abode in other
No
countries or regions
Major occupation and position Chairman of Wellhope Foods Co., Ltd.
Domestic and foreign listed companies once
held by the actual controller in the past 10 Non
years
Wellhope Foods Co., Ltd. 2020 Annual Report
B. A block diagram of the property rights and controlling relationship between the Company and its
actual controller
Note: Note: As at the end of the reporting period, Jin Weidong directly held 149,549,498 shares of the
Company, accounting for 16.22% of the total share capital. He controlled 5.24% of the voting rights of
the Company through holding Wulian Heli Investment, and controlled 24.55% of the voting rights of the
Company through signing the Agreement of Acting in Concert with Ding Yunfeng(shareholding 8.89%),
Wang Fengjiu(shareholding 5.20%), Shao Caimei(shareholding 5.40%) and Wang Zhongtao(shareholding
Company’s voting rights.
Section VII Preference Share
Not Applicable
Wellhope Foods Co., Ltd. 2020 Annual Report
Section VIII Directors, Supervisors, Senior Management and Employees
I. Changes in Shareholdings and Remuneration
Whether
Pre-tax
Changes in obtain
Opening Closing remuneration
Start of End of shareholding Reason of remuneration
Name Office title Gender Age shareholding shareholding paid by the
tenure tenure (shares) in changes from related
(shares) (shares) Company (RMB
Company
Jin Weidong Chairman male 58 Feb. 3, 2015 Feb. 1, 2021 149,549,498 149,549,498 75.05 No
Director and
Ding Yunfeng male 58 Feb. 3, 2015 Feb. 1, 2021 81,929,558 81,929,558 70.00 No
President
Selling in the
Wang Fengjiu Vice President male 52 Feb. 3, 2015 Feb. 1, 2021 49,146,202 47,964,602 -1,181,600 secondary 70.00 No
market
Director and
Shao Caimei Chief Technical female 55 Feb. 3, 2015 Feb. 1, 2021 49,773,878 49,773,878 70.31 No
Officer
Chairman of the
Wang Zhongtao Supervisory male 57 Feb. 3, 2015 Feb. 1, 2021 46,625,229 46,625,229 70.00 No
Board
Wang Zhenyong Vice President male 55 Feb. 3, 2015 Feb. 1, 2021 9,800,000 9,800,000 70.00 No
Director and
Zhang Wenliang Chief Financial male 61 Feb. 3, 2015 Feb. 1, 2021 8,565,100 8,565,100 39.60 No
Officer
Director, Board Selling in the
Zhao Xin Secretary, Chief female 49 Feb. 3, 2015 Feb. 1, 2021 4,470,160 4,420,160 -50,000 secondary 70.00 No
HR Officer market
Qiu Jiahui Vice President male 49 Feb. 3, 2015 Feb. 1, 2021 70.00 No
Independent
Hu Jianmin male 62 Feb. 3, 2015 Feb. 1, 2021 6.00 No
Director
Wellhope Foods Co., Ltd. 2020 Annual Report
Independent
Liu Huan male 66 Feb. 3, 2015 Feb. 1, 2021 6.00 No
Director
Independent
Wang Zhe female 41 Feb. 2, 2018 Feb. 1, 2021 6.00 No
Director
Jacobus
Johannes de Director male 52 Feb. 3, 2015 Feb. 1, 2021 - No
Heus
Marcus
Leonardus van Supervisor male 52 Feb. 3, 2015 Feb. 1, 2021 - No
der Kwaak
Yuan Minger Supervisor female 51 Feb. 3, 2015 Feb. 1, 2021 No
Li Jun Supervisor male 49 Apr. 27,2016 Feb. 1, 2021 No
Ren Bingxin Supervisor male 58 Mar. 27,2019 Feb. 1, 2021 5,429,500 5,429,500 No
Total 405,289,125 404,057,525 -1,231,600 / 622.96 /
Name Work experience
Male, born in 1963, Chinese nationality, bachelor of veterinarian from Shenyang Agricultural University, master of physiology and biochemistry from Jilin University,
doctoral advisor of Shenyang Agricultural University, winner of the first batch of National Natural Science Foundation of China, core founder of Wellhope, serving as the
Chairman of Wellhope since 1995. After graduation, he worked in the university for two years. In 1991, he joined Continental Grain Company (the US), successively
served as the sales manager of China’s Northeast Region, national sales manager and assistant vice president of Asia Region. Currently he holds the posts of Vice
President of China Feed Industry Association, Vice President of China Animal Husbandry Industry Association, President of Liaoning Feed Industry Association, also the
MBA interviewer of Peking University and Tsinghua University, guest professor of Remin University of China, Ocean University of China and Northeast Agricultural
Jin Weidong
University, etc. He has been awarded the honorary titles of "China's Outstanding Private Science and Technology Entrepreneur", "National Outstanding Builder of the
Socialist Cause", "China's Top Ten Economic Figures in the 30 Years of Reform and Opening up of Feed Industry", "May 1st Labor Medal of Shenyang City", "Model Worker
of Liaoning Province" and etc. In 2015, he was awarded as One of the Top Ten Models of Entrepreneurship for Agriculture, Rural Areas and Farmers. Meanwhile, he was
awarded as Outstanding Entrepreneur of Liaoning Province in 2017, and awarded as Career-creating Talent regarding Science and Technology Innovation by China’s
Ministry of Science and Technology in 2018. In 2019, he was selected as the fourth batch of leading talents regarding technology entrepreneurship in the National Ten
Thousand Talents Program, and in 2020 awarded as the National Model Worker.
Male, born in 1963, Chinese nationality, bachelor's degree, one of the founders of Wellhope. Once served as the deputy general manager of Liaohe Feed Group, the
Ding Yunfeng northeast regional manager and consulting manager of Continental Grain Company. After founding Wellhope, serving as general manager of Gongzhuling Wellhope,
Liaoning Wellhope, Shanghai Wellhope and many other subsidiaries, now holds the posts of board director and President.
Male, born in 1969, Chinese nationality, master's degree, one of the founders of Wellhope, served successively as northeast regional sales manager of Continental Grain
Wang Fengjiu Company, business manager and vice general manager of Liaoning Wellhope, general manager of Gongzhuling Wellhope, Shenyang Wellhope, Daqing Wellhope and
Liaoning Wellhope Food, now holds the post of Vice President, taking charge of Wellhope’s food business division.
Wellhope Foods Co., Ltd. 2020 Annual Report
Female, born in 1966, Chinese nationality, Ph.D., one of the founders of Wellhope, the board director and CTO of Wellhope, also holds the posts of standing director of
Shao Caimei Animal Nutrition Branch of Chinese Association of Animal Science and Veterinary Medicine, member of Chinese Feed Industrial Standardization Technical Committee,
etc.
Male, born in 1964, Chinese nationality, master's degree, one of the founders of Wellhope, served successively as purchasing manager, financial manager of Liaoning
Wang Zhongtao Wellhope, general manager of Harbin Wellhope and Dalian Wellhope, chief financial officer and vice president of Wellhope. Now holds the post of Chairman of
Supervisory Board, taking charge of Wellhope’s feed raw materials trade business division.
Male, born in 1966, Chinese nationality, Ph.D., joined Wellhope in 1996, served successively as technical manager, general manager and northeast region technical
Wang Zhenyong
director, now holds the post of Vice President, taking charge of international business.
Male, born in 1960, Chinese nationality, master's degree, senior auditor, certified public accountant, lawyer, joined Wellhope in 1996, now holds the posts of board
Zhang Wenliang
director and CFO.
Female, born in 1972, Chinese nationality, bachelor's degree, joined Wellhope in 1995, successively served as the secretary to the general manager, Director of marketing
Zhao Xin department, Director of HR Department, Human Resources Manager and Chief HR Director. Now holds the posts of board director, Board Secretary and CHO of
Wellhope.
Male, born in 1972, Chinese nationality, bachelor's degree, joined Wellhope in 2000, served successively as General Manager of Haicheng Wellhope Feed Mill, Haicheng
Xinzhongxin Feed Mill, Vice President of Former Huakang Feed Group, Marketing Director of Wellhope, President of Broiler Integration Business Division, Vice President
Qiu Jiahui of Wellhope. Due to his outstanding performance and diligence, he has been elected as the board director and President of Wellhope on February 1, 2021. Qiu Jiahui is
the pioneer of Wellhope’s broiler integration business. With more than 10 years of leadership, the broiler integration business has achieved rapid development, the
comprehensive strength of this business has ranked among the best in the industry.
Female, born in 1980, Chinese nationality, Ph.D., professor and doctoral advisor of School of Animal Husbandry and Veterinarian of Shenyang Agricultural University,
Wang Zhe
independent director of Wellhope.
Male, born in 1959, Chinese nationality, Ph.D., professor of School of Animal Husbandry and Veterinarian of Shenyang Agricultural University, independent director of
Hu Jianmin
Wellhope.
Male, born in 1955, Chinese nationality, CPA, Deputy Dean of School of Tax Administration of Central University of Finance and Economics, independent director of
Liu Huan
Wellhope.
Jacobus Johannes Male, born in 1969, the Netherlands’ nationality, master's degree, been working in Royal De Heus since 1992, now serves as the CEO of Royal De Heus, board director of
de Heus Wellhope.
Marcus
Leonardus van Male, born in 1969, the Netherlands’ nationality, master's degree, CFO of Royal De Heus, supervisor of Wellhope.
der Kwaak
Female, born in 1970, Chinese nationality, bachelor's degree, senior auditor, joined Wellhope in 2004, served successively as vice finance manager of Liaoning Wellhope
Yuan Minger
and finance manager of Wellhope Aquatic Feed Company, now holds the posts of supervisory board director and audit manager of Wellhope.
Male, born in 1972, Chinese nationality, master's degree, joined Wellhope in 2004, served successively as the general manager of Wellhope Trading Branch, Shenyang
Li Jun Expert and Shenyang Pufeng Trade, now holds the posts of supervisory board director, chief director of raw material trade business and general manager of Liaoning
Expert Trading Co., Ltd.
Male, born in 1963, Ph.D., once worked in Animal Husbandry and Veterinary Science Institute of Liaoning province, joined Wellhope in 1998, served successively as
Ren Bingxin production manager of Gongzhuling Wellhope, technical manager of Liaoning Wellhope, vice general manager of Qingdao Shenfeng, etc., now holds the posts of the
supervisory board director and technical director of Wellhope’s broiler integration business division.
Wellhope Foods Co., Ltd. 2020 Annual Report
Name Other entity Post Start of tenure End of tenure
Wang Zhe Shenyang Agricultural University Professor 2015
Hu Jianmin Shenyang Agricultural University Professor 2000
Liaoning-Shenyang Agricultural
Hu Jianmin Board director 2016
Wellhope Bio-Tech Co., Ltd.
School of Tax Administration of
Liu Huan Central University of Finance and Deputy dean and professor 2010
Economics
Jacobus Johannes de Heus Royal De Heus CEO 2002
Marcus Leonardus van der Kwaak Royal De Heus CFO 2001
Beijing BOYAR Agriculture and Animal
Jin Weidong Supervisor 2010
Husbandry Technology Co., Ltd.
Beijing Huikezhongda Information
Jin Weidong Board director 2020
Consulting Co., Ltd.
Shenyang Shengjing Asset
Jin Weidong Board director 2019
Management Group Co., Ltd.
II. Remuneration of Directors, Supervisors and Senior Management
According to the Company's performance appraisal management, related regulations and the stipulations of
Decision-making procedure for remuneration
the Remuneration and Performance Appraisal Committee of the Board of Directors.
According to the remuneration level in the industry, the Company's business performance, job
responsibilities, etc., and in accordance with the work plan made by the Board of Directors at the beginning
Basis for determining remuneration
of the year, in combination with individual’s work performance and other qualitative and quantitative
indicators.
Paying in accordance with the annual performance of the Company, the work performance of senior
Actual payment
managers and management ability, etc.
Total remuneration during the reporting period Totally paid RMB 6.23 million to board directors, supervisory board directors and senior managers.
Wellhope Foods Co., Ltd. 2020 Annual Report
III. Employees of the Parent Company and Major Subsidiaries
Full time employee of parent company 224
Full time employee of major subsidiaries 6,981
Total full-time employees 7,205
The number of retired employees whose expenses are
borne by the parent company and major subsidiaries
Functions
Line Employees
Production 2,829
Sales 2,445
Technology 811
Finance 403
Administration 717
Total 7,205
Educational backgrounds
Educational background Employees
Master's degree and above 408
Bachelor's degree 2,412
Junior college 2,186
Below junior college 2,199
Total 7,205
Wellhope always follows the human resource strategy of providing a fair, just and merit-based
environment for rewarding employees, constantly optimizes and innovates incentive methods from the
aspects of reward management, performance appraisal, appointment management, and talents’
echelon construction, etc.
In 2020, Wellhope has accelerated the promotion of broad-banding in some business sectors and
regions. Wellhope also continuously optimized the salary management and control mode, as well as
amended the rank of post value to maximize the motivation of employees and ensure internal fairness.
Meanwhile, Wellhope bravely tried to innovate the incentive mode in swine raising business to attract
and motivate talents with the booming development of swine business. Wellhope also revised the
“Administrative Measures on Appointment” in 2020 to further boost the construction of talents’
echelon, and screen out more outstanding young managers through scientific selection system, as well
as provide a rapid development channel for them.
Moreover, Wellhope has been paying close attention to the long-term incentives for outstanding
employees. In 2018, 372 key managers were granted restricted shares, they signed performance
agreements with the Company, and they could unlock the restricted shares according to the results of
working performance. By doing this, it can fully mobilize the enthusiasm and sense of ownership of key
talents and promote the rapid development of all business sectors. In 2020, these managers have
successfully unlocked part of their restricted shares.
Wellhope Foods Co., Ltd. 2020 Annual Report
In addition, Wellhope, in strict accordance with national laws and regulations, also offers staff social
insurances and housing fund. Besides, Wellhope provides commercial insurance to benefit employees
and their families, also enriches their benefits through internal resource sharing, 25th anniversary’s
benefits package, “Wings of Love” foundation and other ways to improve satisfaction.
Under the guidance of overall strategy and human resource strategy, Wellhope continues to build and
update the training system to help employees make signs of progress. In 2020, stressed by the
COVID-19 and African swine fever, Wellhope focused on creating online training methods and
improving course design, as well as centered on the improvement of basic skills and professional
knowledge of employees.
A. Continuously improving the training system and optimizing the selection & training mechanism
The three-level training system supported by Wellhope’s head office, business regions and subsidiary
have been becoming increasingly clear, and each performs own roles and cooperates with others in
multiple aspects, such as new employee training, middle and senior manager training. In regards to
new employees, Wellhope innovated the training methods via online platform and other tools to watch
the growth of new bloods and help them adapt to their job effectively. Regarding middle managers,
Wellhope carried out three-dimensional training to continuously improve the ability of the Company’s
backbones. For instance, holding the "Sunflower" training program and other programs to constantly
improve the professional competence of the managers. In addition, Wellhope actively organized video
conferences and live streaming for all employees, including both external cooperation and internal
courses, to lay a solid foundation for long-term development.
B. Further developing the training courses to boost up professional knowledge
Wellhope has been actively promoting the development of new training courses based on work
scenarios and task modules, etc. During the reporting period, Wellhope developed a total of more than
the overall learning participation rate of was over 95%, showing a significant increase in employees’
learning enthusiasm. To cope with the adverse impact brought by the COVID-19, Wellhope rapidly
updated relevant courses, widely introduced external training resources, and vigorously organized
trainings via various methods such as live broadcast and online academy.
The total number of working hours 3,878,967
Total amount of remuneration paid for outsourcing RMB 80,568,060
Wellhope Foods Co., Ltd. 2020 Annual Report
Section IX Corporate Governance
I. Overview of Corporate Governance
In accordance with the Corporation Law, the Securities Law, the Guidelines for Governance of Listed
Company and other requirements, Wellhope has constantly improved corporate governance and
internal control, such as shareholder’s meeting, board meeting, supervisory board meeting, etc. In
supervisory board meetings. The actual circumstance of corporate governance has been basically in
line with the requirements of the normative documents issued by China Securities Regulatory
Commission. Wellhope’s corporate governance regarding shareholder’s meeting, board meeting,
supervisory board meeting, information disclosure and stakeholder complied with the requirements of
relevant documents.
A. Shareholder and shareholders’ meeting. Wellhope convened and held shareholders’ meeting in
strict accordance with relevant laws, and adopted physical voting and online voting to ensure that all
shareholders, especially non-controlling shareholders, could fully exercise their right to vote. The
controlling shareholder (actual controller) of the Company conscientiously performed the obligation of
good faith and did not damage the rights and interests of the Company and non-controlling
shareholders.
B. Board directors and board meeting. The convening procedure of the board of directors complied
with the requirements of laws and regulations. All directors actively attended the board meetings and
shareholders’ meetings held by the Company, got familiar with relevant laws and regulations,
understood the rights, obligations and responsibilities of directors, and safeguarded the legitimate
rights and interests of all shareholders.
C. Supervisors and supervisory board meeting. Wellhope's supervisors, in accordance with the
Company Constitution and relevant laws and regulations, have conscientiously performed their duties,
supervised the Company's financial position, related transactions, periodic reports, as well as the
compliance of the directors and senior managers regarding their performance of duties, and
safeguarded the legitimate rights and interests of the Company and its shareholders.
D. Information disclosure. Wellhope strictly implemented its Information Disclosure Management
Regulation, which has clarified the person taking charge of information disclosure to ensure that the
disclosed information could be true, accurate, complete, timely and fair. It designated the board
secretary to take charge of information disclosure and investor relations management, strictly
implemented the Company’s regulations regarding information disclosure, such as Management
Regulation on Insider Information Registration, so as to disclose information truly, accurately,
completely and timely to guarantee that all shareholders could have equal right to know the
information of the Company. Meanwhile, Wellhope constantly improved corporate governance
structure and standardized internal operations in strict accordance with the requirements of the
Wellhope Foods Co., Ltd. 2020 Annual Report
Corporation Law, the Securities Law, relevant laws and regulations issued by China Securities
Regulatory Commission.
E. Stakeholder. Wellhope fully respected and safeguarded the legitimate rights and interests of
stakeholders, strived to achieve the coordination and balance among shareholders, employees, and
other parties, and jointly promoted the sustainable, healthy and stable development of the Company.
II. Shareholders' Meeting Convened during the Reporting Period
Disclosing Date of
Meeting Date Query URLs of Resolution
Resolution
April 20, 2020 www.sse.com.cn April 21, 2020
Meeting
Explanation:
During the reporting period, Wellhope held Annual Shareholders' Meeting to deliberate 2019 Annual
Report, dividend plan, the proposals of revising the Company Constitution, etc. The meeting resolution
had been detailed in the Company's extraordinary announcement No. 2020-031 published on the
website of Shanghai Stock Exchange.
The convening, holding, voting and other relevant procedures of the shareholders’ meeting complied
with laws and regulations, and relevant provisions of the Company's Constitution and Rules of
Procedure of the Shareholders’ Meeting, which could guarantee that all shareholders, especially
non-controlling shareholders, enjoyed equal status and fully exercised their rights.
III. Performance of Duties of the Board Director
Shareholders'
Attendance of Board Meeting
Meeting
Whether
Number
Independent continually
of Number of
Name director or Via Number fail to
attended Physical Via attended
not Tele- of physically
board presence proxy shareholders'
communi absences attend the
meetings meeting
meeting
in 2020
two times
Jin Weidong no 6 6 3 0 0 no 0
Ding Yunfeng no 6 6 3 0 0 no 0
Jacobus
Johannes de no 6 6 6 0 0 no 0
Heus
Shao Caimei no 6 6 3 0 0 no 0
Zhang Wenliang no 6 6 6 0 0 no 1
Zhao Xin no 6 6 2 0 0 no 1
Hu Jianmin yes 6 6 5 0 0 no 1
Liu Huan yes 6 6 6 0 0 no 0
Wang Zhe yes 6 6 6 0 0 no 1
Number of board meetings held in 2020 6
Including on-site meeting 0
Number of meeting held via telecommunication 2
Number of meeting held via on-site meeting and
telecommunication
Wellhope Foods Co., Ltd. 2020 Annual Report
IV. Whether Disclosing Self-evaluation Report of the Internal Control
Wellhope will disclose the evaluation report of internal control when discloses 2020 Annual Report.
Details please refer to the website of Shanghai Stock Exchange (http://www.sse.com.cn).
V. Explanation of Audit Report for Internal Control
SuyaJincheng CPA LLP issued the Audit Report of Internal Control, put forward that Wellhope has
maintained effective internal control over financial reports in all major aspects on December 31, 2020
in accordance with relevant regulations. Details please refer to the website of Shanghai Stock Exchange
(http://www.sse.com.cn).
Wellhope Foods Co., Ltd. 2020 Annual Report
Section X Corporate Bond
Not applicable
Wellhope Foods Co., Ltd. 2020 Annual Report
Section XI Financial Statements
I. Audit Report
Audit Report
Suya Audit No. [2021]248
To all the shareholders of Wellhope Foods Co., Ltd.,
We have audited the financial statements of Wellhope Foods Co., Ltd. (hereinafter referred to as "the
Company"), which comprise the statement of financial position as at December 31, 2020, and the
income statement, statement of changes in equity and cash flow statement for the year then ended,
and notes to the financial statements.
In our opinion, the financial statements give a true and fair view of the financial position of the
Company as at December 31, 2020, and of its operating performance and cash flow for the year then
ended, and have been properly prepared in compliance with the Accounting Standards for Business
Enterprises ("the ASBE").
We conducted our audits in accordance with China's CPA Auditing Standards. Our responsibilities
under those standards are further described in the "Auditor’s Responsibilities for the Audit of the
Financial Statements" section of our report. We are independent of the Company in accordance with
China CPA's Code of Ethics for Professional Accountants ("the Code"), and we have fulfilled our other
ethical responsibilities in accordance with the Code. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements in the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
A. Confirmation and recognition of revenue
Please refer to Important Accounting Policies and Accounting Estimates
Key audit item How our audit addressed the key audit item
The operating revenue of the Company Our audit procedures mainly include:
reached RMB 23.82 billion with a a. We got to know and evaluated the design of internal
year-on-on growth rate of 33.87%, control in Wellhope’s sales process and tested the
increased RMB 6.03 billion compared effectiveness of the implementation of critical control.
with prior year. Of which, sales revenue b. Through sampling inspection of the sales contracts and
of feed business increased RMB 4.32 interviewing with the management team, we identified
billion compared with prior year, rose the rights and obligations of the contract, evaluated the
Wellhope Foods Co., Ltd. 2020 Annual Report
by 55.54%. As the operating revenue is time point of performing the obligations, and evaluated
one of the key performance indicators whether the judgment of the transfer of control rights
of Wellhope, we took the recognition related to revenue recognition conformed to the
of operating revenue as the key audit provisions of the Company's accounting policies and
item. accounting standards for enterprises.
c. We implemented analytical review procedures to
identify whether there were significant or abnormal
fluctuations and recognized the reasons that caused such
fluctuations. We also determined the rationality of
changes in operating revenue and gross profit.
d. We conducted the following procedures for sales
revenue based on sampling method to confirm the
occurrence and cut-off of sales revenue.
(a) Checking the supporting documents related to revenue
recognition, including sales contracts, sales orders, sales
invoices, customer receipt, etc.
(b) Issuing external confirmations to recognize the balance
of accounts receivable and the amount of sales revenue.
(c) Carrying out cut-off test on the revenue recognized
before and after the balance sheet date to evaluate
whether the revenue was recognized during the
appropriate period.
B. Income from long-term equity investment recognized by the equity method.
Please refer to Important Accounting Policies and Accounting Estimates
Key audit item How our audit addressed the key audit item
Our audit procedures mainly include:
a. We reviewed and evaluated Wellhope’s internal control
regarding the income from long-term equity investment
measured by the equity method.
b. We obtained related investee’s constitution, investment
agreements and other documents to judge whether
Wellhope had a significant effect on related investee and
The income from long-term equity
whether the accounting method was correct.
investment calculated by the equity
c. We obtained related investee's audit reports or financial
method in the reporting period
statements to review the adjustment of unrealized profit
reached RMB 361.32 million, which had
of related transactions, whether the calculation of
a significant impact on current gains
investment income was accurate and whether the share of
and losses, thus we took it as the key
net asset changes was correct.
audit item.
d. We inquired the management team about the reasons
of significant or abnormal fluctuations in investment
returns, analyzed and determined whether they were
reasonable.
e. We analyzed the operating income, cost, inventory and
other things of the investees with large investment income
in the current period, whilst obtained and checked the
detailed list and related materials provided by the
investees.
The management of the Company is responsible for the other information. The other information
comprises information covered by the Company's 2020 Annual Report, but excludes the financial
statements and our auditor's report thereon.
Wellhope Foods Co., Ltd. 2020 Annual Report
Our opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained during the audit or otherwise appears to be
materially misstated.
If, based on the work we have executed, we confirm that there is a material misstatement in the other
information, we are required to report the fact. We have nothing to report in this regard.
The management team of the Company is responsible for preparing the financial statements that give
a fair view in accordance with the ASBE, and for designing, executing and maintaining requisite internal
control to enable the preparation of the financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing the Company’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the management either intends to liquidate the
Company or to cease operation, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the auditing standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with the auditing standards, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
A. Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
B. Obtain an understanding of the internal control relevant to the audit in order to design audit
Wellhope Foods Co., Ltd. 2020 Annual Report
procedures that are appropriate in the circumstances.
C. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the management.
D. Conclude on the appropriateness of the management’s use of the going concern basis of accounting
and, based on the obtained audit evidence, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required by the auditing standards to draw the
statements users’ attention in our auditor’s report to the related disclosures in the financial statements,
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may
cause the Company to cease to continue as a going concern.
E. Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.
F. Obtain sufficient and appropriate audit evidence regarding the financial information of related
entities or business activities within the Company to express an opinion on its financial statements. We
are responsible for guiding, overseeing and performing the audit of the Company, and solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timetable of the audit and significant audit findings, including any noteworthy deficiencies in
the internal control that we identify during our audit.
We also provide those charged with governance with a statement to declare that we have complied
with the professional ethics related to independence, and communicate with the governance on all
relationships and other matters that may reasonably be considered to affect our independence, as well
as the relevant precautions.
From the matters communicated with those charged with governance, we determine which matters are
the most important for the audit of the current financial statements and thus constitute the key audit
matters. We describe these matters in the audit report, unless laws and regulations prohibit the public
disclosure of these matters, or in rare cases, if it is reasonably expected that the negative consequences
of communicating a matter in the audit report will outweigh the benefits in terms of the public interest,
we determine that the matter should not be communicated in the audit report.
