Important Notes, Directory, and Definitions
The Board of Directors, Supervisory Board, and the directors, supervisors, and senior management of the company guarantee that the content of the semi-annual report is true, accurate, and complete, with no false records, misleading statements, or significant omissions, and bear individual and joint legal responsibilities. The person in charge of the company, Hou Jianfang, the person in charge of accounting work, Yang Guihong, and the head of the accounting institution (accounting supervisor) Dou Xiaoling declare: they guarantee the truthfulness, accuracy, and completeness of the financial report in this semi-annual report. Luo Yi, as an independent director of the company, cannot guarantee the truthfulness, accuracy, and completeness of this report due to unresolved matters related to the 2018 annual audit report. Wang Aiguo, as an independent director of the company, cannot guarantee the truthfulness, accuracy, and completeness of this report because he formally submitted a written resignation from the position of independent director on June 3; the company is currently under investigation by the China Securities Regulatory Commission. Liu Jiangtao, as an independent director of the company, cannot guarantee the truthfulness, accuracy, and completeness of this report due to unresolved matters related to the 2018 annual audit report. Chu Gang, as a director, board secretary, and vice president of the company, cannot guarantee the truthfulness, accuracy, and completeness of this report due to unresolved matters related to the 2018 annual audit report. Li Shuai, as the vice president of the company, cannot guarantee the truthfulness, accuracy, and completeness of this report due to unresolved matters related to the 2018 annual audit report. Investors are advised to pay special attention.
All directors have attended the board meeting to review this report. The forward-looking statements regarding future plans and development strategies in this report do not constitute substantial commitments to investors, and investors should be aware of investment risks. The company must comply with the disclosure requirements of the "Shenzhen Stock Exchange Industry Information Disclosure Guidelines No. 1 - Listed Companies Engaged in Livestock and Aquaculture Business." The company plans not to distribute cash dividends, issue bonus shares, or increase capital using reserves.
Major Risk Alerts
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Risk of Fluctuation in Pig Prices
The cyclical fluctuations in the market prices of commodity pigs and piglets lead to cyclical fluctuations in the gross profit margin of the pig farming industry, resulting in certain fluctuations in the company's operating performance. -
Risk of Raw Material Price Changes
The risk of changes in raw material market prices covers the entire pig production industry and is an objective and uncontrollable external risk. Significant fluctuations in raw material market prices may have a substantial impact on the company's operating performance. -
Epidemic Risk
Epidemics, as unpredictable emergencies, pose the greatest risk to the current livestock industry. Once an epidemic occurs, it can cause market panic and reduced demand, directly affecting the fluctuation of pig prices and the company's profitability. In August 2018, the domestic pig market began to experience outbreaks of "African swine fever," which significantly impacted the circulation and prices of pigs. -
Liquidity Risk
The company has a high debt ratio due to large investments in previous years, and the high debt ratio combined with the industry's downturn and financial deleveraging has caused issues with the company's cash flow, leading to risks such as the inability to pay principal and interest on loans, failure to redeem short-term financing bonds and corporate bonds on time, and inability to honor acceptances on schedule. Currently, many of the company's assets have been applied for preservation by creditors, and the company's financing ability is limited, posing a risk of debt repayment.