SuyaJincheng CPA LLP CPA: Zhou Jiawen (Project Partner)
CPA: Wang Lei
China Nanjing March 29, 2021
Wellhope Foods Co., Ltd. 2020 Annual Report
II. Financial Statements
Consolidated Balance Sheet
December 31, 2020
Wellhope Unit: yuan Currency: RMB
Item Dec. 31, 2020 Dec. 31, 2019
Current Assets
Monetary capital 1,197,722,799.16 1,554,781,324.13
Tradable financial assets 50,000,000.00 40,000,000.00
Derivative financial assets 4,725,552.30 3,912,584.30
Notes receivable 14,200,547.87 3,696,180.25
Accounts receivable 450,170,744.45 362,060,802.38
Prepayments 364,401,520.23 222,064,368.55
Other receivables 121,043,476.45 85,600,811.75
including: Interest receivable
Dividends receivable 49,123,722.11 25,353,722.11
Inventory 2,473,827,570.38 1,568,373,133.15
Contract assets 4,301,418.29
Other current assets 109,698,865.94 121,711,175.93
Total current assets 4,790,092,495.07 3,962,200,380.44
Non-current assets
Long-term equity investment 2,424,902,965.26 2,070,047,882.51
Other equity instruments investment 20,847,697.96 5,760,839.23
Fixed assets 2,860,162,059.91 2,023,113,939.02
Construction in progress 322,895,206.90 240,012,874.86
Biological assets 221,654,027.17 94,826,312.88
Intangible assets 291,785,453.15 245,564,167.39
Goodwill 290,425.67 290,425.67
Long-term prepaid expenses 143,945,562.29 134,504,217.80
Deferred income tax assets 38,791,631.37 35,987,736.49
Other non-current assets 531,140,679.24 337,463,267.56
Total non-current assets 6,856,415,708.92 5,187,571,663.41
Total Assets 11,646,508,203.99 9,149,772,043.85
Wellhope Foods Co., Ltd. 2020 Annual Report
Consolidated Balance Sheet(continue) Unit: yuan Currency: RMB
Item Dec. 31, 2020 Dec. 31, 2019
Current Liabilities
Short-term borrowings 1,110,672,869.40 1,050,878,205.81
Notes payable 4,000,000.00
Accounts payable 1,068,968,589.85 659,216,483.84
Advance receipt 15,522,362.13 209,529,248.68
Contract liabilities 365,124,817.02
Payroll 92,456,475.56 62,549,364.12
Taxes and surcharges 47,590,795.53 37,680,953.84
Other payables 280,673,085.07 342,239,361.28
including: Interest payable 1,528,201.39
Dividends payable 1,500,000.00 1,434,027.14
Non-current liabilities due within one year 121,896,906.66 70,593,717.62
Other current liabilities 3,386,523.00
Total current liabilities 3,110,292,424.22 2,432,687,335.19
Non-current Liabilities
Long-term borrowings 574,880,271.67 174,330,000.00
Long-term payables 15,458,230.92 11,025,000.09
Deferred income 42,238,872.75 31,841,250.00
Deferred income tax liabilities 1,936,853.23 396,995.58
Total Non-current liabilities 634,514,228.57 217,593,245.67
Total Liabilities 3,744,806,652.79 2,650,280,580.86
Owners' equity (or shareholders' equity)
Paid-up capital (or share capital) 922,059,896.00 922,304,396.00
Capital reserves 888,159,916.65 882,723,066.29
deduct: Treasury stock 45,695,815.00 70,688,750.00
Other comprehensive income -2,157,502.61 6,122,835.30
Surplus reserves 417,370,506.33 352,059,456.90
Undistributed profits 4,572,660,487.98 3,605,618,553.05
Total owners’ equity attributable to the
parent company
Non-controlling interests 1,149,304,061.85 801,351,905.45
Total owners' equity (or shareholders' equity) 7,901,701,551.20 6,499,491,462.99
Total liabilities and owners' equity (or
shareholders' equity)
Wellhope Foods Co., Ltd. 2020 Annual Report
Consolidated Balance Sheet of Parent Company
December 31, 2020
Unit: yuan Currency :RMB
Item Dec. 31, 2020 Dec. 31, 2019
Current assets
Monetary capital 882,265,252.26 1,039,575,222.99
Tradable financial assets 50,000,000.00 40,000,000.00
Derivative financial assets 4,725,552.30 2,285,934.30
Accounts receivable 20,085,558.13 13,631,690.45
Prepayments 9,917,656.22 7,560,408.95
Other receivables 1,371,365,317.28 1,020,785,676.46
including: Interest receivable
Dividends receivable 57,747,209.35 33,977,209.35
Inventory 51,828,244.25 49,839,754.57
Total current assets 2,390,187,580.44 2,173,678,687.72
Non-current assets
Long-term equity investment 4,984,232,967.75 4,117,315,830.10
Other equity instruments investment 20,151,707.44 5,539,369.92
Fixed assets 137,920,401.73 132,106,337.38
Construction in progress 9,937,098.75 5,163,075.76
Intangible assets 14,556,983.41 15,425,425.33
Long-term prepaid expenses 1,997,913.51 797,929.30
Deferred income tax assets 7,805,635.89 10,699,738.59
Other non-current assets 1,800,000.00
Total non-current assets 5,178,402,708.48 4,287,047,706.38
Total assets 7,568,590,288.92 6,460,726,394.10
Current liabilities:
Short-term borrowings 680,000,000.00 770,000,000.00
Accounts payable 38,179,034.66 34,960,859.00
Advance receipt 5,019,752.33
Contract liabilities 5,446,528.15
Payroll 7,302,711.24 4,611,910.56
Taxes and surcharges 4,129,417.63 4,624,045.02
Other payables 1,472,651,727.41 1,109,464,926.75
including: Interest payable 1,261,159.72
Dividends payable
Non-current liabilities due within one year 78,000,000.00 52,000,000.00
Total current liabilities 2,285,709,419.09 1,980,681,493.66
Non-current liabilities
Long-term borrowings 494,500,000.00 174,000,000.00
Deferred income 25,056,500.00 21,520,000.00
Deferred income tax liabilities 8,972.25
Total non-current liabilities 519,556,500.00 195,528,972.25
Total liabilities 2,805,265,919.09 2,176,210,465.91
Owners' equity (or shareholders' equity)
Paid-up capital (or share capital) 922,059,896.00 922,304,396.00
Capital reserves 885,579,203.34 875,861,339.55
deduct: Treasury stock 45,695,815.00 70,688,750.00
Other Comprehensive income -337,193.02 5,621,991.32
Surplus reserves 417,370,506.33 352,059,456.90
Wellhope Foods Co., Ltd. 2020 Annual Report
Undistributed profits 2,584,347,772.18 2,199,357,494.42
Total owners' equity 4,763,324,369.83 4,284,515,928.19
Total liabilities and owners' equity (or
shareholders' equity)
Wellhope Foods Co., Ltd. 2020 Annual Report
Consolidated Income Statement
January-December, 2020
Wellhope Unit: yuan Currency: RMB
Item 2020 2019
including: Operating revenue 23,817,600,766.26 17,792,091,973.58
including: Operating costs 21,683,591,011.74 15,792,020,015.55
Taxes and surtaxes 31,300,864.53 26,510,483.05
Selling expenses 465,307,995.89 487,217,524.04
Administrative expenses 310,275,697.03 275,560,691.30
R&D expenses 83,587,106.40 65,209,116.65
Financial expenses 64,680,213.72 76,392,967.30
including: Interest expenses 75,771,816.48 77,508,278.78
Interest income 14,953,268.10 9,696,477.31
add: Other income 23,500,036.20 11,495,398.41
Income from investment 362,563,704.83 637,479,444.82
including: Income from investments
in associated companies and joint ventures
Gain or loss from changes in fair value -1,397,309.00 577,449.00
Credit impairment loss -6,184,987.84 -26,344,201.05
Assets impairment loss -35,172,892.83 -98,459,269.89
Gain or loss from assets disposal 3,169,342.06 572,151.35
add: Non-operating income 12,873,829.17 13,406,536.26
deduct: Non-operating expenditure 28,976,468.62 25,737,839.85
deduct: Income tax expense 151,654,167.45 84,706,528.93
Net Profit from continuing operations 1,357,578,963.47 1,497,464,315.81
Net profit attributable to the shareholders of
parent company
Non-controlling interests income 122,416,811.99 298,116,959.85
Attributable to owners of parent company -8,280,337.91 7,921,322.05
a. Other comprehensive income that
cannot be reclassified into gains or losses
(a) Changes in the fair value of other equity
instruments
b. Other comprehensive income that will be
-9,521,296.99 8,199,969.48
reclassified into the gains or losses
Wellhope Foods Co., Ltd. 2020 Annual Report
(a) Other comprehensive income that can
be transferred in gains or losses under the -7,100,475.65 7,238,557.02
equity method
(b) Exchange differences on translation of
-2,420,821.34 961,412.46
foreign currency financial statements
Attributable to non-controlling interests -1,956,579.50 778,287.33
Attributable to the owners of parent
company
Attributable to non-controlling interests 120,460,232.49 298,895,247.18
(1) Basic earnings per share (yuan per share) 1.34 1.34
(2) Diluted earnings per share (yuan per
share)
Wellhope Foods Co., Ltd. 2020 Annual Report
Consolidated Income Statement of Parent Company
January-December, 2020
Unit: yuan Currency: RMB
Item 2020 2019
deduct: Operating cost 668,625,276.01 440,528,615.18
Taxes and surtaxes 1,466,963.13 1,565,707.59
Selling expenses 12,812,998.32 15,499,507.05
Administrative expenses 31,515,779.33 35,606,213.46
R&D expenses 30,983,694.34 19,801,103.17
Financial expenses 18,445,842.72 25,764,751.95
including: Interest expenses 54,535,663.77 56,712,261.00
Interest income 36,300,491.74 31,126,902.17
add: Other income 6,458,638.63 2,446,851.22
Income from Investment 451,034,585.06 699,355,097.82
including: Income from investments in
associated companies and joint ventures
Gain or loss from changes in fair value -1,397,425.00 689,565.00
Credit impairment loss 19,002,016.21 -15,937,167.84
Assets impairment loss
Gain or loss from assets disposal 44,255.41 -22,077.70
add: Non-operating income 3,171,550.00 8,319,590.00
deduct: Non-operating expenditure 1,419,521.13 3,435,681.90
deduct: Income tax expense 29,035,688.84 16,371,114.85
Net profit from continuing operations 653,110,494.31 789,452,908.26
a. Other comprehensive income that cannot
be reclassified into gains or losses
(a) Changes in the fair value of other equity
instruments
b. Other comprehensive income that will be
-7,071,521.86 7,238,557.02
reclassified into gains or losses
(a) Other comprehensive income that can
be transferred in gains or losses under the -7,071,521.86 7,238,557.02
equity method
Wellhope Foods Co., Ltd. 2020 Annual Report
Consolidated Statement of Cash Flow
January-December, 2020
Wellhope Unit: yuan Currency: RMB
Item 2020 2019
Cash received by selling products, providing labor
services
Tax refunds 25,001,167.43 31,713,272.85
Cash received from other activities related to
operating
Sub-total of cash inflow of operating activities 24,607,049,169.74 18,665,159,099.25
Cash paid for goods purchase and labor services 22,505,368,996.49 16,331,792,562.75
Cash paid to and for employee 746,684,020.36 664,160,201.72
Tax payments 206,928,395.54 126,114,944.41
Cash paid to other activities related to operating 382,122,304.32 431,485,423.79
Sub-total of cash outflow of operating activities 23,841,103,716.71 17,553,553,132.67
Net cash flow from operating activities 765,945,453.03 1,111,605,966.58
Cash received from disinvestment 325,807,581.05 267,623,915.25
Cash received from return on investment 75,296,262.02 39,407,633.67
Net cash received from disposal of fixed assets,
intangible assets and other long-lived assets
Net cash received from disposal of subsidiaries and
other business units
Cash received from other activities related to
investment
Sub-total of cash inflow of investing activities 504,590,930.16 348,000,132.83
Cash paid for acquiring and building fixed assets,
intangible assets and other long-lived assets
Cash paid for investments 490,847,437.70 431,091,352.29
Net cash paid for acquiring subsidiaries and other
business units
Cash paid to other activities related to investment 4,587,407.44 38,034,996.79
Sub-total of cash outflow of investing activities 2,010,940,377.73 1,222,207,956.12
Net cash flow from investing activities -1,506,349,447.57 -874,207,823.29
Cash received by absorbing investments 208,487,520.00 833,019,100.67
including: Capital contributed by non-controlling
interests to subsidiaries
Cash received from borrowings 2,340,899,248.82 1,512,771,597.45
Cash received from other activities related to
financing
Sub-total of cash inflow of financing activities 2,555,443,020.39 2,365,290,378.12
Repayments of borrowings 1,826,910,664.27 1,723,732,178.39
Cash paid for dividends, profits, or paid for interests 307,059,194.55 256,169,043.57
including: Dividends or profits paid by subsidiaries
to non-controlling interests
Wellhope Foods Co., Ltd. 2020 Annual Report
Cash paid to other activities related to financing
activities
Sub-total of cash outflow of financing activities 2,136,010,143.82 1,986,335,207.32
Net cash flow from financing activities 419,432,876.57 378,955,170.80
-1,221,720.67 2,832,293.62
cash and cash equivalents
add: Opening balance of cash and cash equivalents 1,508,390,481.68 889,204,873.97
Wellhope Foods Co., Ltd. 2020 Annual Report
Consolidated Statement of Cash Flow of Parent Company
January-December, 2020
Unit: yuan Currency: RMB
Item 2020 2019
Cash received by selling products, providing
labor services
Cash received from other activities related to
operating
Sub-total of cash inflow of operating activities 1,010,026,914.25 706,289,827.44
Cash paid for goods purchase and labor services 663,825,841.93 413,396,277.57
Cash paid to and for employee 33,388,862.93 28,770,817.79
Tax payments 28,959,107.21 19,458,354.60
Cash paid to other activities related to operating 45,247,262.37 35,097,588.50
Sub-total of cash outflow of operating activities 771,421,074.44 496,723,038.46
Net cash flow from operating activities 238,605,839.81 209,566,788.98
Cash received from disinvestment 326,865,784.65 242,076,974.20
Cash received from return on investment 163,698,097.56 83,541,669.81
Net cash received from disposal of fixed assets,
intangible assets and other long-lived assets
Cash received from other activities related to
investment
Sub-total of cash inflow of investing activities 500,996,628.41 325,673,556.64
Cash paid for acquiring and building fixed assets,
intangible assets and other long-lived assets
Cash paid for investments 949,351,043.00 486,919,077.89
Net cash paid for acquiring subsidiaries and
other business units
Cash paid to other activities related to investing 111,555,196.70 174,207,415.01
Sub-total of cash outflow of investing activities 1,094,265,229.94 674,099,819.56
Net cash flow from investing activities -593,268,601.53 -348,426,262.92
Cash received by absorbing investments 769,777,738.50
Cash received from borrowings 1,430,000,000.00 940,000,000.00
Cash received from other activities related to
financing
Sub-total of cash inflow of financing activities 1,634,715,710.21 1,796,950,140.40
Repayments of borrowings 1,173,500,000.00 1,157,000,000.00
Cash paid for dividends, profits, or paid for
interests
Cash paid to other activities related to financing 1,141,815.00
Sub-total of cash outflow of financing activities 1,431,988,669.76 1,375,297,464.88
Net cash flow from financing activities 202,727,040.45 421,652,675.52
-338.21 86.36
on cash and cash equivalents
add: Opening balance of cash and cash
equivalents
Wellhope Foods Co., Ltd. 2020 Annual Report
Change Statement of Owner's Equity
January-December, 2020
Unit: yuan Currency: RMB
Equity Attributable to the Owners of Parent Company
Item Other Non-controlling Total owners'
Deduct: Surplus Undistributed
Share capital Capital reserve comprehensive Subtotal interests equity
Treasury stock reserve profits
income
balance of 922,304,396.00 882,723,066.29 70,688,750.00 6,122,835.30 352,059,456.90 3,605,618,553.05 5,698,139,557.54 801,351,905.45 6,499,491,462.99
prior period
add: Changes
in accounting
policies
Other
balance of 922,304,396.00 882,723,066.29 70,688,750.00 6,122,835.30 352,059,456.90 3,605,618,553.05 5,698,139,557.54 801,351,905.45 6,499,491,462.99
current period
-244,500.00 5,436,850.36 -24,992,935.00 -8,280,337.91 65,311,049.43 967,041,934.93 1,054,257,931.81 347,952,156.40 1,402,210,088.21
current period
A. Total
comprehensive -8,346,872.91 1,235,162,151.48 1,226,815,278.57 120,460,232.49 1,347,275,511.06
income
B. Capital
contributed
-244,500.00 5,436,850.36 -24,992,935.00 30,185,285.36 257,455,136.91 287,640,422.27
and reduced
by owners
a. Common
stock invested 247,921,446.89 247,921,446.89
by owners
b. Amount of
share-based
payment -244,500.00 5,330,798.53 -24,992,935.00 30,079,233.53 4,429,445.04 34,508,678.57
included in the
owner's equity
c. Other 106,051.83 106,051.83 5,104,244.98 5,210,296.81
Wellhope Foods Co., Ltd. 2020 Annual Report
C. Profit
distribution
a.
Appropriation
of surplus
reserves
b. Extraction of
general risk
provisions
c. Dividend to
owners (or -202,809,167.12 -202,809,167.12 -29,963,213.00 -232,772,380.12
shareholders)
D. Internal
carry-over of 66,535.00 66,535.00 66,535.00
owners’ equity
a. Carry-over
of other
comprehensive
income to
retained
earnings
balance of 922,059,896.00 888,159,916.65 45,695,815.00 -2,157,502.61 417,370,506.33 4,572,660,487.98 6,752,397,489.35 1,149,304,061.85 7,901,701,551.20
current period
Wellhope Foods Co., Ltd. 2020 Annual Report
Equity Attributable to the Owners of Parent Company
Item Deduct: Other Non-controlling Total owners'
Undistributed
Share capital Capital reserve Treasury comprehensive Surplus reserve Subtotal interests equity
profits
stock income
balance of 845,751,469.00 153,824,536.37 70,688,750.00 -1,316,942.00 272,882,920.19 2,651,462,525.08 3,851,915,758.64 414,072,220.38 4,265,987,979.02
prior period
add: Changes
in accounting -481,544.75 -481,544.75 -645.73 -482,190.48
policies
Other -91,554.12 91,554.12
balance of 845,751,469.00 153,824,536.37 70,688,750.00 -1,798,486.75 272,791,366.07 2,651,554,079.20 3,851,434,213.89 414,071,574.65 4,265,505,788.54
current period
current period
A. Total
comprehensive 7,921,322.05 1,199,347,355.96 1,207,268,678.01 298,895,247.18 1,506,163,925.19
income
B. Capital
contributed
and reduced
by owners
a. Common
stock invested 76,552,927.00 709,853,069.86 786,405,996.86 94,885,588.06 881,291,584.92
by owners
b. Amount of
share-based
payment 22,783,015.06 22,783,015.06 22,783,015.06
included in the
owner's equity
c. Other -3,737,555.00 -3,737,555.00 -2,696,430.36 -6,433,985.36
C. Profit
distribution
a. 79,268,090.83 -79,268,090.83
Wellhope Foods Co., Ltd. 2020 Annual Report
Appropriation
of surplus
reserves
b. Extraction of
general risk
provisions
c. Dividend to
owners (or -166,014,791.28 -166,014,791.28 -3,804,074.08 -169,818,865.36
shareholders)
balance of 922,304,396.00 882,723,066.29 70,688,750.00 6,122,835.30 352,059,456.90 3,605,618,553.05 5,698,139,557.54 801,351,905.45 6,499,491,462.99
current period
Wellhope Foods Co., Ltd. 2020 Annual Report
Change Statement of Owner's Equity of Parent Company
January-December, 2020
Unit: yuan Currency: RMB
Other
Item Deduct: Treasury Undistributed Total owners'
Share capital Capital reserve comprehensive Surplus reserve
stock profits equity
income
period
add: Changes in accounting
policies
Other
period
A. Total comprehensive
-5,959,184.34 653,110,494.31 647,151,309.97
income
B. Capital contributed and
-244,500.00 9,717,863.79 -24,992,935.00 34,466,298.79
reduced by owners
a. Common stock invested by
owners
b. Amount of share-based
payment that included in the -244,500.00 9,717,863.79 -24,992,935.00 34,466,298.79
owner's equity
C. Profit distribution 65,311,049.43 -268,120,216.55 -202,809,167.12
a. Appropriation of surplus
reserves
b. Dividend to owners (or
-202,809,167.12 -202,809,167.12
shareholders)
c. Other
period
Wellhope Foods Co., Ltd. 2020 Annual Report
Item Deduct: Treasury Other comprehensive Surplus Undistributed Total owners'
Share capital Capital reserve
stock income reserve profits equity
period
add: Changes in accounting
-310,630.08 -310,630.08
policies
Other -91,554.12 -823,987.07 -915,541.19
period
A. Total comprehensive income 7,238,557.02 789,452,908.26 796,691,465.28
B. Capital contributed and
reduced by owners
a. Common stock invested by
owners
b. Amount of share-based
payment that included in the 22,783,015.06 22,783,015.06
owner's equity
C. Profit distribution 79,268,090.83 -245,282,882.11 -166,014,791.28
a. Appropriation of surplus
reserves
b. Dividend to owners (or
-166,014,791.28 -166,014,791.28
shareholders)
c.Other
period
Wellhope Foods Co., Ltd. 2020 Annual Report
III. Basic Information of the Company
Approved by the People's Government of Liaoning Province, Wellhope Foods Co., Ltd. (former name
Liaoning Wellhope Agri-Tech Joint Stock, hereinafter referred to as the Company) is a limited liability
company founded by 23 natural persons, including Jin Weidong, Ding Yunfeng, etc., which was
registered in the Administrative Bureau of Industry and Commerce of Liaoning Province on March 27,
with the number of 9121000074712989XU and the registered capital of RMB 922.06 million, registered
address (head office)--No. 169, Huishan Street, Shenbei New District, Shenyang, Liaoning Province. Jin
Weidong is the legal representative.
The primary business of Wellhope covers feed, feed raw material trade, broiler integration, swine
raising. The business scope of its parent company covers feed and feed additives processing, marketing;
grain purchase (self-use), sales of feed raw materials, poultry and livestock raising, seawater and
freshwater aquaculture, agricultural and sideline products processing, enterprise management service,
supply chain management, information services (internet information services only), ordinary road
freight (the business activities that need to be approved by the laws, shall receive the approval of
relevant authorities).
These financial statements have been approved to be disclosed by the 2nd board meeting of the 7th
Session of Board of Directors on March 29, 2021.
The scope of the Company's consolidated financial statements is determined on the basis of control, all
the controlled subsidiaries are included in the consolidated financial statements.
The changes in the scope of the consolidated financial statements are shown in the table below.
A. The subsidiaries which are newly included in the consolidation scope in the reporting period
Company Way of obtaining
Yangling Wellhope Agriculture and Animal Husbandry Company Combination under different control
Yixian Dingli Hesheng Livestock and Poultry Feeding Company Combination under different control
Yixian Weijing Livestock and Poultry Feeding Company Combination under different control
Hebei Hetai Livestock and Poultry Farming Company Combination under different control
Yixian Hekang Agri-Tech Company Combination under different control
Dunhua Wellhope Agri-Tech Company Combination under different control
Dunhua Fengda Agriculture and Animal Husbandry Development Company Combination under different control
Anhui Wellhope Haoxiang Swine Breeding Company Invested
Anhui Wellhope Food Company Invested
Anyang Wellhope Agriculture and Animal Husbandry Company Invested
Hebei Taihang Wellhope Food Company Invested
Wellhope Foods Co., Ltd. 2020 Annual Report
Hebei Taihang Wellhope Agri-Tech Company Invested
Shenyang Xiangmai Electronic Commerce Company Invested
Chifeng Wellhope Fuxinyuan Food Company Invested
Hongkong Expert Trading Company Invested
Hainan Expert Trading Company Invested
Liaoning Qingyuan Wellhope Agriculture and Animal Husbandry Company Invested
Nanyang Wellhope Cattle Industry Sci-Tech Company Invested
Fuzhou Wellhope Xingyuan Animal Husbandry Development Company Invested
Tianjin Fullyond Supply Chain Company Invested
Daqing Wellhope Food Company Invested
Zhumadian Wellhope Agricultural Development Company Invested
Datong Hejia Agriculture and Animal Husbandry Company Invested
Shijiazhuang Hejia Agriculture and Animal Husbandry Company Invested
Fuxin Wellhope Agriculture and Animal Husbandry Company Invested
Dalian Hongtu Agri-tech Company Invested
Shandong Heyuan Agri-tech Company Invested
Wafangdian Huinong Poultry Industry Company Invested
Luoyang Wellhope Agriculture and Animal Husbandry Company Invested
Tongxu Wellhope Agriculture and Animal Husbandry Company Invested
Gongzhuling Wellhope Swine Farming Company Invested
Lishu Wellhope Ecological Farming Company Invested
Kaifeng Jiufeng Agriculture and Animal Husbandry Company Invested
B. The subsidiaries excluded from the consolidation scope in the reporting period
Reason of excluding from the
Company
consolidation scope
Shenyang Tianjingde Trading Company Cancelled
Changtu Wellhope Feed Mill Cancelled
Xi'an Linfeng Shengyi Trading Company Transferred
IV. Basis of Preparing Financial Statements
The Company, on the basis of going concern operation, confirms and measures the transactions and
activities actually occurred in accordance with the Accounting Standards for Business Enterprises--Basic
Standards, various specific accounting standards, and other relevant provisions, prepares financial
statements on this basis.
The Company has the ability of going concern within at least 12 months since the end of the reporting
period, and there are no major issues affecting the ability of going concern.
Wellhope Foods Co., Ltd. 2020 Annual Report
V. Important Accounting Policies and Accounting Estimates
The following important accounting policies and accounting estimates of the Company are formulated
in accordance with the Accounting Standards for Business Enterprises. The business that does not
mentioned is subject to relevant accounting policies in the Accounting Standards for Business
Enterprises.
The financial statements prepared by the Company are in line with the requirements of Accounting
Standards for Business Enterprises, which truly and completely reflect the financial position, operating
results, changes in shareholders' equity, cash flow, and other relevant information during the reporting
period.
The Financial Year of the Company starts from January 1 and ends on December 31 of the Gregorian
calendar.
The Company takes a 12-month operating cycle.
RMB
different control
(1). Accounting arrangement methods for business combination under the same control
The Company adopts pooling of interest method to deal with the accounting of business combination,
which is under the same control.
On the date of combination, the assets and liabilities acquired by the Company in business combination
under the same control shall be measured according to the book value of assets and liabilities of the
combining party in the consolidated financial statements of the final controlling party. The share of the
book value of the owner's equity held by the combining party, which is owned, by the final controlling
party in the consolidated statement of the final controlling party is regarded as the initial investment
cost of long-term equity investment in the individual financial statements. The balance between initial
cost of investment of long-term equity investment and paid combining consideration (including paid
cash, non-cash assets transferred, book value of occurred or assumed debt as well as the total face
value of issued stocks), capital reserve (equity premium or capital premium) shall be adjusted; If the
balance of capital reserve (equity premium or capital premium) is not sufficient for offset, the surplus
reserves and undistributed profit shall be offset successively.
(2). Accounting arrangement methods for business combination under the different control
The Company adopts acquisition method to deal with the accounting of business combination, which is
under the different control.
Wellhope Foods Co., Ltd. 2020 Annual Report
① The identifiable assets, liabilities and contingent liabilities acquired in the business combination
under the different control are measured at fair value. Based on the fair value of assets, liabilities
incurred or assumed and issued equity securities paid out as the combining consideration on the
acquisition date, the balance between the fair value and the book value of the Company is included
into current gains and losses.
② Combined cost shall be recognized according to the following conditions respectively:
(A) For the business combination realized by one-time transaction, the combined costs shall be
recognized by the sum of the fair values, on the acquisition date, of the assets paid, the liabilities
occurred or assumed and the equity securities issued by the Company to obtain the control right on the
acquiree and the contingent consideration complying with the recognition conditions. Combined cost is
initial investment cost of such long-term equity investment.
(B) For business combination realized step by step through multiple exchange transactions, the
combined cost shall be the sum of the amount of equity investments held prior to the acquisition date
that are re-measured at fair value on the acquisition date and the investment cost newly increased on
the acquisition date. The long-term equity investment in individual financial statements is the sum of
the book value of the equity investment held before the acquisition date and the investment cost newly
increased on the acquisition date. Exclude package deal.
③ The Company allocates the combined cost between the identifiable assets and liabilities acquired
on the acquisition date.
(A) Where other assets other than intangible assets obtained from the Acquiree in the business
combination (not only finite to the assets which have been originally recognized by the Acquiree), the
future economic benefits are expected to flow into the Company and the fair values reliably measured,
they shall be separately recognized and measured at the fair values.
(B) Where the fair value of the intangible assets of the Acquiree acquired by the Company in business
combination can be reliably measured, it shall be separately recognized and measured at the fair value.
(C) Where the acquiree's liabilities, other than contingent liabilities, acquired by the Company in
business combination, are expected to result in the outflow of economic benefits from the Company
and the fair value can be reliably measured, they shall be separately recognized and measured at the
fair value.
(D) Where the fair value of the contingent liabilities of the Acquiree acquired by the Company in
business combination can be reliably measured, they shall be separately recognized as liabilities and
shall be measured at the fair values.
(E) When the Company allocates the cost of business combination and confirms that it has acquired
identifiable assets and liabilities in the combination, it shall not consider the goodwill and deferred
income tax items that have been recognized by the Acquiree before the combination.
④ Disposal of the balance of the business combination cost and the share of the fair value of the
Wellhope Foods Co., Ltd. 2020 Annual Report
identifiable net assets obtained from the Acquiree in the combination.
(A) The balance between the business combination costs greater than the share of fair value of the
identifiable net assets obtained from the Acquiree in the combination, shall be recognized as goodwill.
(B) The balance between the business combination cost less than the share of fair value of the
identifiable net assets obtained from the Acquiree in the combination shall be disposed pursuant to the
following provisions.
(a) The measurement of the fair values of the identifiable assets, liabilities and contingent liabilities
obtained from the Acquiree as well as the combination costs shall be reviewed;
(b) After the review, if the combined costs are still less than the fair value share of the identifiable net
assets obtained from the Acquiree in the combination, the balance shall be included into the current
gains and losses.
(3) Disposal of relevant expenses accrued due to business combination by the Company
① All direct related expenses accrued due to business combination of the Company (including audit,
legal service, assessment consultation and other agency expense and other relevant administrative
expenses accrued due to business combination), shall be included into current gains and losses when
accruing.
② The commission and service fee paid by the Company for issuing debt securities for the merger of
enterprise shall be included in the initial measurement amount of debt securities.
(A) If the bond is issued at the discount or par value, the amount of discount will be increased.
(B) If the bond is issued at premium, the premium amount shall be reduced in this part of expenses.
③ The commission and service fee paid by the Company for issuing equity securities as consideration
for the business combination shall be included in the initial measurement amount of equity securities.
(A) When equity securities are issued at the premium, the cost shall be deducted from the capital
reserve (equity premium).
(B) When equity securities are issued at par value or at discount, the retained earnings shall be written
down from the fee.
(1) Uniform accounting policy and accounting period
All the accounting policies and accounting period adopted by subsidiaries included in the consolidated
financial statements shall be consistent with the Company. In case of any inconsistency, adjustment
according to the accounting policies and accounting period is necessary when preparing consolidated
financial statements.
(2) Preparation methods for consolidated financial statements
Based on the financial statements of the Company and its subsidiaries, according to other relevant
information, the parent company prepares consolidated financial statements after adjusting the
long-term equity investment in the subsidiaries according to the equity method to offset the impact of
Wellhope Foods Co., Ltd. 2020 Annual Report
internal transactions among the Company and its subsidiaries on the consolidated financial statements.
(3) The reflection of excess deficit of subsidiaries in consolidated financial statements
In the consolidated financial statements, if the current loss shared by the parent company exceeds its
share of the owner's equity of the subsidiary company at the beginning of the period, the balance of
write-downs shall be attributed to the owner's equity of the parent company (undistributed profits). If
the current loss shared by the non-controlling shareholders of the subsidiaries exceeds its share of the
owner's equity of the subsidiary company at the beginning of the period, the balance shall continually
offset the non-controlling interests.
(4) Disposal of increased or decreased number of subsidiaries during the report period
①Disposal of increased number of subsidiaries during the report period
(A) Disposal of increased number of subsidiary due to business combination under the same control
during the report period
During the report period, if the number of subsidiary increases due to business combination under the
same control, the Company shall adjust the opening balance of consolidated balance sheet, take the
income, expenses and profit of such subsidiary from the beginning to the end of combination into the
consolidated income statement, and the cash flow of the subsidiary from the acquisition date to the
end of the report period shall be included in the consolidated cash flow statement.
(B) Disposal of increased number of subsidiary due to business combination under the different control
during the report period
During the report period, if the number of subsidiaries increases due to business combination under
the different control, the Company shall not adjust the opening balance of consolidated balance sheet,
take the income, expenses and profit of such subsidiary from the acquisition date to the end of the
report period into the consolidated income statement, and the cash flow of the subsidiary from the
acquisition date to the end of the report period shall be included in the consolidated cash flow
statement.
②Disposal of subsidiary during the report period
Where the company disposes a subsidiary during the report period, the opening balance of the
consolidated balance sheet shall not be adjusted, take the income, expenses and profit of such
subsidiary from the beginning of the beginning to the disposal date into the consolidated profit
statement, and include the cash flow of such subsidiary into the consolidated cash flow statement, and
the cash flow of the subsidiary from the beginning to the disposal date shall be included in the
consolidated cash flow statement.
Cash shall include cash on hand of the Company, as well as bank deposit and other monetary funds that
can be used for payment at any time.
The investments with short term (generally refer to three months from the acquisition date), high
Wellhope Foods Co., Ltd. 2020 Annual Report
liquidity, convenience to convert into known amount of cash and with low risk of change in value
owned by Company shall be recognized as cash equivalent.
(1) Accounting methods of foreign currency transactions
①Initial recognition of foreign currency transaction
For foreign currency transactions, the Company shall convert the amount of foreign currency into the
amount of the book-keeping base currency according to the spot exchange rate (intermediate price)
announced by the People's Bank of China on the date of the transaction. Of which, for foreign currency
exchange or related transactions, the Company shall convert according to the exchange rate on the date
of the transaction.
②Adjustment or settlement of balance sheet date or settlement date
On the balance sheet date or settlement date, the Company shall dispose the foreign currency
monetary items and foreign currency non-monetary items according to the following methods:
(A) Accounting arrangement principle for foreign currency monetary item
For foreign currency monetary items, on the balance sheet date or settlement date, the Company
adopts spot exchange rate (intermediate price) for conversion on the balance sheet date or settlement
date to adjust the amount of the accounting base currency of foreign currency monetary items caused
by exchange rate fluctuations, and treat them as exchange balances. Among them, the exchange
balance between foreign currency loans related to the acquisition, construction or production of assets
eligible for capitalization is included in the cost of assets eligible for capitalization. Other balance of
exchange shall be included into current financial expense.
(B) Accounting arrangement principle for foreign currency non-monetary item
(a) For the foreign non-monetary currency asset measured at historical cost, the Company shall convert
at spot rate (intermediate price) on transaction date with unchanging its original recording currency
amount and without exchange balance.
(b) For inventory measured at a lower cost between the cost and net realizable value, if the net
realizable value is recognized in foreign currency, the Company first converts the net realizable value
into the accounting standard currency, and then compares it with the inventory cost reflected by the
accounting standard currency when determining the end value of the inventory.
(c) For non-monetary items measured at fair values, if the fair value at the end of the period is reflected
in foreign currency, the Company shall convert the foreign currency into the amount of recording
currency based on the spot exchange rate on the day when fair values are recognized, then compare
them with the original amount of recording currency, and the balance shall be treated as gains and
losses from the changes in fair value and included into current gains and losses.
(2) Accounting arrangement methods for foreign currency statement translation
①The Company shall conduct translation of the financial statements of overseas operations as the
Wellhope Foods Co., Ltd. 2020 Annual Report
following methods:
(A) The asset and liability items in the balance sheets shall be translated at a spot exchange rate on the
balance sheet date, among the equity items of owner, except for the items as “undistributed profits”,
other items shall be translated at the spot exchange rate at the time when they are incurred.
(B) The income and expense items in the profit statements shall be c translated at the spot exchange
rate of the transaction date, or at a spot exchange rate which is recognized through a systematic and
rational method and which is approximate to the spot exchange rate on the transaction date.
The balance in the financial statement of foreign currency translated by the above-mentioned methods
shall be listed in the owners’ equity item "Other Comprehensive Income" of consolidated balance
sheet.
②The Company shall translate the financial statements of overseas operations in hyperinflation
economy according to the following methods:
(A) The Company shall restate the balance sheet items by utilizing the general price index, restate the
items of the income statement by utilizing the variation of the general price index, and then translate
them at the spot exchange rate on the recent balance sheet date.
(B) If an overseas business is no longer situated in the hyperinflationary economy, the Company shall
stop the restatement and shall translate the restated financial statements at the price of the cessation
date.
③When the Company disposes any overseas operation, shall translate the balance of foreign currency
financial statements related to the overseas business as shown below under the owner's equity items in
the balance sheet, and the balance shall be transferred from the owner's equity items and disposed as
current gains and losses; When the Company disposes part of the overseas operations, shall calculate
the balance according to the proportion of the disposal of foreign currency financial statements, and
record the balance as the current gains and losses.
The financial instrument refers to a contract that forms the financial assets of one party and the
financial liabilities or equity instruments of the other party.
(1) Classification of financial instruments
①Classification of financial assets
According to the business model of financial assets management and the contractual cash flow
characteristics of financial assets, the Company classifies financial assets into the following three
categories :(A) financial assets measured at amortized cost; (B) financial assets measured at fair value
and the changes included in other comprehensive income (including financial assets designated to be
measured at fair value and the changes are included in other comprehensive income);(C) financial
assets measured at fair value and the changes recorded in current gains or losses.
Wellhope Foods Co., Ltd. 2020 Annual Report
②Classification of financial liabilities
According to business characteristics and risk management requirements, the Company divides the
financial liabilities into the following two categories: (A) The financial liabilities measured at fair value
and the changes included in current gains and losses(including trading financial liabilities and the
financial liabilities designated to be measured at fair value and of the changes included in current gains
or losses); (B) Other financial liabilities.
(2) Recognition basis and measurement method of financial instruments
①Recognition basis of financial instruments
When becoming one party of financial instrument contract, the Company shall confirm a financial asset
or financial liability.
②Measurement method of financial instruments
(A)Financial assets
Financial assets shall be measured at fair value when they are initially recognized.
For financial assets measured at fair value and the changes booked into current gains or losses, relevant
transaction expenses shall be directly recorded into current gains or losses; for other financial assets,
relevant transaction expenses shall be included in the initial recognized amount. Accounts receivable or
notes receivable arising from selling products or providing labor services that do not contain a
significant financing component or do not consider the financing component of contracts that do not
exceed one year, shall take the amount of consideration to which it is expected to be entitled as the
initially recognized amount.
(a) Financial assets measured at amortized cost
After the initial recognition, the real interest method shall be adopted to implement follow-up
measurement of such financial assets at amortized cost. Gains or losses of financial assets measured at
amortized cost and not belong to part of any hedging relationship shall be recorded into current gains
and losses when recognition is terminated, reclassified, amortized or recognized as impairment
according to the real interest method.
(b) Financial assets measured at fair value and the changes included in other comprehensive income
After the initial recognition, such financial assets shall be subsequently measured at fair value. The
impairment loss or gain, exchange gain or loss and the interest calculated by the real interest method
shall be recorded into current gains or losses, other gains or losses shall be booked into other
comprehensive income. When the recognition is terminated, the accumulated gains or losses booked
into other comprehensive income before shall be transferred out from other comprehensive income
and booked into current gains or losses.
Where the Company designates part of non-trading equity instrument investments as the financial
assets that measured at fair value and the changes included in other comprehensive income, relevant
dividend income of such financial assets shall be included in current gains or losses, and changes in fair
Wellhope Foods Co., Ltd. 2020 Annual Report
value shall be included in other comprehensive income. When the recognition is terminated, the
accumulated gains or losses recorded in other comprehensive income shall be transferred to retained
income, and not recorded in current gains or losses.
(c) Financial assets measured at fair value and the changes recorded in current gains and losses.
Besides the financial assets measured at amortized cost and those measured at fair value and the
changes included in other comprehensive income, the Company classifies other financial assets as the
assets measured at fair value and the changes included in current gains or losses.
In addition, in the initial recognition, in order to eliminate or significantly reduce accounting
mismatches, the Company designates some financial assets as the financial assets measured at fair
value and the changes recorded into current gains or losses. For such financial assets, the Company
adopts fair value for follow-up measurement, and the changes in fair value are recorded into current
gains or losses.
(B) Financial liabilities
(a) Financial liabilities measured at fair value and the changes included in current gains or losses
Trading financial liabilities (including derivative instruments belonging to financial liabilities) shall be
subsequently measured in accordance with the fair value, and the changes in fair value shall be
recorded into current gains or losses except for those related to hedge accounting. For the financial
liabilities that are designated to be measured at fair value and the changes included in current gains or
losses, in case the changes in the fair value of liabilities are caused by the changes in the Company's
own credit risk shall be included in other comprehensive income, and when terminates such liabilities,
the accumulated changes in fair value shall be transferred to retained earnings. Other changes in fair
value shall be booked into current gains or losses.
(b) Financial liabilities measured at amortized cost
Besides the financial liabilities that do not meet the condition of derecognition or the financial liabilities
formed by transferred financial assets or financial guarantee contract, other financial liabilities shall be
measured at amortized cost, gains or losses arising from the termination of recognition or amortization
shall be booked into current gains or losses.
(3) The recognition basis and measurement method of financial assets transfer
If the Company transfers almost all the risks and rewards in the ownership of financial assets, it shall
terminate to recognize the financial assets and separately recognize the rights and obligations
generated or retained in the transfer as assets or liabilities; if almost all the risks and rewards in the
ownership of financial assets are retained, the transferred financial assets shall continue to be
recognized. If the Company neither transfers nor retains almost all the risks and rewards on the
ownership of the financial asset, it shall deal with the following situations:
① If it does not retain control of the financial asset, the recognition of the financial asset shall be
terminated, and the rights and obligations generated or retained in the transfer shall be separately
Wellhope Foods Co., Ltd. 2020 Annual Report
recognize as assets or liabilities;
② If the control of the financial asset is retained, the relevant financial asset shall be recognized
according to the phases of transferred financial asset, and relevant liabilities shall be recognized
accordingly.
(4) Terminating the recognition of financial liabilities
When the current obligation of the financial liability (or part thereof) has been discharged, the
Company shall terminate the recognition of such financial liability (or part thereof) and record the
difference between its book value and the consideration paid (including non-cash assets transferred or
liabilities assumed) into the current gains or losses.
(5) Offsetting financial assets and financial liabilities
Financial assets and financial liabilities shall be listed separately in the balance sheet and shall not be
offset mutually. However, if the following conditions are met at the same time, the net offset shall be
shown in the balance sheet:
①The Company has the legal right to offset recognized amount, and such legal right is currently
enforceable.
②The Company plans to implement net settlement, or simultaneously sell off the financial assets and
liquidate such financial liabilities.
(6) Equity instrument
Equity instruments are the contracts that prove the ownership of the residual equity in the Company's
assets after deducting all liabilities. Instruments issued (including refinancing), repurchased, sold or
written off by the Company shall be taken as the disposal of changes in equity. The company does not
recognize changes in the fair value of equity instruments.
Transaction expenses associated with equity transactions shall be deducted from equity.
The Company shall take the distribution of equity instrument holders as profit distribution, and the
stock dividends paid will not affect the total equity of shareholders.
(7) The method of recognizing the fair value of financial instruments
When implement initial recognition, if the fair value of the financial asset or financial liability is
determined by quoting the same asset or liability in an active market or by other means other than
valuation techniques of observable market data, the Company will defer the difference between that
fair value and the trading price. After the initial recognition, the Company recognizes the deferred
difference as the gain or loss of the corresponding accounting period based on the degree of change of
a factor in the corresponding accounting period.
(8) Impairment of financial assets
Regarding the financial assets measured at amortized cost and the debt instrument investment
measured at fair value and the changes recorded in other comprehensive income, the Company
recognizes loss provision based on expected credit losses.
Wellhope Foods Co., Ltd. 2020 Annual Report
①Recognition method of impairment provision
(A)General method
At each balance sheet date, the Company measures the expected credit losses of financial instruments
at different stages. If the credit risk of the financial instrument has not significantly increased since its
initial recognition, it is in the first stage. The Company measures the loss provision according to the
expected credit loss within the next 12 months. If the credit risk of the financial instrument has
significantly increased since its initial recognition but no credit impairment has occurred, it is in the
second stage, the Company measures the loss provision according to the expected credit loss of the
instrument during the whole period. If the financial instrument has experienced credit impairment
since its initial recognition, it is in the third stage, and the Company measures the loss provision
according to the expected credit loss of the instrument during the whole period. For the financial
instruments (such as time deposit in commercial banks with high credit rating, financial instruments
with external credit rating of "investment grade" or above), that have lower credit risk in the balance
sheet date, assuming that the credit risk has not increased significantly since the initial recognition, the
Company measures the loss provision according to expected credit loss within the next 12 month.
(B)Simplified method
For accounts receivable and revenue-related notes receivable that do not contain a significant financing
component or do not consider the financing component of contracts that do not exceed one year, the
Company measures the loss provision in accordance with the expected credit loss for the entire
duration.
②Criteria for determining whether credit risk has increased significantly since the initial recognition
If the probability of default of the financial asset recognized on the balance sheet date is significantly
higher than the probability of default at the time of initial recognition, the credit risk of the financial
asset is proved to be significantly increased.
No matter which way used by the Company to assess whether a significant increase in credit risk, if the
contract payment is overdue more than 30 (included), usually can presume the credit risk of financial
assets increase significantly, unless rational and evidence-based information is available to be obtained
by the company at reasonable cost to prove that the credit risk does not increase significantly even
after 30 days of delay
Except for special cases, the Company uses the change of default risk within the next 12 months as a
reasonable estimate of default risk in the whole duration to determine whether the credit risk has
increased significantly since the initial recognition.
③ The combination method and determination basis of credit risk assessment based on combination
The Company respectively evaluates the credit risks of notes receivable, accounts receivable and other
receivables with the following characteristics. Such as: the receivables in dispute with the other party or
involving litigation or arbitration; receivables with a clear indication that the debtor is likely to be
Wellhope Foods Co., Ltd. 2020 Annual Report
unable to repay.
When it is impossible to evaluate the information of the expected credit loss of each financial asset at a
reasonable cost, the Company divides the receivables into several portfolios according to the credit risk
characteristics and calculates the expected credit loss based on the portfolios.
Portfolio Accrual method
For the notes receivable divided into portfolios, the expected credit loss shall be
calculated based on the default risk exposure and the expected credit loss rate of
Bank's acceptance bill,
the entire duration by referring to the experience of past credit losses and
commercial acceptance bill
combining the current situation and the forecast of future economic conditions.
It will not accrue the allowance for doubtful accounts of bank’s acceptance bill
For the accounts receivable divided into aging portfolios, the Company shall, by
referring to the experience of past credit loss and combining with the current
Aging situation and the prediction of future economic situation, prepare a table
comparing the aging of accounts receivable with the expected credit loss rate of the
whole period to calculate the expected credit loss.
For receivables that shall be paid by the subsidiary included in the scope of
consolidation, the Company shall, by referring to the experience of past credit loss
Other and combining with the current situation and the prediction of future economic
situation, prepare a table comparing the aging of accounts receivable with the
expected credit loss rate of the whole period to calculate the expected credit loss.
The recognition method and accounting arrangement method for the expected credit loss of the
receivables have been shown in "Financial Instruments".
Receivables include notes receivable, accounts receivable, other receivables, and long-term receivables.
The recognition method and accounting arrangement method for the expected credit loss of the
receivables have been shown in "Financial Instruments".
Receivables include notes receivable, accounts receivable, other receivables, and long-term receivables.
The recognition method and accounting arrangement method for the expected credit loss of the
receivables have been shown in "Financial Instruments".
Receivables include notes receivable, accounts receivable, other receivables, and long-term receivables.
(1) Classification of inventory
The Company's inventory is divided into materials in transit, raw materials, revolving materials
(including packaging and low-value consumables), in process products, finished products (inventory),
delivered products, expendable biological assets, project construction costs and so on. Expendable
biological assets include broiler, piglet, finishing swine, etc.
(2) Valuation method for delivery of inventory
The delivered materials, delivered finished products, and delivered expendable biological assets shall be
calculated by weighted average method.
(3) Recognition basis of net realizable value of inventory and the accrual method for inventory falling
Wellhope Foods Co., Ltd. 2020 Annual Report
price reserves
① Recognition basis of net realizable value of inventory
(A) For merchandise inventory (or finished products) for sale including materials for direct sale, during
the normal production and operation, the net realizable value shall be recognized by the amount of
estimated sales price of the inventory deducting the estimated selling expenses and related taxes and
dues.
(B) The materials inventory needs to be processed, during the normal process of production and
management, the estimated sale price of the finished products minus the estimated costs when
finished the works, the estimated selling expenses and related tax payments, the net realizable value
can be recognized.
(C) For the inventory hold to execute sale contract or labor contract, its net realizable value shall be
calculated based on the contract price; In case inventory quantity hold by the Company is more than
the order quantity of the sale contract, the net realizable value of the exceeding part inventory shall be
calculated based on general sale price.
(D) But for materials held for production, etc., if the net realizable value of finished products made from
the materials is higher than the cost, the materials shall still be measured at the cost; If the decline of
material prices indicates that the net realizable value of finished products is lower than the cost, the
materials can be measured based on net realizable value.
(E) For expendable biological Assets: on the balance sheet date, the expendable biological assets shall
be measured at the lower of cost and net realizable value, and the falling price reserves shall be
calculated by the same way as that for recognizing the falling price reserves of inventory. If the
influencing factors of impairment have disappeared, the amount of write-down shall be recovered and
the amount of write-down shall be reversed back and recorded into the current gains or losses. If the
Company changes the use of consumable biological assets, the cost after the change of use shall be
determined by the book value at the time of the change of use.
②Accrual method of inventory falling price reserves
The Company shall accrue inventory falling price reserves according to the lower of cost and net
realizable value of a single inventory item. For those inventories with large number and low unit price,
the falling price reserves for inventory shall be accrued according to the categories.
(4) Inventory system
The Company adopts perpetual inventory system for the stock inventory and regularly conducts
physical inventory.
(5) The amortization method for revolving materials
① The amortization method of low-value consumption goods
The Company adopts fifty percent amortization method for ring mould and wooden pallets, and
one-time amortization method for other low-value consumables.
Wellhope Foods Co., Ltd. 2020 Annual Report
② Amortization method of packing material
The Company shall conduct amortization by once write-off process in case of receiving packing
materials.
The contract assets refer to the company's rights to charge consideration for product that has
transferred to the customer, and such rights shall depend on factors other than the passage of time.
The Company's contract assets mainly include completed and unsettled assets, and quality retention
money. The contract assets and contract liabilities under the same contract shall be shown on a net
amount, and the contract assets and contract liabilities under different contracts shall not be offset.
(1) Available-for-sale
① Range of non-current assets and disposal group of available-for-sale assets
When the Company recovers its book value mainly by selling (including the exchange of non-monetary
assets with commercial substance) rather than continuing to use non-current asset or disposal group, it
classifies the non-current asset or disposal group as holding for sale.
Disposal group refers to a group of assets disposed of as a whole through sale or other means in
transaction, and liabilities directly related to these assets transferred in the transaction.
② Recognition condition for non-current assets and disposal group of available-for-sale assets
(A) The Company shall classify the non-current assets and the disposal group that meet the following
conditions as available-for-sale assets:
According to the usual practice of selling such assets or disposal groups in similar transactions, they can
be sold immediately in the current situation.
(B) They are likely to be sold, that is, the Company has made a decision on sale plan and obtained
definite purchase commitment, and the sale is expected to be completed within one year. They can be
sold with the approval of the relevant authority or regulatory authority of the Company.
③ Accounting arrangement method and reporting for non-current assets and disposal group of
available-for-sale assets.
The Company shall measure the book value of assets and liabilities in non-current assets or disposal
groups according to relevant accounting standards before dividing non-current assets or disposal
groups into available for sale assets for the first time.
When the Company initially measures or recalculates non-current assets or disposal groups held for
sale on the balance sheet date, if its book value is higher than the net amount of fair value minus selling
expenses, the book value is written down to the net amount of fair value minus selling expenses, and
the amount written down is recognized as the loss of assets impairment, which is recorded in the
current gains and losses, and the provision for holding impairment of assets for sale is made. For the
amount of loss of impairment of assets recognized by the disposal group held for sale, it shall firstly
Wellhope Foods Co., Ltd. 2020 Annual Report
offset the book value of goodwill in the disposal group, and then offset proportionally the book value
according to the proportion of the book value of each non-current asset in the disposal group. There is
no depreciation or amortization of non-current assets held for sale.
The non-current assets held for sale or assets in disposal groups held for sale shall not offset each other
with the liabilities in the disposal group held for sale and shall be shown as current assets and current
liabilities respectively.
If the Company loses control of its subsidiary Company due to the sale of its investment in subsidiary
Company or other reasons, no matter whether the enterprise retains part of equity investment after
the sale, when the investment in subsidiary Company to be sold meets the conditions for the
classification of categories held for sale, the investment in subsidiary Company will be divided into
categories held for sale as a whole in the individual financial statements of the parent Company , and all
assets and liabilities of subsidiaries will be divided into category of available-for-sale in the consolidated
financial statements.
(2) Discontinuing operation
Termination of business refers to a separate component of Company that meets one of the following
conditions and has been disposed of or classified as category held for sale:
① The constituent part represents an independent principal business or a principal business region;
② The constituent part is a part intended for disposal planning of a major independent business or a
main business region;
③ The constituent part is a subsidiary Company specially acquired for resale.
(1) Initial investment cost recognition of long-term equity investment
① The recognition of the initial investment cost of long-term equity investment formed by business
combination can be seen in the accounting arrangement of business combination under the same
control and under the different control in Note 5.
② Besides the long-term equity investment formed by business combination, the initial investment
cost of the long-term equity investment obtained by other means shall be recognized in accordance
with the following provisions:
(A) For long-term equity investment acquired through paying cash, the acquisition price actually paid
shall be taken as the initial investment cost. The initial investment cost includes the expenses directly
related to the long-term equity investment obtained, taxes and other necessary expenses.
(B) The long-term equity investment obtained by issuing equity securities (equity instruments) is
regarded as its initial investment cost according to the fair value of equity securities (equity instruments)
issued. If there is conclusive evidence that the fair value of long-term equity investment obtained is
more reliable than that of equity securities (equity instruments) issued, the initial investment cost is
recognized on the basis of the fair value of long-term equity investment invested by investors. If the
Wellhope Foods Co., Ltd. 2020 Annual Report
fees directly related to the issuance of equity securities (equity instruments), including service fees and
commissions, are reduced by the issuance premium, and if the premium is insufficient to be reduced,
the surplus reserve and undistributed profits are reduced in turn. Long-term equity investment
obtained by issuing debt securities (debt instruments) shall be treated by issuing equity securities
(equity instruments).
(C) For the long-term equity investment obtained through debt restructuring, the Company takes the
fair value of the shares enjoyed by the creditor's rights into equity as its initial investment cost.
(D) For long-term equity investment acquired through non-monetary assets exchange, if non-monetary
assets exchange is of commercial substance and fair value of converted assets can be reliably measured.
The Company confirms its initial investment cost on the basis of fair value of converted assets, unless
there is solid evidence that the fair value of converted assets is more reliable. If the above-mentioned
conditions cannot be met, the book value of swap-out assets and related payable taxes shall be taken as
the initial investment cost of swap-in long-term equity investments.
The expenses, taxes and other necessary expenses incurred by the Company directly related to the
acquisition of long-term equity investment are included in the initial investment cost of long-term
equity investment.
No matter how the Company acquires long-term equity investment, the cash dividends or profits
declared but not yet paid in actual payments or consideration shall be accounted for separately as the
dividend receivable and shall not constitute the cost of long-term equity investment.
(2) The subsequent measurement and loss and profit recognition method of long-term equity
investment
① The long-term equity investment checked and calculated by cost method
(A) The Company shall adopt method to calculate the long-term equity investment can be controlled by
the invested unit, that is, investment in subsidiaries.
(B) For long-term equity investment calculated by cost method, except for cash dividends or profits
which have been declared but not yet paid in the actual price or consideration at the time of
investment, the Company, regardless of whether it belongs to the net profits realized by the invested
units before and after investment, shall recognize the investment income according to the cash
dividends or profits declared by the invested units.
② The long-term equity investment checked and calculated by equity method
(A) A Company shall adopt the equity method to account for joint venture under the joint control of the
invested entity or joint venture with significant influence.
(B) For long-term equity investment adopted equity method, if the initial investment cost is more than
the enjoyed share of net asset fair value identified by the invested units when the investment happens,
the initial investment cost of the long-term equity interest investment shall not be adjusted; If the initial
investment cost is less than the enjoyed share of net asset fair value identified by the invested units
Wellhope Foods Co., Ltd. 2020 Annual Report
when the investment happens, its balance shall be included into the current gains and losses and the
initial investment cost of the long-term equity investment shall be adjusted simultaneously.
(C) After obtaining a long-term equity investment, the Company shall confirm the investment losses and
profits and other comprehensive income respectively and adjust the book value of the long-term equity
investment in terms of the due owned or borne share of the net gains or losses and other
comprehensive income achieved by the invested unit. When confirming the net loss and profit of the
invested unit that shall be owned or borne, recognition shall be conducted for the net profit of the
invested unit upon adjustment based on fair value of net identifiable assets of the invested unit when
obtaining the investment. However, if the Company is unable to reasonably confirm the fair value of the
identifiable assets of the invested unit at the time of obtaining investment, the balance between the
fair value of the identifiable assets of the invested unit at the time of investment and book value is
small or it is impossible to obtain relevant information of the invested unit due to other reasons, the
Company shall directly calculate and confirm the investment gains and losses on the basis of the net
book gains and losses of the invested unit. The Company shall reduce correspondingly the book value of
the long-term equity investment according to the deserved portion of assigning cash dividends or profit
declared by the invested unit. As for other changes concerning owner's equity of the invested unit
besides net profit or loss, other comprehensive income and profit distribution, the Company shall
adjust the book value of the long-term equity investment and include them into the owner's equity.
When affirming the investment income generated by the investment of joint ventures, the Company
offsets the unrealized internal transaction income between the Company and the joint venture which
belongs to the Company according to the share-holding ratio, and affirms the investment gains and
losses. The internal transaction loss occurred between the Company and invested unit belongs to assets
impairment loss, which shall be recognized in full amount. The Company shall offset the unrealized
internal transaction gains and losses between subsidiaries incorporated into combination and joint
ventures in accordance with the above-mentioned principles, and confirm the investment gains and
losses.
When net deficiency of the invested entity that recognized to be borne, it shall be disposed as the
following orders: The book value of the long-term equity investment shall be offset at first. If the book
value of long-term equity investment is not enough to be offset, the investment losses shall be
recognized continuously according to the limit that the book value of other long-term equity
investments substantially constitutes the net investment in the invested entity, to offset the book value
of long-term receivables. After the process above, if the Company still shall share extra duty according
to investment contract or the agreement, confirm beforehand liabilities according to estimated duty
that shall be undertaken and include it in the current investment loss. If the invested unit realizes to be
profitable in the following period, the Company shall process it in the sequence contrary to the
mentioned above after deducting the contribution of loss that hasn’t been recognized, write down the
Wellhope Foods Co., Ltd. 2020 Annual Report
book value that has been recognized to be estimated liabilities, resume other book values that
constitute the long-term interest and long-term equity investment of the invested unit in substance and
meanwhile confirm investment income.
(3) The basis recognized to have joint control and significant influence on the invested entity
① The basis recognized to have joint control on the invested entity
The joint control refers to the control jointly performed towards certain arrangement as per the related
agreements, and the related activities thereof must be agreed by all the participants who share the
control rights before making decisions. The relevant activities generally include sale and purchase of
goods or labor services, management of financial assets, acquisition and disposal of asset, R&D
activities and financing activities. Joint venture refers to the joint venture arrangement that the
Company has the right to arrange the net assets of the Company. The joint venture arrangement in
which the joint venture party enjoys assets related to arrangement and bears relevant liabilities is
cooperation rather than joint venture.
② The basis recognized to have significant influence on the invested entity
The significant influence refers to having the rights to participate in the decision-making of the financial
and business policies of the invested entity, but not being able to control or jointly control the
formulation of these policies together with other parties. When the Company is able to exert significant
influence on the invested entity, the invested entity shall be its associated company.
(1). Recognition conditions
The fixed assets refer to the tangible assets held for commodity production, rendering service, lease or
operation management with a service life of more than one accounting year. The fixed assets are
recognized when the following conditions are met,
① The economic interests related to the fixed assets are likely to flow into the Company;
② The costs of the fixed assets can be calculated reliably.
(2). Method of depreciation
Method of Period of
Item RM value rate % Yearly depreciation %
depreciation depreciation（year）
straight-line
Office and buildings 10-40 3 2.43-9.70
depreciation
Machinery straight-line
equipment depreciation
Transportation straight-line
equipment depreciation
straight-line
Other equipment 5 3 19.40
depreciation
(3). Recognition basis, pricing and depreciation method of fixed assets under finance lease
①Recognition basis of fixed assets under finance lease
At the beginning of the lease period, the Company shall recognize the leased fixed assets that meet the
financial lease criteria as the financial leased fixed assets.
Wellhope Foods Co., Ltd. 2020 Annual Report
② Pricing method of fixed assets under finance lease
At the beginning of the lease period, the Company shall regard the lower of the fair value of leased
assets and the present value of the minimum lease payment on the lease start date and the initial
direct expenses incurred as the accounting value of the financing leased assets, the lowest lease
payment as the value of the long-term accounts payable, and the balance between the lower of the fair
value of leased assets and the present value of the minimum lease payment on the lease start date as
the accounting value of the financing leased assets and the minimum rental payments as unrecognized
financing cost. Unrecognized financial charges shall be amortized to each period in lease term according
to effective interest method.
③ Method for depreciation of fixed assets under finance lease
The Company shall adopt the depreciation policy consistent with owned fixed asset to accrue leasing
asset depreciation. If it is reasonable to be certain that the lessee will obtain the ownership of the
leasing asset when the lease term expires, the leasing asset shall be accrued depreciation within its
service life. If it is not reasonable to be certain that the lessee shall obtain the ownership of the leasing
asset at the expiry of the lease term, the leasing asset shall be accrued depreciation within the shorter
one between the lease term and the service life of leasing asset.
(1) Category of construction in process
Construction in process shall be calculated separately according to the approved projects
(2) The standard and time point for construction in process carried down fixed assets
All expenditures of the construction in progress that incurred before it reaches the estimated
serviceable condition shall be regarded as entry value of the fixed assets. The self-operating engineering
shall be measured according to direct materials, direct wages, direct mechanical construction costs, etc.;
Package project is measured according to the payable project price; The borrowing expenses that meet
the capitalization conditions and occur before the project under borrowing reaches its intended usable
state shall be capitalized and included in the cost of the project under construction.
If the fixed assets have reached the intended usable state but have not yet completed the final accounts,
the Company shall, from the date of reaching the intended usable state, determine its cost according to
the project budget, cost or actual cost of the project, as well as the estimated value, transfer it to the
fixed assets, and calculate the depreciation of the fixed assets in accordance with the Company's fixed
assets depreciation policy; After final account is completed, the Company shall adjust the original
provisionally estimated value according to actual cost, but not adjust the previously accrued amount of
depreciation.
(1) Range of the borrowing costs
The borrowing cost of the Company shall include interest on borrowings, amortization of discount or
Wellhope Foods Co., Ltd. 2020 Annual Report
premium, auxiliary expenses, and exchange balance incurred from foreign currency borrowings.
(2) Recognition principle of borrowing costs
Where the incurred borrowing cost of the Company can be directly attributable to the acquisition and
construction or production of assets eligible for capitalization, it shall be capitalized and reckoned in the
costs of relevant assets. Other borrowing costs shall be recognized as costs on the basis of the actual
amount accrued, and shall be included into current gains and losses.
The term "assets eligible for capitalization" shall refer to the fixed assets, investment real estate,
inventories and other assets, of which the acquisition and construction or production may take quite a
long time to get ready for its intended use or for sale.
(3) Recognition of the time period for capitalization of the borrowing cost
① Recognition of the time point for capitalization of the borrowing cost
After assets expenditures and the borrowing expenses have happened, the necessary acquisition and
construction or production activities have already started in order to reach the pre-recognized usable or
marketable state for the assets, the borrowing expenses can begin capitalization. The asset expenses
shall include the cash, transferred non-cash assets or expenses that bearing debts paid for the
acquisition and construction or production for assets eligible for capitalization
② Recognition of the suspending time point for capitalization of the borrowing costs
If assets eligible for capitalization is interrupted abnormally during the course of acquisition and
construction or production, and the interruption lasts more than 3 months, the capitalization of
borrowing costs shall be suspended. The borrowing costs occurred during the interruption shall be
recognized as current gains or losses, until the acquisition and construction or production activities of
the asset restart, the capitalization of borrowing costs shall be continued. If the interruption is a
necessary step for making the acquired, built or produced assets which are eligible for capitalization
reaching estimated usable and marketable status, the capitalization of the borrowing costs shall be
continued.
③ Recognition of the suspending time point for capitalization of the borrowing costs
When the acquired, built or produced assets which are eligible for capitalization can reach estimated
usable and marketable state, shall stop capitalizing on borrowing costs; the borrowing costs incurred
thereafter shall be recognized as current gains and losses according to the real amount.
Where each part of the acquired, built or produced assets which are eligible for capitalization is
completed separately, and every single part is available to use or sell during the continuing construction
of other parts, and the acquisition and construction or production activities, which are necessary to
make such part of asset reaching the estimated status of being available to use or sell, have already
been completed substantially, shall stop capitalizing on the borrowing costs in relation to this part of
asset. Where each part of the acquired, built or produced assets which are eligible for capitalization is
completed separately and but it cannot be available to use or sell till the whole construction finishing,
Wellhope Foods Co., Ltd. 2020 Annual Report
shall stop capitalizing on the borrowing costs when the assets can be completed entirely.
(4) The recognition of the amount of the capitalization of borrowing costs
① The recognition of the amount of the capitalization of borrowing interests
During the capitalization period, the interests' capitalization amount (including the amortization of
discounts or premiums) in each accounting period shall be recognized according to the following
provisions:
(A) As for special borrowing costs arising from the acquisition and construction or production of assets
which are eligible for capitalization, the amount shall be recognized based on the interests cost of the
special borrowings costs occurred actually in the current period deducting the interests' income earned
from depositing the unused borrowing costs or the income from temporary investment.
(B) If ordinary borrowings used for acquisition and construction or production of assets which are
eligible for capitalization, the interests' amount of ordinary borrowings to be capitalized shall be
recognized by the weighted average of the asset expenditures for cumulative capital expenditure that
exceed the capital expenditure of specific borrowings to multiply the capitalization rate of ordinary
borrowings. The capitalization rate is recognized by the calculation of the weighted average interest rate
of general borrowing costs.
(C) If there is any discount or premium of the borrowings, the number of discounts or premiums
amortized during each accounting period shall be recognized by the effective interest rate method, and
an adjustment shall be made to the amount of interests in each period.
(D) Within period of the capitalization, the interest capitalization amount of each accounting period
shall not exceed the amount of interest actually occurred to the relevant borrowings in the current
period.
② The recognition of the amount of the capitalization of borrowing auxiliary expenses
(A) Article For the ancillary expense incurred to a specifically borrowings, those incurred before assets
eligible for capitalization under acquisition, construction or production is ready for the intended use or
sale shall be capitalized at the incurred amount when they are incurred, and shall be included into the
costs of the asset eligible for capitalization those incurred after a qualified asset under acquisition and
construction or production is ready for the intended use or sale shall be recognized as expenses on the
basis of the incurred amount when they are incurred, and shall be recorded into the gains and losses of
the current period.
(B) The auxiliary expenses arising from general borrowings shall be recognized as expenses at the time
of occurrence and shall be included into the gains and losses of the current period.
③ The recognition of the amount of the capitalization of the balance of exchange
During the period of capitalization, the exchange balance on foreign currency specific borrowings shall
be capitalized, and shall be included in the cost of assets eligible for capitalization.
Wellhope Foods Co., Ltd. 2020 Annual Report
(1) Classification of biological assets
Biological assets refer to live animals and plants. The Company's biological assets are divided into
expendable biological assets and productive biological assets.
(2) Conformation conditions of biological assets
The Company shall confirm the biological assets that satisfy the following conditions at the same time:
① The Company possesses or controls the biological asset as a result of past transaction or matter.
② The economic benefits or service potential concerning this biological asset are likely to flow into the
Company.
③ The cost of the biological asset can be measured reliably.
(3) Depreciation of productive biological assets
The Company shall depreciate the productive biological assets that have achieved the predetermined
purposes of production and operation, and reasonably confirm their service life, estimated net residual
value and depreciation method according to nature, usage and expected realization of the economic
benefits involved.
The type, service life, anticipated net residual value and yearly depreciation of the Company's
productive biological assets are as follows:
Anticipated net
Type Service life Depreciation method
residual value
Straight-line service
Pig breeder 36 months 20.00%
life
RMB 22.50 per
Broiler breeder 30 weeks Workload
broiler
The depreciation rate and depreciation amount of the productive biological assets which have been
prepared for impairment are recalculated according to the book value, estimated net residual value and
usable life of the productive biological assets.
The Company reviews the service life, estimated net residual value and depreciation methods of
productive biological assets at regular intervals. If the expected number of service life or estimated net
residual value is different from the original estimate, or if there is any significant change in the expected
realization of the economic benefits involved, it shall be treated as a change in accounting estimate.
(1). Valuation methods, service life, and impairment test
①Initial measurement of intangible assets
(A) Initial measurement of outsourcing intangible assets
The cost of outsourcing intangible assets, including acquisition price, relevant taxes and dues as well as
other expenditures which is directly attributed to make intangible assets to the estimated purpose.
When the payment of purchased intangible assets price exceeding normal credit conditions is delayed
Wellhope Foods Co., Ltd. 2020 Annual Report
in payment, with financing nature in essence, the intangible assets cost shall be recognized based on
the present value of purchase price. The balance between the cost actually paid and the present value
of the purchasing cost will be included into the current gains and losses during the credit period except
the part that shall be capitalized.
(B) Initial calculation for independently developed intangible assets
The cost of self-developed intangible assets shall be recognized according to the total expenditure
incurred from meeting the capitalization conditions to reaching the intended purpose, and the
expenditure already expended in the previous period shall not be adjusted.
For the intangible assets researched and developed by the Company, the expenditure during research
stage shall be recorded into the current gains and losses as occurring; if the expenditures in
development stage which don't meet the conditions of capitalization shall be included into current
gains and losses when it occurs. Those meeting the condition of capitalization shall be recognized as
intangible assets. When the expenditures occur during research or development stage cannot be
distinguished, all the R&D expenditures occurred shall be included into the current gains and losses.
②Subsequent measurement of intangible assets
The service life shall be analyzed and recognized by the Company when obtaining the intangible assets.
The intangible assets acquired by the Company include intangible assets with finite service life and
indefinite service life.
(A) Subsequent calculation for intangible assets with finite service life
For intangible assets with limited service life, the Company will adopt the straight-line method to
amortize them in phases during their service life from the time they reach their intended purpose,
without reserving residual value. The amortization amount of intangible assets shall be included into
current gains and losses. If the economic benefits of an intangible asset are realized through product or
other assets, the amortization amount shall be included into the cost of the relevant assets.
The categories of intangible assets, estimated service life, estimated net residual value and annual
amortization rate are listed as follows:
Estimated net residual Annual amortization
Categories Estimated service life(year)
value % rate %
According to the service life of
Land use rights 0 -
land license
Computer software and
other
The Company shall review the service life and the amortization method of intangible assets with the
finite service life on the balance sheet date.
(B) The subsequent measurement for intangible assets with indefinite service life
The Company shall not amortize intangible assets with uncertain service life during the holding period.
③Estimate the service life of intangible assets
(A) The service life of the intangible asset derived from the contractual rights or other statutory rights
Wellhope Foods Co., Ltd. 2020 Annual Report
shall be recognized according to the limit not exceed the contractual rights or other statutory rights; If
when the contract rights or other statutory rights are due, they can be extended because of renewal,
and there is evidence that the Company does not need to pay a large amount of cost to renew contract,
then the renewal period shall be included into the service life.
(B) If the service life is not stipulated in the contract or law, the Company shall confirm the period when
intangible assets can bring economic benefits to the Company by employing relevant experts for
demonstration or comparing with those in the same industry and referring to the Company's historical
experience.
(C) In accordance with the above method, if it is still unable to reasonably confirm the time limit when
the intangible assets can bring economic benefits for the Company, the intangible assets shall be
deemed as the intangible assets with uncertain service life.
④Arrangement of land use right
(A) The land use right acquired by the Company is usually recognized as intangible assets, but if the land
use right is used to earn rent or capital appreciation, it will be converted into investment real estate.
(B) If the Company develops and constructs buildings such as factory buildings, it shall treat the
relevant land use rights and buildings separately.
(C) The price paid for the acquisition of land and buildings shall be allocated between the building and
the right to use the land. If they cannot be reasonably distributed, they shall be recognized as fixed
assets.
(2). Accounting policies of internal R&D expenditure
①The specific standard for the partition of the research stage and development stage of the Company
internal R&D project
According to the actual situation of R&D, the Company divides R&D projects into two stages: research
stage and development stage.
(A) Research stage
Research stage refers to the stage for ingenious and planned investigation, research activities so as to
acquire and understand new scientific or technical knowledge, etc.
(B) Development stage
Development stage refers to before the commercial manufacture or use, the stage for the application of
research achievement and other knowledge to a certain plan or design to produce new or substantial
improved materials, devices or products, etc.
The expenditure of the internal R&D projects at the research stage shall be included into current gains
and losses when incurred.
②The specific standards for expenditure at development stage which meet capitalization
The expenditure of the internal R&D projects at the development stage shall be recognized as the
intangible assets when meeting the following conditions simultaneously:
Wellhope Foods Co., Ltd. 2020 Annual Report
(A) Complete the intangible assets to make them feasible to be used or sold in technology;
(B) Possess the intention to complete the intangible assets and use or sell them;
(C) The ways of intangible assets to generate economic benefits include the ability to prove the
existence of the market where there are the products produced by the intangible assets or the
existence of that of the intangible assets, and prove its usefulness if intangible assets will be used
internally;
(D) There are sufficient technologies, financial resources and other resources supporting to complete
the development of the intangible assets, and the Company is able to use or sell the intangible assets;
(E) Expenditures that belong to the development stage of the intangible assets can be measured
reliably.
The impairment test shall be made to long-term equity investments, investment property measured by
using the cost model, fixed assets, projects under construction, intangible assets with finite service life
and other long-term assets with signs of impairment on the balance sheet date. If the impairment test
result is indicated that the recoverable amount of assets is lower than its book value, it is withdrawn
impairment reserves in accordance with the balance and calculated into the impairment loss. The
recoverable amount shall be the higher one of the net amounts of the fair value of the assets deducted
by the disposal expenses and the present value of the expected future cash flow of the assets. Calculate
and confirm the assets impairment reserves based on single asset; shall it be difficult to estimate the
recoverable amount of single asset, the recoverable amount of the asset group shall be recognized
based on its belonging asset group. Asset group is the minimum asset portfolio that can generate cash
inflow independently.
Each year, the Company performs the impairment test on the goodwill and the intangible assets with
uncertain service life, no matter whether there are signs of impairment or not.
When the Company conducts the impairment test on business reputation, as for the book value of
goodwill formed due to the business combination, it shall be amortized to related assets groups from
the acquisition date according to the reasonable methods; The part that is hard to be allocated to
related assets groups shall be amortized to related combined assets groups. When apportioning the
book value of the goodwill to the relevant asset groups or combinations of asset groups, it shall be
apportioned on the basis of the proportion of the fair value of each asset group or combination of asset
groups to the total fair value of the relevant asset groups or combinations of asset groups. Where it is
difficult to measure the fair value reliably, it shall be apportioned on the basis of the proportion of the
carrying value of each asset group or combination of asset groups to the total carrying value of the
relevant asset groups or combinations of asset groups. When making an impairment test on the
relevant asset groups or combinations of asset groups including goodwill, if any evidence shows that
the impairment of asset groups or combinations of asset groups is possible, the Company first makes an
Wellhope Foods Co., Ltd. 2020 Annual Report
impairment test on the asset groups or combinations of asset groups not including goodwill, calculate
the recoverable amount, compare it with the relevant carrying value and confirm the corresponding
impairment losses. The Company makes an impairment test of the asset groups or combinations of
asset groups containing business reputation, and compares the book value of these relevant asset
groups or combinations of asset groups (including the book value of goodwill amortized thereto) and
their recoverable amount. Where the recoverable amount of relevant assets or combinations of the
asset groups is lower than the book value thereof, the depreciation of the goodwill losses shall be
recognized.
Once the impairment loss of above-mentioned asset is recognized, it shall not be reversed in following
accounting periods.
(1) Scope of long-term prepaid expense
The long-term prepaid expense refers to an expense that has incurred but shall be amortized by the
current period and subsequent periods with the time limit of more than 1 year (exclusive), and includes
improvement expenditures incurred in fixed assets by way of operating lease.
(2) Initial calculation for long-term prepaid expense
The long-term prepaid expense received initial calculation based on the actual cost.
(3) Amortization of long-term prepaid expense
Long-term prepaid expenses in benefit period will be of amortization average using the straight-line
method.
Recognition method of contract liabilities
Contract liabilities refer to the obligation of the Company to transfer commodities to customers as the
Company has received the consideration or needs to receive the consideration from customers. Before
the Company transferring the commodities to the customer, if the customer has paid the contract
consideration or the Company has obtained an unconditional right to collect the accounts, the
Company shall record the accounts received or needed to receive as the contractual liabilities based on
the time when the customer actually pays the accounts or when the accounts become due. The
contract assets and contract liabilities under the same contract shall be recorded on a net basis, and the
contract assets and contract liabilities under different contracts shall not be offset.
(1). The accounting arrangement method of short-term remuneration
Short-term remuneration refers to employee remuneration that needs to be paid in full amount within
the remuneration given for labor relation removing with the employee.
Short-term remuneration includes: Employee salary, bonus, allowance and subsidy, employee welfare
Wellhope Foods Co., Ltd. 2020 Annual Report
expenses, medical insurance premiums, industrial injury insurance premium, birth insurance premium
and other social insurance premiums, housing accumulation fund, labor union expenditure and
employee education expenditure, short-term compensated absence, short-term profit-sharing plan,
non-monetary welfare and other short-term remunerations.
The Company shall confirm the actual short-term remuneration accrued as liabilities and include it into
current gains and losses or related asset cost during the accounting period of services provided by staff.
(2). The accounting arrangement method of post-employment welfare
The Company participates in the establishment of withdrawal plans, which include basic pension
insurance premiums, unemployment insurance premiums and enterprise annuity payments for
employees in accordance with relevant regulations. The amount due for deposit shall be recognized as
the debt of employee remuneration on the balance sheet date in order to exchange for the service
provided by employees during accounting period, and include into the current gains and losses or
relevant asset cost.
(3). Accounting arrangement method of dismissal welfare
Dismissal welfare refers to the remuneration for the employee when the Company terminates the labor
relationship with the employee before the labor contract expires or when the Company encourages the
employee to receive layoff voluntarily. If the Company provides dismissal welfare for staffs, the staff
remuneration liability generating from confirming dismissal welfare on the earlier one of the following
two dates shall be included into current gains and losses:
① When the Company cannot unilaterally withdraw the dismissal welfare provided by labor
relationship relief plan or reduction suggestion.
② When the Company confirms cost or expense relevant to the restructuring involved in paying
dismissal welfare.
(4). Accounting arrangement method of other long-term employee benefits
Other long-term employee welfare refers to other welfares of all employees other than short-term
remuneration, welfare after demission and dismisses welfare. At the end of report period, staff
remuneration cost generating from other permanent staff welfare shall be recognized to the following
constituent parts:
① Cost to serve.
② Net interest amount of net liabilities or net asset of other permanent staff welfares.
③ The change generating from the recalculation of net liability or net asset of other permanent staff
welfares.
In order to simplify the relevant accounting arrangements, the total net amount of above items is
recorded into current gains and losses or relevant asset costs.
(1) Recognition principles of estimated liabilities
Wellhope Foods Co., Ltd. 2020 Annual Report
When the external guarantees, pending litigation or arbitration, product quality assurance, loss of
contract, the obligation of restructuring matters or the relevant business meet three of the following
conditions, it shall be recognized as estimated liabilities:
① That obligation is a current obligation undertaken by the Company;
② It is likely to cause the economic benefit to flow out of the Company due to the performance of the
obligation;
③ The amount of the obligation can be measured reliably.
(2) Calculated method for estimated liabilities
The amount of the estimated liability is measured in accordance with the best estimate of the
expenditure required for the contingency.
① If there is a sequent range for the necessary expenses and if all the outcomes within this range are
equally likely to occur, the best estimate shall be recognized in accordance with the middle estimate
within the range.
② In other cases, the best estimate shall be disposed according to the following cases respectively:
(A) If the contingencies involve a single item, it shall be recognized according to the most likely
outcome.
(B) If the contingencies involve two or more items, the best estimate shall be calculated and recognized
according to all possible outcomes and the relevant probabilities.
The share-based payments shall consist of equity-settled share-based payments and cash-settled
share-based payments.
(1) Accounting arrangement on the grant date
In addition to share-based payments of the immediate vesting, regardless of equity-settled share-based
payment or cash-settled share-based payment, the Company shall not accept accounting arrangement
on the grant date.
(2) Accounting arrangement on each balance sheet date in the waiting period
In the waiting period of each balance sheet date, services acquired in hiring employees or other parties
shall be included in the cost, and the owner's equity or liabilities shall be recognized.
As for share-based payments with market conditions, as long as employees meet all other non-market
conditions, the acquired service shall be recognized. When the performance conditions are non-market
conditions, after the waiting period is fixed, if the subsequent information indicates that the estimation
of feasible rights needs to be adjusted, the earlier estimate shall be modified.
As for equity-settled share-based payment involving employees, according to fair value of equity
instruments in the grant date, it shall be included in cost and capital reserve (other capital reserve), and
its subsequent changes of fair value shall not be recognized. As for cash-settled share-based payment
involving employees, it shall be recounted according to fair value of equity instruments at each balance
Wellhope Foods Co., Ltd. 2020 Annual Report
sheet date to recognize the cost and payable employee remuneration.
On each balance sheet date within the waiting period, the Company shall make the best estimates
according to the newly obtained changes in exercisable right staff number variation and other follow-up
information, and amend the number of equity instruments of expected exercisable right.
According to the fair value of the above-mentioned equity instruments and the number of equity
instruments with predicted feasible rights, the cumulative cost and expense amount that shall be
recognized up to the current period is calculated, with the cumulative recognized amount in the
previous period subtracted, as the cost and expense amount that shall be recognized in the current
period.
(3) Accounting Arrangement on the Vesting Date
① As for equity-settled share-based payment, after vesting date, the recognized cost and the total
owner equity shall no longer be adjusted. On the vesting date, the Company shall confirm the share
capital and share premium according to the exercise situation, and the capital reserve (other capital
reserve) in the waiting period shall be carried forward at the same time.
② As for cash-settled share-based payment, after the vesting date, the Company shall no longer
confirm the cost, and changes in fair value of liabilities (staff remuneration) shall be included in current
gains and losses (changes of profit or loss in fair value).
(4) Accounting arrangement for using repurchased share as incentive stock option for staff Where the
Company rewards its employees in the form of share repurchase, when it repurchases shares, it shall
treat all the expenditures of the share repurchase as stock shares, and make a record. On each balance
sheet date during the waiting period, according to the fair value of equity instruments on the granting
date, the obtained staff services are included in the cost and expenses, and the capital reserve (other
capital reserve) is increased. When the employee's right to purchase shares of Company receives the
price, the cost of the stocks in stock delivered to the employee and the accumulated amount of capital
reserve (other capital reserve) during the waiting period shall be resold, and the capital reserve (equity
premium) shall be adjusted according to its balance.
The revenues mainly consist of the income of selling goods, providing labor services, and transferring
the right to use assets. And the principles of income recognition shall be driven as below:
(1) Confirming principle of the revenue for selling products
The main risks and rewards of the property in the commodities have been transferred to the acquiree
by the Company; The Company retains neither continuing management right related with the
ownership nor effective control over the products sold; The amount of revenue can be measured in a
reliable way; The relevant economic interests may be flowed into the Company; When the relevant cost
incurred or to incur can be measured reliably, it shall be recognized as the realization of product sales
income. The Company's sales revenue, mainly includes feed products, feed raw materials, poultry
Wellhope Foods Co., Ltd. 2020 Annual Report
products and raising business. The revenue shall be recognized after receipt of payment or completion
of credit procedures and delivery of products.
(2) Confirming principle of the revenue for providing labor services
① Principle of recognition of labor income is to provide labor transactions in the case of reliable
estimation
On the balance sheet date, when the labor service transaction results rendered can be reliably
estimated, the Company shall confirm the revenue from providing labor service by the
percentage-of-completion method.
When the amount of income can be reliably measured, the relevant economic benefits may flow into
the Company, the completion schedule of the transaction can be reliably recognized, and the costs that
have occurred and will occur in the transaction can be reliably measured, the results of the labor
transaction can be reliably estimated.
②Recognition principle of labor income under the condition that provide labor transactions in the
case of unreliable estimation
On the balance sheet date, when the labor service transaction results provided by the Company cannot
be reliably measured, it shall confirm labor services income by the following three kinds of condition.
(A) If labor service cost incurred is estimated to be compensated in full amount, provision of labor
service income shall be recognized according to the amount that has been regained or can be regained
by estimation and carry forward the labor service cost that has accrued;
(B) If the labor cost estimation that has occurred can be compensated partly, the labor revenue shall be
recognized to provide as the labor cost amount that has occurred or can be compensated, and the
occurred labor cost will be carried over;
(C) If the cost of labor services incurred is expected not to be compensated, the cost incurred shall be
included into current gains and losses (main business cost), and no income from the provision of labor
services will be recognized.
(3) Recognition principles of transferring the right to use assets
When the trade-related economic interest is likely flow into this Company, and the relevant revenue
that can be reliably calculated, the realization of the revenue from transferring the right to use assets
shall be recognized.
Contract costs can be divided into contract performance costs and contract acquisition costs.
Costs incurred by the Company in the performance of a contract shall be recognized as an asset when
the following conditions are met.
(1) Such costs are directly related to a current or anticipated contract
(2) Such costs increase the Company's resources that will be used in the future to meet performance
obligations.
Wellhope Foods Co., Ltd. 2020 Annual Report
(3) Such costs are expected to be recovered
Assets related to contract costs are amortized on the same basis as the revenue recognition of
commodities or services related to such assets. However, if the amortization period of the contract
acquisition costs is less than one year, the Company shall record such amortization into current gains or
losses when it is incurred.
If the book value of the assets related to the contract costs is higher than the difference between the
following two items, the Company will make provision for impairment of the excess part and recognize
it as impairment loss of the assets.
(1) The remaining consideration that is expected to be obtained as a result of transferring the
commodities or services related to such assets.
(2) The estimated costs that will be incurred due to transfer such commodities or services.
(1) Category of government grant
Government grant refers to the monetary assets or non-monetary assets that the Company obtains
from the government free of charge, including the government grant related to assets and income.
The government grants pertinent to assets refer to the government assets that are obtained by
enterprises used for purchase or construction, or forming the long-term assets by other ways.
The government grants related to earnings refer to the government grants besides the government
grants related to assets.
(2) Recognition principle and recognition time-point of government grant
Recognition principle of government grant
① The Company can meet all attached conditions for governmental grant.
② The Company is able to receive governmental grant.
Government grant may be recognized on condition that it meets the above conditions simultaneously.
(3) Measurement for government grant
① If the government grants belong to monetary assets, shall be calculated according to the received
or receivable amount.
② Non-monetary assets of government grants shall be measured by the fair value; if the fair value
cannot be obtained reliably, it shall be measured according to the nominal amount (the nominal
amount is RMB 1).
(4) Accounting arrangement method for government grants
① The government grant related to assets shall, when acquired, be deducted with the book value of
the relevant assets or recognized as deferred income. If it is recognized as deferred income, it shall be
divided into gains and losses in stages according to a reasonable and systematic method during the
service life of the relevant assets. The governmental grants calculated according to the nominal amount
shall be directly included in the current gains and losses.
Wellhope Foods Co., Ltd. 2020 Annual Report
② Government grant related to the incomes shall be disposed separately according to the conditions:
(A) If the grants are used to compensate for related expenses or losses in the later period of the
Company, it shall be recognized as deferred income and included in the current gains and losses during
recognition of relevant expenses or loss
(B) Those used for compensating the related expenses or losses have been incurred shall be included in
current gains and losses directly or relevant offset cost as obtaining.
③ If government grants that include both asset-related and revenue-related parts can be distinguished,
they are treated separately in different parts. If it is difficult to distinguish, it shall be wholly recognized
as government grants related to incomes.
④ Government grants related to the day-to-day operation of the Company shall be accounted for as
other benefits or deducted with relevant costs in accordance with the nature of its economic
operations. Government grants unrelated to the daily activities of enterprise are included in the income
and expenditure of non-business activities. If the finance allocates the discount funds directly to the
Company, the Company will deduct the relevant borrowing costs from the corresponding discount.
⑤ If it is necessary to return governmental grants which have been recognized, it shall be disposed
respectively according to the following conditions:
(A) If the book value of the relevant assets is deducted at the time of initial recognition, the book value
of the assets shall be adjusted.
(B) If there is the deferred income concerned, the book balance of the deferred income shall be offset
against, but the excessive part shall be included in the current gains and losses.
(C) In other circumstances, it shall be directly included in the gains and losses of the current period.
The Company adopts the balance sheet debt method to calculate the income tax.
(1) Recognition of the deferred income tax assets and the deferred income tax liabilities
① When the Company obtains the assets or liabilities, it shall determine its tax basis. On the balance
sheet date, the Company analyses and compares the book value of assets and liabilities with their tax
basis, and the book value of assets and liabilities with their tax basis. If there is temporary balance
between the book value of assets and liabilities and their tax basis, the Company shall recognize
deferred income tax liabilities or deferred income tax assets respectively for taxable temporary balance
or deductible temporary balance if the relevant temporary balance occurs in the current period and
meets the recognition conditions. Tax assets.
② Recognition basis of deferred income tax assets
(A) The Company shall confirm the deferred income tax assets arising from a deductible temporary
balance to the extent of the amount of the taxable income which it is likely to obtain and which can be
deducted from the deductible temporary balance. The amount of taxable income likely to be obtained
in the future period includes the amount of taxable income realized in normal production and
Wellhope Foods Co., Ltd. 2020 Annual Report
operation activities in the future period, and the amount of taxable income increased due to the return
of temporary balance of taxable income during the period of deductible temporary balance.
(B) As for any deductible losses and tax deduction that can be carried over to the next years, the
corresponding deferred income tax assets shall be recognized to the extent that the amount of future
taxable income to be offset for the deductible loss and tax to be likely obtained.
(C) On the balance sheet date, the book value of deferred income tax assets shall be re-checked. If it is
unlikely to obtain sufficient taxable income to deduct from the benefit of the deferred income tax asset,
the carrying amount of the deferred income tax assets shall be written down. The write-down amount
shall be reversed when it is likely that the sufficient taxable income is available.
③ Recognition basis of the deferred income tax liabilities
The Company shall confirm the current or past taxable temporary balance that shall be paid but is not
paid as deferred income tax liabilities. But it doesn’t include goodwill and transaction formed by non-
business combination and the temporary balance neither affects the accounting profit nor taxable
income when transaction incurred.
(2) Measurement for the deferred income tax assets and the deferred income tax liabilities
① On the balance sheet date, the deferred income tax assets and deferred income tax liabilities shall
be measured at the applicable tax rate of the period during which the assets are expected to be
recovered or the liabilities are expected to be settled.
② If the applicable tax rate varies, the deferred income tax assets and deferred income tax liabilities
which have been recognized are re-measured, excluding the deferred income tax assets and deferred
income tax liabilities arising from any transactions or events directly recognized as the owners' equities,
the amount affected by them shall be included into the income tax expenses of the current period
during which the change occurs.
③ When measuring deferred income tax assets and deferred income tax liabilities, the Company
adopts tax rates and tax basis consistent with the expected way of recovering assets or paying off debts.
④ The Company shall not discount any deferred income tax asset and deferred income tax liability.
(1) Accounting arrangement method of operating lease
A tenant includes the rental payment of operation lease into the relevant cost of assets or current gains
and losses according to the straight-line method in each period of the lease term. The initial direct costs
accrued to the Company shall be included into current gains or losses. The contingent rental shall be
included into the current gains or losses when it is actually accrued.
A lessor includes the assets subject to operating lease in relevant items of its balance sheets in light of
the nature of the asset. The rent in operating lease shall be recognized as current gains and losses
during each lease term according to straight-line method. The initial direct costs accrued to the
Company shall be included into current gains and losses. The depreciation of fixed assets in the
Wellhope Foods Co., Ltd. 2020 Annual Report
operation lease assets shall be withdrawn by adopting depreciation policy of similar asset; other
operation lease assets shall be amortized adopting systematic and reasonable method. The contingent
rental shall be included into gains and losses of the current period when it is actually accrued.
(2) Accounting arrangement methods of financial lease
As tenant, on the commencement date of the lease term, the lower one between fair value of leased
asset and present value of minimum lease payments as account record value of leased asset, and regard
the minimum lease payments as account record value of long-term payables, and their balance shall be
treated as the unrecognized financing costs. The initial direct costs such as commissions, attorney's fees
and traveling expenses, stamp duties, etc. directly attributable to the leased item incurred during the
process of lease negotiating and signing the leasing agreement shall be included into the rent asset
value. The unrecognized financing costs shall be amortized during each lease term, and the current
financing costs shall be recognized adopting real interest method. The contingent rental shall be
included into gains and losses of the current period when it is actually accrued.
On the commencement date of the lease term, a lessor recognizes the sum of the minimum lease
receipts on the lease commencement date and the initial direct costs as the entry value in an account
of the finance lease values receivable, and record the un-guaranteed residual value at the same time.
The balance between the sum of the minimum lease collection amount, the initial direct expenses and
the non-guaranteed residual value, and the sum of their present values shall be recognized as the
unrealized financing income. The unrealized financing income shall be allocated to each period during
the lease term. The lessor shall calculate and recognize the financing income at the current period by
adopting the effective interest rate method. The contingent rental shall be included into the gains and
losses of the current period when it is actually accrued.
A. Significant changes in accounting policies
Explanation
Content and reason for the changes of accounting (items in the financial
Approval procedure
policies statements that are
materially affected)
On July 5, 2017, the Ministry of Finance issued the
revised Accounting Standards for Business
Enterprises No. 14-Revenue. The revised standard
Wellhope held the
stipulates that when the enterprise implements the
new standards at the first time, it shall adjust the
retained earnings and other related items in the
of Directors on July
financial statements at the beginning of that year Non
according to the cumulative influence number,
and approve the
without adjusting the information for comparable
proposal of Changing
periods.
Accounting Policies
Wellhope has implemented the new standards
since January 1, 2020, and adjusted related items in
accordance with relevant provisions.
Wellhope Foods Co., Ltd. 2020 Annual Report
B. Adjustment of financial statements when firstly implementing the new revenue standard and new
leasing standard
Consolidated balance sheet
Unit: yuan Currency: RMB
Item Dec. 31, 2019 January 1, 2020 Adjustment
Current Assets
Monetary capital 1,554,781,324.13 1,554,781,324.13
Trading financial assets 40,000,000.00 40,000,000.00
Derivative financial assets 3,912,584.30 3,912,584.30
Notes receivable 3,696,180.25 3,696,180.25
Accounts receivable 362,060,802.38 362,060,802.38
Prepayments 222,064,368.55 222,064,368.55
Other receivables 85,600,811.75 85,600,811.75
including: Interest receivable
Dividends receivable 25,353,722.11 25,353,722.11
Inventory 1,568,373,133.15 1,568,373,133.15
Other current assets 121,711,175.93 121,711,175.93
Total current assets 3,962,200,380.44 3,962,200,380.44
Non-current assets
Long-term equity investment 2,070,047,882.51 2,070,047,882.51
Other equity instruments
investment
Fixed assets 2,023,113,939.02 2,023,113,939.02
Construction in progress 240,012,874.86 240,012,874.86
Biological assets 94,826,312.88 94,826,312.88
Intangible assets 245,564,167.39 245,564,167.39
Goodwill 290,425.67 290,425.67
Long-term prepaid expenses 134,504,217.80 134,504,217.80
Deferred income tax assets 35,987,736.49 35,987,736.49
Other non-current assets 337,463,267.56 337,463,267.56
Total non-current assets 5,187,571,663.41 5,187,571,663.41
Total Assets 9,149,772,043.85 9,149,772,043.85
Current liabilities
Short-term borrowings 1,050,878,205.81 1,050,878,205.81
Accounts payable 659,216,483.84 659,216,483.84
Wellhope Foods Co., Ltd. 2020 Annual Report
Advance receipt 209,529,248.68 4,879,960.48 -204,649,288.20
Contract liabilities 203,523,445.03 203,523,445.03
Payroll 62,549,364.12 62,549,364.12
Taxes and surcharges 37,680,953.84 37,680,953.84
Other payables 342,239,361.28 342,239,361.28
including: Interest payable 1,528,201.39 1,528,201.39
Dividends payable 1,434,027.14 1,434,027.14
Non-current liabilities due within
one year
Other current liabilities 1,125,843.17 1,125,843.17
Total current liabilities 2,432,687,335.19 2,432,687,335.19
Non-current Liabilities
Long-term borrowings 174,330,000.00 174,330,000.00
Long-term payables 11,025,000.09 11,025,000.09
Deferred income 31,841,250.00 31,841,250.00
Deferred income tax liabilities 396,995.58 396,995.58
Total Non-current liabilities 217,593,245.67 217,593,245.67
Total Liabilities 2,650,280,580.86 2,650,280,580.86
Owners' equity
(or shareholders' equity)
Paid-up capital (or share capital) 922,304,396.00 922,304,396.00
Capital reserves 882,723,066.29 882,723,066.29
deduct: Treasury stock 70,688,750.00 70,688,750.00
Other comprehensive income 6,122,835.30 6,122,835.30
Surplus reserves 352,059,456.90 352,059,456.90
Undistributed profits 3,605,618,553.05 3,605,618,553.05
Total owners’ equity attributable to
the of parent company
Non-controlling interests 801,351,905.45 801,351,905.45
Total owners' equity
(or shareholders' equity)
Total liabilities and owners' equity
(or shareholders' equity)
Wellhope Foods Co., Ltd. 2020 Annual Report
Consolidated balance sheet of parent company
Unit: yuan Currency: RMB
Item Dec. 31, 2019 January 1, 2020 Adjustment
Current Assets
Monetary capital 1,039,575,222.99 1,039,575,222.99
Trading financial assets 40,000,000.00 40,000,000.00
Derivative financial assets 2,285,934.30 2,285,934.30
Accounts receivable 13,631,690.45 13,631,690.45
Prepayments 7,560,408.95 7,560,408.95
Other receivables 1,020,785,676.46 1,020,785,676.46
including: Interest receivable
Dividends receivable 33,977,209.35 33,977,209.35
Inventory 49,839,754.57 49,839,754.57
Total current assets 2,173,678,687.72 2,173,678,687.72
Non-current assets
Long-term equity investment 4,117,315,830.10 4,117,315,830.10
Other equity instruments
investment
Fixed assets 132,106,337.38 132,106,337.38
Construction in progress 5,163,075.76 5,163,075.76
Intangible assets 15,425,425.33 15,425,425.33
Long-term prepaid expenses 797,929.30 797,929.30
Deferred income tax assets 10,699,738.59 10,699,738.59
Total non-current assets 4,287,047,706.38 4,287,047,706.38
Total assets 6,460,726,394.10 6,460,726,394.10
Current liabilities
Short-term borrowings 770,000,000.00 770,000,000.00
Accounts payable 34,960,859.00 34,960,859.00
Advance receipt 5,019,752.33 -5,019,752.33
Contract liabilities 5,019,752.33 5,019,752.33
Payroll 4,611,910.56 4,611,910.56
Taxes and surcharges 4,624,045.02 4,624,045.02
Other payables 1,109,464,926.75 1,109,464,926.75
including: Interest payable 1,261,159.72 1,261,159.72
Non-current liabilities due within
one year
Wellhope Foods Co., Ltd. 2020 Annual Report
Total current liabilities 1,980,681,493.66 1,980,681,493.66
Non-current Liabilities
Long-term borrowings 174,000,000.00 174,000,000.00
Deferred income 21,520,000.00 21,520,000.00
Deferred income tax liabilities 8,972.25 8,972.25
Total non-current liabilities 195,528,972.25 195,528,972.25
Total liabilities 2,176,210,465.91 2,176,210,465.91
Owners' equity
(or shareholders' equity)
Paid-up capital (or share capital) 922,304,396.00 922,304,396.00
Capital reserves 875,861,339.55 875,861,339.55
deduct: Treasury stock 70,688,750.00 70,688,750.00
Other comprehensive income 5,621,991.32 5,621,991.32
Surplus reserves 352,059,456.90 352,059,456.90
Undistributed profits 2,199,357,494.42 2,199,357,494.42
Total owners' equity
(or shareholders' equity)
Total liabilities and owners' equity
(or shareholders' equity)
Explanation of adjustment
In accordance with new revenue standards, Wellhope adjusted relevant items in the financial
statements at the beginning of 2020, the amounts that meet the requirements of accounting of
contract liabilities have been adjusted from "advance receipt" to "contract liabilities", and unamortized
output VAT has been adjusted to other current liabilities.
VI. Tax
Categories Taxation basis Tax rate
Output VAT--deductible
Value-added tax 1%、9%、13%
input VAT
Urban maintenance and
Turnover tax payable 1%、5%、7%
construction tax
Corporate income tax Income tax payable 15%、20%、25%
Extra charges of education
Turnover tax payable 3%
funds
Extra charges of local
Turnover tax payable 2%
education funds
Wellhope Foods Co., Ltd. 2020 Annual Report
Taxpayer Income tax rate
Wellhope Foods Co., Ltd., Beijing Sanyuan Wellhope Agri-Tech Company,
Beijing Helai Sci-Tech Company, Xi'an Wellhope Feed Sci-Tech Company, Gansu
Wellhope Agri-Tech Company, Guangzhou Xiangshun Livestock Equipment
Company, Chongqing Dahong Agriculture and Animal Husbandry Equipment
Company, Shenyang Fame Bio-Tech Company, Yangling Wellhope Agriculture
and Animal Husbandry Company, Yunnan Wellhope Feed Mill
Dalian Huakang Xinxin Food Company, Kaifeng Wellhope Meat Products
Company, Puyang Wellhope Food Company, Dalian Heyuan Agri-Tech
Company, Wafangdian Yifeng Agri-Tech Company, Shandong Heyuan Food
Company, Shandong Heyuan Agri-Tech Company, Pingyuan Wellhope Food
Processing Company, Fuyu Wellhope Taolaizhao Poultry Raising Company,
Puyang Wellhope Agri-Tech Company, Changchun Wellhope Food Company,
Dehui Wellhope Agri-Tech Company, Tongliao Wellhope Tianyi Prataculture
Company, Kaifeng Wellhope Agriculture and Animal Husbandry Company,
Shenyang Huakang Broiler Company, Shenyang Huakang Agriculture and
Animal Husbandry Company, Tangshan Hejia Agriculture and Animal
Husbandry Company, Shenyang Wellhope Poultry Industry Company, Fushun
Wellhope Agriculture and Animal Husbandry Company, Anhui Wellhope
Haoxiang Agricultural Development Company, Suizhong Renhe Fishery
Company, Lixin Xiangfeng Agriculture and Animal Husbandry Company, Lixin Enterprises that
Hongfeng Agriculture and Animal Husbandry Company, Shulan Fengtai engaged in primary
Agriculture and Animal Husbandry Company, Shulan Fengtai Farming processing of
Company, Hebei Deheng Farming Company, Dalian Hongtu Agri-tech Company, agricultural products,
Liaoning Wellhope Agriculture and Animal Husbandry Development, Luoyang livestock and poultry
Wellhope Agriculture and Animal Husbandry Company, Tongxu Wellhope raising businesses
Agriculture and Animal Husbandry Company, Gongzhuling Wellhope Swine exempt from levying
Farmig Company, Lishu Wellhope Ecological Farming Company, Anyang corporate income tax
Wellhope Agriculture and Animal Husbandry Company, Hebei Taihang
Wellhope Food Company, Hebei Taihang Wellhope Agri-Tech Company, Yixian
Dingli Hesheng Livestock and Poultry Feeding Company, Yixian Weijing
Livestock and Poultry Feeding Company, Yixian Hekang Agri-Tech Company,
Hebei Hetai Livestock and Poultry Farming Company, Anhui Wellhope
Haoxiang Swine Breeding Company, Nanyang Wellhope Cattle Sci-Tech
Company, Daqing Wellhope Food Company, Zhumadian Wellhope Agricultural
Development Company, Datong Hejia Agriculture and Animal Husbandry
Company, Shijiazhuang Hejia Agriculture and Animal Husbandry Company,
Fuxin Wellhope Agriculture and Animal Husbandry Company , Dalian Zhongjia
Food Company, Wafangdian Huinong Poultry Industry Company, Shenyang
Wellhope Extruded Feed Mill , Jilin Hefeng Swine Breeding Company, Dunhua
Fengda Agriculture and Animal Husbandry Development Company
Russia Wellhope Agri-Tech Company 20%
Other companies 25%
A. Value-added tax
In accordance with the Notice on the Exemption of Value-added Tax on Feed Products and other
documents, the sales of feed products of the Company and related subsidiaries are exempted from
value-added tax.
According to the regulation issued by the Ministry of Finance and Taxation of China, from April 1, 2019,
taxpayers occurred taxable sales of VAT, where the tax rates of 16% and 10% were originally applicable,
Wellhope Foods Co., Ltd. 2020 Annual Report
the tax rates shall be adjusted to 13% and 9% respectively.
According to the announcement issued by the General Tax Bureau of the Ministry of Finance regarding
VAT policy for supporting work resumption of privately or individually-owned companies, during the
outbreak of the COVID-19 pandemic, VAT shall be levied at a rate of 1% for small-scale taxpayers.
B. Income tax
The Company and related subsidiaries, which are suitable to related government policies, such as
receiving the certificates of High-Tech enterprise, the applicable corporate income tax rate is 15% in the
valid period.
VII. Notes to the Items of Consolidated Financial Statements
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Cash on hand 401,767.96 693,912.75
Cash at bank 1,185,795,875.08 1,507,696,568.93
Other monetary capital 11,525,156.12 46,390,842.45
Total 1,197,722,799.16 1,554,781,324.13
including: total amount of funds
deposited abroad
Other explanation:
Balance of letter of credit included in other monetary capital was RMB 1,144.57, futures margin was
RMB 11,524,011.55 in the end of the period.
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Financial assets measured at fair value and the changes
recorded in current profits and losses
including
Wealth management products 50,000,000.00 40,000,000.00
Total 50,000,000.00 40,000,000.00
Other explanation:
The Company bought structural deposit from Industrial and Commercial Bank of China on September
annualized return of 1.50%-3.20%.
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Futures 4,725,552.30 3,912,584.30
Total 4,725,552.30 3,912,584.30
Wellhope Foods Co., Ltd. 2020 Annual Report
A. Classification
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Bank's acceptance bill 12,601,548.00 3,696,180.25
Commercial acceptance bill 1,598,999.87
Total 14,200,547.87 3,696,180.25
B. Bad debt provision
Unit: yuan Currency: RMB
Changes in 2020
Opening Closing
Item Collected or Charged-off or
balance Accruing balance
recovered written-off
Commercial
acceptance bill
Total 32,632.65 32,632.65
A. Categorized by aging
Unit: yuan Currency: RMB
Aging Closing book balance
Within 1 year 417,907,003.42
Over 3 years 93,507,385.47
Total 577,480,506.52
Wellhope Foods Co., Ltd. 2020 Annual Report
B. Categorized by bad debt accrual method
Unit: yuan Currency: RMB
Closing balance Opening balance
Category Book balance Bad debt provision Book balance Bad debt provision
Accruing Book value Accruing Book value
Amount Percentage % Amount Amount Percentage % Amount
percentage % percentage %
Accruing
bad debt
provision
individually
Accruing
bad debt
provision by
grouping
including
Aging group 538,418,802.21 93.24 88,248,057.76 16.39 450,170,744.45 434,053,298.76 91.88 74,416,623.53 17.14 359,636,675.23
Total 577,480,506.52 / 127,309,762.07 / 450,170,744.45 472,418,444.95 / 110,357,642.57 / 362,060,802.38
Wellhope Foods Co., Ltd. 2020 Annual Report
? Accruing bad debt provision individually
Unit: yuan Currency: RMB
Closing balance
Name Accruing
Book balance Bad debt provision Reason
percentage %
Customer 1 23,998,355.83 23,998,355.83 100.00 uncollectible
Customer 2 4,734,285.00 4,734,285.00 100.00 uncollectible
Customer 3 2,942,919.70 2,942,919.70 100.00 uncollectible
Customer 4 927,022.22 927,022.22 100.00 uncollectible
Customer 5 807,150.00 807,150.00 100.00 uncollectible
Other bad debt
provision accrued 5,651,971.56 5,651,971.56 100.00 uncollectible
individually
Total 39,061,704.31 39,061,704.31 100.00 /
? Accruing bad debt provision according to aging
Unit: yuan Currency: RMB
Closing balance
Aging
Account receivable Bad debt provision Accruing percentage %
Within 1 year 417,904,828.42 13,652,486.00 3.27
Over 3 years 55,019,612.25 55,019,612.25 100.00
Total 538,418,802.21 88,248,057.76 /
C. Bad debt provision
Unit: yuan Currency: RMB
Changes in 2020
Opening Closing
Category Charged off or
balance Accruing Other changes balance
written off
Accounts
receivable
Total 110,357,642.57 20,584,815.87 3,693,968.37 61,272.00 127,309,762.07
D. Accounts receivable that were actually written off in current period
Unit: yuan Currency: RMB
Item Write-off amount
Actual write-off of accounts receivable 3,693,968.37
Circumstances of other important accounts receivable that were written off
Unit: yuan Currency: RMB
Written off Whether generated by
Name Nature Reason
amount related party transactions
Payment for uncollectible after
Customer 1 790,882.40 No
products filing of a lawsuit
Payment for exempted by mutual
Customer 2 453,168.40 No
products consultation
Payment for uncollectible after
Customer 3 360,000.00 No
products filing of a lawsuit
Payment for uncollectible after
Customer 4 285,720.30 No
products filing of a lawsuit
Payment for this enterprise no
Customer 5 234,878.95 No
products longer exists
Total / 2,124,650.05 / /
Wellhope Foods Co., Ltd. 2020 Annual Report
E. Top 5 accounts receivable
Unit: yuan Currency: RMB
Percentage of the closing
Debtor Closing balance balance of total accounts Bad debt provision
receivable %
Total 104,339,735.63 18.07 26,308,830.57
A. Presenting by aging
Unit: yuan Currency: RMB
Closing balance Opening balance
Aging
Amount Percentage % Amount Percentage %
Within 1 year 355,432,049.57 97.54 217,146,116.15 97.79
Over 1 year 8,969,470.66 2.46 4,918,252.40 2.21
Total 364,401,520.23 100.00 222,064,368.55 100.00
B. Top 5 prepayments
Unit: yuan Currency: RMB
Percentage of the closing balance
Company Closing balance
of total prepayments %
Total 121,658,181.75 33.37
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Interest receivable
Dividends receivable 49,123,722.11 25,353,722.11
Other receivables 71,919,754.34 60,247,089.64
Total 121,043,476.45 85,600,811.75
A. Dividends receivable
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Dividends from long-term investment
under the equity method
Total 49,123,722.11 25,353,722.11
Wellhope Foods Co., Ltd. 2020 Annual Report
B. Other receivables
a. Presenting by aging
Unit: yuan Currency: RMB
Aging Closing book balance
Within 1 year 44,269,894.64
Over 3 years 37,214,088.10
Total 88,394,966.30
b. Presenting by nature
Unit:yuan Currency: RMB
Nature Closing book balance Opening book balance
General operating receivables 24,394,151.68 18,445,739.40
Guarantee deposit 24,067,394.92 14,096,016.42
Disposal of investment receivables 2,764,218.95 28,471,800.00
Other 37,169,200.75 30,141,206.46
Total 88,394,966.30 91,154,762.28
c. Accruing bad debt provision
Unit: yuan Currency: RMB
First stage Second stage Third stage
Expected credit loss Expected credit loss
Bad debt Expected credit for the entire for the entire Total
provision losses over the next duration (no credit duration (credit
occurred) occurred)
Balance on
January 1, 26,950,938.36 3,956,734.28 30,907,672.64
-recorded in
the second
stage
- recorded in
the third -2,462,387.69 2,462,387.69
stage
-recovered in
the second
stage
- recovered in
the first stage
Accrued in
the reporting -15,709,121.54 1,276,660.86 -14,432,460.68
period
Balance on
December 31, 8,779,429.13 7,695,782.83 16,475,211.96
Wellhope Foods Co., Ltd. 2020 Annual Report
d. Bad debt provision
Unit: yuan Currency: RMB
Changes in 2020
Category Opening balance Collected or Closing balance
Accruing
recovered
Other
receivables
total 30,907,672.64 -14,432,460.68 16,475,211.96
e. Top 5 other receivables
Unit: yuan Currency: RMB
Percentage of
Closing balance of
closing balance
Company Nature Closing balance Aging bad debt
of total other
provision
receivables %
Temporary over 3
borrowing years
less than 1
year
less than 1
year
Temporary less than 1
borrowing year
Total / 45,970,253.00 / 52.01 5,847,847.95
f. Receivables involving government grant
Unit: yuan Currency: RMB
Government subsidy Closing Aging at Estimated receiving
Name
project balance period-end time, amount and basis
The secondary nodes
Shenyang Big Data
of industrial internet less than 1 Receiving on January 29,
Administration 5,000,000.00
identification and year 2021
Bureau
resolution
A. Category of inventory
Unit: yuan Currency: RMB
Closing balance Opening balance
Falling price Falling price
reserve or reserve or
provision for provision for
Item
Book balance impairment of Book value Book balance impairment of Book value
contract contract
performance performance
costs costs
Raw material 1,067,170,395.01 2,756,874.79 1,064,413,520.22 651,999,952.04 2,852,699.42 649,147,252.62
Low value
consumbles
Product in
process
Wellhope Foods Co., Ltd. 2020 Annual Report
Finished
product
Consumptive
biological 713,091,097.93 12,069,247.10 701,021,850.83 274,774,516.57 19,595,499.74 255,179,016.83
assets
Wrappage 18,861,661.78 18,861,661.78 15,557,821.25 15,557,821.25
Engineering
construction
Products in
transit
Total 2,494,630,927.93 20,803,357.55 2,473,827,570.38 1,601,200,435.66 32,827,302.51 1,568,373,133.15
B. Falling price reserves and provision for impairment of contract performance costs
Unit: yuan Currency: RMB
Decreased
Increased amount
amount
Item Opening balance Closing balance
Recovered or
Accrued
charged off
Raw material 2,852,699.42 95,824.63 2,756,874.79
Product in process 653,313.59 653,313.59
Finished product 9,725,789.76 24,379,358.14 28,781,225.83 5,323,922.07
Consumptive
biological assets
Total 32,827,302.51 35,085,108.79 47,109,053.75 20,803,357.55
A. Circumstance of contract assets
Unit: yuan Currency: RMB
Closing balance Opening balance
Provision
Item Provision for
Book balance Book value Book balance for Book value
impairment
impairment
Guarantee
deposit
Total 4,389,202.33 87,784.04 4,301,418.29
B. Accruing provision for impairment of contract assets in 2020
Unit: yuan Currency: RMB
Accrued in current Recovered in Charged off or
Item Reason
period current period written off
Guarantee deposit 87,784.04
Total 87,784.04
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Available for deducting VAT and
prepaid tax
total 109,698,865.94 121,711,175.93
Wellhope Foods Co., Ltd. 2020 Annual Report
Unit: yuan Currency: RMB
Changes in the current period
Gains or losses on Adjustment of Declared Closing balance
Investee Opening balance Additional investments other payment of Closing balance of impairment
Other
investment recognized under comprehensive dividends or provision
the equity method income profits
Unphung Joint Venture
Company
Nepal Wellhope
Agri-tech Pvt. Ltd.
NEXUS WELL-HOPE
AGRITECH 17,900,000.00
INTERNATIONAL LIMITED
Subtotal 11,669,191.54 11,669,191.54 17,900,000.00
Qingdao Shenfeng
Agri-Tech Company
Anshan Jiuguhe Food
Company
Tai’an Jiuguhe
Agriculture Development 111,292,888.94 -17,857,734.59 93,435,154.35
Company
Linghai Jiuguhe Feed Mill 62,403,210.81 -6,876,608.46 55,526,602.35
Huludao Jiuguhe Food
Company
Dandong Wellhope
Chengsan Food Company
Dandong Wellhope
Chengsan Agri-Tech 112,253,275.58 3,669,492.40 2,000,000.00 113,922,767.98
Company
Haicheng New
Hongzunda Agri-Tech 12,850,037.83 2,203,643.38 1,470,000.00 13,583,681.21
Company
Beipiao Hongfa Food
Company
Wellhope Foods Co., Ltd. 2020 Annual Report
Beijing Dahong Hengfeng
Agri-Tech Company
Tai'an Jiufeng Agri-Tech
Company
Shihaipu (Beijing)
Technology and Trade 1,270,877.77 300,450.44 1,571,328.21
Co., Ltd.
Shenyang Wenjie
Bio-Tech Company
Huludao Jiuguhe Feed
Mill
Jinzhou Jiufeng Food
Company
Zhangjiakou Jiahe
Agriculture and Animal 68,145,308.99 44,466,778.68 112,612,087.67
Husbandry Company
Tai'an Fengjiu Agri-Tech
Company
Anshan Fengsheng Food
Company
Dalian Chengsan Animal
Husbandry Company
Tailai Jiahe Agriculture
and Animal Husbandry 27,134,553.62 60,174,013.06 87,308,566.68
Company
Gongzhuling Corn
Purchasing and Storing 61,494,603.43 122,491.94 61,617,095.37
Company
Lankao Skyland Duck
Company
Hainan Nongken
Wenfeng Wenchang
Chicken
Industry(Group)Company
Dunhua Wellhope
Agri-Tech Company
Dunhua Fengda
Agriculture and Animal
Wellhope Foods Co., Ltd. 2020 Annual Report
Husbandry Company
PT SEKAR GOLDEN
HARVESTA INDONESIA
GOLDEN HARVESTA INC. 104,931,225.82 1,119,949.36 -1,328,489.14 104,722,686.04
PT. Mulia Harvest
Agritech
Shulan Fengtai Organic
Fertilizer Company
Shenyang Zhongwenjia
Bio-Tech Company
Liaoning Mubang Animal
Husbandry Equipment 1,791,476.38 1,520,000.00 7,785,460.14 11,096,936.52
Manufacturing Company
Anshan Yufeng Feed Mill -193,154.81 5,700,000.00 -2,160,121.26 3,346,723.93
Weifang Wellhope
Xinhesheng Feed Mill
Dunhua Fengda Broiler
Breeding Company
Tai’an Huijun Biomass
Energy Company
Dazhou Wellhope
Bio-Tech Company
Anshan Jiujianhe Paper
Packaging Company
Anshan Antai Plastic
Products Company
Bei’an Nongken Shengda
Pasture Specialized 7,830,000.00 590,847.40 8,420,847.40
cooperative
Dalian Wellhope Fishery
Company
Liaoning Petmate
Bio-Tech Company
Guangzhou Yikun Trading
Company
Jilin Hengfeng Animal
Health Products 1,832,880.70 881,022.35 2,713,903.05
Company
Wellhope Foods Co., Ltd. 2020 Annual Report
Shenyang Wanlitian
Agriculture and Animal 2,247,702.24 2,000,000.00 1,737,906.72 5,985,608.96
Husbandry Company
Daqing Supply and
Marketing Agri-Tech 3,527,190.48 1,018,859.02 4,546,049.50
Company
Heilongjiang Zhongyi
Ranch Information
Technology Service
Company
Indonesia Max Animal
Husbandry Technology 1,460,475.96 -51,703.20 1,408,772.76
Company
Dalian Sida Food
Company
Shandong Fengkang
Food Company
Henan Jinhezhong Cattle
Industry Company
Subtotal 2,058,378,690.97 109,105,511.00 361,315,137.75 -7,123,225.06 96,237,700.00 -12,204,640.94 2,413,233,773.72
Total 2,070,047,882.51 109,105,511.00 361,315,137.75 -7,123,225.06 96,237,700.00 -12,204,640.94 2,424,902,965.26 17,900,000.00
The investment of Unphung Joint Venture Company, Nepal Wellhope Agri-tech Pvt. Ltd. and NEXUS WELL-HOPE AGRITECH INTERNATIONAL LIMITED adopts cost
method due to the local market and regulatory environment as well as the effects that can be exerted on these three companies.
Wellhope Foods Co., Ltd. 2020 Annual Report
A. Other equity instruments Investment
Unit: yuan Currency: RMB
Item Closing balance Opening balance
China-Russia Friendship Association of
Liaoning Province
Hengshui Hejia Agriculture and Animal
Husbandry Company
Xi'an Micro Monkey E-commerce
Company
Xinji Jiayu Agriculture and Animal
Husbandry Company
Shenze Jiahe Agriculture and Animal
Husbandry Company
Dalian Xuelong Heniu Import and
Export Company
Henan Shanghui Feed Development
Company
Shenyang Bononveit Animal Health
Products Company
Beijing Haobang Swine Artificial
Insemination Service Company
Gansu Judinghe Agriculture and Animal
Husbandry
Total 20,847,697.96 5,760,839.23
B. Non-transactional equity instrument investment
Unit: yuan Currency: RMB
Amount of
Dividend other
income comprehensive
Cumulative Cumulative
Item recognized in income
gains losses
the current transferred
period into retained
earnings
China-Russia Friendship Association of
Liaoning Province
Hengshui Hejia Agriculture and Animal
Husbandry Company
Xi'an Micro Monkey E-commerce
Company
Xinji Jiayu Agriculture and Animal
Husbandry Company
Shenze Jiahe Agriculture and Animal
Husbandry Company
Dalian Xuelong Heniu Import and
Export Company
Henan Shanghui Feed Development
Company
Shenyang Bononveit Animal Health
Products Company
Beijing Haobang Swine Artificial
Insemination Service Company
Total 1,596,347.68 1,145,184.72 66,535.00
Wellhope Foods Co., Ltd. 2020 Annual Report
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Fixed assets 2,860,162,059.91 2,023,113,939.02
Disposal of fixed assets
Total 2,860,162,059.91 2,023,113,939.02
Circumstance of fixed assets
Unit: yuan Currency: RMB
Buildings and Machinery Transportation Other
Item Total
structures equipment vehicle equipment
A. Opening
balance
B. Increased
amount
a. Purchased 234,075,404.05 235,685,225.99 28,437,592.23 21,431,564.09 519,629,786.36
b. Construction
in progress 238,935,701.37 182,075,762.58 3,715,229.27 4,676,476.34 429,403,169.56
transferred in
c. Increased by
business 81,183,177.84 53,431,364.41 755,630.52 1,184,582.03 136,554,754.80
combination
C. Decreased
amount
a. Disposed or
scrapped
b. Decreased by
business
combination
D. Closing
balance
depreciation
A. Opening
balance
B. Increased
amount
a. Accruing 49,383,347.96 136,000,553.88 20,709,035.09 11,778,301.54 217,871,238.47
b. Increased by
business 12,595,183.70 12,565,357.32 166,116.82 605,923.33 25,932,581.17
combination
C. Decreased
amount
a. Disposed or
scrapped
b. Decreased by
business
combination
Wellhope Foods Co., Ltd. 2020 Annual Report
D. Closing
balance
provision
A. Opening
balance
B. Increased
amount
a. Accruing
C. Decreased
amount
a. Disposed or
scrapped
D. Closing
balance
A. Closing book
value
B. Opening
book value
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Construction in progress 322,895,206.90 240,012,874.86
Engineering material
Total 322,895,206.90 240,012,874.86
A. Circumstance of construction in progress
Unit: yuan Currency: RMB
Closing balance Opening balance
Item
Book balance Book value Book balance Book value
Hebei Taihang
Wellhope-broiler 87,767,632.25 87,767,632.25
slaughtering and processing
Hainan Wellhope-feed
production line with 200,000 51,058,543.76 51,058,543.76 13,326,858.52 13,326,858.52
tons per year
Lingyuan Wellhope-pig farm
construction
Yangling Wellhope-plant
construction and renovation
Dalian Zhongjia-the second
phase of chicken processing 12,688,431.38 12,688,431.38 2,226,208.39 2,226,208.39
and slaughtering project
Shenyang Wellhope Poultry-
the first phase of layer 12,147,049.98 12,147,049.98
factory
Daqing Wellhope
Food-production workshop 11,723,775.64 11,723,775.64
construction
Wellhope Foods Co., Ltd. 2020 Annual Report
Liaoning Wellhope-
construction of raw material 9,457,098.75 9,457,098.75
warehouse
Lixin Xiangfeng-pig farm
construction
Qingyuan Wellhope-feed
production line with 400,000 9,143,447.15 9,143,447.15
tons per year
Changchun Wellhope
Food-factory area 4,726,334.17 4,726,334.17
reconstruction
Fushun Agriculture and
Animal Husbandry-pig farm 890,360.00 890,360.00 81,582,306.27 81,582,306.27
construction
Dalian Heyuan-Dayao
hatching farm
Jilin Hefeng-pig farm
construction
Shulan Fengtai Agriculture
and Animal Husbandry- 55,672,411.04 55,672,411.04
broiler house construction
Puyang Wellhope- broiler
house construction
Shenyang Huakang Broiler
Company-workshop 8,929,925.91 8,929,925.91
renovation
Lankao Wellhope-premix
project
Other constructions 51,527,837.83 51,527,837.83 31,388,001.80 31,388,001.80
Total 322,895,206.90 322,895,206.90 240,012,874.86 240,012,874.86
Wellhope Foods Co., Ltd. 2020 Annual Report
B. Changes of important constructions in progress
Unit: yuan Currency: RMB
Percentage of
accumulated
Increased Amount transferred Construction Source of
Project Budget Opening balance input
amount in fixed assets Closing balance progress funds
accounting for
the budget %
Hebei Taihang
Wellhope-broiler
slaughtering and
processing
Hainan Wellhope-feed
production line with 85,000,000.00 13,326,858.52 53,690,582.03 15,958,896.79 51,058,543.76 78.84 79% Self-raised
Lingyuan Wellhope-pig
farm construction
Yangling Wellhope-
plant construction and 23,000,000.00 13,336,130.05 13,336,130.05 57.98 58% Self-raised
renovation
Dalian Zhongjia-the
second phase of chicken
processing and
slaughtering project
Shenyang Wellhope
Poultry- the first phase of 15,000,000.00 12,147,049.98 12,147,049.98 80.98 81% Self-raised
layer factory
Daqing Wellhope
Food-production 12,000,000.00 11,723,775.64 11,723,775.64 97.70 100% Self-raised
workshop construction
Liaoning Wellhope-
construction of raw 30,000,000.00 9,457,098.75 9,457,098.75 31.52 32% Self-raised
material warehouse
Lixin Xiangfeng-pig farm
construction
QingyuanWellhope-feed
production line with 70,000,000.00 9,143,447.15 9,143,447.15 13.06 10% Self-raised
Wellhope Foods Co., Ltd. 2020 Annual Report
Changchun Wellhope
Food-factory area 97,300,000.00 4,726,334.17 4,726,334.17 4.86 10% Self-raised
reconstruction
Fushun Agriculture and
Animal Husbandry-pig 300,300,000.00 81,582,306.27 58,099,549.97 138,791,496.24 890,360.00 98.12 98% Self-raised
farm construction
Dalian Heyuan-Dayao
hatching farm
Jilin Hefeng-pig farm
construction
Shulan Fengtai
Agriculture and Animal
Husbandry-broiler house
construction
Puyang Wellhope- broiler
house construction
Shenyang Huakang
Broiler Company- 12,741,491.00 8,929,925.91 3,088,993.08 12,018,918.99 94.33 100% Self-raised
workshop renovation
Lankao Wellhope-
premix project
Total 1,617,467,676.00 208,624,873.06 400,796,508.35 338,054,012.34 271,367,369.07 / /
Wellhope Foods Co., Ltd. 2020 Annual Report
Productive biological assets using cost measurement model
Unit: yuan Currency: RMB
Animal husbandry
Item Total
Broiler breeder Pig breeder
A. Opening balance 52,264,742.77 67,953,454.22 120,218,196.99
B. Increased amount 61,150,663.85 195,455,652.41 256,606,316.26
a. Externally purchased 22,601,238.14 95,939,394.62 118,540,632.76
b. Breeding by own farm 38,549,425.71 99,516,257.79 138,065,683.50
C. Decreased amount 55,042,535.39 58,327,405.14 113,369,940.53
a. Disposed 55,042,535.39 58,327,405.14 113,369,940.53
D. closing balance 58,372,871.23 205,081,701.49 263,454,572.72
A. Opening balance 22,090,264.89 3,301,619.22 25,391,884.11
B. Increased amount 42,020,630.00 23,918,175.89 65,938,805.89
a. Accruing 42,020,630.00 23,918,175.89 65,938,805.89
C. Decreased amount 41,981,506.81 7,904,160.60 49,885,667.41
a. Disposed 41,981,506.81 7,904,160.60 49,885,667.41
D. Closing balance 22,129,388.08 19,315,634.51 41,445,022.59
A. Closing book value 36,243,483.15 185,410,544.02 221,654,027.17
B. Opening book value 30,174,477.88 64,651,835.00 94,826,312.88
Unit: yuan Currency: RMB
Computer software
Item Land use rights Total
and other
A. Opening balance 283,885,270.01 12,795,928.14 296,681,198.15
B. Increased amount 54,877,628.75 337,213.42 55,214,842.17
a. Purchased 44,262,441.04 337,213.42 44,599,654.46
b. Increased by business
combination 10,615,187.71 10,615,187.71
C. Decreased amount 25,700.00 83,660.29 109,360.29
a. Disposed 25,700.00 83,660.29 109,360.29
b. Decreased by business
combination
D. closing balance 338,737,198.76 13,049,481.27 351,786,680.03
amortization
A. Opening balance 45,817,866.76 5,299,164.00 51,117,030.76
B. Increased amount 7,501,178.60 1,462,162.25 8,963,340.85
a. Accruing 6,423,665.41 1,462,162.25 7,885,827.66
b. Increased by business
combination
C. Decreased amount 79,144.73 79,144.73
a. Disposed 79,144.73 79,144.73
b. Decreased by business
combination
D. Closing balance 53,319,045.36 6,682,181.52 60,001,226.88
Wellhope Foods Co., Ltd. 2020 Annual Report
A. Closing book value 285,418,153.40 6,367,299.75 291,785,453.15
B. Opening book value 238,067,403.25 7,496,764.14 245,564,167.39
Original value of goodwill
Unit: yuan Currency: RMB
Increased amount Decreased
Invested entity or amount
matters forming goodwill Opening balance Formed by Closing balance
business Disposal
combination
Dalian Zhongjia Food
Company 290,425.67 290,425.67
Total 290,425.67 290,425.67
Unit: yuan Currency: RMB
Item Opening balance Increased amount Amortized Closing balance
amount
Broiler cages 82,161,315.11 55,649,585.76 26,511,729.35
Land lease fee 30,526,112.57 62,453,539.61 7,141,321.20 85,838,330.98
Fixed assets 16,377,506.34 11,657,431.82 6,099,381.47 21,935,556.69
improvement
Other 5,439,283.78 7,783,564.99 3,562,903.50 9,659,945.27
Total 134,504,217.80 81,894,536.42 72,453,191.93 143,945,562.29
A. Deferred income tax assets that have not been offset
Unit: yuan Currency: RMB
Closing balance Opening balance
Deductible Deductible
Item Deferred income Deferred income
temporary temporary
tax assets tax assets
difference difference
Provision for the
impairment of assets
Unrealized profit of
internal transaction
Equity incentive expenses 1,331,842.67 199,776.40 3,243,114.20 508,474.55
Deferred income 500,000.00 125,000.00
Changes in fair value 1,397,540.92 209,642.73 112,115.92 28,028.98
Total 189,579,707.38 38,791,631.37 183,397,760.09 35,987,736.49
B. Deferred income tax liabilities that have not been offset
Unit: yuan Currency: RMB
Closing balance Opening balance
Taxable Taxable
Item Deferred income Deferred income
temporary temporary
tax liabilities tax liabilities
differences differences
Book value of assets
greater than the tax base
Total 9,692,077.59 1,936,853.23 1,611,908.32 396,995.58
Wellhope Foods Co., Ltd. 2020 Annual Report
C. Details of unrecognized deferred income tax asset
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Deductible temporary difference 56,201,873.58 51,189,855.72
Deductible losses 224,930,527.78 207,837,022.11
Total 281,132,401.36 259,026,877.83
D. The deductible losses of unrecognized deferred income tax assets will be due in the following years
Unit: yuan Currency: RMB
Year Closing balance Opening balance
Total 224,930,527.78 207,837,022.11
Unit: yuan Currency: RMB
Closing balance Opening balance
Item
Book balance Book value Book balance Book value
Prepayments of long-lived assets 51,380,357.44 51,380,357.44 44,490,695.92 44,490,695.92
Prepayments of fees to contract farms 474,836,821.82 474,836,821.82 277,650,038.27 277,650,038.27
Prepayments of house rent 4,923,499.98 4,923,499.98 15,322,533.37 15,322,533.37
Total 531,140,679.24 531,140,679.24 337,463,267.56 337,463,267.56
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Guaranteed loan 220,517,679.61 109,638,205.81
Credit loan 889,153,690.88 941,240,000.00
Accrued interest 1,001,498.91
Total 1,110,672,869.40 1,050,878,205.81
Explanation: The guaranteed loan is the bank loan guaranteed by the Company for its subsidiary
companies, including Lingyuan Wellhope, Chongqing Dahong Machinery， Liaoning Expert Trading
Company，Lixin Xiangfeng Agriculture and Animal Husbandry, Puyang Wellhope Food and Kaifeng
Wellhope Meat Food.
Wellhope Foods Co., Ltd. 2020 Annual Report
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Bank acceptance 4,000,000.00
Total 4,000,000.00
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Accounts payable related to purchasing and expenses 934,645,438.88 613,009,029.34
Accounts payable related to long-lived assets 134,323,150.97 46,207,454.50
Total 1,068,968,589.85 659,216,483.84
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Proceeds from sale 15,522,362.13 4,879,960.48
Total 15,522,362.13 4,879,960.48
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Proceeds from sale 365,124,817.02 203,523,445.03
Total 365,124,817.02 203,523,445.03
A. Payroll payable
Unit: yuan Currency: RMB
Opening Increased Decreased Closing
Item
balance amount amount balance
defined contribution plan
year
Total 62,549,364.12 779,570,707.69 749,663,596.25 92,456,475.56
B. Short-term benefits
Unit: yuan Currency: RMB
Opening Increased Decreased
Item Closing balance
balance amount amount
allowances and subsidies
including: Medical
insurance premiums
Wellhope Foods Co., Ltd. 2020 Annual Report
Occupational
injury insurance premium
Birth insurance
premium
dues, employee education 749,115.33 4,434,768.56 4,482,820.70 701,063.19
expense
absences
profit-sharing plan
Total 61,001,277.97 769,318,440.11 738,934,262.02 91,385,456.06
C. Defined contribution plan
Unit: yuan Currency: RMB
Opening Increased Decreased Closing
Item
balance amount amount balance
Basic endowment insurance 1,499,516.44 9,559,614.82 10,021,631.51 1,037,499.75
Unemployment insurance expense 48,569.71 326,527.97 341,577.93 33,519.75
Enterprise annuity
Total 1,548,086.15 9,886,142.79 10,363,209.44 1,071,019.50
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Value-added tax 1,562,198.72 1,351,995.42
Corporate income tax 40,452,996.63 32,731,646.44
Individual income tax 2,172,312.75 729,362.56
City maintenance and construction tax 117,653.05 109,286.49
Extra charges of education funds 87,641.61 74,513.94
House property tax 802,901.94 697,937.54
City and town land use tax 1,289,546.55 1,343,282.00
Stamp tax 811,721.16 462,741.13
Other 293,823.12 180,188.32
Total 47,590,795.53 37,680,953.84
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Interest payable 1,528,201.39
Dividends payable 1,500,000.00 1,434,027.14
Other payables 279,173,085.07 339,277,132.75
Total 280,673,085.07 342,239,361.28
Wellhope Foods Co., Ltd. 2020 Annual Report
A. Interest payable
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Interests of long-term loan that pay interests
periodically and repay the principal due at maturity
Interest payable of short-term borrowings 1,290,618.06
Total 1,528,201.39
B. Dividends payable
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Common stock dividends 1,500,000.00 1,434,027.14
Total 1,500,000.00 1,434,027.14
C. Other payables
Other payables presented by nature
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Operational payables related to expenses
and transactions
Investment related payables 6,300,000.00 64,505,700.00
Repurchasing obligations of non-restricted
stock
Total 279,173,085.07 339,277,132.75
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Long-term borrowings due within 1 year 102,845,470.70 52,000,000.00
Long-term payables due within 1 year 19,051,435.96 18,593,717.62
Total 121,896,906.66 70,593,717.62
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Short-term bonds payable
Refunds payable
Unamortized output VAT 3,386,523.00 1,125,843.17
Total 3,386,523.00 1,125,843.17
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Credit loan 573,789,000.00 174,330,000.00
Interest payable 1,091,271.67
Total 574,880,271.67 174,330,000.00
Wellhope Foods Co., Ltd. 2020 Annual Report
Unit: yuan Currency: RMB
Item Closing balance Opening balance
long-term payable 15,458,230.92 11,025,000.09
Total 15,458,230.92 11,025,000.09
Long-term payable presented by nature
Unit: yuan Currency: RMB
Item Opening balance Closing balance
Accrued financial lease outlay 15,458,230.92 11,025,000.09
Unit: yuan Currency: RMB
Opening Increased Decreased Closing
Item Reason
balance amount amount balance
Government grant 31,841,250.00 17,461,277.47 7,063,654.72 42,238,872.75
total 31,841,250.00 17,461,277.47 7,063,654.72 42,238,872.75 /
Wellhope Foods Co., Ltd. 2020 Annual Report
Projects receiving government grants
Unit: yuan Currency: RMB
Related to
Amount of Amount
Opening Other Closing assets or
Liability item newly recorded in
balance changes balance related to
increased grant other income
income
Lingyuan
Wellhope
related to
asset
ruminant feed
project
Lingyuan
Wellhope corn related to
purchasing and asset
storage barn
Shenyang city
central
industrial related to
transformation asset
and upgrading
funds
Lingyuan
Wellhope
related to
asset
organic fertilizer
project
sic-tech major related to
special project asset
funds
Project funds
related to related to
benefit farming asset
policy
Government’s
development
funds for
related to
high-quality 8,100,000.00 8,100,000.00 7,290,000.00
asset
development of
manufacturing
industry (green
manufacturing)
province
industrial
internet related to
innovation and asset
development
special project
funds
Provincial
Research Funds
related to
for Corn Major 1,000,000.00 1,000,000.00
income
Special Project
Collaborators
Wellhope Foods Co., Ltd. 2020 Annual Report
White feather
broiler green
related to
platform 945,000.00 945,000.00
asset
construction
project
Epidemic
low-interest
related to
loans 1,076,277.47 740,154.72 336,122.75
income
government
subsidies
Jilin province
science and
related to
technology 500,000.00 500,000.00
income
special funds in
Funding for the
related to
Hebao pig 4,100,000.00 4,100,000.00
asset
project
Total 31,841,250.00 17,461,277.47 6,323,500.00 740,154.72 42,238,872.75 /
Wellhope Foods Co., Ltd. 2020 Annual Report
Unit: yuan Currency: RMB
Changes (increase or decrease)
Opening balance Issuing new Closing balance
Other Subtotal
shares
Total shares 922,304,396.00 -244,500.00 -244,500.00 922,059,896.00
written off by the Company.
Unit: yuan Currency: RMB
Opening Increased Decreased
Item Closing balance
balance amount amount
Capital premium (share capital
premium)
Other capital reserves 29,112,460.73 5,436,850.36 34,549,311.09
Total 882,723,066.29 5,436,850.36 888,159,916.65
Note: The change in other capital reserve was caused by restricted shares. The amount of share-based
payment of restricted shares settled by equity that was attributable to the parent company, and those
repurchased and cancelled restrict shares that did not meet the unlocking conditions increased RMB
Unit: yuan Currency: RMB
Item Opening balance Increased amount Decreased amount Closing balance
Repurchase of
restricted stock
Total 70,688,750.00 24,992,935.00 45,695,815.00
Explanation: The Company granted restricted shares to 372 managers in December 2018 and
recognized the treasury shares of restricted stock with repurchase obligation.
In the first lockup period, these restricted shares that met unlocking conditions reduced treasury shares
by RMB 19,768,110.00, those restricted shares that did not meet unlocking conditions reduced treasury
shares by RMB 1,185,825.00, and the revocable cash dividends paid during the waiting period for the
unlockable restricted shares reached RMB 4,039, 000.00.
Wellhope Foods Co., Ltd. 2020 Annual Report
Unit: yuan Currency: RMB
Amount in current period
Deduct: Transfer
to retained
earnings in the
Opening After-tax, Closing
Item current period After-tax,
balance attributable to balance
Pre-tax from prior attributable to
non-controlling
periods charged parent company
interest
to other
comprehensive
income
comprehensive
income that
-760,192.18 1,220,323.73 -66,535.00 1,240,959.08 45,899.65 480,766.90
cannot be
reclassified into
gains or losses
Changes in the
fair value of
-760,192.18 1,220,323.73 -66,535.00 1,240,959.08 45,899.65 480,766.90
other equity
instruments
comprehensive
income that will
be reclassified
into gains or
losses
including: other
comprehensive
income that can
be transferred in 5,932,621.40 -7,123,225.06 -7,100,475.65 -22,749.41 -1,167,854.25
gains or losses
under the equity
method
Translation
balance of
foreign currency 950,406.08 -4,400,551.08 -2,420,821.34 -1,979,729.74 -1,470,415.26
financial
statements
Total other
comprehensive 6,122,835.30 -10,303,452.41 -66,535.00 -8,280,337.91 -1,956,579.50 -2,157,502.61
income
Unit: yuan Currency: RMB
Item Opening balance Increased amount Closing balance
Statutory surplus
reserve
Total 352,059,456.90 65,311,049.43 417,370,506.33
Unit: yuan Currency: RMB
Item 2020 2019
Undistributed profit at the end of prior period before
adjustment
Adjusting total undistributed profit at the beginning of
current period
Undistributed profit at the beginning of current period
after adjustment
Wellhope Foods Co., Ltd. 2020 Annual Report
add: Net profit attributable to the owners of the parent
company in current period
deduct: Extraction of statutory surplus reserve 65,311,049.43 79,268,090.83
Extraction of discretionary surplus reserve
Extraction of general risk provisions
Common stock dividends payable 202,809,167.12 166,014,791.28
Dividends of common stock transferred to share
capital
Undistributed profit at the end of current period 4,572,660,487.98 3,605,618,553.05
Explanation: Due to retroactive adjustment in accordance with Accounting Standards for Business
Enterprises and its related new provisions, the impacts on the opening balance of undistributed profits
was 0 yuan.
Unit: yuan Currency: RMB
Item
Revenue Cost Revenue Cost
Primary businesses 23,795,661,737.11 21,669,041,137.36 17,783,082,417.36 15,788,139,269.90
Other businesses 21,939,029.15 14,549,874.38 9,009,556.22 3,880,745.65
Total 23,817,600,766.26 21,683,591,011.74 17,792,091,973.58 15,792,020,015.55
Unit: yuan Currency: RMB
Item 2020 2019
City maintenance and construction tax 1,224,844.77 1,137,929.68
Extra charges of education funds 897,418.84 807,658.13
House property tax 8,012,204.63 6,831,387.45
Land use tax 11,188,806.30 10,819,153.17
Stamp tax 8,325,020.40 5,826,905.19
Other 1,652,569.59 1,087,449.43
Total 31,300,864.53 26,510,483.05
Unit: yuan Currency: RMB
Item 2020 2019
Payroll 230,455,048.50 205,619,077.91
Travelling expense 118,203,610.39 114,195,701.76
Transportation and handling expense and
vehicle expense
Service fee 18,440,888.50 15,968,067.70
Business entertainment expense 21,382,773.93 20,982,184.66
Business advertising expense 17,886,211.01 13,494,317.66
Lease expense 5,224,564.43 6,181,904.43
Meeting expenditure 4,749,542.89 4,368,050.10
Sales service charge 10,265,689.03 4,927,406.41
Office and communication fee 5,887,049.55 5,134,153.70
Subtotal of other items 18,543,773.49 17,138,345.34
Total 465,307,995.89 487,217,524.04
Explanation: The Company implemented the New Revenue Standard on January 1, 2020, recorded the
transportation cost of products incurred for the performance of contracts as contract performance
costs in the operating costs.
Wellhope Foods Co., Ltd. 2020 Annual Report
Unit: yuan Currency: RMB
Item 2020 2019
Payroll 141,131,861.94 112,439,535.70
Depreciation 35,401,179.38 40,847,499.96
Office and communication fee 18,549,111.05 16,797,136.59
Travelling expense 8,412,870.03 9,014,660.58
Repair charge 14,761,977.62 11,342,686.18
Lease expense 6,254,489.04 5,146,925.10
Amortization of intangible assets 8,617,015.70 7,683,509.63
Business entertainment expense 8,907,262.28 7,482,966.92
Water and electricity 5,143,990.72 4,299,424.06
Service fee 16,921,076.32 9,642,037.71
Heating fee 4,750,298.48 6,817,865.20
Subtotal of other items 41,424,564.47 44,046,443.67
Total 310,275,697.03 275,560,691.30
Unit: yuan Currency: RMB
Item 2020 2019
Payroll 24,857,318.54 25,431,025.81
Design and experiment fee 36,616,357.05 17,512,053.59
Material and appliance charge 14,439,616.57 10,743,283.02
Travel expense 2,130,998.14 3,941,624.57
Depreciation and amortization expense 3,253,286.96 3,058,470.18
Subtotal of other items 2,289,529.14 4,522,659.48
Total 83,587,106.40 65,209,116.65
Unit: yuan Currency: RMB
Item 2020 2019
Interest expenditure 75,771,816.48 77,508,278.78
deduct: Interest income -14,953,268.10 -9,696,477.31
add: Exchange loss (deduct income) 413,230.21 5,689,613.00
add: Service charge 3,448,435.13 2,891,552.83
Total 64,680,213.72 76,392,967.30
Unit: yuan Currency: RMB
Item 2020 2019
Government grant recorded in 23,500,036.20 11,495,398.41
Total 23,500,036.20 11,495,398.41
Explanation: Details are listed in “Government Grants”
Unit: yuan Currency: RMB
Item 2020 2019
Income from long-term equity investment measured by the equity
method
Income from disposal of long-term equity investment 3,624,691.43
Investment income from financial assets held for trading 2,828,562.02 3,545,198.63
Dividend income from other equity instrument investments during 100,000.00
Wellhope Foods Co., Ltd. 2020 Annual Report
the holding period
Investment income from disposal of trading financial assets -1,579,994.94 195,571.87
Income from disposal of other equity instrument investments 100,000.00
After losing control, gain or loss generated by the re-measurement
of the residual equity according to fair value
Total 362,563,704.83 637,479,444.82
Unit: yuan Currency: RMB
Source of income from changes in fair value 2020 2019
Trading financial assets -1,397,309.00 577,449.00
including: Income from fair value changes generated by
-1,397,309.00 577,449.00
derivative financial instruments
Total -1,397,309.00 577,449.00
Unit: yuan Currency: RMB
Item 2020 2019
Bad debt loss of notes receivable -32,632.65
Bad debt loss of accounts receivable -20,584,815.87 -9,898,584.12
Bad debt loss of other receivables 14,432,460.68 -16,445,616.93
Total -6,184,987.84 -26,344,201.05
Unit: yuan Currency: RMB
Item 2020 2019
Loss of inventory falling price and loss of impairment of
-35,085,108.79 -40,242,301.07
contract performance cost
Impairment loss on fixed assets -58,216,968.82
Impairment loss on contract assets -87,784.04
Total -35,172,892.83 -98,459,269.89
Unit: yuan Currency: RMB
Item 2020 2019
Gain or loss from disposal of fixed assets 624,443.26 1,177,420.87
Gain or loss from disposal of productive biological asset 2,544,898.80 -605,269.52
Total 3,169,342.06 572,151.35
Unit: yuan Currency: RMB
Amount included in current
Item 2020 2019
extraordinary items
Total gains or losses from
disposal of non-current assets
Government grants 8,861,828.97 10,868,297.38 8,861,828.97
Other 3,694,824.63 2,483,254.32 3,694,824.63
Total 12,873,829.17 13,406,536.26 12,873,829.17
Wellhope Foods Co., Ltd. 2020 Annual Report
Government grants recorded in current gains and losses
Unit: yuan Currency: RMB
Related to
assets or
Item 2020 2019
related to
income
related to
Tax subsidy from Food and Drug Office 3,000,000.00
income
related to
Moderate scale operation project 1,925,960.00
income
Award for resumption of production during related to
the COVID-19 income
Award for production increment from related to
Finance Bureau of Daxing District, Beijing income
Subtotal for other projects under RMB related to
Special funds for foreign trade industry related to
development income
Incentive fund for China's top 500 private related to
enterprises income
Special fund for financial development in related to
related to
Support fund for enterprise development 550,000.00
income
Total 8,861,828.97 10,868,297.38 /
Unit: yuan Currency: RMB
Amount included in current
Item 2020 2019
extraordinary items
Total losses from disposal of
non-current assets
External donations 3,281,079.38 3,782,783.00 3,281,079.38
Extraordinary loss 9,972,261.57 13,449,568.40 9,972,261.57
Amercement outlay 1,203,665.89 924,253.69 1,203,665.89
Other 58,469.67 183,300.79 58,469.67
Total 28,976,468.62 25,737,839.85 28,976,468.62
Unit: yuan Currency: RMB
Item 2020 2019
Current income tax expense 152,918,204.68 90,037,145.50
Deferred income tax expense -1,264,037.23 -5,330,616.57
Total 151,654,167.45 84,706,528.93
Adjustment procedure for accounting profit and income tax expense
Unit: yuan Currency: RMB
Item 2020
Total profit 1,509,233,130.92
Income tax expenses calculated at statutory or applicable tax rates 226,384,969.64
Effects of subsidiaries that are subject to different tax rates 27,672,741.86
Effects of adjusting the income tax on previous periods -2,874,146.23
Effects of non-taxable income -97,051,440.04
Wellhope Foods Co., Ltd. 2020 Annual Report
Effects of non-deductible costs, expenses and losses 4,558,827.90
Effects of using deductible losses of deferred income tax assets that
-8,278,079.94
have not been recognized in previous period
Effects of deductible temporary differences or deductible losses on
deferred income tax assets that have not been recognized in current 12,169,821.68
period
Calculation and deduction of R&D expenditure -5,930,394.68
Other -4,998,132.74
Income tax expense 151,654,167.45
See note.
A. Cash received from other activities related to operating
Unit: yuan Currency: RMB
Item 2020 2019
Government grants 38,499,642.64 33,951,978.38
Interest income 14,953,268.10 9,696,477.31
Subtotal of transactions and other 46,320,016.55 74,276,495.00
Total 99,772,927.29 117,924,950.69
B. Cash paid for other activities related to operating
Unit: yuan Currency: RMB
Item 2020 2019
Travelling expense 128,747,478.56 127,151,986.91
Transportation and handling expense 14,268,844.17 79,208,314.37
R&D expenditure 51,055,973.62 32,777,996.09
Business entertainment expense 21,382,773.93 28,465,151.58
Office and communication fee 24,436,160.60 21,931,290.29
Service fee 35,361,964.82 22,863,995.41
Other operating expenses paid 60,209,885.08 76,106,845.41
Transactions and other paid 46,659,223.54 42,979,843.73
Total 382,122,304.32 431,485,423.79
C. Cash received from other activities related to investment
Unit: yuan Currency: RMB
Item 2020 2019
L/C Guarantee deposits decreased 1,778,735.87 28,220,000.81
Futures margin decreased 33,086,950.46
Net cash received from acquiring
subsidiaries
Total 45,855,779.74 35,351,061.09
D. Cash paid for other activities related to investment
Unit: yuan Currency: RMB
Item 2020 2019
Futures margin increased 34,912,964.17
Net cash paid for disposal of subsidiaries 237,407.44 3,122,032.62
Cash paid for providing funds 4,350,000.00
Total 4,587,407.44 38,034,996.79
Wellhope Foods Co., Ltd. 2020 Annual Report
E. Cash received from other activities related to financing
Unit: yuan Currency: RMB
Item 2020 2019
Subsidiaries receive capital increase from
non-controlling shareholders in advance
Cash received from disposal of subsidiaries'
shareholdings
Total 6,056,251.57 19,499,680.00
F. Cash paid for other activities related to financing
Unit: yuan Currency: RMB
Item 2020 2019
Parent company repurchased shares that did not meet
the unlocking conditions
Finance lease fee 854,460.00
Cash paid for buying non-controlling interests of
subsidiaries
Total 2,040,285.00 6,433,985.36
A. Supplementary information
Unit: yuan Currency: RMB
Further information 2020 2019
Net profit 1,357,578,963.47 1,497,464,315.81
add: Assets impairment provision 35,172,892.83 98,459,269.89
Credit impairment losses 6,184,987.84 26,344,201.05
Depreciation of fixed assets, depletion of oil and gas assets,
depreciation of productive biological assets
Amortization of intangible assets 7,883,410.95 6,977,214.30
Amortization of long-term unamortized expense 71,796,049.07 61,409,487.93
Losses on disposal of fixed assets, intangible assets and
-3,169,342.06 -572,151.35
other long-lived assets
Losses on retirement of fixed assets 14,143,816.54 20,792,517.81
Losses due to changes in fair value 1,397,309.00 -577,449.00
Financial expense 76,993,537.15 82,145,120.02
Investment losses -362,563,704.83 -637,479,444.82
Decrease of deferred income tax assets -2,803,894.88 -5,727,612.15
Increase of deferred income tax liabilities 1,539,857.65 396,995.58
Decrease of inventory -923,577,752.02 -200,278,163.60
Decrease of operating receivables -460,716,561.45 -223,764,950.58
Increase of operating payables 688,456,892.10 195,376,635.14
Other -26,076,787.04 -18,351,471.92
Net cash flow from operating activities 765,945,453.03 1,111,605,966.58
Closing balance of cash 1,186,197,643.04 1,508,390,481.68
deduct: Opening balance of cash 1,508,390,481.68 889,204,873.97
add: Closing balance of cash equivalent
deduct: Opening balance of cash equivalent
Net increase in cash and cash equivalents -322,192,838.64 619,185,607.71
Wellhope Foods Co., Ltd. 2020 Annual Report
B. Net cash paid for acquiring subsidiaries
Unit: yuan Currency: RMB
Amount
Cash or cash equivalents paid for business combinations occurred
in current period
including: Yangling Wellhope Agri-Tech Company 42,000,000.00
Yixian Dingli Hesheng Livestock and Poultry Feeding Company 20,526,500.00
Yixian Weijing Livestock and Poultry Feeding Company 8,250,200.00
Yixian Hekang Agri-Tech Company 26,020,000.00
Hebei Hetai Livestock and Poultry Farming Company 15,159,200.00
Dunhua Wellhope Agri-Tech Company 3,151,150.87
deduct: Cash and cash equivalents held by the subsidiary on the
acquiring date
including: Yangling Wellhope Agri-Tech Company
Yixian Dingli Hesheng Livestock and Poultry Feeding Company
Yixian Weijing Livestock and Poultry Feeding Company 2,967.79
Yixian Hekang Agri-Tech Company 2,008.44
Hebei Hetai Livestock and Poultry Farming Company 792.32
Dunhua Wellhope Agri-Tech Company 61,790.47
add: Cash or cash equivalents paid for business combinations
occurred in previous periods
Net cash paid for acquiring subsidiaries 115,039,491.85
C. Cash and cash equivalents
Unit: yuan Currency: RMB
Item Closing balance Opening balance
including: Cash on hand 401,767.96 693,912.75
Bank deposits available for payment at any time 1,185,795,875.08 1,507,696,568.93
Unit: yuan Currency: RMB
Item Closing book value Reason for restriction
Monetary capital 11,524,011.55 Futures margin
Monetary capital 1,144.57 L/C guarantee deposit
Total 11,525,156.12 /
A. Foreign currency monetary items
Unit: yuan
Closing balance
Closing balance of Translating exchange
Item translated into
foreign currency rate
RMB
Monetary capital 5,515,874.94
including: US dollar 418,763.54 6.5249 2,732,390.22
Euro 82.90 8.0250 665.27
HK dollar 1,889,051.99 0.8416 1,589,901.72
Ruble 13,602,254.62 0.0877 1,192,917.73
Accounts receivable 8,676,049.58
including: US dollar 994,755.99 6.5249 6,490,683.34
HK dollar 2,596,557.01 0.8416 2,185,366.24
Short-term borrowing 89,517,679.61
Wellhope Foods Co., Ltd. 2020 Annual Report
including: US dollar 13,719,394.87 6.5249 89,517,679.61
Accounts payable 2,571,424.38
including: US dollar 1,609.22 6.5249 10,500.00
Ruble 29,200,962.14 0.0877 2,560,924.38
Prepayment 165,954.31
including: US dollar 25,434.00 6.5249 165,954.31
Other payables 2,508,003.06
including: Ruble 28,597,526.34 0.0877 2,508,003.06
B. Explanation of overseas business entity
Currency
Name Business place abroad Recording currency
selection basis
Russia Wellhope Agri-Tech
Russia Ruble Local currency
Company
Unit: yuan Currency: RMB
Amount
recorded in
Category Amount Present item
current gains or
losses
non-operating
Tax Subsidy from Food and Drug Office 3,000,000.00 3,000,000.00
income
Job Stabilization Allowance 2,335,393.68 other income 2,335,393.68
Subsidies for livestock and poultry projects 2,200,000.00 other income 2,200,000.00
Subsidy from Agriculture Bureau 2,000,000.00 other income 2,000,000.00
non-operating
Moderate scale operation project 1,925,960.00 1,925,960.00
income
Special funds for agricultural development 1,430,000.00 other income 1,430,000.00
Award for resumption of production during non-operating
COVID-19 income
High-tech enterprise subsidy for the year 2017
from Guangzhou Science and Technology 600,000.00 other income 600,000.00
Innovation Commission
Work allowance 524,400.00 other income 524,400.00
The second batch of project allocations for the
Incentive funds from Shenyang Municipal
Bureau of Industry and Information Technology
on the allocation of national and provincial 500,000.00 other income 500,000.00
green manufacturing system demonstration
enterprises
Award for production increment from Finance non-operating
Bureau of Daxing District, Beijing 500,000.00 income 500,000.00
Subtotal for other grants under RMB 500,000 7,086,742.52 other income 7,086,742.52
non-operating
Subtotal for other grants under RMB 500,000 2,715,868.97 2,715,868.97
income
Deferred income transferred in current period 6,323,500.00 other income 6,323,500.00
financial
Deferred income transferred in current period 740,154.72 740,154.72
expense
Total 33,102,019.89 / 33,102,019.89
Wellhope Foods Co., Ltd. 2020 Annual Report
VIII. Change of Consolidation Scope
A. Business combination under different control occurred in current period
Unit: yuan Currency: RMB
Investee's
Investee's net
Time of Basis for income from
Acquisition Shareholding Way of Acquisition profit from
Investee acquiring determining acquisition
cost % acquisition date acquisition date
equity acquisition date date to the
to the period end
period end
Yangling
Wellhope May 12, Control right
Agri-Tech 2020 shifting
Company
Yixian Dingli
Hesheng
Aug. 24, Control right
Livestock and 20,526,500.00 100.00 Cash Aug. 24, 2020 3,548,120.65 -1,478,497.51
Poultry Feeding
Company
Yixian Weijing
Livestock and Aug. 24, Control right
Poultry Feeding 2020 shifting
Company
Dunhua
Wellhope Jul. 3, Control right
Agri-Tech 2020 shifting
Company
Dunhua
Fengda
Agriculture and
Jul. 2, Control right
Animal 5,392,097.79 21.00 Cash Jul. 2, 2020 183,846,473.86 1,624,092.27
Husbandry
Development
Company
Yixian Hekang
Sep. 22, Control right
Agri-Tech 26,020,000.00 100.00 Cash Sep. 22, 2020 5,613,540.58 -339,115.81
Company
Hebei Hetai
Livestock and
Dec. 29, Dec. 29, Control right
Poultry 15,159,200.00 100.00 Cash -3,200.56
Farming
Company
Wellhope Foods Co., Ltd. 2020 Annual Report
B. Combined cost and goodwill
Unit: yuan Currency: RMB
Yixian Dingli Hesheng Yixian Weijing Dunhua Wellhope Dunhua Fengda Agriculture Yixian Hekang Hebei Hetai Livestock
Yangling Wellhope
Combined cost Livestock and Poultry Livestock and Poultry Agri-Tech and Animal Husbandry Agri-Tech and Poultry Farming
Agri-Tech Company
Feeding Company Feeding Company Company Development Company Company Company
Cash 42,000,000.00 20,526,500.00 8,250,200.00 3,151,150.87 5,392,097.79 26,020,000.00 15,159,200.00
Fair value of the equity, which 4,501,644.10 7,702,996.84
held prior to the acquiring date,
on the acquisition date
Total combined costs 42,000,000.00 20,526,500.00 8,250,200.00 7,652,794.97 13,095,094.63 26,020,000.00 15,159,200.00
deduct: Fair value share of 7,652,794.97 13,095,094.63 26,020,000.00 15,159,200.00
identifiable net assets obtained
Goodwill or combined cost is less
than the amount of the fair value
share of the identifiable net
assets obtained
C. Identifiable assets and liabilities of the investee on the acquisition date
Unit: 10k yuan Currency: RMB
Dunhua Fengda
Yixian Dingli Hesheng Yixian Weijing Livestock Agriculture and Animal Yixian Hekang Agri-Tech Hebei Hetai Livestock
Yangling Wellhope Dunhua Wellhope
Livestock and Poultry and Poultry Feeding and Poultry Farming
Agri-Tech Company Agri-Tech Company Husbandry Development Company
Feeding Company Company Company
Company
Fair value Book value Fair value Book value Fair value Book value Fair value Book value Fair value Book value Fair value Book value Fair value Book value
on on on on on on on on on on on on on on
acquisition acquisition acquisition acquisition acquisition acquisition acquisition acquisition acquisition acquisition acquisition acquisition acquisition acquisition
date date date date date date date date date date date date date date
Assets 4,200.00 3,705.59 2,052.65 2,049.58 826.35 824.91 2,068.03 2,068.03 3,728.01 3,728.01 2,607.00 2,604.23 2,042.92 2,039.90
Monetary 0.30 0.30 6.18 6.18 1,638.22 1,638.22 0.20 0.20 0.08 0.08
capital
Account 1,104.33 82.29 82.29
receivable
Prepayment 0.23 0.23 868.95 868.95
Other
receivables
Inventory 5.08 5.08 838.98 838.98 498.34 498.34 2.92 2.92
Other current 105.50 105.50
assets
Wellhope Foods Co., Ltd. 2020 Annual Report
Fixed assets 3,246.23 3,246.23 2,035.95 2,032.88 825.82 824.38 37.72 37.72 280.08 280.08 2,603.88 2,601.11 2,042.84 2,039.82
Construction in
progress
Intangible assets 953.77 459.36
Long-term 76.01 76.01 182.03 182.03
prepaid expense
Liabilities 1.33 1.33 567.48 567.48 1,160.34 1,160.34 5.00 5.00 527.00 527.00
Accounts 1.33 1.33 541.14 541.14 489.18 489.18
payable
Advance receipt 553.65 553.65
Payroll 3.83 3.83 5.63 5.63
Taxes and
surcharges
Other payables 10.83 10.83 111.12 111.12 5.00 5.00 527.00 527.00
Net assets 4,200.00 3,705.59 2,052.65 2,049.58 825.02 823.58 1,500.55 1,500.55 2,567.67 2,567.67 2,602.00 2,599.23 1,515.92 1,515.92
deduct:
Non-controlling 735.27 735.27 1,258.16 1,258.16
interests
Net assets
acquired
Wellhope Foods Co., Ltd. 2020 Annual Report
D. Gain or loss arising from remeasuring the equity held prior to the acquisition date by fair value
Unit: yuan Currency: RMB
Book value of the Fair value of the Gain or loss arising Determination
equity, which held equity, which held from remeasuring method and main
Investee prior to the acquiring prior to the acquiring the equity held prior assumptions of fair
date, on the date, on the to the acquisition value on the
acquisition date acquisition date date by fair value acquisition date
Dunhua
Wellhope Reference
Agri-Tech
Company
Dunhua Fengda
Agriculture and
Animal Reference
Husbandry
Development
Company
Unit: yuan Currency: RMB
Disposal Percentage of disposed Disposal Basis for
Date of losing determining
Subsidiary price shareholding % way control loss of
control
Xi’an Linfeng November 24,
Shengyi Trading 2,000,000.00 100.00 Transferred Lossing control
Company 2020
During the year, the Company newly initiated 26 subsidiaries, cancelled 2 subsidiaries. Details are listed
in the notes.
Wellhope Foods Co., Ltd. 2020 Annual Report
IX. Equity in other Entities
A. Composition of the Company
Business Registered Business Shareholding % Way of
Subsidiary
site site type Direct Indirect acquisition
Haicheng
Xinzhongxin Haicheng Haicheng
production 51.00 investment
Wellhope Feed city city
Mill
Dalian Huakang
Xinxin Food Dalian city Dalian city production 65.00 investment
Company
Changchun
Hengfeng
Agriculture and Changchun Changchun
trading 51.00 investment
Animal city city
Husbandry
Company
Jinan Xinweita
Trading Jinan city Jinan city trading 76.00 investment
Company
Henan
Wellhope
Kaifeng city Kaifeng city production 100.00 investment
Agri-Tech
Company
Zhengzhou
Wellhope Zhengzhou Zhengzhou
production 70.00 investment
Agri-Tech city city
Company
Zhumadian
Wellhope Zhumadian Zhumadian
production 90.00 investment
Agri-Tech city city
Company
Jiaozuo
Wellhope Feed Jiaozuo city Jiaozuo city production 98.30 investment
Mill
Nanyang
Nanyang Nanyang
Wellhope Feed production 70.00 investment
city city
Mill
Zhangwu
Wellhope
Zhangwu Zhangwu
Agriculture production 60.00 investment
county county
Development
Company
Xifeng Qianyue
Xifeng Xifeng
Planting production 100.00 investment
county county
Company
Sanjiang
Wellhope Jixian Jixian
production 100.00 investment
Agri-Tech county county
Company
Jixian Expert
Jixian Jixian
Trading trading 65.00 investment
county county
Company
Wellhope Foods Co., Ltd. 2020 Annual Report
Gongzhuling
Wellhope Gongzhuling Gongzhuling
production 100.00 investment
Agri-Tech city city
Company
Shenyang
Shenyang Shenyang
Expert Trading trading 100.00 investment
city city
Company
Liaoning
Skyland
Shenyang Shenyang
Livestock production 100.00 investment
city city
Equipment
Company
Shenyang
Wellhope Shenyang Shenyang
production 100.00 investment
Ruminant Feed city city
Mill
Shenyang
Wellhope Shenyang Shenyang
production 100.00 investment
Extruded Feed city city
Mill
Shenyang
Wellhope Shenyang Shenyang
production 100.00 investment
Aquatic Feed city city
Mill
Shenyang Jiahe
Tianfeng Shenyang Shenyang
trading 100.00 investment
Commerce and city city
Trade Company
Liaoning
Wellhope Food Beipiao city Beipiao city production 60.00 investment
Company
Haicheng
Wellhope Haicheng Haicheng
production 100.00 investment
Agri-Tech Feed city city
Mill
Tai'an Wellhope Tai'an Tai'an
production 100.00 investment
Feed Mill county county
Lingyuan
Wellhope Lingyuan Lingyuan
production 90.50 investment
Agri-Tech city city
Company
Beijing Helai
Sci-Tech Beijing city Beijing city production 100.00 investment
Company
Beijing
Wellhope
Beijing city Beijing city trading 100.00 investment
Agri-Tech
Company
Beijing Sanyuan
Wellhope
Beijing city Beijing city production 70.00 investment
Agri-Tech
Company
Jilin Wellhope
Agri-Tech Jilin city Jilin city production 100.00 investment
Company
Jilin Hefeng Gongzhuling Gongzhuling production 100.00 investment
Wellhope Foods Co., Ltd. 2020 Annual Report
Swine Breeding city city
Company
Harbin
Weierhao
Harbin city Harbin city trading 51.00 investment
Trading
Company
Daqing
Wellhope Bayi
Nongda Animal Daqing city Daqing city production 70.00 investment
Sci-Tech
Company
Mudanjiang
Wellhope Mudanjiang Mudanjiang
production 100.00 investment
Agri-Tech city city
Company
Jinzhou
Wellhope
Jinzhou city Jinzhou city production 100.00 investment
Agri-Tech
Company
Gongzhuling
Wellhope Gongzhuling Gongzhuling
production 100.00 investment
Ruminant Feed city city
Mill
Heilongjiang
Wellhope
Harbin city Harbin city production 100.00 investment
Agri-Tech
Company
Tangshan
Tangshan Tangshan
Wellhope Feed production 85.00 investment
city city
Mill
Cangzhou Helai
Cangzhou Cangzhou
Sci-Tech production 70.00 investment
city city
Company
Xi'an Wellhope
Feed Sci-Tech Xi'an city Xi'an city production 80.00 investment
Company
Gansu
Wellhope
Wuwei city Wuwei city production 100.00 investment
Agri-Tech
Company
Jining Wellhope
Agri-Tech Jining city Jining city production 70.00 investment
Company
Shanghai
Shanghai Shanghai
Wellhope Feed production 65.00 investment
city city
Mill
Shanghai
Shanghai Shanghai
Hehong Trading trading 32.00 42.00 investment
city city
Company
Zhejiang Pinghu
Wellhope
Pinghu city Pinghu city production 85.00 investment
Agri-Tech
Company
Huai'an
Wellhope Feed Huai'an city Huai'an city production 100.00 investment
Mill
Wellhope Foods Co., Ltd. 2020 Annual Report
Qingdao
Wellhope
Pingdu city Pingdu city production 95.00 investment
Agri-Tech
Company
Guangzhou
Xiangshun
Guangzhou Guangzhou
Livestock production 56.00 investment
city city
Equipment
Company
Hainan
Wellhope Chengmai Chengmai
production 60.00 investment
Agri-Tech county county
Company
Fuyu Wellhope
Agri-Tech Fuyu city Fuyu city production 97.00 investment
Company
Fuyu Wellhope
Taolaizhao
Fuyu city Fuyu city production 97.00 investment
Poultry Raising
Company
Changchun
Nong'an Nong'an
Wellhope Feed production 98.00 investment
county county
Mill
Lankao
Wellhope Lankao Lankao
production 100.00 investment
Agri-Tech county county
Company
Tongliao
Wellhope
Tianyi Tongliao city Tongliao city production 51.00 investment
Prataculture
Company
Liaoning
Wellhope
Shenyang Shenyang
Purchasing and trading 100.00 investment
city city
Trading
Company
Shenyang
Wellhope Shenyang Shenyang
production 100.00 investment
Agri-Tech city city
Company
Liaoning Expert combined under
Shenyang Shenyang
Trading trading 100.00 the same
city city
Company control
Shenyang Fame combined under
Shenyang Shenyang
Bio-Tech production 100.00 the same
city city
Company control
Shenyang
combined under
Pufeng Shenyang Shenyang
trading 100.00 the same
Commerce and city city
control
Trade Company
Shenyang
combined under
Huawei Shenyang Shenyang
production 51.00 the same
Pharmaceutical city city
control
Company
Liaoning Shenyang Shenyang production 100.00 combined under
Wellhope Foods Co., Ltd. 2020 Annual Report
Wellhope city city different control
Agriculture and
Animal
Husbandry
Development
Puyang
combined under
Wellhope Food Puyang city Puyang city production 49.81
different control
Company
Jingzhou
Wellhope
Jingzhou Jingzhou
Agricultural trading 86.00 investment
city city
Sci-Tech
Company
Dalian Heyuan
Agri-Tech Dalian city Dalian city production 51.00 investment
Company
Shenyang
Nongda Shenyang Shenyang
production 100.00 investment
Wellhope Feed city city
Mill
Dalian
Wellhope Feed Dalian city Dalian city production 100.00 investment
Mill
Xingcheng
Xingcheng Xingcheng
Wellhope Feed production 100.00 investment
city city
Mill
Yunnan
Kunming Kunming
Wellhope Feed production 97.00 investment
city city
Mill
Liaoning Godaji
Shenyang Shenyang
E-commerce trading 100.00 investment
city city
Company
Anhui Wellhope
Haozhou Haozhou
Agri-Tech production 70.00 investment
city city
Company
Shanxi
Wellhope Yuanping Yuanping
production 100.00 investment
Agri-Tech city city
Company
Pingyuan
Wellhope Food
Handan city Handan city production 100.00 investment
Processing
Company
Shenyang
Huaweida
Shenyang Shenyang
Animal Health trading 100.00 investment
city city
Products
Company
Dalian Zhongjia combined under
Dalian city Dalian city production 100.00
Food Company different control
Wellhope
Shenyang Shenyang
Food(Shenyang) production 100.00 investment
city city
Company
Changchun
Changchun Changchun
Wellhope Food production 85.00 investment
city city
Company
Wellhope Foods Co., Ltd. 2020 Annual Report
Pingyuan
Wellhope
Handan city Handan city production 100.00 investment
Agri-Tech
Company
Puyang
Wellhope
Puyang city Puyang city production 100.00 investment
Agri-Tech
Company
Chongqing
Dahong
Agriculture and
Chongqing Chongqing combined under
Animal production 50.00
city city different control
Husbandry
Equipment
Company
Beijing Brilliant
Dragon
Beijing city Beijing city trading 51.00 investment
Commerce and
Trade Company
Tangshan Hejia
Agriculture and
Tangshan Tangshan
Animal production 65.00 investment
city city
Husbandry
Company
Tangshan
Wellhope Tangshan Tangshan combined under
production 70.00
Sci-Tech city city different control
Company
Shenyang
Shenyang Shenyang
Huakang Xinxin production 85.00 investment
city city
Food Company
Kaifeng
Wellhope Meat
Kaifeng city Kaifeng city production 100.00 investment
Products
Company
Shenyang
Shenyang Shenyang
Huakang Broiler production 85.00 investment
city city
Company
Kaifeng
Wellhope
Agriculture and
Kaifeng city Kaifeng city production 100.00 investment
Animal
Husbandry
Company
Fushun
Wellhope
Agriculture and
Fushun city Fushun city production 100.00 investment
Animal
Husbandry
Company
Shenyang
Wellhope Shenyang Shenyang
production 100.00 investment
Poultry Industry city city
Company
Shenyang Shenyang Shenyang
production 100.00 investment
Huakang city city
Wellhope Foods Co., Ltd. 2020 Annual Report
Agriculture and
Animal
Husbandry
Company
Dehui Wellhope
Agri-Tech Dehui city Dehui city production 100.00 investment
Company
Chongqing
Wellhope Chongqing Chongqing
production 65.00 investment
Agri-Tech city city
Company
Dahong
Agriculture and
Animal
Husbandry
Chongqing Chongqing
Technology production 100.00 investment
city city
Research
Institute
Chongqing
Branch
Russia
Wellhope
Overseas Overseas production 55.00 investment
Agri-Tech
Company
Suizhong Renhe
Suizhong Suizhong combined under
Fishery production 95.00
county county different control
Company
Harbin
Baoweikang combined under
Harbin city Harbin city production 100.00
Bio-Tech different control
Company
Shulan Fengtai
Agriculture and
Animal Shulan city Shulan city production 70.00 investment
Husbandry
Company
Shulan Fengtai
Farming Shulan city Shulan city production 51.00 investment
Company
Linxi Helai
Agri-Tech Linxi city Linxi city production 100.00 investment
Company
Nanchang
Wellhope Nanchang Nanchang
production 65.00 investment
Agri-Tech city city
Company
Hengyang
Wellhope Hengyang Hengyang
production 78.50 investment
Agri-Sci-Tech city city
Company
Anhui Wellhope
Haoxiang
Agricultural Lixin county Lixin county production 100.00 investment
Development
Company
Lixin Xiangfeng Lixin county Lixin county production 100.00 investment
Wellhope Foods Co., Ltd. 2020 Annual Report
Agriculture and
Animal
Husbandry
Company
Lixin Hongfeng
Agriculture and
Animal Lixin county Lixin county production 100.00 investment
Husbandry
Company
Guangzhou
Dashang Guangzhou Guangzhou
trading 51.00 investment
Trading city city
Company
Shandong
Heyuan Food Weihai city Weihai city production 65.00 investment
Company
Wafangdian
Wafangdian Wafangdian
Yifeng Agri-Tech production 51.00 investment
city city
Company
Hebei Deheng
combined under
Farming Handan city Handan city production 100.00
different control
Company
Dahongda
Construction
Chongqing Chongqing
Engineering production 100.00 investment
city city
Chongqing
Company
Zhangwu
Zhangwu Zhangwu combined under
Jiufeng Trading production 100.00
city city different control
Company
Yangling
Wellhope
Agriculture and Xianyang Xianyang combined under
production 100.00
Animal city city different control
Husbandry
Company
Yixian Dingli
Hesheng
Yixian Yixian combined under
Livestock and production 100.00
county county different control
Poultry Feeding
Company
Yixian Weijing
Livestock and Yixian Yixian combined under
production 100.00
Poultry Feeding county county different control
Company
Hebei Hetai
Livestock and Yuanshi Yuanshi combined under
production 100.00
Poultry Farming county county different control
Company
Yixian Hekang
Yixian Yixian combined under
Agri-Tech production 100.00
county county different control
Company
Dunhua
Wellhope combined under
Dunhua city Dunhua city production 51.00
Agri-Tech different control
Company
Wellhope Foods Co., Ltd. 2020 Annual Report
Dunhua Fengda
Agriculture and
Animal combined under
Dunhua city Dunhua city production 51.00
Husbandry different control
Development
Company
Anhui Wellhope
Haoxiang Swine
Lixin county Lixin county production 100.00 investment
Breeding
Company
Anhui Wellhope
Lixin county Lixin county production 100.00 investment
Food Company
Anyang
Wellhope
Agriculture and
Anyang city Anyang city production 100.00 investment
Animal
Husbandry
Company
Hebei Taihang
Wellhope Food Baoding city Baoding city production 62.00 investment
Company
Hebei Taihang
Wellhope
Baoding city Baoding city production 62.00 investment
Agri-Tech
Company
Shenyang
Xiangmai
Shenyang Shenyang
Electronic trading 65.00 investment
city city
Commerce
Company
Chifeng
Wellhope
Chifeng city Chifeng city production 70.00 investment
Fuxinyuan Food
Company
Hongkong
Expert Trading Hongkong Hongkong trading 100.00 investment
Company
Hainan Expert
Chengmai Chengmai
Trading trading 100.00 investment
county county
Company
Liaoning
Qingyuan
Wellhope
Agriculture and Fushun city Fushun city production 95.00 investment
Animal
Husbandry
Company
Nanyang
Wellhope Cattle
Nanyang Nanyang
Industry production 100.00 investment
city city
Sci-Tech
Company
Fuzhou
Wellhope
Fuzhou city Fuzhou city production 60.00 investment
Xingyuan
Animal
Wellhope Foods Co., Ltd. 2020 Annual Report
Husbandry
Development
Company
Tianjin Fullyond
Supply Chain Tianjin city Tianjin city other 100.00 investment
Company
Daqing
Wellhope Food Daqing city Daqing city production 51.00 investment
Company
Zhumadian
Wellhope
Zhumadian Zhumadian
Agricultural production 100.00 investment
city city
Development
Company
Datong Hejia
Agriculture and
Animal Datong city Datong city production 65.00 investment
Husbandry
Company
Shijiazhuang
Hejia
Agriculture and Shijiazhuang Shijiazhuang
production 65.00 investment
Animal city city
Husbandry
Company
Fuxin Wellhope
Agriculture and
Animal Fuxin city Fuxin city production 94.00 investment
Husbandry
Company
Dalian Hongtu
Agri-tech Dalian city Dalian city production 51.00 investment
Company
Shandong
Heyuan
Weihai city Weihai city production 51.00 investment
Agri-tech
Company
Wafangdian
Huinong Wafangdian Wafangdian
production 52.94 investment
Poultry Industry city city
Company
Luoyang
Wellhope
Agriculture and
Luoyang city Luoyang city production 100.00 investment
Animal
Husbandry
Company
Tongxu
Wellhope
Agriculture and Tongxu Tongxu
production 100.00 investment
Animal county county
Husbandry
Company
Gongzhuling
Gongzhuling Gongzhuling
Wellhope Swine production 65.00 investment
city city
Farmig
Wellhope Foods Co., Ltd. 2020 Annual Report
Company
Lishu Wellhope
Ecological
Siping city Siping city production 65.00 investment
Farming
Company
Kaifeng Jiufeng
Agriculture and
Animal Kaifeng city Kaifeng city production 100.00 investment
Husbandry
Company
B. Important non-wholly owned subsidiary
Unit: yuan Currency: RMB
Shareholding Gain or loss
Declared dividends Closing balance of
of attributable to
Subsidiary to non-controlling non-controlling
non-controlling non-controlling
interests interests
interests % interests
Dalian Heyuan
Agri-Tech 49.00 30,310,693.02 14,700,000.00 443,860,747.65
Company
Xi'an Wellhope
Feed Sci-Tech 20.00 10,490,331.28 3,000,000.00 33,717,168.90
Company
Beijing Sanyuan
Wellhope
Agri-Tech
Company
Tangshan
Wellhope Feed 15.00 327,517.44 10,810,026.90
Mill
Wellhope Foods Co., Ltd. 2020 Annual Report
C. Financial figures of important non-wholly owned subsidiary
Unit: yuan Currency: RMB
Closing balance Opening balance
Subsidiary Non-current Current Non-current Non-current Current Non-current
Current assets Total assets Total liabilities Current assets Total assets Total liabilities
assets liabilities liabilities assets liabilities liabilities
Dalian
Heyuan
Agri-Tech
Company
Xi'an
Wellhope
Feed 120,322,073.99 96,733,892.61 217,055,966.60 47,740,872.83 729,249.25 48,470,122.08 120,990,215.88 40,503,567.21 161,493,783.09 25,655,577.75 25,655,577.75
Sci-Tech
Company
Beijing
Sanyuan
Wellhope 246,088,391.98 23,170,506.34 269,258,898.32 41,722,989.99 41,722,989.99 203,102,041.98 25,669,497.12 228,771,539.10 30,470,419.37 30,470,419.37
Agri-Tech
Company
Tangshan
Wellhope 49,796,904.64 70,971,898.77 120,768,803.41 48,701,957.40 48,701,957.40 50,349,221.33 73,444,222.46 123,793,443.79 53,986,003.46 53,986,003.46
Feed Mill
Total Total
Subsidiary Operation Cash flow from Operation Cash flow from
Net profit comprehensive Net profit comprehensive
revenue operating activities revenue operating activities
income income
Dalian Heyuan Agri-Tech
Company
Xi'an Wellhope Feed Sci-Tech
Company
Beijing Sanyuan Wellhope
Agri-Tech Company
Tangshan Wellhope Feed Mill 239,765,031.08 2,183,449.58 2,183,449.58 7,615,415.84 161,847,154.96 -1,522,374.99 -1,522,374.99 15,383,862.25
Wellhope Foods Co., Ltd. 2020 Annual Report
Company still controls the subsidiary
A. Circumstance of the change of owner's equity
During the current period, the Company transferred 5.00% of shareholdings of Xi'an Wellhope Feed
Sci-Tech Company and 15.00% of Shenyang Xiangmai E-commerce Company.
B. The impact of the transaction on non-controlling interests and the equity attributable to the
owners of parent company
Unit: yuan Currency: RMB
Xi'an Wellhope Feed Sci-Tech Shenyang Xiangmai
Company E-commerce Company
Cost of acquisition/disposal
considerations
--Cash 5,897,962.10 158,289.47
Total cost of acquisition or disposal 158,289.47
considerations
deduct: Share of net assets in the
subsidiary calculated according to
the percentage of acquired or
disposed shareholdings
Balance 106,051.83
including: Adjusting capital reserve 106,051.83
A. Important joint ventures or associated companies
Unit: yuan Currency: RMB
Shareholding % Accounting
Business Registered Business
Company arrangement
site site type Direct Indirect method
Beipiao Hongfa Food Beipiao Beipiao
production 35.00 equity method
Company city city
Anshan Jiuguhe Food Tai'an Tai'an
production 41.55 equity method
Company county county
Tai’an Jiuguhe Agriculture Tai'an Tai'an
production 41.55 equity method
Development Company county county
Dalian Chengsan Animal Dalian
Dalian city production 20.00 equity method
Husbandry Company city
Wellhope Foods Co., Ltd. 2020 Annual Report
B. Financial figures of important joint ventures or associated companies
Unit: yuan Currency: RMB
Tai’an Jiuguhe Tai’an Jiuguhe
Dalian Chengsan Dalian Chengsan
Beipiao Hongfa Anshan Jiuguhe Agriculture Beipiao Hongfa Anshan Jiuguhe Agriculture
Animal Husbandry Animal Husbandry
Food Company Food Company Development Food Company Food Company Development
Company Company
Company Company
Current assets 1,168,043,370.14 609,389,600.57 431,665,980.03 1,428,082,960.71 808,320,727.52 433,236,440.94 225,516,906.39 1,467,906,023.75
Non-current
assets
Total assets 2,098,385,441.58 714,209,444.47 476,409,263.35 1,942,004,321.84 1,529,124,725.92 535,644,988.61 417,017,250.40 1,916,251,044.43
Current liabilities 554,891,462.18 279,627,361.90 250,447,113.47 360,773,992.52 242,424,331.42 162,491,901.70 148,906,962.33 498,609,123.11
Non-current
liabilities
Total liabilities 652,031,462.18 279,924,163.90 250,622,613.47 366,290,095.59 265,854,331.42 164,805,382.48 149,163,462.33 504,460,930.22
Non-controlling
interests
Equity
attributable to
shareholders of
parent company
Share of net
assets calculated 506,223,892.79 180,445,534.08 93,814,353.03 259,415,175.62 442,144,638.08 154,083,856.35 111,293,248.94 237,385,120.27
by shareholdings
Adjustment -276,269.40 -379,198.68 116,463,321.10 -1,645,427.58 -360.00 116,569,111.62
--Goodwill 116,569,111.62 116,569,111.62
--Unrealized profit
of internal -276,269.40 -379,198.68 -105,790.52 -1,645,427.58
transaction
--Other -360.00
Book value of
equity investment
in associated
company
Wellhope Foods Co., Ltd. 2020 Annual Report
Operating
revenue
Net profit 229,283,584.90 153,445,674.44 -42,067,138.19 142,746,792.02 574,147,650.00 140,590,100.91 124,064,948.67 604,777,510.19
Total
comprehensive 229,283,584.90 153,445,674.44 -42,067,138.19 142,746,792.02 574,147,650.00 140,590,100.91 124,064,948.67 604,777,510.19
income
Dividends
received from
associated
company
Wellhope Foods Co., Ltd. 2020 Annual Report
C. Financial information of unimportant joint ventures and associated companies
Unit: yuan Currency: RMB
Joint venture
Book value of investment 11,669,191.54 11,669,191.54
The following items were calculated
according to the shareholdings
--Net profit 7,622,329.52 7,181,908.21
--Other comprehensive income -3,301,098.09 53,833.62
--Total comprehensive income 4,321,231.43 7,235,741.84
Associated company
Book value of investment 1,257,526,965.18 998,548,503.29
The following items were calculated
according to the shareholdings
--Net profit 211,870,816.89 216,479,052.22
--Other comprehensive income -7,123,225.06 7,238,557.02
--Total comprehensive income 204,747,591.83 223,717,609.24
Note: Unphung Joint Venture Company, Nepal Wellhope Agri-tech Pvt. Ltd., NEXUS WELL-HOPE
AGRITECH INTERNATIONAL LIMITED use cost method.
X. Risks Related to Financial Instruments
The Company's main financial instruments include equity investment, borrowing, accounts receivable
and accounts payable. Detailed descriptions of various financial instruments can be found in the
relevant items in Note V. The Company manages and monitors these risk exposures to ensure that these
risked can be contained within limits.
The Company's objective in risk management is to strike a balance between risks and return, minimize
the negative impact of risk on the Company's operating results, and maximize the benefits of
shareholders and other equity investors. Based on this risk management objective, the basic strategy of
the Company’s risk management is to identify and evaluate various risks faced by operation, set up
appropriate risk bearing bottom line and carry out risk management, and supervise various risks in a
timely and reliable way to control risks within the limited range.
A. Interest rate risk
The Company's risk of cash flow changes in financial instruments due to the changes in interest rates
mainly related to floating-rate bank loans. The Company's policy is to maintain the floating-rate of these
loans.
B. Foreign exchange risks
Foreign exchange risk refers to the risk of loss caused by exchange rate movement. The Company's main
business activities are settled in RMB, with a small amount of import and export business, changes in
exchange rate have little impact on the Company.
Wellhope Foods Co., Ltd. 2020 Annual Report
The maximum credit risk exposure that may cause financial losses to the Company mainly comes from
financial assets loss caused by the other party of contract failed to perform duty.
In order to reduce credit risk, the Company constantly strengthens the risk management awareness of
accounts receivable, and only deals with recognized and reputable third parties. In accordance with the
Company's policies, it is necessary to conduct credit audit and approval, carefully confirm the credit
limit, implement other monitoring procedures and take necessary measures to recover overdue claims.
In regard of managing liquidity risk, the Company monitors cash and cash equivalents, to satisfy its
operation demand, and to reduce the influence caused by cash flow fluctuation. The management of
the Company supervises the usage circumstances of bank loans and ensures the Company complying
with the agreement of loan.
XI. Disclosure of fair value
Unit: yuan Currency: RMB
Closing fair value
The first level of The second level of The third level of
Item
fair value fair value fair value Total
measurement measurement measurement
Continuous fair value
measurement
Financial assets measured at
fair value and changes
recorded into current gains
or losses
assets
instrument investment
Total assets continuously
measured at fair value
value measurement items
The derivative financial assets of the Company are futures, which are measured by the unadjusted
quoted price of the same assets or liabilities in the active market on the balance sheet date.
Wellhope Foods Co., Ltd. 2020 Annual Report
XII. Related Party and Transaction
Circumstance of the joint ventures and associated companies, which had related transactions with the
Company in the period.
Company Relationship
Unphung Joint Venture Company joint venture
Nepal Wellhope Agri-tech Pvt. Ltd. joint venture
Anshan Fengsheng Food Company associated company
Anshan Jiuguhe Food Company associated company
Beipiao Hongfa Food Company associated company
Dalian Chengsan Animal Husbandry Company associated company
Dalian Wellhope Fish Meal Company associated company
Daqing Supply and Marketing Agri-Tech Company associated company
Dandong Wellhope Chengsan Agri-Tech Company associated company
Gongzhuling Corn Purchasing and Storing Company associated company
Guangzhou Yikun Trading Company associated company
Haicheng New Hongzunda Agri-Tech Company associated company
Huluodao Jiuguhe Food Company associated company
Huluodao Jiuguhe Feed Mill associated company
Jinzhou Jiufeng Food Company associated company
Lankao Skyland Feed Milll associated company
Lankao Skyland Duck Company associated company
Linghai Jiuguhe Feed Mill associated company
Qingdao Shenfeng Agri-Tech Company associated company
Shenyang Wenjie Bio-Tech Company associated company
Shihaipu (Beijing) Technology and Trade Company associated company
Tai'an Fengjiu Agri-Tech Company associated company
Tai'an Jiufeng Agri-Tech Company associated company
Tai'an Jiuguhe Agriculture Development Company associated company
Tailai Jiahe Agriculture and Animal Husbandry associated company
Zhangjiakou Jiahe Agriculture and Animal Husbandry Company associated company
Beijing Dahong Hengfeng Agri-Tech Company associated company
Shenyang Zhongwenjie Bio-Tech Company associated company
Liaoning Mubang Animal Husbandry Equipment Manufacturing
associated company
Company
Dunhua Fengda Agriculture and Animal Husbandry Company subsidiary
Dunhua Wellhope Agri-Tech Company subsidiary
Heilongjiang Zhongyi Ranch Information Technology Service
associated company
Company
Dalian Sida Food Company associated company
Shulan Fengtai Organic Fertilizer Company associated company
Bei’an Nongken Shengda Pasture Specialized Cooperative associated company
Shangdong Fengkang Food Company associated company
Anshan Jiuguhe Paper Packaging Company associated company
Anshan Antai Plastic Products Company associated company
Other explanation-- In July 2020, the Company made additional investment and acquired 31.00% of
shareholding of Dunhua Wellhope Agri-Tech and Dunhua Fengda Agriculture and Animal Husbandry
separately, the shareholding percentage changed from 20.00% to 51.00%, and the associated company
became a subsidiary.
Wellhope Foods Co., Ltd. 2020 Annual Report
Related party Relationship
Controlling shareholder, natural
person shareholders who hold
more than 5% shares of the
Associated natural persons Company, board directors,
supervisory board directors,
senior managers and their
relatives
Shareholder who holds more
Wulian Heli Equity Investment Partnership (Limited Partnership)
than 5% shares of the Company
A. Purchasing and selling products, providing and accepting labor service
Unit: yuan Currency: RMB
Relate party Transaction 2020 2019
Dalian Wellhope Fish Meal Company Feed raw material 114,840,387.56 74,187,322.55
Anshan Jiuguhe Food Company Broiler product 21,848,636.14 19,156,542.50
Dalian Chengsan Animal Husbandry
Live broiler 186,018,137.63 186,973,531.46
Company
Huludao Jiuguhe Food Broiler product 255,807.60 3,516,670.71
Shihaipu (Beijing) Technology and
Other 2,282,511.69 1,959,646.55
Trade Company
Guangzhou Yikun Trading Company Feed raw material 12,029,615.50
Tai'an Fengjiu Agri-Tech Company Day old chick 23,206,491.02 21,997,336.14
Zhangjiakou Jiahe Agriculture and
Piglet 64,133,190.90 9,975,239.60
Animal Husbandry Company
Tai’an Jiuguhe Agriculture Feed,
Development Company live broiler
Haicheng New Hongzunda Agri-Tech
Feed 658,306.00
Company
Shenyang Wenjie Bio-Tech Company Other 6,435,070.50 13,150,075.20
Jinzhou Jiufeng Food Company Broiler product 13,972,659.17 6,513,833.00
Daqing Supply and Marketing
Feed raw material 41,483,415.84 36,588,085.03
Agri-Tech Company
Feed,
Linghai Jiuguhe Feed Mill 27,252,715.36
live broiler
Gongzhuling Corn Purchasing and
Feed raw materials 2,472,800.71 360,872.66
Storing Company
Qingdao Shenfeng Agri-Tech
Feed 28,638,011.49 11,539,082.78
Company
Dandong Wellhope Chengsan
Live broiler 1,230,045.91
Agri-Tech Company
Lankao Skyland Duck Company Feed 6,060,071.37 301,315.88
Liaoning Mubang Animal Husbandry Farming
Equipment Manufacturing Company equipment
Shenyang Zhongwenjie Bio-Tech
Animal medicine 3,000.00 18,000.00
Company
Anshan Yufeng Feed Mill Feed raw material 71,923.00
Anshan Jiuguhe Paper Packaging Other (packaging
Company materials)
Anshan Antai Plastic Products Other (packaging
Company materials)
Wellhope Foods Co., Ltd. 2020 Annual Report
Dunhua Fengda Broiler Breeding
Day old chick 750,730.00
Company
Jilin Hengfeng Animal Health Animal medicine,
Products Company vaccine
Shenyang Wanlitian Agriculture and Animal medicine,
Animal Husbandry Company vaccine
Total 758,282,592.12 513,686,119.17
Selling products or providing labor service
Unit: yuan Currency: RMB
Relate party Transaction 2020 2019
Nepal Wellhope Agri-tech Pvt. Ltd. Feed 2,563,464.22
Linghai Jiuguhe Feed Mill Feed raw material 50,260,931.83 52,588,895.71
Tai’an Jiuguhe Agriculture Feed raw material
Development Company 78,282,971.50 98,035,082.01
Anshan Jiuguhe Food Company Live broiler 90,810,505.77 189,619,141.00
Qingdao Shenfeng Agri-Tech Feed raw material
Company 56,218,315.02 29,083,613.37
Beipiao Hongfa Food Company Feed raw material 4,685,260.00 5,593,402.11
Huludao Jiuguhe Food Company Feed 10,327,169.62 481,301.83
Haicheng New Hongzunda Agri-Tech Feed raw material
Company 97,778,241.34 38,303,436.30
Dandong Wellhope Chengsan Feed raw material
Agri-Tech Company 6,667,470.38 7,160,969.75
Tai'an Jiufeng Agri-Tech Company Feed raw material 1,460,623.81 1,248,972.58
Huludao Jiuguhe Feed Mill Feed raw material 25,323,351.66 30,081,192.14
Shihaipu (Beijing) Technology and Other
Trade Company 1,286,272.58 705,596.51
Zhangjiakou Jiahe Agriculture and Feed
Animal Husbandry Company 22,521,186.33 23,746,562.54
Dalian Wellhope Fish Meal Company Feed raw material 301,061.95 165,589.72
Guangzhou Yikun Trading Company Feed raw material 2,846,401.98 198,682,941.12
Jinzhou Jiufeng Food Company Live broiler 3,002,040.00
Anshan Fengsheng Food Company Live broiler 212,919,976.02 204,582,154.82
Dalian Chengsan Animal Husbandry Feed raw material
Company 6,391,128.72 3,777,282.46
Tailai Jiahe Agriculture and Animal Feed
Husbandry Company 29,224,805.65 14,596,398.75
Daqing Supply and Marketing Feed raw material
Agri-Tech Company 51,521,554.90 34,314,134.88
Lankao Skyland Duck Company Feed raw material 5,707,315.21
Dunhua Wellhope Agri-Tech Company Feed raw material 4,759,518.19
Dunhua Fengda Agriculture and
Animal Husbandry Development Live broiler 857,264.00
Company
Heilongjiang Zhongyi Ranch
Information Technology Service Feed 113,959.73
Company
Anshan Yufeng Feed Mill Broiler product 781,937.43
Dunhua Fengda Broiler Breeding Feed
Company 4,093,061.21
Shangdong Fengkang Food Company Live broiler 5,954,219.87
Dalian Sida Food Company Live broiler 252,267,573.09
Total 1,020,194,800.09 941,499,449.52
Wellhope Foods Co., Ltd. 2020 Annual Report
B. Related party guarantee
The Company acted as the guarantor
Unit: yuan Currency: RMB
Whether the
Amount of Guarantee guarantee
Guaranteed party Guarantee date
guarantee maturity date has finished
performance
Chongqing Dahong
Agriculture and Animal
Husbandry Equipment
Company
Lixin Xiangfeng Agriculture
and Animal Husbandry 25,000,000.00 May 21, 2020 May 20, 2021 No
Company
Lingyuan Wellhope Agri-Tech
Company
Puyang Wellhope Food
Company
Kaifeng Wellhope Meat
Products Company
Liaoning Expert Trading
Company
Liaoning Expert Trading
Company
Liaoning Expert Trading
Company
C. Borrowings to related party
Unit: yuan Currency: RMB
Related Starting Due
Borrowings Note
party date date
Lankao
This was the borrowings of Lankao Skyland Duck
Skyland
Duck
associated company after the loss of control.
Company
Bei’an
Bei’an Nongken Shengda Pasture Specialized
Nongken
Cooperative is an associated company of Wellhope.
Shengda
Pasture
the cooperative according to the proportion of
Specialized
shares held in accordance with the agreement.
Cooperative
D. Remuneration for key management
Unit: 10k yuan Currency: RMB
Item 2020 2019
Remuneration for key management 622.96 563.64
Wellhope Foods Co., Ltd. 2020 Annual Report
A. Receivables
Unit: yuan Currency: RMB
Closing balance Opening balance
Item Related party Bad debt Bad debt
Book balance Book balance
provision provision
Accounts
Linghai Jiuguhe Feed Mill 4,530,820.00 90,616.40
receivable
Accounts Tai’an Jiuguhe Agriculture
receivable Development Company
Accounts
Anshan Jiuguhe Food Company 24,051,313.84 481,026.28 21,356,822.76 1,067,841.14
receivable
Zhangjiakou Jiahe Agriculture
Accounts
and Animal Husbandry 3,905,319.96 390,532.00 3,618,629.61 180,931.48
receivable
Company
Accounts
Beipiao Hongfa Food Company 416,558.00 8,331.16
receivable
Accounts
Huludao Jiuguhe Feed Mill 2,942,700.00 58,854.00
receivable
Accounts Anshan Fengsheng Food
receivable Company
Accounts Dalian Chengsan Animal
receivable Husbandry Company
Accounts Tailai Jiahe Agriculture and
receivable Animal Husbandry Company
Accounts
Lankao Skyland Duck Company 78,000.00 1,560.00
receivable
Accounts Nepal Wellhope Agri-tech Pvt.
receivable Ltd.
Accounts Daqing Supply and Marketing
receivable Agri-Tech Company
Accounts Guangzhou Yikun Trading
receivable Company
Accounts Haicheng New Hongzunda
receivable Agri-Tech Company
Accounts Tai'an Jiufeng Agri-Tech
receivable Company
Heilongjiang Zhongyi Ranch
Accounts
Information Technology Service 43,174.50 2,158.73
receivable
Company
Accounts
Dalian Sida Food Company 2,316,560.24 46,331.20
receivable
Other
Lankao Skyland Duck Company 27,300,253.00 5,441,847.95 27,067,493.00 10,826,997.20
receivables
Other Bei’an Nongken Shengda
receivables Pasture Specialized Cooperative
Other Weifang Wellhope Xinhesheng
receivables Feed Mill
Prepayment Linghai Jiuguhe Feed Mill 138,554.00 0.00
Liaoning Mubang Animal
Prepayment Husbandry Equipment 514,333.00 7,624,669.60
Manufacturing Company
Dunhua Fengda Agriculture and
Prepayment 5,000,000.00
Animal Husbandry Company
Prepayment Guangzhou Yikun Trading 4,997,400.00
Wellhope Foods Co., Ltd. 2020 Annual Report
Company
Dalian Wellhope Fish Meal
Prepayment 914,705.00
Company
B. Payables
Unit: yuan Currency: RMB
Closing book Opening book
Item Related party
balance balance
Tai’an Jiuguhe Agriculture Development
Accounts payable 23,002,101.15 7,077,312.65
Company
Accounts payable Qingdao Shenfeng Agri-Tech Company 5,776,665.31
Zhangjiakou Jiahe Agriculture and Animal
Accounts payable 15,100,000.00
Husbandry Company
Accounts payable Shenyang Wenjie Bio-Tech Company 854,324.00 2,593,516.64
Dalian Chengsan Animal Husbandry
Accounts payable 3,447,455.47 4,749,094.21
Company
Accounts payable Anshan Jiuguhe Paper Packaging Company 230,852.87
Accounts payable Anshan Antai Plastic Products Company 823,525.36
Accounts payable Dalian Wellhope Fish Meal Company 9,137,325.56 2,716,351.95
Jilin Hengfeng Animal Health Products
Accounts payable 323,205.00
Company
Shenyang Wanlitian Agriculture and
Accounts payable 1,055,021.00
Animal Husbandry Company
Daqing Supply and Marketing Agri-Tech
Accounts payable 594,676.70 457,060.50
Company
Accounts payable Anshan Jiuguhe Food Company 1,049,646.00
Accounts payable Tai’an Fengjiu Agri-Tech Company 138,708.74
Accounts payable Jinzhou Jiufeng Food Company 1,617,740.00
Liaoning Mubang Animal Husbandry
Accounts payable 11,284,184.00
Equipment Manufacturing Company
Accounts payable Shenyang Zhongwenjie Bio-Tech Company 18,000.00
Advance receipt Dunhua Fengda Broiler Breeding Company 348,450.06
Contract liability Linghai Jiuguhe Feed Mill 1,317,500.00 7,860.00
Tai’an Jiuguhe Agriculture Development
Contract liability 4,421,611.30 281,300.00
Company
Contract liability Qingdao Shenfeng Agri-Tech Company 77,911.69
Haicheng New Hongzunda Agri-Tech
Contract liability 708,806.00
Company
Contract liability Huludao Jiuguhe Feed 771,500.00 564,892.50
Contract liability Nepal Wellhope Agri-tech Pvt. Ltd. 38,700.00 38,700.00
Contract liability Dunhua Wellhope Agri-Tech Company 323,000.00
Other payables Nepal Wellhope Agri-tech Pvt. Ltd. 2,999.41 2,999.41
Other payables Unphung Joint Venture Company 71,682.43 71,682.43
Liaoning Mubang Animal Husbandry
Other payables 5,932,500.00
Equipment Manufacturing Company
XIII. Share-based Payment
Unit: share Currency: RMB
Wellhope Foods Co., Ltd. 2020 Annual Report
Total amount of exercised equity instruments 4,233,000
Total amount of expired equity instruments 244,500
Note:
In accordance with the approved resolutions--Wellhope 2018 Restricted Stock Incentive Plan and Its
Abstract (draft), Adjusting Related Items regarding to 2018 Restricted Stock Incentive Plan, the
Company issued 14.575 million restricted shares to 372 key managers at the price of 4.85 yuan per
share in 2018, increased RMB 14.575 million of the registered capital.
This incentive plan should be valid from the date of granting restricted shares to the date when all
restricted shares could be unlocked or repurchased and written off by the Company, with a maximum
period of no more than 48 months. The restricted shares should not be transferred, used for guarantee
or repaying debts before removing the trading restrictions, and the shares and dividends obtained from
the restricted shares due to the Company conducting capital reserve converted to share capital, paying
dividends, etc., should be simultaneously locked according to the incentive plan. After the expiration of
restricted period, the Company shall cope with related matters, such as removing trading restrictions,
whilst the restricted shares held by the managers who could not meet the conditions of unlocking
shares, should be repurchased and written off by the Company, relevant equity could not be deferred to
the next period.
Arrangement of restricted shares
Arrangement of
Percentage of
unlocking restricted Time of unlocking shares
unlocking shares
shares
The first trading day after 12 months from the date of
finishing the registration of granted shares to the last
The first lockup period 30.00%
trading day within 24 months from the date of finishing
the registration of granted shares
The first trading day after 24 months from the date of
The second lockup finishing the registration of granted shares to the last
period trading day within 36 months from the date of finishing
the registration of granted shares
The first trading day after 36 months from the date of
The third lockup finishing the registration of granted shares to the last
period trading day within 48 months from the date of finishing
the registration of granted shares
On March 27, 2020, the board meeting of the Company approved the proposal of Unlocking restricted
common shares after achieving the performance objective stated in 2018 Restricted Stock Incentive
Plan, 367 managers could totally unlock 4.233 million restricted shares in the first lockup period. On
April 9, 2020, these 4.233 million shares could be traded in the capital market.
Unit: yuan Currency: RMB
Recognition method of fair value of equity instrument at Closing price at the grant date
Wellhope Foods Co., Ltd. 2020 Annual Report
the grant date
It is expected that in case the conditions of
Basis for determining the number of exercised equity
unlocking restricted shares can be met,
instrument
each individual can exercise the equity.
Accumulated amount of equity-settled share-based
payment that recorded into capital reserve
Total expenses recognized by equity-settled share-based
payment
XIV. Commitment and Contingency
As at December 31, 2020, the operating lease contracts that the Company had signed or were ready to
perform, were mainly the lease of operating site and buildings, as follows:
Period Lease payable (RMB 10k)
The first year after the balance sheet date 2,720.44
The second year after the balance sheet date 2,507.25
The third year after the balance sheet date 2,150.98
After the third year after the balance sheet date 11,657.06
The Company has no material contingencies that need to be disclosed.
XV. Post Balance Sheet Events
Unit: yuan Currency: RMB
Profit or dividend planned to be paid 202,853,177.12
Declared profit or dividend after receiving internal approval 202,853,177.12
XVI. Notes to major Items of the Parent Company's Financial Statements
A. Categorized by aging
Unit: yuan Currency: RMB
Aging Closing book balance
Within 1 year 17,159,415.70
Over 3 years 25,206,660.47
Total 47,410,986.85
Wellhope Foods Co., Ltd. 2020 Annual Report
B. Categorized by bad debt provision method
Unit: yuan Currency: RMB
Closing balance Opening balance
Category Book balance Bad debt provision Book balance Bad debt provision
Book value Book value
Amount Percentage% Amount Accruing % Amount Percentage% Amount Accruing %
Accruing bad debt
provision on an 686,300.00 1.45 686,300.00 100.00
individual basis
Accruing bad debt
provision by grouping 46,724,686.85 98.55 26,639,128.72 57.01 20,085,558.13 43,173,647.52 100.00 29,541,957.07 68.43 13,631,690.45
including:
Aging portfolio 46,724,686.85 98.55 26,639,128.72 57.01 20,085,558.13 43,173,647.52 100.00 29,541,957.07 68.43 13,631,690.45
Total 47,410,986.85 / 27,325,428.72 / 20,085,558.13 43,173,647.52 / 29,541,957.07 / 13,631,690.45
Accruing bad debt provision on an individual basis
Unit: yuan Currency: RMB
Closing balance
Aging
Book balance Bad debt provision Accruing percentage % Reason for accruing
Customer 1 312,000.00 312,000.00 100.00 uncollectible
Customer 2 200,000.00 200,000.00 100.00 uncollectible
Customer 3 174,300.00 174,300.00 100.00 uncollectible
Total 686,300.00 686,300.00 100.00 /
Accruing bad debt provision by grouping
Unit: yuan Currency: RMB
Closing balance
Aging
Accounts receivable Bad debt provision Accruing percentage %
Within 1 year 17,159,415.70 572,379.95 3.34
Over 3 years 24,520,360.47 24,520,360.47 100.00
Total 46,724,686.85 26,639,128.72 /
Wellhope Foods Co., Ltd. 2020 Annual Report
C. Bad debt provision
Unit: yuan Currency: RMB
Changes in current
Category Opening balance period Closing balance
Accruing
Aging 29,541,957.07 -2,216,528.35 27,325,428.72
Total 29,541,957.07 -2,216,528.35 27,325,428.72
D. Top 5 accounts receivable
Unit: yuan Currency: RMB
Percentage of total
Debtor Closing balance Bad debt provision
accounts receivable %
Total 26,281,148.21 55.43 22,123,041.01
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Interests receivable
Dividends receivable 57,747,209.35 33,977,209.35
Other receivables 1,313,618,107.93 986,808,467.11
Total 1,371,365,317.28 1,020,785,676.46
A. Dividends receivable
Unit: yuan Currency: RMB
Item Closing balance Opening balance
Dividends from long-term investment
under cost method
Dividends from long-term investment
under equity method
Total 57,747,209.35 33,977,209.35
Wellhope Foods Co., Ltd. 2020 Annual Report
B. Other receivables
a. Categorized by aging
Unit: yuan Currency: RMB
Aging Closing book balance
Within 1 year 565,870,306.87
Over 3 years 29,312,256.07
Total 1,319,754,615.73
b. Categorized by nature
Unit: yuan Currency: RMB
Nature Closing book balance Opening book balance
Operating receivables 539,013.85 665,830.66
Cash pledge and guarantee deposit 457,900.00 259,200.00
Related party- fund transfer 1,279,343,229.93 950,230,259.11
Disposal of investment receivables 2,764,218.95 28,471,800.00
Other 36,650,253.00 30,103,373.00
Total 1,319,754,615.73 1,009,730,462.77
c. Bad debt provision accruing
Unit:yuan Currency: RMB
First stage Second stage Third stage
Expected credit loss Expected credit loss
Bad debt Expected credit for the entire for the entire Total
provision losses over the next duration (no credit duration (credit
occurred) occurred)
Balance on
January 1, 22,921,995.66 22,921,995.66
-recorded in
the second
stage
- recorded in
the third -259,254.66 259,254.66
stage
-recovered in
the second
stage
- recovered in
the first stage
Accrued in
the reporting -16,783,717.32 -1,770.54 -16,785,487.86
period
Balance on
December 31, 5,879,023.68 257,484.12 6,136,507.80
Wellhope Foods Co., Ltd. 2020 Annual Report
d. Bad debt provision
Unit:yuan Currency: RMB
Changes in current period
Opening Closing
Category Collected or Charged off or
balance Accruing balance
recovered written off
Aging 22,921,995.66 -16,785,487.86 6,136,507.80
Total 22,921,995.66 -16,785,487.86 6,136,507.80
e. Top 5 other receivables
Unit: yuan Currency: RMB
% of closing Closing balance
Company Type Closing balance Aging balance of total of bad debt
other receivables provision
Total / 637,949,158.31 / 48.34
Unit: yuan Currency: RMB
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Investment in
subsidiaries
Investment in
associates and 2,312,858,926.16 17,900,000.00 2,294,958,926.16 2,021,291,294.06 17,900,000.00 2,003,391,294.06
joint ventures
Total 5,002,132,967.75 17,900,000.00 4,984,232,967.75 4,135,215,830.10 17,900,000.00 4,117,315,830.10
A. Investment in subsidiaries
Unit: yuan Currency: RMB
Company Jan. 1, 2020 Increase in 2020 Decrease in 2020 Dec. 31, 2020
Haicheng Wellhope
Feed Mill
Tai'an Wellhope Feed
Mill
Shenyang Wellhope
Ruminant Feed Mill
Liaoning Wellhope
Agriculture and Animal 47,541,089.95 335,959.67 47,877,049.62
Husbandry Company
Shenyang Nongda
Wellhope Feed Mill
Xingcheng Wellhope
Feed Mill
Dalian Wellhope Feed
Mill
Jinzhou Wellhope
Agri-Tech Company
Wellhope Foods Co., Ltd. 2020 Annual Report
Changtu Wellhope Feed
Mill
Shenyang Wellhope
Extruded Feed Mill
Shenyang Wellhope
Aquatic Feed Mill
Shenyang Wellhope
Agri-Tech Company
Shenyang Wellhope
Poultry Industry 68,463.33 30,751.46 99,214.79
Company
Gongzhuling Wellhope
Agri-Tech Company
Jilin Wellhope Agri-Tech
Company
Gongzhuling Wellhope
Ruminant Feed Mill
Sanjiang Wellhope
Agri-Tech Company
Mudanjiang Wellhope
Agri-Tech Company
Heilongjiang Wellhope
Agri-Tech Company
Beijing Helai Sci-Tech
Company
Beijing Wellhope
Agri-Tech Company
Huai'an Wellhope Feed
Mill
Gansu Wellhope
Agri-Tech Company
Henan Wellhope
Agri-Tech Company
Lankao Wellhope
Agri-Tech Company
Henan Wellhope
Agri-Tech Company 193,757.50 108,858.15 302,615.65
Kaifeng Branch
Shenyang Huaweida
Animal Health Product 77,021.25 -46,269.78 30,751.47
Company
Jilin Hefeng Swine
Breeding Company
Shenyang Expert
Trading Company
Shenyang Jiahe
Tianfeng Commerce 10,146,170.00 65,346.85 10,211,516.85
and Trade Company
Liaoning Expert Trading
Company
Shenyang Pufeng
Commerce and Trade
Wellhope Foods Co., Ltd. 2020 Annual Report
Company
Liaoning Wellhope
Purchasing & Trading 30,282,411.25 128,057.71 30,410,468.96
Company
Liaoning Skyland
Livestock Equipment 28,669,810.83 54,117.87 28,723,928.70
Company
Shenyang Fame
Bio-Tech Company
Pingyuan Wellhope
Food Processing 147,540,969.17 130,693.69 147,671,662.86
Company
Pingyuan Wellhope
Agri-Tech Company
Kaifeng Wellhope Meat
Product Company
Wellhope Food
(Shenyang) Company
Liaoning Godaji
E-commerce Company
Linxi Helai Agri-Tech
Company
Xi'an Linfeng Shengyi
Commerce and Trade 2,000,000.00 2,000,000.00 -
Company
Lingyuan Wellhope
Agri-Tech Company
Haicheng Xinzhongxin
Feed Mill
Fuyu Wellhope
Agri-Tech Company
Changchun Wellhope
Feed Mill
Daqing Wellhope Bayi
Nongda Animal Sci-Tech 13,896,289.17 9,880,722.57 23,777,011.74
Company
Beijing Sanyuan
Wellhope Agri-Tech 8,808,814.58 733,922.48 9,542,737.06
Company
Tangshan Wellhope
Feed Mill
Cangzhou Helai Sci-Tech
Company
Shanxi Wellhope
Agri-Tech Company
Tangshan Hejia
Agriculture and Animal 19,636,926.67 61,502.91 19,698,429.58
Husbandry Company
Tangshan Wellhope
Sci-Tech Company
Shanghai Wellhope
Feed Mill
Wellhope Foods Co., Ltd. 2020 Annual Report
Pinghu Wellhope
Agri-Tech Company
Anhui Wellhope
Agri-Tech Company
Xi'an Wellhope Feed
Sci-Tech Company
Zhengzhou Wellhope
Agri-Tech Company
Zhumadian Wellhope
Agri-Tech Company
Nanyang Wellhope Feed
Mill
Jiaozuo Wellhope Feed
Mill
Jingzhou Wellhope
Agri-Sci-Tech Company
Qingdao Wellhope
Agri-Tech Company
Jining Wellhope
Agri-Tech Company
Yunnan Wellhope Feed
Mill
Fuyu Wellhope
Taolaizhao Poultry 5,660,231.67 11,069.18 5,671,300.85
Raising Company
Harbin Weierhao
Trading Company
Changchun Hengfeng
Agriculture and Animal 239,621.66 107,630.10 347,251.76
Husbandry Company
Beijing Brilliant Dragon
Commerce and Trade 222,505.83 71,949.70 294,455.53
Company
Shanghai Hehong
Trading Company
Jinan Xinweita Trading
Company
Zhangwu Wellhope
Agriculture 1,800,000.00 1,800,000.00
Development Company
Tongliao Wellhope
Tianyi Prataculture 10,200,000.00 10,200,000.00
Company
Chongqing Dahong
Agriculture and Animal
Husbandry Equipment
Company
Guangzhou Xiangshun
Livestock Equipment 3,001,347.50 23,063.59 3,024,411.09
Company
Dalian Huakang Xinxin
Food Company
Wellhope Foods Co., Ltd. 2020 Annual Report
Dalian Heyuan
Agri-Tech Company
Dalian Zhongjia Food
Company
Shenyang Huakang
Broiler Company
Shenyang Huakang
Xinxin Food Company
Shenyang Huakang
Agriculture and Animal 770,212.50 345,953.89 1,116,166.39
Husbandry Company
Changchun Wellhope
Food Company
Dehui Wellhope
Agri-Tech Company
Puyang Wellhope Food
Company
Puyang Wellhope
Agri-Tech Company
Kaifeng Wellhope
Agriculture and Animal 51,347.50 23,063.59 74,411.09
Husbandry Company
Liaoning Wellhope Food
Company
Chongqing Wellhope
Agri-Tech Company
Nanchang Wellhope
Agri-Tech Company
Hengyang Wellhope
Agri-Sci-Tech Company
Shulan Fengtai
Agriculture and Animal 6,000,000.00 50,000,000.00 56,000,000.00
Husbandry Company
Shulan Fengtai Farming
Company
Hainan Agri-Tech
Company
Russia Wellhope
Agri-Tech Company
Luoyang Wellhope
Agriculture and Animal 50,000,000.00 50,000,000.00
Husbandry Company
Anyang Wellhope
Agriculture and Animal 48,000,000.00 48,000,000.00
Husbandry Company
Hainan Expert Trading
Company
Tianjin Fullyond Supply
Chain Company
Zhumadian Wellhope
Agriculture and Animal 10,000,000.00 10,000,000.00
Husbandry
Wellhope Foods Co., Ltd. 2020 Annual Report
Development Company
Chifeng Wellhope
Fuxinyuan Food 125,000,000.00 125,000,000.00
Company
Shenyang Xiangmai
E-commerce Company
Hebei Taihang Wellhope
Food Company
Dunhua Wellhope
Agri-Tech Company
Dunhua Fengda
Agriculture and Animal
Husbandry
Development Company
Heibei Taihang
Agri-Tech Company
Nanyang Wellhope
Cattle Sci-Tech 10,000,000.00 10,000,000.00
Company
Liaoning Qingyuan
Wellhope Agriculture
and Animal Husbandry
Company
Fuzhou Wellhope
Xingyuan Agri-Tech 3,600,000.00 3,600,000.00
Development Company
Daqing Wellhope Food
Company
Shandong Heyuan Food
Company
Total 2,113,924,536.04 580,749,505.55 5,400,000.00 2,689,274,041.59
Wellhope Foods Co., Ltd. 2020 Annual Report
B. Investment in associated companies and joint ventures
Unit: yuan Currency: RMB
Changes in 2020
Gains or losses Closing
Adjustment of Declaring of balance of
Company Opening balance on investments Closing balance
Additional other paying impairment
recognized Other
investment comprehensive dividend or provision
under equity
income profit
method
Unphung Joint
Venture Company
Nepal Wellhope
Agri-tech Pvt. Ltd.
NEXUS
WELL-HOPE
AGRITECH 17,900,000.00
INTERNATIONAL
LIMITED
Subtotal 11,669,191.54 11,669,191.54 17,900,000.00
Dunhua Wellhope
Agri-Tech 4,178,671.25 322,972.85 -4,501,644.10
Company
Dunhua Fengda
Agriculture and
Animal Husbandry 2,986,597.14 4,716,399.70 -7,702,996.84
Development
Company
Qingdao Shenfeng
Agri-Tech 13,573,648.97 2,280,790.09 3,000,000.00 12,854,439.06
Company
Zhangjiakou Jiahe
Animal Husbandry 68,145,308.99 50,730,981.24 118,876,290.23
Company
Wellhope Foods Co., Ltd. 2020 Annual Report
Tailai Jiahe Animal
Husbandry 27,134,553.62 60,174,013.06 87,308,566.68
Company
Gongzhuling Corn
Purchasing and 49,602,919.46 122,491.94 49,725,411.40
Storing Company
Beijing Dahong
Hengfeng Sci-Tech 20,087,982.12 5,243,999.15 25,331,981.27
Company
Shihaipu (Beijing)
Technology and 1,270,877.77 300,450.44 1,571,328.21
Trade Company
GOLDEN
HARVESTA INC.
PT SEKAR GOLDEN
HARVESTA 38,998,739.72 678,021.37 -2,475,988.86 37,200,772.23
INDONESIA
Hainan Nongken
Wenfeng
Wenchang 1,071,542.40 4,900,000.00 -353,962.52 5,617,579.88
Chicken (Group)
Company
Tai’an Jiuguhe
Agriculture
Development
Company
Linghai Jiuguhe
Feed Mill
Dandong
Wellhope
Chengsan Food
Company
Anshan Jiuguhe
Food Company
Beipiao Hongfa
Food Company
Haicheng New
Hongzunda
Wellhope Foods Co., Ltd. 2020 Annual Report
Agri-Tech
Company
Huludao Jiuguhe
Food Company
Dandong
Wellhope
Chengsan 112,253,275.58 3,669,492.40 2,000,000.00 113,922,767.98
Agri-Tech
Company
Tai'an Jiufeng
Agri-Tech 5,951,804.50 309,724.00 -3,185,467.28 3,076,061.22
Company
Shenyang Wenjie
Bio-Tech Company
Shenyang
Zhongwenjie 4,060,534.77 1,162,002.17 5,222,536.94
Bio-Tech Company
Huludao Jiuguhe
Feed Mill
Jinzhou Jiufeng
Food Company
Dalian Chengsan
Animal Husbandry 353,954,231.89 22,030,055.35 375,984,287.24
Company
Tai'an Fengjiu
Agri-Tech 37,837,537.89 9,763,110.34 7,600,000.00 40,000,648.23
Company
Anshan
Fengsheng Food 30,430,304.76 4,177,778.00 19,224,686.26 53,832,769.02
Company
Lankao Skyland
Duck Industry 52,618,773.55 -6,166,074.01 46,452,699.54
Company
PT. Mulia Harvest
Agritech
Shulan Fengtai
Organic Fertilizer 1,500,000.00 772,206.00 2,272,206.00
Company
Wellhope Foods Co., Ltd. 2020 Annual Report
Weifang Wellhope
Xinhesheng Feed 4,517,477.41 169,208.08 4,686,685.49
Mill
Liaoning Mubang
Animal Husbandry
Equipment 1,791,476.38 1,520,000.00 7,785,460.14 11,096,936.52
Manufacturing
Company
Anshan Yufeng
-193,154.81 5,700,000.00 -2,160,121.26 3,346,723.93
Feed Mill
Dunhua Fengda
Broiler Breeding 6,000,000.00 -215,914.95 5,784,085.05
Company
Dazhou Wellhope
Bio-Tech Company
Tai’an Huijun
Biomass Energy 3,257,800.00 -460,920.67 2,796,879.33
Company
Anshan Jiuguhe
Paper Packaging 2,516,209.00 488,253.97 3,004,462.97
Company
Anshan Antai
Plastic Products 1,824,000.00 340,615.90 2,164,615.90
Company
Bei’an Nongken
Shengda Pasture
Specialized
Cooperative
Subtotal 1,991,722,102.52 43,035,511.00 364,045,983.90 -7,071,521.86 96,237,700.00 -12,204,640.94 2,283,289,734.62
Total 2,003,391,294.06 43,035,511.00 364,045,983.90 -7,071,521.86 96,237,700.00 -12,204,640.94 2,294,958,926.16 17,900,000.00
Wellhope Foods Co., Ltd. 2020 Annual Report
Unit: yuan Currency: RMB
Item
Revenue Cost Revenue Cost
Revenue from primary
businesses
Revenue from other
businesses
Total 969,102,637.82 668,625,276.01 653,173,744.91 440,528,615.18
Unit: yuan Currency: RMB
Item 2020 2019
Income from long-term equity investments
under cost method
Income from long-term equity investments
under equity method
Income from disposal of long-term equity
investments
Income from disposal of trading financial
-2,036,868.25 2,735,905.66
assets
Income from disposal of other equity
instrument investments
Income from trading financial assets during
the holding period
Total 451,034,585.06 699,355,097.82
XVII. Supplementary Information
Unit: yuan Currency: RMB
Item Amount Note
Gains or losses from disposal of non-current assets 3,169,342.06
Government grants charged to current gains or losses
(excl. the government grants which are closely related to
the Company's ordinary course of business and gained 33,102,019.89
constantly at fixed quotas or amounts as per certain
standards based on the state polices)
Gains or losses on fair-value changes in trading financial
assets and liabilities, derivative financial assets and
liabilities, and the income from disposal of trading
financial assets and liabilities, derivative financial assets -148,741.92
and liabilities as well as other debt investment (excl. the
effective portion of hedges that arise in the Company's
ordinary course of business)
Non-operating income and expense other than those
-24,964,468.42
described above
Income tax effects -3,223,835.48
Non-controlling interests effects -3,449,600.51
Total 4,484,715.62
Wellhope Foods Co., Ltd. 2020 Annual Report
Weighted average Earnings per share
Profit in 2020
ROE % Basic EPS Diluted EPS
Net profit attributable to shareholders who
hold common stock
Net profit attributable to common
shareholders deducting extraordinary items
Wellhope Foods Co., Ltd. 2020 Annual Report
Section XII Reference
Financial statements with the signature and seal of the legal representative, the
Reference file
person taking charge of accounting and the person taking charge of the accounting
directory
department.
Reference file The original audit report with the seal of the accounting firm and the signature and
directory seal of the CPA.
During the reporting period, all the original documents and original announcements of
Reference file
the Company that have been publicly disclosed on the websites designated by the
directory
CSRC.
Chairman of the Board of Directors: Jin Weidong
The submission date approved by the Board of Directors: March 31, 2021
首页
微信公众号
证券之星APP
